Cover Page
Cover Page | 6 Months Ended |
Jun. 30, 2022 | |
Document Information [Line Items] | |
Entity Registrant Name | Kanzhun Ltd |
Entity Central Index Key | 0001842827 |
Document Type | 6-K |
Document Period End Date | Jun. 30, 2022 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
UNAUDITED INTERIM CONDENSED CON
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS - CNY (¥) ¥ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets | |||
Cash and cash equivalents | ¥ 11,158,756 | ¥ 12,174,097 | ¥ 11,341,758 |
Short-term investments | 2,764,368 | 812,225 | 884,996 |
Accounts receivable | 4,511 | 2,013 | 1,002 |
Amounts due from related parties | 10,050 | 9,583 | 6,615 |
Prepayments and other current assets | 549,174 | 520,589 | 724,583 |
Total current assets | 14,486,859 | 13,518,507 | 12,958,954 |
Non-current assets | |||
Property, equipment and software, net | 550,894 | 546,106 | 369,126 |
Intangible assets, net | 390 | 413 | 458 |
Right-of-use assets, net | 310,445 | 303,609 | 309,085 |
Other non-current assets | 4,000 | 4,000 | 4,000 |
Total non-current assets | 865,729 | 854,128 | 682,669 |
Total assets | 15,352,588 | 14,372,635 | 13,641,623 |
Current liabilities (including amounts of the consolidated VIE and VIE's subsidiaries without recourse to the primary beneficiary of RMB2,762,123 and RMB2,811,310 as of December 31, 2021 and June 30, 2022, respectively) | |||
Accounts payable | 51,763 | 135,273 | 52,963 |
Deferred revenue | 2,038,669 | 1,979,056 | 1,958,570 |
Other payables and accrued liabilities | 638,947 | 578,981 | 645,138 |
Operating lease liabilities, current | 150,513 | 146,134 | 127,531 |
Total current liabilities | 2,879,892 | 2,839,444 | 2,784,202 |
Non-current liabilities (including amounts of the consolidated VIE and VIE's subsidiaries without recourse to the primary beneficiary of RMB178,844 and RMB155,954 as of December 31, 2021 and June 30, 2022, respectively) | |||
Operating lease liabilities, non-current | 163,800 | 166,309 | 183,365 |
Total non-current liabilities | 163,800 | 166,309 | 183,365 |
Total liabilities | 3,043,692 | 3,005,753 | 2,967,567 |
Commitments and contingencies (Note 17) | |||
Shareholders' equity | |||
Ordinary shares (US$0.0001 par value; 1,500,000,000 shares authorized; 748,953,103 Class A ordinary shares issued and 727,855,233 outstanding, 140,830,401 Class B ordinary shares issued and outstanding as of December 31, 2021; 749,323,103 Class A ordinary shares issued and 730,777,761 outstanding, 140,830,401 Class B ordinary shares issued and outstanding as of June 30, 2022) | 560 | 559 | 554 |
Treasury shares (21,097,870 and 18,545,342 shares as of December 31, 2021 and June 30, 2022, respectively) | (346,532) | (267,982) | |
Additional paid-in capital | 15,160,206 | 14,965,856 | 14,624,386 |
Accumulated other comprehensive (loss)/income | 895,743 | 281,247 | (257,765) |
Accumulated deficit | (3,401,081) | (3,612,798) | (3,693,119) |
Total shareholders' equity | 12,308,896 | 11,366,882 | 10,674,056 |
Total liabilities and shareholders' equity | ¥ 15,352,588 | ¥ 14,372,635 | ¥ 13,641,623 |
UNAUDITED INTERIM CONDENSED C_2
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands | Sep. 30, 2022 CNY (¥) shares | Jun. 30, 2022 CNY (¥) shares | Dec. 31, 2021 CNY (¥) shares |
Current liabilities | ¥ | ¥ 2,879,892 | ¥ 2,839,444 | ¥ 2,784,202 |
Non current liabilities | ¥ | ¥ 163,800 | ¥ 166,309 | ¥ 183,365 |
Common stock shares authorized | shares | 1,500,000,000 | 1,500,000,000 | 1,500,000,000 |
Treasury stock common shares | shares | 17,454,538 | 18,545,342 | 21,097,870 |
Class A ordinary shares | |||
Common stock shares issued | shares | 749,323,103 | 749,323,103 | 748,953,103 |
Common stock shares outstanding | shares | 731,868,565 | 730,777,761 | 727,855,233 |
Class B ordinary shares | |||
Common stock shares issued | shares | 140,830,401 | 140,830,401 | 140,830,401 |
Common stock shares outstanding | shares | 140,830,401 | 140,830,401 | 140,830,401 |
VIE and VIE's subsidiaries | |||
Current liabilities | ¥ | ¥ 2,765,437 | ¥ 2,848,672 | ¥ 2,789,346 |
Non current liabilities | ¥ | 154,775 | 155,954 | 178,844 |
VIE and VIE's subsidiaries | Nonrecourse | |||
Current liabilities | ¥ | 2,752,861 | 2,811,310 | 2,762,123 |
Non current liabilities | ¥ | ¥ 154,775 | ¥ 155,954 | ¥ 178,844 |
UNAUDITED INTERIM CONDENSED C_3
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME - CNY (¥) ¥ in Thousands | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues | ||||
Revenues | ¥ 2,250,224 | ¥ 1,956,717 | ¥ 3,428,787 | ¥ 3,168,478 |
Operating cost and expenses | ||||
Cost of revenues | (351,578) | (250,029) | (552,466) | (404,863) |
Sales and marketing expenses | (921,900) | (1,152,780) | (1,318,843) | (1,569,199) |
Research and development expenses | (598,425) | (413,728) | (888,655) | (623,051) |
General and administrative expenses | (316,035) | (1,748,612) | (472,099) | (1,871,950) |
Total operating cost and expenses | (2,187,938) | (3,565,149) | (3,232,063) | (4,469,063) |
Other operating income, net | 10,743 | 7,657 | 14,245 | 10,948 |
(Loss)/Income from operations | 73,029 | (1,600,775) | 210,969 | (1,289,637) |
Investment income | 17,075 | 8,629 | 31,112 | 15,791 |
Financial income, net | 24,185 | 4,017 | 78,013 | 6,754 |
Foreign exchange (loss)/gain | 4,694 | (586) | 10,136 | (317) |
Other expenses, net | (24,539) | (1,597) | 3,682 | (6,669) |
(Loss)/Income before income tax expense | 94,444 | (1,590,312) | 333,912 | (1,274,078) |
Income tax expense | (14,123) | (41,874) | (30,066) | |
Net (loss)/income | 80,321 | (1,590,312) | 292,038 | (1,304,144) |
Accretion on convertible redeemable preferred shares to redemption value | (164,065) | (164,065) | ||
Net (loss)/income attributable to ordinary shareholders | 80,321 | (1,754,377) | 292,038 | (1,468,209) |
Other comprehensive income | ||||
Foreign currency translation adjustments | 539,012 | 7,884 | 1,153,508 | 48,269 |
Total comprehensive (loss)/income | ¥ 619,333 | ¥ (1,582,428) | ¥ 1,445,546 | ¥ (1,255,875) |
Weighted average number of ordinary shares used in computing net (loss)/income per share | ||||
Basic | 869,427,036 | 147,308,942 | 870,385,113 | 420,605,543 |
Diluted | 917,484,059 | 147,308,942 | 916,912,571 | 420,605,543 |
Net (loss)/income per share attributable to ordinary shareholders | ||||
Basic | ¥ 0.09 | ¥ (11.91) | ¥ 0.34 | ¥ (3.49) |
Diluted | ¥ 0.09 | ¥ (11.91) | ¥ 0.32 | ¥ (3.49) |
Online recruitment services to enterprise customers | ||||
Revenues | ||||
Revenues | ¥ 2,227,184 | ¥ 1,939,919 | ¥ 3,391,648 | ¥ 3,137,054 |
Others | ||||
Revenues | ||||
Revenues | ¥ 23,040 | ¥ 16,798 | ¥ 37,139 | ¥ 31,424 |
UNAUDITED INTERIM CONDENSED C_4
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY ¥ in Thousands, $ in Millions | Class A ordinary shares Ordinary shares IPO CNY (¥) shares | Class A ordinary shares Additional paid-in capital IPO CNY (¥) | Class A ordinary shares IPO CNY (¥) | Class A ordinary shares shares | Class B ordinary shares Ordinary shares TECHWOLF LIMITED CNY (¥) shares | Class B ordinary shares Ordinary shares CNY (¥) shares | Class B ordinary shares Additional paid-in capital TECHWOLF LIMITED CNY (¥) | Class B ordinary shares Additional paid-in capital CNY (¥) | Class B ordinary shares TECHWOLF LIMITED CNY (¥) | Class B ordinary shares CNY (¥) shares | Ordinary shares CNY (¥) shares | Treasury shares CNY (¥) shares | Additional paid-in capital CNY (¥) | Accumulated other comprehensive (loss)/income CNY (¥) | Accumulated deficit CNY (¥) | CNY (¥) shares | USD ($) shares |
Balance (in shares) at Dec. 31, 2020 | shares | 7,875,787 | 121,108,037 | 128,983,824 | ||||||||||||||
Balance (in shares) at Dec. 31, 2020 | shares | 3,657,853 | ||||||||||||||||
Balance at Dec. 31, 2020 | ¥ 81 | ¥ 452,234 | ¥ (130,387) | ¥ (2,622,045) | ¥ (2,300,117) | ||||||||||||
Net (loss)/income | (1,590,312) | (1,590,312) | |||||||||||||||
Foreign currency translation adjustments | 7,884 | 7,884 | |||||||||||||||
Share-based compensation | 202,887 | 202,887 | |||||||||||||||
Accretion on convertible redeemable preferred shares to redemption value | (164,065) | (164,065) | |||||||||||||||
Repurchase and cancellation of ordinary shares, Shares | shares | (1,181,339) | ||||||||||||||||
Repurchase and cancellation of ordinary shares, Value | ¥ (1) | ¥ (42,263) | ¥ (42,264) | ||||||||||||||
Issuance of ordinary shares, Shares | shares | 110,400,000 | ||||||||||||||||
Issuance of ordinary shares, Value | ¥ 70 | ¥ 6,406,802 | ¥ 6,406,872 | ||||||||||||||
Conversion of convertible redeemable preferred shares, Shares | shares | 551,352,134 | ||||||||||||||||
Conversion of convertible redeemable preferred shares, Value | ¥ 353 | 5,854,308 | 5,854,661 | ||||||||||||||
Exercise of share-based awards (in shares) | shares | 24,745,531 | 3,657,853 | (3,657,853) | ||||||||||||||
Exercise of share-based awards | ¥ 16 | ¥ 1,506,346 | ¥ 1,506,362 | ¥ 2 | 2 | ||||||||||||
Balance (in shares) at Jun. 30, 2021 | shares | 817,958,003 | ||||||||||||||||
Balance at Jun. 30, 2021 | ¥ 521 | 14,216,249 | (122,503) | (4,212,357) | 9,881,910 | ||||||||||||
Balance (in shares) at Dec. 31, 2020 | shares | 7,875,787 | 121,108,037 | 128,983,824 | ||||||||||||||
Balance (in shares) at Dec. 31, 2020 | shares | 3,657,853 | ||||||||||||||||
Balance at Dec. 31, 2020 | ¥ 81 | 452,234 | (130,387) | (2,622,045) | (2,300,117) | ||||||||||||
Net (loss)/income | (1,304,144) | (1,304,144) | |||||||||||||||
Foreign currency translation adjustments | 48,269 | 48,269 | |||||||||||||||
Share-based compensation | 301,812 | 301,812 | |||||||||||||||
Accretion on convertible redeemable preferred shares to redemption value | (164,065) | (164,065) | |||||||||||||||
Repurchase and cancellation of ordinary shares, Shares | shares | (1,181,339) | ||||||||||||||||
Repurchase and cancellation of ordinary shares, Value | ¥ (1) | ¥ (42,263) | ¥ (42,264) | ||||||||||||||
Issuance of ordinary shares, Shares | shares | 110,400,000 | ||||||||||||||||
Issuance of ordinary shares, Value | ¥ 70 | ¥ 6,406,802 | ¥ 6,406,872 | ||||||||||||||
Conversion of convertible redeemable preferred shares, Shares | shares | 551,352,134 | ||||||||||||||||
Conversion of convertible redeemable preferred shares, Value | ¥ 353 | 5,854,308 | 5,854,661 | ||||||||||||||
Exercise of share-based awards (in shares) | shares | 24,745,531 | ||||||||||||||||
Exercise of share-based awards | ¥ 16 | ¥ 1,506,346 | ¥ 1,506,362 | ||||||||||||||
Exercise of share-based awards (in shares) | shares | 47,697,284 | (3,657,853) | |||||||||||||||
Exercise of share based awards | ¥ 30 | 167,450 | 167,480 | ||||||||||||||
Balance (in shares) at Sep. 30, 2021 | shares | 861,997,434 | ||||||||||||||||
Balance at Sep. 30, 2021 | ¥ 549 | 14,482,624 | (82,118) | (3,926,189) | ¥ 10,474,866 | ||||||||||||
Balance (in shares) at Dec. 31, 2021 | shares | 727,855,233 | 140,830,401 | 868,685,634 | ||||||||||||||
Balance (in shares) at Dec. 31, 2021 | shares | 21,097,870 | 21,097,870 | 21,097,870 | ||||||||||||||
Balance at Dec. 31, 2021 | ¥ 554 | 14,624,386 | (257,765) | (3,693,119) | ¥ 10,674,056 | ||||||||||||
Net (loss)/income | 80,321 | 80,321 | |||||||||||||||
Foreign currency translation adjustments | 539,012 | 539,012 | |||||||||||||||
Share-based compensation | 283,046 | 283,046 | |||||||||||||||
Issuance of ordinary shares for share award plan | shares | 370,000 | ||||||||||||||||
Conversion of convertible redeemable preferred shares, Shares | shares | 551,352,134 | ||||||||||||||||
Exercise of share-based awards (in shares) | shares | 7,069,594 | (7,069,594) | |||||||||||||||
Exercise of share-based awards | ¥ 5 | 58,424 | 58,429 | ||||||||||||||
Repurchase of ordinary shares (in shares) | shares | 4,147,066 | (4,147,066) | 4,147,066 | ||||||||||||||
Repurchase of ordinary shares | ¥ (267,982) | ¥ (268,000) | $ (40) | ||||||||||||||
Balance (in shares) at Jun. 30, 2022 | shares | 730,777,761 | 140,830,401 | 871,608,162 | ||||||||||||||
Balance (in shares) at Jun. 30, 2022 | shares | 18,545,342 | 18,545,342 | 18,545,342 | ||||||||||||||
Balance at Jun. 30, 2022 | ¥ 559 | ¥ (267,982) | 14,965,856 | 281,247 | (3,612,798) | ¥ 11,366,882 | |||||||||||
Balance (in shares) at Dec. 31, 2021 | shares | 727,855,233 | 140,830,401 | 868,685,634 | ||||||||||||||
Balance (in shares) at Dec. 31, 2021 | shares | 21,097,870 | 21,097,870 | 21,097,870 | ||||||||||||||
Balance at Dec. 31, 2021 | ¥ 554 | 14,624,386 | (257,765) | (3,693,119) | ¥ 10,674,056 | ||||||||||||
Net (loss)/income | 292,038 | 292,038 | |||||||||||||||
Foreign currency translation adjustments | 1,153,508 | 1,153,508 | |||||||||||||||
Share-based compensation | 447,961 | 447,961 | |||||||||||||||
Issuance of ordinary shares for share award plan | shares | 370,000 | ||||||||||||||||
Conversion of convertible redeemable preferred shares, Shares | shares | 551,352,134 | ||||||||||||||||
Exercise of share-based awards (in shares) | shares | 9,384,732 | (9,384,732) | |||||||||||||||
Exercise of share based awards | ¥ 6 | 87,859 | 87,865 | ||||||||||||||
Repurchase of ordinary shares (in shares) | shares | 5,371,400 | (5,371,400) | 5,371,400 | ||||||||||||||
Repurchase of ordinary shares | (346,500) | $ (51.2) | |||||||||||||||
Repurchase of ordinary shares | ¥ (346,532) | ¥ (346,532) | |||||||||||||||
Balance (in shares) at Sep. 30, 2022 | shares | 731,868,565 | 140,830,401 | 872,698,966 | ||||||||||||||
Balance (in shares) at Sep. 30, 2022 | shares | 17,454,538 | 17,454,538 | 17,454,538 | ||||||||||||||
Balance at Sep. 30, 2022 | ¥ 560 | ¥ (346,532) | ¥ 15,160,206 | ¥ 895,743 | ¥ (3,401,081) | ¥ 12,308,896 |
UNAUDITED INTERIM CONDENSED C_5
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - CNY (¥) ¥ in Thousands | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities | ||||
Net (loss)/income | ¥ 80,321 | ¥ (1,590,312) | ¥ 292,038 | ¥ (1,304,144) |
Adjustments to reconcile net (loss)/income to net cash generated from operating activities: | ||||
Share-based compensation | 283,046 | 202,887 | 447,961 | 301,812 |
Issuance of Class B ordinary shares to TECHWOLF LIMITED (Note 13) | 1,506,362 | 1,506,362 | ||
Depreciation and amortization | 59,748 | 35,139 | 98,022 | 55,464 |
Loss from disposal of property, equipment and software | 7 | 42 | 85 | 49 |
Foreign exchange loss/(gain) | (4,694) | 586 | (10,136) | 317 |
Amortization of right-of-use assets | 68,979 | 43,453 | 106,479 | 68,076 |
Unrealized investment income | (2,229) | (1,294) | (14,291) | (6,359) |
Changes in operating assets and liabilities: | ||||
Accounts receivable | (1,011) | 4,404 | (3,509) | 6,260 |
Prepayments and other current assets | 87,319 | (98,442) | 30,794 | (278,684) |
Amounts due from related parties | (2,968) | 1,037 | (3,435) | 3,131 |
Other non-current assets | (4,000) | |||
Accounts payable | 17,974 | 62,080 | (663) | 12,651 |
Deferred revenue | 20,486 | 670,129 | 80,099 | 679,370 |
Other payables and accrued liabilities | (64,074) | 39,347 | (71,523) | 125,522 |
Operating lease liabilities | (61,956) | (38,875) | (104,422) | (59,356) |
Net cash generated from operating activities | 480,948 | 836,543 | 847,499 | 1,106,471 |
Cash flows from investing activities | ||||
Purchase of property, equipment and software | (173,207) | (81,374) | (280,672) | (163,765) |
Proceeds from disposal of property, equipment and software | 298 | 9 | 326 | 14 |
Purchase of short-term investments | (1,450,000) | (2,164,000) | (3,785,740) | (3,390,000) |
Proceeds from maturity of short-term investments | 1,525,000 | 2,078,000 | 1,975,000 | 2,748,000 |
Net cash used in investing activities | (97,909) | (167,365) | (2,091,086) | (805,751) |
Cash flows from financing activities | ||||
Proceeds from IPO, net of issuance cost | 6,423,798 | 6,406,872 | ||
Proceeds from exercise of share options | 180,166 | 238,104 | 14,556 | |
Net cash generated from/(used in) financing activities | (87,816) | 6,412,214 | (41,278) | 6,409,844 |
Effect of exchange rate changes on cash and cash equivalents | 537,116 | 9,364 | 1,101,863 | 47,598 |
Net increase in cash and cash equivalents | 832,339 | 7,090,756 | (183,002) | 6,758,162 |
Cash and cash equivalents at beginning of the period | 11,341,758 | 3,998,203 | 11,341,758 | 3,998,203 |
Cash and cash equivalents at end of the period | 12,174,097 | 11,088,959 | 11,158,756 | 10,756,365 |
Supplemental cash flow disclosures | ||||
Cash paid for income tax | 72,083 | 73,536 | ||
Supplemental schedule of non-cash investing and financing activities | ||||
Accretion on convertible redeemable preferred shares to redemption value | 164,065 | 164,065 | ||
Unpaid consideration for share repurchase | 67,150 | |||
Changes in payables for purchase of property, equipment and software | 64,336 | (1,895) | (537) | (21,221) |
Class A ordinary shares | ||||
Cash flows from financing activities | ||||
Repurchase of ordinary shares | ¥ (267,982) | ¥ (279,382) | ||
Class B ordinary shares | ||||
Cash flows from financing activities | ||||
Repurchase of ordinary shares | ¥ (11,584) | ¥ (11,584) |
PRINCIPAL ACTIVITIES AND ORGANI
PRINCIPAL ACTIVITIES AND ORGANIZATION | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
PRINCIPAL ACTIVITIES AND ORGANIZATION | ||
PRINCIPAL ACTIVITIES AND ORGANIZATION | 1. PRINCIPAL ACTIVITIES AND ORGANIZATION (a) Principal activities KANZHUN LIMITED (“Kanzhun” or the “Company”) was incorporated under the laws of the Cayman Islands on January 16, 2014 as an exempted company with limited liability. The Company, its subsidiaries, consolidated variable interest entity (the “VIE”) and VIE’s subsidiaries (collectively referred to as the “Group”) run an online recruitment platform called “BOSS Zhipin” in the People’s Republic of China (“PRC”). The BOSS Zhipin platform mainly focuses on assisting the recruitment process between job seekers and employers. Through BOSS Zhipin platform, employers, mainly executives or middle-level managers of enterprises, could participate directly in the recruiting process. (b) Organization of the Group As of June 30, 2022, the Company’s principal subsidiaries and consolidated VIE are as follows: Attributable Place of Date of equity interest of Name of subsidiaries incorporation incorporation the Group Principal activities Techfish Limited Hong Kong, China February 14, 2014 100% Investment holding in Hong Kong Beijing Glory Wolf Co., Ltd. (“Glory”, or the “WFOE”) Beijing, China May 7, 2014 100% Management consultancy and technical services in the PRC Place of Date of Economic Name of VIE incorporation incorporation interest held Principal activities Beijing Huapin Borui Network Technology Co., Ltd. (“Huapin”) Beijing, China December 25, 2013 100% Online recruitment service in the PRC (c) Consolidated variable interest entity In order to comply with the PRC laws and regulations which prohibit or restrict foreign investments into companies involved in restricted businesses, the Group operates its Apps, websites and other restricted businesses in the PRC through a PRC domestic company and its subsidiaries, whose equity interests are held by certain management members of the Company (“Registered Shareholders”). The Company entered into a series of contractual arrangements, which was updated in September 2022, with such PRC domestic company and its respective Registered Shareholders, which enables the Company to have the power to direct activities of the VIE that most significantly affect the economic performance of the VIE and receive substantially all of the economic benefits from the VIE that could be significant to the VIE. Accordingly, the Company is determined to be the primary beneficiary of the VIE for accounting purposes under U.S. GAAP and therefore the Group consolidates the VIE’s results of operations, assets and liabilities in the Group’s consolidated financial statements for all the periods presented. The principal terms of the agreements entered amongst the VIE, the Registered Shareholders and the WFOE are further described below. 1. PRINCIPAL ACTIVITIES AND ORGANIZATION (CONTINUED) (c) Consolidated variable interest entity (continued) Exclusive technology and service co-operation agreement Pursuant to the exclusive technology and service co-operation agreement, the VIE has agreed to engage the WFOE as the exclusive provider of technical consultancy, technical support and other services as agreed. The VIE shall pay service fees to the WFOE, which shall be equivalent to the total consolidated profit of the VIE and its subsidiaries, after offsetting the prior-year accumulated loss (if any), operating cost and expenses, taxes and other statutory contributions. Notwithstanding the foregoing, the WFOE shall have the right to adjust the level of the service fees by taking into account such factors as (a) the complexity and difficulty of the services, (b) the time taken for the services, (c) the scope and commercial value of the management, technical consulting and other services, (d) the scope and commercial value of intellectual property licensing and leasing services, and (e) the market reference price for services of similar kinds. The VIE shall pay the service fees to the WFOE within 30 days after the delivering of payment instructions by the WFOE. The exclusive technology and service co-operation agreement shall remain effective until, among others, the date on which the WFOE or its designated party is formally registered as the shareholder of the VIE, in the case where the WFOE is permitted by the PRC laws to directly hold the VIE’s shares and the WFOE and its subsidiaries and branches are allowed to engage in the business being currently operated by the VIE. Exclusive purchase option agreement Pursuant to the exclusive purchase option agreement, the Registered Shareholders of the VIE have granted the WFOE, or its offshore parent company or its directly or indirectly owned subsidiaries, the exclusive and irrevocable right to purchase all or any part of the respective equity interests in the VIE from the Registered Shareholders at any time. The VIE and the Registered Shareholders irrevocably covenanted that unless with prior written consent by the WFOE, the VIE shall not sell, transfer, pledge, or otherwise dispose all or any part of its assets, and the Registered Shareholders shall not sell, transfer, pledge, or otherwise dispose all or any part of their equity interest in the VIE, other than the creation of the pledge of the VIE’s equity interest pursuant to the contractual arrangements. The purchase price payable by the WFOE or its designee in respect of the transfer of the entire equity interest and/or total assets of the VIE shall be the nominal price, or the minimum price required by competent PRC authorities or PRC laws. However, in any event, subject to the provisions and requirements of PRC laws, the price paid by the WFOE and/or its designee to the VIE and/or Registered Shareholders at any such price shall be returned by the VIE and/or Registered Shareholders to the WFOE at the time and in the form requested by the WFOE. The exclusive purchase option agreement shall remain effective for ten years with the WFOE having the option to renew it until, among others, all the equity interest in and/or all assets of the VIE has been transferred to the WFOE and/or its designee (registration has been completed for the change of members), and the WFOE and its subsidiaries and branches can legally engage in the business of the VIE. 1. PRINCIPAL ACTIVITIES AND ORGANIZATION (CONTINUED) (c) Consolidated variable interest entity (continued) Equity pledge agreement Pursuant to the equity pledge agreement, the Registered Shareholders of the VIE have pledged 100% equity interests in the VIE to the WFOE to guarantee performance of their contractual obligations under the contractual arrangements and all liabilities, monetary debts or other payment obligations arising out of or in relation with the contractual arrangements. In the event of a breach by the VIE or any of its Registered Shareholders of contractual obligations under the exclusive technology and service co-operation agreement, and the equity pledge agreement, as the case may be, the WFOE, as pledgee, will have the right to (1) demand all the outstanding payment due according to the exclusive technology and service co-operation agreement, and/or (2) exercise its right of pledge according to the equity pledge agreement, or otherwise dispose of the pledged equity interest in accordance with applicable Laws. The equity pledge agreement shall remain valid until, among others, the VIE and the Registered Shareholders have recorded the release of such