Document And Entity Information
Document And Entity Information | 12 Months Ended |
Dec. 31, 2016shares | |
Document Information [Line Items] | |
Entity Registrant Name | YY Inc. |
Entity Central Index Key | 1,530,238 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2016 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | Yes |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | FY |
Class A common shares [Member] | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 750,115,028 |
Class B common shares [Member] | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 359,557,976 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | |
Current assets | ||||
Cash and cash equivalents | ¥ 1,579,743 | $ 227,530 | ¥ 928,934 | |
Short-term deposits | 3,751,519 | 540,331 | 1,894,946 | |
Restricted short-term deposits | 0 | 0 | 389,221 | |
Accounts receivable, net | 169,571 | 24,423 | 132,353 | |
Inventory | 2,266 | 326 | 14,385 | |
Amounts due from related parties | 135,245 | 19,479 | 5,297 | |
Prepayments and other current assets | 224,732 | 32,369 | 147,823 | |
Deferred tax assets | 107,309 | 15,456 | 116,921 | |
Total current assets | 5,970,385 | 859,914 | 3,629,880 | |
Non-current assets | ||||
Deferred tax assets | 10,502 | 1,513 | 3,363 | |
Investments | 918,602 | 132,306 | 567,557 | |
Property and equipment, net | 838,750 | 120,805 | 843,449 | |
Land use right, net | 1,872,394 | 269,681 | 0 | |
Intangible assets, net | 58,926 | 8,487 | 146,437 | |
Goodwill | 14,300 | 2,060 | 151,638 | |
Other non-current assets | 101,933 | 14,681 | 1,960,430 | |
Total non-current assets | 3,815,407 | 549,533 | 3,672,874 | |
Total assets | 9,785,792 | 1,409,447 | 7,302,754 | |
Current liabilities | ||||
Convertible bonds (including convertible bonds of the consolidated variable interest entity without recourse to the Company of nil and nil as of December 31, 2015 and 2016, respectively) | [1] | 2,768,469 | 398,742 | 0 |
Accounts payable (including accounts payable of the consolidated variable interest entity without recourse to the Company of RMB108,500 and RMB117,917 as of December 31, 2015 and 2016, respectively) | 137,107 | 19,748 | 129,819 | |
Deferred revenue (including deferred revenue of the consolidated variable interest entity without recourse to the Company of RMB385,300 and RMB429,883 as of December 31, 2015 and 2016, respectively) | 430,683 | 62,031 | 385,300 | |
Advances from customers (including advances from customers of the consolidated variable interest entity without recourse to the Company of RMB 45,189 and RMB56,108 as of December 31, 2015 and 2016, respectively) | 56,152 | 8,088 | 55,086 | |
Income taxes payable (including income taxes payable of the consolidated variable interest entity without recourse to the Company of RMB80,978 and RMB112,779 as of December 31, 2015 and 2016, respectively) | 140,754 | 20,273 | 107,403 | |
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 RMB579,760 and RMB988,911 as of December 31, 2015 and 2016, respectively) | 1,066,038 | 153,541 | 681,889 | |
Amounts due to related parties (including amounts due to related parties of the consolidated variable interest entity without recourse to the Company of RMB23,684 and RMB91,245 as of December 31, 2015 and 2016, respectively) | 91,245 | 13,142 | 24,917 | |
Total current liabilities | 4,690,448 | 675,565 | 1,384,414 | |
Non-current liabilities | ||||
Convertible bonds (including convertible bonds of the consolidated variable interest entity without recourse to the Company of nil and nil as of December 31, 2015 and 2016, respectively) | [2] | 0 | 0 | 2,572,119 |
Deferred revenue(including deferred revenue of the consolidated variable interest entity without recourse to the Company of RMB20,752 and RMB19,125 as of December 31, 2015 and 2016, respectively) | 25,459 | 3,667 | 20,752 | |
Deferred tax liabilities (including deferred tax liabilities of the consolidated variable interest entity without recourse to the Company of RMB12,592 and RMB4,777 as of December 31, 2015 and 2016, respectively) | 8,058 | 1,161 | 16,817 | |
Total non-current liabilities | 33,517 | 4,828 | 2,609,688 | |
Total liabilities | 4,723,965 | 680,393 | 3,994,102 | |
Commitments and contingencies | ||||
Mezzanine equity | 9,272 | 1,335 | 61,833 | |
Shareholders' equity | ||||
Additional paid-in capital | 2,165,766 | 311,935 | 2,011,799 | |
Statutory reserves | 58,857 | 8,477 | 56,507 | |
Retained earnings | 2,728,736 | 393,020 | 1,207,168 | |
Accumulated other comprehensive (loss)/income | 93,066 | 13,404 | (36,385) | |
Total YY Inc.'s shareholders' equity | 5,046,495 | 726,846 | 3,239,159 | |
Non-controlling interests | 6,060 | 873 | 7,660 | |
Total shareholders' equity | 5,052,555 | 727,719 | 3,246,819 | |
Total liabilities, mezzanine equity and shareholders' equity | 9,785,792 | 1,409,447 | 7,302,754 | |
Class A common shares [Member] | ||||
Shareholders' equity | ||||
Common shares | 44 | 6 | 43 | |
Class B common shares [Member] | ||||
Shareholders' equity | ||||
Common shares | ¥ 26 | $ 4 | ¥ 27 | |
[1] | Convertible bonds classified in current liabilities represent Convertible Senior Notes which may be redeemed within one year. | |||
[2] | Effectively January 2016, ASU 2015-3 issued by FASB requires entities to present the issuance costs of bonds in the balance sheet as a direct deduction from the related bonds rather than assets. Accordingly, the Company retrospectively reclassified RMB25.3 million of issuance cost of bonds from other non-current assets into convertible bonds as of December 31, 2015. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands, $ in Thousands | Dec. 31, 2016CNY (¥)shares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015CNY (¥)shares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014shares | |
Convertible Debt, Current | [1] | ¥ 2,768,469 | $ 398,742 | ¥ 0 | ||
Accounts payable | 137,107 | 19,748 | 129,819 | |||
Deferred revenue | 430,683 | 62,031 | 385,300 | |||
Advances from customers | 56,152 | 8,088 | 55,086 | |||
Income taxes payable | 140,754 | 20,273 | 107,403 | |||
Accrued liabilities and other current liabilities | 1,066,038 | 153,541 | 681,889 | |||
Amounts due to related parties | 91,245 | 13,142 | 24,917 | |||
Convertible Debt, Noncurrent | [2] | 0 | 0 | 2,572,119 | ||
Deferred revenue | 25,459 | 3,667 | 20,752 | |||
Deferred tax liabilities | ¥ 8,058 | $ 1,161 | ¥ 16,817 | |||
Class A common shares [Member] | ||||||
Common shares, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | ||||
Common shares, shares authorized | shares | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | |
Common shares, shares issued | shares | 750,115,028 | 750,115,028 | 728,227,848 | 728,227,848 | 706,173,568 | |
Common shares, shares outstanding | shares | 750,115,028 | 750,115,028 | 728,227,848 | 728,227,848 | 706,173,568 | |
Class B common shares [Member] | ||||||
Common shares, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | ||||
Common shares, shares authorized | shares | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | |
Common shares, shares issued | shares | 359,557,976 | 359,557,976 | 369,557,976 | 369,557,976 | 427,352,696 | |
Common shares, shares outstanding | shares | 359,557,976 | 359,557,976 | 369,557,976 | 369,557,976 | 427,352,696 | |
Variable interest entity [Member] | ||||||
Convertible Debt, Current | $ | ||||||
Accounts payable | ¥ 117,917 | ¥ 108,500 | ||||
Deferred revenue | 429,883 | 385,300 | ||||
Advances from customers | 56,108 | 45,189 | ||||
Income taxes payable | 112,779 | 80,978 | ||||
Accrued liabilities and other current liabilities | 988,911 | 579,760 | ||||
Amounts due to related parties | 91,245 | 23,684 | ||||
Convertible Debt, Noncurrent | $ | ||||||
Deferred revenue | 19,125 | 20,752 | ||||
Deferred tax liabilities | ¥ 4,777 | ¥ 12,592 | ||||
[1] | Convertible bonds classified in current liabilities represent Convertible Senior Notes which may be redeemed within one year. | |||||
[2] | Effectively January 2016, ASU 2015-3 issued by FASB requires entities to present the issuance costs of bonds in the balance sheet as a direct deduction from the related bonds rather than assets. Accordingly, the Company retrospectively reclassified RMB25.3 million of issuance cost of bonds from other non-current assets into convertible bonds as of December 31, 2015. |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2016CNY (¥)¥ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015CNY (¥)¥ / sharesshares | Dec. 31, 2014CNY (¥)¥ / sharesshares | ||||
Net revenues | |||||||
Other revenues | ¥ 257,638 | $ 37,108 | ¥ 294,200 | ¥ 186,091 | |||
Total net revenues | [1] | 8,204,050 | 1,181,629 | 5,897,249 | 3,678,368 | ||
Cost of revenues | [2] | (5,103,430) | (735,047) | (3,579,744) | (1,849,149) | ||
Gross profit | 3,100,620 | 446,582 | 2,317,505 | 1,829,219 | |||
Operating expenses | |||||||
Research and development expenses | [2] | (675,230) | (97,253) | (548,799) | (431,188) | ||
Sales and marketing expenses | [2] | (387,268) | (55,778) | (312,870) | (102,527) | ||
General and administrative expenses | [2] | (482,437) | (69,485) | (358,474) | (223,019) | ||
Goodwill impairment | [2] | (17,665) | [3] | (2,544) | (310,124) | [3] | |
Fair value change of contingent consideration | [2] | 0 | 0 | 292,471 | |||
Total operating expenses | [2] | (1,562,600) | (225,060) | (1,237,796) | (756,734) | ||
Gain on deconsolidation and disposal of subsidiaries | 103,960 | 14,973 | 0 | 0 | |||
Other income | 129,504 | 18,652 | 82,300 | 6,319 | |||
Operating income | 1,771,484 | 255,147 | 1,162,009 | 1,078,804 | |||
Gain on partial disposal of associates | 25,061 | 3,610 | 999 | ||||
Interest expense | (81,085) | (11,679) | (97,125) | (56,607) | |||
Interest income | 67,193 | 9,678 | 137,892 | 164,969 | |||
Foreign currency exchange (losses) / gains, net | 1,158 | 167 | (38,099) | (10,399) | |||
Other non-operating income / (expenses) | 0 | 0 | (2,165) | 36,714 | |||
Income before income tax expenses | 1,783,811 | 256,923 | 1,162,512 | 1,214,480 | |||
Income tax expenses | (280,514) | (40,402) | (178,327) | (154,283) | |||
Income before share of income in equity method investments, net of income taxes | 1,503,297 | 216,521 | 984,185 | 1,060,197 | |||
Share of income in equity method investments, net of income taxes | 8,279 | 1,192 | 14,120 | 4,275 | |||
Net income | 1,511,576 | 217,713 | 998,305 | 1,064,472 | |||
Less: Net loss attributable to the non-controlling interest shareholders and the mezzanine classified non-controlling interest shareholders | (12,342) | (1,778) | (34,938) | ||||
Net income attributable to YY Inc. | 1,523,918 | 219,491 | 1,033,243 | 1,064,472 | |||
Other comprehensive income / (loss): | |||||||
Unrealized gain of available-for-sale securities, net of nil tax | 134,768 | 19,411 | 0 | 0 | |||
Foreign currency translation adjustments, net of nil tax | (5,317) | (766) | 4,414 | 3,638 | |||
Comprehensive income attributable to YY Inc. | ¥ 1,653,369 | $ 238,136 | ¥ 1,037,657 | ¥ 1,068,110 | |||
Net income per common share | |||||||
-Basic (in CNY/dollars per share) | (per share) | [4] | ¥ 1.35 | $ 0.19 | ¥ 0.92 | ¥ 0.92 | ||
-Diluted (in CNY/dollars per share) | (per share) | [4] | ¥ 1.32 | $ 0.19 | ¥ 0.9 | ¥ 0.89 | ||
Weighted average number of common shares used in calculating net income per common share | |||||||
-Basic (in shares) | [4] | 1,127,343,312 | 1,127,343,312 | 1,125,189,978 | 1,153,140,699 | ||
-Diluted (in shares) | [4] | 1,216,111,329 | 1,216,111,329 | 1,150,831,163 | 1,198,543,473 | ||
ADSs [Member] | |||||||
Net income per common share | |||||||
-Basic (in CNY/dollars per share) | (per share) | [4] | ¥ 27.04 | $ 3.89 | ¥ 18.37 | ¥ 18.46 | ||
-Diluted (in CNY/dollars per share) | (per share) | [4] | ¥ 26.4 | $ 3.8 | ¥ 17.96 | ¥ 17.76 | ||
Weighted average number of common shares used in calculating net income per common share | |||||||
-Basic (in shares) | [4] | 56,367,166 | 56,367,166 | 56,259,499 | 57,657,035 | ||
-Diluted (in shares) | [4] | 60,805,566 | 60,805,566 | 57,541,558 | 59,927,174 | ||
Live streaming [Member] | |||||||
Net revenues | |||||||
Total net revenues | [1] | ¥ 7,027,227 | $ 1,012,131 | ¥ 4,539,857 | ¥ 2,475,379 | ||
Online games [Member] | |||||||
Net revenues | |||||||
Total net revenues | [1] | 634,325 | 91,362 | 771,882 | 811,699 | ||
Membership [Member] | |||||||
Net revenues | |||||||
Total net revenues | [1] | ¥ 284,860 | $ 41,028 | ¥ 291,310 | ¥ 205,199 | ||
[1] | For the year ended December 31, 2016, revenue presentation has been changed to live streaming, online games, membership and others, and the revenue presentation for the year ended December 31, 2015 and 2014 has also been retrospectively changed. | ||||||
[2] | Share-based compensation was allocated in cost of revenues and operating expenses as follows:For the year ended December 31, Note 2014 2015 2016 2016 RMB RMB RMB US$ (Note2(e)) Cost of revenues 18,037 23,963 15,894 2,289 Research and development expenses 54,141 70,951 78,816 11,352 Sales and marketing expenses 2,807 3,283 3,107 448 General and administrative expenses 59,647 87,175 59,469 8,565 | ||||||
[3] | (iii) The Group performs its annual goodwill impairment test of each reporting unit as of October 1, or more frequently, if certain events or circumstances warrant. Events or changes in circumstances which might indicate potential impairment in goodwill include the entity-specific factors, including, but not limited to, stock price volatility, market capitalization relative to net book value, and projected revenue, market growth and operating results. In June 2015, it was noted that 100 Online’s financial and operational performance in the first half year of 2015 was behind the original budget resulting from unexpected fierce market competition and the resignation of a number of key personnel in 100 Online. Accordingly, the Group performed an interim assessment on the goodwill impairment related to 100 Online and recognized an estimated goodwill impairment charge of RMB110,699. Correspondingly, long-term payable amounting to RMB111,547 in relation to the contingent consideration was reversed. The unobservable inputs used in the assessment included risk free rate, discount rate and etc. The risk free rate and discount rate were 4.07% and 21.5%, respectively. In the 2015 annual goodwill impairment assessment, the Group has noted further impairment indicator for 100 Online as well as impairment indicator for Beifu as certain key personnel of 100 Online and Beifu resigned in the third quarter of 2015. Based on the result of the annual impairment assessment for 100 Online, an impairment charge of RMB71,390 was recognised and correspondingly, long-term payable amounting to RMB73,618 in relation to the contingent consideration was reversed; For Beifu, an impairment charge of RMB128,035 was recognised and correspondingly, long-term payable amounting to RMB 107,306 in relation to the contingent consideration was reversed. The unobservable inputs used in the assessment, included the risk free rate, discount rate and etc. For the goodwill impairment assessment of 100 Online and Beifu, the risk free rate were both 3.85% and the discount rate were 23% and 24.5%, respectively. In December 2016, the Group has identified further impairment indicator for 100 Online as well as impairment indicator for Bilin Online. Based on the results of the impairment assessment, an impairment charge of RMB13,804 for 100 Online and an impairment charge of RMB3,861 for Bilin Online were recognized, respectively. The above goodwill impairment assessments on 100 Online, Beifu and Bilin Online adopted the income approach and considered a combination of factors, including, but not limited to, market conditions, expected future cash flows, growth rates and discount rates, which required the Group to make certain estimates and assumptions regarding industry economic factors and future profitability of the business. | ||||||
[4] | Each ADS represents 20 Class A common shares. |
CONSOLIDATED STATEMENTS OF OPE5
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Parenthetical) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Nov. 21, 2012 | |
Share-based compensation | ¥ 157,286 | $ 22,654 | ¥ 185,372 | ¥ 134,632 | |
Cost of revenues [Member] | |||||
Share-based compensation | 15,894 | 2,289 | 23,963 | 18,037 | |
Research and development expenses [Member] | |||||
Share-based compensation | 78,816 | 11,352 | 70,951 | 54,141 | |
Sales and marketing expenses [Member] | |||||
Share-based compensation | 3,107 | 448 | 3,283 | 2,807 | |
General and administrative expenses [Member] | |||||
Share-based compensation | ¥ 59,469 | $ 8,565 | ¥ 87,175 | ¥ 59,647 | |
Class A common shares [Member] | |||||
Number of common shares represented by each ADS | 20 | 20 | 20 | 20 | 20 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY ¥ in Thousands, $ in Thousands | CNY (¥) | USD ($) | Class A common shares [Member]shares | Class B common shares [Member]shares | Common Stock [Member]CNY (¥) | Common Stock [Member]Class A common shares [Member]CNY (¥)shares | Common Stock [Member]Class B common shares [Member]CNY (¥)shares | Additional paid-in capital [Member]CNY (¥) | Statutory reserves [Member]CNY (¥) | Retained Earnings [Member]CNY (¥) | Accumulated other comprehensive (loss)/income [Member]CNY (¥) | Total YY Inc.'s shareholders' equity [Member]CNY (¥) | Non-controlling interests [Member]CNY (¥) |
Balance at Dec. 31, 2013 | ¥ 1,887,209 | ¥ 38 | ¥ 34 | ¥ 2,765,614 | ¥ 40,657 | ¥ (874,697) | ¥ (44,437) | ||||||
Balance (in shares) at Dec. 31, 2013 | shares | 622,658,738 | 485,831,386 | |||||||||||
Issuance of common shares for exercised share options | 213 | 213 | |||||||||||
Issuance of common shares for exercised share options (in shares) | shares | 5,841,660 | ||||||||||||
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) | shares | 19,194,480 | ||||||||||||
Class B common shares converted to Class A common shares (issued) | ¥ 4 | ||||||||||||
Class B common shares converted to Class A common shares (issued) (in shares) | shares | 58,478,690 | ||||||||||||
Class B common shares converted to Class A common shares (converted) | ¥ (4) | ||||||||||||
Class B common shares converted to Class A common shares (converted) (in shares) | shares | (58,478,690) | ||||||||||||
Share based compensation- restricted shares | 3,771 | 3,771 | |||||||||||
Share based compensation-restricted share units | 130,718 | 130,718 | |||||||||||
Share based compensation - restricted shares to the founder of a subsidiary of a variable interest entity | 143 | 143 | |||||||||||
Appropriation to statutory reserves | 15,812 | (15,812) | |||||||||||
Components of comprehensive income | |||||||||||||
Net income | 1,064,472 | 1,064,472 | |||||||||||
Unrealized gain of available-for-sales securities | 0 | ||||||||||||
Foreign currency translation adjustment, net of nil tax | 3,638 | 3,638 | |||||||||||
Balance at Dec. 31, 2014 | 3,090,164 | ¥ 43 | ¥ 30 | 2,900,458 | 56,469 | 173,963 | (40,799) | ¥ 3,090,164 | |||||
Balance (in shares) at Dec. 31, 2014 | shares | 706,173,568 | 427,352,696 | 706,173,568 | 427,352,696 | |||||||||
Issuance of common shares for exercised share options | 245 | 245 | 245 | ||||||||||
Issuance of common shares for exercised share options (in shares) | shares | 6,611,970 | ||||||||||||
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) | shares | 19,498,710 | ||||||||||||
Class B common shares converted to Class A common shares (issued) | ¥ 3 | ||||||||||||
Class B common shares converted to Class A common shares (issued) (in shares) | shares | 57,794,720 | ||||||||||||
Class B common shares converted to Class A common shares (converted) | ¥ (3) | ||||||||||||
Class B common shares converted to Class A common shares (converted) (in shares) | shares | (57,794,720) | ||||||||||||
Repurchase of Class A common shares | (1,041,686) | ¥ (4) | (1,041,682) | (1,041,686) | |||||||||
Repurchase of Class A common shares, shares | shares | (61,851,120) | ||||||||||||
Share based compensation-restricted share units | 152,205 | 152,205 | 152,205 | ||||||||||
Share based compensation - restricted shares to the founder of a subsidiary of a variable interest entity | 574 | 574 | 574 | ||||||||||
Appropriation to statutory reserves | 38 | (38) | |||||||||||
Set-up of subsidiaries with non-controlling interest shareholders | 7,798 | 7,798 | |||||||||||
Components of comprehensive income | |||||||||||||
Net income | 1,033,243 | ||||||||||||
Net income / (loss) attributable to YY Inc. and non-controlling interest shareholders | 1,033,105 | 1,033,243 | 1,033,243 | (138) | |||||||||
Unrealized gain of available-for-sales securities | 0 | ||||||||||||
Foreign currency translation adjustment, net of nil tax | 4,414 | 4,414 | 4,414 | ||||||||||
Balance at Dec. 31, 2015 | 3,246,819 | ¥ 43 | ¥ 27 | 2,011,799 | 56,507 | 1,207,168 | (36,385) | 3,239,159 | 7,660 | ||||
Balance (in shares) at Dec. 31, 2015 | shares | 728,227,848 | 369,557,976 | 728,227,848 | 369,557,976 | |||||||||
Issuance of common shares for exercised share options | 9 | 9 | 9 | ||||||||||
Issuance of common shares for exercised share options (in shares) | shares | 234,720 | ||||||||||||
Issuance of common shares for vested restricted shares and restricted share units (in shares) | shares | 11,652,460 | ||||||||||||
Class B common shares converted to Class A common shares (issued) | ¥ 1 | ||||||||||||
Class B common shares converted to Class A common shares (issued) (in shares) | shares | 10,000,000 | ||||||||||||
Class B common shares converted to Class A common shares (converted) | ¥ (1) | ||||||||||||
Class B common shares converted to Class A common shares (converted) (in shares) | shares | (10,000,000) | ||||||||||||
Deemed disposal of partial interest in a subsidiary arising from conversion of liability | 5,718 | 5,718 | 5,718 | ||||||||||
Share based compensation-restricted share units | 143,350 | 143,350 | 143,350 | ||||||||||
Share based compensation - restricted shares to the founder of a subsidiary of a variable interest entity | 572 | 572 | 572 | ||||||||||
Other change in equity in an equity investment | 4,800 | 4,800 | 4,800 | ||||||||||
Partial disposal of an equity investment | (482) | (482) | (482) | ||||||||||
Appropriation to statutory reserves | 2,350 | (2,350) | |||||||||||
Set-up of subsidiaries with non-controlling interest shareholders | 6,500 | 6,500 | |||||||||||
Acquisition of subsidiaries with non-controlling interest shareholders | 291 | 291 | |||||||||||
Capital injection in subsidiaries from non-controlling interest shareholders | 4,142 | 4,142 | |||||||||||
Components of comprehensive income | |||||||||||||
Net income | 1,523,918 | $ 219,491 | |||||||||||
Net income / (loss) attributable to YY Inc. and non-controlling interest shareholders | 1,511,385 | 1,523,918 | 1,523,918 | (12,533) | |||||||||
Unrealized gain of available-for-sales securities | 134,768 | 19,411 | 134,768 | 134,768 | |||||||||
Foreign currency translation adjustment, net of nil tax | (5,317) | (5,317) | (5,317) | ||||||||||
Balance at Dec. 31, 2016 | ¥ 5,052,555 | $ 727,719 | ¥ 44 | ¥ 26 | ¥ 2,165,766 | ¥ 58,857 | ¥ 2,728,736 | ¥ 93,066 | ¥ 5,046,495 | ¥ 6,060 | |||
Balance (in shares) at Dec. 31, 2016 | shares | 750,115,028 | 359,557,976 | 750,115,028 | 359,557,976 |
CONSOLIDATED STATEMENTS OF CHA7
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - CNY (¥) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Foreign currency translation adjustments, tax portion |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | ||||
Cash flows from operating activities | |||||||
Net income | ¥ 1,511,576 | $ 217,713 | ¥ 998,305 | ¥ 1,064,472 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation of property and equipment | 173,625 | 25,007 | 122,098 | 68,035 | |||
Amortization of acquired intangible assets and land use right | 100,892 | 14,531 | 64,201 | 12,598 | |||
Allowance for doubtful accounts | 45,914 | 6,613 | 4,167 | 28,120 | |||
Loss on disposal of property and equipment | 891 | 128 | 3,759 | 61 | |||
Impairment of investments | 80,104 | 11,537 | 6,000 | 4,000 | |||
Impairment of intangible assets | 3,828 | 551 | 57,199 | 5,697 | |||
Impairment of goodwill | [2] | 17,665 | [1] | 2,544 | 310,124 | [1] | |
Fair value change of contingent consideration | [2] | 0 | 0 | (292,471) | |||
Share based compensation | 157,286 | 22,654 | 185,372 | 134,632 | |||
Share of income in equity method investments, net of income taxes | (8,279) | (1,192) | (14,120) | (4,275) | |||
Gain on partial disposal of associates | (25,061) | (3,610) | (999) | ||||
Gain on deconsolidation and disposal of subsidiaries | (103,960) | (14,973) | |||||
Deferred income taxes, net | (7,768) | (1,119) | (25,039) | (45,751) | |||
Foreign currency exchange (gains) / losses, net | (1,158) | (167) | 38,099 | 10,399 | |||
Other non-operating (income) /expense | 2,165 | (36,714) | |||||
Changes in operating assets and liabilities, net of business acquisition and disposal of subsidiaries | |||||||
Accounts receivable, net | (34,293) | (4,939) | 123,634 | (183,527) | |||
Prepayments and other assets | (97,888) | (14,099) | 45,128 | (90,924) | |||
Amounts due from related parties | 1,839 | 265 | (1,323) | ||||
Inventory | 680 | 98 | (11,080) | ||||
Amounts due to related parties | 66,328 | 9,553 | (13,743) | 28,252 | |||
Accounts payable | 36,888 | 5,313 | (22,654) | 23,166 | |||
Deferred revenue | 81,513 | 11,740 | 25,519 | 54,343 | |||
Advances from customers | 10,783 | 1,553 | 20,959 | 14,578 | |||
Income taxes payable | 33,351 | 4,804 | 18,242 | 11,054 | |||
Accrued liabilities and other current liabilities | 376,379 | 54,210 | 178,901 | 204,134 | |||
Net cash provided by operating activities | 2,421,135 | 348,715 | 1,823,442 | 1,301,351 | |||
Cash flows from investing activities | |||||||
Placements of short-term deposits | (8,027,325) | (1,156,175) | (1,869,789) | (5,343,934) | |||
Maturities of short-term deposits | 6,324,897 | 910,975 | 4,257,609 | 2,550,059 | |||
Placements of restricted short-term deposits | (1,492,799) | (155,000) | |||||
Maturities of restricted short-term deposits | 389,221 | 56,059 | 522,981 | 55,000 | |||
Purchase of property and equipment | (162,395) | (23,390) | (219,843) | (178,470) | |||
Purchase of intangible assets and land use right | (70,029) | (10,086) | (50,931) | (21,757) | |||
Purchase of other non-current assets | (5,403) | (778) | (1,926,224) | (510,341) | |||
Cash paid for equity investments | (107,010) | (15,413) | (500) | (15,000) | |||
Cash paid for cost investments | (90,234) | (12,996) | (351,800) | (73,402) | |||
Acquisition of an available-for-sale security | (6,117) | ||||||
Cash received from disposal of investments | 22,608 | 3,256 | 1,563 | ||||
Cash dividend received from an equity investee | 6,720 | 968 | 2,400 | ||||
Acquisition of businesses, net of cash and cash equivalents acquired | (1,946) | (280) | 5,553 | (170,950) | |||
Deconsolidation and disposal of subsidiaries, net of cash disposed | (5,370) | (773) | |||||
Payment on behalf of related parties, net of repayment | [3] | (10,699) | (1,541) | 60,870 | (61,000) | ||
Loans to related parties | (44,500) | (6,409) | (159,000) | (1,500) | |||
Repayment of loans from related parties | 160,000 | 1,500 | |||||
Loans to employees and third parties | (6,605) | (951) | (6,037) | (35,512) | |||
Repayment of loans from employees and third parties | 4,751 | 684 | 13,237 | 4,531 | |||
Proceeds from disposal of property and equipment | 181 | 26 | 12,368 | 158 | |||
Net cash used in investing activities | (1,783,138) | (256,824) | (1,048,022) | (3,954,055) | |||
Cash flows from financing activities | |||||||
Proceeds from exercise of vested share options | 9 | 1 | 245 | 213 | |||
Repurchase of common shares | (1,041,686) | ||||||
Capital contributions from the non-controlling interests | 10,642 | 1,533 | 7,798 | ||||
Proceeds from bank borrowings | 1,148,500 | ||||||
Repayment of bank borrowings | (452,000) | ||||||
Proceeds from issuance of convertible bonds, net of issuance costs | 2,402,549 | ||||||
Net cash provided / (used in) by financing activities | 10,651 | 1,534 | (337,143) | 2,402,762 | |||
Net (decrease) / increase in cash and cash equivalents | 648,648 | 93,425 | 438,277 | (249,942) | |||
Cash and cash equivalents at the beginning of the year | 928,934 | 133,794 | 475,028 | 729,598 | |||
Effect of exchange rate changes on cash and cash equivalents | 2,161 | 311 | 15,629 | (4,628) | |||
Cash and cash equivalents at the end of the year | 1,579,743 | 227,530 | 928,934 | 475,028 | |||
Supplemental disclosure of cash flows information: | |||||||
-Cash paid for interest, net of amounts capitalized | (59,884) | (8,625) | (78,186) | (28,769) | |||
-Acquisition of property and equipment in form of accounts payable | 37,649 | 5,423 | 66,673 | 25,514 | |||
-Income taxes paid | ¥ (254,931) | $ (36,718) | ¥ (185,124) | ¥ (188,979) | |||
[1] | (iii) The Group performs its annual goodwill impairment test of each reporting unit as of October 1, or more frequently, if certain events or circumstances warrant. Events or changes in circumstances which might indicate potential impairment in goodwill include the entity-specific factors, including, but not limited to, stock price volatility, market capitalization relative to net book value, and projected revenue, market growth and operating results. In June 2015, it was noted that 100 Online’s financial and operational performance in the first half year of 2015 was behind the original budget resulting from unexpected fierce market competition and the resignation of a number of key personnel in 100 Online. Accordingly, the Group performed an interim assessment on the goodwill impairment related to 100 Online and recognized an estimated goodwill impairment charge of RMB110,699. Correspondingly, long-term payable amounting to RMB111,547 in relation to the contingent consideration was reversed. The unobservable inputs used in the assessment included risk free rate, discount rate and etc. The risk free rate and discount rate were 4.07% and 21.5%, respectively. In the 2015 annual goodwill impairment assessment, the Group has noted further impairment indicator for 100 Online as well as impairment indicator for Beifu as certain key personnel of 100 Online and Beifu resigned in the third quarter of 2015. Based on the result of the annual impairment assessment for 100 Online, an impairment charge of RMB71,390 was recognised and correspondingly, long-term payable amounting to RMB73,618 in relation to the contingent consideration was reversed; For Beifu, an impairment charge of RMB128,035 was recognised and correspondingly, long-term payable amounting to RMB 107,306 in relation to the contingent consideration was reversed. The unobservable inputs used in the assessment, included the risk free rate, discount rate and etc. For the goodwill impairment assessment of 100 Online and Beifu, the risk free rate were both 3.85% and the discount rate were 23% and 24.5%, respectively. In December 2016, the Group has identified further impairment indicator for 100 Online as well as impairment indicator for Bilin Online. Based on the results of the impairment assessment, an impairment charge of RMB13,804 for 100 Online and an impairment charge of RMB3,861 for Bilin Online were recognized, respectively. The above goodwill impairment assessments on 100 Online, Beifu and Bilin Online adopted the income approach and considered a combination of factors, including, but not limited to, market conditions, expected future cash flows, growth rates and discount rates, which required the Group to make certain estimates and assumptions regarding industry economic factors and future profitability of the business. | ||||||
[2] | Share-based compensation was allocated in cost of revenues and operating expenses as follows:For the year ended December 31, Note 2014 2015 2016 2016 RMB RMB RMB US$ (Note2(e)) Cost of revenues 18,037 23,963 15,894 2,289 Research and development expenses 54,141 70,951 78,816 11,352 Sales and marketing expenses 2,807 3,283 3,107 448 General and administrative expenses 59,647 87,175 59,469 8,565 | ||||||
[3] | For the year ended December 31, 2016, payment on behalf of related parties has been changed to be presented net of repayment. The presentation for the year ended December 31, 2015 and 2014 has also been changed to be consistent with the presentation for 2016. |
Organization and principal acti
Organization and principal activities | 12 Months Ended |
Dec. 31, 2016 | |
Organization and principal activities [Abstract] | |
Organization and principal activities | 1. Organization and principal activities (a) Principal activities YY Inc. (the "Company"), through its subsidiaries, its variable interest entities ("VIEs", also refer to VIEs and their subsidiaries as a whole, where appropriate) (collectively, the "Group") is principally engaged in operating a live streaming platform in the People's Republic of China (the "PRC" or "China") through its platform, YY Client and through its websites YY.com, Huya.com, Zhiniu8.com, Duowan.com, and 100.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 Co., Ltd. (“Guangzhou Huaduo”). Guangzhou Huaduo holds the 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 British Virgin Islands (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 Guangzhou Huaduo, founders of 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 BVI. In March 2008, Duowan BVI established Duowan Entertainment Information Technology (Beijing) Co., Ltd. (“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 Guangzhou Huaduo, founders of Guangzhou Huaduo and Guangzhou Duowan were terminated and a new series of VIE agreements (collectively, “Second VIE agreements”) were signed among Guangzhou Huaduo, founders of 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 Co., Ltd. (“Zhuhai Duowan Technology”), which is directly 100 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 2 In May 2012, Duowan Entertainment was renamed as Huanju Shidai Technology (Beijing) Co., Ltd. (“Beijing Huanju Shidai”). In September 2012, Zhuhai Duowan Technology was renamed as Guangzhou Huanju Shidai Information Technology Co., Ltd. (“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 8,970,000 179,400,000 82,055 359,424,310 548,408,914 (d) Principal subsidiaries and VIEs The details of the principal subsidiaries and VIEs through which the Company conducts its business operations as of December 31, 2016 are set out below: Name Place of Date of % of direct Principal activities Principal subsidiaries Duowan Entertainment Corporation (“Duowan BVI”) BVI November 6, 2007 100 % Investment holding Huanju Shidai Technology (Beijing) Co., Ltd. (“Beijing Huanju Shidai” or “Duowan Entertainment”) PRC March 19, 2008 100 % Investment holding Zhuhai Duowan Information Technology Co., Ltd. (“Zhuhai Duowan” or “Guangzhou Duowan”) PRC April 9, 2007 100 % Online advertising and software development Guangzhou Huanju Shidai Information Technology Co., Ltd. (“Guangzhou Huanju Shidai”) PRC December 2, 2010 100 % Software development Engage Capital Partners I, L.P. (“Engage L.P.”) Cayman Islands March 23, 2015 93.5 % Investment Principal VIEs Guangzhou Huaduo Network Technology Co., Ltd. (“Guangzhou Huaduo”) PRC April 11, 2005 100 % Holder of internet content provider licenses and internet value added services Zhuhai Huanju Huyu Technology Co., Ltd. PRC May 4, 2015 100 % Software development Shanghai Yilian Equity Investment Partnership(LP) (“Shanghai Yilian”) PRC June 23, 2015 93.5 % Investment Guangzhou Huya Technology Co., Ltd. PRC August 10, 2016 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 its operations primarily through its principal VIE Guangzhou Huaduo, 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 its legal shareholders. 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 • 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 • 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. Through the aforementioned contractual agreements, Guangzhou Huaduo is considered a VIE in accordance with Generally Accepted Accounting Principles in the United States (“U.S. GAAP”) because the Company, through Beijing Huanju Shidai, has the ability to: • exercise effective control over Guangzhou Huaduo; • 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. In addition to the aforementioned contractual agreements between Beijing Huanju Shidai and Guangzhou Huaduo, Beijing Huanju Shidai also entered into similar contractual agreements with Beijing Tuda Science and Technology Co., Ltd. ("Beijing Tuda"). Beijing Bilin Changxiang Information Technology Co., Ltd. (“Bilin Changxiang”), a subsidiary of the Company, also entered into similar contractual agreements with Beijing Bilin Online Information Technology Co., Ltd. ("Bilin Online"). Through these contractual agreements, Beijing Tuda and Bilin Online are considered VIEs of the Group. 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 VIEs that can be used only to settle obligations of the VIEs, except for registered capital and PRC statutory reserves of the VIEs amounting to RMB 2,580,160 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. Please refer to Note 3(a) for the consolidated financial information of the Group’s VIEs as of December 31, 2016. |
