☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of Each Class | Trading Symbol(s) | Name of Each Exchange On Which Registered | ||
American depositary shares, each representing one Class Z ordinary share | BILI | Nasdaq Global Select Market | ||
Class Z ordinary shares, par value US$0.0001 per share* | Nasdaq Global Select Market* |
* | Not for trading, but only in connection with the listing on the Nasdaq Global Select Market of American depositary shares. |
Large accelerated filer ☒ | Accelerated filer ☐ | Non-accelerated filer ☐ | Emerging growth company ☐ |
† | The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
U.S. GAAP ☒ | International Financial Reporting Standards as issued | Other ☐ | ||||||
by the International Accounting Standards Board ☐ |
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• | “ADRs” are to the American depositary receipts that evidence our ADSs; |
• | “ADSs” are to our American depositary shares, each of which represents one Class Z ordinary share; |
• | “average monthly paying user” for a period is calculated by dividing the total number of monthly paying users during the specified period by the number of months in such period; |
• | “average monthly paying user for mobile games” for a period is calculated by dividing the total number of monthly paying users for mobile games during the specified period by the number of months in such period; |
• | “average monthly revenue per paying user” for a period is calculated by dividing the sum of revenues from mobile games and live broadcasting and other value-added services during the specified period by the total number of monthly paying users during such period; |
• | “average monthly revenue per paying user for mobile games” for a period is calculated by dividing the revenues from mobile games during the specified period by the total number of monthly paying users for mobile games during such period; |
• | “Bilibili,” “we,” “us,” “our company” and “our” are to Bilibili Inc., its subsidiaries and its consolidated affiliated entities; |
• | “bullet chatting” are to a live commenting function that enables content viewers to send comments that fly across the screen like bullets, which we refer to as bullet-chats herein. Bullet-chats are frame- and context-specific and can be seen by all viewers who watch the same content at different times, and therefore can intrigue interactive commenting among content viewers. Only registered users who have passed our membership exam can send bullet-chats on our platform; |
• | “China” or the “PRC” are to the People’s Republic of China, excluding, for the purposes of this annual report only, Hong Kong, Macau and Taiwan; |
• | “Class Y ordinary shares” refers to our Class Y ordinary shares, par value US$0.0001 per share; |
• | “Class Z ordinary shares” refers to our Class Z ordinary shares, par value US$0.0001 per share; |
• | “Generation Z” are to, for the purposes of this annual report, the demographic cohort in China of individuals born from 1990 to 2009; |
• | “monthly active users” or “MAUs” are to the sum of our mobile app MAUs and PC MAUs after eliminating duplicates so that each active registered user that logged on both our mobile app and our PC website would only be counted towards mobile app MAUs and not PC MAUs during a given month. We calculate mobile app MAUs based on the number of mobile devices that launched our mobile app during a given month. Starting from the first quarter of 2019, we count mobile MAUs of Bilibili Comic, a mobile app offering anime and comics contents, and Maoer, an audio platform offering audio drama, towards our MAUs. We calculate PC MAUs by dividing the total number of IP addresses used by users to visit our PC website during a given month by an estimate of the average number of IP addresses used by each user. When calculating monthly active users for games, we eliminate duplicates so that a user that played multiple games would be counted as one active user for games during a given month; |
• | “our platform” are to our “bilibili” mobile app, PC websites, Smart TV, Bilibili Comic, Maoer and a variety of related features, functionalities, tools and services that we provide to users and content creators; |
• | “paying users” on our platform are to users who make payments for various products and services on our platform, including purchases in mobile games offered on our platform, and payments for virtual items in our live broadcasting programs, for value-added services, or VAS, payments for premium membership, Bilibili Comic and Maoer, after eliminating duplicates of users paid for multiple services other than users of Maoer. We add the number of paying users of Maoer towards our total paying users without eliminating duplicates. A user who makes payments across different products and services offered on our platform using the same registered account is counted as one paying user; |
• | “professional user generated content” or “PUGC” are to a category of content generated by users that exhibits creativity as well as a certain level of professional production and editing capabilities, and we refer to video content in this category as “PUG video”; |
• | “retention rate”, as applied to any cohort of users who visit our platform in a given period, are to the percentage of these users who make at least one repeat visit after a certain duration; the “12th-month retention rate” for any cohort of users in a given month is the retention rate in the twelfth month after the applicable month; |
• | “RMB” and “Renminbi” are to the legal currency of China; |
• | “shares” or “ordinary shares” refers to our Class Y and Class Z ordinary shares, par value US$0.0001 per share; |
• | “US$,” “U.S. dollars,” “$,” and “dollars” are to the legal currency of the United States; and |
• | “valid premium members” are to members who have purchased our monthly, quarterly or annual premium membership, which allow these members to enjoy exclusive or view licensed content as well as original content in advance. We calculate valid premium members based on the number of members whose premium package is still valid by the last day of a given month. |
• | our goals and strategies; |
• | our future business development, financial conditions and results of operations; |
• | the expected growth of the online entertainment and mobile games industries in China; |
• | our expectations regarding demand for and market acceptance of our products and services; |
• | our expectations regarding our relationships with users, content providers, game developers and publishers, advertisers and other partners; |
• | competition in our industry; |
• | relevant government policies and regulations relating to our industry; |
• | the outcome of any current and future litigation or legal or administrative proceedings; and |
• | other factors described under “Item 3. Key Information — D. Risk Factors”. |
A. | Selected Financial Data |
For the Year Ended December 31, | ||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | US$ | |||||||||||||||||||
(in thousands, except for share and per share data) | ||||||||||||||||||||||||
Selected Consolidated Statements of Operations and Comprehensive Loss Data: | ||||||||||||||||||||||||
Net revenues | 130,996 | 523,310 | 2,468,449 | 4,128,931 | 6,777,922 | 973,588 | ||||||||||||||||||
Cost of revenues (1) | (303,568 | ) | (772,812 | ) | (1,919,241 | ) | (3,273,493 | ) | (5,587,673 | ) | (802,619 | ) | ||||||||||||
Gross (loss)/profit | (172,572 | ) | (249,502 | ) | 549,208 | 855,438 | 1,190,249 | 170,969 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Sales and marketing expenses (1) | (17,689 | ) | (102,659 | ) | (232,489 | ) | (585,758 | ) | (1,198,516 | ) | (172,156 | ) | ||||||||||||
General and administrative expenses (1) | (153,707 | ) | (451,334 | ) | (260,898 | ) | (461,165 | ) | (592,497 | ) | (85,107 | ) | ||||||||||||
Research and development expenses (1) | (24,915 | ) | (91,222 | ) | (280,093 | ) | (537,488 | ) | (894,411 | ) | (128,474 | ) | ||||||||||||
Total operating expenses | (196,311 | ) | (645,215 | ) | (773,480 | ) | (1,584,411 | ) | (2,685,424 | ) | (385,737 | ) | ||||||||||||
Loss from operations | (368,883 | ) | (894,717 | ) | (224,272 | ) | (728,973 | ) | (1,495,175 | ) | (214,768 | ) | ||||||||||||
Loss before tax | (371,063 | ) | (908,355 | ) | (174,869 | ) | (539,033 | ) | (1,267,703 | ) | (182,093 | ) |
For the Year Ended December 31, | ||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | US$ | |||||||||||||||||||
(in thousands, except for share and per share data) | ||||||||||||||||||||||||
Income tax | (2,425 | ) | (3,141 | ) | (8,881 | ) | (25,988 | ) | (35,867 | ) | (5,152 | ) | ||||||||||||
Net loss | (373,488 | ) | (911,496 | ) | (183,750 | ) | (565,021 | ) | (1,303,570 | ) | (187,245 | ) | ||||||||||||
Accretion to Pre-IPO preferred shares redemption value | (57,942 | ) | (161,933 | ) | (258,554 | ) | (64,605 | ) | — | — | ||||||||||||||
Deemed dividend in connection with repurchase of Pre-IPO preferred shares | (139,522 | ) | (113,151 | ) | (129,244 | ) | — | — | — | |||||||||||||||
Net loss attributable to noncontrolling interests | 1,912 | 1,430 | — | 13,301 | 14,597 | 2,097 | ||||||||||||||||||
Net loss attributable to the Bilibili Inc.’s shareholders | (569,040 | ) | (1,185,150 | ) | (571,548 | ) | (616,325 | ) | (1,288,973 | ) | (185,148 | ) | ||||||||||||
Net loss | (373,488 | ) | (911,496 | ) | (183,750 | ) | (565,021 | ) | (1,303,570 | ) | (187,245 | ) | ||||||||||||
Other comprehensive income/(loss) | ||||||||||||||||||||||||
Foreign currency translation adjustments | 47,729 | 58,048 | (75,695 | ) | 296,030 | 140,152 | 20,132 | |||||||||||||||||
Total other comprehensive income/(loss) | 47,729 | 58,048 | (75,695 | ) | 296,030 | 140,152 | 20,132 | |||||||||||||||||
Total comprehensive loss | (325,759 | ) | (853,448 | ) | (259,445 | ) | (268,991 | ) | (1,163,418 | ) | (167,113 | ) | ||||||||||||
Accretion to Pre-IPO preferred shares redemption value | (57,942 | ) | (161,933 | ) | (258,554 | ) | (64,605 | ) | — | — | ||||||||||||||
Deemed dividend in connection with repurchase of Pre-IPO preferred shares | (139,522 | ) | (113,151 | ) | (129,244 | ) | — | — | — | |||||||||||||||
Net loss attributable to noncontrolling interests | 1,912 | 1,430 | — | 13,301 | 14,597 | 2,097 | ||||||||||||||||||
Comprehensive loss attributable to the Bilibili Inc.’s shareholders | (521,311 | ) | (1,127,102 | ) | (647,243 | ) | (320,295 | ) | (1,148,821 | ) | (165,016 | ) | ||||||||||||
Net loss per share, basic | (9.72 | ) | (20.42 | ) | (8.17 | ) | (2.64 | ) | (3.99 | ) | (0.57 | ) | ||||||||||||
Net loss per share, diluted | (9.72 | ) | (20.42 | ) | (8.17 | ) | (2.64 | ) | (3.99 | ) | (0.57 | ) | ||||||||||||
Net loss per ADS, basic | — | — | — | (2.64 | ) | (3.99 | ) | (0.57 | ) | |||||||||||||||
Net loss per ADS, diluted | — | — | — | (2.64 | ) | (3.99 | ) | (0.57 | ) | |||||||||||||||
Weighted average number of ordinary shares, basic | 58,548,310 | 58,038,570 | 69,938,570 | 233,047,703 | 323,161,680 | 323,161,680 | ||||||||||||||||||
Weighted average number of ordinary shares, diluted | 58,548,310 | 58,038,570 | 69,938,570 | 233,047,703 | 323,161,680 | 323,161,680 | ||||||||||||||||||
Weighted average number of ADS, basic | — | — | — | 233,047,703 | 323,161,680 | 323,161,680 | ||||||||||||||||||
Weighted average number of ADS, diluted | — | — | — | 233,047,703 | 323,161,680 | 323,161,680 |
(1) | Share-based compensation expenses were allocated as follows: |
For the Year Ended December 31, | ||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | US$ | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Cost of revenues | 476 | 3,775 | 7,936 | 28,173 | 23,281 | 3,344 | ||||||||||||||||||
Sales and marketing expenses | 94 | 3,029 | 3,423 | 11,499 | 14,269 | 2,050 | ||||||||||||||||||
General and administrative expenses | 100,228 | 353,806 | 56,746 | 102,544 | 68,497 | 9,839 | ||||||||||||||||||
Research and development expenses | 119 | 4,878 | 11,849 | 38,977 | 66,503 | 9,553 | ||||||||||||||||||
Total | 100,917 | 365,488 | 79,954 | 181,193 | 172,550 | 24,786 | ||||||||||||||||||
As of December 31, | ||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | US$ | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Selected Consolidated Balance Sheet Data: | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | 689,663 | 387,198 | 762,882 | 3,540,031 | 4,962,660 | 712,842 | ||||||||||||||||||
Time deposits | — | — | 1,960 | 749,385 | 1,844,558 | 264,954 | ||||||||||||||||||
Accounts receivable, net | 16,639 | 110,666 | 392,942 | 324,392 | 744,845 | 106,990 | ||||||||||||||||||
Prepayments and other current assets | 86,143 | 185,378 | 477,265 | 990,851 | 1,315,901 | 189,017 | ||||||||||||||||||
Short-term investments | 50,000 | 712,564 | 488,391 | 945,338 | 1,260,810 | 181,104 | ||||||||||||||||||
Non-current assets: | ||||||||||||||||||||||||
Intangible assets, net | 109,515 | 282,472 | 426,292 | 1,419,435 | 1,657,333 | 238,061 | ||||||||||||||||||
Goodwill | — | 50,967 | 50,967 | 941,488 | 1,012,026 | 145,368 | ||||||||||||||||||
Long-term investments, net | 160,644 | 377,031 | 635,952 | 979,987 | 1,251,129 | 179,713 | ||||||||||||||||||
Total assets | 1,156,943 | 2,166,710 | 3,473,525 | 10,490,036 | 15,516,567 | 2,228,815 | ||||||||||||||||||
Total current liabilities | 308,202 | 628,100 | 1,397,994 | 3,298,834 | 4,272,597 | 613,720 | ||||||||||||||||||
Long-term debt | — | — | — | — | 3,414,628 | 490,481 | ||||||||||||||||||
Total mezzanine equity | 1,394,477 | 2,861,613 | 4,015,043 | — | — | — | ||||||||||||||||||
Total shareholders’ (deficit)/equity | (545,736 | ) | (1,323,003 | ) | (1,939,512 | ) | 7,191,202 | 7,636,460 | 1,096,910 |