pledged equity interests in the register of members of the VIE and completed relevant deregistration procedure. Spousal consent letter Pursuant to the spousal consent letter, the spouse of each Registered Shareholder who is a natural person, unconditionally and irrevocably agreed that the equity interests in the VIE held by such Registered Shareholder will be disposed of pursuant to the equity pledge agreement, the exclusive purchase option agreement and the power of attorney (as the case may be). Each of their spouses agreed not to assert any rights over the equity interests in the VIE held by such Registered Shareholder. In addition, in the event that any spouse obtains any equity interests in VIE held by such Registered Shareholder for any reason, he or she agreed to be bound by the equity pledge agreement, the exclusive purchase option agreement and the power of attorney. Power of attorney Pursuant to the power of attorney, each of the Registered Shareholders appointed the WFOE and/or its designee as their sole and exclusive agent to act on their behalf, including but not limited to (1) to propose, convene and attend shareholders meetings and sign minutes and resolutions, (2) to exercise all shareholder rights that they are entitled to under PRC law and the relevant articles of association, including but not limited to, the right to vote and the right to sell, transfer, pledge or disposal of all or part of the equity interests owned by such shareholders; and (3) to elect, designate and appoint the legal representative, chairman, directors, supervisors, general manager and other senior executives of the VIE. 1. PRINCIPAL ACTIVITIES AND ORGANIZATION (CONTINUED) (d) Risks in relations to the VIE structure The following table set forth the assets, liabilities, results of operations and changes in cash and cash equivalents of the consolidated VIE and VIE’s subsidiaries taken as a whole, which were included in the Group’s unaudited interim condensed consolidated financial statements with intercompany transactions eliminated: As of December 31, As of June 30, 2021 2022 RMB RMB ASSETS Current assets Cash and cash equivalents 864,851 1,245,088 Short-term investments 864,557 802,159 Accounts receivable 1,002 1,946 Amounts due from Group companies 86,989 100,805 Amounts due from related parties 6,615 9,583 Prepayments and other current assets 487,598 450,841 Total current assets 2,311,612 2,610,422 Non-current assets Property, equipment and software, net 368,381 544,171 Intangible assets, net 458 413 Right-of-use assets, net 301,288 287,032 Other non-current assets 4,000 4,000 Total non-current assets 674,127 835,616 Total assets 2,985,739 3,446,038 LIABILITIES Current liabilities Accounts payable 52,938 135,098 Deferred revenue 1,958,570 1,979,019 Other payables and accrued liabilities 626,151 557,568 Amounts due to Group companies 27,223 37,362 Operating lease liabilities, current 124,464 139,625 Total current liabilities 2,789,346 2,848,672 Non-current liabilities Operating lease liabilities, non-current 178,844 155,954 Total non-current liabilities 178,844 155,954 Total liabilities 2,968,190 3,004,626 1. PRINCIPAL ACTIVITIES AND ORGANIZATION (CONTINUED) (d) Risks in relations to the VIE structure (continued) For the six months ended June 30, 2021 2022 RMB RMB Total revenues 1,956,717 2,250,118 Cost of revenues (250,007) (351,566) Net (loss)/income (41,429) 162,265 For the six months ended June 30, 2021 2022 RMB RMB Net cash generated from operating activities 861,135 486,939 Net cash used in investing activities (167,365) (106,702) Net cash used in financing activities (438,586) — Net increase in cash and cash equivalents 255,184 380,237 Cash and cash equivalents at beginning of the period 183,199 864,851 Cash and cash equivalents at end of the period 438,383 1,245,088 Under the contractual arrangements with the VIE, the Company has the power to direct activities of the VIE through the WFOE that most significantly impact the VIE such as having assets transferred out of the VIE at its discretion. Therefore, the Company considers that there is no asset of the VIE that can be used to settle obligations of the VIE except for registered capital and PRC statutory reserves of the VIE amounting to RMB9,002 and RMB9,002 as of December 31, 2021 and June 30, 2022, respectively. Since the VIE was incorporated as a limited liability company under the PRC Company Law, the creditors do not have recourse to the general credit of the WFOE for all the liabilities of the VIE. The Group believes that the contractual arrangements between or among the WFOE, VIE and the Registered Shareholders are following PRC laws and regulations, as applicable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements. On March 15, 2019, the PRC Foreign Investment Law was approved and took effect from January 1, 2020. Since the PRC Foreign Investment Law is relatively new, there are substantial uncertainties exist with respect to its implementation and interpretation and the possibility that the VIE will be deemed as a foreign-invested enterprise and subject to relevant restrictions in the future shall not be excluded. If the contractual arrangements establishing the Company’s VIE structure are found to be in violation of any existing law and regulations or future PRC laws and regulations, the relevant PRC government authorities will have broad discretion in dealing with such violation, including, without limitation, levying fines, confiscating the Group’s income or the income from the VIE, revoking the Group’s business licenses or the business licenses, requiring the Group to restructure its ownership structure or operations and requiring the Group to discontinue any portion or all of the Group’s value-added businesses or other prohibited businesses. Any of these actions could cause significant disruption to the Company’s business operations and have a severe adverse impact on the Company’s cash flows, financial position and operating performance. If the imposing of these penalties causes the WFOE to lose its rights to direct the activities of and receive economic benefits from the VIE, which in turn may restrict the Company’s ability to consolidate and reflect in its financial statements the financial position and results of operations of its VIE. (e) COVID-19 impact and liquidity The Group’s financial performance was impacted by the COVID-19 although the pandemic had been largely contained in China. However, based on the assessment on the Group’s liquidity and financial positions, the Group believes that its current cash and cash equivalents will be sufficient to enable it to meet its anticipated working capital requirements and capital expenditures for at least the next twelve months from the date these unaudited interim condensed consolidated financial statements are issued. | 1. PRINCIPAL ACTIVITIES AND ORGANIZATION (a) Principal activities KANZHUN LIMITED (“Kanzhun” or the “Company”) was incorporated under the laws of the Cayman Islands on January 16, 2014 as an exempted company with limited liability. The Company, its subsidiaries, consolidated variable interest entity (the “VIE”) and VIE’s subsidiaries (collectively referred to as the “Group”) run an online recruitment platform called “BOSS Zhipin” in the People’s Republic of China (“PRC”). The BOSS Zhipin platform mainly focuses on assisting the recruitment process between job seekers and employers. Through BOSS Zhipin platform, employers, mainly executives or middle-level managers of enterprises, could participate directly in the recruiting process. (b) Organization of the Group As of September 30, 2022, the Company’s principal subsidiaries and consolidated VIE are as follows: Attributable Place of Date of equity interest of Name of subsidiaries incorporation incorporation the Group Principal activities Techfish Limited Hong Kong, China February 14, 2014 100% Investment holding in Hong Kong Beijing Glory Wolf Co., Ltd. (“Glory”, or the “WFOE”) Beijing, China May 7, 2014 100% Management consultancy and technical service in the PRC Place of Date of Economic Name of VIE incorporation incorporation interest held Principal activities Beijing Huapin Borui Network Technology Co., Ltd. (“Huapin”) Beijing, China December 25, 2013 100% Online recruitment service in the PRC (c) Consolidated variable interest entity In order to comply with the PRC laws and regulations which prohibit or restrict foreign investments into companies involved in restricted businesses, the Group operates its Apps, websites and other restricted businesses in the PRC through a PRC domestic company and its subsidiaries, whose equity interests are held by certain management members of the Company (“Registered Shareholders”). The Company entered into a series of contractual arrangements, which was updated in September 2022, with such PRC domestic company and its respective Registered Shareholders, which enables the Company to have the power to direct activities of the VIE that most significantly affect the economic performance of the VIE and receive substantially all of the economic benefits from the VIE that could be significant to the VIE. Accordingly, the Company is determined to be the primary beneficiary of the VIE for accounting purposes under U.S. GAAP and therefore the Group consolidates the VIE’s results of operations, assets and liabilities in the Group’s consolidated financial statements for all the periods presented. The principal terms of the agreements entered amongst the VIE, the Registered Shareholders and the WFOE are further described below. 1. PRINCIPAL ACTIVITIES AND ORGANIZATION (CONTINUED) (c) Consolidated variable interest entity (continued) Exclusive technology and service co-operation agreement Pursuant to the exclusive technology and service co-operation agreement, the VIE has agreed to engage the WFOE as the exclusive provider of technical consultancy, technical support and other services as agreed. The VIE shall pay service fees to the WFOE, which shall be equivalent to the total consolidated profit of the VIE and its subsidiaries, after offsetting the prior-year accumulated loss (if any), operating cost and expenses, taxes and other statutory contributions. Notwithstanding the foregoing, the WFOE shall have the right to adjust the level of the service fees by taking into account such factors as (a) the complexity and difficulty of the services, (b) the time taken for the services, (c) the scope and commercial value of the management, technical consulting and other services, (d) the scope and commercial value of intellectual property licensing and leasing services, and (e) the market reference price for services of similar kinds. The VIE shall pay the service fees to the WFOE within 30 days after the delivering of payment instructions by the WFOE. The exclusive technology and service co-operation agreement shall remain effective until, among others, the date on which the WFOE or its designated party is formally registered as the shareholder of the VIE, in the case where the WFOE is permitted by the PRC laws to directly hold the VIE’s shares and the WFOE and its subsidiaries and branches are allowed to engage in the business being currently operated by the VIE. Exclusive purchase option agreement Pursuant to the exclusive purchase option agreement, the Registered Shareholders of the VIE have granted the WFOE, or its offshore parent company or its directly or indirectly owned subsidiaries, the exclusive and irrevocable right to purchase all or any part of the respective equity interests in the VIE from the Registered Shareholders at any time. The VIE and the Registered Shareholders irrevocably covenanted that unless with prior written consent by the WFOE, the VIE shall not sell, transfer, pledge, or otherwise dispose all or any part of its assets, and the Registered Shareholders shall not sell, transfer, pledge, or otherwise dispose all or any part of their equity interest in the VIE, other than the creation of the pledge of the VIE’s equity interest pursuant to the contractual arrangements. The purchase price payable by the WFOE or its designee in respect of the transfer of the entire equity interest and/or total assets of the VIE shall be the nominal price, or the minimum price required by competent PRC authorities or PRC laws. However, in any event, subject to the provisions and requirements of PRC laws, the price paid by the WFOE and/or its designee to the VIE and/or Registered Shareholders at any such price shall be returned by the VIE and/or Registered Shareholders to the WFOE at the time and in the form requested by the WFOE. The exclusive purchase option agreement shall remain effective for ten years with the WFOE having the option to renew it until, among others, all the equity interest in and/or all assets of the VIE has been transferred to the WFOE and/or its designee (registration has been completed for the change of members), and the WFOE and its subsidiaries and branches can legally engage in the business of the VIE. 1. PRINCIPAL ACTIVITIES AND ORGANIZATION (CONTINUED) (c) Consolidated variable interest entity (continued) Equity pledge agreement Pursuant to the equity pledge agreement, the Registered Shareholders of the VIE have pledged 100% equity interests in the VIE to the WFOE to guarantee performance of their contractual obligations under the contractual arrangements and all liabilities, monetary debts or other payment obligations arising out of or in relation with the contractual arrangements. In the event of a breach by the VIE or any of its Registered Shareholders of contractual obligations under the exclusive technology and service co-operation agreement, and the equity pledge agreement, as the case may be, the WFOE, as pledgee, will have the right to (1) demand all the outstanding payment due according to the exclusive technology and service co-operation agreement, and/or (2) exercise its right of pledge according to the equity pledge agreement, or otherwise dispose of the pledged equity interest in accordance with applicable Laws. The equity pledge agreement shall remain valid until, among others, the VIE and the Registered Shareholders have recorded the release of such pledged equity interests in the register of members of the VIE and completed relevant deregistration procedure. Spousal consent letter Pursuant to the spousal consent letter, the spouse of each Registered Shareholder who is a natural person, unconditionally and irrevocably agreed that the equity interests in the VIE held by such Registered Shareholder will be disposed of pursuant to the equity pledge agreement, the exclusive purchase option agreement and the power of attorney (as the case may be). Each of their spouses agreed not to assert any rights over the equity interests in the VIE held by such Registered Shareholder. In addition, in the event that any spouse obtains any equity interests in VIE held by such Registered Shareholder for any reason, he or she agreed to be bound by the equity pledge agreement, the exclusive purchase option agreement and the power of attorney. Power of attorney Pursuant to the power of attorney, each of the Registered Shareholders appointed the WFOE and/or its designee as their sole and exclusive agent to act on their behalf, including but not limited to (1) to propose, convene and attend shareholders meetings and sign minutes and resolutions, (2) to exercise all shareholder rights that they are entitled to under PRC law and the relevant articles of association, including but not limited to, the right to vote and the right to sell, transfer, pledge or disposal of all or part of the equity interests owned by such shareholders; and (3) to elect, designate and appoint the legal representative, chairman, directors, supervisors, general manager and other senior executives of the VIE. 1. PRINCIPAL ACTIVITIES AND ORGANIZATION (CONTINUED) (d) Risks in relations to the VIE structure The following table set forth the assets, liabilities, results of operations and changes in cash and cash equivalents of the consolidated VIE and VIE’s subsidiaries taken as a whole, which were included in the Group’s unaudited interim condensed consolidated financial statements with intercompany transactions eliminated: As of December 31, As of September 30, 2021 2022 RMB RMB ASSETS Current assets Cash and cash equivalents 864,851 873,872 Short-term investments 864,557 1,329,802 Accounts receivable 1,002 3,929 Amounts due from Group companies 86,989 125,745 Amounts due from related parties 6,615 10,050 Prepayments and other current assets 487,598 480,213 Total current assets 2,311,612 2,823,611 Non-current assets Property, equipment and software, net 368,381 548,476 Intangible assets, net 458 390 Right-of-use assets, net 301,288 294,905 Other non-current assets 4,000 4,000 Total non-current assets 674,127 847,771 Total assets 2,985,739 3,671,382 LIABILITIES Current liabilities Accounts payable 52,938 51,678 Deferred revenue 1,958,570 2,036,728 Other payables and accrued liabilities 626,151 521,066 Amounts due to Group companies 27,223 12,576 Operating lease liabilities, current 124,464 143,389 Total current liabilities 2,789,346 2,765,437 Non-current liabilities Operating lease liabilities, non-current 178,844 154,775 Total non-current liabilities 178,844 154,775 Total liabilities 2,968,190 2,920,212 1. PRINCIPAL ACTIVITIES AND ORGANIZATION (CONTINUED) (d) Risks in relations to the VIE structure (continued) For the nine months ended September 30, 2021 2022 RMB RMB Total revenues 3,168,478 3,427,797 Cost of revenues (404,796) (552,380) Net income 274,608 319,165 For the nine months ended September 30, 2021 2022 RMB RMB Net cash generated from operating activities 1,158,919 777,516 Net cash used in investing activities (795,751) (733,351) Net cash used in financing activities (444,239) (35,144) Net (decrease)/increase in cash and cash equivalents (81,071) 9,021 Cash and cash equivalents at beginning of the period 183,199 864,851 Cash and cash equivalents at end of the period 102,128 873,872 Under the contractual arrangements with the VIE, the Company has the power to direct activities of the VIE through the WFOE that most significantly impact the VIE such as having assets transferred out of the VIE at its discretion. Therefore, the Company considers that there is no asset of the VIE that can be used to settle obligations of the VIE except for registered capital and PRC statutory reserves of the VIE amounting to RMB9,002 and RMB9,002 as of December 31, 2021 and September 30, 2022, respectively. Since the VIE was incorporated as a limited liability company under the PRC Company Law, the creditors do not have recourse to the general credit of the WFOE for all the liabilities of the VIE. The Group believes that the contractual arrangements between or among the WFOE, VIE and the Registered Shareholders are following PRC laws and regulations, as applicable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements. On March 15, 2019, the PRC Foreign Investment Law was approved and took effect from January 1, 2020. Since the PRC Foreign Investment Law is relatively new, there are substantial uncertainties exist with respect to its implementation and interpretation and the possibility that the VIE will be deemed as a foreign-invested enterprise and subject to relevant restrictions in the future shall not be excluded. If the contractual arrangements establishing the Company’s VIE structure are found to be in violation of any existing law and regulations or future PRC laws and regulations, the relevant PRC government authorities will have broad discretion in dealing with such violation, including, without limitation, levying fines, confiscating the Group’s income or the income from the VIE, revoking the Group’s business licenses or the business licenses, requiring the Group to restructure its ownership structure or operations and requiring the Group to discontinue any portion or all of the Group’s value-added businesses or other prohibited businesses. Any of these actions could cause significant disruption to the Group’s business operations and have a severe adverse impact on the Group’s cash flows, financial position and operating performance. If the imposing of these penalties causes the WFOE to lose its rights to direct the activities of and receive economic benefits from the VIE, which in turn may restrict the Company’s ability to consolidate and reflect in its financial statements the financial position and results of operations of its VIE. 1. PRINCIPAL ACTIVITIES AND ORGANIZATION (CONTINUED) (e) COVID-19 impact and liquidity The Group’s financial performance was impacted by the COVID-19 although the pandemic had been largely contained in China. However, based on the assessment on the Group’s liquidity and financial positions, the Group believes that its current cash and cash equivalents will be sufficient to enable it to meet its anticipated working capital requirements and capital expenditures for at least the next twelve months from the date these unaudited interim condensed consolidated financial statements are issued. |
PRINCIPAL ACCOUNTING POLICIES
PRINCIPAL ACCOUNTING POLICIES | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
PRINCIPAL ACCOUNTING POLICIES | ||