Principal accounting policies
Principal accounting policies | 12 Months Ended |
Dec. 31, 2016 | |
Principal accounting policies [Abstract] | |
Principal accounting policies | 2. Principal accounting policies (a) Basis of presentation The consolidated financial statements have been prepared in accordance with the U.S. GAAP to reflect the financial position and results of operations of the Group. (b) Consolidation The Group’s consolidated financial statements include the financial statements of the Company, its subsidiaries and VIEs for which the Company or its subsidiary is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and VIEs have been eliminated upon consolidation. 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 VIEs that could potentially be significant to the VIEs or the right to receive benefits from the VIEs that could potentially be significant to the VIEs. Beijing Huanju Shidai, Bilin Changxiang and ultimately the Company hold all the variable interests of the VIEs and has been determined to be the primary beneficiary of the VIEs. The Company established two funds entities, namely Engage L.P. and Shanghai Yilian, (collectively, the “Funds”), in March and June 2015, respectively. The Company holds 93.5% of interests in the Funds. The Company assesses that the Company exercises controls and is entitled to the various returns of the Funds and therefore the Funds have been accounted for as subsidiaries of and has been consolidated by the Company in accordance with ASC 810. The Company deconsolidates its subsidiaries in accordance with ASC 810 as of the date the Company ceased to have a controlling financial interest in the subsidiaries. The Company accounts for the deconsolidation of its subsidiaries by recognizing a gain or loss in net income/loss attributable to the Company in accordance with ASC 810. This gain or loss is measured at the date the subsidiaries are deconsolidated as the difference between (a) the aggregate of the fair value of any consideration received, the fair value of any retained non-controlling interest in the subsidiaries being deconsolidated, and the carrying amount of any non-controlling interest in the subsidiaries being deconsolidated, including any accumulated other comprehensive income/loss attributable to the non-controlling interest, and (b) the carrying amount of the assets and liabilities of the subsidiaries being deconsolidated. (c) Use of estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, mezzanine equity 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 the user relationship period related to online games revenue, assessment of whether the Group acts as a principal or an agent in different revenue streams, classification of perpetual items versus consumable items under item-based model, the determination of estimated selling prices of multiple element revenue contracts, income taxes, allowances for doubtful accounts, determination of share based compensation expenses, impairment assessment of goodwill, long-lived assets and intangible assets, tax considerations for earnings retained in the Group’s VIEs, fair value determination related to the accounting for business combinations and subsequent measurement of contingent consideration following business combinations, assessment on the probability of exercisability of the put option related to business combinations, assessment on the probability of performance condition affiliated in equity-classified award under ASC 718 that affect vesting, 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$”), while the functional currency of the other entities and VIEs in the Group is RMB, which is their respective local currency. In the consolidated financial statements, the financial information of the Company and its subsidiaries, which use US$ 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 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$1.00 = RMB 6.9430 on December 31, 2016 as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate. (f) Fair value of financial instruments U.S. GAAP establishes a three-tier hierarchy to prioritize the inputs used in the valuation methodologies in measuring the fair value of financial instruments. This hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three-tier fair value hierarchy is: Level 1observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2other inputs that are directly or indirectly observable in the marketplace. Level 3unobservable inputs which are supported by little or no market activity. The carrying values of cash and cash equivalents, short-term deposits, restricted short-term deposits, accounts receivable, other receivables, amounts due from (to) related parties, accounts payable, and other payables approximate their fair values because of their generally short maturities, and the carrying value of convertible bonds also approximates their fair value, as they bear interest at rates determined based on prevailing interest rates in the market. The fair value of the contingent consideration recognized on the acquisition date was measured using unobservable input (level 3). Trinomial Tree model was applied in determining the fair value of the contingent consideration. Under this model, the Group performs scenario analysis and calculates the fair value of the contingent consideration based on the net present value of the total contingent payments under each scenario and the expected probability of each scenario. Contingent consideration is remeasured at fair value at each reporting date since initial recognition. The Group recorded two of its investments as available-for-sale securities and subsequently measured at its fair value (Note 10). One of the available-for-sale securities was classified within Level 1 and valued based on observable inputs that reflected quoted prices (unadjusted) for identical assets or liabilities in active markets. The other one of the available-for-sale securities was classified within Level 3 and valued based on a model utilizing unobservable inputs which required management judgment and estimation. There was no significant change in fair value of the investment classified within Level 3 from the initial investment date to December 31, 2016. (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 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 maintains an allowance for doubtful accounts which reflects its best estimate of amounts that potentially will not be collected. The Company determines the allowance for doubtful accounts on an individual basis taking into consideration various factors including but not limited to historical collection experience and credit-worthiness of the debtors as well as the age of the individual receivables balance. Additionally, the Company makes specific bad debt provisions based on 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 entities. 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 adjusts the carrying amount of the investment and recognizes investment income or loss for share of the earnings or loss of the investee after the date of investment. 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 entities, including current earnings trends and undiscounted cash flows, and other entity-specific information. The fair value determination, particularly for investment in privately-held entities, 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 entities. 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) Available-for-sale investment The Group classifies its investments in debt and equity securities into one of three categories and accounts for these as follows: (i) debt securities that the Group has the positive intent and the ability to hold to maturity are classified as “held to maturity” and reported at amortized cost; (ii) debt and equity securities that are bought and held principally for the purpose of selling them in the near term are classified as “trading securities” with unrealized holding gains and losses included in earnings; (iii) debt and equity securities not classified as held to maturity or as trading securities are classified as “available-for-sale” and reported at fair value. The Group has designated its investments in redeemable preferred shares of one company and common shares of one listed company as available-for-sale securities in accordance with ASC 320 (Note 10). Unrealized gains and losses on available-for-sale securities are excluded from earnings and reported as accumulated other comprehensive income/loss, net of tax. Realized gains or losses upon disposal are charged to earnings during the period in which the gains or losses are realized. An impairment loss on the available-for-sale securities is recognized in the consolidated statements of operations and comprehensive income when the decline in value is determined to be other-than-temporary. (m) 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 property and equipment at the end of the estimated useful lives as a percentage of the original cost. Estimated useful lives Residual Buildings 40 years 0 % Servers, computers and equipment 3 years 0%-5 % Leasehold improvements Shorter of lease term or 5 years 0 % Decoration of buildings 10 years 0 % Motor vehicles 4 years 5 % Furniture, fixture and office equipment 5 years 0%-5 % 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. (n) Business combinations Business combinations are recorded using the purchase method of accounting, and the cost of an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any non-controlling interests. The excess of (i) the total of consideration of acquisition, fair value of the non-controlling interests and acquisition date fair value of any previously held equity interest in the subsidiary acquired over (ii) the fair value of the identifiable net assets of the subsidiary acquired is recorded as goodwill. If the consideration of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated statements of operations and comprehensive income. (o) Intangible assets Intangible assets mainly consist of brand names, operating rights for licensed games, software, operating rights for game broadcasting, domain names and technology. 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 their estimated useful lives, which are as follows: Estimated useful lives Brand names 1-15 years Operating rights for game broadcasting Over the contract terms Operating rights for licensed games Shorter of the economic life or license period of relevant online game Software 3 -5 years Domain names 15 years Technology 5 years Others 3-5 years (p) Land use right Land use right is carried at cost less accumulated amortization. Amortization of the land use right is made on straight-line basis over 40 years from the date when the Group first obtained the land use right certificate from the local authorities. (q) Impairment of long-lived assets For long-lived assets other than investments and goodwill whose impairment is discussed elsewhere in the financial statements, 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. The Group tests impairment of long-lived assets at the reporting unit level when impairment indicator appeared and recognizes impairment in the event that the carrying value exceeds the fair value of each reporting unit. The impairment charges of intangible assets recorded in general and administrative expenses for the years ended December 31, 2014, 2015 and 2016 were amounting to RMB5,697, RMB57,199 and RMB3,828, respectively. (r) 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. (s) 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. (t) Convertible bonds The Group determines the appropriate accounting treatment of its convertible bonds in accordance with the terms in relation to the conversion feature, call and put options, and beneficial conversion feature. After considering the impact of such features, the Group may account for such instrument as a liability in its entirety, or separate the instrument into debt and equity components following the respective guidance described under ASC 815 Derivatives and Hedging and ASC 470 Debt. The debt discount, if any, together with related issuance cost are subsequently amortized as interest expense, using the effective interest method, from the issuance date to the earliest conversion date. Interest expenses are recognized in profit or loss in the period in which they are incurred. (u) Mezzanine equity and non-controlling interest Mezzanine equity Mezzanine equity consists of non-controlling interests in certain subsidiaries with put option pursuant to which the non-controlling shareholders had the right to put their equity interests in certain subsidiaries to the Group at fair value if certain subsidiaries achieved specified performance milestones and met other pre-determined conditions before the expiry of the put option. Since the occurrence of the put was not solely within the Group’s control, the Group classifies the non-controlling interests as mezzanine equity instead of permanent equity in the Group’s consolidated financial statements. In accordance with ASC subtopic 480-10, the Group calculated, on an accumulative basis from the acquisition date, (i) the amount of accretion that would increase the balance of non-controlling interests to their estimated redemption value over the period from the date of acquisition to the earliest redemption date of the non-controlling interests and (ii) the amount of net (loss) / profit attributable to non-controlling shareholders of certain subsidiaries based on their ownership percentage. The carrying value of the non-controlling interests as mezzanine equity was adjusted by an accumulative amount equal to the higher of (i) and (ii). Non-controlling interest Non-controlling interests are recognized to reflect the portion of the equity of majority-owned subsidiaries and VIEs which is not attributable, directly or indirectly, to the controlling shareholder. Currently, the non-controlling interests in the Group’s consolidated financial statements consist primarily of non-controlling interests for Engage L.P. and Shanghai Yilian. (v) Revenue recognition For the year ended December 31, 2016, revenue presentation has been changed to live streaming, online games, membership and others to better reflect the way the Company generates revenues. The revenue presentation for the year ended December 31, 2015 and 2014 are also retrospectively changed to be consistent with the year ended December 31, 2016. For the years ended December 31, 2015 and 2014, revenues were originally presented as internet value-added service (“IVAS”) and other revenues. In the category of IVAS, there were four sub-categories: online music and entertainment, online games, online dating and other IVAS. In the new presentation, revenues from online music and entertainment, online dating and other IVAS (excluding revenues from membership and a few minor revenue streams that do not meet the criteria of live streaming), which are under YY Live platform and Huya broadcasting platform, are categorized as live streaming revenues. Revenues from online games and membership are presented separately. Other revenues and those revenues streams previously categorized in other IVAS that do not meet the criteria of live streaming are categorized as “others”. The change in revenue presentation has no impact on the amount of total net revenues. The Group generates revenues from live streaming, online games, membership and others. Revenues from live streaming are generated from YY Live platform and Huya broadcasting platform. Revenues from online games are generated from providing online game platform and access of the games for the game players. Membership subscription program enhanced user privileges when using YY Client. Other revenues mainly include online education revenue and advertising revenue. Online education services consist of vocational training and language training courses. Online advertising revenues are primarily generated from sales of different forms of advertising on the Group’s platforms. 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. The Group operates a virtual currency system, under which, the users can directly purchase virtual currency on live streaming 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 on live streaming channels, or used to purchase virtual items in online games (both developed by third parties and self-developed), 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 unless otherwise stated. (i) Live streaming Live streaming mainly consists of YY Live platform and Huya broadcasting platform. The Group creates and offers virtual items to be used by users on live streaming 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. Live streaming 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 channels for a specific period of time. In order to attract user traffic, the Group shares revenues with certain popular performers and channel owners in accordance with the revenue sharing arrangements with the Group. The portion of the revenues shared with the performers and channel owners are accounted for as cost of revenues by the Group. 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, live streaming revenue is recognized for the sale of virtual items in live streaming channels immediately if the virtual item is a consumable or, in the case of time-based virtual items, recognized ratably over the period when the 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 Live platform and Huya broadcasting 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 Live platform and Huya broadcasting 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. (ii) 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, 2014, 2015 and 2016 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 U.S. 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. 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 is convertible into game tokens based on a predetermined exchange rate agreed among the Group and the relevant game developers. The proceeds from the sales 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 co |
Certain risks and concentration
Certain risks and concentration | 12 Months Ended |
Dec. 31, 2016 | |
Certain risks and concentration [Abstract] | |
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 As mentioned in Note 1(e), 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 its principal VIE, namely Guangzhou Huaduo. As of December 31, 2016, Beijing Tuda owns majority equity interests of Guangzhou Huaduo’s. Guangzhou Huaduo holds the licenses and permits necessary to conduct its internet value-added services and online advertising in the PRC. If the Company had direct ownership of the VIE, 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 VIE and its shareholders’ performance of their contractual obligations to exercise effective control. In addition, the Group’s contractual agreements have terms range from 10 30 100 100 100 363,117 274,285 305,792 As of December 31, 2016, Beijing Tuda and Bilin Online, as the Group’s VIEs, still have no substantial business operation. Therefore no service fees were charged by Beijing Huanju Shidai and Bilin Changxiang respectively for the periods presented as both of the two VIEs have accumulated losses since inception. Further, the Group believes that the contractual arrangements among Beijing Huanju Shidai and Bilin Changxiang, 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 Group 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 Bilin Changxiang, and the VIEs. On January 19, 2015, the Ministry of Commerce of the PRC, or (the “MOFCOM”) released on its Website for public comment a proposed PRC law (the “Draft FIE Law”) that appears to include VIEs within the scope of entities that could be considered to be foreign invested enterprises (or “FIEs”) that would be subject to restrictions under existing PRC law on foreign investment in certain categories of industry. Specifically, the Draft FIE Law introduces the concept of “actual control” for determining whether an entity is considered to be an FIE. In addition to control through direct or indirect ownership or equity, the Draft FIE Law includes control through contractual arrangements within the definition of “actual control.” If the Draft FIE Law is passed by the People’s Congress of the PRC and goes into effect in its current form, these provisions regarding control through contractual arrangements could be construed to reach the Group’s VIE arrangements, and as a result the Group’s VIEs could become explicitly subject to the current restrictions on foreign investment in certain categories of industry. The Draft FIE Law includes provisions that would exempt from the definition of foreign invested enterprises entities where the ultimate controlling shareholders are either entities organized under PRC law or individuals who are PRC citizens. The Draft FIE Law does not make clear how “control” would be determined for such purpose, and is silent as to what type of enforcement action might be taken against existing VIEs that operate in restricted industries and are not controlled by entities organized under PRC law or individuals who are PRC citizens. If a finding were made by PRC authorities, under existing law and regulations or under the Draft FIE Law if it becomes effective, that the Group’s operation of certain of its businesses through VIEs violates the Draft FIE Law, regulatory authorities with jurisdiction over the licensing and operation of such operations and businesses may require the Group to take various actions as discussed in the paragraph above. The Group’s management considers the possibility of such a finding by PRC regulatory authorities under the Draft FIE Law, if it becomes effective, to be remote. The following consolidated financial information of the Group’s VIEs 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, 2015 2016 RMB RMB Assets Current assets Cash and cash equivalents 403,722 1,397,738 Short-term deposits 250,000 1,235,000 Restricted short-term deposits 110,000 - Accounts receivable, net 127,365 165,971 Inventory 14,385 2,266 Amounts due from related parties 5,164 135,245 Prepayments and other current assets 117,536 207,245 Deferred tax assets 87,492 83,242 Total current assets 1,115,664 3,226,707 Non-current assets Deferred tax assets 3,363 10,502 Investments 285,292 496,870 Property and equipment, net 292,340 261,915 Intangible assets, net 110,214 27,241 Land use right, net - 1,872,394 Goodwill 136,066 2,527 Other non-current assets 1,932,356 85,583 Total non-current assets 2,759,631 2,757,032 Total assets 3,875,295 5,983,739 Liabilities Current liabilities Accounts payable 108,500 117,917 Deferred revenue 385,300 429,883 Advances from customers 45,189 56,108 Income taxes payable 80,978 112,779 Accrued liabilities and other current liabilities 579,760 988,911 Amounts due to related parties 23,684 91,245 Total current liabilities 1,223,411 1,796,843 Non-current liabilities Deferred revenue 20,752 19,125 Deferred tax liabilities 12,592 4,777 Total non-current liabilities 33,344 23,902 Total liabilities 1,256,755 1,820,745 For the year ended December 31, 2014 2015 2016 RMB RMB RMB Net revenues 3,543,994 5,821,305 8,164,100 Net income 1,136,570 1,267,111 1,874,435 For the year ended December 31, 2014 2015 2016 RMB RMB RMB Net cash provided by operating activities 1,313,521 2,164,953 2,538,836 Net cash used in investing activities (994,574) (2,251,207) (1,313,002) Net cash provided by financing activities - 704,298 8,508 318,947 618,044 1,234,342 (b) Foreign exchange risk The revenues and expenses of the Group’s subsidiaries and VIEs 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 or remittances of RMB out of the PRC as well as exchange between RMB and foreign currencies 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 risk (i) Concentration of revenue No individual customer accounted for more than 10% of net revenues for the years ended December 31, 2014, 2015 and 2016. (ii) Concentration of accounts receivable The Group collects accounts receivable from payment platforms, external game platforms and advertising customers. The Group depends on payments from a limited number of payment platforms. The top 10 82 75 December 31, 2015 2016 RMB RMB Payment platforms B1 35 % 19 % B2 * 17 % * Less than 10% (d) Credit risk As of December 31, 2015 and 2016, substantially all of the Group’s cash and cash equivalents and short-term deposits were placed with 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. 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 with high credit quality. The Group had not experienced any losses on its deposits of cash and cash equivalents and term deposits during the years ended December 31, 2014, 2015 and 2016 and believes that its credit risk to be minimal. |
Business combination and dispos
Business combination and disposal of subsidiaries | 12 Months Ended |
Dec. 31, 2016 | |
Business combination [Abstract] | |
Business combination | 4. Business combination and disposal of subsidiaries Acquisition and disposal of Shanghai Beifu Culture Communication Co., Ltd. (“Beifu”) In February 2015, the Group acquired 70 39 RMB Cash consideration 39,200 Contingent consideration 107,306 Total consideration 146,506 Net assets acquired 31,994 Identifiable intangible assets acquired 12,900 Goodwill 147,388 Deferred tax liabilities (3,225) Non-controlling interest (42,551) Total 146,506 The agreements for the acquisition of Beifu included a contingent consideration arrangement that required additional consideration to be paid by the Group based on the achievement of pre-established performance metrics as stipulated in the agreements for years 2015 through 2017. The undiscounted amounts the Group shall pay when Beifu achieves 100 219 107 The fair value of non-controlling interest in Beifu was determined mainly based on the number of shares held by non-controlling shareholders and the equity value close to the acquisition date, taking into consideration of other factors, as appropriate. If Beifu achieved specified performance metrics and did not complete an initial public offering, and the founders of Beifu remained being employed by the Group, the non-controlling shareholders had the right to put their equity interests in Beifu to the Group at the fair value (“the put option”). The Group considered the probability of the exercise of the put option and believed that the exercise of the put option was not probable upon the acquisition date and as of December 31, 2015. Pursuant to ASC 480, considering the non-controlling interests were redeemable upon the occurrence of an event that was not solely within the control of the Group, the Group classified the non-controlling interests with the written put option as mezzanine equity in the Company’s consolidated financial statements. The aforementioned put option of Beifu has been cancelled upon the date of disposal. The business combination was completed on February 3, 2015. The excess of the purchase price over tangible assets, identifiable intangible assets acquired, and liabilities assumed and fair value of the non-controlling interest was recorded as goodwill. The acquired identifiable intangible assets were valued by various approaches, including the income approach and the replacement cost approach, as appropriate. Acquisition related costs were immaterial and were included in general and administrative expenses for the year ended December 31, 2015. Pro forma results of operations related to the acquisition have not been presented because they were not material to the Group’s consolidated statements of operations and comprehensive income. There were no indemnification assets involved. Total identifiable intangible assets acquired upon acquisition mainly included cooperation agreements with online game hosts and non-compete agreements, which had an estimated useful life of three and seven years, respectively. Total goodwill of RMB 147 In the 2015 annual goodwill impairment assessment, the Group has noted impairment indicator for Beifu and recognised an impairment charge of RMB 128,035 In June 2016, the Group disposed 60 3,500 10 and accounted for the investment in Beifu as an equity investment as the Group still had significant influence over Beifu 13,236 36,710 As part of the total loss recognized, the loss related to the remeasurement of the retained non-controlling investment to fair value was RMB3,088. Disposal of Beijing Huanqiu Xingxue Technology Development Co., Ltd. (“Xingxue”) Xingxue, a company engaged in online vocational education, was acquired by the Group in 2014. In December 2016, the Group disposed 33.86 118,500 31.14 127,434 282,433 154,999 As part of the total loss recognized, the gain related to the remeasurement of the retained non-controlling investment to fair value was RMB 57,791 |
Cash and cash equivalents
Cash and cash equivalents | 12 Months Ended |
Dec. 31, 2016 | |
Cash and cash equivalents [Abstract] | |
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, 2015 and 2016 primarily consist of the following currencies: December 31, 2015 December 31, 2016 RMB RMB Amount equivalent Amount equivalent RMB 450,802 450,802 1,536,947 1,536,947 US$ 73,632 478,132 6,171 42,796 Total 928,934 1,579,743 |
Short-term deposits
Short-term deposits | 12 Months Ended |
Dec. 31, 2016 | |
Short-term deposits [Abstract] | |
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, 2015 and 2016 primarily consist of the following currencies: December 31, 2015 December 31, 2016 RMB RMB Amount equivalent Amount equivalent RMB 250,000 250,000 1,235,000 1,235,000 US$ 253,322 1,644,946 362,882 2,516,519 Total 1,894,946 3,751,519 |
Restricted short-term deposits
Restricted short-term deposits | 12 Months Ended |
Dec. 31, 2016 | |
Restricted short-term deposits [Abstract] | |
Restricted short-term deposits | 7. Restricted short-term deposits December 31, 2015 2016 RMB RMB Pledge short-term deposits for one pending litigation (i) 110,000 - Pledge short-term deposits for bank borrowing facilities (ii) 279,221 - Total 389,221 - (i) As of December 31, 2015, the Group had restricted short-term deposits balance of RMB110 million representing pledged deposit for one pending litigation in which the Group was the claimant and had applied to the court to freeze the assets of the defendant. Pursuant to relevant PRC laws and regulations, the Group had to deposit a certain amount of cash as pledged deposit in order to submit the application to the court requesting to freeze the defendant’s assets. As of December 31, 2016, the pledged deposits has been unfrozen due to the settlement of the litigation. (ii) As of December 31, 2015, the Company had offshore restricted short-term deposits balance set aside for a period of 12 months or less of approximately RMB279 million for bank borrowing facilities. |
Accounts receivable, net
Accounts receivable, net | 12 Months Ended |
Dec. 31, 2016 | |
Accounts receivable, net [Abstract] | |
Accounts receivable, net | 8. Accounts receivable, net December 31, 2015 2016 RMB RMB Accounts receivable, gross 191,144 224,791 Less: allowance for doubtful receivables (58,791) (55,220) Accounts receivable, net 132,353 169,571 The following table summarized the details of the Company’s allowance for doubtful accounts: For the year ended December 31, 2014 2015 2016 RMB RMB RMB Balance at beginning of the year (31,214) (57,342) (58,791) (Additions)/reversals charged to general and administrative expenses, net (26,246) (1,449) 3,571 Write-off during the year 118 - - Balance at end of the year (57,342) (58,791) (55,220) |
Prepayments and other current a
Prepayments and other current assets | 12 Months Ended |
Dec. 31, 2016 | |
Prepayments and other current assets [Abstract] | |
Prepayments and other current assets | Prepayments and other current assets December 31, 2015 2016 RMB RMB Receivables from disposal of a subsidiary - 95,166 Prepayments and deposits to vendors and content providers 71,354 70,347 Interests receivable 41,220 17,050 Rental and other deposits 12,111 13,015 Employee advances 12,484 12,245 Rental prepayments 1,333 6,462 Others 9,321 10,447 Total 147,823 224,732 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2016 | |
Investments [Abstract] | |
Investments | 10. Investments December 31, 2015 2016 RMB RMB Cost investments (i) 516,446 477,733 Equity investments(ii) 44,994 252,272 Available-for-sale securities (iii) 6,117 188,597 Total 567,557 918,602 (i) In 2015 and RMB 351,800 90,234 respectively (ii) In 2016, the Group acquired minority stake of a number of privately-held entities with total consideration of RMB 107,010 In 2016, following the deconsolidation and disposal of Xingxue (Note 4), the Group reclassified the remaining 31.14 (iii) In 2015, the Group entered into share purchase agreements to acquire 4.25 6,117 In 2016, one of the Group's investees became listed on NASDAQ Global Market. As the investment has readily determinable fair value upon listing, the Group reclassified this investment as an available-for-sale security upon its listing and recorded the investment at fair value with unrealized holding gain or loss recognized in other comprehensive income under ASC 320. (iv) The Group assesses the existence of indicators for other-than-temporary impairment of the investments by considering factors including, but not limited to, current economic and market conditions, the operating performance of the entities including current earnings trends and other entity-specific information. In 2014, 2015 and 2016, based on the Group's assessment, an impairment charge of RMB 4,000 6,000 80,104 recognized in general and administrative expenses, respectively, against the carrying value of the investments due to significant deterioration in earnings or unexpected changes in business prospects of the investees as compared to the original investment |
Property and equipment, net
Property and equipment, net | 12 Months Ended |
Dec. 31, 2016 | |
Property and equipment, net [Abstract] | |
Property and equipment, net | 11. Property and equipment, net Property and equipment consists of the following December 31, 2015 2016 RMB RMB Gross carrying amount Buildings 482,387 482,333 Servers, computers and equipment 453,441 565,786 Leasehold improvements 69,929 80,812 Decoration of buildings 66,140 68,981 Motor vehicles 12,835 24,016 Furniture, fixture and office equipment 26,098 23,259 Construction in progress 1,937 5,586 Total 1,112,767 1,250,773 Less: accumulated depreciation (269,318) (412,023) Property and equipment, net 843,449 838,750 Depreciation expense for the years ended December 31, 2014, 2015 and 2016 were RMB 68,035 122,098 173,625 |