For the Year Ended December 31, | ||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 (1) | 2019 | ||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | US$ | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Selected Consolidated Statements of Cash Flow Data: | ||||||||||||||||||||||||
Net cash (used in)/provided by operating activities | (191,935 | ) | (198,967 | ) | 464,550 | 737,286 | 194,551 | 27,946 | ||||||||||||||||
Net cash used in investing activities | (355,449 | ) | (1,187,300 | ) | (716,254 | ) | (3,196,394 | ) | (3,958,277 | ) | (568,570 | ) | ||||||||||||
Net cash provided by financing activities | 1,099,184 | 1,024,087 | 675,533 | 4,974,810 | 5,078,842 | 729,530 | ||||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash held in foreign currencies | 42,953 | 49,606 | (48,145 | ) | 261,447 | 107,513 | 15,442 | |||||||||||||||||
Net increase/(decrease) in cash and cash equivalents and restricted cash | 594,753 | (312,574 | ) | 375,684 | 2,777,149 | 1,422,629 | 204,348 | |||||||||||||||||
Cash and cash equivalents and restricted cash at beginning of the year | 105,019 | 699,772 | 387,198 | 762,882 | 3,540,031 | 508,494 | ||||||||||||||||||
Cash and cash equivalents and restricted cash at end of the year | 699,772 | 387,198 | 762,882 | 3,540,031 | 4,962,660 | 712,842 | ||||||||||||||||||
(1) | We adopted Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash beginning-of-period andend-of-period total amounts presented in the selected consolidated statements of cash flow data for the years ended December 31, 2015 and 2016. |
B. | Capitalization and Indebtedness |
C. | Reasons for the Offer and Use of Proceeds |
D. | Risk Factors |
• | the popularity, usefulness, ease of use, performance and reliability of our platform, products and services compared to those of our competitors; |
• | the amount, quality and timeliness of content on our platform, especially the amount and quality of the PUGC generated by our content creators; |
• | the environment and culture of our user communities; |
• | our ability, and the ability of our competitors, to develop new products and services and enhancements to existing products and services to keep up with user preferences and demands; |
• | the inventory size, quality and size of player base of the games we operate; |
• | our ability to establish and maintain relationships with content providers and partners; |
• | our ability to monetize our services; |
• | changes mandated by legislation, regulations or government policies, some of which may have a disproportionate effect on us; |
• | acquisitions or consolidation within our industry, which may result in more formidable competitors; and |
• | our reputation and brand strength relative to our competitors. |
• | our financial condition, results of operations and cash flows; |
• | general market conditions for financing activities by internet companies; and |
• | economic, political and other conditions in the PRC and elsewhere. |
• | the integration of new operations and the retention of customers and personnel; |
• | significant volatility in our operating profit (loss) due to changes in the fair value of our contingent purchase consideration payable; |
• | unforeseen or hidden liabilities, including those associated with different business practices; |
• | the diversion of management’s attention and resources from our existing business and technology by acquisition, transition and integration activities; |
• | failure to achieve synergies with our existing business and generate revenues as anticipated; |
• | failure of the newly acquired businesses, technologies, services and products to perform as anticipated; |
• | inability to generate sufficient revenues to offset additional costs and expenses; |
• | breach or termination of key agreements by the counterparties; |
• | the costs of acquisitions; |
• | international operations conducted by some of our subsidiaries; |
• | any different interpretations on contingent purchase consideration; or |
• | the potential loss of, or harm to, relationships with both our employees and customers resulting from our integration of new businesses. |
• | revoking the business licenses and/or operating licenses of such entities; |
• | imposing fines on us; |
• | confiscating any of our income that they deem to be obtained through illegal operations; |
• | discontinuing or placing restrictions or onerous conditions on our operations; |
• | placing restrictions on our right to collect revenues; |
• | shutting down our servers or blocking our app/websites; |
• | requiring us to restructure the operations in such a way as to compel us to establish a new enterprise, re-apply for the necessary licenses or relocate our businesses, staff and assets; |
• | imposing additional conditions or requirements with which we may not be able to comply; or |
• | taking other regulatory or enforcement actions against us that could be harmful to our business. |
• | variations in our revenues, earnings, cash flow and data related to our user base or user engagement; |
• | announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors; |
• | announcements of new product and service offerings, solutions and expansions by us or our competitors; |
• | changes in financial estimates by securities analysts; |
• | detrimental adverse publicity about us, our products and services or our industry; |
• | additions or departures of key personnel; |
• | releases at any time, in some cases without notice, of lock-up or other transfer restrictions on our outstanding ordinary shares, ADSs or other equity related securities; |
• | sales of additional ADSs or other equity-related securities in the public markets, or issuance of ADSs upon conversion of convertible senior notes issued by us, or the perception of these events; and |
• | actual or potential litigation or regulatory investigations. |
• | the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form8-K with the SEC; |
• | the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; |
• | the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and |
• | the selective disclosure rules by issuers of material nonpublic information under Regulation FD. |
A. | History and Development of the Company |
B. | Business Overview |
• | production, duplication, import, release or broadcasting of online cultural products; |
• | publishing of online cultural products on the internet or transmission thereof to computers, fixed-line or mobile phones, radios, television sets or gaming consoles for the purpose of browsing, reading, reviewing, using or downloading such products by online users; or |
• | exhibitions or contests related to online cultural products. |
• | verify the real identity information of registered users; |
• | establish and improve a user information protection system; |
• | establish a system of reviewing at first and then publishing comments if they offer internet follow-up comment services to news information; |
• | furnish corresponding static information content on the same platform and page at the same time if they provide internet follow-up comment services by way of bullet chatting; |
• | establish and improve an internet follow-up comment review and administration, real-time check, emergency response and other information security administration systems, timely identify and process illicit information and submit a report to the relevant competent authorities; |
• | develop internet follow-up comment information protection and administration technologies, innovate internetfollow-up comment administration modes, R&D and utilize an anti-spam administration system and improve the spam handling capability; |
• | timely identify security flaws and loopholes and other risks existing in internet follow-up comment services, take remedial measures and submit a report to the relevant competent authorities; |
• | build a reviewing and editing team in line with service scale and improve the professionalism of editors; |
• | assist the relevant competent authorities in carrying out the supervision and inspection work and provide necessary technologies, materials and data support; and |
• | enter into an agreement with their registered users to stipulate the detailed rules on internet follow-up comment services and administration, the performance of the obligations of disclosing relevant internet laws and regulations. |
• | any ICP service provider, who provides automatic internet access service upon instructions of its users or provides automatic transmission service of works, performance and audio-visual products provided by its users, will not be required to assume the indemnification liabilities if (i) it has not chosen or altered the transmitted works, performance and audio-visual products; and (ii) it provides such works, performance and audio-visual products to the designated user and prevents any person other than such designated user from obtaining the access. |
• | any ICP service provider who, for the sake of improving network transmission efficiency, automatically stores and provides to its own users, based on the technical arrangement, the relevant works, performances and audio-visual products obtained from any other ICP service providers will not be required to assume the indemnification liabilities if (i) it has not altered any of the works, performance or audio-visual products that are automatically stored; (ii) it has not affected such original ICP service provider in grasping the circumstances where the users obtain the relevant works, performance and audio-visual products; and (iii) when the original ICP service provider revises, deletes or shields the works, performance and audio-visual products, it will automatically revise, delete or shield the same based on the technical arrangement. |
• | any ICP service provider, who provides its users with information memory space for such users to provide the works, performance and audio-visual products to the general public via the information network, will not be required to assume the indemnification liabilities if (i) it clearly indicates that the information memory space is provided to the users and publicizes its own name, contact person and web address; (ii) it has not altered the works, performance and audio-visual products that are provided by the users; (iii) it is not aware of or has reason to know the infringement of the works, performance and audio-visual products provided by the users; (iv) it has not directly derived any economic benefit from the provision of the works, performance and audio-visual products by its users; and (v) after receiving a notice from the right holder, it has deleted such works, performance and audio-visual products as alleged for infringement pursuant to such regulation. |
• | any ICP service provider, who provides its users with search services or links, will not be required to assume the indemnification liabilities if, after receiving a notice from the right holder, it has deleted the works, performance and audio-visual products as alleged for copyright infringement pursuant to this regulation. However, the ICP service provider shall be subject to joint liabilities for copyright infringement if it is aware of or has reason to know the infringement of the works, performance and audio-visual products to which it provides links. |
C. | Organizational Structure |
(1) | Rui Chen holds 100% equity interests in Shanghai Kuanyu. He is also the chairman of our board of directors and our chief executive officer. |
(2) | Rui Chen, Yi Xu, Ni Li and two other individuals hold 52.3%, 34.8%, 3.4% and 9.5% equity interests in Shanghai Hode, respectively. Among them, Mr. Chen, Mr. Xu and Ms. Li are also directors and officers of our company. |
• | the ownership structures of Hode Technology, Shanghai Kuanyu and Shanghai Hode will not result in any violation of PRC laws or regulations currently in effect; and |
• | the contractual arrangements among Hode Technology, Shanghai Kuanyu and Shanghai Hode and their shareholders governed by PRC law are valid, binding and enforceable, and will not result in any violation of PRC laws or regulations currently in effect. |
D. | Property, Plant and Equipment |
A. | Operating Results |
For the Three Months Ended | ||||||||||||||||||||||||||||||||
March 31, 2018 | June 30, 2018 | September 30, 2018 | December 31, 2018 | March 31, 2019 | June 30, 2019 | September 30, 2019 | December 31, 2019 | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||
Average MAUs | 77,454.2 | 85,041.4 | 92,748.0 | 92,766.2 | 101,334.7 | 110,352.7 | 127,876.2 | 130,276.9 |
For the Three Months Ended | ||||||||||||||||||||||||||||||||
March 31, 2018 | June 30, 2018 | September 30, 2018 | December 31, 2018 | March 31, 2019 | June 30, 2019 | September 30, 2019 | December 31, 2019 | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||
Average MAUs | 77,454.2 | 85,041.4 | 92,748.0 | 92,766.2 | 101,334.7 | 110,352.7 | 127,876.2 | 130,276.9 | ||||||||||||||||||||||||
Average monthly paying users | 2,472.5 | 2,966.2 | 3,540.2 | 4,415.8 | 5,742.6 | 6,258.5 | 7,946.6 | 8,817.4 | ||||||||||||||||||||||||
Average monthly paying users for mobile games | 829.9 | 817.4 | 913.9 | 879.1 | 1,023.2 | 971.3 | 1,460.6 | 1,256.0 | ||||||||||||||||||||||||
(in RMB) | ||||||||||||||||||||||||||||||||
Average monthly revenue per paying user | 105.7 | 102.2 | 86.0 | 69.0 | 67.6 | 66.4 | 58.1 | 54.5 | ||||||||||||||||||||||||
Average monthly revenue per paying user for mobile games | 276.5 | 322.6 | 271.4 | 270.3 | 284.6 | 315.7 | 213.0 | 231.3 |
For the Year Ended December 31, | ||||||||||||||||||||||||||||
2017 | 2018 | 2019 | ||||||||||||||||||||||||||
RMB | % | RMB | % | RMB | US$ | % | ||||||||||||||||||||||
(in thousands, except for percentages) | ||||||||||||||||||||||||||||
Net revenues: | ||||||||||||||||||||||||||||