PRINCIPAL ACCOUNTING POLICIES | 2. PRINCIPAL ACCOUNTING POLICIES 2.1 Basis of presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Significant accounting policies followed by the Group in the preparation of its accompanying unaudited interim condensed consolidated financial statements are summarized below. 2.2 Basis of consolidation The unaudited interim condensed consolidated financial statements include the financial statements of the Company, its subsidiaries, the consolidated VIE and VIE’s subsidiaries for which the Company is the ultimate primary beneficiary. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors, to cast a majority of votes at the meeting of the board of directors or to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. The Company applies the guidance codified in ASC 810, Consolidations All transactions and balances between the Company, its subsidiaries, the consolidated VIE and VIE’s subsidiaries have been eliminated upon consolidation. 2.3 Use of estimates The preparation of the unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet date, and the reported revenues and expenses during the reporting periods in the unaudited interim condensed consolidated financial statements and accompanying notes. Accounting estimates reflected in the Group’s unaudited interim condensed consolidated financial statements include but are not limited to the useful lives of property, equipment and software, impairment of long-lived assets, valuation allowance for deferred tax assets, valuation of ordinary shares and share-based compensation. Management bases the estimates on historical experience, known trends and various other assumptions that are believed to be reasonable under current circumstances. Actual results could differ from those estimates. 2.4 Foreign currency The Group’s reporting currency is RMB. The functional currency of the Company and subsidiaries incorporated in Hong Kong and United States of America, is the United States dollars (“US$”). The functional currency of the Group’s PRC subsidiaries, consolidated VIE and VIE’s subsidiaries is RMB. The determination of the respective functional currency is based on the criteria of ASC 830, Foreign Currency Matters 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) 2.4 Foreign currency (continued) Transactions denominated in currencies other than the functional currency are translated into the functional currency of the entity at the exchange rates quoted by authoritative banks prevailing on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency using the applicable exchange rates at the balance sheet dates. Exchange gain or loss resulting from those foreign currency transactions denominated in foreign currencies is recorded in the Unaudited Interim Condensed Consolidated Statements of Comprehensive (Loss)/Income. The financial statements of the Company and subsidiaries located outside of the PRC are translated from their functional currency into RMB. Their assets and liabilities are translated into RMB using the applicable exchange rates at the balance sheet date. Equity accounts other than earnings generated in current period are translated into RMB at the appropriate historical rates. Revenues, expenses, gain and loss are translated into RMB using the periodic average exchange rates. The resulting foreign currency translation adjustments are recorded in other comprehensive income in the consolidated financial statements. 2.5 Fair value measurement Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurement for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value: Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 — Include other inputs that are directly or indirectly observable in the marketplace. Level 3 — Unobservable inputs which are supported by little or no market activity. Accounting guidance also describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount and the measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. Financial assets and liabilities of the Group mainly consist of cash and cash equivalents, short-term investments, accounts receivables, amounts due from related parties, prepayments and other current assets, accounts payable, certain accrued expenses and other current liabilities. Except for short-term investments, the carrying values of other financial assets and liabilities approximate their fair values due to the short-term maturity of these instruments. The Group reports short-term investments at fair value based on Level 2 measurement. 2.6 Cash and cash equivalents Cash includes cash on hand and deposits held by financial institutions that can be added to or withdrawn without limitation or restriction. Cash equivalents represent short-term, highly liquid investments that are readily convertible to known amounts of cash and with original maturities of three months or less. 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) 2.7 Short-term investments Short-term investments are wealth management products issued by commercial banks or other financial institutions, which contains fixed or variable interest with original maturities within one year. These investments are stated at fair value. Changes in the fair value are reflected in investment income in the Consolidation Statements of Comprehensive (Loss)/Income. 2.8 Accounts receivable Accounts receivable are presented net of allowance for doubtful accounts (if any). The Group provides general and specific provisions for bad debts when facts and circumstances indicate that the receivables are unlikely to be collected. If the financial condition of its customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. No allowance for doubtful accounts was recognized for the six months ended June 30, 2021 and 2022. 2.9 Property, equipment and software Property, equipment and software are stated at cost less accumulated depreciation and impairment, if any. Property, equipment and software are depreciated at rates sufficient to write off their cost less impairment and residual value, if any, over the estimated useful lives on a straight-line basis. The estimated useful lives are as follows: Category Estimated useful lives Electronic equipment 3-5 years Leasehold improvement Shorter of lease term or estimated useful life of the assets Furniture and fixtures 5 years Motor vehicles 3-5 years Software 5 years The majority of electronic equipment includes servers. The Group recognized the gain or loss on the disposal of property, equipment and software in the Unaudited Interim Condensed Consolidated Statements of Comprehensive (Loss)/Income. 2.10 Intangible assets Intangible assets purchased are recognized and measured at cost less accumulated amortization and impairment, if any. Intangible assets are amortized using the straight-line method over the estimated useful lives as below: Category Estimated useful lives Domains 10 years The estimated useful lives of domains are the periods over which they are expected to be available for use by the Group, which are mainly determined based on the periods of effective registration of the domains. 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) 2.11 Impairment of long-lived assets Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be fully recoverable or that the useful life is shorter than that the Group had originally estimated. When these events occur, the Group evaluates the impairment for the long-lived assets by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the asset and its eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the asset, the Group recognizes an impairment loss based on the excess of the carrying value of the asset over the fair value of the asset. No impairment of long-lived assets was recognized for the six months ended June 30, 2021 and 2022. 2.12 Revenue recognition The Group accounted for revenue under ASC 606, Revenue from Contracts with Customers To achieve that core principle, the Group applies the five steps defined under ASC 606: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) a performance obligation is satisfied. According to ASC 606, revenue is recognized net of value-added tax (“VAT”) when or as the control of services is transferred to a customer. Depending on the terms of the contract, control of services may be transferred over time or at a point in time. Control of services is transferred over time if the Group: (i) provides all of the benefits received and consumed simultaneously by the customer; (ii) creates and enhances an asset that the customer controls as the Group performs; or (iii) does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date. If control of services is transferred over time, revenue is recognized over the period of the contract by reference to the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognized at a point in time when the customer obtains control of the services. Online recruitment services to enterprise customers The Group provides online recruitment services carrying different kinds of features to enterprise customers, including direct recruitment services such as job postings, and value-added tools such as bulk invite sending, which could be purchased as a part of subscription packages or on a standalone basis. Based on the pattern by which the Group provides services and how enterprise customers benefit from services, these services can be divided into two categories in terms of revenue recognition: (i) services over a particular subscription period, which provide enterprise customers certain rights during a particular subscription period; for example, paid job postings allow enterprise customers to present certain job positions, receive job seeker recommendations, browse the mini-resume of and chat with a certain number of job seekers in its platform during the subscription period; and (ii) services with definite and limited number of usages within an expiration period, such as bulk invite sending and advanced filer. Accordingly, the Group recognizes its revenues from online recruitment services either over time or at a point in time as following: ● For services over a particular subscription period, the Group has a stand-ready obligation to deliver the corresponding services on a when-and-if-available basis during the subscription period and enterprise customers simultaneously and continuously receive and consume the benefits as the Group provides the services throughout the subscription period. Therefore, a time-based measure of progress best reflects the satisfaction of the performance obligations and the Group recognizes revenues on a straight-line basis over the subscription period. Revenues recognized over time for the six months ended June 30, 2021 and 2022 were RMB 1,338,480 and RMB 1,647,892 , respectively. 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) 2.12 Revenue recognition (continued) ● For services with definite and limited number of usages within an expiration period, upon the delivery of the individual services, the Group satisfies its performance obligations and enterprise customers benefit from its performance obligations, and therefore revenues are recognized at a point in time; and if these services are unused within the expiration period, the Group recognizes the relevant revenues when they expire. Revenues recognized at a point in time for the six months ended June 30, 2021 and 2022 were RMB 601,439 and RMB 579,292 , respectively. Other services Other services mainly represent paid value-added tools offered to job seekers such as increased exposure of resume and candidate competitive analysis. The Group defines enterprise customers who contributed revenue of RMB50 or more annually as key accounts, who contributed revenue between RMB5 and RMB50 annually as mid-sized accounts, and who contributed revenue of RMB5 or less annually as small-sized accounts. For the six months ended June 30, 2021 2022 RMB RMB Online recruitment services to enterprise customers – Key accounts 362,763 517,925 – Mid-sized accounts 633,685 910,848 – Small-sized accounts 943,471 798,411 Others 16,798 23,040 Total 1,956,717 2,250,224 Arrangements with multiple performance obligations Multiple performance obligations exist when enterprise customers purchase subscription packages which include an array of services. For those services included in subscription packages, the selling prices are consistently made references to the standalone selling prices when sold separately. The Group allocates the transaction price to each performance obligation based on the relative standalone selling price, considering bulk-sale price discounts offered to certain enterprise customers where applicable. Deferred revenue The Group records deferred revenue when the Group receives customers’ payments in advance of transferring control of services to customers. Substantially all deferred revenue recorded are expected to be recognized as revenues in the next twelve months. Remaining performance obligations Remaining performance obligations represent the amount of contracted future revenues not yet recognized as the amount relate to undelivered performance obligations. Substantially all of the Group’s contracts with customers are within one year in duration. As such, the Group has elected to apply the practical expedient which allows an entity to exclude disclosures about its remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. 2.13 Cost of revenues Cost of revenues consist primarily of settlement cost of third-party on-line payment platforms, payroll and other employee-related expenses, server and bandwidth service cost, server depreciation and other expenses incurred by the Group which are directly attributable to the performance of the Group’s online recruitment services. 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) 2.14 Sales and marketing expenses Sales and marketing expenses consist primarily of advertising expenses, payroll and other employee- related expenses for the Group’s sales and marketing staff as well as other expenses such as office rental and property management fees for sales functions. Advertising expenses generally represent online traffic acquisition and branding activities cost. For the six months ended June 30, 2021 and 2022, advertising expenses totaled RMB723,724 and RMB348,594, respectively. 2.15 Research and development expenses Research and development expenses primarily consist of payroll and other employee-related expenses and other expenses such as office rental and property management fees for research and development functions. All research and development costs are expensed as incurred. 2.16 General and administrative expenses General and administrative expenses consist primarily of payroll and other employee-related expenses for the Group’s managerial and administrative staff and other expenses such as office rental and property management fees. 2.17 Employee benefits Full time employees of the Group in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to the employees. Chinese labor regulations require that the PRC subsidiaries, VIE and VIE’s subsidiaries of the Group make contributions to the government for these benefits based on certain percentages of the employees’ salaries, up to a maximum amount specified by the local government. The Group has no legal obligation for the benefits beyond the contributions made. Total amounts of such employee benefit expenses contributed by the Group, including accrued and unpaid amounts, were RMB109,040 and RMB171,116 for the six months ended June 30, 2021 and 2022, respectively. 2.18 Share-based compensation The Group grants share options and restricted share units (“RSUs”) to its management, other key employees and eligible nonemployees. Such compensation is accounted for in accordance with ASC 718, Compensation — Stock Compensation Improvements to Nonemployee Share-Based Payment Accounting Share-based awards with service conditions only are measured at the grant-date fair value of the awards and recognized as expenses using the straight-line method over the requisite service period. Share-based awards that are subject to both service conditions and the occurrence of an IPO or change of control as a performance condition, are measured at the grant-date fair value, and cumulative share-based compensation expenses for the awards that have satisfied the service condition were recorded upon the completion of the Company’s IPO in June 2021. The fair value of share options is estimated using the binomial option-pricing model. The determination of the fair value is affected by the fair value of the ordinary shares as well as assumptions regarding a number of complex and subjective variables, including the expected share price volatility, actual and projected employee and nonemployee share option exercise behavior, risk-free interest rates and expected dividend yield. Binomial option-pricing model incorporates the assumptions about grantees’ future exercise patterns. The fair value of these awards was determined by management with the assistance from an independent valuation firm using management’s estimates and assumptions. The fair value of the RSUs, which were granted subsequent to the completion of the Company’s IPO, is estimated based on the fair value of the underlying ordinary shares of the Company on the grant date. 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) 2.18 Share-based compensation (continued) The assumptions used in share-based compensation expense recognition represent management’s best estimates, but these estimates involve inherent uncertainties and application of management judgment. If factors change or different assumptions are used, the share-based compensation expenses could be materially different for any period. Moreover, the estimates of fair value of the awards are not intended to predict actual future events or the value that ultimately will be realized by grantees who receive share-based awards. 2.19 Operating leases The Group applied ASC 842, Leases For operating lease with a term of one year or less, the Group has elected to not recognize a lease liability or lease right-of-use asset on its Consolidated Balance Sheets. Instead, it recognizes the lease payments as expenses on a straight-line basis over the lease term. Short-term lease expenses are immaterial to its Consolidated Statements of Comprehensive (Loss)/Income. 2.20 Taxation Current income taxes are recorded in accordance with the regulations of the relevant tax jurisdiction. The Group accounts for deferred income taxes under the liability method in accordance with ASC 740, Income Tax The Group recognizes in its consolidated financial statements the benefit of a tax position if the tax position is more likely than not to prevail based on the facts and technical merits of the position. Tax positions that meet the more likely than not recognition threshold is measured at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. The Group estimates its liability for unrecognized tax benefits which are periodically assessed and may be affected by changing interpretations of laws, rulings by tax authorities, changes and/or developments with respect to tax audits, and expiration of the statute of limitations. The ultimate outcome for a particular tax position may not be determined with certainty prior to the conclusion of a tax audit and, in some cases, appeal or litigation process. The actual benefits ultimately realized may differ from the Group’s estimates. As each audit is concluded, adjustments, if any, are recorded in the Group’s consolidated financial statements in the period in which the audit is concluded. Additionally, in future periods, changes in facts, circumstances and new information may require the Group to adjust the recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recognized in the period in which the changes occur. As of June 30, 2022, the Group did not have any significant unrecognized uncertain tax positions. 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) 2.21 Statutory reserves The Company’s subsidiaries, consolidated VIE and VIE’s subsidiaries established in the PRC are required to make appropriations to certain non-distributable reserve funds. In accordance with the laws applicable to the foreign investment enterprises established in the PRC, the Group’s subsidiaries registered as wholly owned foreign enterprises have to make appropriations from their after-tax profits as determined under the PRC GAAP to reserve funds including general reserve fund, enterprise expansion fund and staff bonus and welfare fund on an annual basis. The appropriation to the general reserve fund must be at least 10% of the after-tax profits calculated in accordance with the PRC GAAP. Appropriation is not required if the general reserve fund has reached 50% of the registered capital of the company. Appropriations to the enterprise expansion fund and staff bonus and welfare fund are made at the respective company’s discretion. In addition, in accordance with the PRC Company Law, the Group’s consolidated VIE and VIE’s subsidiaries, registered as Chinese domestic companies, must make appropriations from their after-tax profits as determined under the PRC GAAP to non-distributable reserve funds including statutory surplus fund and discretionary surplus fund on an annual basis. The appropriation to the statutory surplus fund must be 10% of the after-tax profits as determined under the PRC GAAP. Appropriation is not required if the statutory surplus fund has reached 50% of the registered capital of the company. Appropriation to the discretionary surplus fund is made at the discretion of the respective company. The use of the general reserve fund, enterprise expansion fund, statutory surplus fund and discretionary surplus fund are restricted to the offsetting of losses or increasing of the registered capital of the respective company. The staff bonus and welfare fund is a liability in nature and is restricted to fund payments of special bonus to employees and for the collective welfare of employees. None of these reserves are allowed to be transferred to the Company in terms of cash dividends, loans or advances, nor can they be distributed except under liquidation. No appropriation to any reserve fund was made for the six months ended June 30, 2021 and 2022. 2.22 Comprehensive income/(loss) Comprehensive income/(loss) is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding those resulting from investments by shareholders and distributions to shareholders. The Group recognizes foreign currency translation adjustments as other comprehensive income/(loss) in the consolidated financial statements. As such adjustments do not incur income tax obligations, there are no tax adjustments to arrive at other comprehensive income/(loss) on a net-of-tax basis. 2.23 Segment reporting In accordance with ASC 280, Segment Reporting 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) 2.24 Net income/(loss) per share Basic net income/(loss) per share is computed by dividing net income/(loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. The net income/(loss) will be adjusted by deducting (1) dividends declared in the period on preferred shares (if any), (2) cumulative dividends on preferred shares (whether or not declared) and (3) deemed dividends as required by U.S. GAAP. Diluted net income/(loss) per share is calculated by dividing net income/(loss) attributable to ordinary shareholders by the weighted average number of ordinary shares and potential ordinary shares outstanding during the period. Potential ordinary shares consist of shares issuable upon the conversion of the preferred shares using the if-converted method, for periods prior to the completion of the Company’ IPO in June 2021, unvested RSUs and shares issuable upon the exercise of share options using the treasury stock method. The computation of diluted net income/(loss) per share does not assume conversion, exercise or contingent issuance of securities that would have an anti-dilutive effect. The two-class method is used for computing net income per share in the event the Group has net income available for distribution. Using the two-class method, net income is allocated between ordinary shares and other participating securities based on their participating rights, if applicable. Prior to the completion of the Company’ IPO in June 2021, the computation of basic net loss per share using the two-class method was not applicable as the Company was in a net loss position and the participating securities did not have contractual obligations to share in the loss of the Company. After the completion of the IPO, net income/(loss) per share is computed on Class A ordinary shares and Class B ordinary shares combined basis, because both classes have the same dividend rights in the Company’s undistributed net income. 2.25 Recent accounting pronouncements Recently adopted accounting pronouncements In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes Recent accounting pronouncements not yet adopted In June 2016, the FASB amended guidance related to the expected credit loss of financial instruments as part of ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments | 2. PRINCIPAL ACCOUNTING POLICIES 2.1 Basis of presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The interim unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements. The consolidated balance sheet as of December 31, 2021 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by U.S. GAAP. In management’s opinion, the Company has made all adjustments (consisting only of normal, recurring adjustments, except as otherwise indicated) necessary to fairly state its consolidated financial condition, results of operations and cash flows. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year or any other interim period. These financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s audited financial statements for the year ended December 31, 2021 in the Company’s Annual Report on Form 20-F. Significant accounting policies followed by the Group in the preparation of its accompanying unaudited interim condensed consolidated financial statements are summarized below. 2.2 Basis of consolidation The unaudited interim condensed consolidated financial statements include the financial statements of the Company, its subsidiaries, the consolidated VIE and VIE’s subsidiaries for which the Company is the ultimate primary beneficiary. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors, to cast a majority of votes at the meeting of the board of directors or to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. The Company applies the guidance codified in ASC 810, Consolidations All transactions and balances between the Company, its subsidiaries, the consolidated VIE and VIE’s subsidiaries have been eliminated upon consolidation. 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) 2.3 Use of estimates The preparation of the unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet date, and the reported revenues and expenses during the reporting periods in the unaudited interim condensed consolidated financial statements and accompanying notes. Accounting estimates reflected in the Group’s unaudited interim condensed consolidated financial statements include but are not limited to the useful lives of property, equipment and software, impairment of long-lived assets, valuation allowance for deferred tax assets, valuation of ordinary shares and share-based compensation. Management bases the estimates on historical experience, known trends and various other assumptions that are believed to be reasonable under current circumstances. Actual results could differ from those estimates. 