Land use right, net
Land use right, net | 12 Months Ended |
Dec. 31, 2016 | |
Intangible assets, net [Abstract] | |
Land Use Right Disclosure | 12. Land use right, net Land use right consists of the following December 31, 2016 RMB Gross carrying amount 1,916,309 Less: accumulated amortization (43,915) Land use right, net 1,872,394 Land use right was acquired in 2016 and amortization expense for the year ended December 31, 2016 was RMB 43,915 |
Intangible assets, net
Intangible assets, net | 12 Months Ended |
Dec. 31, 2016 | |
Intangible assets, net [Abstract] | |
Intangible assets, net | 13. Intangible assets, net The following table summarizes the Group’s intangible assets: December 31, 2015 2016 RMB RMB Gross carrying amount Brand names 102,654 59,034 Operating rights for game broadcasting 35,071 58,655 Operating rights for licensed games 46,879 40,274 Software 38,307 30,632 Domain names 25,902 27,311 Technology 17,621 18,282 Others 31,200 18,300 Total of gross carrying amount 297,634 252,488 Less: accumulated amortization Brand names (20,294 ) (21,810 ) Operating rights for game broadcasting (23,278 ) (46,855 ) Operating rights for licensed games (15,010 ) (30,804 ) Software (9,464 ) (13,110 ) Domain names (6,249 ) (8,449 ) Technology (7,712 ) (9,457 ) Others (5,478 ) (3,592 ) Total accumulated amortization (87,485 ) (134,077 ) Less: accumulated impairment (63,712 ) (59,485 ) Intangible assets, net 146,437 58,926 In 2015, the Group performed interim and annual goodwill impairment test for the goodwill generated from the acquisition of 100 Online Education Technology (Beijing) Co., Ltd. (“100 Online”) and Beifu, due to the poor financial performance of these two VIEs (Note 14), and recognized impairment loss of intangible assets of RMB48,814 and RMB8,385, respectively, which was mainly made against the carrying amount of the brand names. In 2016, the Group performed goodwill impairment test for the goodwill generated from the acquisition of 100 Online due to the poor financial performance of 100 Online. The recognized impairment loss of intangible assets of RMB3,828 was mainly made against the carrying amount of the brand name due to the goodwill impairment. Income approach was adopted in the above impairment assessments for the determination of fair value of the intangible assets. Amortization expense for the years ended December 31, 2014, 2015 and 2016 were RMB12,598, RMB64,201 and RMB 56,977, respectively. The estimated amortization expenses for each of the following five years are as follows: Amortization expense 2017 25,606 2018 10,453 2019 6,032 2020 4,708 2021 1,925 The weighted average amortization periods of intangible assets as of December 31, 2015 and 2016 are as below: December 31, 2015 2016 Domain names 15 years 15 years Technology 5 years 5 years Software 5 years 5 years Operating rights for licensed games 3 years 2 years Operating rights for game broadcasting 1 year 1 year Brand names 10 years Not applicable Others 3-5 years Not applicable |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill [Abstract] | |
Goodwill | 14. Goodwill The changes in the carrying amount of goodwill for the years ended December 31, 2015 and 2016 are as follows YY Live 100 Education Total RMB RMB RMB Balance as of December 31, 2014 4,107 296,275 300,382 Increase in goodwill related to acquisition (i) 161,326 - 161,326 Impairment charges (iii) (128,035) (182,089) (310,124) Foreign currency translation adjustment 54 - 54 Balance as of December 31, 2015 37,452 114,186 151,638 Decrease in goodwill related to disposal(ii) (19,354) (100,382) (119,736) Impairment charges (iii) (3,861) (13,804) (17,665) Foreign currency translation adjustment 63 - 63 Balance as of December 31, 2016 14,300 - 14,300 (i) In February 2015, the Group purchased 70 147,388 Goodwill represented the synergy effects of the business combination. (ii) In June 2016, the Group disposed 60 19,354 In December 2016, the Group disposed 33.86 100,382 (iii) The Group performs its annual goodwill impairment test of each reporting unit as of October 1, or more frequently, if certain events or circumstances warrant. Events or changes in circumstances which might indicate potential impairment in goodwill include the entity-specific factors, including, but not limited to, stock price volatility, market capitalization relative to net book value, and projected revenue, market growth and operating results. In June 2015, it was noted that 100 Online’s financial and operational performance in the first half year of 2015 was behind the original budget resulting from unexpected fierce market competition and the resignation of a number of key personnel in 100 Online. Accordingly, the Group performed an interim assessment on the goodwill impairment related to 100 Online and recognized an estimated goodwill impairment charge of RMB 110,699 111,547 4.07 21.5 In the 2015 annual goodwill impairment assessment, the Group has noted further impairment indicator for 100 Online as well as impairment indicator for Beifu as certain key personnel of 100 Online and Beifu resigned in the third quarter of 2015. Based on the result of the annual impairment assessment for 100 Online, an impairment charge of RMB 71,390 73,618 128,035 107,306 3.85 23 24.5 In December 2016, the Group has identified further impairment indicator for 100 Online as well as impairment indicator for Bilin Online. Based on the results of the impairment assessment, an impairment charge of RMB 13,804 3,861 The above goodwill impairment assessments on 100 Online, Beifu and Bilin Online adopted the income approach and considered a combination of factors, including, but not limited to, market conditions, expected future cash flows, growth rates and discount rates, which required the Group to make certain estimates and assumptions regarding industry economic factors and future profitability of the business. |
Deferred revenue
Deferred revenue | 12 Months Ended |
Dec. 31, 2016 | |
Deferred revenue [Abstract] | |
Deferred revenue | 15. Deferred revenue December 31, 2015 2016 RMB RMB Deferred revenue, current: Live streaming 187,930 308,545 Online games 81,054 61,589 Membership 87,483 47,532 Others 28,833 13,017 Total current deferred revenue 385,300 430,683 Deferred revenue, non-current: Live streaming 8,757 12,002 Membership 11,328 6,273 Others 667 7,184 Total non-current deferred revenue 20,752 25,459 |
Accrued liabilities and other c
Accrued liabilities and other current liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Accrued liabilities and other current liabilities [Abstract] | |
Accrued liabilities and other current liabilities | 16. Accrued liabilities and other current liabilities December 31, 2015 2016 RMB RMB Accrued revenue sharing fees 298,805 521,654 Accrued salaries and welfare 169,041 200,606 Accrued bandwidth costs 71,507 86,186 Market promotion expenses 29,358 68,243 Value added taxes payable 16,010 38,161 License fees 10,000 22,725 Deposits from content providers and suppliers 16,531 18,779 Other taxes payable 14,370 18,516 Interests payable 14,795 15,800 Others 41,472 75,368 Total 681,889 1,066,038 |
Convertible bonds
Convertible bonds | 12 Months Ended |
Dec. 31, 2016 | |
Convertible bonds [Abstract] | |
Convertible bonds | 17. Convertible bonds December 31, 2015 2016 RMB RMB Convertible Bond, current 2019 Convertible Senior Notes - 2,773,925 Less: issuance cost - (5,456) - 2,768,469 Convertible Bond, non-current 2019 Convertible Senior Notes 2,597,403 - Less: issuance cost (25,284) - 2,572,119 - On March 18, 2014, the Company issued Convertible Senior Notes due 2019 with principal amount of US$ 400 2.25 April 1, 2019 Upon conversion, the Company will deliver, for each US$ 1,000 0.00001 The conversion rate will initially be 9.0334 110.70 The net proceeds to the Company from the issuance of the Notes were US$ 390.8 9.2 March 18, 2014 The Notes are general senior unsecured obligations and rank (1) senior in right of payment to any of the Company’s future indebtedness that is expressly subordinated in right of payment to the Notes, (2) equal in right of payment to any of the Company’s future unsecured indebtedness of the Company that is not so subordinated, (3) junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness and (4) structurally junior to all indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries and VIEs. The value of the Notes is initially measured by the cash received and is subsequently stated at amortized cost. As of December 31, 2015 and 2016, RMB 2.6 397 2.8 399 The key terms of the Notes are as follows: Redemption The Notes are not redeemable prior to the maturity date of April 1, 2019 April 1, 2017 100 100 The contingent redemption option is assessed in accordance with ASC 815. The contingent redemption option is considered clearly and closely related to its debt host and does not meet the requirement for bifurcation as the Notes were issued at par and the repurchase feature requires the issuer to settle the option by delivering par plus accrued and unpaid interest, the Notes holder would recover all of their initial investment. Additionally, since the Notes holder can only recover its initial investment upon exercise of its option, there are no interest rate scenarios under which the embedded derivative would at least double the investor’s initial rate of return. Conversion The Holders may convert their Notes in integral multiples of US$1,000 dollars principle amount at an initial conversion rate of 9.0334 ADS, at any time prior to the maturity date of April 1, 2019. Upon conversion of the Notes, the Company will deliver shares of the Company’s ADS. The conversion rate is subject to adjustment in certain events, including, but not limited to, the issuance of certain share dividends on the Class A common shares, the issuance of certain rights or warrants, subdivisions, combinations, distributions of capital stock, indebtedness, or assets, cash dividends and certain issuer tender or exchange offers (as defined in the Indenture of the 2019 Convertible Senior Notes). In addition, upon a make-whole fundamental change (as defined in the Indenture of the 2019 Convertible Senior Notes), the Company will, under certain circumstances, increase the applicable conversion rate for a holder that elects to convert its Notes in connection with such make-whole fundamental change. In accordance with ASC 815, the conversion option meets the definition of a derivative. However, bifurcation of conversion option from the Notes is not required as the scope exception prescribed in ASC 815 is met as the conversion option is considered indexed to the entity’s own stock and classified in shareholders’ equity. Assessment of Beneficial Conversion Feature and Contingent Beneficial Conversion Feature: As the conversion options are not bifurcated, the Company has assessed the beneficial conversion feature (“BCF”), as of commitment date as defined in ASC 470. There was no BCF attributed to the Notes as the set conversion price for the Notes was greater than the fair value of the common share price on the date of issuance. The Holders have the option to convert upon a fundamental change, if Holders decide to convert in connection with a fundamental change, the number of shares issuable upon conversion will be increased. Upon occurrence of such adjustment, the Company will have to assess the contingent BCF using a measurement date upon issuance of the Notes. The settlement of the conversion is based on a make-whole provision resulting from a fundamental change, this feature is consistent with ASC 815, and therefore the Company concludes that this feature is also considered indexed to its own shares. Accounting for Debt Issuance Costs: The debt issuance costs were recorded as reduction to the convertible bonds and are amortized as interest expense, using the effective interest method, over the term of the Notes pursuant to ASC 835. Interest expense recognized during the years ended December 31, 2015 and 2016 was RMB 74,786 81,085 |
Cost of revenues
Cost of revenues | 12 Months Ended |
Dec. 31, 2016 | |
Cost of revenues [Abstract] | |
Cost of revenues | 18. Cost of revenues For the year ended December 31, 2014 2015 2016 RMB RMB RMB Revenue sharing fees and content costs 1,133,984 2,343,224 3,790,624 Bandwidth costs 345,913 570,169 651,652 Salary and welfare 131,773 198,153 232,497 Depreciation and amortization 59,817 145,135 173,048 Payment handling costs 55,101 104,849 67,474 Business tax and surcharges 49,233 27,794 44,659 Share based compensation 18,037 23,963 15,894 Other costs 55,291 166,457 127,582 Total 1,849,149 3,579,744 5,103,430 |
Other income
Other income | 12 Months Ended |
Dec. 31, 2016 | |
Other income [Abstract] | |
Other income | Other income For the year ended December 31, 2014 2015 2016 RMB RMB RMB Government grants 5,570 79,541 128,550 Others 749 2,759 954 Total 6,319 82,300 129,504 |
Income tax
Income tax | 12 Months Ended |
Dec. 31, 2016 | |
Income tax [Abstract] | |
Income tax | 20. 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) BVI Duowan BVI is exempted 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 (iv) PRC Enterprise Income Tax (“EIT”) The Company’s subsidiaries and VIEs 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 subject to tax at a statutory rate of 25 15 50 The Group’s PRC entities provided for enterprise income tax as follows: · From 2014 to 2016, Guangzhou Huaduo accrued the EIT at a tax rate of 15 · Guangzhou Huanju Shidai reported tax loss from 2010 to 2013. On December 31, 2013, Guangzhou Huanju Shidai was granted the qualification as a software enterprise and started to enjoy the zero preferential tax rate beginning from 2014 and 12.5 · Other PRC subsidiaries and VIEs were subject to 25 According to a policy promulgated by the State Tax Bureau of the PRC and effective from 2008 onwards, enterprises engaged in research and development activities are entitled to claim 150 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 Aggregate undistributed earnings and reserves of the Group entities located in the PRC that are available for distribution to the Company as of December 31, 2015 and 2016 are approximately RMB 3,090,721 4,784,432 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, 2014 2015 2016 RMB RMB RMB Current income tax expenses (200,034) (203,366) (288,282) Deferred income tax benefits 45,751 25,039 7,768 Income tax expense for the year (154,283) (178,327) (280,514) 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 income is as follows: For the year ended December 31, 2014 2015 2016 RMB RMB RMB PRC Statutory income tax rate (25.0) % (25.0) % (25.0) % Effect of preferential tax rate 13.1 % 14.0 % 11.6 % Effect of tax-exempt entities 1.1 % (1.6) % (1.7) % Effect of change in tax rate - 0.5 % - Permanent differences (i) (3.5) % (3.8) % (1.1) % Change in valuation allowance (0.4) % (1.7) % (1.5) % Effect of Super Deduction available to the Group 2.0 % 2.3 % 2.0 % Effective income tax rate (12.7) % (15.3) % (15.7) % (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 are 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, 2015 and 2016 are as follows: December 31, 2015 2016 RMB RMB Deferred tax assets, current: Deferred revenue 46,830 55,484 Allowance for doubtful accounts receivable, accrued expense and others not currently deductible for tax purposes 83,503 65,721 Valuation allowance (13,412) (13,896) Total current deferred tax assets, net 116,921 107,309 Deferred tax assets, non-current: Tax loss carried forward 39,904 66,816 Deferred revenue 1,414 1,800 Impairment of investment 1,698 7,949 Others 251 753 Valuation allowance (i) (39,904) (66,816) Total non-current deferred tax assets, net 3,363 10,502 Deferred tax liabilities, non-current: Related to acquired intangible assets 16,817 3,281 Others - 4,777 Total non-current deferred tax liabilities, net 16,817 8,058 (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 tax loss carry forwards. Valuation allowance was provided for net operating loss carry forward because it was more likely than not that such deferred tax assets would 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, 2016, the Group had tax loss carry forwards of approximately RMB 295,238 Amount RMB 2017 - 2018 9,428 2019 28,373 2020 78,713 2021 178,724 Total 295,238 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 2010 to 2016 remain subject to examination by the tax authorities. There were no ongoing examinations by tax authorities as of December 31, 2016. |
Common shares
Common shares | 12 Months Ended |
Dec. 31, 2016 | |
Common shares [Abstract] | |
Common shares | 21. Common shares During the year ended December 31, 2014, 25,036,140 58,478,690 As of December 31, 2014, 10,000,000,000 1,000,000,000 706,173,568 427,352,696 On May 4, 2014 and March 5, 2015, the Company’s board of directors approved two share repurchase programs (the “Share Repurchase Program”) respectively, pursuant to which the Company may repurchase from time to time at management’s discretion, at prevailing market prices in the open market in accordance with Rule 10b-18 under the Securities Exchange Act of 1934, up to US$ 200 3,092,556 61,851,120 54.82 2.74 169.5 During the year ended December 31, 2015, 26,110,680 As of December 31, 2015, 10,000,000,000 1,000,000,000 728,227,848 369,557,976 During the year ended December 31, 2016, 11,887,180 As of December 31, 2016, 10,000,000,000 1,000,000,000 750,115,028 359,557,976 |
Share based compensation
Share based compensation | 12 Months Ended |
Dec. 31, 2016 | |
Share based compensation [Abstract] | |
Share based compensation | 22. 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 8,499,050 3,832,290 one Vesting of options These Pre-2009 Scheme Options will vest over a four 25 75 six 36 The following table summarizes the activities of the Pre-2009 Scheme Options for employees and non-employee for the years ended December 31, 2014, 2015 and 2016: Weighted Weighted average Aggregate average remaining intrinsic Number of exercise contractual life value options price (US$) (years) (US$) Outstanding, vested and exercisable, December 31, 2013 13,222,005 0.0059 4.40 33,162 Exercised (5,841,660) 0.0057 3.24 Outstanding, vested and exercisable, December 31, 2014 7,380,345 0.0061 3.52 22,959 Exercised (6,611,970) 0.0061 2.46 Outstanding, vested and exercisable, December 31, 2015 768,375 0.0067 2.99 2,395 Exercised (234,720) 0.0067 2.00 Outstanding, vested and exercisable, December 31, 2016 533,655 0.0067 1.98 1,048 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, 2014, 2015 and 2016 and the exercise price. 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, 2015 and 2016. The total intrinsic value of options exercised during the year ended December 31, 2014, 2015 and 2016 amounted to RMB 134,844 122,956 3,270 (b) Restricted shares Since January 1, 2010, Duowan BVI granted 61,250,677 100,000 . Vesting of restricted shares The restricted shares have vesting conditions and will vest 50 24 50 two 24 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 The following table summarizes the restricted shares activity for the years ended December 31, 2014, 2015 and 2016: Weighted Number of average restricted grant-date shares fair value (US$) Outstanding, December 31, 2013 4,673,725 0.6144 Forfeited (159,410) 0.9362 Vested (4,514,315) 0.6030 Outstanding, December 31, 2014, 2015 and 2016 - - Forfeitures are estimated at the time of grant. If necessary, forfeitures are revised in subsequent periods if actual forfeitures differ from those estimates. For the years ended December 31, 2014, 2015 and 2016, the Company recorded share based compensation of RMB 3,771 (c) Restricted Share Units On September 16, 2011, the board of directors of the Company approved the 2011 Share Incentive Scheme. In October 2012, the board of directors of the Company resolved that the maximum aggregate number of Class A common shares which may be issued pursuant to all awards under the 2011 Share Incentive Scheme shall be 43,000,000 20,000,000 Prior to December 31, 2013, the Company granted 57,310,210 48,000 During the years ended December 31, 2014, 2015 and 2016, the Company granted restricted share units to employees of 9,912,595 16,012,644 1,530,008 No restricted share units were granted to non-employees during the year ended December 31, 2014, 2015 and 2016. The following table summarizes the restricted share units activity for the years ended December 31, 2014, 2015 and 2016: Weighted Number of average restricted grant-date shares fair value (US$) Outstanding, December 31, 2013 44,302,600 0.9639 Granted 9,912,595 3.5805 Forfeited (3,125,430) 1.1859 Vested (12,283,670) 1.0144 Outstanding, December 31, 2014 38,806,095 1.5984 Granted 16,012,644 3.3358 Forfeited (7,312,548) 1.8920 Vested (11,222,589) 1.4374 Outstanding, December 31, 2015 36,283,602 2.3535 Granted 1,530,008 1.8618 Forfeited (4,628,202) 2.7386 Vested (12,229,688) 2.0151 Outstanding, December 31, 2016 20,955,720 2.4320 Expected to vest at December 31, 2016 20,568,083 2.4312 For the years ended December 31, 2014, 2015 and 2016, the Company recorded share based compensation of RMB 130,718 152,205 143,350 As of December 31, 2016, total unrecognized compensation expense relating to the restricted share units was RMB 127,905 0.96 (d) Share based awards granted to an employee of a subsidiary The Company completed a business combination in 2014 by acquiring 100 two Under the arrangements entered into by the Company and the Employee, the Employee was granted 20 In 2015 and 2016, the Company recorded share based compensation of RMB 32,593 13,364 (e) Other share based compensation For the years ended December 31, 2014, 2015 and 2016, the Company recorded share based compensation of RMB 143 574 572 |
Basic and diluted net income pe
Basic and diluted net income per share | 12 Months Ended |
Dec. 31, 2016 | |
Basic and diluted net income per share [Abstract] | |
Basic and diluted net income per share | 23. Basic and diluted net income per share For the year ended December 31, 2014 2015 2016 RMB RMB RMB Numerator: Net income attributable to the Company 1,064,472 1,033,243 1,523,918 Interest expenses of convertible notes - - 81,085 Numerator for diluted income per share 1,064,472 1,033,243 1,605,003 Denominator: Denominator for basic calculationweighted average number of Class A and Class B common shares outstanding 1,153,140,699 1,125,189,978 1,127,343,312 Dilutive effect of share options 10,372,442 2,711,486 684,455 Dilutive effect of restricted shares 2,604,789 - - Dilutive effect of restricted share units 32,425,543 22,929,699 15,816,362 Dilutive effect of convertible bonds - - 72,267,200 Denominator for diluted calculation 1,198,543,473 1,150,831,163 1,216,111,329 Basic net income per Class A and Class B common share 0.92 0.92 1.35 Diluted net income per Class A and Class B common share 0.89 0.90 1.32 Basic net income per ADS* 18.46 18.37 27.04 Diluted net income per ADS* 17.76 17.96 26.40 * Each ADS represents 20 Class A common shares. The weighted average number of common shares outstanding which could potentially dilute basic earnings per share in the future related to the 2019 Convertible Senior Notes was 72,267,200 72,267,200 |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related party transactions [Abstract] | |
Related party transactions | 24. Related party transactions The table below sets forth the major related parties and their relationships with the Group: Major related parties Relationship with the Group Guangzhou Shanghang Information Technology Co., Ltd. (“Guangzhou Shanghang”) Controlled by a principal shareholder of the Company Guangzhou Chenjun Equity Investment Limited Partnership (“Guangzhou Chenjun”) Equity investment Bigo Inc. (“Bigo”) Significant influence exercised by Mr. David Xueling Li (the “Chairman”) Shanghai Yaoyu Culture Media Co., Ltd.(“Shanghai Yaoyu”) Cost investment with significant influence Shanghai Rongyi Culture Development Co., Ltd.(“Shanghai Rongyi”) Cost investment with significant influence Guangzhou Kuyou Information Technology Co., Ltd.(“Guangzhou Kuyou”) Equity investment Xingxue (1) Equity investment (1) Xingxue became the Group’s equity investment in December 2016. During the years ended December 31, 2014, 2015 and 2016, significant related party transactions are as follows: For the year ended December 31, 2014 2015 2016 RMB RMB RMB Online games revenue shared from related parties 65,247 163,912 100,078 Bandwidth service provided by Guangzhou Shanghang 42,470 74,661 96,224 Loan to related parties 1,500 159,000 44,500 Partial disposal of an equity investment to Guangzhou Chenjun - - 33,750 Partial disposal of a subsidiary to Guangzhou Chenjun - - 24,394 Payment on behalf of related parties, net of repayments 61,000 (60,870) 10,699 Repayment of loans from related parties 1,500 160,000 - Sales of equipment to Bigo - 12,058 - Purchase of operating rights for game broadcasting from Shanghai Yaoyu - 11,486 - Purchase of operating rights for licensed games from related parties 6,836 10,022 - Others 1,563 9,095 13,573 As of December 31, 2015 and 2016, the amounts due from/to related parties are as follows: December 31, 2015 2016 RMB RMB Amounts due from related parties Due from Guangzhou Chenjun - 58,144 Due from Bigo - 31,528 Due from Xingxue - 20,000 Due from Shanghai Rongyi - 13,000 Others 5,297 12,573 Total 5,297 135,245 Amounts due to related parties Due to Xingxue - 42,128 Due to Guangzhou Kuyou 9,017 30,996 Due to Shanghang 10,167 10,925 Others 5,733 7,196 Total 24,917 91,245 The other receivables/payables from/to related parties are unsecured and payable on demand. |
Fair value measurements
Fair value measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair value measurements [Abstract] | |
Fair value measurements | 25. 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 1Valuation 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 2Valuation 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 3Valuation 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 other financial instruments that were required to be measured at fair value on a recurring basis as of December 31, 2016 except for two available-for-sale investments and contingent consideration. The following table summarizes the Company’s assets that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy as of December 31, 2015 and December 31, 2016: As of December 31, 2015 Level 1 Level 2 Level 3 Total Assets Investments: Available-for-sale securities - - 6,117 6,117 As of December 31, 2016 Level 1 Level 2 Level 3 Total Assets Investments: Available-for-sale securities 182,480 - 6,117 188,597 The available-for-sale security classified in level 3 represented investment in the redeemable preferred shares of a private company. There was no significant changes in fair value of the investment from the investment date to December 31, 2016. The following table presents the changes in level 3 instruments (except for the available-for-sale security classified in level 3, which had no significant changes in fair value) for the years ended 31 December, 2015 and 2016. Contingent consideration in relation to business acquisitions RMB Balance as of December 31, 2014 183,000 Acquisition of Beifu in 2015 (Note 4) 107,306 Fair value change of contingent consideration in 2015 (290,306) Balance as of December 31, 2015 and 2016 - As for contingent consideration in relation to business acquisitions, the Company used the Trinomial Tree model in determining the fair value of the contingent consideration. In applying this model, the Company performed scenario analysis and the fair value of the contingent consideration was determined based on present value of the total contingent consideration under different scenarios and the probability of each scenario. The following table summarizes the factors that the Company used to discount the contingent consideration in relation to acquisition in future years to its present value upon the acquisition date, Initial recognition of contingent consideration in relation to Risk free interest rate Discount rate Acquisition of Beifu 3.81 % 18 % Pursuant to ASC 805, subsequent measurement for changes in the fair value of contingent consideration after the acquisition date can be divided into two categories. i. Additional information about facts and circumstances that existed at the acquisition date that the acquirer obtained after that date; ii. Changes resulting from events after the acquisition date. According to the relevant acquisition agreements, actual financial performance in specific years may result in subsequent changes to the contingent consideration. Unless the change is due to additional information about facts already existed at the acquisition date, these changes should be regarded as resulting from events after the acquisition date and do not constitute measurement period adjustments. Therefore, the second category will be applied to the Company. The Company will re-measure the fair value of the liability recognized for the contingent consideration at each reporting date until the contingency is resolved. For the year ended December 31, 2015 and 2016, the Company recorded a change in fair value of the contingent consideration of RMB290,306 and nil in other expense pursuant to ASC 805. Apart from the contingent consideration in relation to business acquisitions and available-for-sale investment, the Company’s other financial instruments consist principally of cash, short-term deposits, accounts receivable, amounts due to/from related parties, accounts payable, certain accrued expenses and convertible bonds. The recorded values of cash, accounts receivable, amounts due to/from related parties, accounts payable, certain accrued expenses and convertible bonds are recorded at cost which approximates fair value. The fair value of convertible bonds is within level 2 of the fair value hierarchy. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and contingencies [Abstract] | |
Commitments and contingencies | 26. 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 RMB 28,144 53,674 76,753 As of December 31, 2016, future minimum payments under non-cancellable operating leases consist of the following: Office rental RMB 2017 41,848 2018 28,335 2019 1,876 2020 and after 444 72,503 (b) Capital commitment As of December 31, 2016, the Group had outstanding capital commitments totaling RMB 144,301 (c) Litigation In October 2014, Guangzhou NetEase Computer System Co., Ltd. (“NetEase”) brought a copyright infringement claim against the Group in the Intermediate People’s Court of Guangzhou, alleging that the Group’s live game broadcasting program has infringed the copyright of one of their online games called Fantasy Westward Journey. The claimant is seeking RMB 100 |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent events [Abstract] | |
Subsequent events | 27. Subsequent events (a)Repurchase of the Notes The Notes were redeemable at the holders’ option on April 1, 2017 (Note 17). US$ 399 1 (b)Change in segment reporting Considering that the online education business is becoming insignificant to the Group, the Company decided that the financial performance of 100 Education will no longer be presented for CODM's review separately in the Group's internal reporting from the first quarter of 2017. As a result, 100 Education will cease to be a separate operating segment starting from the first quarter of 2017. (c)Loan agreements On January 19, 2017, the Group entered into a loan agreement with a bank, pursuant to which the Group borrowed a loan with a principal amount of US$ 30 80 3-month LIBOR plus 1.5%, accruing from draw-down 30 500 On February 17, 2017, the Group entered into a loan agreement with a bank, pursuant to which the Group borrowed a loan with a total principal amount of US$ 60 80 3-month LIBOR plus 0.85%, accruing from draw-down 45 15 500 |
Restricted net assets
Restricted net assets | 12 Months Ended |
Dec. 31, 2016 | |
Restricted net assets [Abstract] | |
Restricted net assets | 28. Restricted net assets Relevant PRC laws and regulations permit payments of dividends by the Group’s subsidiaries and VIEs 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 VIEs in the PRC are required to annually appropriate 10 50 2,685,373 2,678,921 The Company performed a test on the restricted net assets of 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 exceeded 25% of the consolidated net assets of the Company as of December 31, 2016 and the condensed financial information of the Company are required to be presented (Note 30). |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting | 29. Segment Reporting Prior to 2015, the Group’s internal reporting to the CODM had not distinguish cost and expenses among segments. Hence, the Group had only one operating segment prior to 2015. Starting from the first quarter of 2015, in order to better evaluate the Group’s business performance and better allocate resources the CODM began to review YY IVAS and others, Huya broadcasting, and 100 Education separately. In June 2016, the Group revamped the branding from YY IVAS to YY Live. Therefore, the segment of “YY IVAS and others” was renamed as “YY Live”. For the year ended December 31, 2015 and 2014, net revenues of “YY IVAS” and “others” were presented to the CODM’s review separately. Following the revamp of the branding, net revenues of “YY Live” as a whole are presented to the CODM’s review. Segment presentation for the year ended December 31, 2015 and 2014 have been updated to be consistent with the segment presentation for the year ended December 31, 2016. The CODM assesses the performance of the operating segments mainly based on net revenues, gross profit/loss, operating income/loss of each reporting segment. Net revenues, gross profit/loss and operating income/loss of YY Live, Huya broadcasting and 100 education are presented for the CODM’s review separately. Segmental information for prior periods was prepared and presented on the same basis as 2016 for comparative information purpose. As the Group’s long-lived assets and revenue are substantially located in and derived from the PRC, no geographical segments are presented. The Group currently does not allocate assets to all of its segments, as its CODM does not use such information to allocate resources or evaluate the performance of the operating segments. The following table presents summary information by segment: For the year ended December 31, 2016: YY Live Huya broadcasting 100 Education Total RMB RMB RMB RMB Net revenues Live streaming 6,235,249 791,978 - 7,027,227 Online games 634,325 - - 634,325 Membership 284,860 - - 284,860 Others 91,985 4,926 160,727 257,638 Total net revenues 7,246,419 796,904 160,727 8,204,050 Cost of revenues (1) (3,942,201) (1,053,257) (107,972) (5,103,430) Gross profit / (loss) 3,304,218 (256,353) 52,755 3,100,620 Operating expenses (1) Research and development expenses (519,401) (125,308) (30,521) (675,230) Sales and marketing expenses (278,296) (49,490) (59,482) (387,268) General and administrative expenses (402,072) (45,211) (35,154) (482,437) Goodwill impairment (3,861) - (13,804) (17,665) Fair value change of contingent consideration - - - - Total operating expenses (1,203,630) (220,009) (138,961) (1,562,600) Gain on deconsolidation and disposal of subsidiaries 103,960 - - 103,960 Other income 129,504 - - 129,504 Operating income / (loss) 2,334,052 (476,362) (86,206) 1,771,484 (1) Share based compensation was allocated in cost of revenues and operating expenses as follows: YY Live Huya broadcasting 100 Education Total RMB RMB RMB RMB Cost of revenues 11,367 4,203 324 15,894 Research and development expenses 58,271 14,352 6,193 78,816 Sales and marketing expenses 2,826 281 - 3,107 General and administrative expenses 32,888 13,192 13,389 59,469 Share based compensation expenses 105,352 32,028 19,906 157,286 For the year ended December 31, 2015: YY Live Huya broadcasting 100 Education Total RMB RMB RMB RMB Net revenues Live streaming 4,183,533 356,324 - 4,539,857 Online games 771,882 - - 771,882 Membership 291,310 - - 291,310 Others 170,426 - 123,774 294,200 Total net revenues 5,417,151 356,324 123,774 5,897,249 Cost of revenues (1) (2,798,064) (655,066) (126,614) (3,579,744) Gross profit / (loss) 2,619,087 (298,742) (2,840) 2,317,505 Operating expenses (1) Research and development expenses (445,411) (66,538) (36,850) (548,799) Sales and marketing expenses (253,129) (24,469) (35,272) (312,870) General and administrative expenses (240,536) (25,869) (92,069) (358,474) Goodwill impairment (128,034) - (182,090) (310,124) Fair value change of contingent consideration 107,306 - 185,165 292,471 Total operating expenses (959,804) (116,876) (161,116) (1,237,796) Other income 82,300 - - 82,300 Operating income / (loss) 1,741,583 (415,618) (163,956) 1,162,009 (1) Share based compensation was allocated in cost of revenues and operating expenses as follows: YY Live Huya broadcasting 100 Education Total RMB RMB RMB RMB Cost of revenues 22,077 1,497 389 23,963 Research and development expenses 59,400 4,754 6,797 70,951 Sales and marketing expenses 3,119 164 - 3,283 General and administrative expenses 51,260 3,302 32,613 87,175 Share based compensation expenses 135,856 9,717 39,799 185,372 For the year ended December 31, 2014: YY Live Huya broadcasting 100 Education Total RMB RMB RMB RMB Net revenues Live streaming 2,322,008 153,371 - 2,475,379 Online games 811,699 - - 811,699 Membership 205,199 - - 205,199 Others 185,141 - 950 186,091 Total net revenues 3,524,047 153,371 950 3,678,368 Cost of revenues (1) (1,586,933) (248,154) (14,062) (1,849,149) Gross profit / (loss) 1,937,114 (94,783) (13,112) 1,829,219 Operating expenses (1) Research and development expenses (362,352) (47,765) (21,071) (431,188) Sales and marketing expenses (97,983) (4,399) (145) (102,527) General and administrative expenses (200,535) (20,954) (1,530) (223,019) Total operating expenses (660,870) (73,118) (22,746) (756,734) Other income 6,319 - - 6,319 Operating income / (loss) 1,282,563 (167,901) (35,858) 1,078,804 (1) Share based compensation was allocated in cost of revenues and operating expenses as follows: YY Live Huya broadcasting 100 Education Total RMB RMB RMB RMB Cost of revenues 16,552 1,185 300 18,037 Research and development expenses 47,315 1,895 4,931 54,141 Sales and marketing expenses 2,803 4 - 2,807 General and administrative expenses 57,938 1,660 49 59,647 Share based compensation expenses 124,608 4,744 5,280 134,632 |