Mobile games | 2,058,226 | 83.4 | % | 2,936,331 | 71.1 | % | 3,597,809 | 516,793 | 53.1 | % | ||||||||||||||||||
Live broadcasting and VAS | 176,443 | 7.1 | % | 585,643 | 14.2 | % | 1,641,043 | 235,721 | 24.2 | % | ||||||||||||||||||
Advertising | 159,160 | 6.5 | % | 463,490 | 11.2 | % | 817,016 | 117,357 | 12.1 | % | ||||||||||||||||||
E-commerce and others | 74,620 | 3.0 | % | 143,467 | 3.5 | % | 722,054 | 103,717 | 10.6 | % | ||||||||||||||||||
Total net revenues | 2,468,449 | 100.0 | % | 4,128,931 | 100.0 | % | 6,777,922 | 973,588 | 100.0 | % |
For the Year Ended December 31, | ||||||||||||||||||||||||||||
2017 | 2018 | 2019 | ||||||||||||||||||||||||||
RMB | % | RMB | % | RMB | US$ | % | ||||||||||||||||||||||
(in thousands, except for percentages) | ||||||||||||||||||||||||||||
Cost of revenues: | ||||||||||||||||||||||||||||
Revenue-sharing costs | 926,315 | 48.3 | % | 1,630,881 | 49.8 | % | 2,494,416 | 358,300 | 44.6 | % | ||||||||||||||||||
Content costs | 261,534 | 13.6 | % | 543,009 | 16.6 | % | 1,001,600 | 143,871 | 17.9 | % | ||||||||||||||||||
Staff costs | 128,268 | 6.7 | % | 238,793 | 7.3 | % | 356,688 | 51,235 | 6.4 | % | ||||||||||||||||||
Server and bandwidth costs | 468,903 | 24.4 | % | 618,737 | 18.9 | % | 919,753 | 132,114 | 16.5 | % | ||||||||||||||||||
Others | 134,221 | 7.0 | % | 242,073 | 7.4 | % | 815,216 | 117,099 | 14.6 | % | ||||||||||||||||||
Total cost of revenues | 1,919,241 | 100 | % | 3,273,493 | 100 | % | 5,587,673 | 802,619 | 100 | % |
For the Year Ended December 31, | ||||||||||||||||||||||||||||
2017 | 2018 | 2019 | ||||||||||||||||||||||||||
RMB | % | RMB | % | RMB | US$ | % | ||||||||||||||||||||||
(in thousands, except for percentages) | ||||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||
Sales and marketing expenses | 232,489 | 30.1 | % | 585,758 | 37.0 | % | 1,198,516 | 172,156 | 44.6 | % | ||||||||||||||||||
General and administrative expenses | 260,898 | 33.7 | % | 461,165 | 29.1 | % | 592,497 | 85,107 | 22.1 | % | ||||||||||||||||||
Research and development expenses | 280,093 | 36.2 | % | 537,488 | 33.9 | % | 894,411 | 128,474 | 33.3 | % | ||||||||||||||||||
Total operating expenses | 773,480 | 100 | % | 1,584,411 | 100 | % | 2,685,424 | 385,737 | 100 | % |
For the Year Ended December 31, | ||||||||||||||||||||||||||||
2017 | 2018 | 2019 | ||||||||||||||||||||||||||
RMB | % | RMB | % | RMB | US$ | % | ||||||||||||||||||||||
(in thousands, except for percentages) | ||||||||||||||||||||||||||||
Net revenues | 2,468,449 | 100.0 | % | 4,128,931 | 100.0 | % | 6,777,922 | 973,588 | 100.0 | % | ||||||||||||||||||
Cost of revenues (1) | (1,919,241 | ) | (77.8 | )% | (3,273,493 | ) | (79.3 | )% | (5,587,673 | ) | (802,619 | ) | (82.4 | )% | ||||||||||||||
Gross profit | 549,208 | 22.2 | % | 855,438 | 20.7 | % | 1,190,249 | 170,969 | 17.6 | % | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||
Sales and marketing expenses (1) | (232,489 | ) | (9.4 | )% | (585,758 | ) | (14.2 | )% | (1,198,516 | ) | (172,156 | ) | (17.7 | )% | ||||||||||||||
General and administrative expenses (1) | (260,898 | ) | (10.6 | )% | (461,165 | ) | (11.2 | )% | (592,497 | ) | (85,107 | ) | (8.7 | )% | ||||||||||||||
Research and development expenses (1) | (280,093 | ) | (11.3 | )% | (537,488 | ) | (13.0 | )% | (894,411 | ) | (128,474 | ) | (13.2 | )% | ||||||||||||||
Total operating expenses | (773,480 | ) | (31.3 | )% | (1,584,411 | ) | (38.4 | )% | (2,685,424 | ) | (385,737 | ) | (39.6 | )% | ||||||||||||||
Loss from operations | (224,272 | ) | (9.1 | )% | (728,973 | ) | (17.7 | )% | (1,495,175 | ) | (214,768 | ) | (22.0 | )% | ||||||||||||||
Other income/(expenses): | ||||||||||||||||||||||||||||
Investment income, net (including impairments) | 22,957 | 0.9 | % | 96,440 | 2.3 | % | 96,610 | 13,877 | 1.4 | % | ||||||||||||||||||
Interest income | 1,483 | 0.1 | % | 68,706 | 1.7 | % | 162,782 | 23,382 | 2.4 | % | ||||||||||||||||||
Interest expense | — | — | — | — | (46,543 | ) | (6,685 | ) | (0.7 | )% | ||||||||||||||||||
Exchange gains/(losses) | 6,445 | 0.3 | % | (1,661 | ) | 0.0 | % | (11,789 | ) | (1,693 | ) | (0.2 | )% | |||||||||||||||
Others, net | 18,518 | 0.7 | % | 26,455 | 0.6 | % | 26,412 | 3,794 | 0.4 | % | ||||||||||||||||||
Loss before tax | (174,869 | ) | (7.1 | )% | (539,033 | ) | (13.1 | )% | (1,267,703 | ) | (182,093 | ) | (18.7 | )% | ||||||||||||||
Income tax | (8,881 | ) | (0.4 | )% | (25,988 | ) | (0.6 | )% | (35,867 | ) | (5,152 | ) | (0.5 | )% | ||||||||||||||
Net loss | (183,750 | ) | (7.5 | )% | (565,021 | ) | (13.7 | )% | (1,303,570 | ) | (187,245 | ) | (19.2 | )% | ||||||||||||||
(1) | Share-based compensation expenses were allocated as follows: |
For the Year Ended December 31, | ||||||||||||||||
2017 | 2018 | 2019 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
(in thousands) | ||||||||||||||||
Cost of revenues | 7,936 | 28,173 | 23,281 | 3,344 | ||||||||||||
Sales and marketing expenses | 3,423 | 11,499 | 14,269 | 2,050 | ||||||||||||
General and administrative expenses | 56,746 | 102,544 | 68,497 | 9,839 | ||||||||||||
Research and development expenses | 11,849 | 38,977 | 66,503 | 9,553 | ||||||||||||
Total | 79,954 | 181,193 | 172,550 | 24,786 | ||||||||||||
• | Exclusively distributed mobile games |
• | Jointly operated mobile game distribution services |
• | Display advertisements |
• | Performance-based advertisements |
• | Sales incentives to customers |
• | Equity investments accounted for using the measurement alternative |
• | Equity investments accounted for using the equity method |
• | Investments accounted for at fair value |
B. | Liquidity and Capital Resources |
For the Year Ended December 31, | ||||||||||||||||
2017 | 2018 | 2019 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
(in thousands) | ||||||||||||||||
Selected Consolidated Cash Flows Data: | ||||||||||||||||
Net cash provided by operating activities | 464,550 | 737,286 | 194,551 | 27,946 | ||||||||||||
Net cash used in investing activities | (716,254 | ) | (3,196,394 | ) | (3,958,277 | ) | (568,570 | ) | ||||||||
Net cash provided by financing activities | 675,533 | 4,974,810 | 5,078,842 | 729,530 | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash held in foreign currencies | (48,145 | ) | 261,447 | 107,513 | 15,442 | |||||||||||
Net increase in cash and cash equivalents and restricted cash | 375,684 | 2,777,149 | 1,422,629 | 204,348 | ||||||||||||
Cash and cash equivalents and restricted cash at beginning of the year | 387,198 | 762,882 | 3,540,031 | 508,494 | ||||||||||||
Cash and cash equivalents and restricted cash at end of the year | 762,882 | 3,540,031 | 4,962,660 | 712,842 | ||||||||||||
C. | Research and Development, Patents and Licenses, Etc. |
D. | Trend Information |
E. | Off-balance Sheet Arrangements |
F. | Tabular Disclosure of Contractual Obligations |
Payment due by December 31, | ||||||||||||||||||||||||
Total | 2020 | 2021 | 2022 | 2023 | After | |||||||||||||||||||
(in RMB thousands) | ||||||||||||||||||||||||
Operating lease commitments (1) | 312,249 | 93,741 | 100,109 | 89,399 | 28,643 | 357 | ||||||||||||||||||
Long-term debt obligations (2) | 3,799,847 | 47,961 | 47,961 | 47,961 | 47,961 | 3,608,003 | ||||||||||||||||||
Purchase obligation (3) | 800,000 | 320,000 | 240,000 | 240,000 | — | — | ||||||||||||||||||
Total | 4,912,096 | 461,702 | 388,070 | 377,360 | 76,604 | 3,608,360 | ||||||||||||||||||
(1) | Operating lease commitments consist of the commitments under the lease agreements for our office premises. |
(2) | Long-term debt obligations consist of the principal amount and cash interests in connection with the 2026 Notes. |
(3) | Purchase obligation consists of the commitment under the a letter of intent signed in December 2019 to purchase the three-year license for live broadcasting the League of Legends World Championship in China starting from 2020 at an aggregate purchase price of RMB800 million (US$114.9 million). |
G. | Safe Harbor |
A. | Directors and Senior Management |
Directors and Executive Officers | Age | Position/Title | ||||
Rui Chen | 42 | Chairman of the Board of Directors and Chief Executive Officer | ||||
Yi Xu | 30 | Founder, Director and President | ||||
Ni Li | 34 | Vice Chairman of the Board of Directors and Chief Operating Officer | ||||
Wenji Jin | 47 | Independent Director | ||||
JP Gan | 48 | Independent Director | ||||
Eric He | 59 | Independent Director | ||||
Feng Li | 46 | Independent Director | ||||
Xin Fan | 41 | Chief Financial Officer |
B. | Compensation |
Name | Ordinary Shares Underlying Options Awarded | Exercise Price (US$/Share) | Date of Grant | Date of Expiration | ||||
Rui Chen | — | |||||||
Yi Xu | — | |||||||
Ni Li | * | Nominal | September 1, 2016 | September 1, 2022 | ||||
Xin Fan | * | Nominal | Various dates from April 18, 2016 to June 15, 2019 | Various dates from April 18, 2022 to June 15, 2025 | ||||
Other grantees | 11,369,402 | Nominal | July 28, 2014 to December 4, 2019 | July 28, 2020 to December 4, 2025 | ||||
Total | 12,144,402 | |||||||
* | Less than 1% of our total outstanding shares. |
C. | Board Practices |
• | appointing the independent auditors and pre-approving all auditing andnon-auditing services permitted to be performed by the independent auditors; |
• | reviewing with the independent auditors any audit problems or difficulties and management’s response; |
• | discussing the annual audited financial statements with management and the independent auditors; |
• | reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; |
• | reviewing and approving all proposed related party transactions; |
• | meeting separately and periodically with management and the independent auditors; and |
• | monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. |
• | reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; |
• | reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; |
• | reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and |
• | selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management. |
• | selecting and recommending to the board nominees for election by the shareholders or appointment by the board; |
• | reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; |
• | making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and |
• | advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken. |
• | convening shareholders’ annual general meetings and reporting its work to shareholders at such meetings; |
• | declaring dividends and distributions; |
• | appointing officers and determining the term of office of the officers; |
• | exercising the borrowing powers of our company and mortgaging the property of our company; and |
• | approving the transfer of shares in our company, including the registration of such shares in our share register. |
D. | Employees |
As of December 31, 2019 | ||||
Function: | ||||
Platform operations | 439 | |||
Products and technology | 2,043 | |||
Content operations | 745 | |||
Content audit | 1,220 | |||
Management, sales, finance and administration | 344 | |||
Total | 4,791 | |||
E. | Share Ownership |
• | each of our directors and executive officers; and |
• | each person known to us to own beneficially more than 5% of our ordinary shares. |
Ordinary Shares Beneficially Owned | ||||||||||||||||||||
Class Y Ordinary Shares | Class Z Ordinary Shares | Total Ordinary Shares | % of Beneficial Ownership | % of Aggregate Voting Power † | ||||||||||||||||
Directors and Executive Officers**: | ||||||||||||||||||||
Rui Chen (1) | 49,299,006 | 133,945 | 49,432,951 | 15.1 | % | 45.0 | %*** | |||||||||||||
Yi Xu (2) | 28,865,808 | 25,000 | 28,890,808 | 8.8 | % | 26.3 | %*** | |||||||||||||
Ni Li (3) | 7,200,000 | 800,000 | 8,000,000 | 2.4 | % | 6.6 | %*** | |||||||||||||
Wenji Jin (4) | — | * | * | * | * | |||||||||||||||
JP Gan (5) | — | * | * | * | * | |||||||||||||||
Eric He (6) | — | * | * | * | * | |||||||||||||||
Feng Li (7) | — | — | — | — | — | |||||||||||||||
Xin Fan | — | * | * | * | * | |||||||||||||||
All Directors and Executive Officers as a Group | 85,364,814 | 2,537,445 | 87,902,259 | 26.7 | % | 78.0 | % | |||||||||||||
Principal Shareholders: | ||||||||||||||||||||
Entities affiliated with Rui Chen (8) | 49,299,006 | 133,945 | 49,432,951 | 15.1 | % | 45.0 | % | |||||||||||||
Tencent entities (9) | — | 43,749,518 | 43,749,518 | 13.3 | % | 4.0 | % | |||||||||||||
Kami Sama Limited (10) | 28,865,808 | — | 28,865,808 | 8.8 | % | 26.3 | % | |||||||||||||
Taobao China Holding Limited (11) | — | 23,645,657 | 23,645,657 | 7.2 | % | 2.2 | % | |||||||||||||
Loyal Valley Capital (12) | — | 19,353,524 | 19,353,524 | 5.9 | % | 1.8 | % |
† | For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class Y and Class Z ordinary shares as a single class. Each holder of Class Z ordinary shares is entitled to one vote per share and each holder of our Class Y ordinary shares is entitled to ten votes per share on all matters submitted to them for a vote. Our Class Y ordinary shares and Class Z ordinary shares vote together as a single class on all matters submitted to a vote of our shareholders, except as may otherwise be required by law. Our Class Y ordinary shares are convertible at any time by the holder thereof into Class Z ordinary shares on a one-for-one basis. |
* | Less than 1% of our total outstanding shares. |