2.4 Revenue recognition The Group accounted for revenue under ASC 606, Revenue from Contracts with Customers To achieve that core principle, the Group applies the five steps defined under ASC 606: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) a performance obligation is satisfied. According to ASC 606, revenue is recognized net of value-added tax (“VAT”) when or as the control of services is transferred to a customer. Depending on the terms of the contract, control of services may be transferred over time or at a point in time. Control of services is transferred over time if the Group: (i) provides all of the benefits received and consumed simultaneously by the customer; (ii) creates and enhances an asset that the customer controls as the Group performs; or (iii) does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date. If control of services is transferred over time, revenue is recognized over the period of the contract by reference to the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognized at a point in time when the customer obtains control of the services. Online recruitment services to enterprise customers The Group provides online recruitment services carrying different kinds of features to enterprise customers, including direct recruitment services such as job postings, and value-added tools such as bulk invite sending, which could be purchased as a part of subscription packages or on a standalone basis. Based on the pattern by which the Group provides services and how enterprise customers benefit from services, these services can be divided into two categories in terms of revenue recognition: (i) services over a particular subscription period, which provide enterprise customers certain rights during a particular subscription period; for example, paid job postings allow enterprise customers to present certain job positions, receive job seeker recommendations, browse the mini-resume of and chat with a certain number of job seekers in its platform during the subscription period; and (ii) services with definite and limited number of usages within an expiration period, such as bulk invite sending and advanced filer. Accordingly, the Group recognizes its revenues from online recruitment services either over time or at a point in time as following: ● For services over a particular subscription period, the Group has a stand-ready obligation to deliver the corresponding services on a when-and-if-available basis during the subscription period and enterprise customers simultaneously and continuously receive and consume the benefits as the Group provides the services throughout the subscription period. Therefore, a time-based measure of progress best reflects the satisfaction of the performance obligations and the Group recognizes revenues on a straight-line basis over the subscription period. Revenues recognized over time for the nine months ended September 30, 2021 and 2022 were RMB 2,207,283 and RMB 2,509,702 , respectively. ● For services with definite and limited number of usages within an expiration period, upon the delivery of the individual services, the Group satisfies its performance obligations and enterprise customers benefit from its performance obligations, and therefore revenues are recognized at a point in time; and if these services are unused within the expiration period, the Group recognizes the relevant revenues when they expire. Revenues recognized at a point in time for the nine months ended September 30, 2021 and 2022 were RMB 929,771 and RMB 881,946 , respectively. 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) 2.4 Revenue recognition (continued) Other services Other services mainly represent paid value-added tools offered to job seekers such as increased exposure of resume and candidate competitive analysis. The Group defines enterprise customers who contributed revenue of RMB50 or more annually as key accounts, who contributed revenue between RMB5 and RMB50 annually as mid-sized accounts, and who contributed revenue of RMB5 or less annually as small-sized accounts. For the nine months ended September 30, 2021 2022 RMB RMB Online recruitment services to enterprise customers —Key accounts 643,114 775,037 —Mid-sized accounts 1,080,514 1,375,551 —Small-sized accounts 1,413,426 1,241,060 Others 31,424 37,139 Total 3,168,478 3,428,787 Arrangements with multiple performance obligations Multiple performance obligations exist when enterprise customers purchase subscription packages which include an array of services. For those services included in subscription packages, the selling prices are consistently made references to the standalone selling prices when sold separately. The Group allocates the transaction price to each performance obligation based on the relative standalone selling price, considering bulk-sale price discounts offered to certain enterprise customers where applicable. Deferred revenue The Group records deferred revenue when the Group receives customers’ payments in advance of transferring control of services to customers. Substantially all deferred revenue recorded are expected to be recognized as revenues in the next twelve months. Remaining performance obligations Remaining performance obligations represent the amount of contracted future revenues not yet recognized as the amount relate to undelivered performance obligations. Substantially all of the Group’s contracts with customers are within one year in duration. As such, the Group has elected to apply the practical expedient which allows an entity to exclude disclosures about its remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) 2.5 Share-based compensation The Group grants share options and restricted share units (“RSUs”) to its management, other key employees and eligible nonemployees. Such compensation is accounted for in accordance with ASC 718, Compensation-Stock Compensation Improvements to Nonemployee Share-Based Payment Accounting Share-based awards with service conditions only are measured at the grant-date fair value of the awards and recognized as expenses using the straight-line method over the requisite service period. Share-based awards that are subject to both service conditions and the occurrence of an IPO or change of control as a performance condition, are measured at the grant-date fair value, and cumulative share-based compensation expenses for the awards that have satisfied the service condition were recorded upon the completion of the Company’s IPO in June 2021. The fair value of share options is estimated using the binomial option-pricing model. The determination of the fair value is affected by the fair value of the ordinary shares as well as assumptions regarding a number of complex and subjective variables, including the expected share price volatility, actual and projected employee and nonemployee share option exercise behavior, risk-free interest rates and expected dividend yield. Binomial option-pricing model incorporates the assumptions about grantees’ future exercise patterns. The fair value of these awards was determined by management with the assistance from an independent valuation firm using management’s estimates and assumptions. The fair value of the RSUs, which were granted subsequent to the completion of the Company’s IPO, is estimated based on the fair value of the underlying ordinary shares of the Company on the grant date. The assumptions used in share-based compensation expense recognition represent management’s best estimates, but these estimates involve inherent uncertainties and application of management judgment. If factors change or different assumptions are used, the share-based compensation expenses could be materially different for any period. Moreover, the estimates of fair value of the awards are not intended to predict actual future events or the value that ultimately will be realized by grantees who receive share-based awards. 2.6 Recent accounting pronouncements Recently adopted accounting pronouncements In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes Recent accounting pronouncements not yet adopted In June 2016, the FASB amended guidance related to the expected credit loss of financial instruments as part of ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
CONCENTRATION AND RISKS
CONCENTRATION AND RISKS | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
CONCENTRATION AND RISKS | ||
CONCENTRATION AND RISKS | 3. CONCENTRATION AND RISKS 3.1 Concentration of credit risk Financial instruments that potentially expose the Group to the concentration of credit risk primarily consist of cash and cash equivalents and short-term investments. The maximum exposure of such assets to credit risk is their carrying amounts as of the balance sheet dates. The Group places its cash and cash equivalents and short-term investments with financial institutions with high-credit rating and quality. The Group hasn’t noted any significant credit risk. 3.2 Concentration of customers Substantially all revenues were derived from customers located in China. No customer accounted for greater than 10% of total revenues of the Group in any of the periods presented. 3.3 Foreign currency exchange rate risk In July 2005, the PRC government changed its decades-old policy of pegging the value of the RMB to the US$, and the RMB appreciated more than 20% against the US$ over the following three years. Between July 2008 and June 2010, this appreciation halted and the exchange rate between the RMB and the US$ remained within a narrow band. Since June 2010, the RMB has fluctuated against the US$, at times significantly and unpredictably. The depreciation of the RMB against the US$ was approximately 1.7% in 2019. The appreciation of the RMB against the US$ was approximately 6.5% and 2.3% in 2020 and 2021, respectively. The depreciation of the RMB against the US$ was approximately 5.3% for the six months ended June 30, 2022. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the US$ in the future. | 3. CONCENTRATION AND RISKS 3.1 Concentration of credit risk Financial instruments that potentially expose the Group to the concentration of credit risk primarily consist of cash and cash equivalents and short-term investments. The maximum exposure of such assets to credit risk is their carrying amounts as of the balance sheet dates. The Group places its cash and cash equivalents and short-term investments with financial institutions with high-credit rating and quality. The Group hasn’t noted any significant credit risk. 3.2 Concentration of customers Substantially all revenues were derived from customers located in China. No customer accounted for greater than 10% of total revenues of the Group in any of the periods presented. 3.3 Foreign currency exchange rate risk In July 2005, the PRC government changed its decades-old policy of pegging the value of the RMB to the US$, and the RMB appreciated more than 20% against the US$ over the following three years. Between July 2008 and June 2010, this appreciation halted and the exchange rate between the RMB and the US$ remained within a narrow band. Since June 2010, the RMB has fluctuated against the US$, at times significantly and unpredictably. The depreciation of the RMB against the US$ was approximately 1.7% in 2019. The appreciation of the RMB against the US$ was approximately 6.5% and 2.3% in 2020 and 2021, respectively. The depreciation of the RMB against the US$ was approximately 11.4% for the nine months ended September 30, 2022. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the US$ in the future. |
SHORT-TERM INVESTMENTS
SHORT-TERM INVESTMENTS | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
SHORT-TERM INVESTMENTS | ||
SHORT-TERM INVESTMENTS | 4. SHORT-TERM INVESTMENTS As of December 31, As of June 30, 2021 2022 RMB RMB Wealth management products 884,996 812,225 The investment income from wealth management products for the six months ended June 30, 2021 and 2022 was RMB8,629 and RMB17,075, respectively. | 4. SHORT-TERM INVESTMENTS As of December 31, As of September 30, 2021 2022 RMB RMB Wealth management products 884,996 2,764,368 The investment income from wealth management products for the nine months ended September 30, 2021 and 2022 was RMB15,791 and RMB31,112, respectively. |
PREPAYMENTS AND OTHER CURRENT A
PREPAYMENTS AND OTHER CURRENT ASSETS | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
PREPAYMENTS AND OTHER CURRENT ASSETS | ||
PREPAYMENTS AND OTHER CURRENT ASSETS | 5. PREPAYMENTS AND OTHER CURRENT ASSETS As of December 31, As of June 30, 2021 2022 RMB RMB Prepaid advertising expenses and service fee 234,490 134,821 Receivables related to the exercise of share-based awards* 289,822 166,202 Receivables from third-party on-line payment platforms 63,866 77,608 Deposits 63,814 64,646 Staff loans and advances 52,695 53,798 Others 19,896 23,514 Total 724,583 520,589 * It mainly represented receivables from a third-party share option brokerage platform for the exercise of share-based awards due to the timing of settlement. | 5. PREPAYMENTS AND OTHER CURRENT ASSETS As of December 31, As of September 30, 2021 2022 RMB RMB Prepaid advertising expenses and service fee 234,490 233,392 Receivables from third-party on-line payment platforms 63,866 97,493 Deposits 63,814 71,678 Staff loans and advances 52,695 49,693 Receivables related to the exercise of share-based awards* 289,822 39,092 Others 19,896 57,826 Total 724,583 549,174 * It mainly represented receivables from a third-party share option brokerage platform for the exercise of share-based awards due to the timing of settlement. |
PROPERTY, EQUIPMENT AND SOFTWAR
PROPERTY, EQUIPMENT AND SOFTWARE, NET | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | ||
PROPERTY, EQUIPMENT AND SOFTWARE, NET | 6. PROPERTY, EQUIPMENT AND SOFTWARE, NET As of December 31, As of June 30, 2021 2022 RMB RMB Electronic equipment 429,683 642,042 Leasehold improvement 65,885 86,129 Furniture and fixtures 12,784 15,912 Motor vehicles 3,904 3,904 Software 3,126 4,055 Total cost 515,382 752,042 Less: accumulated depreciation (146,256) (205,936) Total property, equipment and software, net 369,126 546,106 Depreciation expenses were RMB35,094 and RMB59,703 for the six months ended June 30, 2021 and 2022, respectively. | 6. PROPERTY, EQUIPMENT AND SOFTWARE, NET As of December 31, As of September 30, 2021 2022 RMB RMB Electronic equipment 429,683 675,696 Leasehold improvement 65,885 94,034 Furniture and fixtures 12,784 16,922 Motor vehicles 3,904 3,904 Software 3,126 4,055 Total cost 515,382 794,611 Less: accumulated depreciation (146,256) (243,717) Total property, equipment and software, net 369,126 550,894 Depreciation expenses were RMB55,396 and RMB97,954 for the nine months ended September 30, 2021 and 2022, respectively. |
ACCOUNTS PAYABLE
ACCOUNTS PAYABLE | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
ACCOUNTS PAYABLE | ||
ACCOUNTS PAYABLE | 7. ACCOUNTS PAYABLE As of December 31, As of June 30, 2021 2022 RMB RMB Payables for purchase of property, equipment and software 19,987 84,323 Payables for advertising expenses 30,646 39,870 Others 2,330 11,080 Total 52,963 135,273 | 7. ACCOUNTS PAYABLE As of December 31, As of September 30, 2021 2022 RMB RMB Payables for advertising expenses 30,646 26,777 Payables for purchase of property, equipment and software 19,987 19,450 Others 2,330 5,536 Total 52,963 51,763 |
OTHER PAYABLES AND ACCRUED LIAB
OTHER PAYABLES AND ACCRUED LIABILITIES | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
OTHER PAYABLES AND ACCRUED LIABILITIES | ||
OTHER PAYABLES AND ACCRUED LIABILITIES | 8. OTHER PAYABLES AND ACCRUED LIABILITIES As of December 31, As of June 30, 2021 2022 RMB RMB Salary, welfare and bonus payable 373,286 359,477 Tax payable (1) 218,419 148,783 Virtual accounts used in the Group’s platform (2) 41,070 47,748 Contingent liability (Note 17) — 14,882 Others 12,363 8,091 Total 645,138 578,981 (1) Tax payable mainly included value-added tax, enterprise income tax and individual income tax payable mainly related to the exercise of share-based awards. (2) It represents the advance payments from customers that were refundable and stored in their own virtual accounts in the Group’s platform, which they have rights to exchange for services provided on the online recruitment platform. | 8. OTHER PAYABLES AND ACCRUED LIABILITIES As of December 31, As of September 30, 2021 2022 RMB RMB Salary, welfare and bonus payable 373,286 378,599 Tax payable (1) 218,419 84,864 Virtual accounts used in the Group’s platform (2) 41,070 53,616 Consideration payable for share repurchase — 67,443 Contingent liability (Note 16) — 14,882 Others 12,363 39,543 Total 645,138 638,947 (1) Tax payable as of December 31, 2021 mainly included value-added tax, enterprise income tax and individual income tax payable mainly related to the exercise of share-based awards. (2) It represents the advance payments from customers that were refundable and stored in their own virtual accounts in the Group’s platform, which they have rights to exchange for services provided on the online recruitment platform. |
OPERATING LEASE
OPERATING LEASE | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
OPERATING LEASE | ||
OPERATING LEASE | 9. OPERATING LEASE The Group has operating leases primarily for offices. The components of lease expenses are as follows: For the six months ended June 30, 2021 2022 RMB RMB Operating lease expenses 49,357 76,627 Expenses for short-term leases within 12 months 1,104 922 Total lease expenses 50,461 77,549 Supplemental balance sheet information related to operating leases is as follows: As of December 31, As of June 30, 2021 2022 RMB RMB Right-of-use assets 309,085 303,609 Operating lease liabilities, current 127,531 146,134 Operating lease liabilities, non-current 183,365 166,309 Total operating lease liabilities 310,896 312,443 As of December 31, As of June 30, 2021 2022 RMB RMB Weighted average remaining lease term (in years) 3.26 2.90 Weighted average discount rate 4.82 % 4.82 % Supplemental cash flow information related to operating leases is as follows: For the six months ended June 30, 2021 2022 RMB RMB Cash paid for amounts included in the measurement of operating lease liabilities 43,391 68,850 Right-of-use assets obtained in exchange for operating lease liabilities 87,503 63,934 Maturities of operating lease liabilities are as follows: As of June 30, 2022 RMB Succeeding period in 2022 80,485 2023 124,876 2024 64,381 2025 38,268 2026 25,451 2027 1,834 Thereafter — Total undiscounted lease payments 335,295 Less: imputed interest (22,852) Total operating lease liabilities 312,443 | 9. OPERATING LEASE The Group has operating leases primarily for offices. The components of lease expenses are as follows: For the nine months ended September 30, 2021 2022 RMB RMB Operating lease expenses 83,318 118,027 Expenses for short-term leases within 12 months 1,776 1,408 Total lease expenses 85,094 119,435 Supplemental balance sheet information related to operating leases is as follows: As of December 31, As of September 30, 2021 2022 RMB RMB Right-of-use assets 309,085 310,445 Operating lease liabilities, current 127,531 150,513 Operating lease liabilities, non-current 183,365 163,800 Total operating lease liabilities 310,896 314,313 As of December 31, As of September 30, 2021 2022 RMB RMB Weighted average remaining lease term (in years) 3.26 2.75 Weighted average discount rate 4.82 % 4.81 % 9. OPERATING LEASE (CONTINUED) Supplemental cash flow information related to operating leases is as follows: For the nine months ended September 30, 2021 2022 RMB RMB Cash paid for amounts included in the measurement of operating lease liabilities 70,602 113,978 Right-of-use assets obtained in exchange for operating lease liabilities 193,660 107,771 Maturities of operating lease liabilities are as follows: As of September 30, 2022 RMB Succeeding period in 2022 38,417 2023 146,455 2024 78,142 2025 46,149 2026 25,451 2027 1,834 Thereafter — Total undiscounted lease payments 336,448 Less: imputed interest (22,135) Total operating lease liabilities 314,313 |
OTHER OPERATING INCOME, NET
OTHER OPERATING INCOME, NET | 6 Months Ended |
Jun. 30, 2022 | |
OTHER OPERATING INCOME, NET | |
OTHER OPERATING INCOME, NET | 10. OTHER OPERATING INCOME, NET For the six months ended June 30, 2021 2022 RMB RMB VAT-in super deduction* 5,552 5,082 Others 2,105 5,661 Total 7,657 10,743 * In accordance with the Announcement on Relevant Policies for Deepening the Value-added Tax Reform and relevant government policies announced by the Ministry of Finance, the State Taxation Administration and the General Administration of Customs of China, Huapin, as a consumer service company, is allowed to enjoy additional 10% VAT-in deduction for any services or goods it purchased (“VAT-in super deduction”) from April 1, 2019 to December 31, 2021, which was then extended to December 31, 2022. The VAT-in super deduction obtained is considered as operating given that all VAT-in are derived from the purchases for daily operations, and therefore is presented in other operating income in the Consolidation Statements of Comprehensive (Loss)/Income. |
RELATED PARTIES BALANCES AND TR
RELATED PARTIES BALANCES AND TRANSACTIONS | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
RELATED PARTIES BALANCES AND TRANSACTIONS | ||
RELATED PARTIES BALANCES AND TRANSACTIONS | 11. RELATED PARTIES BALANCES AND TRANSACTIONS The table below sets forth the major related parties with which the Group had transactions during the periods presented and their relationships with the Group: Name of related parties Relationship with the Group Image Frame Investment (HK) Limited (under the control of Tencent Holdings Limited) Principal shareholder of the Group Details of major amounts due from related parties for the periods presented are as follows: As of December 31, As of June 30, 2021 2022 RMB RMB Receivables from Tencent Group’s on-line payment platform* 4,284 6,215 Prepaid cloud service fee to Tencent Group* 2,331 3,368 Total 6,615 9,583 Details of major transactions with related parties for the periods presented are as follows: For the six months ended June 30, 2021 2022 RMB RMB Cloud services from Tencent Group* 7,715 11,402 On-line payment platform clearing services from Tencent Group* 2,887 2,355 Total 10,602 13,757 * Tencent Group represents companies under the control of Tencent Holdings Limited, including Image Frame Investment (HK) Limited. The Group purchases cloud services and on-line payment platform clearing services from Tencent Group, which are trade in nature. | 10. RELATED PARTY BALANCES AND TRANSACTIONS The table below sets forth the major related parties with which the Group had transactions during the periods presented and their relationships with the Group: Name of related parties Relationship with the Group Image Frame Investment (HK) Limited (under the control of Tencent Holdings Limited) Principal shareholder of the Group Details of major amounts due from related parties for the periods presented are as follows: As of December 31, As of September 30, 2021 2022 RMB RMB Receivables from Tencent Group’s on-line payment platform* 4,284 6,698 Prepaid cloud service fee to Tencent Group* 2,331 3,352 Total 6,615 10,050 Details of major transactions with related parties for the periods presented are as follows: For the nine months ended September 30, 2021 2022 RMB RMB Cloud services from Tencent Group* 12,445 18,877 On-line payment platform clearing services from Tencent Group* 4,344 3,652 Total 16,789 22,529 * Tencent Group represents companies under the control of Tencent Holdings Limited, including Image Frame Investment (HK) Limited. The Group purchases cloud services and on-line payment platform clearing services from Tencent Group, which are trade in nature. |
TAXATION
TAXATION | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
TAXATION | ||