Additional information - conden
Additional information - condensed financial statements | 12 Months Ended |
Dec. 31, 2016 | |
Additional information - condensed financial statements [Abstract] | |
Additional information - condensed financial statements | 30. Additional information condensed financial statements The condensed financial statements of YY Inc. have been prepared in accordance with SEC Regulation S-X Rule 5-04 and Rule 12-04. The Company records its investments in subsidiaries under the equity method of accounting. Such investments to subsidiaries are presented on the balance sheet as “Interests in subsidiaries and VIEs” and the profit of the subsidiaries is presented as “Share of profit of subsidiaries and VIEs” in the statement of operations and comprehensive income. For the VIEs, where the Company is the primary beneficiary, the amount of the Company’s investment is included in the balance sheet as “Interests in subsidiaries and VIEs” and the profit of the VIEs is included in “Share of profit of subsidiaries and VIEs” in the statement of operations and comprehensive income. The footnote disclosures contain supplemental information relating to the operations of the Company and, as such, these financial statements should be read in conjunction with the notes to the Consolidated Financial Statements of the Company. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. As of December 31, 2015 and 2016, there were no material contingencies, significant provisions for long-term obligations, or guarantees of the Company, except for those, if any, which have been separately disclosed in the consolidated financial statements. (a) Condensed balance sheets of YY Inc. as of December 31, 2015 and 2016 As of December 31, 2015 2016 2016 RMB RMB US$ (Note 2(e)) Assets Current assets Amounts due from a subsidiary 1,881,616 1,947,080 280,438 Non-current assets Interests in subsidiaries and VIEs 3,944,457 5,883,684 847,426 Total non-current assets 3,944,457 5,883,684 847,426 Total assets 5,826,073 7,830,764 1,127,864 Liabilities and shareholders’ equity Current liabilities Interests payable 14,795 15,800 2,276 Convertible bonds (1) - 2,768,469 398,742 Non-current liabilities Convertible bonds (2) 2,572,119 - - Total liabilities 2,586,914 2,784,269 401,018 Shareholders’ equity Class A common shares (US$0.00001 par value; 10,000,000,000 shares authorized, 728,227,848 shares issued and outstanding as of December 31, 2015 and 750,115,028 shares issued and 43 44 6 Class B common shares (US$0.00001 par value; 1,000,000,000 shares authorized, 369,557,976 shares issued and outstanding as of December 31, 2015 and 359,557,976 shares issued and 27 26 4 Additional paid-in capital 2,011,799 2,165,766 311,935 Retained earnings 1,263,675 2,787,593 401,497 Accumulated other comprehensive (loss)/income (36,385) 93,066 13,404 Total shareholders’ equity 3,239,159 5,046,495 726,846 Total liabilities and shareholders’ equity 5,826,073 7,830,764 1,127,864 (1) Convertible bonds classified in current liabilities represent Convertible Senior Notes which may be redeemed within one year. (2) Effectively January 2016, ASU 2015-3 issued by FASB requires entities to present the issuance costs of bonds in the balance sheet as a direct deduction from the related bonds rather than assets. Accordingly, the Company retrospectively reclassified RMB25.3 million of issuance cost of bonds from other non-current assets into convertible bonds as of December 31, 2015 (b) Condensed statements of operations and comprehensive income of YY Inc. for the years ended December 31, 2014, 2015 and 2016 For the year ended December 31, 2014 2015 2016 2016 RMB RMB RMB US$ (Note2(e)) Share of profit of subsidiaries and VIEs 1,121,079 1,108,029 1,605,003 231,170 Interest expense (56,607) (74,786) (81,085) (11,679) Income before income tax expenses 1,064,472 1,033,243 1,523,918 219,491 Net income 1,064,472 1,033,243 1,523,918 219,491 Other comprehensive income/(loss) : Unrealized gain of available-for-sales securities - - 134,768 19,411 Foreign currency translation adjustments, net of nil tax 3,638 4,414 (5,317) (766) Comprehensive income 1,068,110 1,037,657 1,653,369 238,136 (c) Condensed statements of cash flows of YY Inc. for the years ended December 31, 2014, 2015 and 2016 For the year ended December 31, 2014 2015 2016 2016 RMB RMB RMB US$ (Note2(e)) Cash flows from investing activities Loan to a subsidiary (2,412,290) - - - Net cash used in investing activities (2,412,290) - - - Cash flows from financing activities Proceeds from issuance of convertible bonds 2,412,290 - - - Net cash provided by financing activities 2,412,290 - - - Net increase in cash and cash equivalents - - - - Cash and cash equivalents at the beginning of the year - - - - Cash and cash equivalents at the end of the year - - - - |
Principal accounting policies (
Principal accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Principal accounting policies [Abstract] | |
Basis of presentation | (a) Basis of presentation The consolidated financial statements have been prepared in accordance with the U.S. GAAP to reflect the financial position and results of operations of the Group. |
Consolidation | (b) Consolidation The Group’s consolidated financial statements include the financial statements of the Company, its subsidiaries and VIEs for which the Company or its subsidiary is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and VIEs have been eliminated upon consolidation. 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 VIEs that could potentially be significant to the VIEs or the right to receive benefits from the VIEs that could potentially be significant to the VIEs. Beijing Huanju Shidai, Bilin Changxiang and ultimately the Company hold all the variable interests of the VIEs and has been determined to be the primary beneficiary of the VIEs. The Company established two funds entities, namely Engage L.P. and Shanghai Yilian, (collectively, the “Funds”), in March and June 2015, respectively. The Company holds 93.5% of interests in the Funds. The Company assesses that the Company exercises controls and is entitled to the various returns of the Funds and therefore the Funds have been accounted for as subsidiaries of and has been consolidated by the Company in accordance with ASC 810. The Company deconsolidates its subsidiaries in accordance with ASC 810 as of the date the Company ceased to have a controlling financial interest in the subsidiaries. The Company accounts for the deconsolidation of its subsidiaries by recognizing a gain or loss in net income/loss attributable to the Company in accordance with ASC 810. This gain or loss is measured at the date the subsidiaries are deconsolidated as the difference between (a) the aggregate of the fair value of any consideration received, the fair value of any retained non-controlling interest in the subsidiaries being deconsolidated, and the carrying amount of any non-controlling interest in the subsidiaries being deconsolidated, including any accumulated other comprehensive income/loss attributable to the non-controlling interest, and (b) the carrying amount of the assets and liabilities of the subsidiaries being deconsolidated. |
Use of estimates | (c) Use of estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, mezzanine equity 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 the user relationship period related to online games revenue, assessment of whether the Group acts as a principal or an agent in different revenue streams, classification of perpetual items versus consumable items under item-based model, the determination of estimated selling prices of multiple element revenue contracts, income taxes, allowances for doubtful accounts, determination of share based compensation expenses, impairment assessment of goodwill, long-lived assets and intangible assets, tax considerations for earnings retained in the Group’s VIEs, fair value determination related to the accounting for business combinations and subsequent measurement of contingent consideration following business combinations, assessment on the probability of exercisability of the put option related to business combinations, assessment on the probability of performance condition affiliated in equity-classified award under ASC 718 that affect vesting, 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$”), while the functional currency of the other entities and VIEs in the Group is RMB, which is their respective local currency. In the consolidated financial statements, the financial information of the Company and its subsidiaries, which use US$ 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 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 = RMB 6.9430 |
Fair value of financial instruments | (f) Fair value of financial instruments U.S. GAAP establishes a three-tier hierarchy to prioritize the inputs used in the valuation methodologies in measuring the fair value of financial instruments. This hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three-tier fair value hierarchy is: Level 1observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2other inputs that are directly or indirectly observable in the marketplace. Level 3unobservable inputs which are supported by little or no market activity. The carrying values of cash and cash equivalents, short-term deposits, restricted short-term deposits, accounts receivable, other receivables, amounts due from (to) related parties, accounts payable, and other payables approximate their fair values because of their generally short maturities, and the carrying value of convertible bonds also approximates their fair value, as they bear interest at rates determined based on prevailing interest rates in the market. The fair value of the contingent consideration recognized on the acquisition date was measured using unobservable input (level 3). Trinomial Tree model was applied in determining the fair value of the contingent consideration. Under this model, the Group performs scenario analysis and calculates the fair value of the contingent consideration based on the net present value of the total contingent payments under each scenario and the expected probability of each scenario. Contingent consideration is remeasured at fair value at each reporting date since initial recognition. The Group recorded two of its investments as available-for-sale securities and subsequently measured at its fair value (Note 10). One of the available-for-sale securities was classified within Level 1 and valued based on observable inputs that reflected quoted prices (unadjusted) for identical assets or liabilities in active markets. The other one of the available-for-sale securities was classified within Level 3 and valued based on a model utilizing unobservable inputs which required management judgment and estimation. There was no significant change in fair value of the investment classified within Level 3 from the initial investment date to December 31, 2016. |
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 | 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 | (i) Accounts receivable 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 maintains an allowance for doubtful accounts which reflects its best estimate of amounts that potentially will not be collected. The Company determines the allowance for doubtful accounts on an individual basis taking into consideration various factors including but not limited to historical collection experience and credit-worthiness of the debtors as well as the age of the individual receivables balance. Additionally, the Company makes specific bad debt provisions based on 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 entities. 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 adjusts the carrying amount of the investment and recognizes investment income or loss for share of the earnings or loss of the investee after the date of investment. 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 entities, including current earnings trends and undiscounted cash flows, and other entity-specific information. The fair value determination, particularly for investment in privately-held entities, 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 | Cost investment The cost investment is comprised of investments in privately-held entities. 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. |
Available-for-sale investment | (l) Available-for-sale investment The Group classifies its investments in debt and equity securities into one of three categories and accounts for these as follows: (i) debt securities that the Group has the positive intent and the ability to hold to maturity are classified as “held to maturity” and reported at amortized cost; (ii) debt and equity securities that are bought and held principally for the purpose of selling them in the near term are classified as “trading securities” with unrealized holding gains and losses included in earnings; (iii) debt and equity securities not classified as held to maturity or as trading securities are classified as “available-for-sale” and reported at fair value. The Group has designated its investments in redeemable preferred shares of one company and common shares of one listed company as available-for-sale securities in accordance with ASC 320 (Note 10). Unrealized gains and losses on available-for-sale securities are excluded from earnings and reported as accumulated other comprehensive income/loss, net of tax. Realized gains or losses upon disposal are charged to earnings during the period in which the gains or losses are realized. An impairment loss on the available-for-sale securities is recognized in the consolidated statements of operations and comprehensive income when the decline in value is determined to be other-than-temporary. |
Property and equipment | (m) 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 property and equipment at the end of the estimated useful lives as a percentage of the original cost. Estimated useful lives Residual Buildings 40 0 % Servers, computers and equipment 3 0 5 % Leasehold improvements Shorter of lease term or 5 0 % Decoration of buildings 10 0 % Motor vehicles 4 5 % Furniture, fixture and office equipment 5 0 5 % 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 | (n) Business combinations Business combinations are recorded using the purchase method of accounting, and the cost of an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any non-controlling interests. The excess of (i) the total of consideration of acquisition, fair value of the non-controlling interests and acquisition date fair value of any previously held equity interest in the subsidiary acquired over (ii) the fair value of the identifiable net assets of the subsidiary acquired is recorded as goodwill. If the consideration of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated statements of operations and comprehensive income. |
Intangible assets | (o) Intangible assets Intangible assets mainly consist of brand names, operating rights for licensed games, software, operating rights for game broadcasting, domain names and technology. 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 their estimated useful lives, which are as follows: Estimated useful lives Brand names 1 15 Operating rights for game broadcasting Over the contract terms Operating rights for licensed games Shorter of the economic life or license period of relevant online game Software 3 5 Domain names 15 Technology 5 Others 3 5 |
Land use right | Land use right Land use right is carried at cost less accumulated amortization. Amortization of the land use right is made on straight-line basis over 40 |
Impairment of long-lived assets | (q) Impairment of long-lived assets For long-lived assets other than investments and goodwill whose impairment is discussed elsewhere in the financial statements, 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. The Group tests impairment of long-lived assets at the reporting unit level when impairment indicator appeared and recognizes impairment in the event that the carrying value exceeds the fair value of each reporting unit. The impairment charges of intangible assets recorded in general and administrative expenses for the years ended December 31, 2014, 2015 and 2016 were amounting to RMB 5,697 57,199 3,828 |
Goodwill | (r) 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 | (s) 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. |
Convertible bonds | (t) Convertible bonds The Group determines the appropriate accounting treatment of its convertible bonds in accordance with the terms in relation to the conversion feature, call and put options, and beneficial conversion feature. After considering the impact of such features, the Group may account for such instrument as a liability in its entirety, or separate the instrument into debt and equity components following the respective guidance described under ASC 815 Derivatives and Hedging and ASC 470 Debt. The debt discount, if any, together with related issuance cost are subsequently amortized as interest expense, using the effective interest method, from the issuance date to the earliest conversion date. Interest expenses are recognized in profit or loss in the period in which they are incurred. |
Mezzanine equity and non-controlling interest | (u) Mezzanine equity and non-controlling interest Mezzanine equity Mezzanine equity consists of non-controlling interests in certain subsidiaries with put option pursuant to which the non-controlling shareholders had the right to put their equity interests in certain subsidiaries to the Group at fair value if certain subsidiaries achieved specified performance milestones and met other pre-determined conditions before the expiry of the put option. Since the occurrence of the put was not solely within the Group’s control, the Group classifies the non-controlling interests as mezzanine equity instead of permanent equity in the Group’s consolidated financial statements. In accordance with ASC subtopic 480-10, the Group calculated, on an accumulative basis from the acquisition date, (i) the amount of accretion that would increase the balance of non-controlling interests to their estimated redemption value over the period from the date of acquisition to the earliest redemption date of the non-controlling interests and (ii) the amount of net (loss) / profit attributable to non-controlling shareholders of certain subsidiaries based on their ownership percentage. The carrying value of the non-controlling interests as mezzanine equity was adjusted by an accumulative amount equal to the higher of (i) and (ii). Non-controlling interest Non-controlling interests are recognized to reflect the portion of the equity of majority-owned subsidiaries and VIEs which is not attributable, directly or indirectly, to the controlling shareholder. Currently, the non-controlling interests in the Group’s consolidated financial statements consist primarily of non-controlling interests for Engage L.P. and Shanghai Yilian. |
Revenue recognition | Revenue recognition For the year ended December 31, 2016, revenue presentation has been changed to live streaming, online games, membership and others to better reflect the way the Company generates revenues. The revenue presentation for the year ended December 31, 2015 and 2014 are also retrospectively changed to be consistent with the year ended December 31, 2016. For the years ended December 31, 2015 and 2014, revenues were originally presented as internet value-added service (“IVAS”) and other revenues. In the category of IVAS, there were four sub-categories: online music and entertainment, online games, online dating and other IVAS. In the new presentation, revenues from online music and entertainment, online dating and other IVAS (excluding revenues from membership and a few minor revenue streams that do not meet the criteria of live streaming), which are under YY Live platform and Huya broadcasting platform, are categorized as live streaming revenues. Revenues from online games and membership are presented separately. Other revenues and those revenues streams previously categorized in other IVAS that do not meet the criteria of live streaming are categorized as “others”. The change in revenue presentation has no impact on the amount of total net revenues. The Group generates revenues from live streaming, online games, membership and others. Revenues from live streaming are generated from YY Live platform and Huya broadcasting platform. Revenues from online games are generated from providing online game platform and access of the games for the game players. Membership subscription program enhanced user privileges when using YY Client. Other revenues mainly include online education revenue and advertising revenue. Online education services consist of vocational training and language training courses. Online advertising revenues are primarily generated from sales of different forms of advertising on the Group’s platforms. 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. The Group operates a virtual currency system, under which, the users can directly purchase virtual currency on live streaming 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 on live streaming channels, or used to purchase virtual items in online games (both developed by third parties and self-developed), 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 unless otherwise stated. (i) Live streaming Live streaming mainly consists of YY Live platform and Huya broadcasting platform. The Group creates and offers virtual items to be used by users on live streaming 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. Live streaming 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 channels for a specific period of time. In order to attract user traffic, the Group shares revenues with certain popular performers and channel owners in accordance with the revenue sharing arrangements with the Group. The portion of the revenues shared with the performers and channel owners are accounted for as cost of revenues by the Group. 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, live streaming revenue is recognized for the sale of virtual items in live streaming channels immediately if the virtual item is a consumable or, in the case of time-based virtual items, recognized ratably over the period when the 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 Live platform and Huya broadcasting 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 Live platform and Huya broadcasting 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. (ii) 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, 2014, 2015 and 2016 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 U.S. 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. 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 is convertible into game tokens based on a predetermined exchange rate agreed among the Group and the relevant game developers. The proceeds from the sales 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. There are two types of third party developed online games: - Non-exclusive third party developed games - Exclusive third party developed games Under the non-exclusive arrangement, game developers license the games to various platforms and the Group is only one of the platforms. Game developers will receive only revenue shared from the Group pursuant to the mutually agreed sharing percentage. Under the exclusive arrangement, game developers only license the game to the Group as the exclusive licensee. The Group can sub-license the games to other platforms and receive a portion of revenue sharing from sub-licensees. In addition to the revenue shared to the game developers, the Group should also pay an exclusive license fee to the game developers. - Non-exclusive third party developed games Pursuant to contracts signed between the Group and the respective game developers, revenues from the sale or conversion of game tokens 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 for one to two years. The third party developed games under non-exclusive licensing contracts are 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 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 Group’s platforms. 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 principals given the game developers design and develop the online 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 under non-exclusive licensing contracts 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 period with the Group on a game-by-game basis, which is approximately one to six months for the periods presented. Future usage patterns may differ from historical usage patterns and therefore the estimated user relationship period with the Group may change in the future. When the Group launches a new game, it estimates the user relationship period 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 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 performed 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 period 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 relationship period for each game on a quarterly basis. Any adjustments arising from changes in the user relationship period 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. - Exclusive third party developed games Under certain exclusive arrangements, the Group pays additional license fees to the game developers as the Group is entitled to an exclusive right to operate third party developed games in specified geographic areas. Based on ASC 350, the Group has adopted an accounting policy to recognize the exclusive license fee as an intangible asset upon the commercial launch of the related online games. This intangible asset is amortized on a straight-line basis over the shorter of the economic life or license period of the relevant online game. Pursuant to the exclusive licensing contracts signed between the Group and the third party game developers, the Group’s responsibilities in operating the licensed games vary for each game. The determination of whether to record these revenues using gross or net method is based on an assessment of various factors, including but not limited to whether the Group (i) is the primary obligor in the arrangement; (ii) has latitude in establishing the selling price; (iii) changes the product or performs part of the service, (iv) has involvement in the determination of product and service specifications. For the game license arrangements under which the Group takes primary responsibilities of game operation, including determining distribution and payment channels, providing customer services, hosting game servers, if needed, and controlling game and services specifications and pricing, the Group considered itself to be the principal in these arrangements. Accordingly, the Group records online games revenues from these third party licensed games on a gross basis. Commission fees paid to distribution channels and payment channels and content fees paid to third party game developers are recorded as cost of revenues. For the game license arrangements under which the Group’s responsibilities are limited to publishing, providing payment solutions and game operating advice, the Group views the game developers to be its customers and considers itself to be the agent in the arrangements. Accordingly, the Group records online games revenues from these third party licensed games, net of fees paid to third parties upon the provision of service. Pursuant to the terms and conditions of certain online game exclusive license agreements entered into between game developers and the Group, the Group, as the exclusive licensee, could sublicense a non-exclusive, non-transferable and limited license to any third party without the prior formal consent of game developers. Under the non-exclusive and non-transferable limited license, the sub-licensee cannot further license the game to other platforms. The Group received monthly revenue-based royalty payments from all sub-licensees. The Group views the third-party sub-licensees operators as its customers and recognizes revenues on a net basis, as the Group does not have the primary responsibility for fulfillment and acceptability of the game services. Similar to other online games, the exclusive third party developed games are free to play and players can pay for virtual items for better in-game experience. For exclusive third party games, the consumption details can be provided by third party developers or the Group has access to such data. Therefore, the Group recognizes revenues based on item-based model: (1) for consumable items, the revenue is recognized immediately upon consumption; (2) for perpetual items, the revenue is recognized ratably over the user relationship period of a specific game as described. The determination of user relationship period is the same as what is described in “ Non-exclusive third party developed games - 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. Considering that revenues derived from self-developed games were immaterial to the Group for the years presented, the Group does not maintain information on consumption details of in-game virtual items, and only maintains 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 period of third party games with similar popularity, gaming experience and sales to determine the estimated period of user relationship for its self-developed games. (iii) Membership The Group operates a membership subscription program where subscription members can have enhanced user privileges when using YY Client and live streaming channels. 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 when services are rendered. Unrecognized portion beyond 12 months from balance sheet date is classified as long-term deferred revenue. (iv) Others Other revenues mainly include online education revenues and advertising revenues. (1) Online education revenues Educational programs and services consist of vocational training and language training courses. The course fee is generally paid in advance and is initially recorded as deferred revenue. Revenue for regular courses is recognized proportionately as the classes are attended, and is reported net of scholarships and course fee refunds. Students are entitled to one trial class of the purchased course and course fee is fully refundable if a student decides not to take the remaining course after the trial class. No refund will be provided to a student who withdraws from a course after the trial period, and revenue is recognized for the amount collected. Course fee refunds were insignificant over the period presented. In addition to regular courses, the Company also provides a package of several regular courses to students, which has individual fair value in the market. Pursuant to the applicable accounting guidance, the Company has accounted for these course packages as a multiple-element arrangement because each individual course qualifies as a single unit of accounting, and allocated the course fee from the course package to each individual course in the package based on its relative fair value. The Company recognizes revenue equal to the fair value allocated to individual courses proportionately as the classes are attended. Students are granted a right to retake the courses at a substantial discount in the circumstances where the students fail to achieve certain score targets for some specific courses. The discount arrangement has a stand-alone value and qualifies as a separate unit of accounting under U.S. GAAP. Therefore, the Company has accounted for those courses as a multiple-element arrangement and allocated a portion of the initial course fee to the substantial discount based on a breakage rate. The breakage rate is determined based on our historical data. The amount allocated to the substantial discount is deferred and recognized as revenue upon the expiration of the retaking right, which is generally six months after the end of the initial course term. The Company also sells pre-paid cards primarily to distributors. Pre-paid card sales represent prepaid service fees received from students for online courses. The prepaid service fee is recorded as deferred revenue upon receiving the upfront cash payment. Revenue is recognised on a gross basis based on the selling price of the distributors to the students and is recognized over the period the online course is available to the students, which generally is from the enrolment date to the completion of the relevant professional examination date. (2) Advertising revenues The Group primarily generate advertising revenues from sales of various forms of advertising and provision of promotion campaigns on the live streaming platforms by way of advertisement display or integrated promotion activities in shows and programs on the live streaming platforms. Advertisements on the Group’s platforms 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 3 6 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 existsthe Group will enter into framework and execution agreements with the advertising agencies, specifying price, advertising content, format and timing. • Price is fixed or determinableprice charged to the advertising agencies are specified in the agreements, including relevant discount and rebate rates. • Services are renderedthe Group recognizes revenue ratably as the element are delivered over the contract period of display. • Collectability is reasonably assuredthe 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 | Advances from customers and deferred revenue Advances from customers primarily consist of 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. Deferred revenue primarily consists of the unamortized game tokens, prepaid subscriptions under the membership program and unamortized revenue from virtual items in various channels in the Group’s platforms, 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 |