** | Except as otherwise indicated below, the business address of our directors and executive officers is c/o Shanghai Hode Information Technology Co., Ltd., Building 3, Guozheng Center, No. 485 Zhengli Road, Yangpu District, Shanghai, People’s Republic of China. |
*** | In July 2019, Yi Xu executed an irrevocable power of attorney, pursuant to which Yi Xu has appointed Rui Chen as his attorney to, among other things, attend on Yi Xu’s behalf our company’s shareholders meeting and to exercise all voting rights associated with Yi Xu’s shares in our company. In the same month, Ni Li executed an irrevocable power of attorney, pursuant to which Ni Li has appointed Rui Chen as her attorney to, among other things, attend on her behalf our company’s shareholders meeting and to exercise all voting rights associated with her shares in our company. |
(1) | Represents (i) 49,299,006 Class Y ordinary shares directly held by Vanship Limited, a business company limited by shares incorporated in British Virgin Islands, and (ii) 133,945 Class Z ordinary shares directly held by Windforce Limited, a business company limited by shares incorporated in British Virgin Islands. Vanship Limited is controlled by The Le Petit Prince Trust, a trust established under the laws of Cayman Islands and managed by TMF (Cayman) Ltd. as the trustee. Mr. Chen is the settlor of The Le Petit Prince Trust, and Mr. Chen and his family members are the trust’s beneficiaries. Under the terms of this trust, Mr. Chen has the power to direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to, the shares held by Vanship Limited in our company. Windforce Limited is controlled by Diamond Dust Limited, a Cayman Islands exempted company, which in turn is controlled by Mr. Chen. Mr. Chen is a director of Diamond Dust Limited, and indirectly holds 100% equity interests in Diamond Dust Limited through Vanship Limited. |
(2) | Represents (i) 28,865,808 Class Y ordinary shares directly held by Kami Sama Limited, a business company limited by shares incorporated in British Virgin Islands, and (ii) 25,000 Class Z ordinary shares in the form of ADSs held by Mr. Xu. Kami Sama Limited is controlled by The Homur Trust, a trust established under the laws of Cayman Islands and managed by TMF (Cayman) Ltd. as the trustee. Mr. Yi Xu is the settlor of The Homur Trust, and Mr. Xu and his family members are the trust’s beneficiaries. Under the terms of this trust, Mr. Xu has the power to direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to, the shares held by Kami Sama Limited in our company. |
(3) | Represents 7,200,000 Class Y ordinary shares and 800,000 Class Z ordinary shares directly held by Saber Lily Limited, a business company limited by shares incorporated in British Virgin Islands. Saber Lily Limited is controlled by The Fortuna Trust, a trust established under the laws of Cayman Islands and managed by TMF (Cayman) Ltd. as the trustee. Ms. Li is the settlor of The Fortuna Trust, and Ms. Li and her family members are the trust’s beneficiaries. Under the terms of this trust, Ms. Li has the power to direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to, the shares held by Saber Lily Limited in our company. |
(4) | The business address of Mr. Wenji Jin is #12, Lane 168, Qingtong Road, Pudong New District, Shanghai, People’s Republic of China. |
(5) | The business address of Mr. JP Gan is Suite 909, Bank of America Tower, 12 Harcourt Road, Central, Hong Kong. |
(6) | The business address of Mr. Eric He is 3F, 607 Ming Shuei Road, Taipei, Taiwan, People’s Republic of China. |
(7) | The business address of Mr. Feng Li is Room 701, Tower 1, Liangmaqiao Diplomatic Office Building, No 19 Dongfangdong Road, Chaoyang District, Beijing, People’s Republic of China. |
(8) | Represents (i) 49,299,006 Class Y ordinary shares directly held by Vanship Limited, a business company limited by shares incorporated in British Virgin Islands, and (ii) 133,945 Class Z ordinary shares directly held by Windforce Limited, a business company limited by shares incorporated in British Virgin Islands. Vanship Limited is controlled by The Le Petit Prince Trust, a trust established under the laws of Cayman Islands and managed by TMF (Cayman) Ltd. as the trustee. Mr. Chen is the settlor of The Le Petit Prince Trust, and Mr. Chen and his family members are the trust’s beneficiaries. Under the terms of this trust, Mr. Chen has the power to direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to, the shares held by Vanship Limited in our company. Windforce Limited is controlled by Diamond Dust Limited, a Cayman Islands exempted company, which in turn is controlled by Mr. Chen. Mr. Chen is a director of Diamond Dust Limited, and indirectly holds 100% equity interests in Diamond Dust Limited through Vanship Limited. |
(9) | Represents (i) 10,954,357 Class Z ordinary shares directly held by OPH B Limited, a company limited by shares incorporated in British Virgin Islands, and (ii) 32,795,161 Class Z ordinary shares directly held by Tencent Mobility Limited, a limited company incorporated in Hong Kong, based on the Schedule 13G/A filed on February 10, 2020. OPH B Limited and Tencent Mobility Limited are investing entities ultimately controlled by Tencent Holdings Limited, and are collectively referred to as Tencent entities. The registered address of OPH B Limited is P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands. The registered address of Tencent Mobility Limited is 27/F, Three Pacific Place, No.1 Queen’s Road East, Wanchai, Hong Kong. |
(10) | Represents 28,865,808 Class Y ordinary shares directly held by Kami Sama Limited, a business company limited by shares incorporated in British Virgin Islands. The registered address of Kami Sama Limited is Start Chambers, Wickham’s Cay II., P.O. Box 2221, Road Town, Tortola, British Virgin Islands. |
(11) | Represents 13,645,657 Class Z ordinary shares and 10,000,000 Class Z ordinary shares in the form of ADSs directly held by Taobao China Holding Limited, a business company limited by shares incorporated in Hong Kong, based on the Schedule 13G filed on February 14, 2019. Taobao China Holding Limited is a wholly-owned subsidiary of Taobao Holding Limited, a business company limited by shares incorporated in Cayman Islands, which is a wholly-owned subsidiary of Alibaba Group Holding Limited, a business company limited by shares incorporated in Cayman Islands. The principal business address of Alibaba Group Holding Limited, Taobao Holding Limited and Taobao China Holding Limited is c/o Alibaba Group Services Limited, 26/F Tower One, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong. |
(12) | Represents (i) 8,063,968 Class Z ordinary shares and 1,612,794 Class Z ordinary shares in the form of ADSs directly held by Sunrise View Investments Limited, a business company limited by shares incorporated in British Virgin Islands, and (ii) 8,063,968 Class Z ordinary shares and 1,612,794 Class Z ordinary shares in the form of ADSs directly held by Starry Concept Group Limited, a business company limited by shares incorporated in British Virgin Islands, based on the information provided by these entities to our company. Sunrise View Investments Limited and Starry Concept Group Limited are collectively referred to as Loyal Valley Capital. Both Sunrise View Investments Limited and Starry Concept Group Limited are wholly owned indirectly by Loyal Valley Capital Advantage Fund LP (formerly known as LVC Super Unicorn Fund LP), a Cayman Islands exempted limited partnership, which is controlled by Mr. Lijun Lin, its director. The registered address of each of Sunrise View Investments Limited and Starry Concept Group Limited is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Vrigin Islands. |
A. | Major Shareholders |
B. | Related Party Transactions |
C. | Interests of Experts and Counsel |
A. | Consolidated Statements and Other Financial Information |
B. | Significant Changes |
A. | Offering and Listing Details |
B. | Plan of Distribution |
C. | Markets |
D. | Selling Shareholders |
E. | Dilution |
F. | Expenses of the Issue |
A. | Share Capital |
B. | Memorandum and Articles of Association |
• | the instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer; |
• | the instrument of transfer is in respect of only one class of ordinary shares; |
• | the instrument of transfer is properly stamped, if required; |
• | in the case of a transfer to joint holders, the number of joint holders to whom the ordinary share is to be transferred does not exceed four; and |
• | a fee of such maximum sum as the Nasdaq Stock Market may determine to be payable or such lesser sum as our directors may from time to time require is paid to us in respect thereof. |
• | the designation of the series; |
• | the number of shares of the series; |
• | the dividend rights, dividend rates, conversion rights, voting rights; and |
• | the rights and terms of redemption and liquidation preferences. |
• | authorize our board of directors to issue preference shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preference shares without any further vote or action by our shareholders; and |
• | limit the ability of shareholders to requisition and convene general meetings of shareholders. |
• | does not have to file an annual return of its shareholders with the Registrar of Companies; |
• | is not required to open its register of members for inspection; |
• | does not have to hold an annual general meeting; |
• | may issue shares with no par value; |
• | may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance); |
• | may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands; |
• | may register as an exempted limited duration company; and |
• | may register as a segregated portfolio company. |
C. | Material Contracts |
D. | Exchange Controls |
E. | Taxation |
• | that no law which is hereafter enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply to our company or its operations; and |
• | in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax shall be payable: |
• | on or in respect of the shares, debentures or other obligations of our company; or |
• | by way of the withholding, in whole or part, of any relevant payment as defined in Section 6(3) of the Tax Concessions Law (as amended). |
• | the excess distribution or gain will be allocated ratably over the U.S. Holder’s holding period for the ADSs or ordinary shares; |
• | the amount allocated to the current taxable year and any taxable years in the U.S. Holder’s holding period prior to the first taxable year in which we are classified as a PFIC (each, a “pre-PFIC year”), will be taxable as ordinary income; |
• | the amount allocated to each prior taxable year, other than a pre-PFIC year, will be subject to tax at the highest tax rate in effect for individuals or corporations, as appropriate, for that year; and |
• | the interest charge generally applicable to underpayments of tax will be imposed on the tax attributable to each prior taxable year, other than a pre-PFIC year. |
F. | Dividends and Paying Agents |
G. | Statement by Experts |
H. | Documents on Display |
I. | Subsidiary Information |
A. | Debt Securities |
B. | Warrants and Rights |
C. | Other Securities |
D. | American Depositary Shares |
Service | Fees | |
• To any person to which ADSs are issued or to any person to which a distribution is made in respect of ADS distributions pursuant to stock dividends or other free distributions of stock, bonus distributions, stock splits or other distributions (except where converted to cash) | Up to US$0.05 per ADS issued | |
• Cancellation of ADSs, including the case of termination of the deposit agreement | Up to US$0.05 per ADS cancelled | |
• Distribution of cash dividends | Up to US$0.05 per ADS held | |
• Distribution of cash entitlements (other than cash dividends) and/or cash proceeds from the sale of rights, securities and other entitlements | Up to US$0.05 per ADS held | |
• Distribution of ADSs pursuant to exercise of rights | Up to US$0.05 per ADS held | |
• Distribution of securities other than ADSs or rights to purchase additional ADSs | Up to US$0.05 per ADS held | |
• Depositary services | Up to US$0.05 per ADS held on the applicable record date(s) established by the depositary bank |
• | Fees for the transfer and registration of Class Z ordinary shares charged by the registrar and transfer agent for the Class Z ordinary shares in the Cayman Islands (i.e., upon deposit and withdrawal of Class Z ordinary shares). |
• | Expenses incurred for converting foreign currency into U.S. dollars. |
• | Expenses for cable, telex and fax transmissions and for delivery of securities. |
• | Taxes and duties upon the transfer of securities, including any applicable stamp duties, any stock transfer charges or withholding taxes (i.e., when Class Z ordinary shares are deposited or withdrawn from deposit). |
• | Fees and expenses incurred in connection with the delivery or servicing of Class Z ordinary shares on deposit. |
• | Fees and expenses incurred in connection with complying with exchange control regulations and other regulatory requirements applicable to Class Z ordinary shares, deposited securities, ADSs and ADRs. |
• | Any applicable fees and penalties thereon. |
For the Year Ended December 31, | ||||||||
2018 | 2019 | |||||||
(RMB in thousands) | ||||||||
Audit fees (1) | 7,450 | 9,128 | ||||||
Audit-related fees (2) | — | 3,650 | ||||||
Tax fees (3) | 1,090 | 1,050 | ||||||
Other fees (4) | 180 | 150 |
(1) | “Audit fees” means the aggregate fees incurred for each of the fiscal years listed for professional services rendered by our principal auditors for the audit or review of our annual financial statements or quarterly financial information and review of documents filed with the SEC. In 2018, the audit refers to financial statement audit and assurance services rendered in connection with our IPO in 2018. In 2019, the audit refers to financial statement audit and audit pursuant to Section 404 of the Sarbanes-Oxley Act of 2002. |
(2) | “Audit-related fees” means the aggregate fees incurred for the issuance of comfort letters in connection with the offering of the convertible senior notes and concurrent offering of additional ADSs in April 2019, and permissible services to review and comment on the design of internal control over financial reporting rendered by our principal auditors in 2019. |