TAXATION | 12. TAXATION (a) Value added tax The Group is subject to statutory VAT rate of 6% for revenues from online recruitment service in the PRC. (b) Income tax Cayman Islands The Company was incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, no Cayman Islands withholding tax will be imposed upon payments of dividends to shareholders. Hong Kong Under the current Hong Kong Inland Revenue Ordinance, the Group’s subsidiary in Hong Kong is subject to 16.5% Hong Kong profit tax on its taxable income generated from operations in Hong Kong. Additionally, payments of dividends by the subsidiary incorporated in Hong Kong to the Company are not subject to any Hong Kong withholding tax. China Under the PRC Enterprise Income Tax Law (the “EIT Law”), which is effective from January 1, 2008, domestic enterprises and foreign investment enterprises are subject to a uniform enterprise income tax rate of 25%. In accordance with the implementation rules of EIT Law, a qualified “High and New Technology Enterprise” (“HNTE”) is eligible for a preferential tax rate of 15%. The HNTE certificate is effective for a period of three years. An entity could re-apply for the HNTE certificate when the prior certificate expires. Huapin is qualified as a HNTE and enjoys a preferential income tax rate of 15% for the years presented, which will expire in 2022 and need to be re-applied. According to relevant laws and regulations promulgated by the State Administration of Tax of the PRC effective from 2018 onwards, enterprises engaging in research and development activities are entitled to claim 175% of their qualified research and development expenses incurred as tax deductible expenses when determining their assessable profits for the year. The additional deduction of 75% of qualified research and development expenses is subject to the approval from the relevant tax authorities. Components of (loss)/income before income tax are as follow: For the six months ended June 30, 2021 2022 RMB RMB (Loss)/income from PRC entities (40,300) 177,153 Loss from overseas entities (1,550,012) (82,709) Total (loss)/income before income tax (1,590,312) 94,444 Components of income tax expense are as follows: For the six months ended June 30, 2021 2022 RMB RMB Current income tax expense — 14,123 12. TAXATION (CONTINUED) (b) Income tax (continued) The following table sets forth a reconciliation between the PRC statutory income tax rate of 25% and the Group’ effective tax rate: For the six months ended June 30, 2021 2022 RMB RMB PRC statutory income tax rate 25.00 % 25.00 % Tax rate difference from statutory rate in other jurisdictions (1) (23.84) % 5.83 % Permanent difference (2) 0.46 % (6.53) % Effect of preferential tax rates (0.41) % (17.76) % Changes in valuation allowance (7.72) % 10.57 % Others 6.51 % (2.16) % Effective tax rate — 14.95 % (1) The tax rate difference for the six months ended June 30, 2021 was mainly attributed to net loss of the Company, which is located in the Cayman Islands and exempted from income tax. (2) The permanent difference was primarily related to additional tax deductions for qualified research and development expenses offset by non-deductible share-based compensation expenses. (c) Deferred tax assets The following table sets forth the significant components of the deferred tax assets: As of December 31, As of June 30, 2021 2022 RMB RMB Net operating loss carry-forwards 70,985 82,028 Deductible advertising expenses 262,801 262,797 Others 1,062 — Total deferred tax assets 334,848 344,825 Less: valuation allowance (334,848) (344,825) Total deferred tax assets, net of valuation allowance — — As of June 30, 2022, the Group had accumulated tax losses of approximately RMB331.9 million, mainly derived from certain entities incorporated in the PRC and overseas. The tax losses in PRC can be carried forward for five years to offset future taxable profit, and the period is extended to 10 years for entities qualified as HNTE in 2019 and thereafter. The tax losses in Hong Kong can be carried forward with no expiration date. Under the U.S. tax law, majority of the Group’s federal tax losses arose in tax years beginning after December 31, 2017 and can be carried forward indefinitely. California state tax losses can be carried forward for up to 20 years. The Group considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will be more likely than not realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses and forecasts of future profitability. These assumptions require significant judgment and the forecasts of future taxable income are consistent with the plans and estimates the Group is using to manage the underlying business. Valuation allowance is established for deferred tax assets based on a more-likely-than-not threshold. The Group’s ability to realize deferred tax assets depends on its ability to generate sufficient taxable income within the carry-forward periods provided for in the tax law. The Group believes that it is more likely than not that these deferred tax assets will not be utilized in the future. Therefore, the Group has provided full valuation allowance for the deferred tax assets as of December 31, 2021 and June 30, 2022. 12. TAXATION (CONTINUED) (c) Deferred tax assets (continued) Movements of valuation allowance are as follows: As of December 31, As of June 30, 2021 2022 RMB RMB Balance at beginning of the year/period 250,032 334,848 Additions 84,816 9,977 Balance at end of the year/period 334,848 344,825 | 11. TAXATION (a) Value added tax The Group is subject to statutory VAT rate of 6% for revenues from online recruitment service in the PRC. (b) Income tax Cayman Islands The Company was incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, no Cayman Islands withholding tax will be imposed upon payments of dividends to shareholders. Hong Kong Under the current Hong Kong Inland Revenue Ordinance, the Group’s subsidiary in Hong Kong is subject to 16.5% Hong Kong profit tax on its taxable income generated from operations in Hong Kong. Additionally, payments of dividends by the subsidiary incorporated in Hong Kong to the Company are not subject to any Hong Kong withholding tax. China Under the PRC Enterprise Income Tax Law (the “EIT Law”), which is effective from January 1, 2008, domestic enterprises and foreign investment enterprises are subject to a uniform enterprise income tax rate of 25%. In accordance with the implementation rules of EIT Law, a qualified “High and New Technology Enterprise” (“HNTE”) is eligible for a preferential tax rate of 15%. The HNTE certificate is effective for a period of three years. An entity could re-apply for the HNTE certificate when the prior certificate expires. Huapin is qualified as a HNTE and enjoys a preferential income tax rate of 15% for the periods presented, which will expire in 2022 and need to be re-applied. According to relevant laws and regulations promulgated by the State Administration of Tax of the PRC effective from 2018 onwards, enterprises engaging in research and development activities are entitled to claim 175% of their qualified research and development expenses incurred as tax deductible expenses when determining their assessable profits for the year. The additional deduction of 75% of qualified research and development expenses is subject to the approval from the relevant tax authorities. |
ORDINARY SHARES
ORDINARY SHARES | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
ORDINARY SHARES | ||
ORDINARY SHARES | 13. ORDINARY SHARES As of January 1, 2019, the Company had 1,500,000,000 shares authorized and 110,000,000 shares issued at a par value of $0.0001 per share. 9,920,000 ordinary shares were issued on May 20, 2014 to TECHWOLF LIMITED, controlled by Mr. Peng Zhao, Founder, Chairman and CEO of the Group, and these ordinary shares were reserved and held by Mr. Peng Zhao on behalf of the Company solely for the purpose of implementing the Company’s share award plan. The Company accounted for these shares as issued but not outstanding and presented as treasury shares in the Consolidated Balance Sheets and Consolidated Statement of Changes in Shareholders’ Equity throughout all the periods until July 4, 2019, when the Company cancelled these ordinary shares. The original commercial intent behind the arrangement regarding such 9,920,000 ordinary shares was later reflected in the Company’s share award plan, and the whose pool of available shares for future grants encompassed such 9,920,000 shares. As of December 31, 2019, 1,500,000,000 shares had been authorized and 100,080,000 ordinary shares were issued and outstanding On February 10, 2020, all issued and outstanding ordinary shares of the Company were re-designated as Class B ordinary shares, and each Class B ordinary share was entitled to 10 votes. Mr. Peng Zhao, Founder, Chairman and CEO of the Group was deemed to beneficially own all of the Company’s issued Class B ordinary shares. On August 21, 2020, the Company newly issued a total of 4,122,853 Class A ordinary shares to Coatue PE Asia 26 LLC with a total consideration of US$11,431. Meanwhile, TECHWOLF LIMITED sold a total of 3,752,934 Class B ordinary shares to Image Frame Investment (HK) Limited, and immediately after the completion of the transfer, the Company re-designated these shares into Class A ordinary shares. On September 19, 2020, the Company issued 3,657,853 Class A ordinary shares to TWL Fellows Holding Limited for nominal consideration. TWL Fellows Holding Limited, a consolidated VIE of the Company incorporated on January 14, 2020 in the British Virgin Islands, was established as an employee shareholding vehicle (a “Trust”) for the purpose of implementing the Company’s share award plan. Therefore, the Company’s ordinary shares issued to TWL Fellows Holding Limited were presented as treasury shares in the consolidated financial statements. Other than holding the Company’s ordinary shares, the Trust does not have any assets. On November 27, 2020, the Company issued and granted 24,780,971 Class B ordinary shares to TECHWOLF LIMITED (Note 15). On the same day, the voting rights of a total of 121,108,037 Class B ordinary shares was modified and each Class B ordinary share was entitled to 15 votes. As of December 31, 2020, 1,500,000,000 shares had been authorized; 11,533,640 Class A ordinary shares were issued, out of which 7,875,787 were outstanding, and 121,108,037 Class B ordinary shares were issued and outstanding On March 12, 2021, TECHWOLF LIMITED transferred a total of 1,965,361 and 1,876,467 Class B ordinary shares to two new external investors named Index Capital International Limited and Duckling Fund L.P., respectively, and those shares were automatically converted into Class A ordinary shares upon the closing of share transfer between the shareholders. 13. ORDINARY SHARES (CONTINUED) In March 2021, the Company repurchased a total of 1,181,339 Class B ordinary shares from TECHWOLF LIMITED at a price of US$5.33 per share. Immediately after the repurchase, those Class B ordinary shares were cancelled. The difference between the purchase price and the fair value of Class B ordinary shares was recorded as additional paid-in capital in the consolidated financial statements. In June 2021, the Company completed its IPO and 110,400,000 Class A ordinary shares were issued with total net proceeds of RMB6,406,872. Upon the completion of the IPO, all of the preferred shares were automatically converted to 551,352,134 Class A ordinary shares. In June 2021, the Company issued and granted 24,745,531 Class B ordinary shares to TECHWOLF LIMITED (Note 15). As of December 31, 2021, 1,500,000,000 shares had been authorized; 748,953,103 Class A ordinary shares were issued, out of which 727,855,233 Class A ordinary shares were outstanding, and 140,830,401 Class B ordinary shares were issued and outstanding In March 2022, the Company’s Board of Directors authorized a share repurchase program under which the Company may repurchase up to US$150 million of its American depositary shares (“ADSs”) over the following 12 months. Under this share repurchase program, during the six months ended June 30, 2022, the Company repurchased a total of 2,073,533 ADSs (representing a total of 4,147,066 Class A ordinary shares) for approximately US$40.0 million (RMB268.0 million) on the open market. The repurchased ordinary shares were accounted for under the cost method and included as treasury shares as a component of the shareholders’ equity. As of June 30, 2022, 1,500,000,000 shares had been authorized; 749,323,103 Class A ordinary shares were issued, out of which 730,777,761 Class A ordinary shares were outstanding, and 140,830,401 Class B ordinary shares were issued and outstanding. | 12. ORDINARY SHARES In March 2021, the Company repurchased a total of 1,181,339 Class B ordinary shares from TECHWOLF LIMITED at a price of US$5.33 per share. Immediately after the repurchase, those Class B ordinary shares were cancelled. The difference between the purchase price and the fair value of Class B ordinary shares was recorded as additional paid-in capital in the consolidated financial statements. In June 2021, the Company completed its IPO and 110,400,000 Class A ordinary shares were issued with total net proceeds of RMB6,406,872. Upon the completion of the IPO, all of the preferred shares were automatically converted to 551,352,134 Class A ordinary shares. In June 2021, the Company issued and granted 24,745,531 Class B ordinary shares to TECHWOLF LIMITED (Note 14). In March 2022, the Company’s Board of Directors authorized a share repurchase program under which the Company may repurchase up to US$150 million of its American depositary shares (“ADSs”) over the following 12 months. Under this share repurchase program, during the nine months ended September 30, 2022, the Company repurchased a total of 2,685,700 ADSs (representing a total of 5,371,400 Class A ordinary shares) for approximately US$51.2 million (RMB346.5 million) on the open market. The repurchased ordinary shares were accounted for under the cost method and included as treasury shares as a component of the shareholders’ equity. As of September 30, 2022, 1,500,000,000 shares had been authorized; 749,323,103 Class A ordinary shares were issued, out of which 731,868,565 Class A ordinary shares were outstanding, and 140,830,401 Class B ordinary shares were issued and outstanding. |
CONVERTIBLE REDEEMABLE PREFERRE
CONVERTIBLE REDEEMABLE PREFERRED SHARES | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
CONVERTIBLE REDEEMABLE PREFERRED SHARES | ||
CONVERTIBLE REDEEMABLE PREFERRED SHARES | 14. CONVERTIBLE REDEEMABLE PREFERRED SHARES On May 20, 2014, the Company entered into a shares purchase agreement with certain investors, pursuant to which 60,000,000 Series A Convertible Redeemable Preferred Shares (the “Series A Preferred Shares”) were issued on May 20, 2014 for an aggregated consideration of US$3,000. The Company incurred issuance costs of US$20 in connection with this offering. On December 16, 2014, the Company entered into a shares purchase agreement with certain investors, pursuant to which 26,666,667 Series B Convertible Redeemable Preferred Shares (the “Series B Preferred Shares”) were issued on December 16, 2014 for an aggregated consideration of US$4,000. The Company incurred issuance costs of US$41 in connection with the offering of Series B Preferred Shares. Besides, the Company also issued 13,333,333 Series B Preferred Shares to TECHWOLF LIMITED, controlled by Mr. Peng Zhao, the Company’s Founder, Chairman and CEO, with no consideration received. Then the Company repurchased all of the Series B Preferred Shares issued to TECHWOLF LIMITED at par value and sold them to one of previous Series B investor on April 8, 2015 at the original issue price of the Series B Preferred Shares. On April 8, 2015, the Company entered into a shares purchase agreement with certain investors, pursuant to which 48,000,000 Series C Convertible Redeemable Preferred Shares (the “Series C Preferred Shares”) were issued on April 8, 2015 for an aggregated consideration of US$10,000. The Company incurred issuance costs of US$40 in connection with this offering. On July 7, 2016, the Company entered into a shares purchase agreement with certain investors, pursuant to which 45,319,316 Series C-1 Convertible Redeemable Preferred Shares (the “Series C Preferred Shares”, “Series C-1 Preferred Shares” or “Series C Preferred Shares Tranche I”) were issued on July 7, 2016 for an aggregated consideration of US$12,508. The Company incurred issuance costs of US$86 in connection with this offering of Series C-1 Preferred Shares. 14. CONVERTIBLE REDEEMABLE PREFERRED SHARES (CONTINUED) On August 15, 2016, the Company entered into a shares purchase agreement with certain investors, pursuant to which 42,251,744 Series C-2 Convertible Redeemable Preferred Shares (the “Series C Preferred Shares”, “Series C-2 Preferred Shares” or “Series C Preferred Shares Tranche II”) were issued on August 15, 2016 for an aggregated consideration of US$18,000. The Company incurred issuance costs of US$100 in connection with this offering. On February 10, 2017, the Company entered into a shares purchase agreement with certain investors, pursuant to which 11,497,073 Series C-3 Convertible Redeemable Preferred Shares (the “Series C Preferred Shares”, “Series C-3 Preferred Shares” or “Series C Preferred Shares Tranche III”) were issued on February 10, 2017 for an aggregated consideration of US$6,001. The Company incurred issuance costs of US$32 in connection with this offering. On November 2, 2017, the Company entered into a shares purchase agreement with certain investors, pursuant to which 60,856,049 Series D Convertible Redeemable Preferred Shares (the “Series D Preferred Shares”) were issued on November 2, 2017 for an aggregated consideration of US$43,394. The Company incurred issuance costs of US$1,132 in connection with this offering. On December 18, 2018, the Company entered into a shares purchase agreement with certain investors, pursuant to which 83,474,263 Series E Convertible Redeemable Preferred Shares (the “Series E Preferred Shares”) were issued on December 18, 2018 for an aggregated consideration of US$130,000. The Company incurred issuance costs of US$3,376 in connection with this offering. On March 8, 2019, the Company entered into a shares purchase agreement with certain investors, pursuant to which 32,373,031 Series E+ Convertible Redeemable Preferred Shares (the “Series E Preferred Shares”, “Series E-1 Preferred Shares” or “Series E Preferred Shares Tranche I”) were issued on March 8, 2019 for an aggregated consideration of US$55,000. The Company incurred issuance costs of US$1,982 in connection with this offering. On July 4, 2019, the Company entered into a shares purchase agreement with certain investors, pursuant to which 28,226,073 Series E-2 Convertible Redeemable Preferred Shares (the “Series E Preferred Shares”, “Series E-2 Preferred Shares” or “Series E Preferred Shares Tranche II”) were issued on July 4, 2019 for an aggregated consideration of US$50,000. The Company incurred issuance costs of US$1,917 in connection with this offering. On February 10, 2020, the Company entered into a shares purchase agreement with certain investors, pursuant to which 48,689,976 Series F Convertible Redeemable Preferred Shares (the “Series F Preferred Shares”) were issued on February 10, 2020 for an aggregated consideration of US$150,000. The Company incurred issuance costs of US$1 in connection with this offering. On November 27, 2020, the Company entered into a shares purchase agreement with certain investors, pursuant to which 50,664,609 Series F+ Convertible Redeemable Preferred Shares (the “Series F Preferred Shares” or “Series F-plus Preferred Shares”) were issued on November 27, 2020 for an aggregated consideration of US$270,000. The Company incurred issuance costs of US$3,080 in connection with this offering. The Series A, B, C, D, E and F Preferred Shares are collectively referred to as the Preferred Shares. The holders of Preferred Shares are collectively referred to as the Preferred Shareholders. The key terms of the Preferred Shares issued by the Company are as follows: 14. CONVERTIBLE REDEEMABLE PREFERRED SHARES (CONTINUED) Conversion rights Optional conversion Each Series A, B, C, D, E and F Preferred Share shall be convertible, at the option of the holder thereof, at any time and without the payment of additional consideration by the holder thereof, into such number of Class A ordinary shares as determined by the quotient of the applicable issue price divided by the then effective applicable conversion price with respect to such particular series of Preferred Shares, which shall initially be the applicable issue price for the Series A, B, C, D, E and F Preferred Shares, as the case may be, resulting in an initial conversion ratio for the Preferred Shares of 1:1, and shall be subject to adjustment and readjustment from time to time, including but not limited to additional equity securities issuances, share dividends, distributions, subdivisions, redemptions, combinations, or reorganizations, mergers, consolidations, reclassifications, exchanges or substitutions. Automatic conversion Each Preferred Share is convertible, at the option of the holder, at any time after the date of issuance of such Preferred Shares according to a conversion ratio, subject to adjustments for dilution, including but not limited to stock splits, stock dividends and capitalization and certain other events. Each Preferred Share is convertible into a number of ordinary shares determined by dividing the applicable original issue price by the conversion price (initially being 1 to 1 conversion ratio). The conversion price of each Preferred Share is the same as its original issue price and no adjustments to conversion price have occurred so far. Each Series A, B, C, D, E and F Preferred Share shall automatically be converted into Class A ordinary shares, at the then applicable preferred share conversion price upon (i) closing of a Qualified Initial Public Offering (“Qualified IPO”), or (ii) the written approval of the holders of a majority of each series of Preferred Shares (calculated and voting separately in their respective single class on an as-converted basis). Prior to the Series D Preferred Shares issuance on November 2, 2017, a “Qualified IPO” was defined as an initial public offering with gross proceeds no less than US$60 million and capitalization of the Company of no less than US$350 million prior to such initial public offering. Upon the issuance of Series D Preferred Shares, the gross proceeds and market capitalization criteria for a “Qualified IPO” were increased to US$90 million and US$900 million, respectively. Upon the issuance of Series E Preferred Shares, the gross proceeds and market capitalization criteria for a “Qualified IPO” were increased to US$100 million and US$2,000 million, respectively. Upon the issuance of Series F Preferred Shares, the gross proceeds and market capitalization criteria for a “Qualified IPO” were increased to US$100 million and US$3,300 million, respectively. Upon the issuance of Series F-plus Preferred Shares, the gross proceeds and market capitalization criteria for a “Qualified IPO” were increased to US$300 million and US$5,000 million, respectively. Voting rights Each holder of Series A, B, C, D, E and F Preferred Shares is entitled to cast the number of votes equal to the number of Class A ordinary shares such Preferred Shares would be entitled to convert into at the then effective conversion price. There was a modification to the voting rights of the shares controlled by Mr. Peng Zhao when the Series F and Series F-plus Preferred Shares were issued as follows: ● the voting rights of ordinary shares controlled by Mr. Peng Zhao was modified to carry 10 votes in connection with the Series F Preferred Shares financing; and ● the voting rights of shares controlled by Mr. Peng Zhao was modified to carry 15 votes in connection with the Series F-plus Preferred Shares financing. 