Cost of revenues | (x) Cost of revenues Amounts recorded as cost of revenue relate to direct expenses incurred in order to generate 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) depreciation and amortization expense for servers, other equipment and intangibles directly related to operating the platform, (v) payment handling cost, (vi) business taxes and surcharges, (vii) share based compensation, and (viii) other costs. In the PRC, business taxes were imposed by the government on revenues reported by any selling entity for the provision of taxable services in the PRC. The business tax rate varied depending on the nature of the revenues. The Group was also subject to cultural development fee at a tax rate of 3 Except for online games revenues, the Group’s live streaming revenues and membership revenues became subject to VAT from June 1, 2014, at a rate of 6 3 The Group is subject to surcharges of business taxes and VAT, which are calculated based on 12 The Group reported business taxes and surcharges, and cultural development fees 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 6 17 |
Research and development expenses | (y) 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, 2014, 2015 and 2016, respectively. |
Sales and marketing expenses | (z) Sales and marketing expenses Sales and marketing expenses consist primarily of (i) advertising and market promotion expenses, (ii) salary and welfare for sales and marketing personnel, and (iii) rental expenses. The advertising and market promotion expenses amounted to approximately RMB 76,192 253,210 298,681 |
General and administrative expenses | 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, and (iii) impairment charges of intangible assets and other non-current |
Employee social security and welfare benefits | (bb) 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 RMB 115,012 171,349 206,704 |
Share based compensation | (cc) Share based compensation The Company grants stock-based award, such as, but not limited to, share options, restricted shares, and restricted share units 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 share 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 recorded in consistent with the method used in recognizing the original compensation costs. 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. For an award with a performance and/or service condition that affects vesting, the performance and/or service condition is not considered in determining the award’s fair value on the grant date. Performance and service conditions should be considered when the Company is estimating the quantity of awards that will vest. Compensation cost will reflect the number of awards that are expected to vest and will be adjusted to reflect those awards that do ultimately vest. The Group recognizes compensation cost for awards with performance conditions if and when the Group concludes that it is probable that the performance condition will be achieved, net of an estimate of pre-vesting forfeitures over the requisite service period. The Group reassesses the probability of vesting at each reporting period for awards with performance conditions and adjusts compensation cost based on its probability assessment, unless on certain situations, the Group may not be able to determine that it is probable that a performance condition will be satisfied until the event occurs. |
Other income | (dd) Other income Other income primarily consists of government grants which represent cash subsidies received from the PRC government by the Group entities. 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 income. |
Income taxes | (ee) 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 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, 2014, 2015 and 2016. As of December 31, 2015 and 2016, the Group did not have any significant unrecognized uncertain tax positions. |
Statutory reserves | (ff) Statutory reserves The Group’s subsidiaries and VIEs 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 50 In addition, in accordance with the Company Laws of the PRC, the VIEs 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 50 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, 2014, 2015 and 2016, appropriations to general reserve fund and statutory surplus fund amounted to RMB 15,812 38 2,350 |
Related parties | (gg) 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 | (hh) Dividends Dividends are recognized when declared. No dividends were declared for the years ended December 31, 2014, 2015 and 2016, 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. |
Income per share | (ii) Income per share Basic income per share is computed on the basis of the weighted-average number of common shares outstanding during the period under measurement. Diluted income per share is based on the weighted-average number of common shares outstanding and potential common shares. Potential common shares result from the assumed exercise of outstanding share options, RSs and RSUs or other potentially dilutive equity instruments, when they are dilutive under the treasury stock method or the if-converted method. |
Comprehensive income | (jj) Comprehensive income Comprehensive 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 income is reported in the consolidated statements of operations and comprehensive income. Accumulated other comprehensive income/loss of the Group includes the unrealized gain of available-for-sale securities and the foreign currency translation adjustments. |
Segment reporting | (kk) 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 (“CODM”) 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. |
Recently issued accounting pronouncements | (ll) Recently issued accounting pronouncements In May 2014, the FASB issued ASU 2014-09 Revenue from Contracts with Customers (Topic 606) which will replace requirements in U.S. GAAP. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The standard will be effective for the first quarter of 2018. The Company has set up a team and started the assessment of each revenue stream in accordance with the new revenue standard to determine the impact to the consolidated financial statements, if any. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which simplifies the presentation of deferred income taxes by requiring deferred tax assets and liabilities to be classified as noncurrent on the balance sheet. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. Additionally, the new guidance may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company will apply this guidance retrospectively to all period presented. Following the adoption of this guidance in 2017, RMB 107,309 In January 2016, the FASB issued ASU 2016-01: Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this Update make targeted improvements to generally accepted accounting principles (GAAP) as follows: 1) Require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. 2) Simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value. 3) Eliminate the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities. 4) Eliminate the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. 5) Require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. 6) Require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. 7) Require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. 8) Clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is in the process of evaluating the impact of the standard on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02: Leases (Topic 842). The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. All leases create an asset and a liability for the lessee in accordance with FASB Concepts Statement No. 6, Elements of Financial Statements, and, therefore, recognition of those lease assets and lease liabilities represents an improvement over previous GAAP, which did not require lease assets and lease liabilities to be recognized for most leases. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is in the process of evaluating the impact of the standard on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09 (“ASU 2016-09”): Compensation Stock Compensation: Improvements to Employee Share-Based Payment Accounting, which relates to the accounting for employee share-based payments. This standard addresses several aspects of the accounting for share-based payment award transactions, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows; (d) accounting for forfeitures of share-based payments. This standard will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is in the process of evaluating the impact of the standard on its consolidated financial statements. In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13: Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is in the process of evaluating the impact of the standard on its consolidated financial statements. In August 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-15: Statement of Cash Flows Classification of Certain Cash Receipts and Cash Payments, which clarifies the presentation and classification of certain cash receipts and cash payments in the statement of cash flows. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company is in the process of evaluating the impact of the standard on its consolidated financial statements. In November 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The standard is effective for fiscal years beginning after December 15, 2017, and interim period within those fiscal years. Early adoption is permitted, including adoption in an interim period. The standard should be applied using a retrospective transition method to each period presented. The Company is in the process of evaluating the impact of the standard on its consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The standard should be applied prospectively on or after the effective date. The Company is in the process of evaluating the impact of the standard on its consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-04: Simplifying the Test for Goodwill Impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance should be adopted on a prospective basis for the annual or any interim goodwill impairment tests beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is in the process of evaluating the impact of the standard on its consolidated financial statements. |
Organization and principal ac40
Organization and principal activities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Organization and principal activities [Abstract] | |
Schedule of details of the subsidiaries, VIEs and VIE's subsidiaries | Name Place of Date of % of direct Principal activities Principal subsidiaries Duowan Entertainment Corporation (“Duowan BVI”) BVI November 6, 2007 100 % Investment holding Huanju Shidai Technology (Beijing) Co., Ltd. (“Beijing Huanju Shidai” or “Duowan Entertainment”) PRC March 19, 2008 100 % Investment holding Zhuhai Duowan Information Technology Co., Ltd. (“Zhuhai Duowan” or “Guangzhou Duowan”) PRC April 9, 2007 100 % Online advertising and software development Guangzhou Huanju Shidai Information Technology Co., Ltd. (“Guangzhou Huanju Shidai”) PRC December 2, 2010 100 % Software development Engage Capital Partners I, L.P. (“Engage L.P.”) Cayman Islands March 23, 2015 93.5 % Investment Principal VIEs Guangzhou Huaduo Network Technology Co., Ltd. (“Guangzhou Huaduo”) PRC April 11, 2005 100 % Holder of internet content provider licenses and internet value added services Zhuhai Huanju Huyu Technology Co., Ltd. PRC May 4, 2015 100 % Software development Shanghai Yilian Equity Investment Partnership(LP) (“Shanghai Yilian”) PRC June 23, 2015 93.5 % Investment Guangzhou Huya Technology Co., Ltd. PRC August 10, 2016 100 % Software development |
Principal accounting policies41
Principal accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Principal accounting policies [Abstract] | |
Schedule of property and equipment estimated useful lives and residual rate | Estimated useful lives Residual Buildings 40 0 % Servers, computers and equipment 3 0 5 % Leasehold improvements Shorter of lease term or 5 0 % Decoration of buildings 10 0 % Motor vehicles 4 5 % Furniture, fixture and office equipment 5 0 5 % |
Schedule of amortization of finite-lived intangible assets is computed using the straight-line method over the following estimated useful lives | Estimated useful lives Brand names 1-15 years Operating rights for game broadcasting Over the contract terms Operating rights for licensed games Shorter of the economic life or license period of relevant online game Software 3 -5 years Domain names 15 years Technology 5 years Others 3-5 years |
Certain risks and concentrati42
Certain risks and concentration (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Concentration of risks [Line Items] | |
Schedule of consolidated financial information of the Group's VIEs and VIE's subsidiaries excluding the inter company items with the Group's subsidiaries included in the accompanying consolidated financial statements | December 31, 2015 2016 RMB RMB Assets Current assets Cash and cash equivalents 403,722 1,397,738 Short-term deposits 250,000 1,235,000 Restricted short-term deposits 110,000 - Accounts receivable, net 127,365 165,971 Inventory 14,385 2,266 Amounts due from related parties 5,164 135,245 Prepayments and other current assets 117,536 207,245 Deferred tax assets 87,492 83,242 Total current assets 1,115,664 3,226,707 Non-current assets Deferred tax assets 3,363 10,502 Investments 285,292 496,870 Property and equipment, net 292,340 261,915 Intangible assets, net 110,214 27,241 Land use right, net - 1,872,394 Goodwill 136,066 2,527 Other non-current assets 1,932,356 85,583 Total non-current assets 2,759,631 2,757,032 Total assets 3,875,295 5,983,739 Liabilities Current liabilities Accounts payable 108,500 117,917 Deferred revenue 385,300 429,883 Advances from customers 45,189 56,108 Income taxes payable 80,978 112,779 Accrued liabilities and other current liabilities 579,760 988,911 Amounts due to related parties 23,684 91,245 Total current liabilities 1,223,411 1,796,843 Non-current liabilities Deferred revenue 20,752 19,125 Deferred tax liabilities 12,592 4,777 Total non-current liabilities 33,344 23,902 Total liabilities 1,256,755 1,820,745 For the year ended December 31, 2014 2015 2016 RMB RMB RMB Net revenues 3,543,994 5,821,305 8,164,100 Net income 1,136,570 1,267,111 1,874,435 For the year ended December 31, 2014 2015 2016 RMB RMB RMB Net cash provided by operating activities 1,313,521 2,164,953 2,538,836 Net cash used in investing activities (994,574) (2,251,207) (1,313,002) Net cash provided by financing activities - 704,298 8,508 318,947 618,044 1,234,342 |
Summary of the percentage of accounts receivable from collection agencies, sub-licensed platforms and advertising customers with over 10% of total accounts receivable | December 31, 2015 2016 RMB RMB Payment platforms B1 35 % 19 % B2 * 17 % * Less than 10% |
Business combination and disp43
Business combination and disposal of subsidiaries (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Beifu [Member] | |
Business combination [Line Items] | |
Schedule of allocation of the purchase price at the date of acquisition | RMB Cash consideration 39,200 Contingent consideration 107,306 Total consideration 146,506 Net assets acquired 31,994 Identifiable intangible assets acquired 12,900 Goodwill 147,388 Deferred tax liabilities (3,225) Non-controlling interest (42,551) Total 146,506 |
Cash and cash equivalents (Tabl
Cash and cash equivalents (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Cash and cash equivalents [Abstract] | |
Schedule of cash and cash equivalents balance | December 31, 2015 December 31, 2016 RMB RMB Amount equivalent Amount equivalent RMB 450,802 450,802 1,536,947 1,536,947 US$ 73,632 478,132 6,171 42,796 Total 928,934 1,579,743 |
Short-term deposits (Tables)
Short-term deposits (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Short-term deposits [Abstract] | |
Schedule of short-term deposits | December 31, 2015 December 31, 2016 RMB RMB Amount equivalent Amount equivalent RMB 250,000 250,000 1,235,000 1,235,000 US$ 253,322 1,644,946 362,882 2,516,519 Total 1,894,946 3,751,519 |
Restricted short-term deposits
Restricted short-term deposits (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Restricted short-term deposits [Abstract] | |
Schedule of restricted short-term deposits | December 31, 2015 2016 RMB RMB Pledge short-term deposits for one pending litigation (i) 110,000 - Pledge short-term deposits for bank borrowing facilities (ii) 279,221 - Total 389,221 - (i) As of December 31, 2015, the Group had restricted short-term deposits balance of RMB110 million representing pledged deposit for one pending litigation in which the Group was the claimant and had applied to the court to freeze the assets of the defendant. Pursuant to relevant PRC laws and regulations, the Group had to deposit a certain amount of cash as pledged deposit in order to submit the application to the court requesting to freeze the defendant’s assets. As of December 31, 2016, the pledged deposits has been unfrozen due to the settlement of the litigation. (ii) As of December 31, 2015, the Company had offshore restricted short-term deposits balance set aside for a period of 12 months or less of approximately RMB279 million for bank borrowing facilities. |
Accounts receivable, net (Table
Accounts receivable, net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounts receivable, net [Abstract] | |
Schedule of accounts receivable, net | December 31, 2015 2016 RMB RMB Accounts receivable, gross 191,144 224,791 Less: allowance for doubtful receivables (58,791) (55,220) Accounts receivable, net 132,353 169,571 |
Summary of allowance for doubtful accounts | For the year ended December 31, 2014 2015 2016 RMB RMB RMB Balance at beginning of the year (31,214) (57,342) (58,791) (Additions)/reversals charged to general and administrative expenses, net (26,246) (1,449) 3,571 Write-off during the year 118 - - Balance at end of the year (57,342) (58,791) (55,220) |
Prepayments and other current48
Prepayments and other current assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Prepayments and other current assets [Abstract] | |
Schedule of prepayments and other current assets | December 31, 2015 2016 RMB RMB Receivables from disposal of a subsidiary - 95,166 Prepayments and deposits to vendors and content providers 71,354 70,347 Interests receivable 41,220 17,050 Rental and other deposits 12,111 13,015 Employee advances 12,484 12,245 Rental prepayments 1,333 6,462 Others 9,321 10,447 Total 147,823 224,732 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments [Abstract] | |
Schedule of investments | December 31, 2015 2016 RMB RMB Cost investments (i) 516,446 477,733 Equity investments(ii) 44,994 252,272 Available-for-sale securities (iii) 6,117 188,597 Total 567,557 918,602 (i) In 2015 and RMB 351,800 90,234 respectively (ii) In 2016, the Group acquired minority stake of a number of privately-held entities with total consideration of RMB 107,010 In 2016, following the deconsolidation and disposal of Xingxue (Note 4), the Group reclassified the remaining 31.14 (iii) In 2015, the Group entered into share purchase agreements to acquire 4.25 6,117 In 2016, one of the Group's investees became listed on NASDAQ Global Market. As the investment has readily determinable fair value upon listing, the Group reclassified this investment as an available-for-sale security upon its listing and recorded the investment at fair value with unrealized holding gain or loss recognized in other comprehensive income under ASC 320. (iv) The Group assesses the existence of indicators for other-than-temporary impairment of the investments by considering factors including, but not limited to, current economic and market conditions, the operating performance of the entities including current earnings trends and other entity-specific information. In 2014, 2015 and 2016, based on the Group's assessment, an impairment charge of RMB 4,000 6,000 80,104 recognized in general and administrative expenses, respectively, against the carrying value of the investments due to significant deterioration in earnings or unexpected changes in business prospects of the investees as compared to the original investment |
Property and equipment, net (Ta
Property and equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property and equipment, net [Abstract] | |
Schedule of property and equipment | December 31, 2015 2016 RMB RMB Gross carrying amount Buildings 482,387 482,333 Servers, computers and equipment 453,441 565,786 Leasehold improvements 69,929 80,812 Decoration of buildings 66,140 68,981 Motor vehicles 12,835 24,016 Furniture, fixture and office equipment 26,098 23,259 Construction in progress 1,937 5,586 Total 1,112,767 1,250,773 Less: accumulated depreciation (269,318) (412,023) Property and equipment, net 843,449 838,750 |
Land use right, net (Tables)
Land use right, net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Intangible assets, net [Abstract] | |
Schedule Of Land Use Right | December 31, 2016 RMB Gross carrying amount 1,916,309 Less: accumulated amortization (43,915) Land use right, net 1,872,394 |
Intangible assets, net (Tables)
Intangible assets, net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Intangible assets, net [Abstract] | |
Summary of Group's intangible assets | December 31, 2015 2016 RMB RMB Gross carrying amount Brand names 102,654 59,034 Operating rights for game broadcasting 35,071 58,655 Operating rights for licensed games 46,879 40,274 Software 38,307 30,632 Domain names 25,902 27,311 Technology 17,621 18,282 Others 31,200 18,300 Total of gross carrying amount 297,634 252,488 Less: accumulated amortization Brand names (20,294) (21,810) Operating rights for game broadcasting (23,278) (46,855) Operating rights for licensed games (15,010) (30,804) Software (9,464) (13,110) Domain names (6,249) (8,449) Technology (7,712) (9,457) Others (5,478) (3,592) Total accumulated amortization (87,485) (134,077) Less: accumulated impairment (63,712) (59,485) Intangible assets, net 146,437 58,926 |
Schedule of estimated amortization expenses | Amortization expense of intangible assets 2017 25,606 2018 10,453 2019 6,032 2020 4,708 2021 1,925 |
Schedule of weighted average amortization periods of intangible assets | December 31, 2015 2016 Domain names 15 15 Technology 5 5 Software 5 5 Operating rights for licensed games 3 2 Operating rights for game broadcasting 1 1 Brand names 10 Not applicable Others 3 5 Not applicable |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill [Abstract] | |
Schedule of goodwill | YY Live 100 Education Total RMB RMB RMB Balance as of December 31, 2014 4,107 296,275 300,382 Increase in goodwill related to acquisition (i) 161,326 - 161,326 Impairment charges (iii) (128,035) (182,089) (310,124) Foreign currency translation adjustment 54 - 54 Balance as of December 31, 2015 37,452 114,186 151,638 Decrease in goodwill related to disposal(ii) (19,354) (100,382) (119,736) Impairment charges (iii) (3,861) (13,804) (17,665) Foreign currency translation adjustment 63 - 63 Balance as of December 31, 2016 14,300 - 14,300 |
Deferred revenue (Tables)
Deferred revenue (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Deferred revenue [Abstract] | |
Schedule of deferred revenue | December 31, 2015 2016 RMB RMB Deferred revenue, current: Live streaming 187,930 308,545 Online games 81,054 61,589 Membership 87,483 47,532 Others 28,833 13,017 Total current deferred revenue 385,300 430,683 Deferred revenue, non-current: Live streaming 8,757 12,002 Membership 11,328 6,273 Others 667 7,184 Total non-current deferred revenue 20,752 25,459 |
Accrued liabilities and other55
Accrued liabilities and other current liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accrued liabilities and other current liabilities [Abstract] | |
Schedule of accrued liabilities and other current liabilities | December 31, 2015 2016 RMB RMB Accrued revenue sharing fees 298,805 521,654 Accrued salaries and welfare 169,041 200,606 Accrued bandwidth costs 71,507 86,186 Market promotion expenses 29,358 68,243 Value added taxes payable 16,010 38,161 License fees 10,000 22,725 Deposits from content providers and suppliers 16,531 18,779 Other taxes payable 14,370 18,516 Interests payable 14,795 15,800 Others 41,472 75,368 Total 681,889 1,066,038 |
Convertible bonds (Tables)
Convertible bonds (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Convertible bonds [Abstract] | |
Schedule of convertible bonds | 17. Convertible bonds December 31, 2015 2016 RMB RMB Convertible Bond, current 2019 Convertible Senior Notes - 2,773,925 Less: issuance cost - (5,456) - 2,768,469 Convertible Bond, non-current 2019 Convertible Senior Notes 2,597,403 - Less: issuance cost (25,284) - 2,572,119 - |
Cost of revenues (Tables)
Cost of revenues (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Cost of revenues [Abstract] | |
Schedule of Cost of revenues | For the year ended December 31, 2014 2015 2016 RMB RMB RMB Revenue sharing fees and content costs 1,133,984 2,343,224 3,790,624 Bandwidth costs 345,913 570,169 651,652 Salary and welfare 131,773 198,153 232,497 Depreciation and amortization 59,817 145,135 173,048 Payment handling costs 55,101 104,849 67,474 Business tax and surcharges 49,233 27,794 44,659 Share based compensation 18,037 23,963 15,894 Other costs 55,291 166,457 127,582 Total 1,849,149 3,579,744 5,103,430 |
Other income (Tables)
Other income (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other income [Abstract] | |
Schedule of other income | For the year ended December 31, 2014 2015 2016 RMB RMB RMB Government grants 5,570 79,541 128,550 Others 749 2,759 954 Total 6,319 82,300 129,504 |
Income tax (Tables)
Income tax (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income tax [Abstract] | |
Schedule of the current and deferred portions of income tax expense included in the consolidated statements of operations | For the year ended December 31, 2014 2015 2016 RMB RMB RMB Current income tax expenses (200,034) (203,366) (288,282) Deferred income tax benefits 45,751 25,039 7,768 Income tax expense for the year (154,283) (178,327) (280,514) |
Schedule of the reconciliation of total tax expense computed by applying the respective statutory income tax rate to pre-tax income | For the year ended December 31, 2014 2015 2016 RMB RMB RMB PRC Statutory income tax rate (25.0) % (25.0) % (25.0) % Effect of preferential tax rate 13.1 % 14.0 % 11.6 % Effect of tax-exempt entities 1.1 % (1.6) % (1.7) % Effect of change in tax rate - 0.5 % - Permanent differences (i) (3.5) % (3.8) % (1.1) % Change in valuation allowance (0.4) % (1.7) % (1.5) % Effect of Super Deduction available to the Group 2.0 % 2.3 % 2.0 % Effective income tax rate (12.7) % (15.3) % (15.7) % (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, 2015 2016 RMB RMB Deferred tax assets, current: Deferred revenue 46,830 55,484 Allowance for doubtful accounts receivable, accrued expense and others not currently deductible for tax purposes 83,503 65,721 Valuation allowance (13,412) (13,896) Total current deferred tax assets, net 116,921 107,309 Deferred tax assets, non-current: Tax loss carried forward 39,904 66,816 Deferred revenue 1,414 1,800 Impairment of investment 1,698 7,949 Others 251 753 Valuation allowance (i) (39,904) (66,816) Total non-current deferred tax assets, net 3,363 10,502 Deferred tax liabilities, non-current: Related to acquired intangible assets 16,817 3,281 Others - 4,777 Total non-current deferred tax liabilities, net 16,817 8,058 (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 tax loss carry forwards. Valuation allowance was provided for net operating loss carry forward because it was more likely than not that such deferred tax assets would 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 2017 - 2018 9,428 2019 28,373 2020 78,713 2021 178,724 Total 295,238 |
Share based compensation (Table
Share based compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Share-based compensation [Line Items] | |
Summary of the restricted shares activity | Weighted Number of average restricted grant-date shares fair value (US$) Outstanding, December 31, 2013 4,673,725 0.6144 Forfeited (159,410) 0.9362 Vested (4,514,315) 0.6030 Outstanding, December 31, 2014, 2015 and 2016 - - |
Summary of the restricted share units activity | Weighted Number of average restricted grant-date shares fair value (US$) Outstanding, December 31, 2013 44,302,600 0.9639 Granted 9,912,595 3.5805 Forfeited (3,125,430) 1.1859 Vested (12,283,670) 1.0144 Outstanding, December 31, 2014 38,806,095 1.5984 Granted 16,012,644 3.3358 Forfeited (7,312,548) 1.8920 Vested (11,222,589) 1.4374 Outstanding, December 31, 2015 36,283,602 2.3535 Granted 1,530,008 1.8618 Forfeited (4,628,202) 2.7386 Vested (12,229,688) 2.0151 Outstanding, December 31, 2016 20,955,720 2.4320 Expected to vest at December 31, 2016 20,568,083 2.4312 |
Pre-2009 Scheme Options [Member] | |
Share-based compensation [Line Items] | |
Summary of the activities of the Pre-2009 Scheme Options for employees and non-employee | Weighted Weighted average Aggregate average remaining intrinsic Number of exercise contractual life value options price (US$) (years) (US$) Outstanding, vested and exercisable, December 31, 2013 13,222,005 0.0059 4.40 33,162 Exercised (5,841,660) 0.0057 3.24 Outstanding, vested and exercisable, December 31, 2014 7,380,345 0.0061 3.52 22,959 Exercised (6,611,970) 0.0061 2.46 Outstanding, vested and exercisable, December 31, 2015 768,375 0.0067 2.99 2,395 Exercised (234,720) 0.0067 2.00 Outstanding, vested and exercisable, December 31, 2016 533,655 0.0067 1.98 1,048 |
Basic and diluted net income 61
Basic and diluted net income per share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Basic and diluted net income per share [Abstract] | |
Schedule of calculation of basic and diluted net income per share | Basic and diluted net income per share for the years ended December 31, 2014, 2015 and 2016 are calculated as follows: For the year ended December 31, 2014 2015 2016 RMB RMB RMB Numerator: Net income attributable to the Company 1,064,472 1,033,243 1,523,918 Interest expenses of convertible notes - - 81,085 Numerator for diluted income per share 1,064,472 1,033,243 1,605,003 Denominator: Denominator for basic calculationweighted average number of Class A and Class B common shares outstanding 1,153,140,699 1,125,189,978 1,127,343,312 Dilutive effect of share options 10,372,442 2,711,486 684,455 Dilutive effect of restricted shares 2,604,789 - - Dilutive effect of restricted share units 32,425,543 22,929,699 15,816,362 Dilutive effect of convertible bonds - - 72,267,200 Denominator for diluted calculation 1,198,543,473 1,150,831,163 1,216,111,329 Basic net income per Class A and Class B common share 0.92 0.92 1.35 Diluted net income per Class A and Class B common share 0.89 0.90 1.32 Basic net income per ADS* 18.46 18.37 27.04 Diluted net income per ADS* 17.76 17.96 26.40 * Each ADS represents 20 Class A common shares. |
Related party transactions (Tab
Related party transactions (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Related party transactions [Abstract] | |
Schedule of related parties and their relationships with the Group | Major related parties Relationship with the Group Guangzhou Shanghang Information Technology Co., Ltd. (“Guangzhou Shanghang”) Controlled by a principal shareholder of the Company Guangzhou Chenjun Equity Investment Limited Partnership (“Guangzhou Chenjun”) Equity investment Bigo Inc. (“Bigo”) Significant influence exercised by Mr. David Xueling Li (the “Chairman”) Shanghai Yaoyu Culture Media Co., Ltd.(“Shanghai Yaoyu”) Cost investment with significant influence Shanghai Rongyi Culture Development Co., Ltd.(“Shanghai Rongyi”) Cost investment with significant influence Guangzhou Kuyou Information Technology Co., Ltd.(“Guangzhou Kuyou”) Equity investment Xingxue (1) Equity investment (1) Xingxue became the Group’s equity investment in December 2016. |
Schedule of significant related party transactions | For the year ended December 31, 2014 2015 2016 RMB RMB RMB Online games revenue shared from related parties 65,247 163,912 100,078 Bandwidth service provided by Guangzhou Shanghang 42,470 74,661 96,224 Loan to related parties 1,500 159,000 44,500 Partial disposal of an equity investment to Guangzhou Chenjun - - 33,750 Partial disposal of a subsidiary to Guangzhou Chenjun - - 24,394 Payment on behalf of related parties, net of repayments 61,000 (60,870) 10,699 Repayment of loans from related parties 1,500 160,000 - Sales of equipment to Bigo - 12,058 - Purchase of operating rights for game broadcasting from Shanghai Yaoyu - 11,486 - Purchase of operating rights for licensed games from related parties 6,836 10,022 - Others 1,563 9,095 13,573 |
Schedule of the amounts due from/to related parties | December 31, 2015 2016 RMB RMB Amounts due from related parties Due from Guangzhou Chenjun - 58,144 Due from Bigo - 31,528 Due from Xingxue - 20,000 Due from Shanghai Rongyi - 13,000 Others 5,297 12,573 Total 5,297 135,245 Amounts due to related parties Due to Xingxue - 42,128 Due to Guangzhou Kuyou 9,017 30,996 Due to Shanghang 10,167 10,925 Others 5,733 7,196 Total 24,917 91,245 |
Fair value measurements (Tables
Fair value measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair value measurements [Abstract] | |
Summary of liabilities measured at fair value on recurring basis | As of December 31, 2015 Level 1 Level 2 Level 3 Total Assets Investments: Available-for-sale securities - - 6,117 6,117 As of December 31, 2016 Level 1 Level 2 Level 3 Total Assets Investments: Available-for-sale securities 182,480 - 6,117 188,597 |
Schedule of changes in level 3 instruments | Contingent consideration in relation to business acquisitions RMB Balance as of December 31, 2014 183,000 Acquisition of Beifu in 2015 (Note 4) 107,306 Fair value change of contingent consideration in 2015 (290,306) Balance as of December 31, 2015 and 2016 - |
Schedule of valuation techniques used to discount the contingent consideration | Initial recognition of contingent consideration in relation to Risk free interest rate Discount rate Acquisition of Beifu 3.81 % 18 % |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and contingencies [Abstract] | |