(3) | “Tax fees” means the aggregate fees incurred in each of the fiscal years listed for the professional tax services rendered by our principal auditors. |
(4) | “Other fees” means the aggregate fees incurred in each of the fiscal years listed for services rendered by our principal auditors other than services reported under “Audit fees,” “Audit-related fees” and “Tax fees”. |
Exhibit Number | Description of Document | |||
1.1 | ||||
2.1 | ||||
2.2 | ||||
2.3 | ||||
2.4 | ||||
2.5* | ||||
2.6 | Description of American Depositary Shares and Description of Class Z Ordinary Shares of the Registrant (incorporated herein by reference to (i) the sections titled “Description of American Depositary Shares” and “Description of Share Capital” in the Registrant’s registration statement on Form F-3(File No. 333-230660), initially filed with the Commission on April 1, 2019, as amended, including any form of prospectus contained therein pursuant to Rule 424(b) under the Securities Act of 1933 and (ii) the Registrant’s registration statement on Form 8-A (File No. 000-38429), filed with the Securities and Exchange Commission on March 16, 2018) | |||
4.1 | ||||
4.2* | ||||
4.3 | ||||
4.4 | ||||
4.5* | ||||
4.6* | ||||
4.7* | ||||
4.8* |
Exhibit Number | Description of Document | |||
4.9* | ||||
4.10 | ||||
4.11 | ||||
4.12 | ||||
4.13 | ||||
4.14 | ||||
4.15 | ||||
4.16 | ||||
8.1* | ||||
11.1 | ||||
12.1* | ||||
12.2* | ||||
13.1** | ||||
13.2** | ||||
15.1* | ||||
15.2* | ||||
15.3* | ||||
101.INS** | Inline XBRL Instance Document—this instance document does not appear in the Interactive Data File because its XBRL tags are not embedded within the Inline XBRL document | |||
101.SCH** | Inline XBRL Taxonomy Extension Scheme Document | |||
101.CAL** | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||
101.DEF** | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||
101.LAB** | Inline XBRL Taxonomy Extension Label Linkbase Document | |||
101.PRE** | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* | Filed with this Annual Report on Form 20-F. |
** | Furnished with this Annual Report on Form 20-F. |
(1) | Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish copies of any of the omitted schedules and exhibits upon request by the Securities and Exchange Commission. |
Bilibili Inc. |
By: | /s/ Rui Chen | |
Name: | Rui Chen | |
Title: | Chairman of the Board of Directors and | |
Chief Executive Officer |
F- 2 | ||||
F- 5 | ||||
F- 7 | ||||
F- 8 | ||||
F- 11 | ||||
F- 13 |
December 31, 2018 | December 31, 2019 | December 31, 2019 | ||||||||||
RMB | RMB | US$ | ||||||||||
Note 2(e) | ||||||||||||
Assets | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | 3,540,031 | 4,962,660 | 712,842 | |||||||||
Time deposits | 749,385 | 1,844,558 | 264,954 | |||||||||
Accounts receivable, net | 324,392 | 744,845 | 106,990 | |||||||||
Receivables due from related parties | — | 195,290 | 28,052 | |||||||||
Prepayments and other current assets | 990,851 | 1,315,901 | 189,017 | |||||||||
Short-term investments | 945,338 | 1,260,810 | 181,104 | |||||||||
Total current assets | 6,549,997 | 10,324,064 | 1,482,959 | |||||||||
Non-current assets: | ||||||||||||
Property and equipment, net | 394,898 | 516,087 | 74,131 | |||||||||
Production cost, net | 204,231 | 443,533 | 63,710 | |||||||||
Intangible assets, net | 1,419,435 | 1,657,333 | 238,061 | |||||||||
Deferred tax assets | — | 10,479 | 1,505 | |||||||||
Goodwill | 941,488 | 1,012,026 | 145,368 | |||||||||
Long-term investments, net | 979,987 | 1,251,129 | 179,713 | |||||||||
Other long-term assets | — | 301,916 | 43,368 | |||||||||
Total non-current assets | 3,940,039 | 5,192,503 | 745,856 | |||||||||
Total assets | 10,490,036 | 15,516,567 | 2,228,815 | |||||||||
Liabilities | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable (including amounts of the consolidated VIEs without recourse to the primary beneficiary of RMB1,078.1 million and RMB1,454.9 million as of December 31, 2018 and 2019, respectively) | 1,307,598 | 1,904,042 | 273,499 | |||||||||
Salary and welfare payable | 246,815 | 355,936 | 51,127 | |||||||||
Taxes payable (including amounts of the consolidated VIEs without recourse to the primary beneficiary of RMB27.2 million and RMB33.6 million as of December 31, 2018 and 2019, respectively) | 38,505 | 67,856 | 9,747 | |||||||||
Deferred revenue (including amounts of the consolidated VIEs without recourse to the primary beneficiary of RMB937.1 million and RMB1,234.5 million as of December 31, 2018 and 2019, respectively) | 985,143 | 1,369,000 | 196,645 | |||||||||
Accrued liabilities and other payables (including amounts of the consolidated VIEs without recourse to the primary beneficiary of RMB318.6 million and RMB222.1 million as of December 31, 2018 and 2019, respectively) | 670,442 | 575,763 | 82,702 | |||||||||
Amount due to related parties (including amounts of the consolidated VIEs without recourse to the primary beneficiary of RMB23.1 million and NaN as of December 31, 2018 and 2019, respectively) | 50,331 | — | — | |||||||||
Total current liabilities | 3,298,834 | 4,272,597 | 613,720 | |||||||||
Non-current liabilities: | ||||||||||||
Long-term debt | — | 3,414,628 | 490,481 | |||||||||
Other long-term liabilities (including amounts of the consolidated VIEs without recourse to the primary beneficiary of NaN and RMB23.1 million as of December 31, 2018 and 2019, respectively) | — | 192,882 | 27,704 | |||||||||
Total non- current liabilities | — | 3,607,510 | 518,185 | |||||||||
Total liabilities | 3,298,834 | 7,880,107 | 1,131,905 | |||||||||
Commitments and contingencies 1 ) |
December 31, 2018 | December 31, 2019 | December 31, 2019 | ||||||||||
RMB | RMB | US$ | ||||||||||
Note 2(e) | ||||||||||||
Shareholders’ equity | ||||||||||||
Ordinary shares: | ||||||||||||
Class Y Ordinary Shares (US$0.0001 par value; 100,000,000 shares authorized, 85,364,814 shares issued and outstanding as of December 31, 2018 and 2019) | 53 | 53 | 8 | |||||||||
Class , 226,323,075 shares outstanding as of December 31, 2018; 9,800,000,000 shares authorized, 247,230,234 shares issued, 242,751,341 shares outstanding as of December 31, 2019) | 144 | 155 | 22 | |||||||||
Additional paid-in capital | 9,459,546 | 10,718,190 | 1,539,572 | |||||||||
Statutory reserves | 7,666 | 13,463 | 1,934 | |||||||||
Accumulated other comprehensive income | 326,077 | 466,229 | 66,970 | |||||||||
Accumulated deficit | (2,842,690 | ) | (4,145,606 | ) | (595,479 | ) | ||||||
Total Bilibili Inc.’s shareholders’ equity | 6,950,796 | 7,052,484 | 1,013,027 | |||||||||
Noncontrolling interests | 240,406 | 583,976 | 83,883 | |||||||||
Total shareholders’ equity | 7,191,202 | 7,636,460 | 1,096,910 | |||||||||
Total liabilities and shareholders’ equity | 10,490,036 | 15,516,567 | 2,228,815 | |||||||||
For the Year Ended December 31, | ||||||||||||||||
2017 | 2018 | 2019 | 2019 | |||||||||||||
RMB | RMB | RMB | US$ Note 2(e) | |||||||||||||
Net revenues | 2,468,449 | 4,128,931 | 6,777,922 | 973,588 | ||||||||||||
Cost of revenues | (1,919,241 | ) | (3,273,493 | ) | (5,587,673 | ) | (802,619 | ) | ||||||||
Gross profit | 549,208 | 855,438 | 1,190,249 | 170,969 | ||||||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing expenses | (232,489 | ) | (585,758 | ) | (1,198,516 | ) | (172,156 | ) | ||||||||
General and administrative expenses | (260,898 | ) | (461,165 | ) | (592,497 | ) | (85,107 | ) | ||||||||
Research and development expenses | (280,093 | ) | (537,488 | ) | (894,411 | ) | (128,474 | ) | ||||||||
Total operating expenses | (773,480 | ) | (1,584,411 | ) | (2,685,424 | ) | (385,737 | ) | ||||||||
Loss from operations | (224,272 | ) | (728,973 | ) | (1,495,175 | ) | (214,768 | ) | ||||||||
Other income/(expenses): | ||||||||||||||||
Investment income, net (including impairments) | 22,957 | 96,440 | 96,610 | 13,877 | ||||||||||||
Interest income | 1,483 | 68,706 | 162,782 | 23,382 | ||||||||||||
Interest expen se | — | — | (46,543 | ) | (6,685 | ) | ||||||||||
Exchange gains/(losses) | 6,445 | (1,661 | ) | (11,789 | ) | (1,693 | ) | |||||||||
Others, net | 18,518 | 26,455 | 26,412 | 3,794 | ||||||||||||
Loss before tax | (174,869 | ) | (539,033 | ) | (1,267,703 | ) | (182,093 | ) | ||||||||
Income tax | (8,881 | ) | (25,988 | ) | (35,867 | ) | (5,152 | ) | ||||||||
Net loss | (183,750 | ) | (565,021 | ) | (1,303,570 | ) | (187,245 | ) | ||||||||
Accretion to Pre-IPO Preferred Shares redemption value | (258,554 | ) | (64,605 | ) | — | — | ||||||||||
Deemed dividend in connection with repurchase of Pre-IPO Preferred Shares | (129,244 | ) | — | — | — | |||||||||||
Net loss attributable to noncontrolling interests | — | 13,301 | 14,597 | 2,097 | ||||||||||||
Net loss attributable to the Bilibili Inc.’s shareholders | (571,548 | ) | (616,325 | ) | (1,288,973 | ) | (185,148 | ) | ||||||||
Net loss | (183,750 | ) | (565,021 | ) | (1,303,570 | ) | (187,245 | ) | ||||||||
Other comprehensive (loss)/income: | ||||||||||||||||
Foreign currency translation adjustments | (75,695 | ) | 296,030 | 140,152 | 20,132 | |||||||||||
Total other comprehensive (loss)/income | (75,695 | ) | 296,030 | 140,152 | 20,132 | |||||||||||
Total comprehensive loss | (259,445 | ) | (268,991 | ) | (1,163,418 | ) | (167,113 | ) | ||||||||
Accretion to Pre-IPO Preferred Shares redemption value | (258,554 | ) | (64,605 | ) | — | — | ||||||||||
Deemed dividend in connection with repurchase of Pre-IPO Preferred Shares | (129,244 | ) | — | — | — | |||||||||||
Net loss attributable to noncontrolling interests | — | 13,301 | 14,597 | 2,097 | ||||||||||||
Comprehensive loss attributable to the Bilibili Inc.’s shareholders | (647,243 | ) | (320,295 | ) | (1,148,821 | ) | (165,016 | ) | ||||||||
Net loss per share, basic | (8.17 | ) | (2.64 | ) | (3.99 | ) | (0.57 | ) | ||||||||
Net loss per share, diluted | (8.17 | ) | (2.64 | ) | (3.99 | ) | (0.57 | ) | ||||||||
Net loss per ADS, basic | — | (2.64 | ) | (3.99 | ) | (0.57 | ) | |||||||||
Net loss per ADS, diluted | — | (2.64 | ) | (3.99 | ) | (0.57 | ) | |||||||||
Weighted average number of ordinary shares, basic | 69,938,570 | 233,047,703 | 323,161,680 | 323,161,680 | ||||||||||||
Weighted average number of ordinary shares, diluted | 69,938,570 | 233,047,703 | 323,161,680 | 323,161,680 | ||||||||||||
Weighted average number of ADS, basic | — | 233,047,703 | 323,161,680 | 323,161,680 | ||||||||||||
Weighted average number of ADS, diluted | — | 233,047,703 | 323,161,680 | 323,161,680 | ||||||||||||
Share-based compensation expenses included in | ||||||||||||||||
Cost of revenues | 7,936 | 28,173 | 23,281 | 3,344 | ||||||||||||
S a les and marketing expenses | 3,423 | 11,499 | 14,269 | 2,050 | ||||||||||||
General and administrative expenses | 56,746 | 102,544 | 68,497 | 9,839 | ||||||||||||
Research and development expenses | 11,849 | 38,977 | 66,503 | 9,553 |
Ordinary shares | Other permanent equities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class Y Ordinary Shares | Class Z Ordinary Shares | Pre-IPO Class AOrdinary Shares | Pre-IPO Class BOrdinary Shares | Pre-IPO Class COrdinary Shares | Pre-IPO Class DOrdinary Shares | Additional paid-in capital | Statutory reserves | Accumulated other comprehensive income | Accumulated deficit | Non contr olling interests | Total shareholders’ (deficit)/equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | RMB | RMB | RMB | RMB | RMB | RMB | RMB | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2016 | — | — | — | — | 71,136,926 | 46 | 13,600,000 | 16,356 | 8,500,000 | 16,944 | 2,132,353 | 6,911 | 307,036 | 1,595 | 105,742 | (1,777,990 | ) | 357 | (1,323,003 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | — | (183,750 | ) | — | (183,750 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | — | — | — | — | — | — | 69,480 | — | — | — | — | 69,480 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of Pre-IPO Class A Ordinary Shares | — | — | — | — | (1,154,643 | ) | (1 | ) | — | — | — | — | — | — | (49,085 | ) | — | — | — | — | (49,086 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Redesignation of Pre-IPO Class A Ordinary Shares to Pre-IPO Series D1 Preferred Shares | — | — | — | — | (645,357 | ) | — | — | — | — | — | — | — | (17,003 | ) | — | — | — | — | (17,003 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Redesignation of Pre-IPO Series C Preferred Shares to Pre-IPO Series D1 Preferred Shares | — | — | — | — | — | — | — | — | — | — | — | — | (129,244 | ) | — | — | — | — | (129,244 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Pre-IPO Preferred Shares redemption value accretion | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | (258,554 | ) | — | (258,554 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase of noncontrolling interests | — | — | — | — | — | — | — | — | — | — | — | — | (2,332 | ) | — | — | — | (357 | ) | (2,689 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Spin-off transactions | — | — | — | — | — | — | — | — | — | — | — | — | 30,032 | — | — | — | — | 30,032 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Appropriation to statutory reserves | — | — | — | — | — | — | — | — | — | — | — | — | — | 2,480 | — | (2,480 | ) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | — | — | — | — | — | — | — | — | (75,695 | ) | — | — | (75,695 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2017 | — | — | — | — | 69,336,926 | 45 | 13,600,000 | 16,356 | 8,500,000 | 16,944 | 2,132,353 | 6,911 | 208,884 | 4,075 | 30,047 | (2,222,774 | ) | — | (1,939,512 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Ordinary shares | Other permanent equities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class