14. CONVERTIBLE REDEEMABLE PREFERRED SHARES (CONTINUED) Dividend rights Each Preferred Share shall have the right to receive dividends, on an as-converted basis, when, as and if declared by the Board. No dividend shall be paid on the ordinary shares at any time unless and until all dividends on the Preferred Shares have been paid in full. No dividends on preferred and ordinary shares have been declared since the issuance date. Liquidation preference In the event of any liquidation (unless waived by the majority of Preferred Shareholders) including deemed liquidation, dissolution or winding up of the Company, Preferred Shareholders shall be entitled to receive a per share amount equal to 100% of the original preferred share issue price of the respective series of Preferred Shares, as adjusted for share dividends, share splits, combinations, recapitalizations or similar events, plus all accrued and declared but unpaid dividends thereon, in the sequence of Series F Preferred Shares, Series E Preferred Shares, Series D Preferred Shares, Series C Preferred Shares, Series B Preferred Shares, and Series A Preferred Shares. After such liquidation amounts have been paid in full, any remaining funds or assets of the Company legally available for distribution to shareholders shall be distributed on a pro rata, pari passu basis among the holders of the Preferred Shares, on an as-converted basis, together with the holders of the ordinary shares. Redemption rights At any time commencing on a date specified in the shareholders’ agreements (the “Redemption Start Date”), holders of majority (more than 50%) of the then outstanding Series A, B, C, D, E and F Preferred Shares may request a redemption of the Preferred Shares of such series. On receipt of a redemption request from the holders, the Company shall redeem all or part, as requested, of the outstanding Preferred Shares of such series. The Redemption Start Date of Preferred Shares have been amended for a number of times historically. If any holder of any series of Preferred Shares exercises its redemption right, any holder of other series of Preferred Shares shall have the right to exercise the redemption of its series at the same time. The redemption prices have been modified historically. Prior to the issuance of Series F Preferred Shares, the price at which each Preferred Share shall be redeemed shall equal to the original Preferred Shares issue price for such series plus 10% compound interest per annum (calculated from the issuance date of the respective series of Preferred Shares), and declared but unpaid dividends. Upon the issuance of Series F Preferred Shares, the price at which each Preferred Share shall be redeemed shall equal to the original Preferred Shares issue price for such series plus 8% simple interest per annum (calculated from the issuance dates of the respective series of Preferred Shares), and declared but unpaid dividends. If on the redemption date triggered by the occurrence of any redemption event, the Company’s assets or funds which are legally available are insufficient to pay in full the aggregate redemption price for Preferred Shares requested to be redeemed, upon the request of a redeeming shareholder, the Company shall execute and deliver a two-year note, bearing an interest of ten percent (10%) per annum and with repayment of the principal and interest to be made on a monthly basis over a period of twenty-four (24) months. Preferred Shares subject to redemption with respect to which the Company has become obligated to pay the redemption price but which it has not paid in full shall continue to have all the rights and privileges which such Preferred Shareholders had prior to such date, until the redemption price has been paid in full with respect to such Preferred Shares. Conversion upon IPO In June 2021, upon the completion of IPO, all of the Preferred Shares were automatically converted to 551,352,134 Class A ordinary shares on a one-for-one basis. 14. CONVERTIBLE REDEEMABLE PREFERRED SHARES (CONTINUED) Accounting for preferred shares The Company classified the Preferred Shares in the mezzanine equity section of the Consolidated Balance Sheets because they were redeemable at the holders’ option any time after a certain date and were contingently redeemable upon the occurrence of certain liquidation event outside of the Company’s control. The Preferred Shares are recorded initially at fair value, net of issuance costs. The Company records accretion on the Preferred Shares, where applicable, to the redemption value from the issuance dates to the earliest redemption dates. The accretion, calculated using the effective interest method, is recorded against retained earnings, or in the absence of retained earnings, by charging against additional paid-in capital. Once additional paid-in capital has been exhausted, additional charges are recorded by increasing the accumulated deficit. The accretion of Preferred Shares was RMB164,065 (US$25,284) for the six months ended June 30, 2021. The Company has determined that, under the whole instrument approach, host contract of the Preferred Shares is more akin to a debt host, given the Preferred Shares holders have potential creditors’ right in the event of insufficient fund upon redemption, along with other debt-like features in the terms of the Preferred Shares, including the redemption rights. However, the Company determined that the embedded feature, including conversion feature, do not require bifurcation as they either are clearly and closely related to the host or do not meet definition of a derivative. The Company has determined that there was no beneficial conversion feature attributable to all Preferred Shares because the initial effective conversion prices of these Preferred Shares were higher than the fair value of the Company’s ordinary shares determined by the Company with the assistance from an independent third-party appraiser. Modification of preferred shares The Company assesses whether an amendment to the terms of its convertible redeemable preferred shares is an extinguishment or a modification based on a qualitative evaluation of the amendment. If the amendment adds, removes, significantly changes to a substantive contractual term or to the nature of the overall instrument, the amendment results in an extinguishment of the preferred shares. The Company also assess if the change in terms results in value transfer between Preferred Shareholders or between Preferred Shareholders and ordinary shareholders. When convertible redeemable preferred shares are extinguished, the difference between the fair value of the consideration transferred to the convertible redeemable Preferred Shareholders and the carrying amount of such preferred shares (net of issuance costs) is treated as a deemed dividend to the Preferred Shareholders. When convertible redeemable preferred shares are modified and such modification results in value transfer between Preferred Shareholders and ordinary shareholders, the change in fair value resulted from the amendment is treated as a deemed dividend to or from the Preferred Shareholders. Preferred shares modification were mainly included below: ● Starting from the issuance of Series C Preferred Shares, optional redemption date of each pre-existing Preferred Shares was modified and extended to the fifth anniversary of each newly issued series of Preferred Shares applicable closing date; and ● On February 10, 2020, the Redemption Start Date of Series A, B, C, D and E Preferred Shares was extended from July 5, 2024 to February 10, 2025 , which is to be in line with the optional redemption date of Series F Preferred Shares. In the meanwhile, redemption price interest rate was lowered from 10% compound interest per annum to 8% simple interest per annum commencing from Series F Preferred Shares original issuance date and ending on the date of redemption. From both quantitative and qualitative perspectives, the Company assessed the impact of these modifications and concluded that they represented a modification rather than extinguishment of pre-existing preferred shares, and the impact of the modification was immaterial. 14. CONVERTIBLE REDEEMABLE PREFERRED SHARES (CONTINUED) The Company’s convertible redeemable preferred shares activities for the six months ended June 30, 2021 are summarized below: Series A Series B Series C Series D Series E Series F Preferred Shares Preferred Shares Preferred Shares Preferred Shares Preferred Shares Preferred Shares Total Number Number Number Number Number Number Number of shares Amount of shares Amount of shares Amount of shares Amount of shares Amount of shares Amount of shares Amount RMB RMB RMB RMB RMB RMB RMB Balance as of January 1, 2021 60,000,000 36,177 40,000,000 67,976 147,068,133 478,565 60,856,049 380,782 144,073,367 1,845,033 99,354,585 2,882,063 551,352,134 5,690,596 Accretion on convertible redeemable preferred shares to redemption value — 1,057 — 2,006 — 13,580 — 10,823 — 51,072 — 85,527 — 164,065 Conversion of Preferred Shares to ordinary shares (60,000,000) (37,234) (40,000,000) (69,982) (147,068,133) (492,145) (60,856,049) (391,605) (144,073,367) (1,896,105) (99,354,585) (2,967,590) (551,352,134) (5,854,661) Balance as of June 30, 2021 — — — — — — — — — — — — — — | 13. CONVERTIBLE REDEEMABLE PREFERRED SHARES On May 20, 2014, the Company entered into a shares purchase agreement with certain investors, pursuant to which 60,000,000 Series A Convertible Redeemable Preferred Shares (the “Series A Preferred Shares”) were issued on May 20, 2014 for an aggregated consideration of US$3,000. The Company incurred issuance costs of US$20 in connection with this offering. On December 16, 2014, the Company entered into a shares purchase agreement with certain investors, pursuant to which 26,666,667 Series B Convertible Redeemable Preferred Shares (the “Series B Preferred Shares”) were issued on December 16, 2014 for an aggregated consideration of US$4,000. The Company incurred issuance costs of US$41 in connection with the offering of Series B Preferred Shares. Besides, the Company also issued 13,333,333 Series B Preferred Shares to TECHWOLF LIMITED, controlled by Mr. Peng Zhao, the Company’s Founder, Chairman and CEO, with no consideration received. Then the Company repurchased all of the Series B Preferred Shares issued to TECHWOLF LIMITED at par value and sold them to one of previous Series B investor on April 8, 2015 at the original issue price of the Series B Preferred Shares. On April 8, 2015, the Company entered into a shares purchase agreement with certain investors, pursuant to which 48,000,000 Series C Convertible Redeemable Preferred Shares (the “Series C Preferred Shares”) were issued on April 8, 2015 for an aggregated consideration of US$10,000. The Company incurred issuance costs of US$40 in connection with this offering. On July 7, 2016, the Company entered into a shares purchase agreement with certain investors, pursuant to which 45,319,316 Series C-1 Convertible Redeemable Preferred Shares (the “Series C Preferred Shares”, “Series C-1 Preferred Shares” or “Series C Preferred Shares Tranche I”) were issued on July 7, 2016 for an aggregated consideration of US$12,508. The Company incurred issuance costs of US$86 in connection with this offering of Series C-1 Preferred Shares. On August 15, 2016, the Company entered into a shares purchase agreement with certain investors, pursuant to which 42,251,744 Series C-2 Convertible Redeemable Preferred Shares (the “Series C Preferred Shares”, “Series C-2 Preferred Shares” or “Series C Preferred Shares Tranche II”) were issued on August 15, 2016 for an aggregated consideration of US$18,000. The Company incurred issuance costs of US$100 in connection with this offering. 13. CONVERTIBLE REDEEMABLE PREFERRED SHARES (CONTINUED) On February 10, 2017, the Company entered into a shares purchase agreement with certain investors, pursuant to which 11,497,073 Series C-3 Convertible Redeemable Preferred Shares (the “Series C Preferred Shares”, “Series C-3 Preferred Shares” or “Series C Preferred Shares Tranche III”) were issued on February 10, 2017 for an aggregated consideration of US$6,001. The Company incurred issuance costs of US$32 in connection with this offering. On November 2, 2017, the Company entered into a shares purchase agreement with certain investors, pursuant to which 60,856,049 Series D Convertible Redeemable Preferred Shares (the “Series D Preferred Shares”) were issued on November 2, 2017 for an aggregated consideration of US$43,394. The Company incurred issuance costs of US$1,132 in connection with this offering. On December 18, 2018, the Company entered into a shares purchase agreement with certain investors, pursuant to which 83,474,263 Series E Convertible Redeemable Preferred Shares (the “Series E Preferred Shares”) were issued on December 18, 2018 for an aggregated consideration of US$130,000. The Company incurred issuance costs of US$3,376 in connection with this offering. On March 8, 2019, the Company entered into a shares purchase agreement with certain investors, pursuant to which 32,373,031 Series E+ Convertible Redeemable Preferred Shares (the “Series E Preferred Shares”, “Series E-1 Preferred Shares” or “Series E Preferred Shares Tranche I”) were issued on March 8, 2019 for an aggregated consideration of US$55,000. The Company incurred issuance costs of US$1,982 in connection with this offering. On July 4, 2019, the Company entered into a shares purchase agreement with certain investors, pursuant to which 28,226,073 Series E-2 Convertible Redeemable Preferred Shares (the “Series E Preferred Shares”, “Series E-2 Preferred Shares” or “Series E Preferred Shares Tranche II”) were issued on July 4, 2019 for an aggregated consideration of US$50,000. The Company incurred issuance costs of US$1,917 in connection with this offering. On February 10, 2020, the Company entered into a shares purchase agreement with certain investors, pursuant to which 48,689,976 Series F Convertible Redeemable Preferred Shares (the “Series F Preferred Shares”) were issued on February 10, 2020 for an aggregated consideration of US$150,000. The Company incurred issuance costs of US$1 in connection with this offering. On November 27, 2020, the Company entered into a shares purchase agreement with certain investors, pursuant to which 50,664,609 Series F+ Convertible Redeemable Preferred Shares (the “Series F Preferred Shares” or “Series F-plus Preferred Shares”) were issued on November 27, 2020 for an aggregated consideration of US$270,000. The Company incurred issuance costs of US$3,080 in connection with this offering. The Series A, B, C, D, E and F Preferred Shares are collectively referred to as the Preferred Shares. The holders of Preferred Shares are collectively referred to as the Preferred Shareholders. The key terms of the Preferred Shares issued by the Company are as follows: Conversion rights Optional conversion Each Series A, B, C, D, E and F Preferred Share shall be convertible, at the option of the holder thereof, at any time and without the payment of additional consideration by the holder thereof, into such number of Class A ordinary shares as determined by the quotient of the applicable issue price divided by the then effective applicable conversion price with respect to such particular series of Preferred Shares, which shall initially be the applicable issue price for the Series A, B, C, D, E and F Preferred Shares, as the case may be, resulting in an initial conversion ratio for the Preferred Shares of 1:1, and shall be subject to adjustment and readjustment from time to time, including but not limited to additional equity securities issuances, share dividends, distributions, subdivisions, redemptions, combinations, or reorganizations, mergers, consolidations, reclassifications, exchanges or substitutions. 13. CONVERTIBLE REDEEMABLE PREFERRED SHARES (CONTINUED) Automatic conversion Each Preferred Share is convertible, at the option of the holder, at any time after the date of issuance of such Preferred Shares according to a conversion ratio, subject to adjustments for dilution, including but not limited to stock splits, stock dividends and capitalization and certain other events. Each Preferred Share is convertible into a number of ordinary shares determined by dividing the applicable original issue price by the conversion price (initially being 1 to 1 conversion ratio). The conversion price of each Preferred Share is the same as its original issue price and no adjustments to conversion price have occurred so far. Each Series A, B, C, D, E and F Preferred Share shall automatically be converted into Class A ordinary shares, at the then applicable preferred share conversion price upon (i) closing of a Qualified Initial Public Offering (“Qualified IPO”), or (ii) the written approval of the holders of a majority of each series of Preferred Shares (calculated and voting separately in their respective single class on an as-converted basis). Prior to the Series D Preferred Shares issuance on November 2, 2017, a “Qualified IPO” was defined as an initial public offering with gross proceeds no less than US$60 million and capitalization of the Company of no less than US$350 million prior to such initial public offering. Upon the issuance of Series D Preferred Shares, the gross proceeds and market capitalization criteria for a “Qualified IPO” were increased to US$90 million and US$900 million, respectively. Upon the issuance of Series E Preferred Shares, the gross proceeds and market capitalization criteria for a “Qualified IPO” were increased to US$100 million and US$2,000 million, respectively. Upon the issuance of Series F Preferred Shares, the gross proceeds and market capitalization criteria for a “Qualified IPO” were increased to US$100 million and US$3,300 million, respectively. Upon the issuance of Series F-plus Preferred Shares, the gross proceeds and market capitalization criteria for a “Qualified IPO” were increased to US$300 million and US$5,000 million, respectively. Voting rights Each holder of Series A, B, C, D, E and F Preferred Shares is entitled to cast the number of votes equal to the number of Class A ordinary shares such Preferred Shares would be entitled to convert into at the then effective conversion price. There was a modification to the voting rights of the shares controlled by Mr. Peng Zhao when the Series F and Series F-plus Preferred Shares were issued as follows: ● the voting rights of ordinary shares controlled by Mr. Peng Zhao was modified to carry 10 votes in connection with the Series F Preferred Shares financing; and ● the voting rights of shares controlled by Mr. Peng Zhao was modified to carry 15 votes in connection with the Series F-plus Preferred Shares financing. Dividend rights Each Preferred Share shall have the right to receive dividends, on an as-converted basis, when, as and if declared by the Board. No dividend shall be paid on the ordinary shares at any time unless and until all dividends on the Preferred Shares have been paid in full. No dividends on preferred and ordinary shares have been declared since the issuance date. 13. CONVERTIBLE REDEEMABLE PREFERRED SHARES (CONTINUED) Liquidation preference In the event of any liquidation (unless waived by the majority of Preferred Shareholders) including deemed liquidation, dissolution or winding up of the Company, Preferred Shareholders shall be entitled to receive a per share amount equal to 100% of the original preferred share issue price of the respective series of Preferred Shares, as adjusted for share dividends, share splits, combinations, recapitalizations or similar events, plus all accrued and declared but unpaid dividends thereon, in the sequence of Series F Preferred Shares, Series E Preferred Shares, Series D Preferred Shares, Series C Preferred Shares, Series B Preferred Shares, and Series A Preferred Shares. After such liquidation amounts have been paid in full, any remaining funds or assets of the Company legally available for distribution to shareholders shall be distributed on a pro rata, pari passu basis among the holders of the Preferred Shares, on an as-converted basis, together with the holders of the ordinary shares. Redemption rights At any time commencing on a date specified in the shareholders’ agreements (the “Redemption Start Date”), holders of majority (more than 50%) of the then outstanding Series A, B, C, D, E and F Preferred Shares may request a redemption of the Preferred Shares of such series. On receipt of a redemption request from the holders, the Company shall redeem all or part, as requested, of the outstanding Preferred Shares of such series. The Redemption Start Date of Preferred Shares have been amended for a number of times historically. If any holder of any series of Preferred Shares exercises its redemption right, any holder of other series of Preferred Shares shall have the right to exercise the redemption of its series at the same time. The redemption prices have been modified historically. Prior to the issuance of Series F Preferred Shares, the price at which each Preferred Share shall be redeemed shall equal to the original Preferred Shares issue price for such series plus 10% compound interest per annum (calculated from the issuance date of the respective series of Preferred Shares), and declared but unpaid dividends. Upon the issuance of Series F Preferred Shares, the price at which each Preferred Share shall be redeemed shall equal to the original Preferred Shares issue price for such series plus 8% simple interest per annum (calculated from the issuance dates of the respective series of Preferred Shares), and declared but unpaid dividends. If on the redemption date triggered by the occurrence of any redemption event, the Company’s assets or funds which are legally available are insufficient to pay in full the aggregate redemption price for Preferred Shares requested to be redeemed, upon the request of a redeeming shareholder, the Company shall execute and deliver a two-year note, bearing an interest of ten percent (10%) per annum and with repayment of the principal and interest to be made on a monthly basis over a period of twenty-four (24) months. Preferred Shares subject to redemption with respect to which the Company has become obligated to pay the redemption price but which it has not paid in full shall continue to have all the rights and privileges which such Preferred Shareholders had prior to such date, until the redemption price has been paid in full with respect to such Preferred Shares. Conversion upon IPO In June 2021, upon the completion of IPO, all of the Preferred Shares were automatically converted to 551,352,134 Class A ordinary shares on a one-for-one basis. Accounting for preferred shares The Company classified the Preferred Shares in the mezzanine equity section of the consolidated balance sheets because they were redeemable at the holders’ option any time after a certain date and were contingently redeemable upon the occurrence of certain liquidation event outside of the Company’s control. The Preferred Shares are recorded initially at fair value, net of issuance costs. 13. CONVERTIBLE REDEEMABLE PREFERRED SHARES (CONTINUED) The Company records accretion on the Preferred Shares, where applicable, to the redemption value from the issuance dates to the earliest redemption dates. The accretion, calculated using the effective interest method, is recorded against retained earnings, or in the absence of retained earnings, by charging against additional paid-in capital. Once additional paid-in capital has been exhausted, additional charges are recorded by increasing the accumulated deficit. The accretion of Preferred Shares was RMB164,065 (US$25,284) for the nine months ended September 30, 2021. The Company has determined that, under the whole instrument approach, host contract of the Preferred Shares is more akin to a debt host, given the Preferred Shares holders have potential creditors’ right in the event of insufficient fund upon redemption, along with other debt-like features in the terms of the Preferred Shares, including the redemption rights. However, the Company determined that the embedded feature, including conversion feature, do not require bifurcation as they either are clearly and closely related to the host or do not meet definition of a derivative. The Company has determined that there was no beneficial conversion feature attributable to all Preferred Shares because the initial effective conversion prices of these Preferred Shares were higher than the fair value of the Company’s ordinary shares determined by the Company with the assistance from an independent third-party appraiser. Modification of preferred shares The Company assesses whether an amendment to the terms of its convertible redeemable preferred shares is an extinguishment or a modification based on a qualitative evaluation of the amendment. If the amendment adds, removes, significantly changes to a substantive contractual term or to the nature of the overall instrument, the amendment results in an extinguishment of the preferred shares. The Company also assess if the change in terms results in value transfer between Preferred Shareholders or between Preferred Shareholders and ordinary shareholders. When convertible redeemable preferred shares are extinguished, the difference between the fair value of the consideration transferred to the convertible redeemable Preferred Shareholders and the carrying amount of such preferred shares (net of issuance costs) is treated as a deemed dividend to the Preferred Shareholders. When convertible redeemable preferred shares are modified and such modification results in value transfer between Preferred Shareholders and ordinary shareholders, the change in fair value resulted from the amendment is treated as a deemed dividend to or from the Preferred Shareholders. Preferred shares modification were mainly included below: ● Starting from the issuance of Series C Preferred Shares, optional redemption date of each pre-existing Preferred Shares was modified and extended to the fifth anniversary of each newly issued series of Preferred Shares applicable closing date; and ● On February 10, 2020, the Redemption Start Date of Series A, B, C, D and E Preferred Shares was extended from July 5, 2024 to February 10, 2025 , which is to be in line with the optional redemption date of Series F Preferred Shares. In the meanwhile, redemption price interest rate was lowered from 10% compound interest per annum to 8% simple interest per annum commencing from Series F Preferred Shares original issuance date and ending on the date of redemption. From both quantitative and qualitative perspectives, the Company assessed the impact of these modifications and concluded that they represented a modification rather than extinguishment of pre-existing preferred shares, and the impact of the modification was immaterial. 13. CONVERTIBLE REDEEMABLE PREFERRED SHARES (CONTINUED) The Company’s convertible redeemable preferred shares activities for the nine months ended September 30, 2021 are summarized below: Series A Series B Series C Series D Series E Series F Preferred Shares Preferred Shares Preferred Shares Preferred Shares Preferred Shares Preferred Shares Total Number Number Number Number Number Number Number of shares Amount of shares Amount of shares Amount of shares Amount of shares Amount of shares Amount of shares Amount RMB RMB RMB RMB RMB RMB RMB Balance as of January 1, 2021 60,000,000 36,177 40,000,000 67,976 147,068,133 478,565 60,856,049 380,782 144,073,367 1,845,033 99,354,585 2,882,063 551,352,134 5,690,596 Accretion on convertible redeemable preferred shares to redemption value — 1,057 — 2,006 — 13,580 — 10,823 — 51,072 — 85,527 — 164,065 Conversion of Preferred Shares to ordinary shares (60,000,000) (37,234) (40,000,000) (69,982) (147,068,133) (492,145) (60,856,049) (391,605) (144,073,367) (1,896,105) (99,354,585) (2,967,590) (551,352,134) (5,854,661) Balance as of September 30, 2021 — — — — — — — — — — — — — — |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