Schedule of future minimum payments under non-cancellable operating leases | Office rental RMB 2017 41,848 2018 28,335 2019 1,876 2020 and after 444 72,503 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Summary information by segment | YY Live Huya broadcasting 100 Education Total RMB RMB RMB RMB Net revenues Live streaming 6,235,249 791,978 - 7,027,227 Online games 634,325 - - 634,325 Membership 284,860 - - 284,860 Others 91,985 4,926 160,727 257,638 Total net revenues 7,246,419 796,904 160,727 8,204,050 Cost of revenues (1) (3,942,201) (1,053,257) (107,972) (5,103,430) Gross profit / (loss) 3,304,218 (256,353) 52,755 3,100,620 Operating expenses (1) Research and development expenses (519,401) (125,308) (30,521) (675,230) Sales and marketing expenses (278,296) (49,490) (59,482) (387,268) General and administrative expenses (402,072) (45,211) (35,154) (482,437) Goodwill impairment (3,861) - (13,804) (17,665) Fair value change of contingent consideration - - - - Total operating expenses (1,203,630) (220,009) (138,961) (1,562,600) Gain on deconsolidation and disposal of subsidiaries 103,960 - - 103,960 Other income 129,504 - - 129,504 Operating income / (loss) 2,334,052 (476,362) (86,206) 1,771,484 (1) Share based compensation was allocated in cost of revenues and operating expenses as follows: YY Live Huya broadcasting 100 Education Total RMB RMB RMB RMB Cost of revenues 11,367 4,203 324 15,894 Research and development expenses 58,271 14,352 6,193 78,816 Sales and marketing expenses 2,826 281 - 3,107 General and administrative expenses 32,888 13,192 13,389 59,469 Share based compensation expenses 105,352 32,028 19,906 157,286 For the year ended December 31, 2015: YY Live Huya broadcasting 100 Education Total RMB RMB RMB RMB Net revenues Live streaming 4,183,533 356,324 - 4,539,857 Online games 771,882 - - 771,882 Membership 291,310 - - 291,310 Others 170,426 - 123,774 294,200 Total net revenues 5,417,151 356,324 123,774 5,897,249 Cost of revenues (1) (2,798,064) (655,066) (126,614) (3,579,744) Gross profit / (loss) 2,619,087 (298,742) (2,840) 2,317,505 Operating expenses (1) Research and development expenses (445,411) (66,538) (36,850) (548,799) Sales and marketing expenses (253,129) (24,469) (35,272) (312,870) General and administrative expenses (240,536) (25,869) (92,069) (358,474) Goodwill impairment (128,034) - (182,090) (310,124) Fair value change of contingent consideration 107,306 - 185,165 292,471 Total operating expenses (959,804) (116,876) (161,116) (1,237,796) Other income 82,300 - - 82,300 Operating income / (loss) 1,741,583 (415,618) (163,956) 1,162,009 (1) Share based compensation was allocated in cost of revenues and operating expenses as follows: YY Live Huya broadcasting 100 Education Total RMB RMB RMB RMB Cost of revenues 22,077 1,497 389 23,963 Research and development expenses 59,400 4,754 6,797 70,951 Sales and marketing expenses 3,119 164 - 3,283 General and administrative expenses 51,260 3,302 32,613 87,175 Share based compensation expenses 135,856 9,717 39,799 185,372 For the year ended December 31, 2014: YY Live Huya broadcasting 100 Education Total RMB RMB RMB RMB Net revenues Live streaming 2,322,008 153,371 - 2,475,379 Online games 811,699 - - 811,699 Membership 205,199 - - 205,199 Others 185,141 - 950 186,091 Total net revenues 3,524,047 153,371 950 3,678,368 Cost of revenues (1) (1,586,933) (248,154) (14,062) (1,849,149) Gross profit / (loss) 1,937,114 (94,783) (13,112) 1,829,219 Operating expenses (1) Research and development expenses (362,352) (47,765) (21,071) (431,188) Sales and marketing expenses (97,983) (4,399) (145) (102,527) General and administrative expenses (200,535) (20,954) (1,530) (223,019) Total operating expenses (660,870) (73,118) (22,746) (756,734) Other income 6,319 - - 6,319 Operating income / (loss) 1,282,563 (167,901) (35,858) 1,078,804 (1) Share based compensation was allocated in cost of revenues and operating expenses as follows: YY Live Huya broadcasting 100 Education Total RMB RMB RMB RMB Cost of revenues 16,552 1,185 300 18,037 Research and development expenses 47,315 1,895 4,931 54,141 Sales and marketing expenses 2,803 4 - 2,807 General and administrative expenses 57,938 1,660 49 59,647 Share based compensation expenses 124,608 4,744 5,280 134,632 |
Additional information - cond66
Additional information - condensed financial statements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Additional information - condensed financial statements [Abstract] | |
Condensed balance sheets | As of December 31, 2015 2016 2016 RMB RMB US$ (Note 2(e)) Assets Current assets Amounts due from a subsidiary 1,881,616 1,947,080 280,438 Non-current assets Interests in subsidiaries and VIEs 3,944,457 5,883,684 847,426 Total non-current assets 3,944,457 5,883,684 847,426 Total assets 5,826,073 7,830,764 1,127,864 Liabilities and shareholders’ equity Current liabilities Interests payable 14,795 15,800 2,276 Convertible bonds (1) - 2,768,469 398,742 Non-current liabilities Convertible bonds (2) 2,572,119 - - Total liabilities 2,586,914 2,784,269 401,018 Shareholders’ equity Class A common shares (US$0.00001 par value; 10,000,000,000 shares authorized, 728,227,848 shares issued and outstanding as of December 31, 2015 and 750,115,028 shares issued and 43 44 6 Class B common shares (US$0.00001 par value; 1,000,000,000 shares authorized, 369,557,976 shares issued and outstanding as of December 31, 2015 and 359,557,976 shares issued and 27 26 4 Additional paid-in capital 2,011,799 2,165,766 311,935 Retained earnings 1,263,675 2,787,593 401,497 Accumulated other comprehensive (loss)/income (36,385) 93,066 13,404 Total shareholders’ equity 3,239,159 5,046,495 726,846 Total liabilities and shareholders’ equity 5,826,073 7,830,764 1,127,864 (1) Convertible bonds classified in current liabilities represent Convertible Senior Notes which may be redeemed within one year. (2) Effectively January 2016, ASU 2015-3 issued by FASB requires entities to present the issuance costs of bonds in the balance sheet as a direct deduction from the related bonds rather than assets. Accordingly, the Company retrospectively reclassified RMB25.3 million of issuance cost of bonds from other non-current assets into convertible bonds as of December 31, 2015 |
Condensed statements of operations and comprehensive income | (b) Condensed statements of operations and comprehensive income of YY Inc. for the years ended December 31, 2014, 2015 and 2016 For the year ended December 31, 2014 2015 2016 2016 RMB RMB RMB US$ (Note2(e)) Share of profit of subsidiaries and VIEs 1,121,079 1,108,029 1,605,003 231,170 Interest expense (56,607) (74,786) (81,085) (11,679) Income before income tax expenses 1,064,472 1,033,243 1,523,918 219,491 Net income 1,064,472 1,033,243 1,523,918 219,491 Other comprehensive income/(loss) : Unrealized gain of available-for-sales securities - - 134,768 19,411 Foreign currency translation adjustments, net of nil tax 3,638 4,414 (5,317) (766) Comprehensive income 1,068,110 1,037,657 1,653,369 238,136 |
Condensed statements of cash flows | (c) Condensed statements of cash flows of YY Inc. for the years ended December 31, 2014, 2015 and 2016 For the year ended December 31, 2014 2015 2016 2016 RMB RMB RMB US$ (Note2(e)) Cash flows from investing activities Loan to a subsidiary (2,412,290) - - - Net cash used in investing activities (2,412,290) - - - Cash flows from financing activities Proceeds from issuance of convertible bonds 2,412,290 - - - Net cash provided by financing activities 2,412,290 - - - Net increase in cash and cash equivalents - - - - Cash and cash equivalents at the beginning of the year - - - - Cash and cash equivalents at the end of the year - - - - |
Organization and principal ac67
Organization and principal activities (Narrative) (Details) ¥ in Thousands, $ in Thousands | Nov. 21, 2012USD ($)shares | Sep. 06, 2011 | Dec. 31, 2016CNY (¥)entity | Dec. 31, 2014shares | Dec. 31, 2015 | Dec. 31, 2010 |
Organization and principal activities [Line Items] | ||||||
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 | entity | 2 | |||||
Registered capital and PRC statutory reserves of the VIEs and VIE's subsidiaries | ¥ | ¥ 2,580,160 | |||||
Common shares [Member] | ||||||
Organization and principal activities [Line Items] | ||||||
Number of shares converted into Class B common shares | 548,408,914 | |||||
Class A common shares [Member] | ||||||
Organization and principal activities [Line Items] | ||||||
Number of ADS issued and sold in IPO (in shares) | 179,400,000 | 25,036,140 | ||||
Number of common shares represented by each ADS | 20 | 20 | 20 | 20 | ||
ADSs [Member] | ||||||
Organization and principal activities [Line Items] | ||||||
Number of ADS issued and sold in IPO (in shares) | 8,970,000 | |||||
Net proceeds received from IPO, after deducting commissions and offering expenses | $ | $ 82,055 | |||||
Preferred Shares [Member] | ||||||
Organization and principal activities [Line Items] | ||||||
Number of shares converted into Class B common shares | 359,424,310 | |||||
Duowan Entertainment Corporation [Member] | Zhuhai Duowan Technology [Member] | ||||||
Organization and principal activities [Line Items] | ||||||
Equity interest owned (as a percent) | 100.00% | |||||
Huanju Shidai Technology Beijing Company Limited [Member] | Guangzhou Huaduo [Member] | Exclusive Technology Support and Technology Services Agreement [Member] | ||||||
Organization and principal activities [Line Items] | ||||||
Period of prior written notice required to terminate the agreement | 30 days | |||||
Huanju Shidai Technology Beijing Company Limited [Member] | Guangzhou Huaduo [Member] | Exclusive Business Cooperation Agreement [Member] | ||||||
Organization and principal activities [Line Items] | ||||||
Period of prior written notice required to terminate the agreement | 30 days | |||||
Huanju Shidai Technology Beijing Company Limited [Member] | Guangzhou Huaduo [Member] | Exclusive Option Agreement [Member] | ||||||
Organization and principal activities [Line Items] | ||||||
Term of agreement | 10 years |
Organization and principal ac68
Organization and principal activities (Schedule of Details of Subsidiaries, VIEs and VIE's Subsidiary) (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Shanghai Yilian Equity Investment Partnership LP [Member] | |
Subsidiaries, VIEs and VIE's subsidiary [Line Items] | |
% of direct or indirect economic ownership | 93.50% |
Zhuhai Huanju Huyu Technology Co., Ltd. [Member] | |
Subsidiaries, VIEs and VIE's subsidiary [Line Items] | |
% of direct or indirect economic ownership | 100.00% |
Guangzhou Huya Technology Co., Ltd. [Member] | |
Subsidiaries, VIEs and VIE's subsidiary [Line Items] | |
% of direct or indirect economic ownership | 100.00% |
Guangzhou Huaduo [Member] | |
Subsidiaries, VIEs and VIE's subsidiary [Line Items] | |
% of direct or indirect economic ownership | 100.00% |
Duowan Entertainment Corporation [Member] | |
Subsidiaries, VIEs and VIE's subsidiary [Line Items] | |
% of direct or indirect economic ownership | 100.00% |
Huanju Shidai Technology Beijing Company Limited [Member] | |
Subsidiaries, VIEs and VIE's subsidiary [Line Items] | |
% of direct or indirect economic ownership | 100.00% |
Zhuhai Duowan or Guangzhou Duowan [Member] | |
Subsidiaries, VIEs and VIE's subsidiary [Line Items] | |
% of direct or indirect economic ownership | 100.00% |
Guangzhou Huanju Shidai [Member] | |
Subsidiaries, VIEs and VIE's subsidiary [Line Items] | |
% of direct or indirect economic ownership | 100.00% |
Engage Capital Partners I LP [Member] | |
Subsidiaries, VIEs and VIE's subsidiary [Line Items] | |
% of direct or indirect economic ownership | 93.50% |
Principal accounting policies69
Principal accounting policies (Convenience Translation - Narrative) (Details) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
Convenience translation | |||
Rate of translations of amounts from RMB into US$ | 6.9430 | ||
Impairment of long-lived assets | |||
Impairment charges of intangible assets | ¥ 3,828 | ¥ 57,199 | ¥ 5,697 |
Accounting Standards Update 2015-17 [Member] | |||
Impairment of long-lived assets | |||
Reclassification Of Current Deferred Tax Assets To Non Current Assets | ¥ 107,309 | ||
Use Rights [Member] | |||
Impairment of long-lived assets | |||
Useful life of intangible assets | 40 years |
Principal accounting policies70
Principal accounting policies (Schedule of Property and Equipment Estimated Useful Lives and Residual Rate) (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Buildings [Member] | |
Property and equipment [Line Items] | |
Estimated useful lives | 40 years |
Residual rate (as a percent) | 0.00% |
Servers, computers and equipment [Member] | |
Property and equipment [Line Items] | |
Estimated useful lives | 3 years |
Servers, computers and equipment [Member] | Minimum [Member] | |
Property and equipment [Line Items] | |
Residual rate (as a percent) | 0.00% |
Servers, computers and equipment [Member] | Maximum [Member] | |
Property and equipment [Line Items] | |
Residual rate (as a percent) | 5.00% |
Leasehold improvements [Member] | |
Property and equipment [Line Items] | |
Residual rate (as a percent) | 0.00% |
Leasehold improvements [Member] | Maximum [Member] | |
Property and equipment [Line Items] | |
Estimated useful lives | 5 years |
Decoration of buildings [Member] | |
Property and equipment [Line Items] | |
Estimated useful lives | 10 years |
Residual rate (as a percent) | 0.00% |
Motor vehicles [Member] | |
Property and equipment [Line Items] | |
Estimated useful lives | 4 years |
Residual rate (as a percent) | 5.00% |
Furniture, fixture and office equipment [Member] | |
Property and equipment [Line Items] | |
Estimated useful lives | 5 years |
Furniture, fixture and office equipment [Member] | Minimum [Member] | |
Property and equipment [Line Items] | |
Residual rate (as a percent) | 0.00% |
Furniture, fixture and office equipment [Member] | Maximum [Member] | |
Property and equipment [Line Items] | |
Residual rate (as a percent) | 5.00% |
Principal accounting policies71
Principal accounting policies (Schedule of Amortization of Finite-lived Intangible Assets is Computed Using Straight-line Method Over Following Estimated Useful Lives) (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Brand names [Member] | ||
Intangible assets, net [Line Items] | ||
Estimated useful lives | 10 years | |
Brand names [Member] | Minimum [Member] | ||
Intangible assets, net [Line Items] | ||
Estimated useful lives | 1 year | |
Brand names [Member] | Maximum [Member] | ||
Intangible assets, net [Line Items] | ||
Estimated useful lives | 15 years | |
Software [Member] | ||
Intangible assets, net [Line Items] | ||
Estimated useful lives | 5 years | 5 years |
Software [Member] | Minimum [Member] | ||
Intangible assets, net [Line Items] | ||
Estimated useful lives | 3 years | |
Software [Member] | Maximum [Member] | ||
Intangible assets, net [Line Items] | ||
Estimated useful lives | 5 years | |
Domain names [Member] | ||
Intangible assets, net [Line Items] | ||
Estimated useful lives | 15 years | 15 years |
Technology [Member] | ||
Intangible assets, net [Line Items] | ||
Estimated useful lives | 5 years | |
Others [Member] | Minimum [Member] | ||
Intangible assets, net [Line Items] | ||
Estimated useful lives | 3 years | 3 years |
Others [Member] | Maximum [Member] | ||
Intangible assets, net [Line Items] | ||
Estimated useful lives | 5 years | 5 years |
Principal accounting policies72
Principal accounting policies (Revenue Recognition and Cost of Revenues - Narrative) (Details) $ in Thousands | Jun. 01, 2014 | Dec. 31, 2016USD ($) | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 |
Cost of revenues | |||||
Tax rate on service income from provision of advertising services in the PRC (as a percent) | 3.00% | ||||
Surcharges on business taxes and VAT (as a percent) | 12.00% | 12.00% | 12.00% | ||
Minimum [Member] | |||||
Cost of revenues | |||||
VAT (as a percent) | 6.00% | ||||
Maximum [Member] | |||||
Cost of revenues | |||||
VAT (as a percent) | 17.00% | ||||
IVAS revenue [Member] | |||||
Cost of revenues | |||||
Business taxes prior to the Pilot Program's being applied (as a percent) | 3.00% | ||||
Online games revenue [Member] | |||||
Cost of revenues | |||||
VAT (as a percent) | 6.00% | ||||
Third party developed online games [Member] | |||||
Revenue recognition [Line Items] | |||||
Number of types of third party developed online games | 2 | ||||
Third party developed online games [Member] | Minimum [Member] | |||||
Revenue recognition [Line Items] | |||||
Period of revenue-sharing contracts | 1 year | ||||
Estimated user relationship period | 1 month | ||||
Third party developed online games [Member] | Maximum [Member] | |||||
Revenue recognition [Line Items] | |||||
Period of revenue-sharing contracts | 2 years | ||||
Estimated user relationship period | 6 months | ||||
Online music and entertainment revenue [Member] | |||||
Revenue recognition [Line Items] | |||||
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 | ||||
Advertising revenues [Member] | Minimum [Member] | |||||
Revenue recognition [Line Items] | |||||
Advertising revenues contract term | 1 month | ||||
Advertising revenues [Member] | Maximum [Member] | |||||
Revenue recognition [Line Items] | |||||
Advertising revenues contract term | 3 months | ||||
Period over which payments are due | 6 months | ||||
Online Education Revenues [Member] | |||||
Revenue recognition [Line Items] | |||||
Number of trial class of the purchased course | 1 | ||||
Amount of refund to be provided to student who withdraws fund after the trial period | $ 0 | ||||
Initial course term | 6 months | ||||
Online Education Revenues [Member] | Minimum [Member] | |||||
Revenue recognition [Line Items] | |||||
Advertising revenues contract term | 1 month | ||||
Online Education Revenues [Member] | Maximum [Member] | |||||
Revenue recognition [Line Items] | |||||
Advertising revenues contract term | 3 months |
Principal accounting policies73
Principal accounting policies (Sales and Marketing Expenses, Share based Compensation, Statutory Reserves, Dividends and Segment Reporting - Narrative) (Details) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
Sales and marketing expenses | |||
Advertising and market promotion expenses | ¥ 298,681 | ¥ 253,210 | ¥ 76,192 |
Employee social security and welfare benefits | |||
Employee social security and welfare benefits | ¥ 206,704 | 171,349 | 115,012 |
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 | |||
Dividends | |||
Dividends declared | ¥ 0 | 0 | 0 |
Segment reporting | |||
Number of operating segments | 1 | ||
Statutory reserves [Member] | |||
Employee social security and welfare benefits | |||
Amount appropriated to statutory reserves | ¥ 2,350 | ¥ 38 | ¥ 15,812 |
Certain risks and concentrati74
Certain risks and concentration (Narrative) (Details) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2016CNY (¥)item | Dec. 31, 2015CNY (¥)item | Dec. 31, 2014CNY (¥) | |
Certain risks and concentration [Line Items] | |||
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 or their shareholders entitled to terminate the contracts prior to the expiration date | 0 | ||
Number of VIEs have accumulated losses since inception | 0 | ||
Minimum [Member] | |||
Certain risks and concentration [Line Items] | |||
Term of contractual agreements | 10 years | ||
Maximum [Member] | |||
Certain risks and concentration [Line Items] | |||
Term of contractual agreements | 30 years | ||
Guangzhou Huaduo [Member] | |||
Certain risks and concentration [Line Items] | |||
Equity interests ownership (as a percent) | 100.00% | ||
Guangzhou Huaduo [Member] | Guangzhou Huanju Shidai and Beijing Huanju Shidai [Member] | |||
Certain risks and concentration [Line Items] | |||
Service fees | ¥ | ¥ 305,792 | ¥ 274,285 | ¥ 363,117 |
Beijing Tuda and Guangzhou Huaduo [Member] | Beijing Huanju Shidai [Member] | |||
Certain risks and concentration [Line Items] | |||
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% | ||
Accounts receivable [Member] | Credit concentration [Member] | Top 10 accounts receivable [Member] | |||
Certain risks and concentration [Line Items] | |||
Number of top accounts receivable | item | 10 | 10 | |
Concentration percentage | 75.00% | 82.00% |
Certain risks and concentrati75
Certain risks and concentration (Schedule of Consolidated Financial Information of Group's VIEs and VIE's Subsidiary Excluding Inter Company Items With Group's Subsidiaries Included in Accompanying Consolidated Financial Statements) (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2013CNY (¥) | |
Current assets | |||||||
Cash and cash equivalents | ¥ 1,579,743 | ¥ 928,934 | ¥ 475,028 | $ 227,530 | $ 133,794 | ¥ 729,598 | |
Short-term deposits | 3,751,519 | 1,894,946 | 540,331 | ||||
Restricted short-term deposits | 0 | 389,221 | 0 | ||||
Accounts receivable, net | 169,571 | 132,353 | 24,423 | ||||
Inventory | 2,266 | 14,385 | 326 | ||||
Amounts due from related parties | 135,245 | 5,297 | 19,479 | ||||
Prepayments and other current assets | 224,732 | 147,823 | 32,369 | ||||
Deferred tax assets | 107,309 | 116,921 | 15,456 | ||||
Total current assets | 5,970,385 | 3,629,880 | 859,914 | ||||
Non-current assets | |||||||
Deferred tax assets | 10,502 | 3,363 | 1,513 | ||||
Investments | 918,602 | 567,557 | 132,306 | ||||
Property and equipment, net | 838,750 | 843,449 | 120,805 | ||||
Intangible assets, net | 58,926 | 146,437 | 8,487 | ||||
Goodwill | 14,300 | 151,638 | 300,382 | 2,060 | |||
Other non-current assets | 101,933 | 1,960,430 | 14,681 | ||||
Total non-current assets | 3,815,407 | 3,672,874 | 549,533 | ||||
Total assets | 9,785,792 | 7,302,754 | 1,409,447 | ||||
Current liabilities | |||||||
Accounts payable | 137,107 | 129,819 | 19,748 | ||||
Deferred revenue | 430,683 | 385,300 | 62,031 | ||||
Advances from customers | 56,152 | 55,086 | 8,088 | ||||
Income taxes payable | 140,754 | 107,403 | 20,273 | ||||
Accrued liabilities and other current liabilities | 1,066,038 | 681,889 | 153,541 | ||||
Amounts due to related parties | 91,245 | 24,917 | 13,142 | ||||
Total current liabilities | 4,690,448 | 1,384,414 | 675,565 | ||||
Non-current liabilities | |||||||
Deferred revenue | 25,459 | 20,752 | 3,667 | ||||
Deferred tax liabilities | 8,058 | 16,817 | 1,161 | ||||
Total non-current liabilities | 33,517 | 2,609,688 | 4,828 | ||||
Total liabilities | 4,723,965 | 3,994,102 | $ 680,393 | ||||
Net income | 1,523,918 | $ 219,491 | 1,033,243 | 1,064,472 | |||
Net cash provided by operating activities | 2,421,135 | 348,715 | 1,823,442 | 1,301,351 | |||
Net cash used in investing activities | (1,783,138) | (256,824) | (1,048,022) | (3,954,055) | |||
Net (decrease) / increase in cash and cash equivalents | 648,648 | $ 93,425 | 438,277 | (249,942) | |||
Variable interest entity [Member] | |||||||
Current assets | |||||||
Cash and cash equivalents | 1,397,738 | 403,722 | |||||
Short-term deposits | 1,235,000 | 250,000 | |||||
Restricted short-term deposits | 110,000 | ||||||
Accounts receivable, net | 165,971 | 127,365 | |||||
Inventory | 2,266 | 14,385 | |||||
Amounts due from related parties | 135,245 | 5,164 | |||||
Prepayments and other current assets | 207,245 | 117,536 | |||||
Deferred tax assets | 83,242 | 87,492 | |||||
Total current assets | 3,226,707 | 1,115,664 | |||||
Non-current assets | |||||||
Deferred tax assets | 10,502 | 3,363 | |||||
Investments | 496,870 | 285,292 | |||||
Property and equipment, net | 261,915 | 292,340 | |||||
Intangible assets, net | 27,241 | 110,214 | |||||
Land use right, net | 1,872,394 | ||||||
Goodwill | 2,527 | 136,066 | |||||
Other non-current assets | 85,583 | 1,932,356 | |||||
Total non-current assets | 2,757,032 | 2,759,631 | |||||
Total assets | 5,983,739 | 3,875,295 | |||||
Current liabilities | |||||||
Accounts payable | 117,917 | 108,500 | |||||
Deferred revenue | 429,883 | 385,300 | |||||
Advances from customers | 56,108 | 45,189 | |||||
Income taxes payable | 112,779 | 80,978 | |||||
Accrued liabilities and other current liabilities | 988,911 | 579,760 | |||||
Amounts due to related parties | 91,245 | 23,684 | |||||
Total current liabilities | 1,796,843 | 1,223,411 | |||||
Non-current liabilities | |||||||
Deferred revenue | 19,125 | 20,752 | |||||
Deferred tax liabilities | 4,777 | 12,592 | |||||
Total non-current liabilities | 23,902 | 33,344 | |||||
Total liabilities | 1,820,745 | 1,256,755 | |||||
Net revenues | 8,164,100 | 5,821,305 | 3,543,994 | ||||
Net income | 1,874,435 | 1,267,111 | 1,136,570 | ||||
Net cash provided by operating activities | 2,538,836 | 2,164,953 | 1,313,521 | ||||
Net cash used in investing activities | (1,313,002) | (2,251,207) | (994,574) | ||||
Net cash provided by financing activities | 8,508 | 704,298 | 0 | ||||
Net (decrease) / increase in cash and cash equivalents | ¥ 1,234,342 | ¥ 618,044 | ¥ 318,947 |
Certain Risks And Concentrati76
Certain Risks And Concentration (Summary of Percentage of Accounts Receivable from Collection Agencies and Advertising Customers With Over 10% of Total Accounts Receivable) (Details) - Accounts receivable [Member] - Credit concentration [Member] | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Collection agencies and advertising customers, B1 [Member] | |||
Concentration of risks [Line Items] | |||
Concentration percentage | 19.00% | 35.00% | |
Collection agencies and advertising customers, B2 [Member] | |||
Concentration of risks [Line Items] | |||
Concentration percentage | 17.00% | [1] | |
[1] | Less than 10% |
Business combination and disp77
Business combination and disposal of subsidiaries (Narrative) (Details) ¥ in Thousands, $ in Thousands | Feb. 03, 2015CNY (¥) | Dec. 31, 2016CNY (¥) | Jun. 30, 2016CNY (¥) | Feb. 28, 2015CNY (¥) | Sep. 30, 2015CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2016USD ($) | |||
Business combination [Line Items] | |||||||||||||
Goodwill | ¥ 14,300 | ¥ 14,300 | ¥ 151,638 | ¥ 300,382 | $ 2,060 | ||||||||
Goodwill, Impairment Loss | [2] | 17,665 | [1] | $ 2,544 | 310,124 | [1] | |||||||
Gain (Loss) on Disposition of Stock in Subsidiary | 103,960 | 14,973 | |||||||||||
Equity Method Investment, Realized Gain (Loss) on Disposal | ¥ 25,061 | $ 3,610 | ¥ 999 | ||||||||||
Xingxue Technology Development Co., Ltd [Member] | |||||||||||||
Business combination [Line Items] | |||||||||||||
Percentage of equity interests acquired | 33.86% | 33.86% | 33.86% | ||||||||||
Equity Method Investment Disposal Percentage | 33.86% | ||||||||||||
Assets and Liabilities for Disposal of Subsidiaries | ¥ 154,999 | ¥ 154,999 | |||||||||||
Proceeds from Sale of Equity Method Investments | ¥ 118,500 | ||||||||||||
Equity Method Investment, Ownership Percentage | 31.14% | 31.14% | 31.14% | ||||||||||
Equity Method Investment, Realized Gain (Loss) on Disposal | ¥ 127,434 | ||||||||||||
Deconsolidation, Revaluation of Retained Investment, Gain (Loss), Amount | ¥ 57,791 | ||||||||||||
Fair value of consideration received, fair value the retained noncontrolling interest and carrying amount of noncontrolling interest | ¥ 282,433 | ||||||||||||
Beifu [Member] | |||||||||||||
Business combination [Line Items] | |||||||||||||
Percentage of equity interests acquired | 70.00% | ||||||||||||
Cash consideration | ¥ 39,200 | ||||||||||||
Base contingent payment to be made when achieves specific percentage of performance metrics | 100.00% | ||||||||||||
Maximum undiscounted amounts the Company could have paid under the contingent consideration provisions of the agreement | ¥ 219,000 | ||||||||||||
Contingent consideration | ¥ 107,000 | ||||||||||||
Goodwill | ¥ 147,388 | ||||||||||||
Subsidiary Divestiture Interest Percentage | 60.00% | ||||||||||||
Goodwill, Impairment Loss | ¥ 128,035 | ¥ 128,035 | |||||||||||
Proceeds from Divestiture of Interest in Consolidated Subsidiaries | ¥ 3,500 | ||||||||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 10.00% | ||||||||||||
Gain (Loss) on Disposition of Stock in Subsidiary | ¥ (23,474) | ||||||||||||
Fair Value Consideration Received | 13,236 | ||||||||||||
Assets and Liabilities for Disposal of Subsidiaries | 36,710 | ||||||||||||
Deconsolidation, Revaluation of Retained Investment, Gain (Loss), Amount | ¥ (3,088) | ||||||||||||
[1] | (iii) The Group performs its annual goodwill impairment test of each reporting unit as of October 1, or more frequently, if certain events or circumstances warrant. Events or changes in circumstances which might indicate potential impairment in goodwill include the entity-specific factors, including, but not limited to, stock price volatility, market capitalization relative to net book value, and projected revenue, market growth and operating results. In June 2015, it was noted that 100 Online’s financial and operational performance in the first half year of 2015 was behind the original budget resulting from unexpected fierce market competition and the resignation of a number of key personnel in 100 Online. Accordingly, the Group performed an interim assessment on the goodwill impairment related to 100 Online and recognized an estimated goodwill impairment charge of RMB110,699. Correspondingly, long-term payable amounting to RMB111,547 in relation to the contingent consideration was reversed. The unobservable inputs used in the assessment included risk free rate, discount rate and etc. The risk free rate and discount rate were 4.07% and 21.5%, respectively. In the 2015 annual goodwill impairment assessment, the Group has noted further impairment indicator for 100 Online as well as impairment indicator for Beifu as certain key personnel of 100 Online and Beifu resigned in the third quarter of 2015. Based on the result of the annual impairment assessment for 100 Online, an impairment charge of RMB71,390 was recognised and correspondingly, long-term payable amounting to RMB73,618 in relation to the contingent consideration was reversed; For Beifu, an impairment charge of RMB128,035 was recognised and correspondingly, long-term payable amounting to RMB 107,306 in relation to the contingent consideration was reversed. The unobservable inputs used in the assessment, included the risk free rate, discount rate and etc. For the goodwill impairment assessment of 100 Online and Beifu, the risk free rate were both 3.85% and the discount rate were 23% and 24.5%, respectively. In December 2016, the Group has identified further impairment indicator for 100 Online as well as impairment indicator for Bilin Online. Based on the results of the impairment assessment, an impairment charge of RMB13,804 for 100 Online and an impairment charge of RMB3,861 for Bilin Online were recognized, respectively. The above goodwill impairment assessments on 100 Online, Beifu and Bilin Online adopted the income approach and considered a combination of factors, including, but not limited to, market conditions, expected future cash flows, growth rates and discount rates, which required the Group to make certain estimates and assumptions regarding industry economic factors and future profitability of the business. | ||||||||||||
[2] | Share-based compensation was allocated in cost of revenues and operating expenses as follows:For the year ended December 31, Note 2014 2015 2016 2016 RMB RMB RMB US$ (Note2(e)) Cost of revenues 18,037 23,963 15,894 2,289 Research and development expenses 54,141 70,951 78,816 11,352 Sales and marketing expenses 2,807 3,283 3,107 448 General and administrative expenses 59,647 87,175 59,469 8,565 |
Business combination and disp78
Business combination and disposal of subsidiaries (Schedule of Allocation of Purchase Price at Date of Acquisition) (Details) ¥ in Thousands, $ in Thousands | Feb. 03, 2015CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) |
Purchase price allocation | |||||
Goodwill | ¥ 14,300 | $ 2,060 | ¥ 151,638 | ¥ 300,382 | |
Shanghai Beifu Culture Communication Co Ltd [Member] | |||||
Purchase price allocation | |||||
Cash consideration | ¥ 39,200 | ||||
Contingent consideration | 107,306 | ||||
Total consideration | 146,506 | ||||
Net assets acquired | 31,994 | ||||
Identifiable intangible assets acquired | 12,900 | ||||
Goodwill | 147,388 | ||||
Deferred tax liabilities | (3,225) | ||||
Non-controlling interest | (42,551) | ||||
Total | ¥ 146,506 |
Cash and cash equivalents (Deta
Cash and cash equivalents (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2015USD ($) | Dec. 31, 2014CNY (¥) | Dec. 31, 2013CNY (¥) |
Cash and cash equivalents [Line Items] | ||||||
Cash and cash equivalents | ¥ 1,579,743 | $ 227,530 | ¥ 928,934 | $ 133,794 | ¥ 475,028 | ¥ 729,598 |
RMB [Member] | ||||||
Cash and cash equivalents [Line Items] | ||||||
Cash and cash equivalents | 1,536,947 | 450,802 | ||||
US$ [Member] | ||||||
Cash and cash equivalents [Line Items] | ||||||
Cash and cash equivalents | ¥ 42,796 | $ 6,171 | ¥ 478,132 | $ 73,632 |
Short-term deposits (Details)
Short-term deposits (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2015USD ($) |
Short Term Deposits [Line Items] | ||||
Short-term deposits | ¥ 3,751,519 | $ 540,331 | ¥ 1,894,946 | |
RMB [Member] | ||||
Short Term Deposits [Line Items] | ||||
Short-term deposits | 1,235,000 | 250,000 | ||
US$ [Member] | ||||
Short Term Deposits [Line Items] | ||||
Short-term deposits | ¥ 2,516,519 | $ 362,882 | ¥ 1,644,946 | $ 253,322 |
Restricted short-term deposit81
Restricted short-term deposits (Schedule of restricted short-term deposits) (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | |
Restricted Cash And Investments [Line Items] | ||||
Pledge short-term deposits for one pending litigation | [1] | ¥ 110,000 | ||
Pledge short-term deposits for bank borrowing facilities | [2] | 279,221 | ||
Restricted short-term deposits | ¥ 0 | $ 0 | ¥ 389,221 | |
[1] | As of December 31, 2015, the Group had restricted short-term deposits balance of RMB110 million representing pledged deposit for one pending litigation in which the Group was the claimant and had applied to the court to freeze the assets of the defendant. Pursuant to relevant PRC laws and regulations, the Group had to deposit a certain amount of cash as pledged deposit in order to submit the application to the court requesting to freeze the defendant’s assets. | |||
[2] | As of December 31, 2015, the Company had offshore restricted short-term deposits balance set aside for a period of 12 months or less of approximately RMB279 million for bank borrowing facilities. |
Accounts receivable, net (Detai
Accounts receivable, net (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | |
Accounts Receivable Net [Line Items] | ||||||
Accounts receivable, gross | ¥ 224,791 | ¥ 191,144 | ||||
Less: allowance for doubtful receivables | ¥ (58,791) | ¥ (58,791) | ¥ (31,214) | (55,220) | (58,791) | |
Accounts receivable, net | ¥ 169,571 | $ 24,423 | ¥ 132,353 | |||
Summary of allowance for doubtful accounts | ||||||
Balance at beginning of the year | (58,791) | (57,342) | (31,214) | |||
(Additions)/reversals charged to general and administrative expenses, net | 3,571 | (1,449) | (26,246) | |||
Write-off during the year | 118 | |||||
Balance at end of the year | ¥ (55,220) | ¥ (58,791) | ¥ (57,342) |
Prepayments and other current83
Prepayments and other current assets (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) |
Prepayments and other current assets [Line Items] | |||
Receivables from disposal of a subsidiary | ¥ 95,166 | ¥ 0 | |
Prepayments and deposits to vendors and content providers | 70,347 | 71,354 | |
Interests receivable | 17,050 | 41,220 | |
Rental and other deposits | 13,015 | 12,111 | |
Employee advances | 12,245 | 12,484 | |
Rental prepayments | 6,462 | 1,333 | |
Others | 10,447 | 9,321 | |
Total | ¥ 224,732 | $ 32,369 | ¥ 147,823 |
Investments (Schedule of Invest
Investments (Schedule of Investments) (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | |
Investments [Line Items] | ||||
Cost investments | [1] | ¥ 477,733 | ¥ 516,446 | |
Equity investments | [2] | 252,272 | 44,994 | |
Available-for-sale securities | [3] | 188,597 | 6,117 | |
Total | ¥ 918,602 | $ 132,306 | ¥ 567,557 | |
[1] | In 2015 and 2016, the Group entered into agreements to acquire minority stake of a number of privately-held entities with total consideration of RMB351,800 and RMB90,234 respectively. The investments are not investment in common stock or in-substance common stock and therefore have been precluded from applying the equity method of accounting. They have been accounted for as investments under cost method, since all of these equity securities do not have a readily determinable fair value. | |||
[2] | In 2016, the Group acquired minority stake of a number of privately-held entities with total consideration of RMB107,010. Investments have been accounted for under the equity method where the Group has significant influence in these investments and the investments are considered as in substance ordinary shares. In 2016, following the deconsolidation and disposal of Xingxue (Note 4), the Group reclassified the remaining 31.14% equity interest of Xingxue as an equity investment, as the Group still can exercise significant influence over Xingxue. | |||