Y Ordinary Shares | Class Z Ordinary Shares | Pre-IPO Class AOrdinary Shares | Pre-IPO Class BOrdinary Shares | Pre-IPO Class COrdinary Shares | Pre-IPO Class DOrdinary Shares | Additional paid-in capital | Statutory reserves | Accumulated other comprehensive income | Accumulated deficit | Non contr olling interests | Total shareholders’ (deficit)/equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | RMB | RMB | RMB | RMB | RMB | RMB | RMB | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31 , 2017 | — | — | — | — | 69,336,926 | 45 | 13,600,000 | 16,356 | 8,500,000 | 16,944 | 2,132,353 | 6,911 | 208,884 | 4,075 | 30,047 | (2,222,774 | ) | — | (1,939,512 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | (551,720 | ) | (13,301 | ) | (565,021 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | — | — | — | — | — | — | 178,343 | — | — | — | 2,850 | 181,193 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share issuance upon initial public offering and followed offering, net of issuance costs of US$6,333 | — | — | 67,063,451 | 43 | — | — | — | — | — | — | — | — | 4,952,563 | — | — | — | — | 4,952,606 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redesignation of Pre-IPO Ordinary Shares into Class Y and Class Z Ordinary Shares upon initial public offering | 84,260,279 | 52 | 9,309,000 | 6 | (69,336,926 | ) | (45 | ) | (13,600,000 | ) | (16,356 | ) | (8,500,000 | ) | (16,944 | ) | (2,132,353 | ) | (6,911 | ) | 40,198 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Redesignation of Pre-IPO Preferred Shares into Class Y and Class Z Ordinary Shares upon initial public offering | 1,104,535 | 1 | 141,808,970 | 89 | — | — | — | — | — | — | — | — | 4,079,558 | — | — | — | — | 4,079,648 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pre-IPO Preferred Shares redemption value accretion | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | (64,605 | ) | — | (64,605 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital injection in subsidiaries by noncontrolling interests | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 22,198 | 22,198 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions of subsidiaries | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 228,659 | 228,659 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share issuance from exercise of share options | — | — | 8,141,654 | 6 | — | — | — | — | — | — | — | — | — | — | — | — | 6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Appropriation to statutory reserves | — | — | — | — | — | — | — | — | — | — | — | — | — | 3,591 | — | (3,591 | ) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 296,030 | — | — | 296,030 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31 , 2018 | 85,364,814 | 53 | 226,323,075 | 144 | — | — | — | — | — | — | — | — | 9,459,546 | 7,666 | 326,077 | (2,842,690 | ) | 240,406 | 7,191,202 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Ordinary shares | ||||||||||||||||||||||||||||||||||||||||
Class Y Ordinary Shares | Class Z Ordinary Shares | Additional paid-in capital | Statutory reserves | Accumulated other comprehensive income | Accumulated deficit | Noncontrolling interests | Total shareholders’ equity | |||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | RMB | RMB | RMB | |||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | 85,364,814 | 53 | 226,323,075 | 144 | 9,459,546 | 7,666 | 326,077 | (2,842,690 | ) | 240,406 | 7,191,202 | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | (1,288,973 | ) | (14,597 | ) | (1,303,570 | ) | |||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | 172,550 | — | — | — | — | 172,550 | ||||||||||||||||||||||||||||||
Issuance of ordinary shares, net of issuance costs of US$9,376 | — | — | 14,173,813 | 10 | 1,647,701 | — | — | — | — | 1,647,711 | ||||||||||||||||||||||||||||||
Acquisition of a subsidiary | — | — | — | — | — | — | — | — | 30,000 | 30,000 | ||||||||||||||||||||||||||||||
Consolidation of an entity under common control (Note 26) | — | — | — | — | (488,463 | ) | — | — | (8,146 | ) | 426,448 | (70,161 | ) | |||||||||||||||||||||||||||
Purchase of noncontrolling interests | — | — | — | — | (73,144 | ) | — | — | — | (102,480 | ) | (175,624 | ) | |||||||||||||||||||||||||||
Share issuance from exercise of share options | — | — | 2,254,453 | 1 | — | — | — | — | — | 1 | ||||||||||||||||||||||||||||||
Deconsolidation of a subsidiary | — | — | — | — | — | — | — | — | 4,199 | 4,199 | ||||||||||||||||||||||||||||||
Appropriation to statutory reserves | — | — | — | — | — | 5,797 | — | (5,797 | ) | — | — | |||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | 140,152 | — | — | 140,152 | ||||||||||||||||||||||||||||||
Balance at December 31, 2019 | 85,364,814 | 53 | 242,751,341 | 155 | 10,718,190 | 13,463 | 466,229 | (4,145,606 | ) | 583,976 | 7,636,460 | |||||||||||||||||||||||||||||
For the Year Ended December 31, | ||||||||||||||||
2017 | 2018 | 2019 | 2019 | |||||||||||||
RMB | RMB | RMB | US$ Note 2(e) | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net loss | (183,750 | ) | (565,021 | ) | (1,303,570 | ) | (187,245 | ) | ||||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||
Depreciation of property and equipment | 38,356 | 99,714 | 191,784 | 27,548 | ||||||||||||
Amortization of intangible assets | 266,042 | 542,731 | 905,613 | 130,083 | ||||||||||||
Amortization of the right-of-use assets | — | — | 70,712 | 10,157 | ||||||||||||
Amortization of debt issuance costs | — | — | 9,117 | 1,310 | ||||||||||||
Share-based compensation expenses | 79,954 | 181,193 | 172,550 | 24,786 | ||||||||||||
Allowance for doubtful accounts | 2,716 | 10,904 | 9,396 | 1,350 | ||||||||||||
Inventory provision | — | — | 5,987 | 860 | ||||||||||||
Deferred income taxes | — | — | (10,479 | ) | (1,505 | ) | ||||||||||
Unrealized exchange (gains)/losses | (115 | ) | 497 | 2,636 | 379 | |||||||||||
Unrealized f air value changes ofshort-term investments | (12,523 | ) | (1,799 | ) | 17,939 | 2,577 | ||||||||||
Fair value changes of long-term investments | — | 2,072 | 18,444 | 2,649 | ||||||||||||
Gain on disposal of long-term investments and subsidiaries | — | — | (148,776 | ) | (21,371 | ) | ||||||||||
Loss from equity method investments, net of dividends received | — | — | 24,173 | 3,472 | ||||||||||||
Revaluation of previously held equity interests | — | (144,434 | ) | — | — | |||||||||||
Impairments of long-term investments | 15,989 | 46,375 | 5,900 | 847 | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable | (283,218 | ) | 65,612 | (398,968 | ) | (57,308 | ) | |||||||||
Receivables due from related parties | (24,660 | ) | 35,118 | 7,382 | 1,060 | |||||||||||
Prepayments and other assets | (247,492 | ) | (540,647 | ) | (508,515 | ) | (73,044 | ) | ||||||||
Other long-term assets | — | — | (360,497 | ) | (51,782 | ) | ||||||||||
Accounts payable | 271,893 | 345,917 | 586,864 | 84,298 | ||||||||||||
Salary and welfare payable | 91,402 | 95,452 | 101,788 | 14,621 | ||||||||||||
Taxes payable | 13,514 | 13,708 | 23,114 | 3,320 | ||||||||||||
Amount due to related parties | 5,724 | 44,607 | (50,331 | ) | (7,230 | ) | ||||||||||
Deferred revenue | 356,413 | 398,623 | 353,997 | 50,848 | ||||||||||||
Accrued liabilities and other payables | 74,305 | 106,664 | 277,875 | 39,914 | ||||||||||||
Other long-term liabilities | — | — | 190,416 | 27,352 | ||||||||||||
Net cash provided by operating activities | 464,550 | 737,286 | 194,551 | 27,946 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchase of property and equipment | (144,906 | ) | (293,566 | ) | (296,044 | ) | (42,524 | ) | ||||||||
Purchase of intangible assets | (485,912 | ) | (1,040,125 | ) | (1,268,830 | ) | (182,256 | ) | ||||||||
Purchase of short-term investments | (4,708,514 | ) | (6,666,731 | ) | (9,973,879 | ) | (1,432,658 | ) | ||||||||
M aturities ofshort-term investments | 4,932,376 | 6,252,151 | 9,993,525 | 1,435,480 | ||||||||||||
Cash consideration paid for purchase of subsidiaries, net of cash acquired | — | (135,822 | ) | (719,909 | ) | (103,408 | ) | |||||||||
Cash paid for long-term investments including loans | (320,088 | ) | (565,137 | ) | (1,226,794 | ) | (176,218 | ) | ||||||||
Repayment of loans from investees | — | — | 11,000 | 1,580 | ||||||||||||
Cash received from disposal of long-term investments | 12,750 | 1,250 | 566,554 | 81,380 | ||||||||||||
Impact to cash resulting from deconsolidation of subsidiar y | — | — | (959 | ) | (137 | ) | ||||||||||
Placement s of time deposits | (1,960 | ) | (750,473 | ) | (4,920,099 | ) | (706,728 | ) | ||||||||
Maturit ies of time deposits | — | 2,059 | 3,877,158 | 556,919 | ||||||||||||
Net cash used in investing activities | (716,254 | ) | (3,196,394 | ) | (3,958,277 | ) | (568,570 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||||
Proceeds of short-term loans | 9,000 | — | 141,857 | 20,376 | ||||||||||||
Repayment of short-term loans | — | — | (100,000 | ) | (14,364 | ) | ||||||||||
Repurchase of Pre-IPO Ordinary Shares | (49,086 | ) | — | — | — | |||||||||||
Repurchase of noncontrolling interests | (2,689 | ) | — | (121,325 | ) | (17,427 | ) | |||||||||
Capital injections from noncontrolling interests | — | 22,198 | 154,492 | 22,191 | ||||||||||||
Proceeds from exercise of employees’ share options | — | 6 | 1 | * | ||||||||||||
Proceeds from issuance of ordinary shares, net of issuance costs of US$6,333 US$9,376 , respectively | — | 4,952,606 | 1,647,711 | 236,679 | ||||||||||||
Proceeds from issuance of Pre-IPO Series D1 Preferred Shares, net of NaN issuance costs | 49,086 | — | — | — | ||||||||||||
Proceeds from issuance of Pre-IPO Series D2 Preferred Shares, net of NaN issuance costs | 689,069 | — | — | — | ||||||||||||
Cash and cash equivalents of disposed business in connection with the spin-off transaction | (19,847 | ) | — | — | — | |||||||||||
Proceeds from issuance of convertible senior notes, net of issuance costs of US$11,805 | — | — | 3,356,106 | 482,075 | ||||||||||||
Net cash provided by financing activities | 675,533 | 4,974,810 | 5,078,842 | 729,530 | ||||||||||||
For the Year Ended December 31, | ||||||||||||||||
2017 | 2018 | 2019 | 2019 | |||||||||||||
RMB | RMB | RMB | US$ Note 2(e) | |||||||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash held in foreign currencies | (48,145 | ) | 261,447 | 107,513 | 15,442 | |||||||||||
Net increase in cash and cash equivalents and restricted cash | 375,684 | 2,777,149 | 1,422,629 | 204,348 | ||||||||||||
Cash and cash equivalents and restricted cash at beginning of the year | 387,198 | 762,882 | 3,540,031 | 508,494 | ||||||||||||
Including: | ||||||||||||||||
Cash and cash equivalents at beginning of the year | 387,198 | 762,882 | 3,540,031 | 508,494 | ||||||||||||
Restricted cash at beginning of the year | — | — | — | — | ||||||||||||
Cash and cash equivalents and restricted cash at end of the year | 762,882 | 3,540,031 | 4,962,660 | 712,842 | ||||||||||||
Including: | ||||||||||||||||
Cash and cash equivalents at end of the year | 762,882 | 3,540,031 | 4,962,660 | 712,842 | ||||||||||||
Restricted cash at end of the year | — | — | — | — | ||||||||||||
Supplemental disclosures of cash flows information: | ||||||||||||||||
Cash paid for income taxes, net of tax refund | 6,196 | 15,765 | 33,734 | 4,846 | ||||||||||||
Cash paid for interest expense | — | — | 26,203 | 3,764 | ||||||||||||
Supplemental schedule of non-cash investing and financing activities: | ||||||||||||||||
Accretion to Pre-IPO Preferred Shares redemption value | 258,554 | 64,605 | — | — | ||||||||||||
Deemed dividend in connection with repurchase of Pre-IPO Preferred Shares | 129,244 | — | — | — | ||||||||||||
Fixed assets purchases financed by accounts payable | 30,050 | 40,277 | 55,759 | 8,009 | ||||||||||||
Acquisitions and investments financed by accrued liabilities and other payables | 6,534 | 502,279 | 79,059 | 11,356 | ||||||||||||
Intangible assets purchases financed by accounts payable | 70,726 | 415,780 | 365,187 | 52,456 |
* | Less than 1. |
1. | Operations and Reorganization |
Major Subsidiaries | Place and Year of Incorporation | Percentage Direct or Indirect Economic | Principal Activities | |||
Bilibili HK Limited | Hong Kong Y2014 | 100 | Investment holding | |||
Hode HK Limited | Hong Kong Y2014 | 100 | Investment holding | |||
Bilibili Co., Ltd. | Japan Y2014 | 100 | Business development | |||
Hode Shanghai Limited. (“Hode Technology”) | PRC Y2014 | 100 | Technology development | |||
Shanghai Bilibili Technology Co., Ltd. | PRC Y2016 | 100 | Technology development |
Major VIEs and VIEs’ subsidiaries | Place and Year of Incorporation Acquisition | Percentage Direct Indirect Economic O wnership | Principal Activities | |||
Shanghai Hode Information Technology Co., Ltd. (“Shanghai Hode”) | PRC Y2013 | 100 | Mobile game operation | |||
Shanghai Kuanyu Digital Technology Co., Ltd. (“Shanghai Kuanyu”) | PRC Y2014 | 100 | Video distribution | |||
Sharejoy Network Technology Co., Ltd. | PRC Y2014 | 100 | Game promotion and marketing | |||
Shanghai Hehehe Culture Communication Co., Ltd | PRC Y2014 | 100 | Comics distribution | |||
Shanghai Anime Tamashi Cultural Media Co., Ltd. | PRC Y2015 | 100 | E-commerce |
• | Reorganization |
1. | Operations and Reorganization (Continued) |
• | Initial public offering (“IPO”) and followed offering s |
1. | Operations and Reorganization (Continued) |
1. | Operations and Reorganization (Continued) |
• | revoke the Group’s business and / operatingor licenses ; |
• | impose fines on the Group; |
• | confiscate any of the Group’s income that they deem to be obtained through illegal operations; |
• | discontinue or place restrictions or onerous conditions on the Group’s operations |
• | restrict the Group’s right to collect revenues; |
• | shut down the Group’s servers or block the Group’s app/websites ; |