SHARE-BASED COMPENSATION | ||
SHARE-BASED COMPENSATION | 15. SHARE-BASED COMPENSATION (a) Share options Since 2014, the Company has granted options to certain directors, executive officers and employees. The maximum aggregate number of ordinary shares that are authorized to be issued under the Company’s share award plans is 158,726,695 as of June 30, 2022. The share options have a contractual term of ten years. Share options granted contain service conditions. With respect to the service conditions, there are 3 types of vesting schedule, which are: (i) 25% of the share options shall become vested on each anniversary of the vesting commencement date for 4 years thereafter; (ii) 50% of the share options shall become vested on each anniversary of the vesting commencement date for 2 years thereafter; and (iii) immediately vested upon grant. For share options with service conditions only, those awards are measured at the grant-date fair value and recognized as expenses over the requisite service period, which is the vesting period. For certain share options granted to employees, even though the service condition might have been satisfied, employees are required to provide continued service through the occurrence of an IPO or change of control (“Trigger Event”). Given the vesting of these share options is contingent upon the occurrence of Trigger Event, no share-based compensation expenses were recognized for these share options until the completion of the IPO in June 2021, when cumulative share-based compensation expenses for the awards that have satisfied the service conditions were recorded. The following table sets forth the activities of share options for the six months ended June 30, 2021 and 2022, respectively: Weighted Weighted Weighted average average Aggregate average Number of exercise remaining intrinsic grant-date options price contractual life value fair value US$ In Years US$ US$ Outstanding as of January 1, 2021 107,133,353 1.16 6.84 226,639 0.64 Granted 32,701,729 4.14 Forfeited (2,463,934) 1.85 Outstanding as of June 30, 2021 137,371,148 1.85 7.45 2,468,589 1.93 Outstanding as of January 1, 2022 82,475,968 2.71 8.05 1,214,916 2.82 Granted 8,424 — Exercised (6,812,174) 1.30 Forfeited (1,113,600) 2.50 Outstanding as of June 30, 2022 74,558,618 2.84 7.68 767,897 2.90 Vested and expected to vest as of June 30, 2022 74,558,618 2.84 7.68 767,897 2.90 Exercisable as of June 30, 2022 30,629,972 2.12 6.93 337,665 1.79 The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the estimated fair value of the underlying ordinary share at each reporting date. As of June 30, 2022, there were US$146,502 of unrecognized compensation expenses related to share options, which are expected to be recognized over a weighted-average period of 2.72 years and may be adjusted for future forfeitures. 15. SHARE-BASED COMPENSATION (CONTINUED) (a) Share options (continued) The Company uses binomial option-pricing model to determine the fair value of the share options as of the grant dates. Key assumptions (or ranges thereof) are set as below: a For the six months ended June 30, 2021 Fair value of ordinary shares on the date of option grant 6.78 – Risk-free interest rate (1) 1.7% – 2.0% Expected term (in years) 10 Expected dividend yield (2) 0% Expected volatility (3) 58.8% – 59.8% Expected early exercise multiple 2.2x – 2.8x (1) The risk-free interest rate of periods within the contractual life of the share option is based on the market yield of U.S. Treasury Strips with a maturity life equal to the expected life to expiration. (2) The Company has no history or expectation of paying dividends on its ordinary shares. (3) Expected volatility is estimated based on the average of historical volatilities of the comparable companies in the same industry as at the valuation dates. (b) RSUs After the completion of the Company’s IPO in June 2021, the Company started to grant RSUs to employees. One RSU represents a right relating to one Class A ordinary share of the Company. The RSUs were granted with service conditions. The fair value of the RSUs is estimated based on the market value of the underlying ordinary share of the Company at the grant date. The following table summarizes activities of the Company’s RSUs for the six months ended June 30, 2022: Number of Weighted average RSUs grant-date fair value US$ Outstanding as of January 1, 2022 3,521,118 19.05 Granted 8,118,214 Vested (257,420) Forfeited (242,012) Outstanding as of June 30, 2022 11,139,900 12.81 As of June 30, 2022, there were US$128,950 of unrecognized compensation expenses related to RSUs, which are expected to be recognized over a weighted-average period of 3.63 years and may be adjusted for future forfeitures. 15. SHARE-BASED COMPENSATION (CONTINUED) (c) Share-based compensation expenses by function The following table sets forth the amounts of share-based compensation expenses included in each of the relevant financial statement line items: For the six months ended June 30, 2021 2022 RMB RMB Cost of revenues 13,137 16,113 Sales and marketing expenses 26,922 63,817 Research and development expenses 58,633 115,117 General and administrative expenses* 1,610,559 87,999 Total 1,709,251 283,046 * In June 2021, the Company granted 24,745,531 Class B ordinary shares to TECHWOLF LIMITED, and recorded share- based compensation expenses of RMB1,506.4 million in general and administrative expenses upon the grant (Note 13). | 14. SHARE-BASED COMPENSATION (a) Share options Since 2014, the Company has granted options to certain directors, executive officers and employees. The maximum aggregate number of ordinary shares that are authorized to be issued under the Company’s share award plans is 158,726,695 as of September 30, 2022. The share options have a contractual term of ten years. Share options granted contain service conditions. With respect to the service conditions, there are 3 types of vesting schedule, which are: (i) 25% of the share options shall become vested on each anniversary of the vesting commencement date for 4 years thereafter; (ii) 50% of the share options shall become vested on each anniversary of the vesting commencement date for 2 years thereafter; and (iii) immediately vested upon grant. For share options with service conditions only, those awards are measured at the grant-date fair value and recognized as expenses over the requisite service period, which is the vesting period. For certain share options granted to employees, even though the service condition might have been satisfied, employees are required to provide continued service through the occurrence of an IPO or change of control (“Trigger Event”). Given the vesting of these share options is contingent upon the occurrence of Trigger Event, no share-based compensation expenses were recognized for these share options until the completion of the IPO in June 2021, when cumulative share-based compensation expenses for the awards that have satisfied the service conditions were recorded. The following table sets forth the activities of share options for the nine months ended September 30, 2021 and 2022, respectively: Weighted Weighted Weighted average average Aggregate average Number of exercise remaining intrinsic grant-date options price contractual life value fair value US$ In Years US$ US$ Outstanding as of January 1, 2021 107,133,353 1.16 6.84 226,639 0.64 Granted 32,710,153 4.08 Exercised (47,697,284) 0.54 Forfeited (2,924,868) 1.95 Outstanding as of September 30, 2021 89,221,354 2.53 8.21 1,379,942 2.77 Outstanding as of January 1, 2022 82,475,968 2.71 8.05 1,214,916 2.82 Granted 8,424 — Exercised (9,071,268) 1.45 Forfeited (1,356,950) 2.91 Outstanding as of September 30, 2022 72,056,174 2.86 7.45 410,810 2.93 Vested and expected to vest as of September 30, 2022 72,056,174 2.86 7.45 410,810 2.93 Exercisable as of September 30, 2022 32,174,348 2.07 6.70 204,988 1.71 The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the estimated fair value of the underlying ordinary share at each reporting date. As of September 30, 2022, there were US$130,916 of unrecognized compensation expenses related to share options, which are expected to be recognized over a weighted-average period of 2.48 years and may be adjusted for future forfeitures. 14. SHARE-BASED COMPENSATION (CONTINUED) (a) Share options (continued) The Company uses binomial option-pricing model to determine the fair value of the share options as of the grant dates. Key assumptions (or ranges thereof) are set as below: For the nine months ended September 30, 2021 Fair value of ordinary shares on the date of option grant 6.78 - 18.09 Risk-free interest rate (1) 1.6% - 2.0% Expected term (in years) 10 Expected dividend yield (2) 0 Expected volatility (3) 58.8% - 59.8% Expected early exercise multiple 2.2x - 2.8x (1) The risk-free interest rate of periods within the contractual life of the share option is based on the market yield of U.S. Treasury Strips with a maturity life equal to the expected life to expiration. (2) The Company has no history or expectation of paying dividends on its ordinary shares. (3) Expected volatility is estimated based on the average of historical volatilities of the comparable companies in the same industry as at the valuation dates. (b) RSUs After the completion of the Company’s IPO in June 2021, the Company started to grant RSUs to employees. One RSU represents a right relating to one Class A ordinary share of the Company. The RSUs were granted with service conditions. The fair value of the RSUs is estimated based on the market value of the underlying ordinary share of the Company at the grant date. The following table summarizes activities of the Company’s RSUs for the nine months ended September 30, 2022: Number of Weighted average RSUs grant-date fair value US$ Outstanding as of January 1, 2021 — — Granted 202,274 Vested — Forfeited — Outstanding as of September 30, 2021 202,274 19.40 Outstanding as of January 1, 2022 3,521,118 19.05 Granted 11,994,570 Vested (313,464) Forfeited (334,176) Outstanding as of September 30, 2022 14,868,048 12.35 As of September 30, 2022, there were US$161,259 of unrecognized compensation expenses related to RSUs, which are expected to be recognized over a weighted-average period of 3.54 years and may be adjusted for future forfeitures. 14. SHARE-BASED COMPENSATION (CONTINUED) (c) Share-based compensation expenses by function The following table sets forth the amounts of share-based compensation expenses included in each of the relevant financial statement line items: For the nine months ended September 30, 2021 2022 RMB RMB Cost of revenues 24,568 25,204 Sales and marketing expenses 44,838 106,613 Research and development expenses 95,321 184,945 General and administrative expenses* 1,643,447 131,199 Total 1,808,174 447,961 * In June 2021, the Company granted 24,745,531 Class B ordinary shares to TECHWOLF LIMITED and recorded share- based compensation expenses of RMB1,506.4 million in general and administrative expenses upon the grant (Note 12). |
BASIC AND DILUTED NET (LOSS)_IN
BASIC AND DILUTED NET (LOSS)/INCOME PER SHARE | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
BASIC AND DILUTED NET (LOSS)/INCOME PER SHARE | ||
BASIC AND DILUTED NET (LOSS)/INCOME PER SHARE | 16. BASIC AND DILUTED NET (LOSS)/INCOME PER SHARE The computation of basic and diluted net (loss)/income per share for the six months ended June 30, 2021 and 2022 is as follows: For the six months ended June 30, 2021 2022 RMB RMB Numerator Net (loss)/income (1,590,312) 80,321 Accretion on convertible redeemable preferred shares to redemption value (164,065) — Net (loss)/income attributable to ordinary shareholders (1,754,377) 80,321 Denominator Weighted average number of ordinary shares used in computing net (loss)/income per share, basic 147,308,942 869,427,036 Dilutive effect of share-based awards — 48,057,023 Weighted average number of ordinary shares used in computing net (loss)/income per share, diluted 147,308,942 917,484,059 Net (loss)/income per share attributable to ordinary shareholders – Basic (11.91) 0.09 – Diluted (11.91) 0.09 As the Group incurred loss for the six months ended June 30, 2021, the ordinary share equivalents, including preferred shares, share options and RSUs granted, were anti-dilutive and excluded from the computation of diluted net loss per share. The weighted average numbers of these ordinary share equivalents for the periods presented were as follows: For the six months ended June 30, 2021 RMB Preferred shares 502,881,617 Share options and RSUs 94,100,191 | 15. BASIC AND DILUTED NET (LOSS)/INCOME PER SHARE The computation of basic and diluted net (loss)/income per share for the nine months ended September 30, 2021 and 2022 is as follows: For the nine months ended September 30, 2021 2022 RMB RMB Numerator Net (loss)/income (1,304,144) 292,038 Accretion on convertible redeemable preferred shares to redemption value (164,065) — Net (loss)/income attributable to ordinary shareholders (1,468,209) 292,038 Denominator Weighted average number of ordinary shares used in computing net (loss)/income per share, basic 420,605,543 870,385,113 Dilutive effect of share-based awards — 46,527,458 Weighted average number of ordinary shares used in computing net (loss)/income per share, diluted 420,605,543 916,912,571 Net (loss)/income per share attributable to ordinary shareholders —Basic (3.49) 0.34 —Diluted (3.49) 0.32 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
COMMITMENTS AND CONTINGENCIES | ||
COMMITMENTS AND CONTINGENCIES | 17. COMMITMENTS AND CONTINGENCIES Commitments The Group engaged third parties for promoting its brand image through various advertising channels. The amount of advertising commitments relates to the committed advertising services that have not been delivered and paid. As of June 30, 2022, future minimum advertising commitments under non-cancelable agreements were RMB110.3 million. Contingencies The Group and certain of the officers and directors have been named as defendants in a putative securities class action filed on July 12, 2021 in the U.S. District Court for the District of New Jersey. On March 4, 2022, plaintiff filed the Amended Complaint, purportedly brought on behalf of a class of persons who allegedly suffered damages as a result of their trading in the securities between June 11, 2021 and July 2, 2021, both inclusive. The action alleges that the Group made false and misleading statements regarding the business, operations and compliance policies in violation of the Sections 10(b) and 20(a) of the U.S. Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. In May 2022, the Company filed its motion to dismiss the Amended Complaint. Briefing on the motion to dismiss was completed in July 2022, and a decision remains pending. In September 2022, the parties reached a tentative agreement in principle to settle the case. Accordingly, the Group has recorded a contingent liability of RMB14.9 million as of June 30, 2022. On November 10, 2022, the Court granted preliminary approval of the parties’ settlement agreement, pursuant to which, without any admission or finding of any wrongdoing on the part of any of the Defendants, the parties agreed that, in consideration of the Company’s payment of US$2.25 million, all actual and potential claims and causes of action that have been or could have been alleged against the Company and the individual defendant (including the individuals mentioned above) are resolved and discharged and precluded from being raised again in any future action. The payment of the settlement amount is due by mid-December 2022 and has been paid. The Court scheduled a fairness hearing for March 2023, after which the Court will decide whether to grant final approval of the settlement. | 16. COMMITMENTS AND CONTINGENCIES Commitments The Group engaged third parties for promoting its brand image through various advertising channels. The amount of advertising commitments relates to the committed advertising services that have not been delivered and paid. As of September 30, 2022, future minimum advertising commitments under non-cancelable agreements were RMB110.5 million. 16. COMMITMENTS AND CONTINGENCIES (CONTINUED) Contingencies The Group and certain of the officers and directors have been named as defendants in a putative securities class action filed on July 12, 2021 in the U.S. District Court for the District of New Jersey. On March 4, 2022, plaintiff filed the Amended Complaint, purportedly brought on behalf of a class of persons who allegedly suffered damages as a result of their trading in the securities between June 11, 2021 and July 2, 2021, both inclusive. The action alleges that the Group made false and misleading statements regarding the business, operations and compliance policies in violation of the Sections 10(b) and 20(a) of the U.S. Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. In May 2022, the Company filed its motion to dismiss the Amended Complaint. Briefing on the motion to dismiss was completed in July 2022, and a decision remains pending. In September 2022, the parties reached a tentative agreement in principle to settle the case. Accordingly, the Group has recorded a contingent liability of RMB14.9 million as of September 30, 2022. On November 10, 2022, the Court granted preliminary approval of the parties’ settlement agreement, pursuant to which, without any admission or finding of any wrongdoing on the part of any of the Defendants, the parties agreed that, in consideration of the Company’s payment of US$2.25 million, all actual and potential claims and causes of action that have been or could have been alleged against the Company and the individual defendant (including the individuals mentioned above) are resolved and discharged and precluded from being raised again in any future action. The payment of the settlement amount is due by mid-December 2022 and has been paid. The Court scheduled a fairness hearing for March 2023, after which the Court will decide whether to grant final approval of the settlement. |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
FAIR VALUE MEASUREMENT | ||
FAIR VALUE MEASUREMENT | 18. FAIR VALUE MEASUREMENT Information about inputs into the fair value measurement of the Group’s assets that are measured or disclosed at fair value on a recurring basis in periods subsequent to their initial recognition is as follows: Fair value measurement at reporting date using Quoted prices in active Significant other Significant markets for identical assets observable inputs unobservable inputs Description Fair value (Level 1) (Level 2) (Level 3) RMB RMB RMB RMB Short-term investments As of December 31, 2021 884,996 — 884,996 — As of June 30, 2022 812,225 — 812,225 — When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Group will measure fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates. For short-term investments, which consists of wealth management products, the Group refers to the quoted rate of return provided by financial institutions at the end of each period using the discounted cash flow method. The Group classifies the valuation techniques as Level 2 of fair value measurement. | 17. FAIR VALUE MEASUREMENT Information about inputs into the fair value measurement of the Group’s assets that are measured or disclosed at fair value on a recurring basis in periods subsequent to their initial recognition is as follows: Fair value measurement at reporting date using Quoted prices in active Significant other Significant markets for identical assets observable inputs unobservable inputs Description Fair value (Level 1) (Level 2) (Level 3) RMB RMB RMB RMB Short-term investments As of December 31, 2021 884,996 — 884,996 — As of September 30, 2022 2,764,368 — 2,764,368 — When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Group will measure fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates. For short-term investments, which consists of wealth management products, the Group refers to the quoted rate of return provided by financial institutions at the end of each period using the discounted cash flow method. The Group classifies the valuation techniques as Level 2 of fair value measurement. |
RESTRICTED NET ASSETS
RESTRICTED NET ASSETS | 6 Months Ended |
Jun. 30, 2022 | |
RESTRICTED NET ASSETS | |
RESTRICTED NET ASSETS | 19. RESTRICTED NET ASSETS In accordance with the laws applicable to foreign investment enterprises established in the PRC, the Group’s subsidiaries registered as wholly owned foreign enterprises must make appropriations from after-tax profits (as determined under PRC GAAP) to reserve funds including general reserve fund, enterprise expansion fund and staff bonus and welfare fund. The appropriation to the general reserve fund must be at least 10% of the after-tax profits until such reserve fund has reached 50% of the enterprise’s registered capital. The appropriation to enterprise expansion fund and staff bonus and welfare fund is at the discretion of the respective company. Additionally, in accordance with the PRC Company Law, the Group’s consolidated VIE and VIE’s subsidiaries must make appropriations from after-tax profits (as determined under the PRC GAAP) to statutory surplus fund and discretionary surplus fund. The appropriation to the statutory surplus fund is at least 10% of the after-tax profits until such reserve fund has reached 50% of the company’s registered capital. The appropriation to discretionary surplus fund is at the discretion of the respective company. The aforementioned reserved funds can only be used for specific purposes and are not distributable as cash dividends. As a result of these PRC laws and regulations that require annual appropriations of 10% of net after-tax profits to be set aside prior to payment of dividends as general reserve fund or statutory surplus fund, the Company’s subsidiaries, the consolidated VIE and VIE’s subsidiaries incorporated in PRC are restricted in their ability to transfer a portion of their net assets to the Company. Amounts restricted include paid-in capital and statutory reserve funds, totaling approximately RMB938.0 million, or 8.25% of the Group’s total consolidated net assets as of June 30, 2022. |