[3] | In 2015, the Group entered into share purchase agreements to acquire 4.25% equity stake of a company with a total consideration of RMB6,117. The Group recorded this investment as an available-for-sale debt security since the preferred shares purchased by the Group are redeemable at the option of the Group. Subsequent to initial recognition, the available-for-sale debt security is measured at fair value at every period end. There was no significant change in fair value of the investment from the investment date to December 31, 2016. In 2016, one of the Group's investees became listed on NASDAQ Global Market. As the investment has readily determinable fair value upon listing, the Group reclassified this investment as an available-for-sale security upon its listing and recorded the investment at fair value with unrealized holding gain or loss recognized in other comprehensive income under ASC 320. |
Investments (Narrative) (Detail
Investments (Narrative) (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
Investments [Line Items] | ||||
Consideration to acquire minority stake | ¥ 90,234 | $ 12,996 | ¥ 351,800 | ¥ 73,402 |
Equity interest in an investee company (as a percent) | 4.25% | |||
Original investment | 107,010 | ¥ 6,117 | ||
Impairment charge | ¥ 80,104 | ¥ 6,000 | ¥ 4,000 | |
Xingxue Technology Development Co., Ltd [Member] | ||||
Investments [Line Items] | ||||
Equity Method Investment, Ownership Percentage | 31.14% |
Property and equipment, net (Sc
Property and equipment, net (Schedule of Property and Equipment) (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) |
Property and equipment, net [Line Items] | |||
Gross carrying amount | ¥ 1,250,773 | ¥ 1,112,767 | |
Less: accumulated depreciation | (412,023) | (269,318) | |
Property and equipment, net | 838,750 | $ 120,805 | 843,449 |
Buildings [Member] | |||
Property and equipment, net [Line Items] | |||
Gross carrying amount | 482,333 | 482,387 | |
Servers, computers and equipment [Member] | |||
Property and equipment, net [Line Items] | |||
Gross carrying amount | 565,786 | 453,441 | |
Leasehold improvements [Member] | |||
Property and equipment, net [Line Items] | |||
Gross carrying amount | 80,812 | 69,929 | |
Decoration of buildings [Member] | |||
Property and equipment, net [Line Items] | |||
Gross carrying amount | 68,981 | 66,140 | |
Furniture, fixture and office equipment [Member] | |||
Property and equipment, net [Line Items] | |||
Gross carrying amount | 23,259 | 26,098 | |
Motor vehicles [Member] | |||
Property and equipment, net [Line Items] | |||
Gross carrying amount | 24,016 | 12,835 | |
Construction in progress [Member] | |||
Property and equipment, net [Line Items] | |||
Gross carrying amount | ¥ 5,586 | ¥ 1,937 |
Property and equipment, net (Na
Property and equipment, net (Narrative) (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
Depreciation expense | ¥ 173,625 | $ 25,007 | ¥ 122,098 | ¥ 68,035 |
Land use right, net (Schedule O
Land use right, net (Schedule Of Land Use Right) (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) |
Gross carrying amount | ¥ 252,488 | ¥ 297,634 | |
Less: accumulated amortization | (134,077) | (87,485) | |
Land use right, net | 58,926 | $ 8,487 | ¥ 146,437 |
Land use right [Member] | |||
Gross carrying amount | 1,916,309 | ||
Less: accumulated amortization | (43,915) | ||
Land use right, net | ¥ 1,872,394 |
Land use right, net (Narrative)
Land use right, net (Narrative) (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
Amortization of acquired intangible assets and land use right | ¥ 100,892 | $ 14,531 | ¥ 64,201 | ¥ 12,598 |
Land use right [Member] | ||||
Amortization of acquired intangible assets and land use right | ¥ 43,915 |
Intangible assets, net (Summary
Intangible assets, net (Summary of Group's Intangible Assets) (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) |
Intangible assets, net [Line Items] | |||
Gross carrying amount | ¥ 252,488 | ¥ 297,634 | |
Less: accumulated amortization | (134,077) | (87,485) | |
Less: accumulated impairment | (59,485) | (63,712) | |
Intangible assets, net | 58,926 | $ 8,487 | 146,437 |
Brand names [Member] | |||
Intangible assets, net [Line Items] | |||
Gross carrying amount | 59,034 | 102,654 | |
Less: accumulated amortization | (21,810) | (20,294) | |
Operating rights for game broadcasting [Member] | |||
Intangible assets, net [Line Items] | |||
Gross carrying amount | 58,655 | 35,071 | |
Less: accumulated amortization | (46,855) | (23,278) | |
Operating rights for licensed games [Member] | |||
Intangible assets, net [Line Items] | |||
Gross carrying amount | 40,274 | 46,879 | |
Less: accumulated amortization | (30,804) | (15,010) | |
Software [Member] | |||
Intangible assets, net [Line Items] | |||
Gross carrying amount | 30,632 | 38,307 | |
Less: accumulated amortization | (13,110) | (9,464) | |
Domain names [Member] | |||
Intangible assets, net [Line Items] | |||
Gross carrying amount | 27,311 | 25,902 | |
Less: accumulated amortization | (8,449) | (6,249) | |
Technology [Member] | |||
Intangible assets, net [Line Items] | |||
Gross carrying amount | 18,282 | 17,621 | |
Less: accumulated amortization | (9,457) | (7,712) | |
Others [Member] | |||
Intangible assets, net [Line Items] | |||
Gross carrying amount | 18,300 | 31,200 | |
Less: accumulated amortization | ¥ (3,592) | ¥ (5,478) |
Intangible assets, net (Schedul
Intangible assets, net (Schedule of Estimated Amortization Expenses) (Details) ¥ in Thousands | Dec. 31, 2016CNY (¥) |
Amortization expense of intangible assets | |
2,017 | ¥ 25,606 |
2,018 | 10,453 |
2,019 | 6,032 |
2,020 | 4,708 |
2,021 | ¥ 1,925 |
Intangible assets, net (Sched92
Intangible assets, net (Schedule of Weighted Average Amortization Periods of Intangible Assets) (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Domain names [Member] | ||
Weighted average amortization periods of intangible assets | ||
Weighted average amortization period | 15 years | 15 years |
Technology [Member] | ||
Weighted average amortization periods of intangible assets | ||
Weighted average amortization period | 5 years | 5 years |
Software [Member] | ||
Weighted average amortization periods of intangible assets | ||
Weighted average amortization period | 5 years | 5 years |
Software [Member] | Minimum [Member] | ||
Weighted average amortization periods of intangible assets | ||
Weighted average amortization period | 3 years | |
Software [Member] | Maximum [Member] | ||
Weighted average amortization periods of intangible assets | ||
Weighted average amortization period | 5 years | |
Operating rights for licensed games [Member] | ||
Weighted average amortization periods of intangible assets | ||
Weighted average amortization period | 2 years | 3 years |
Operating rights for game broadcasting [Member] | ||
Weighted average amortization periods of intangible assets | ||
Weighted average amortization period | 1 year | 1 year |
Brand names [Member] | ||
Weighted average amortization periods of intangible assets | ||
Weighted average amortization period | 10 years | |
Brand names [Member] | Minimum [Member] | ||
Weighted average amortization periods of intangible assets | ||
Weighted average amortization period | 1 year | |
Brand names [Member] | Maximum [Member] | ||
Weighted average amortization periods of intangible assets | ||
Weighted average amortization period | 15 years | |
Others [Member] | Minimum [Member] | ||
Weighted average amortization periods of intangible assets | ||
Weighted average amortization period | 3 years | 3 years |
Others [Member] | Maximum [Member] | ||
Weighted average amortization periods of intangible assets | ||
Weighted average amortization period | 5 years | 5 years |
Intangible assets, net (Narrati
Intangible assets, net (Narrative) (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
Impairment of intangible assets | ¥ 3,828 | $ 551 | ¥ 57,199 | ¥ 5,697 |
Amortization of acquired intangible assets and land use right | 100,892 | $ 14,531 | 64,201 | 12,598 |
Finite-Lived Intangible Assets [Member] | ||||
Amortization of acquired intangible assets and land use right | ¥ 56,977 | 64,201 | ¥ 12,598 | |
100 Online Education Technology (Beijing) Co., Ltd. [Member] | ||||
Impairment of intangible assets | 48,814 | |||
Beifu [Member] | ||||
Impairment of intangible assets | ¥ 8,385 |
Goodwill (Details)
Goodwill (Details) ¥ in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2015CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | ||||
Goodwill | ||||||||
Balance at beginning of the year | ¥ 151,638 | ¥ 300,382 | ||||||
Increase in goodwill related to acquisition | [1] | 161,326 | ||||||
Decrease in goodwill related to disposal | [2] | (119,736) | ||||||
Impairment charges | [4] | (17,665) | [3] | $ (2,544) | (310,124) | [3] | ||
Foreign currency translation adjustment | 63 | 54 | ||||||
Balance at end of the year | 14,300 | $ 2,060 | 151,638 | 300,382 | ||||
YY Live [Member] | ||||||||
Goodwill | ||||||||
Balance at beginning of the year | 37,452 | 4,107 | ||||||
Increase in goodwill related to acquisition | [1] | 161,326 | ||||||
Decrease in goodwill related to disposal | [2] | (19,354) | ||||||
Impairment charges | [3] | (3,861) | (128,035) | |||||
Foreign currency translation adjustment | 63 | 54 | ||||||
Balance at end of the year | 14,300 | 37,452 | 4,107 | |||||
100 Education [Member] | ||||||||
Goodwill | ||||||||
Balance at beginning of the year | 114,186 | 296,275 | ||||||
Increase in goodwill related to acquisition | [1] | |||||||
Decrease in goodwill related to disposal | [2] | (100,382) | ||||||
Impairment charges | ¥ (71,390) | (13,804) | [3] | (182,089) | [3] | |||
Foreign currency translation adjustment | ||||||||
Balance at end of the year | ¥ 114,186 | ¥ 296,275 | ||||||
[1] | In February 2015, the Group purchased 70% equity interest of Beifu. Goodwill of RMB147,388 was recognized in the segment of YY Live from this business acquisition (Note 4). Goodwill represented the synergy effects of the business combination. | |||||||
[2] | In June 2016, the Group disposed 60% equity interest of Beifu and ceased to consolidate Beifu as a subsidiary. Goodwill of RMB19,354 was derecognized in the segment of YY Live (Note 4). In December 2016, the Group disposed 33.86% equity interest of Xingxue and ceased to consolidate Xingxue as a subsidiary. Goodwill of RMB100,382 was derecognized in the segment of 100 Education upon this disposal (Note 4). | |||||||
[3] | (iii) The Group performs its annual goodwill impairment test of each reporting unit as of October 1, or more frequently, if certain events or circumstances warrant. Events or changes in circumstances which might indicate potential impairment in goodwill include the entity-specific factors, including, but not limited to, stock price volatility, market capitalization relative to net book value, and projected revenue, market growth and operating results. In June 2015, it was noted that 100 Online’s financial and operational performance in the first half year of 2015 was behind the original budget resulting from unexpected fierce market competition and the resignation of a number of key personnel in 100 Online. Accordingly, the Group performed an interim assessment on the goodwill impairment related to 100 Online and recognized an estimated goodwill impairment charge of RMB110,699. Correspondingly, long-term payable amounting to RMB111,547 in relation to the contingent consideration was reversed. The unobservable inputs used in the assessment included risk free rate, discount rate and etc. The risk free rate and discount rate were 4.07% and 21.5%, respectively. In the 2015 annual goodwill impairment assessment, the Group has noted further impairment indicator for 100 Online as well as impairment indicator for Beifu as certain key personnel of 100 Online and Beifu resigned in the third quarter of 2015. Based on the result of the annual impairment assessment for 100 Online, an impairment charge of RMB71,390 was recognised and correspondingly, long-term payable amounting to RMB73,618 in relation to the contingent consideration was reversed; For Beifu, an impairment charge of RMB128,035 was recognised and correspondingly, long-term payable amounting to RMB 107,306 in relation to the contingent consideration was reversed. The unobservable inputs used in the assessment, included the risk free rate, discount rate and etc. For the goodwill impairment assessment of 100 Online and Beifu, the risk free rate were both 3.85% and the discount rate were 23% and 24.5%, respectively. In December 2016, the Group has identified further impairment indicator for 100 Online as well as impairment indicator for Bilin Online. Based on the results of the impairment assessment, an impairment charge of RMB13,804 for 100 Online and an impairment charge of RMB3,861 for Bilin Online were recognized, respectively. The above goodwill impairment assessments on 100 Online, Beifu and Bilin Online adopted the income approach and considered a combination of factors, including, but not limited to, market conditions, expected future cash flows, growth rates and discount rates, which required the Group to make certain estimates and assumptions regarding industry economic factors and future profitability of the business. | |||||||
[4] | Share-based compensation was allocated in cost of revenues and operating expenses as follows:For the year ended December 31, Note 2014 2015 2016 2016 RMB RMB RMB US$ (Note2(e)) Cost of revenues 18,037 23,963 15,894 2,289 Research and development expenses 54,141 70,951 78,816 11,352 Sales and marketing expenses 2,807 3,283 3,107 448 General and administrative expenses 59,647 87,175 59,469 8,565 |
Goodwill (Narrative) (Details)
Goodwill (Narrative) (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2016 | Sep. 30, 2015CNY (¥) | Jun. 30, 2015CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2016USD ($) | Feb. 28, 2015CNY (¥) | Feb. 03, 2015CNY (¥) | ||||
Goodwill [Line Items] | |||||||||||||
Goodwill | ¥ 14,300 | ¥ 151,638 | ¥ 300,382 | $ 2,060 | |||||||||
Goodwill impairment losses | [2] | 17,665 | [1] | $ 2,544 | 310,124 | [1] | |||||||
Contingent consideration reversed amount | [2] | 0 | $ 0 | (292,471) | |||||||||
Goodwill, Period Increase (Decrease) | [3] | ¥ (119,736) | |||||||||||
Other Notes Payable | 0 | ||||||||||||
Fair Value, Inputs, Level 3 [Member] | |||||||||||||
Goodwill [Line Items] | |||||||||||||
Contingent consideration reversed amount | (290,306) | ||||||||||||
Xingxue Technology Development Co., Ltd [Member] | |||||||||||||
Goodwill [Line Items] | |||||||||||||
Percentage of equity interests acquired | 33.86% | 33.86% | |||||||||||
100 Education [Member] | |||||||||||||
Goodwill [Line Items] | |||||||||||||
Goodwill | 114,186 | 296,275 | |||||||||||
Goodwill impairment losses | ¥ 71,390 | 13,804 | [1] | 182,089 | [1] | ||||||||
Contingent consideration reversed amount | 73,618 | (185,165) | |||||||||||
Goodwill, Period Increase (Decrease) | [3] | (100,382) | |||||||||||
YY Live [Member] | |||||||||||||
Goodwill [Line Items] | |||||||||||||
Goodwill | 14,300 | 37,452 | ¥ 4,107 | ||||||||||
Goodwill impairment losses | [1] | 3,861 | 128,035 | ||||||||||
Contingent consideration reversed amount | ¥ (107,306) | ||||||||||||
Goodwill, Period Increase (Decrease) | [3] | ¥ (19,354) | |||||||||||
100 Online and DuBooker [Member] | |||||||||||||
Goodwill [Line Items] | |||||||||||||
Goodwill impairment losses | ¥ 110,699 | ||||||||||||
Contingent consideration reversed amount | ¥ 111,547 | ||||||||||||
100 Online and DuBooker [Member] | Fair Value, Inputs, Level 3 [Member] | |||||||||||||
Goodwill [Line Items] | |||||||||||||
Fair Value Assumptions, Risk Free Interest Rate | 4.07% | 3.85% | |||||||||||
Fair Value Inputs, Discount Rate | 21.50% | 23.00% | |||||||||||
Beifu [Member] | |||||||||||||
Goodwill [Line Items] | |||||||||||||
Percentage of equity interests acquired | 70.00% | ||||||||||||
Goodwill | ¥ 147,388 | ||||||||||||
Goodwill impairment losses | 128,035 | ¥ 128,035 | |||||||||||
Contingent consideration reversed amount | ¥ 107,306 | ||||||||||||
Subsidiary Divestiture Interest Percentage | 60.00% | ||||||||||||
Fair Value Assumptions, Risk Free Interest Rate | 3.81% | 3.81% | |||||||||||
Fair Value Inputs, Discount Rate | 18.00% | 18.00% | |||||||||||
Beifu [Member] | Fair Value, Inputs, Level 3 [Member] | |||||||||||||
Goodwill [Line Items] | |||||||||||||
Fair Value Assumptions, Risk Free Interest Rate | 3.85% | ||||||||||||
Fair Value Inputs, Discount Rate | 24.50% | ||||||||||||
Beifu [Member] | YY Live [Member] | |||||||||||||
Goodwill [Line Items] | |||||||||||||
Goodwill | ¥ 147,388 | ||||||||||||
Bilin Online [Member] | |||||||||||||
Goodwill [Line Items] | |||||||||||||
Goodwill impairment losses | ¥ 3,861 | ||||||||||||
[1] | (iii) The Group performs its annual goodwill impairment test of each reporting unit as of October 1, or more frequently, if certain events or circumstances warrant. Events or changes in circumstances which might indicate potential impairment in goodwill include the entity-specific factors, including, but not limited to, stock price volatility, market capitalization relative to net book value, and projected revenue, market growth and operating results. In June 2015, it was noted that 100 Online’s financial and operational performance in the first half year of 2015 was behind the original budget resulting from unexpected fierce market competition and the resignation of a number of key personnel in 100 Online. Accordingly, the Group performed an interim assessment on the goodwill impairment related to 100 Online and recognized an estimated goodwill impairment charge of RMB110,699. Correspondingly, long-term payable amounting to RMB111,547 in relation to the contingent consideration was reversed. The unobservable inputs used in the assessment included risk free rate, discount rate and etc. The risk free rate and discount rate were 4.07% and 21.5%, respectively. In the 2015 annual goodwill impairment assessment, the Group has noted further impairment indicator for 100 Online as well as impairment indicator for Beifu as certain key personnel of 100 Online and Beifu resigned in the third quarter of 2015. Based on the result of the annual impairment assessment for 100 Online, an impairment charge of RMB71,390 was recognised and correspondingly, long-term payable amounting to RMB73,618 in relation to the contingent consideration was reversed; For Beifu, an impairment charge of RMB128,035 was recognised and correspondingly, long-term payable amounting to RMB 107,306 in relation to the contingent consideration was reversed. The unobservable inputs used in the assessment, included the risk free rate, discount rate and etc. For the goodwill impairment assessment of 100 Online and Beifu, the risk free rate were both 3.85% and the discount rate were 23% and 24.5%, respectively. In December 2016, the Group has identified further impairment indicator for 100 Online as well as impairment indicator for Bilin Online. Based on the results of the impairment assessment, an impairment charge of RMB13,804 for 100 Online and an impairment charge of RMB3,861 for Bilin Online were recognized, respectively. The above goodwill impairment assessments on 100 Online, Beifu and Bilin Online adopted the income approach and considered a combination of factors, including, but not limited to, market conditions, expected future cash flows, growth rates and discount rates, which required the Group to make certain estimates and assumptions regarding industry economic factors and future profitability of the business. | ||||||||||||
[2] | Share-based compensation was allocated in cost of revenues and operating expenses as follows:For the year ended December 31, Note 2014 2015 2016 2016 RMB RMB RMB US$ (Note2(e)) Cost of revenues 18,037 23,963 15,894 2,289 Research and development expenses 54,141 70,951 78,816 11,352 Sales and marketing expenses 2,807 3,283 3,107 448 General and administrative expenses 59,647 87,175 59,469 8,565 | ||||||||||||
[3] | In June 2016, the Group disposed 60% equity interest of Beifu and ceased to consolidate Beifu as a subsidiary. Goodwill of RMB19,354 was derecognized in the segment of YY Live (Note 4). In December 2016, the Group disposed 33.86% equity interest of Xingxue and ceased to consolidate Xingxue as a subsidiary. Goodwill of RMB100,382 was derecognized in the segment of 100 Education upon this disposal (Note 4). |
Deferred revenue (Details)
Deferred revenue (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) |
Deferred revenue [Line Items] | |||
Deferred revenue, current | ¥ 430,683 | $ 62,031 | ¥ 385,300 |
Deferred revenue, non-current | 25,459 | $ 3,667 | 20,752 |
Live streaming [Member] | |||
Deferred revenue [Line Items] | |||
Deferred revenue, current | 308,545 | 187,930 | |
Deferred revenue, non-current | 12,002 | 8,757 | |
Online Games [Member] | |||
Deferred revenue [Line Items] | |||
Deferred revenue, current | 61,589 | 81,054 | |
Membership [Member] | |||
Deferred revenue [Line Items] | |||
Deferred revenue, current | 47,532 | 87,483 | |
Deferred revenue, non-current | 6,273 | 11,328 | |
Others | |||
Deferred revenue [Line Items] | |||
Deferred revenue, current | 13,017 | 28,833 | |
Deferred revenue, non-current | ¥ 7,184 | ¥ 667 |
Accrued liabilities and other97
Accrued liabilities and other current liabilities (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) |
Accrued revenue sharing fees | ¥ 521,654 | ¥ 298,805 | |
Accrued salaries and welfare | 200,606 | 169,041 | |
Accrued bandwidth costs | 86,186 | 71,507 | |
Market promotion expenses | 68,243 | 29,358 | |
Value added taxes payable | 38,161 | 16,010 | |
License fees | 22,725 | 10,000 | |
Deposits from content providers and suppliers | 18,779 | 16,531 | |
Other taxes payable | 18,516 | 14,370 | |
Interests payable | 15,800 | 14,795 | |
Others | 75,368 | 41,472 | |
Total | ¥ 1,066,038 | $ 153,541 | ¥ 681,889 |
Convertible bonds (Details)
Convertible bonds (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | |
Convertible Bond, current | ||||
Convertible Bond, current | [1] | ¥ 2,768,469 | $ 398,742 | ¥ 0 |
Convertible Bond, non-current | ||||
Convertible Bond, non-current | [2] | 0 | $ 0 | 2,572,119 |
Short-term Debt [Member] | ||||
Convertible Bond, current | ||||
2019 Convertible Senior Notes | 2,773,925 | 0 | ||
Less: issuance cost | (5,456) | 0 | ||
Convertible Bond, current | 2,768,469 | 0 | ||
Long-term Debt [Member] | ||||
Convertible Bond, non-current | ||||
2019 Convertible Senior Notes | 0 | 2,597,403 | ||
Less: issuance cost | 0 | (25,284) | ||
Convertible Bond, non-current | ¥ 0 | ¥ 2,572,119 | ||
[1] | Convertible bonds classified in current liabilities represent Convertible Senior Notes which may be redeemed within one year. | |||
[2] | Effectively January 2016, ASU 2015-3 issued by FASB requires entities to present the issuance costs of bonds in the balance sheet as a direct deduction from the related bonds rather than assets. Accordingly, the Company retrospectively reclassified RMB25.3 million of issuance cost of bonds from other non-current assets into convertible bonds as of December 31, 2015. |
Convertible bonds (Narrative) (
Convertible bonds (Narrative) (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | Mar. 18, 2014USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2016USD ($)$ / shares | Dec. 31, 2015USD ($)$ / shares | |
Convertible bonds [Line Items] | ||||||||
Convertible bonds | [1] | ¥ 0 | ¥ 2,572,119 | $ 0 | ||||
Net proceeds | ¥ 2,402,549 | |||||||
Interest expense | 81,085 | 11,679 | 97,125 | ¥ 56,607 | ||||
Convertible Bond, non-current | ||||||||
Debt Conversion, Original Debt, Amount | $ 1,000 | |||||||
Class A common shares [Member] | ||||||||
Convertible bonds [Line Items] | ||||||||
Common shares, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | ||||||
2.25% Convertible Senior Notes due 2019 [Member] | ||||||||
Convertible bonds [Line Items] | ||||||||
Convertible bonds | ¥ 2,800,000 | 2,600,000 | $ 399,000 | $ 397,000 | ||||
Aggregate principle amount | $ 400,000 | |||||||
Interest rate (as a percent) | 2.25% | 2.25% | ||||||
Net proceeds | $ 390,800 | |||||||
Issuance date | Mar. 18, 2014 | |||||||
Interest expense | ¥ | ¥ 81,085 | ¥ 74,786 | ||||||
Maturity date | Apr. 1, 2019 | Apr. 1, 2019 | ||||||
Debt Issuance Costs, Net | $ 9,200 | |||||||
2.25% Convertible Senior Notes due 2019 [Member] | Contingent redemption option [Member] | ||||||||
Convertible bonds [Line Items] | ||||||||
Redemption period, start date | Apr. 1, 2019 | Apr. 1, 2019 | ||||||
Redemption percentage | 100.00% | 100.00% | ||||||
2.25% Convertible Senior Notes due 2019 [Member] | Non-contingent redemption option [Member] | ||||||||
Convertible bonds [Line Items] | ||||||||
Redemption period, start date | Apr. 1, 2017 | Apr. 1, 2017 | ||||||
Redemption percentage | 100.00% | 100.00% | ||||||
2.25% Convertible Senior Notes due 2019 [Member] | ADS [Member] | ||||||||
Convertible bonds [Line Items] | ||||||||
Initial conversion rate | 9.0334 | 9.0334 | ||||||
Initial conversion price | $ / shares | $ 110.70 | |||||||
[1] | Effectively January 2016, ASU 2015-3 issued by FASB requires entities to present the issuance costs of bonds in the balance sheet as a direct deduction from the related bonds rather than assets. Accordingly, the Company retrospectively reclassified RMB25.3 million of issuance cost of bonds from other non-current assets into convertible bonds as of December 31, 2015. |
Cost of revenues (Details)
Cost of revenues (Details) - Cost of revenues [Member] - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue sharing fees and content costs | ¥ 3,790,624 | ¥ 2,343,224 | ¥ 1,133,984 |
Bandwidth costs | 651,652 | 570,169 | 345,913 |
Salary and welfare | 232,497 | 198,153 | 131,773 |
Depreciation and amortization | 173,048 | 145,135 | 59,817 |
Payment handling costs | 67,474 | 104,849 | 55,101 |
Business tax and surcharges | 44,659 | 27,794 | 49,233 |
Share based compensation | 15,894 | 23,963 | 18,037 |
Other costs | 127,582 | 166,457 | 55,291 |
Total | ¥ 5,103,430 | ¥ 3,579,744 | ¥ 1,849,149 |
Other income (Details)
Other income (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
Government grants | ¥ 128,550 | ¥ 79,541 | ¥ 5,570 | |
Others | 954 | 2,759 | 749 | |
Total | ¥ 129,504 | $ 18,652 | ¥ 82,300 | ¥ 6,319 |
Income tax (Schedule of Current
Income tax (Schedule of Current and Deferred Portions of Income Tax Expense Included in Consolidated Statements of Operations) (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
Current and deferred portions of income tax expense | ||||
Current income tax expenses | ¥ (288,282) | ¥ (203,366) | ¥ (200,034) | |
Deferred income tax benefits | 7,768 | $ 1,119 | 25,039 | 45,751 |
Income tax expense for the year | ¥ (280,514) | $ (40,402) | ¥ (178,327) | ¥ (154,283) |
Income tax (Schedule of Reconci
Income tax (Schedule of Reconciliation of Total Tax Expense Computed by Applying Respective Statutory Income Tax Rate to Pre-tax Income) (Details) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
PRC Statutory income tax rate (as a percent) | (25.00%) | (25.00%) | (25.00%) | |
Effect of preferential tax rate (as a percent) | 11.60% | 14.00% | 13.10% | |
Effect of tax-exempt entities (as a percent) | (1.70%) | (1.60%) | 1.10% | |
Effect of change in tax rate (as a percent) | [1] | 0.50% | ||
Permanent differences (as a percent) | (1.10%) | (3.80%) | (3.50%) | |
Change in valuation allowance (as a percent) | (1.50%) | (1.70%) | (0.40%) | |
Effect of Super Deduction available to the Group (as a percent) | 2.00% | 2.30% | 2.00% | |
Effective income tax rate (as a percent) | (15.70%) | (15.30%) | (12.70%) | |
[1] | Permanent differences mainly arise from expenses not deductible for tax purposes including primarily share based compensation costs and expenses incurred by subsidiaries and VIEs. |
Income tax (Schedule of Tax Eff
Income tax (Schedule of Tax Effects of Temporary Differences that Give Rise to Deferred Tax Asset Balances) (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | |
Deferred tax assets, current: | ||||
Deferred revenue | ¥ 55,484 | ¥ 46,830 | ||
Allowance for doubtful accounts receivable, accrued expense and others not currently deductible for tax purposes | 65,721 | 83,503 | ||
Valuation allowance | (13,896) | (13,412) | ||
Total current deferred tax assets, net | 107,309 | $ 15,456 | 116,921 | |
Deferred tax assets, non-current: | ||||
Tax loss carried forward | 66,816 | 39,904 | ||
Deferred revenue | 1,800 | 1,414 | ||
Impairment of investment | 7,949 | 1,698 | ||
Others | 753 | 251 | ||
Valuation allowance | [1] | (66,816) | (39,904) | |
Total non-current deferred tax assets, net | 10,502 | 1,513 | 3,363 | |
Deferred tax liabilities, non-current: | ||||
Related to acquired intangible assets | 3,281 | 16,817 | ||
Others | 4,777 | |||
Total non-current deferred tax liabilities, net | ¥ 8,058 | $ 1,161 | ¥ 16,817 | |
[1] | 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 tax loss carry forwards. Valuation allowance was provided for net operating loss carry forward because it was more likely than not that such deferred tax assets would 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. |
Income tax (Schedule of Net Ope
Income tax (Schedule of Net Operating Tax Loss Carry Forwards) (Details) ¥ in Thousands | Dec. 31, 2016CNY (¥) |
Net operating tax loss carry forwards [Line Items] | |
Operating tax loss carry forwards | ¥ 295,238 |
2017 [Member] | |
Net operating tax loss carry forwards [Line Items] | |
Operating tax loss carry forwards | |
2018 [Member] | |
Net operating tax loss carry forwards [Line Items] | |
Operating tax loss carry forwards | 9,428 |
2019 [Member] | |
Net operating tax loss carry forwards [Line Items] | |
Operating tax loss carry forwards | 28,373 |
2020 [Member] | |
Net operating tax loss carry forwards [Line Items] | |
Operating tax loss carry forwards | 78,713 |
2021 [Member] | |
Net operating tax loss carry forwards [Line Items] | |
Operating tax loss carry forwards | ¥ 178,724 |
Income tax (Narrative) (Details
Income tax (Narrative) (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | 36 Months Ended | 96 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income tax [Line Items] | |||||
Income tax rate (as a percent) | 25.00% | 25.00% | 25.00% | ||
Accrued deferred tax liability | ¥ 0 | ¥ 0 | ¥ 0 | ¥ 0 | |
Operating Loss Carryforwards | 295,238 | 295,238 | |||
Cayman [Member] | |||||
Income tax [Line Items] | |||||
Withholding Income Tax | 0 | 0 | |||
BVI [Member] | |||||
Income tax [Line Items] | |||||
Withholding Income Tax | ¥ 0 | 0 | |||
Hong Kong [Member] | |||||
Income tax [Line Items] | |||||
Income tax rate (as a percent) | 16.50% | 16.50% | 16.50% | ||
PRC [Member] | |||||
Income tax [Line Items] | |||||
Income tax rate (as a percent) | 25.00% | 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 | ¥ 4,784,432 | ¥ 3,090,721 | ¥ 4,784,432 | ¥ 3,090,721 | |
Maximum period for claw back underpaid tax plus penalties and interest by tax authorities | 5 years | ||||
Guangzhou Huaduo [Member] | |||||
Income tax [Line Items] | |||||
Preferential tax rate (as a percent) | 15.00% | ||||
Guangzhou Huaduo [Member] | PRC [Member] | |||||
Income tax [Line Items] | |||||
Preferential tax rate (as a percent) | 15.00% | ||||
Guangzhou Huanju Shidai [Member] | |||||
Income tax [Line Items] | |||||
Preferential tax rate (as a percent) | 12.50% |
Common shares (Details)
Common shares (Details) | Nov. 21, 2012shares | Mar. 31, 2015USD ($) | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014shares | Dec. 31, 2013shares |
Share repurchase program approved on May 4, 2014 and March 5, 2015 [Member] | ||||||
Common shares [Line Items] | ||||||
Number of share repurchase programs | 2 | |||||
Share repurchase program authorized amount | $ | $ 200,000,000 | |||||
Average purchase price per share | $ / shares | $ 54.82 | |||||
Shares repurchased value | $ | $ 169,500,000 | |||||
Share repurchase programs, shares | 3,092,556 | |||||
Class A common shares [Member] | ||||||
Common shares [Line Items] | ||||||
Issuance of common shares (in shares) | 179,400,000 | 25,036,140 | ||||
Issuance costs of common stock | $ | $ 11,887,180 | $ 26,110,680 | ||||
Common shares, shares authorized | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | |||
Common shares, shares issued | 750,115,028 | 728,227,848 | 706,173,568 | |||
Common shares, shares outstanding | 750,115,028 | 728,227,848 | 706,173,568 | |||
Class B common shares [Member] | ||||||
Common shares [Line Items] | ||||||
Common shares, shares authorized | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | |||
Common shares, shares issued | 359,557,976 | 369,557,976 | 427,352,696 | |||
Common shares, shares outstanding | 359,557,976 | 369,557,976 | 427,352,696 | |||
Common shares [Member] | ||||||
Common shares [Line Items] | ||||||
Conversion of Stock, Shares Converted | 548,408,914 | |||||
Common shares [Member] | Share repurchase program approved on May 4, 2014 and March 5, 2015 [Member] | ||||||
Common shares [Line Items] | ||||||
Average purchase price per share | $ / shares | $ 2.74 | |||||
Share repurchase programs, shares | 61,851,120 | |||||
Common shares [Member] | Class A common shares [Member] | ||||||
Common shares [Line Items] | ||||||
Common shares, shares outstanding | 750,115,028 | 728,227,848 | 706,173,568 | 622,658,738 | ||
Common shares [Member] | Class B common shares [Member] | ||||||
Common shares [Line Items] | ||||||
Conversion of Stock, Shares Converted | 10,000,000 | 57,794,720 | 58,478,690 | |||
Common shares, shares outstanding | 359,557,976 | 369,557,976 | 427,352,696 | 485,831,386 |
Share based compensation (Share
Share based compensation (Share Options - Narrative) (Details) ¥ in Thousands | Dec. 31, 2008shares | Dec. 31, 2007shares | Dec. 31, 2015 | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) |
Share-based Compensation Award, Tranche Two [Member] | ||||||
Share-based compensation [Line Items] | ||||||
Number of equal installments in which award will vest | 2 | |||||
Share options [Member] | Pre-2009 Scheme Options [Member] | ||||||
Share-based compensation [Line Items] | ||||||
Vesting period | 4 years | |||||
Total intrinsic value of options exercised | ¥ | ¥ 3,270 | ¥ 122,956 | ¥ 134,844 | |||
Share options [Member] | Pre-2009 Scheme Options [Member] | Share-based Compensation Award, Tranche One [Member] | ||||||
Share-based compensation [Line Items] | ||||||
Vesting rate | 25.00% | |||||
Share options [Member] | Pre-2009 Scheme Options [Member] | Share-based Compensation Award, Tranche Two [Member] | ||||||
Share-based compensation [Line Items] | ||||||
Vesting period | 36 months | |||||
Vesting rate | 75.00% | |||||
Number of equal installments in which award will vest | 6 | |||||
Share options [Member] | Pre-2009 Scheme Options [Member] | Employees [Member] | ||||||
Share-based compensation [Line Items] | ||||||
Awards granted (in shares) | 8,499,050 | 12,705,700 | ||||
Share options [Member] | Pre-2009 Scheme Options [Member] | Non-employee [Member] | ||||||
Share-based compensation [Line Items] | ||||||
Awards granted (in shares) | 3,832,290 | |||||
Number of non-employees to whom options were granted | 1 |
Share based compensation (Summa
Share based compensation (Summary of Activities of Pre-2009 Scheme Options for Employees and Non-employee) (Details) - Share options [Member] - Pre-2009 Scheme Options [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Number of options | |||
Outstanding at the beginning of the period (in shares) | 768,375 | 7,380,345 | 13,222,005 |
Exercised (in shares) | (234,720) | (6,611,970) | (5,841,660) |
Outstanding, vested and exercisable at the end of the period (in shares) | 533,655 | ||