• | require the Group to restructure the operations, re-apply for the necessary licenses or relocate the Group’s businesses, staff and assets; |
• | 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 the Group’s business. |
1. | Operations and Reorganization (Continued) |
1. | Operations and Reorganization (Continued) |
December 31, 2018 | December 31, 2019 | |||||||
RMB in thousands | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 152,295 | 201,310 | ||||||
Time deposits | 10,265 | 7,674 | ||||||
Accounts receivable, net | 130,823 | 223,438 | ||||||
Amounts due from the Company and its subsidiaries | 165,559 | 127,944 | ||||||
Receivables due from related parties | — | 170,535 | ||||||
Prepayments and other current assets | 841,018 | 999,780 | ||||||
Short-term investments | 252,943 | 672,787 | ||||||
Non-current assets: | ||||||||
Long-term investments, net | 843,149 | 794,549 | ||||||
Other non-current assets | 943,373 | 1,483,983 | ||||||
Total assets | 3,339,425 | 4,682,000 | ||||||
Current liabilities: | ||||||||
Accounts payable | 1,078,070 | 1,454,924 | ||||||
Salary and welfare payable | 94,699 | 128,343 | ||||||
Taxes payable | 27,152 | 33,611 | ||||||
Deferred revenue | 937,086 | 1,234,508 | ||||||
Amounts due to the Company and its subsidiaries | 1,594,527 | 2,650,499 | ||||||
Accrued liabilities and other payables | 318,568 | 222,078 | ||||||
Amount due to related parties | 23,054 | — | ||||||
Non-current liabilities : | ||||||||
Other long-term liabilities | — | 23,108 | ||||||
Total liabilitie s | 4,073,156 | 5,747,071 |
For the Year Ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
RMB in thousands | ||||||||||||
Net revenues: | ||||||||||||
Revenue from third parties | 2,465,296 | 3,691,219 | 6,056,332 | |||||||||
Revenue from the Company and its subsidiaries | 22,751 | 443,405 | 531,830 | |||||||||
Net revenues | 2,488,047 | 4,134,624 | 6,588,162 | |||||||||
Net loss | (63,088 | ) | (587,932 | ) | (448,114 | ) |
For the Year Ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
RMB in thousands | ||||||||||||
Net cash provided by operating activities | 492,063 | 636,972 | 271,299 | |||||||||
Net cash used in investing activities | (632,549 | ) | (674,483 | ) | (1,518,931 | ) | ||||||
Net cash provided by financing activities | 179,707 | 130,592 | 1,300,740 |
1. | Operations and Reorganization (Continued) |
2. | Significant Accounting Policies |
a) | Basis of presentation |
b) | Principles of consolidation |
c) | Use of estimates |
d) | Functional currency and foreign currency translation |
2. | Significant Accounting Policies (Continued) |
d) | Functional currency and foreign currency translation (continued) |
e) | Convenience Translation |
f) | Fair value measurements |
a. | Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. |
b. | Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical asset or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. |
2. | Significant Accounting Policies (Continued) |
f) | Fair value measurements (continued) |
• | Level 3 applies to asset or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. |
g) | Cash and cash equivalents and time deposits |
h) | Inventories, net |
2. | Significant Accounting Policies (Continued) |
i) | Property and equipment, net |
j) | Intangible assets, net |
Licensed copyrights of content | shorter of the licensed period or projected useful life of the content | |
License rights of mobile games | shorter of the licensed period or projected useful life of mobile games | |
Domain names and others | 1 - 10 years |
2. | Significant Accounting Policies (Continued) |
k) | Goodwill |
l) | Impairment of long-lived assets other than goodwill and intangible assets |
2. | Significant Accounting Policies (Continued) |
m) | Research and development expenses |
n | Sales and marketing expenses |
o) | Leases |
2. | Significant Accounting Policies (Continued) |
o) | Leases (continued) |
December 31, 2019 | ||||
RMB in thousands | ||||
2020 | 93,741 | |||
2021 | 100,109 | |||
2022 | 89,399 | |||
2023 | 28,643 | |||
2024 | 357 | |||
Total future lease payments | 312,249 | |||
Impact of discounting remaining lease payments | (23,298) | |||
Total lease liabilities | 288,951 | |||
For the Year Ended December 31, 2019 | ||||
RMB in thousands | ||||
Cash payments for operating leases | 67,535 | |||
Right-of-use assets obtained in exchange for operating lease liabilities | 96,692 |
Operating Leases* | ||||
RMB in thousands | ||||
2019 | 65,400 | |||
2020 | 72,230 | |||
2021 | 73,054 | |||
2022 | 69,681 | |||
Beyond 2022 | 19,544 |
* | Amounts are based on ASC 840, Leases Leases |
p ) | Share-based compensation |
2. | Significant Accounting Policies (Continued) |
q | Employee benefits |
r | Investments |
2. | Significant Accounting Policies ( Continued ) |
r) | Investments (continued) |
2. | Significant Accounting Policies (Continued) |
s) | Taxation |
t ) | Revenue recognition |
2. | Significant Accounting Policies (Continued) |
t) | Revenue recognition (continued) |
2. | Significant Accounting Policies (Continued) |
t) | Revenue recognition (continued) |
2. | Significant Accounting Policies (Continued) |
t) | Revenue recognition (continued) |
2. | Significant Accounting Policies (Continued) |
t) | Revenue recognition (continued) |
For the Year Ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
RMB in thousands | ||||||||||||
Mobile game | 2,058,226 | 2,936,331 | 3,597,809 | |||||||||
Advertising | 159,160 | 463,490 | 817,016 | |||||||||
Live broadcasting and other VAS | 176,443 | 585,643 | 1,641,043 | |||||||||
E-commerce and others | 74,620 | 143,467 | 722,054 | |||||||||
Total net revenues | 2,468,449 | 4,128,931 | 6,777,922 | |||||||||
2. | Significant Accounting Policies (Continued) |
u) | Cost of revenues |
v) | Related parties |
w) | Net loss per share |
2. | Significant Accounting Policies (Continued) |
x) | Statutory reserves |
For the Year Ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
RMB in thousands | ||||||||||||
Appropriations to general reserve funds and statutory surplus funds | 2,480 | 3,591 | 5,797 |
y ) | Noncontrolling interests |
z ) | Comprehensive (loss)/ income |
2. | Significant Accounting Policies (Continued) |
aa) | Segment reporting |
bb) | Business c ombinations |
2. | Significant Accounting Policies (Continued) |
3. | Concentrations and Risks |
a) | Telecommunications service provider |
For the Year Ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
Total number of telecommunications service providers | 52 | 88 | 107 | |||||||||
Number of service providers providing 10% or more of the Group’s servers and bandwidth expenditure | 2 | 3 | 2 | |||||||||
Total percentage of the Group’s servers and bandwidth expenditure provided by 10% or greater service providers | 34 | % | 48 | % | 45 | % |
b) | Foreign currency exchange rate risk |
c) | Credit risk |
RMB in thousands | December 31, 2018 | December 31, 2019 | ||||||
Distribution channel A | 63,762 | 118,860 |
3. | Concentrations and Risks (Continued) |
d) | Major customers and supplying channels |
e) | Mobile games |
For the Year Ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
Mobile game 1 | 72 | % | 74 | % | 58 | % | ||||||
Mobile game 2 | 13 | % | 11 | % | 10 | % |
4. | Allowance for Doubtful Accounts |
Balance at January 1, | Charged to (write- back against) cost and expenses | Write-off ofreceivable balances and corresponding provisions | Balance at December 31, | |||||||||||||
RMB in thousands | ||||||||||||||||
2017 | 1,800 | 2,716 | — | 4,516 | ||||||||||||
2018 | 4,516 | 10,904 | (1,000 | ) | 14,420 | |||||||||||
2019 | 14,420 | 9,396 | (6,120 | ) | 17,696 |
5. | Prepayments and Other Current Assets |
December 31, 2018 | December 31, 2019 | |||||||
RMB in thousands | ||||||||
Prepayments for revenue sharing cost* | 462,883 | 542,971 | ||||||
Prepayments for content cost | 130,619 | 226,500 | ||||||
Prepayments for sales tax | 80,487 | 157,244 | ||||||
Interest income receivable | 26,812 | 93,688 | ||||||
Inventories, net | 55,032 | 69,914 | ||||||
Loans to investees or ongoing investments | 84,075 | 64,463 | ||||||
Prepayments of marketing and other operational expenses | 33,198 | 53,246 | ||||||
Prepayments /receivable jointly invested contents relating | 44,951 | 43,838 | ||||||
Deposits | 20,447 | 26,301 | ||||||
Prepayments to inventory suppliers | 12,901 | 9,058 | ||||||
Others | 39,446 | 28,678 | ||||||
Total | 990,851 | 1,315,901 | ||||||
* | App stores retain commissions on each purchase made by the users through the App stores. The Group is also obligated to pay ongoing licensing fees in form of royalties to the third-party game developers. Licensing fees consist of fees that the Group pays to content owners for the use of licensed content, including trademarks and copyrights, in the development of games. Licensing fees are either paid in advance and recorded on the balance sheet as prepayments or accrued as incurred and subsequently paid. Additionally, the Group defers the revenue from licensed mobile games over the estimated average playing period of paying players given that there is an implied obligation to provide on-going services toend-users. The related direct and incremental platform commissions as well as game developers’ licensing fees are deferred and reported in “Prepayments and Other Current Assets” on the consolidated balance sheets. |
6. | Short-term Investments |
December 31, 2018 | December 31, 2019 | |||||||
RMB in thousands | ||||||||
Financial products | 858,021 | 1,070,113 | ||||||
Investment s in publicly traded companies | — | 80,918 | ||||||
Money market funds | 87,317 | 109,779 | ||||||
Total | 945,338 | 1,260,810 | ||||||
7. | Property and Equipment, Net |
December 31, 2018 | December 31, 2019 | |||||||
RMB in thousands | ||||||||
Leasehold improvements | 51,186 | 76,772 | ||||||
Servers and computers | 481,695 | 765,110 | ||||||
Others | 19,127 | 23,211 | ||||||
Total | 552,008 | 865,093 | ||||||
Less: accumulated depreciation | (157,110 | ) | (349,006 | ) | ||||
Net book value | 394,898 | 516,087 | ||||||
8. | Intangible Assets, Net |
As of December 31, 2018 | ||||||||||||
Gross carrying value | Accumulated amortization | Net carrying value | ||||||||||
RMB in thousands | ||||||||||||
Licensed copyrights of content | 1,997,175 | (921,565 | ) | 1,075,610 | ||||||||
License rights of mobile games | 18,098 | (15,163 | ) | 2,935 | ||||||||
Domain names and others | 412,202 | (71,312 | ) | 340,890 | ||||||||
Total | 2,427,475 | (1,008,040 | ) | 1,419,435 | ||||||||
As of December 31, 2019 | ||||||||||||
Gross carrying value | Accumulated amortization | Net carrying value | ||||||||||
RMB in thousands | ||||||||||||
Licensed copyrights of content | 3,072,959 | (1,736,608 | ) | 1,336,351 | ||||||||
License rights of mobile games | 71,703 | (35,863 | ) | 35,840 | ||||||||
Domain names and others | 434,089 | (148,947 | ) | 285,142 | ||||||||
Total | 3,578,751 | (1,921,418 | ) | 1,657,333 | ||||||||
Intangible assets amortization expense | ||||
RMB in thousands | ||||
2020 | 705,062 | |||
2021 | 390,818 | |||
2022 | 228,651 | |||
2023 | 123,159 | |||
2024 | 74,550 | |||
Thereafter | 135,093 | |||
Total expected amortization expense | 1,657,333 | |||
9. | Goodwill |
December 31, 2018 | December 31, 2019 | |||||||
RMB in thousands | ||||||||
Beginning balance | 50,967 | 941,488 | ||||||
Additions (Note 26) | 890,521 | 70,538 | ||||||
Ending balance | 941,488 | 1,012,026 | ||||||
10. | Long-term Investments, Net |
10. | Long-term Investments, Net (Continued) |
11. | Taxation |
For the Year Ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
RMB in thousands | ||||||||||||
Current income tax expense | 8,881 | 14,909 | 29,452 | |||||||||
Withholding income tax expense | — | 11,079 | 16,894 | |||||||||
Deferred income tax expense | — | — | (10,479 | ) | ||||||||
Total | 8,881 | 25,988 | 35,867 | |||||||||
a) | Income taxes |
11. | Taxation (Continued) |
a) | Income taxes (continued) |
For the Year Ended | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
% | % | % | ||||||||||
Statutory income tax rate | 25.00 | 25.00 | 25.00 | |||||||||
Permanent differences | (13.22 | ) | (3.76 | ) | (0.83 | ) | ||||||
Tax rate difference from statutory rate in other jurisdictions* | (20.07 | ) | (0.92 | ) | (0.39 | ) | ||||||
Tax effect of preferential tax treatments | 3.76 | (3.15 | ) | (8.48 | ) | |||||||
Withholding tax | — | (2.05 | ) | (1.33 | ) | |||||||
Change in valuation allowance | (0.55 | ) | (19.94 | ) | (16.80 | ) | ||||||
Effective income tax rate | (5.08 | ) | (4.82 | ) | (2.83 | ) | ||||||
* | It is primarily due to the tax effect of the Company as a tax-exempt entity incorporated in the Cayman Islands. |
RMB in thousands | ||||
Loss expiring in 2020 | 78,943 | |||
Loss expiring in 2021 | 53,320 | |||
Loss expiring in 2022 | 137,483 | |||
Loss expiring in 2023 | 457,884 | |||
Loss expiring in 2024 | 1,316,206 | |||
Total | 2,043,836 | |||
11. | Taxation (Continued) |
b) | Sales tax |
c) | Deferred tax assets and liabilities |
December 31, 2018 | December 31, 2019 | |||||||
RMB in thousands | ||||||||
Deferred tax assets: | ||||||||
Deferred revenue, primarily for games | 90,311 | 95,806 | ||||||
Accrued expenses and other payables | 25,984 | 82,351 | ||||||
Advertising expenses in excess of deduction limit | 312 | 7,507 | ||||||
Net operating tax loss carry forwards | 176,439 | 360,975 | ||||||
Others | 909 | 1,199 | ||||||
Total deferred tax assets | 293,955 | 547,838 | ||||||
Less: valuation allowance | (293,955 | ) | (537,359 | ) | ||||
Net deferred tax assets | — | 10,479 | ||||||
Balance at January 1 | Re-measurement due to applicable preferential tax rate for HNTE | Addition | Expiration of loss carry forward and impact of disposal of subsidiaries | Balance at December 31 | ||||||||||||||||||