Weighted average exercise price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 0.0067 | $ 0.0061 | $ 0.0059 |
Exercised (in dollars per share) | 0.0067 | $ 0.0061 | $ 0.0057 |
Outstanding, vested and exercisable at the end of the period (in dollars per share) | $ 0.0067 | ||
Weighted average remaining contractual life | |||
Outstanding at the end of the period | 2 years 11 months 26 days | 3 years 6 months 7 days | 4 years 4 months 24 days |
Exercised | 2 years | 2 years 5 months 16 days | 3 years 2 months 26 days |
Outstanding, vested and exercisable at the end of the period | 1 year 11 months 23 days | ||
Aggregate intrinsic value | |||
Outstanding at the end of the period | $ 2,395 | $ 22,959 | $ 33,162 |
Outstanding, vested and exercisable, December 31, 2016 | $ 1,048 |
Share based compensation (Restr
Share based compensation (Restricted Shares - Narrative) (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | 72 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | |
Share-based Compensation Award, Tranche Two [Member] | ||||
Share-based compensation [Line Items] | ||||
Number of equal installments in which award will vest | 2 | |||
Restricted shares [Member] | ||||
Share-based compensation [Line Items] | ||||
Share-based compensation (benefit) | ¥ 0 | ¥ 0 | ¥ 3,771 | |
Restricted shares [Member] | Share-based Compensation Award, Tranche One [Member] | ||||
Share-based compensation [Line Items] | ||||
Vesting period | 24 months | |||
Vesting rate | 50.00% | |||
Restricted shares [Member] | Share-based Compensation Award, Tranche Two [Member] | ||||
Share-based compensation [Line Items] | ||||
Vesting period | 24 months | |||
Vesting rate | 50.00% | |||
Restricted shares [Member] | Maximum [Member] | ||||
Share-based compensation [Line Items] | ||||
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 | |||
Duowan Entertainment Corporation [Member] | Non Employee [Member] | ||||
Share-based compensation [Line Items] | ||||
Granted (in shares) | 100,000 | |||
Duowan Entertainment Corporation [Member] | Employees [Member] | ||||
Share-based compensation [Line Items] | ||||
Granted (in shares) | 61,250,677 |
Share based compensation (Su111
Share based compensation (Summary of Restricted Shares Activity) (Details) - Restricted shares [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Number of restricted shares | ||
Outstanding at the beginning of the period (in shares) | 4,673,725 | |
Forfeited (in shares) | (159,410) | |
Vested (in shares) | (4,514,315) | |
Outstanding at the end of the period (in shares) | ||
Weighted average grant-date fair value | ||
Outstanding at the beginning of the period (in dollars per share) | $ 0.6144 | |
Forfeited (in dollars per share) | 0.9362 | |
Vested (in dollars per share) | 0.6030 | |
Outstanding at the end of the period (in dollars per share) |
Share based compensation (Re112
Share based compensation (Restricted Share Units - Narrative) (Details) - CNY (¥) ¥ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Oct. 31, 2012 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 16, 2011 | |
Share-based compensation [Line Items] | ||||||
Shares approved for grants to qualified persons | 43,000,000 | |||||
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 | |||||
Restricted share units [Member] | ||||||
Share-based compensation [Line Items] | ||||||
Granted (in shares) | 48,000 | |||||
Restricted share units [Member] | Employees [Member] | ||||||
Share-based compensation [Line Items] | ||||||
Granted (in shares) | 1,530,008 | 16,012,644 | 9,912,595 | 57,310,210 | ||
2011 Incentive Scheme [Member] | Restricted share units [Member] | ||||||
Share-based compensation [Line Items] | ||||||
Granted (in shares) | 1,530,008 | 16,012,644 | 9,912,595 | |||
Share-based compensation (benefit) | ¥ 143,350 | ¥ 152,205 | ¥ 130,718 | |||
Total unrecognized compensation expense | ¥ 127,905 | |||||
Weighted average period over which unrecognized compensation expense is expected to be recognized | 11 months 16 days |
Share based compensation (Su113
Share based compensation (Summary of Restricted Share Units Activity) (Details) - Restricted share units [Member] - $ / shares | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Number of restricted shares | ||||
Granted (in shares) | 48,000 | |||
2011 Incentive Scheme [Member] | ||||
Number of restricted shares | ||||
Outstanding at the beginning of the period (in shares) | 36,283,602 | 38,806,095 | 44,302,600 | |
Granted (in shares) | 1,530,008 | 16,012,644 | 9,912,595 | |
Forfeited (in shares) | (4,628,202) | (7,312,548) | (3,125,430) | |
Vested (in shares) | (12,229,688) | (11,222,589) | (12,283,670) | |
Outstanding at the end of the period (in shares) | 20,955,720 | 36,283,602 | 38,806,095 | 44,302,600 |
Expected to vest at the end of the period (in shares) | 20,568,083 | |||
Weighted average grant-date fair value | ||||
Outstanding at the beginning of the period (in dollars per share) | $ 2.3535 | $ 1.5984 | $ 0.9639 | |
Granted (in dollars per share) | 1.8618 | 3.3358 | 3.5805 | |
Forfeited (in dollars per share) | 2.7386 | 1.892 | 1.1859 | |
Vested (in dollars per share) | 2.0151 | 1.4374 | 1.0144 | |
Outstanding at the end of the period (in dollars per share) | 2.432 | $ 2.3535 | $ 1.5984 | $ 0.9639 |
Expected to vest at the end of the period (in dollars per share) | $ 2.4312 |
Share based compensation (Sh114
Share based compensation (Share based awards granted to an employee of a subsidiary and Other share based compensation - Narrative) (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Xingxue and Chuangzhi [Member] | |||
Share-based compensation [Line Items] | |||
Percentage of equity interests acquired | 100.00% | ||
Number of vocational training companies acquired | 2 | ||
Beijing Huanqiu Xingxue Technology Development Co., Ltd [Member] | |||
Share-based compensation [Line Items] | |||
Initial percentage of equity interests of acquiree, which employees will be entitled | 20.00% | ||
Share based compensation | ¥ 572 | ¥ 574 | ¥ 143 |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | ¥ 13,364 | ¥ 32,593 |
Basic and diluted net income115
Basic and diluted net income per share (Schedule of Calculation of Basic and Diluted Net Income Per Share) (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2016CNY (¥)¥ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015CNY (¥)¥ / sharesshares | Dec. 31, 2014CNY (¥)¥ / sharesshares | ||
Numerator: | |||||
Net income attributable to the Company | ¥ 1,523,918 | $ 219,491 | ¥ 1,033,243 | ¥ 1,064,472 | |
Interest expenses of convertible notes | ¥ | 81,085 | ||||
Numerator for diluted income per share | ¥ | ¥ 1,605,003 | ¥ 1,033,243 | ¥ 1,064,472 | ||
Denominator: | |||||
Denominator for basic calculationweighted average number of Class A and Class B common shares outstanding | [1] | 1,127,343,312 | 1,127,343,312 | 1,125,189,978 | 1,153,140,699 |
Dilutive effect of share options | 684,455 | 684,455 | 2,711,486 | 10,372,442 | |
Dilutive effect of restricted shares | 2,604,789 | ||||
Dilutive effect of restricted share units | 15,816,362 | 15,816,362 | 22,929,699 | 32,425,543 | |
Dilutive effect of convertible bonds | 72,267,200 | 72,267,200 | |||
Denominator for diluted calculation (in shares) | [1] | 1,216,111,329 | 1,216,111,329 | 1,150,831,163 | 1,198,543,473 |
Basic net income per share (in CNY/dollars per share) | (per share) | [1] | ¥ 1.35 | $ 0.19 | ¥ 0.92 | ¥ 0.92 |
Diluted net income per share (in CNY/dollars per share) | (per share) | [1] | ¥ 1.32 | $ 0.19 | ¥ 0.9 | ¥ 0.89 |
American Depository Shares [Member] | |||||
Denominator: | |||||
Denominator for basic calculationweighted average number of Class A and Class B common shares outstanding | [1] | 56,367,166 | 56,367,166 | 56,259,499 | 57,657,035 |
Denominator for diluted calculation (in shares) | [1] | 60,805,566 | 60,805,566 | 57,541,558 | 59,927,174 |
Basic net income per share (in CNY/dollars per share) | (per share) | [1] | ¥ 27.04 | $ 3.89 | ¥ 18.37 | ¥ 18.46 |
Diluted net income per share (in CNY/dollars per share) | (per share) | [1] | ¥ 26.4 | $ 3.8 | ¥ 17.96 | ¥ 17.76 |
[1] | Each ADS represents 20 Class A common shares. |
Basic and diluted net income116
Basic and diluted net income per share (Narrative) (Details) - shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Convertible Bonds [Member] | ||
Additional Information | ||
Anti-dilutive securities excluded from computation of diluted net loss per common share (in shares) | 72,267,200 | 72,267,200 |
Related party transactions (Sch
Related party transactions (Schedule of Significant Related Party Transactions) (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | ||
Related party transactions [Line Items] | |||||
Loan to related parties | ¥ 44,500 | ¥ 159,000 | ¥ 1,500 | ||
Payment on behalf of related parties, net of repayments | [1] | 10,699 | $ 1,541 | (60,870) | 61,000 |
Repayment of loans from related parties | 160,000 | 1,500 | |||
Sales of equipment to related party | 181 | $ 26 | 12,368 | 158 | |
Online games revenue [Member] | |||||
Related party transactions [Line Items] | |||||
Revenue shared from related parties | 100,078 | 163,912 | 65,247 | ||
Guangzhou Chenjun [Member] | |||||
Related party transactions [Line Items] | |||||
Partial disposal of an equity investment to Guangzhou Chenjun | 33,750 | ||||
Partial disposal of a subsidiary to Guangzhou Chenjun | 24,394 | ||||
Bigo [Member] | |||||
Related party transactions [Line Items] | |||||
Sales of equipment to related party | 12,058 | ||||
Shanghang [Member] | Bandwidth service [Member] | |||||
Related party transactions [Line Items] | |||||
Expense with related party | 96,224 | 74,661 | 42,470 | ||
Shanghai Yaoyu [Member] | Operating Rights for Games Broadcasting [Member] | |||||
Related party transactions [Line Items] | |||||
Purchase of operating rights from related party | 11,486 | ||||
Other Related Party [Member] | |||||
Related party transactions [Line Items] | |||||
Other transaction with related parties | 13,573 | 9,095 | 1,563 | ||
Other Related Party [Member] | Operating rights for licensed games [Member] | |||||
Related party transactions [Line Items] | |||||
Purchase of operating rights from related party | ¥ 10,022 | ¥ 6,836 | |||
[1] | For the year ended December 31, 2016, payment on behalf of related parties has been changed to be presented net of repayment. The presentation for the year ended December 31, 2015 and 2014 has also been changed to be consistent with the presentation for 2016. |
Related party transactions (118
Related party transactions (Schedule of Amounts Due from/to Related Parties) (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) |
Related party transactions [Line Items] | |||
Amounts due from related parties | ¥ 135,245 | $ 19,479 | ¥ 5,297 |
Amounts due to related parties | 91,245 | $ 13,142 | 24,917 |
Bigo [Member] | |||
Related party transactions [Line Items] | |||
Amounts due from related parties | 31,528 | ||
Other Related Party [Member] | |||
Related party transactions [Line Items] | |||
Amounts due from related parties | 12,573 | 5,297 | |
Amounts due to related parties | 7,196 | 5,733 | |
Guangzhou Chenjun [Member] | |||
Related party transactions [Line Items] | |||
Amounts due from related parties | 58,144 | ||
Xingxue [Member] | |||
Related party transactions [Line Items] | |||
Amounts due from related parties | 20,000 | ||
Amounts due to related parties | 42,128 | ||
Shanghai Rongyi [Member] | |||
Related party transactions [Line Items] | |||
Amounts due from related parties | 13,000 | ||
Shanghang [Member] | |||
Related party transactions [Line Items] | |||
Amounts due to related parties | 10,925 | 10,167 | |
Guangzhou Kuyou [Member] | |||
Related party transactions [Line Items] | |||
Amounts due to related parties | ¥ 30,996 | ¥ 9,017 |
Fair value measurements (Summar
Fair value measurements (Summary of Liabilities Measured at Fair Value on Recurring Basis) (Details) - Recurring [Member] - CNY (¥) ¥ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Investments: | ||
Available-for-sale securities | ¥ 188,597 | ¥ 6,117 |
Level 1 [Member] | ||
Investments: | ||
Available-for-sale securities | 182,480 | |
Level 2 [Member] | ||
Investments: | ||
Available-for-sale securities | ||
Level 3 [Member] | ||
Investments: | ||
Available-for-sale securities | ¥ 6,117 | ¥ 6,117 |
Fair value measurements (Schedu
Fair value measurements (Schedule of Changes in Level 3 Instruments) (Details) ¥ in Thousands, $ in Thousands | Feb. 03, 2015CNY (¥) | Sep. 30, 2015CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
Liabilities measured at fair value [Line Items] | |||||||
Fair value change of contingent consideration | [1] | ¥ 0 | $ 0 | ¥ (292,471) | |||
Level 3 [Member] | |||||||
Liabilities measured at fair value [Line Items] | |||||||
Balance | 183,000 | ||||||
Fair value change of contingent consideration | (290,306) | ||||||
Balance | ¥ 0 | ¥ 183,000 | |||||
Beifu [Member] | |||||||
Liabilities measured at fair value [Line Items] | |||||||
Contingent consideration | ¥ 107,306 | ||||||
Fair value change of contingent consideration | ¥ 107,306 | ||||||
Beifu [Member] | Level 3 [Member] | |||||||
Liabilities measured at fair value [Line Items] | |||||||
Contingent consideration | ¥ 107,306 | ||||||
[1] | Share-based compensation was allocated in cost of revenues and operating expenses as follows:For the year ended December 31, Note 2014 2015 2016 2016 RMB RMB RMB US$ (Note2(e)) Cost of revenues 18,037 23,963 15,894 2,289 Research and development expenses 54,141 70,951 78,816 11,352 Sales and marketing expenses 2,807 3,283 3,107 448 General and administrative expenses 59,647 87,175 59,469 8,565 |
Fair value measurements (Sch121
Fair value measurements (Schedule of Valuation Techniques Used to Discount Contingent Consideration) (Details) - Beifu [Member] | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value | |
Risk-free interest rate (as a percent) | 3.81% |
Discount rate (as a percent) | 18.00% |
Commitments and contingencie122
Commitments and contingencies (Narrative) (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Litigation [Line Items] | |||
Total office rental expenses | ¥ 76,753 | ¥ 53,674 | ¥ 28,144 |
Outstanding capital commitments | 144,301 | ||
Copyright infringement claim [Member] | NetEase [Member] | |||
Litigation [Line Items] | |||
Amount of potential damages sought | ¥ 100,000 |
Commitments and contingencie123
Commitments and contingencies (Schedule of Future Minimum Payments Under Non-cancellable Operating Leases) (Details) ¥ in Thousands | Dec. 31, 2016CNY (¥) |
Future minimum payments under non-cancellable operating leases | |
2,017 | ¥ 41,848 |
2,018 | 28,335 |
2,019 | 1,876 |
2020 and after | 444 |
Total | ¥ 72,503 |
Subsequent events (Details)
Subsequent events (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | |||||||||||
Mar. 30, 2017USD ($) | Mar. 21, 2017USD ($) | Mar. 08, 2017USD ($) | Feb. 17, 2017CNY (¥) | Jan. 19, 2017CNY (¥) | Apr. 01, 2017USD ($) | Feb. 17, 2017USD ($) | Jan. 19, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | ||
Subsequent events [Line Items] | ||||||||||||
Convertible Debt, Current | [1] | ¥ 2,768,469 | $ 398,742 | ¥ 0 | ||||||||
Short-term Debt [Member] | ||||||||||||
Subsequent events [Line Items] | ||||||||||||
Convertible Debt, Current | ¥ | ¥ 2,768,469 | ¥ 0 | ||||||||||
Short-term Debt [Member] | Scenario, Forecast [Member] | ||||||||||||
Subsequent events [Line Items] | ||||||||||||
Debt Instrument, Repurchase Amount | $ 399,000 | |||||||||||
Convertible Debt, Current | $ 1,000 | |||||||||||
Subsequent event [Member] | Loan Agreement [Member] | ||||||||||||
Subsequent events [Line Items] | ||||||||||||
Debt Instrument, Face Amount | $ 60,000 | $ 30,000 | ||||||||||
Line of Credit Facility, Interest Rate Description | 3-month LIBOR plus 0.85%, accruing from draw-down | 3-month LIBOR plus 1.5%, accruing from draw-down | ||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 80,000 | $ 80,000 | ||||||||||
Debt Instrument, Collateral Amount | ¥ | ¥ 500,000 | ¥ 500,000 | ||||||||||
Proceeds from Lines of Credit | $ 15,000 | $ 45,000 | $ 30,000 | |||||||||
[1] | Convertible bonds classified in current liabilities represent Convertible Senior Notes which may be redeemed within one year. |
Restricted net assets (Details)
Restricted net assets (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
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 | ¥ 2,678,921 | ¥ 2,685,373 |
Segment Reporting (Details)
Segment Reporting (Details) ¥ in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2015CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | ||||
Net revenues | ||||||||
Others | ¥ 257,638 | $ 37,108 | ¥ 294,200 | ¥ 186,091 | ||||
Total net revenues | [1] | 8,204,050 | 1,181,629 | 5,897,249 | 3,678,368 | |||
Cost of revenues | [2] | (5,103,430) | (735,047) | (3,579,744) | (1,849,149) | |||
Gross profit / (loss) | 3,100,620 | 446,582 | 2,317,505 | 1,829,219 | ||||
Operating expenses | ||||||||
Research and development expenses | [2] | (675,230) | (97,253) | (548,799) | (431,188) | |||
Sales and marketing expenses | [2] | (387,268) | (55,778) | (312,870) | (102,527) | |||
General and administrative expenses | [2] | (482,437) | (69,485) | (358,474) | (223,019) | |||
Goodwill impairment | [2] | (17,665) | [3] | (2,544) | (310,124) | [3] | ||
Fair value change of contingent consideration | [2] | 0 | 0 | 292,471 | ||||
Total operating expenses | [2] | (1,562,600) | (225,060) | (1,237,796) | (756,734) | |||
Gain on deconsolidation and disposal of subsidiaries | 103,960 | 14,973 | ||||||
Other income | 129,504 | 18,652 | 82,300 | 6,319 | ||||
Operating income / (loss) | 1,771,484 | 255,147 | 1,162,009 | 1,078,804 | ||||
Share-based compensation | 157,286 | 22,654 | 185,372 | 134,632 | ||||
Cost of revenues [Member] | ||||||||
Operating expenses | ||||||||
Share-based compensation | 15,894 | 2,289 | 23,963 | 18,037 | ||||
Research and development expenses [Member] | ||||||||
Operating expenses | ||||||||
Share-based compensation | 78,816 | 11,352 | 70,951 | 54,141 | ||||
Sales and marketing expenses [Member] | ||||||||
Operating expenses | ||||||||
Share-based compensation | 3,107 | 448 | 3,283 | 2,807 | ||||
General and administrative expenses [Member] | ||||||||
Operating expenses | ||||||||
Share-based compensation | 59,469 | 8,565 | 87,175 | 59,647 | ||||
Live streaming [Member] | ||||||||
Net revenues | ||||||||
Total net revenues | [1] | 7,027,227 | 1,012,131 | 4,539,857 | 2,475,379 | |||
Online games [Member] | ||||||||
Net revenues | ||||||||
Total net revenues | [1] | 634,325 | 91,362 | 771,882 | 811,699 | |||
Membership [Member] | ||||||||
Net revenues | ||||||||
Total net revenues | [1] | 284,860 | $ 41,028 | 291,310 | 205,199 | |||
Huya Broadcasting [Member] | ||||||||
Net revenues | ||||||||
Others | 4,926 | 0 | ||||||
Total net revenues | 796,904 | 356,324 | 153,371 | |||||
Cost of revenues | (1,053,257) | (655,066) | (248,154) | |||||
Gross profit / (loss) | (256,353) | (298,742) | (94,783) | |||||
Operating expenses | ||||||||
Research and development expenses | (125,308) | (66,538) | (47,765) | |||||
Sales and marketing expenses | (49,490) | (24,469) | (4,399) | |||||
General and administrative expenses | (45,211) | (25,869) | (20,954) | |||||
Goodwill impairment | ||||||||
Fair value change of contingent consideration | ||||||||
Total operating expenses | (220,009) | (116,876) | (73,118) | |||||
Gain on deconsolidation and disposal of subsidiaries | ||||||||
Other income | ||||||||
Operating income / (loss) | (476,362) | (415,618) | (167,901) | |||||
Share-based compensation | 32,028 | 9,717 | 4,744 | |||||
Huya Broadcasting [Member] | Cost of revenues [Member] | ||||||||
Operating expenses | ||||||||
Share-based compensation | 4,203 | 1,497 | 1,185 | |||||
Huya Broadcasting [Member] | Research and development expenses [Member] | ||||||||
Operating expenses | ||||||||
Share-based compensation | 14,352 | 4,754 | 1,895 | |||||
Huya Broadcasting [Member] | Sales and marketing expenses [Member] | ||||||||
Operating expenses | ||||||||
Share-based compensation | 281 | 164 | 4 | |||||
Huya Broadcasting [Member] | General and administrative expenses [Member] | ||||||||
Operating expenses | ||||||||
Share-based compensation | 13,192 | 3,302 | 1,660 | |||||
Huya Broadcasting [Member] | Live streaming [Member] | ||||||||
Net revenues | ||||||||
Total net revenues | 791,978 | 356,324 | 153,371 | |||||
Huya Broadcasting [Member] | Online games [Member] | ||||||||
Net revenues | ||||||||
Total net revenues | ||||||||
Huya Broadcasting [Member] | Membership [Member] | ||||||||
Net revenues | ||||||||
Total net revenues | ||||||||
100 Education [Member] | ||||||||
Net revenues | ||||||||
Others | 160,727 | 123,774 | 950 | |||||
Total net revenues | 160,727 | 123,774 | 950 | |||||
Cost of revenues | (107,972) | (126,614) | (14,062) | |||||
Gross profit / (loss) | 52,755 | (2,840) | (13,112) | |||||
Operating expenses | ||||||||
Research and development expenses | (30,521) | (36,850) | (21,071) | |||||
Sales and marketing expenses | (59,482) | (35,272) | (145) | |||||
General and administrative expenses | (35,154) | (92,069) | (1,530) | |||||
Goodwill impairment | ¥ (71,390) | (13,804) | [3] | (182,089) | [3] | |||
Fair value change of contingent consideration | ¥ (73,618) | 185,165 | ||||||
Total operating expenses | (138,961) | (161,116) | (22,746) | |||||
Gain on deconsolidation and disposal of subsidiaries | ||||||||
Other income | ||||||||
Operating income / (loss) | (86,206) | (163,956) | (35,858) | |||||
Share-based compensation | 19,906 | 39,799 | 5,280 | |||||
100 Education [Member] | Cost of revenues [Member] | ||||||||
Operating expenses | ||||||||
Share-based compensation | 324 | 389 | 300 | |||||
100 Education [Member] | Research and development expenses [Member] | ||||||||
Operating expenses | ||||||||
Share-based compensation | 6,193 | 6,797 | 4,931 | |||||
100 Education [Member] | Sales and marketing expenses [Member] | ||||||||
Operating expenses | ||||||||
Share-based compensation | ||||||||
100 Education [Member] | General and administrative expenses [Member] | ||||||||
Operating expenses | ||||||||
Share-based compensation | 13,389 | 32,613 | 49 | |||||
100 Education [Member] | Live streaming [Member] | ||||||||
Net revenues | ||||||||
Total net revenues | ||||||||
100 Education [Member] | Online games [Member] | ||||||||
Net revenues | ||||||||
Total net revenues | ||||||||
100 Education [Member] | Membership [Member] | ||||||||
Net revenues | ||||||||
Total net revenues | ||||||||
YY Live [Member] | ||||||||
Net revenues | ||||||||
Others | 91,985 | 170,426 | 185,141 | |||||
Total net revenues | 7,246,419 | 5,417,151 | 3,524,047 | |||||
Cost of revenues | (3,942,201) | (2,798,064) | (1,586,933) | |||||
Gross profit / (loss) | 3,304,218 | 2,619,087 | 1,937,114 | |||||
Operating expenses | ||||||||
Research and development expenses | (519,401) | (445,411) | (362,352) | |||||
Sales and marketing expenses | (278,296) | (253,129) | (97,983) | |||||
General and administrative expenses | (402,072) | (240,536) | (200,535) | |||||
Goodwill impairment | [3] | (3,861) | (128,035) | |||||
Fair value change of contingent consideration | 107,306 | |||||||
Total operating expenses | (1,203,630) | (959,804) | (660,870) | |||||
Gain on deconsolidation and disposal of subsidiaries | 103,960 | |||||||
Other income | 129,504 | 82,300 | 6,319 | |||||
Operating income / (loss) | 2,334,052 | 1,741,583 | 1,282,563 | |||||
Share-based compensation | 105,352 | 135,856 | 124,608 | |||||
YY Live [Member] | Cost of revenues [Member] | ||||||||
Operating expenses | ||||||||
Share-based compensation | 11,367 | 22,077 | 16,552 | |||||
YY Live [Member] | Research and development expenses [Member] | ||||||||
Operating expenses | ||||||||
Share-based compensation | 58,271 | 59,400 | 47,315 | |||||
YY Live [Member] | Sales and marketing expenses [Member] | ||||||||
Operating expenses | ||||||||
Share-based compensation | 2,826 | 3,119 | 2,803 | |||||
YY Live [Member] | General and administrative expenses [Member] | ||||||||
Operating expenses | ||||||||
Share-based compensation | 32,888 | 51,260 | 57,938 | |||||
YY Live [Member] | Live streaming [Member] | ||||||||
Net revenues | ||||||||
Total net revenues | 6,235,249 | 4,183,533 | 2,322,008 | |||||
YY Live [Member] | Online games [Member] | ||||||||
Net revenues | ||||||||
Total net revenues | 634,325 | 771,882 | 811,699 | |||||
YY Live [Member] | Membership [Member] | ||||||||
Net revenues | ||||||||
Total net revenues | ¥ 284,860 | ¥ 291,310 | ¥ 205,199 | |||||
[1] | For the year ended December 31, 2016, revenue presentation has been changed to live streaming, online games, membership and others, and the revenue presentation for the year ended December 31, 2015 and 2014 has also been retrospectively changed. | |||||||
[2] | Share-based compensation was allocated in cost of revenues and operating expenses as follows:For the year ended December 31, Note 2014 2015 2016 2016 RMB RMB RMB US$ (Note2(e)) Cost of revenues 18,037 23,963 15,894 2,289 Research and development expenses 54,141 70,951 78,816 11,352 Sales and marketing expenses 2,807 3,283 3,107 448 General and administrative expenses 59,647 87,175 59,469 8,565 | |||||||
[3] | (iii) The Group performs its annual goodwill impairment test of each reporting unit as of October 1, or more frequently, if certain events or circumstances warrant. Events or changes in circumstances which might indicate potential impairment in goodwill include the entity-specific factors, including, but not limited to, stock price volatility, market capitalization relative to net book value, and projected revenue, market growth and operating results. In June 2015, it was noted that 100 Online’s financial and operational performance in the first half year of 2015 was behind the original budget resulting from unexpected fierce market competition and the resignation of a number of key personnel in 100 Online. Accordingly, the Group performed an interim assessment on the goodwill impairment related to 100 Online and recognized an estimated goodwill impairment charge of RMB110,699. Correspondingly, long-term payable amounting to RMB111,547 in relation to the contingent consideration was reversed. The unobservable inputs used in the assessment included risk free rate, discount rate and etc. The risk free rate and discount rate were 4.07% and 21.5%, respectively. In the 2015 annual goodwill impairment assessment, the Group has noted further impairment indicator for 100 Online as well as impairment indicator for Beifu as certain key personnel of 100 Online and Beifu resigned in the third quarter of 2015. Based on the result of the annual impairment assessment for 100 Online, an impairment charge of RMB71,390 was recognised and correspondingly, long-term payable amounting to RMB73,618 in relation to the contingent consideration was reversed; For Beifu, an impairment charge of RMB128,035 was recognised and correspondingly, long-term payable amounting to RMB 107,306 in relation to the contingent consideration was reversed. The unobservable inputs used in the assessment, included the risk free rate, discount rate and etc. For the goodwill impairment assessment of 100 Online and Beifu, the risk free rate were both 3.85% and the discount rate were 23% and 24.5%, respectively. In December 2016, the Group has identified further impairment indicator for 100 Online as well as impairment indicator for Bilin Online. Based on the results of the impairment assessment, an impairment charge of RMB13,804 for 100 Online and an impairment charge of RMB3,861 for Bilin Online were recognized, respectively. The above goodwill impairment assessments on 100 Online, Beifu and Bilin Online adopted the income approach and considered a combination of factors, including, but not limited to, market conditions, expected future cash flows, growth rates and discount rates, which required the Group to make certain estimates and assumptions regarding industry economic factors and future profitability of the business. |
Additional information_ condens
Additional information: condensed financial statements of the Company (Condensed balance sheets) (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2013CNY (¥) | |
Current assets | ||||||
Amounts due from a subsidiary | ¥ 135,245 | $ 19,479 | ¥ 5,297 | |||
Non-current assets | ||||||
Interests in subsidiaries and VIEs | 918,602 | 132,306 | 567,557 | |||
Total non-current assets | 3,815,407 | 549,533 | 3,672,874 | |||
Total assets | 9,785,792 | 1,409,447 | 7,302,754 | |||
Current liabilities | ||||||
Interests payable | 15,800 | 14,795 | ||||
Convertible bonds | [1] | 2,768,469 | 398,742 | 0 | ||
Non-current liabilities | ||||||
Convertible bonds | [2] | 0 | 0 | 2,572,119 | ||
Total liabilities | 4,723,965 | 680,393 | 3,994,102 | |||
Shareholders’ equity | ||||||
Additional paid-in capital | 2,165,766 | 311,935 | 2,011,799 | |||
Retained earnings | 2,728,736 | 393,020 | 1,207,168 | |||
Accumulated other comprehensive (loss)/income | 93,066 | 13,404 | (36,385) | |||
Total shareholders' equity | 5,052,555 | 727,719 | 3,246,819 | ¥ 3,090,164 | ¥ 1,887,209 | |
Total liabilities, mezzanine equity and shareholders' equity | 9,785,792 | 1,409,447 | 7,302,754 | |||
Class A common shares [Member] | ||||||
Shareholders’ equity | ||||||
Common shares | 44 | 6 | 43 | |||
Class B common shares [Member] | ||||||
Shareholders’ equity | ||||||
Common shares | 26 | 4 | 27 | |||
Parent [Member] | ||||||
Current assets | ||||||
Amounts due from a subsidiary | 1,947,080 | 280,438 | 1,881,616 | |||
Non-current assets | ||||||
Interests in subsidiaries and VIEs | 5,883,684 | 847,426 | 3,944,457 | |||
Total non-current assets | 5,883,684 | 847,426 | 3,944,457 | |||
Total assets | 7,830,764 | 1,127,864 | 5,826,073 | |||
Current liabilities | ||||||
Interests payable | 15,800 | 2,276 | 14,795 | |||
Convertible bonds | [1] | 2,768,469 | 398,742 | |||
Non-current liabilities | ||||||
Convertible bonds | [2] | 2,572,119 | ||||
Total liabilities | 2,784,269 | 401,018 | 2,586,914 | |||
Shareholders’ equity | ||||||
Additional paid-in capital | 2,165,766 | 311,935 | 2,011,799 | |||
Retained earnings | 2,787,593 | 401,497 | 1,263,675 | |||
Accumulated other comprehensive (loss)/income | 93,066 | 13,404 | (36,385) | |||
Total shareholders' equity | 5,046,495 | 726,846 | 3,239,159 | |||
Total liabilities, mezzanine equity and shareholders' equity | 7,830,764 | 1,127,864 | 5,826,073 | |||
Parent [Member] | Class A common shares [Member] | ||||||
Shareholders’ equity | ||||||
Common shares | 44 | 6 | 43 | |||
Parent [Member] | Class B common shares [Member] | ||||||
Shareholders’ equity | ||||||
Common shares | ¥ 26 | $ 4 | ¥ 27 | |||
[1] | Convertible bonds classified in current liabilities represent Convertible Senior Notes which may be redeemed within one year. | |||||
[2] | Effectively January 2016, ASU 2015-3 issued by FASB requires entities to present the issuance costs of bonds in the balance sheet as a direct deduction from the related bonds rather than assets. Accordingly, the Company retrospectively reclassified RMB25.3 million of issuance cost of bonds from other non-current assets into convertible bonds as of December 31, 2015. |
Additional information_ cond128
Additional information: condensed financial statements of the Company (Condensed balance sheets) (Parenthetical) (Details) ¥ in Millions | Dec. 31, 2016CNY (¥)shares | Dec. 31, 2016$ / shares | Dec. 31, 2015$ / sharesshares | Dec. 31, 2014shares |
Accounting Standards Update 2015-03 [Member] | ||||
Condensed balance sheets [Line Items] | ||||
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets | ¥ | ¥ 25.3 | |||
Class A common shares [Member] | ||||
Condensed balance sheets [Line Items] | ||||
Common shares, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | ||
Common shares, shares authorized | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | |
Common shares, shares issued | 750,115,028 | 728,227,848 | 706,173,568 | |
Common shares, shares outstanding | 750,115,028 | 728,227,848 | 706,173,568 | |
Class B common shares [Member] | ||||
Condensed balance sheets [Line Items] | ||||
Common shares, par value (in dollars per share) | $ / shares | 0.00001 | $ 0.00001 | ||
Common shares, shares authorized | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | |
Common shares, shares issued | 359,557,976 | 369,557,976 | 427,352,696 | |
Common shares, shares outstanding | 359,557,976 | 369,557,976 | 427,352,696 | |
Parent [Member] | Class A common shares [Member] | ||||
Condensed balance sheets [Line Items] | ||||
Common shares, par value (in dollars per share) | $ / shares | 0.00001 | $ 0.00001 | ||
Common shares, shares authorized | 10,000,000,000 | 10,000,000,000 | ||
Common shares, shares issued | 750,115,028 | 728,227,848 | ||
Common shares, shares outstanding | 750,115,028 | 728,227,848 | ||
Parent [Member] | Class B common shares [Member] | ||||
Condensed balance sheets [Line Items] | ||||
Common shares, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | ||
Common shares, shares authorized | 1,000,000,000 | 1,000,000,000 | ||
Common shares, shares issued | 359,557,976 | 369,557,976 | ||
Common shares, shares outstanding | 359,557,976 | 369,557,976 |
Additional information_ cond129
Additional information: condensed financial statements of the Company (Condensed statements of operations and comprehensive income) (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
Condensed statements of operations [Line Items] | ||||
Interest expense | ¥ (81,085) | $ (11,679) | ¥ (97,125) | ¥ (56,607) |
Income before income tax expenses | 1,783,811 | 256,923 | 1,162,512 | 1,214,480 |
Net income | 1,511,576 | 217,713 | 998,305 | 1,064,472 |
Other comprehensive income/(loss) : | ||||
Unrealized gain of available-for-sale securities | 134,768 | 19,411 | 0 | 0 |
Foreign currency translation adjustments, net of nil tax | (5,317) | (766) | 4,414 | 3,638 |
Comprehensive income attributable to YY Inc. | 1,653,369 | 238,136 | 1,037,657 | 1,068,110 |
Parent [Member] | ||||
Condensed statements of operations [Line Items] | ||||
Share of profit of subsidiaries and VIEs | 1,605,003 | 231,170 | 1,108,029 | 1,121,079 |
Interest expense | (81,085) | (11,679) | (74,786) | (56,607) |
Income before income tax expenses | 1,523,918 | 219,491 | 1,033,243 | 1,064,472 |
Net income | 1,523,918 | 219,491 | 1,033,243 | 1,064,472 |
Other comprehensive income/(loss) : | ||||
Unrealized gain of available-for-sale securities | 134,768 | 19,411 | ||
Foreign currency translation adjustments, net of nil tax | (5,317) | (766) | 4,414 | 3,638 |
Comprehensive income attributable to YY Inc. | ¥ 1,653,369 | $ 238,136 | ¥ 1,037,657 | ¥ 1,068,110 |
Additional information_ cond130
Additional information: condensed financial statements of the Company (Condensed statements of cash flows) (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
Cash flows from investing activities | ||||
Net cash used in investing activities | ¥ (1,783,138) | $ (256,824) | ¥ (1,048,022) | ¥ (3,954,055) |
Cash flows from financing activities | ||||
Proceeds from issuance of convertible bonds | 2,402,549 | |||
Net cash provided by financing activities | 10,651 | 1,534 | (337,143) | 2,402,762 |
Cash and cash equivalents at the beginning of the year | 928,934 | 133,794 | 475,028 | 729,598 |
Cash and cash equivalents at the end of the year | 1,579,743 | 227,530 | 928,934 | 475,028 |
Parent [Member] | ||||
Cash flows from investing activities | ||||
Loan to a subsidiary | (2,412,290) | |||
Net cash used in investing activities | (2,412,290) | |||
Cash flows from financing activities | ||||
Proceeds from issuance of convertible bonds | 2,412,290 | |||
Net cash provided by financing activities | 2,412,290 | |||
Net increase in cash and cash equivalents | ||||
Cash and cash equivalents at the beginning of the year | ||||
Cash and cash equivalents at the end of the year |