RMB in thousands | ||||||||||||||||||||||
2017 | (183,091 | ) | 23,074 | (962 | ) | 3,715 | (157,264 | ) | ||||||||||||||
2018 | (157,264 | ) | 22,502 | (159,690 | ) | 497 | (293,955 | ) | ||||||||||||||
2019 | (293,955 | ) | — | (248,896 | ) | 5,492 | (537,359 | ) |
11. | Taxation (Continued) |
d) | Withholding income tax on dividends |
12. | Taxes Payable |
December 31, 2018 | December 31, 2019 | |||||||
RMB in thousands | ||||||||
Withholding individual income taxes for employees | 7,844 | 12,941 | ||||||
VAT payable | 13,920 | 16,519 | ||||||
EIT payable | 6,913 | 20,599 | ||||||
Withholding income tax payable | 5,510 | 12,302 | ||||||
Others | 4,318 | 5,495 | ||||||
Total | 38,505 | 67,856 | ||||||
13. | Accrued Liabilities and Other Payables |
December 31, 2018 | December 31, 2019 | |||||||
RMB in thousands | ||||||||
Accrued marketing expenses | 71,217 | 229,457 | ||||||
Leasing liabilities - current portion | — | 95,901 | ||||||
Consideration payable for acquisitions and investments | 502,279 | 79,059 | ||||||
Advances to/payables from third parties | 21,966 | 76,893 | ||||||
Payables to producers and licensors | 9,357 | 25,898 | ||||||
Professional fees | 13,492 | 22,562 | ||||||
Other staff related cost | 18,685 | 13,791 | ||||||
Interest payable | — | 11,990 | ||||||
Others | 33,446 | 20,212 | ||||||
Total | 670,442 | 575,763 | ||||||
14. | Deferred Revenue |
15. | Long-term D ebt |
• | Since the conversion option is considered indexed to the Company’s own stock and classified in stockholders’ equity, bifurcation of conversion option from the 2026 Notes is not required as the scope exception prescribed in ASC 815-10-15-74 is met; |
• | The repurchase option is considered clearly and closely related to its debt host and does not meet the requirement for bifurcation; |
15. | Long-term Debt (Continued) |
• | There was no beneficial conversion feature attributed to the 2026 Notes as the conversion price for the 2026 Notes was greater than the fair value of the Company’s ordinary share price at date of issuance; |
16. | Ordinary Shares |
16. | Ordinary Shares (Continued) |
1 7 . | Pre-IPO Preferred Shares |
17. | Pre-IPO Preferred Shares (Continued) |
Pre-IPO Series APreferred | Pre-IPO Series A+Preferred Shares | Pre-IPO Series BPreferred Shares | Pre-IPO Series CPreferred Shares | Pre-IPO Series C1Preferred Shares | Pre-IPO Series C2Preferred | Pre-IPO Series D1Preferred Shares | Pre-IPO Series D2Preferred Shares | Total Mezzanine Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares | Amount | Number of shares | Amount | Number of shares | Amount | Number of shares | Amount | Number of shares | Amount | Number of shares | Amount | Number of shares | Amount | Number of shares | Amount | Number of shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
RMB in thousands, except for share data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2016 | 7,078,502 | 15,640 | 14,643,281 | 79,349 | 22,794,876 | 302,257 | 39,297,373 | 1,085,154 | 42,585,304 | 1,344,896 | 954,605 | 34,317 | — | — | — | — | 127,353,941 | 2,861,613 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Pre-IPO Preferred Shares | — | — | — | — | — | — | — | — | — | — | — | — | 1,154,643 | 49,086 | 13,759,564 | 689,069 | 14,914,207 | 738,155 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redesignation of Pre-IPO Series C Preferred Shares toPre-IPO Series D1 Preferred Shares | — | — | — | — | — | — | (11,301,189 | ) | (351,928 | ) | — | — | — | — | 11,301,189 | 481,172 | — | — | — | 129,244 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Share based compensation in connection with redesignation of Pre-IPO Ordinary Shares toPre-IPO Preferred Shares | — | — | — | — | — | — | — | — | — | — | — | — | — | 10,474 | — | — | — | 10,474 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redesignation of Pre-IPO Ordinary Shares toPre-IPO Series D1 Preferred Shares | — | — | — | — | — | — | — | — | — | — | — | — | 645,357 | 17,003 | — | — | 645,357 | 17,003 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accretion to Pre-IPO Preferred Shares redemption value | — | 985 | — | 6,332 | — | 23,302 | — | 64,129 | — | 97,455 | — | 2,446 | — | 28,650 | — | 35,255 | — | 258,554 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2017 | 7,078,502 | 16,625 | 14,643,281 | 85,681 | 22,794,876 | 325,559 | 27,996,184 | 797,355 | 42,585,304 | 1,442,351 | 954,605 | 36,763 | 13,101,189 | 586,385 | 13,759,564 | 724,324 | 142,913,505 | 4,015,043 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
17. | Pre-IPO Preferred Shares (Continued) |
Pre-IPO Series APreferred Shares | Pre-IPO Series A+Preferred Shares | Pre-IPO Series BPreferred Shares | Pre-IPO Series CPreferred Shares | Pre-IPO Series C1Preferred Shares | Pre-IPO Series C2Preferred Shares | Pre-IPO Series D1Preferred Shares | Pre-IPO Series D2Preferred Shares | Total Mezzanine | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares | Amount | Number of shares | Amount | Number of shares | Amount | Number of shares | Amount | Number of shares | Amount | Number of shares | Amount | Number of shares | Amount | Number of shares | Amount | Number of shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
RMB in thousands, except for share data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2017 | 7,078,502 | 16,625 | 14,643,281 | 85,681 | 22,794,876 | 325,559 | 27,996,184 | 797,355 | 42,585,304 | 1,442,351 | 954,605 | 36,763 | 13,101,189 | 586,385 | 13,759,564 | 724,324 | 142,913,505 | 4,015,043 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accretion to Pre-IPO PreferredShares redemption value | — | 242 | — | 1,448 | — | 5,328 | — | 13,633 | — | 23,024 | — | 578 | — | 9,124 | — | 11,228 | — | 64,605 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redesignation of Pre-IPO PreferredShares into Class Y Ordinary Shares | — | — | — | — | — | — | — | — | (1,104,535 | ) | (38,007 | ) | — | — | — | — | — | — | (1,104,535 | ) | (38,007 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Redesignation of Pre-IPO Preferred Shares into Class Z OrdinaryShares | (7,078,502 | ) | (16,867 | ) | (14,643,281 | ) | (87,129 | ) | (22,794,876 | ) | (330,887 | ) | (27,996,184 | ) | (810,988 | ) | (41,480,769 | ) | (1,427,368 | ) | (954,605 | ) | (37,341 | ) | (13,101,189 | ) | (595,509 | ) | (13,759,564 | ) | (735,552 | ) | (141,808,970 | ) | (4,041,641 | ) | ||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2018 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
18. | Employee Benefits |
For the Year Ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
RMB in thousands | ||||||||||||
Contributions to medical and pension schemes | 91,302 | 158,113 | 215,553 | |||||||||
Other employee benefits | 14,595 | 23,958 | 24,180 | |||||||||
Total | 105,897 | 182,071 | 239,733 | |||||||||
1 9 . | Share-based Compensation |
a) | Description of share option plans |
b) | Valuation assumptions |
For the Year Ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
Expected volatility | 42.5%-45.8 | % | 47.8%-48.4 | % | 49.6%-52.1 | % | ||||||
Weighted average volatility | 43.3 | % | 48.3 | % | 50.8 | % | ||||||
Expected dividends | — | — | — | |||||||||
Risk-free rate | 1.5% - 2.3 | % | 2.6%-2.8 | % | 1.4%-2.4 | % | ||||||
Contractual term (in years) | 6 | 6 | 6 |
19. | Share-based Compensation (Continued) |
(b) | Valuation assumptions (continued) |
(c) | Share options activities |
Employees | Senior Management | Consultants | Total | Weighted Average Exercise | Weighted Average Remaining Contractual Life | Aggregate Intrinsic | ||||||||||||||||||||||
(In thousands) | (In thousands) | (In thousands) | (In thousands) | US$ | (In years) | (RMB in thousands) | ||||||||||||||||||||||
Outstanding at January 1, 2017 | 4,992 | 6,580 | — | 11,572 | 0.0001 | 5.02 | 224,620 | |||||||||||||||||||||
Granted | 3,419 | 5,115 | 700 | 9,234 | 0.0001 | |||||||||||||||||||||||
Exercised | — | — | — | — | 0.0001 | |||||||||||||||||||||||
Forfeited | (287 | ) | (1,100 | ) | — | (1,387 | ) | 0.0001 | ||||||||||||||||||||
Outstanding at December 31, 2017 | 8,124 | 10,595 | 700 | 19,419 | 0.0001 | 4.80 | 880,197 | |||||||||||||||||||||
Outstanding at January 1, 2018 | 8,124 | 10,595 | 700 | 19,419 | 0.0001 | 4.80 | 880,197 | |||||||||||||||||||||
Granted | 2,587 | 620 | — | 3,207 | 0.0001 | |||||||||||||||||||||||
Exercised | (2,387 | ) | (5,543 | ) | (212 | ) | (8,142 | ) | 0.0001 | |||||||||||||||||||
Forfeited | (683 | ) | (1,437 | ) | (50 | ) | (2,170 | ) | 0.0001 | |||||||||||||||||||
Outstanding at December 31, 2018 | 7,641 | 4,235 | 438 | 12,314 | 0.0001 | 4.46 | 1,233,028 | |||||||||||||||||||||
Outstanding at January 1, 2019 | 7,641 | 4,235 | 438 | 12,314 | 0.0001 | 4.46 | 1,233,028 | |||||||||||||||||||||
Granted | 2,464 | 730 | — | 3,194 | 0.0001 | |||||||||||||||||||||||
Exercised | (1,352 | ) | (710 | ) | (193 | ) | (2,255 | ) | 0.0001 | |||||||||||||||||||
Forfeited | (479 | ) | (600 | ) | — | (1,079 | ) | 0.0001 | ||||||||||||||||||||
Outstanding at December 31, 2019 | 8,274 | 3,655 | 245 | 12,174 | 0.0001 | 4.13 | 1,581,408 | |||||||||||||||||||||
Exercisable as of December 31, 2019 | 955 | — | 145 | 1,100 | 0.0001 | 2.59 | 142,892 | |||||||||||||||||||||
20. | Net Loss per Share |
20. | Net Loss p er Share (Continued) |
For the Year Ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
RMB in thousands, except share and per | ||||||||||||
Numerator: | ||||||||||||
Net loss | (183,750 | ) | (565,021 | ) | (1,303,570 | ) | ||||||
Accretion to Pre-IPO Preferred Shares redemption value | (258,554 | ) | (64,605 | ) | — | |||||||
Deemed dividend in connection with repurchase of Pre-IPO Preferred Shares | (129,244 | ) | — | — | ||||||||
Net loss attributable to noncontrolling interests | — | 13,301 | 14,597 | |||||||||
Net loss attributable to Bilibili Inc.’s shareholders for basic/dilutive net loss per share calculation | (571,548 | ) | (616,325 | ) | (1,288,973 | ) | ||||||
Denominator: | ||||||||||||
Weighted average number of ordinary shares outstanding, basic | 69,938,570 | 233,047,703 | 323,161,680 | |||||||||
Weighted average number of ordinary shares outstanding, diluted | 69,938,570 | 233,047,703 | 323,161,680 | |||||||||
Net loss per share, basic | (8.17 | ) | (2.64 | ) | (3.99 | ) | ||||||
Net loss per share, diluted | (8.17 | ) | (2.64 | ) | (3.99 | ) |
21. | Commitments and Contingencies |
(a) | Commitments |
(b) | Litigation |
22. | Related Party Transactions and Balances |
For the Year Ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
RMB in thousands | ||||||||||||
Purchases of goods and services | 3,741 | 162,992 | 87,597 | |||||||||
Transfer of long-term investments * | 12,750 | 3,250 | 539,646 |
December 31, 2018 | December 31, 2019 | |||||||
RMB in thousands | ||||||||
Amount due from related parties | ||||||||
Due from an investment fund | — | |||||||
Due from other related parties | — | 24,755 | ||||||
Total | — | 195,290 | ||||||
Amount due to related parties | ||||||||
Due to Chaodian | 50,331 | — | ||||||
Total | 50,331 | — |
* | In June 2019, to focus the Company’s efforts and resources on its core businesses, the Company transferred several equity investments of the Group to an investment fund. The Group contributed a total of RMB220.0 million cash into this fund as a limited partner, which is accounted for as an equity method investment. The cost of the equity investments transferred was RMB465.8 million. The consideration was RMB539.6 million, which was based on the estimated fair value of the investments. The difference between the consideration and cost of the investments was recognized as investment income. As of December 31, 2019, the consideration receivable was RMB143.7 million. The transactions in 2017 and 2018 referred to the investments transferred to an entity controlled by the Group’s major shareholders. |
23. | Segment Information |
24. | Fair Value Measurement |
25. | Restricted Net Assets |
26. | Acquisitions |
Amount | Amortization Period | |||||||
RMB in thousands | ||||||||
Net assets acquired | 30,252 | |||||||
Intangible assets | ||||||||
—Tradename | 54,974 | 8 years | ||||||
—Non-compete clause | 2,230 | 3 years | ||||||
Noncontrolling interests | (121,154 | ) | ||||||
Goodwill | 360,039 | |||||||
Total | 326,341 | |||||||
Amount | ||||
RMB in thousands | ||||
Cash consideration | 296,796 | |||
Fair value of previously held equity interests | 29,545 | |||
Total | 326,341 | |||
26. | Acquisitions (Continued) |
Amount | ||||
RMB in thousands | ||||
Consideration | 1,198,198 | |||
Cash and cash equivalents | 1,199,117 | |||
Accounts receivable, net | 95,147 | |||
Goodwill | 36,120 | |||
Other asset acquired | 68,214 | |||
Total assets acquired | 1,398,598 | |||
Accrued liabilities and other payables | (323,025 | ) | ||
Other liabilities assumed | (89,217 | ) | ||
Total liability assumed | (412,242 | ) | ||
Noncontrolling interests | (276,621 | ) | ||
Deemed dividend | 488,463 | |||
Total | 1,198,198 |
26. | Acquisitions (Continued) |
For the Year Ended December 31, | Amortization | |||||||||
2018 | 2019 | |||||||||
Amount | ||||||||||
RMB in thousands | ||||||||||
Net assets acquired | 62,800 | 65,582 | ||||||||
Intangible assets | ||||||||||
—Tradename | 104,000 | — | 5 | |||||||
—User base | 21,500 | — | 3 years | |||||||
—Copyrights | 23,500 | — | 9 months to 3 years | |||||||
—Technology | 9,000 | — | 6 to 8 months | |||||||
Noncontrolling interests | (107,505 | ) | (30,000 | ) | ||||||
Goodwill | 530,482 | 34,418 | ||||||||
Total | 643,777 | 70,000 | ||||||||
Amount | ||||||||||
RMB in thousands | ||||||||||
Cash consideration | 391,071 | 70,000 | ||||||||
Fair value of previously held equity interests | 252,706 | — | ||||||||
Total | 643,777 | 70,000 | ||||||||
27. | Subsequent Events |