PRINCIPAL ACCOUNTING POLICIES (
PRINCIPAL ACCOUNTING POLICIES (Policies) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
PRINCIPAL ACCOUNTING POLICIES | ||
Basis of presentation | 2.1 Basis of presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Significant accounting policies followed by the Group in the preparation of its accompanying unaudited interim condensed consolidated financial statements are summarized below. | 2.1 Basis of presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The interim unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements. The consolidated balance sheet as of December 31, 2021 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by U.S. GAAP. In management’s opinion, the Company has made all adjustments (consisting only of normal, recurring adjustments, except as otherwise indicated) necessary to fairly state its consolidated financial condition, results of operations and cash flows. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year or any other interim period. These financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s audited financial statements for the year ended December 31, 2021 in the Company’s Annual Report on Form 20-F. Significant accounting policies followed by the Group in the preparation of its accompanying unaudited interim condensed consolidated financial statements are summarized below. |
Basis of consolidation | 2.2 Basis of consolidation The unaudited interim condensed consolidated financial statements include the financial statements of the Company, its subsidiaries, the consolidated VIE and VIE’s subsidiaries for which the Company is the ultimate primary beneficiary. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors, to cast a majority of votes at the meeting of the board of directors or to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. The Company applies the guidance codified in ASC 810, Consolidations All transactions and balances between the Company, its subsidiaries, the consolidated VIE and VIE’s subsidiaries have been eliminated upon consolidation. | 2.2 Basis of consolidation The unaudited interim condensed consolidated financial statements include the financial statements of the Company, its subsidiaries, the consolidated VIE and VIE’s subsidiaries for which the Company is the ultimate primary beneficiary. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors, to cast a majority of votes at the meeting of the board of directors or to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. The Company applies the guidance codified in ASC 810, Consolidations All transactions and balances between the Company, its subsidiaries, the consolidated VIE and VIE’s subsidiaries have been eliminated upon consolidation. |
Use of estimates | 2.3 Use of estimates The preparation of the unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet date, and the reported revenues and expenses during the reporting periods in the unaudited interim condensed consolidated financial statements and accompanying notes. Accounting estimates reflected in the Group’s unaudited interim condensed consolidated financial statements include but are not limited to the useful lives of property, equipment and software, impairment of long-lived assets, valuation allowance for deferred tax assets, valuation of ordinary shares and share-based compensation. Management bases the estimates on historical experience, known trends and various other assumptions that are believed to be reasonable under current circumstances. Actual results could differ from those estimates. | 2.3 Use of estimates The preparation of the unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet date, and the reported revenues and expenses during the reporting periods in the unaudited interim condensed consolidated financial statements and accompanying notes. Accounting estimates reflected in the Group’s unaudited interim condensed consolidated financial statements include but are not limited to the useful lives of property, equipment and software, impairment of long-lived assets, valuation allowance for deferred tax assets, valuation of ordinary shares and share-based compensation. Management bases the estimates on historical experience, known trends and various other assumptions that are believed to be reasonable under current circumstances. Actual results could differ from those estimates. |
Foreign currency | 2.4 Foreign currency The Group’s reporting currency is RMB. The functional currency of the Company and subsidiaries incorporated in Hong Kong and United States of America, is the United States dollars (“US$”). The functional currency of the Group’s PRC subsidiaries, consolidated VIE and VIE’s subsidiaries is RMB. The determination of the respective functional currency is based on the criteria of ASC 830, Foreign Currency Matters 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) 2.4 Foreign currency (continued) Transactions denominated in currencies other than the functional currency are translated into the functional currency of the entity at the exchange rates quoted by authoritative banks prevailing on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency using the applicable exchange rates at the balance sheet dates. Exchange gain or loss resulting from those foreign currency transactions denominated in foreign currencies is recorded in the Unaudited Interim Condensed Consolidated Statements of Comprehensive (Loss)/Income. The financial statements of the Company and subsidiaries located outside of the PRC are translated from their functional currency into RMB. Their assets and liabilities are translated into RMB using the applicable exchange rates at the balance sheet date. Equity accounts other than earnings generated in current period are translated into RMB at the appropriate historical rates. Revenues, expenses, gain and loss are translated into RMB using the periodic average exchange rates. The resulting foreign currency translation adjustments are recorded in other comprehensive income in the consolidated financial statements. | |
Fair value measurement | 2.5 Fair value measurement Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurement for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value: Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 — Include other inputs that are directly or indirectly observable in the marketplace. Level 3 — Unobservable inputs which are supported by little or no market activity. Accounting guidance also describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount and the measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. Financial assets and liabilities of the Group mainly consist of cash and cash equivalents, short-term investments, accounts receivables, amounts due from related parties, prepayments and other current assets, accounts payable, certain accrued expenses and other current liabilities. Except for short-term investments, the carrying values of other financial assets and liabilities approximate their fair values due to the short-term maturity of these instruments. The Group reports short-term investments at fair value based on Level 2 measurement. | |
Cash and cash equivalents | 2.6 Cash and cash equivalents Cash includes cash on hand and deposits held by financial institutions that can be added to or withdrawn without limitation or restriction. Cash equivalents represent short-term, highly liquid investments that are readily convertible to known amounts of cash and with original maturities of three months or less. 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) | |
Short-term investments | 2.7 Short-term investments Short-term investments are wealth management products issued by commercial banks or other financial institutions, which contains fixed or variable interest with original maturities within one year. These investments are stated at fair value. Changes in the fair value are reflected in investment income in the Consolidation Statements of Comprehensive (Loss)/Income. | |
Accounts receivable | 2.8 Accounts receivable Accounts receivable are presented net of allowance for doubtful accounts (if any). The Group provides general and specific provisions for bad debts when facts and circumstances indicate that the receivables are unlikely to be collected. If the financial condition of its customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. No allowance for doubtful accounts was recognized for the six months ended June 30, 2021 and 2022. | |
Property, equipment and software | 2.9 Property, equipment and software Property, equipment and software are stated at cost less accumulated depreciation and impairment, if any. Property, equipment and software are depreciated at rates sufficient to write off their cost less impairment and residual value, if any, over the estimated useful lives on a straight-line basis. The estimated useful lives are as follows: Category Estimated useful lives Electronic equipment 3-5 years Leasehold improvement Shorter of lease term or estimated useful life of the assets Furniture and fixtures 5 years Motor vehicles 3-5 years Software 5 years The majority of electronic equipment includes servers. The Group recognized the gain or loss on the disposal of property, equipment and software in the Unaudited Interim Condensed Consolidated Statements of Comprehensive (Loss)/Income. | |
Intangible assets | 2.10 Intangible assets Intangible assets purchased are recognized and measured at cost less accumulated amortization and impairment, if any. Intangible assets are amortized using the straight-line method over the estimated useful lives as below: Category Estimated useful lives Domains 10 years The estimated useful lives of domains are the periods over which they are expected to be available for use by the Group, which are mainly determined based on the periods of effective registration of the domains. 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) | |
Impairment of long-lived assets | 2.11 Impairment of long-lived assets Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be fully recoverable or that the useful life is shorter than that the Group had originally estimated. When these events occur, the Group evaluates the impairment for the long-lived assets by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the asset and its eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the asset, the Group recognizes an impairment loss based on the excess of the carrying value of the asset over the fair value of the asset. No impairment of long-lived assets was recognized for the six months ended June 30, 2021 and 2022. | |
Revenue recognition | 2.12 Revenue recognition The Group accounted for revenue under ASC 606, Revenue from Contracts with Customers To achieve that core principle, the Group applies the five steps defined under ASC 606: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) a performance obligation is satisfied. According to ASC 606, revenue is recognized net of value-added tax (“VAT”) when or as the control of services is transferred to a customer. Depending on the terms of the contract, control of services may be transferred over time or at a point in time. Control of services is transferred over time if the Group: (i) provides all of the benefits received and consumed simultaneously by the customer; (ii) creates and enhances an asset that the customer controls as the Group performs; or (iii) does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date. If control of services is transferred over time, revenue is recognized over the period of the contract by reference to the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognized at a point in time when the customer obtains control of the services. Online recruitment services to enterprise customers The Group provides online recruitment services carrying different kinds of features to enterprise customers, including direct recruitment services such as job postings, and value-added tools such as bulk invite sending, which could be purchased as a part of subscription packages or on a standalone basis. Based on the pattern by which the Group provides services and how enterprise customers benefit from services, these services can be divided into two categories in terms of revenue recognition: (i) services over a particular subscription period, which provide enterprise customers certain rights during a particular subscription period; for example, paid job postings allow enterprise customers to present certain job positions, receive job seeker recommendations, browse the mini-resume of and chat with a certain number of job seekers in its platform during the subscription period; and (ii) services with definite and limited number of usages within an expiration period, such as bulk invite sending and advanced filer. Accordingly, the Group recognizes its revenues from online recruitment services either over time or at a point in time as following: ● For services over a particular subscription period, the Group has a stand-ready obligation to deliver the corresponding services on a when-and-if-available basis during the subscription period and enterprise customers simultaneously and continuously receive and consume the benefits as the Group provides the services throughout the subscription period. Therefore, a time-based measure of progress best reflects the satisfaction of the performance obligations and the Group recognizes revenues on a straight-line basis over the subscription period. Revenues recognized over time for the six months ended June 30, 2021 and 2022 were RMB 1,338,480 and RMB 1,647,892 , respectively. 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) 2.12 Revenue recognition (continued) ● For services with definite and limited number of usages within an expiration period, upon the delivery of the individual services, the Group satisfies its performance obligations and enterprise customers benefit from its performance obligations, and therefore revenues are recognized at a point in time; and if these services are unused within the expiration period, the Group recognizes the relevant revenues when they expire. Revenues recognized at a point in time for the six months ended June 30, 2021 and 2022 were RMB 601,439 and RMB 579,292 , respectively. Other services Other services mainly represent paid value-added tools offered to job seekers such as increased exposure of resume and candidate competitive analysis. The Group defines enterprise customers who contributed revenue of RMB50 or more annually as key accounts, who contributed revenue between RMB5 and RMB50 annually as mid-sized accounts, and who contributed revenue of RMB5 or less annually as small-sized accounts. For the six months ended June 30, 2021 2022 RMB RMB Online recruitment services to enterprise customers – Key accounts 362,763 517,925 – Mid-sized accounts 633,685 910,848 – Small-sized accounts 943,471 798,411 Others 16,798 23,040 Total 1,956,717 2,250,224 Arrangements with multiple performance obligations Multiple performance obligations exist when enterprise customers purchase subscription packages which include an array of services. For those services included in subscription packages, the selling prices are consistently made references to the standalone selling prices when sold separately. The Group allocates the transaction price to each performance obligation based on the relative standalone selling price, considering bulk-sale price discounts offered to certain enterprise customers where applicable. Deferred revenue The Group records deferred revenue when the Group receives customers’ payments in advance of transferring control of services to customers. Substantially all deferred revenue recorded are expected to be recognized as revenues in the next twelve months. Remaining performance obligations Remaining performance obligations represent the amount of contracted future revenues not yet recognized as the amount relate to undelivered performance obligations. Substantially all of the Group’s contracts with customers are within one year in duration. As such, the Group has elected to apply the practical expedient which allows an entity to exclude disclosures about its remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. | 2.4 Revenue recognition The Group accounted for revenue under ASC 606, Revenue from Contracts with Customers To achieve that core principle, the Group applies the five steps defined under ASC 606: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) a performance obligation is satisfied. According to ASC 606, revenue is recognized net of value-added tax (“VAT”) when or as the control of services is transferred to a customer. Depending on the terms of the contract, control of services may be transferred over time or at a point in time. Control of services is transferred over time if the Group: (i) provides all of the benefits received and consumed simultaneously by the customer; (ii) creates and enhances an asset that the customer controls as the Group performs; or (iii) does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date. If control of services is transferred over time, revenue is recognized over the period of the contract by reference to the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognized at a point in time when the customer obtains control of the services. Online recruitment services to enterprise customers The Group provides online recruitment services carrying different kinds of features to enterprise customers, including direct recruitment services such as job postings, and value-added tools such as bulk invite sending, which could be purchased as a part of subscription packages or on a standalone basis. Based on the pattern by which the Group provides services and how enterprise customers benefit from services, these services can be divided into two categories in terms of revenue recognition: (i) services over a particular subscription period, which provide enterprise customers certain rights during a particular subscription period; for example, paid job postings allow enterprise customers to present certain job positions, receive job seeker recommendations, browse the mini-resume of and chat with a certain number of job seekers in its platform during the subscription period; and (ii) services with definite and limited number of usages within an expiration period, such as bulk invite sending and advanced filer. Accordingly, the Group recognizes its revenues from online recruitment services either over time or at a point in time as following: ● For services over a particular subscription period, the Group has a stand-ready obligation to deliver the corresponding services on a when-and-if-available basis during the subscription period and enterprise customers simultaneously and continuously receive and consume the benefits as the Group provides the services throughout the subscription period. Therefore, a time-based measure of progress best reflects the satisfaction of the performance obligations and the Group recognizes revenues on a straight-line basis over the subscription period. Revenues recognized over time for the nine months ended September 30, 2021 and 2022 were RMB 2,207,283 and RMB 2,509,702 , respectively. ● For services with definite and limited number of usages within an expiration period, upon the delivery of the individual services, the Group satisfies its performance obligations and enterprise customers benefit from its performance obligations, and therefore revenues are recognized at a point in time; and if these services are unused within the expiration period, the Group recognizes the relevant revenues when they expire. Revenues recognized at a point in time for the nine months ended September 30, 2021 and 2022 were RMB 929,771 and RMB 881,946 , respectively. 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) 2.4 Revenue recognition (continued) Other services Other services mainly represent paid value-added tools offered to job seekers such as increased exposure of resume and candidate competitive analysis. The Group defines enterprise customers who contributed revenue of RMB50 or more annually as key accounts, who contributed revenue between RMB5 and RMB50 annually as mid-sized accounts, and who contributed revenue of RMB5 or less annually as small-sized accounts. For the nine months ended September 30, 2021 2022 RMB RMB Online recruitment services to enterprise customers —Key accounts 643,114 775,037 —Mid-sized accounts 1,080,514 1,375,551 —Small-sized accounts 1,413,426 1,241,060 Others 31,424 37,139 Total 3,168,478 3,428,787 Arrangements with multiple performance obligations Multiple performance obligations exist when enterprise customers purchase subscription packages which include an array of services. For those services included in subscription packages, the selling prices are consistently made references to the standalone selling prices when sold separately. The Group allocates the transaction price to each performance obligation based on the relative standalone selling price, considering bulk-sale price discounts offered to certain enterprise customers where applicable. Deferred revenue The Group records deferred revenue when the Group receives customers’ payments in advance of transferring control of services to customers. Substantially all deferred revenue recorded are expected to be recognized as revenues in the next twelve months. Remaining performance obligations Remaining performance obligations represent the amount of contracted future revenues not yet recognized as the amount relate to undelivered performance obligations. Substantially all of the Group’s contracts with customers are within one year in duration. As such, the Group has elected to apply the practical expedient which allows an entity to exclude disclosures about its remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) |
Cost of revenues | 2.13 Cost of revenues Cost of revenues consist primarily of settlement cost of third-party on-line payment platforms, payroll and other employee-related expenses, server and bandwidth service cost, server depreciation and other expenses incurred by the Group which are directly attributable to the performance of the Group’s online recruitment services. 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) | |
Sales and marketing expenses | 2.14 Sales and marketing expenses Sales and marketing expenses consist primarily of advertising expenses, payroll and other employee- related expenses for the Group’s sales and marketing staff as well as other expenses such as office rental and property management fees for sales functions. Advertising expenses generally represent online traffic acquisition and branding activities cost. For the six months ended June 30, 2021 and 2022, advertising expenses totaled RMB723,724 and RMB348,594, respectively. | |
Research and development expenses | 2.15 Research and development expenses Research and development expenses primarily consist of payroll and other employee-related expenses and other expenses such as office rental and property management fees for research and development functions. All research and development costs are expensed as incurred. | |
General and administrative expenses | 2.16 General and administrative expenses General and administrative expenses consist primarily of payroll and other employee-related expenses for the Group’s managerial and administrative staff and other expenses such as office rental and property management fees. | |
Employee benefits | 2.17 Employee benefits Full time employees of the Group in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to the employees. Chinese labor regulations require that the PRC subsidiaries, VIE and VIE’s subsidiaries of the Group make contributions to the government for these benefits based on certain percentages of the employees’ salaries, up to a maximum amount specified by the local government. The Group has no legal obligation for the benefits beyond the contributions made. Total amounts of such employee benefit expenses contributed by the Group, including accrued and unpaid amounts, were RMB109,040 and RMB171,116 for the six months ended June 30, 2021 and 2022, respectively. | |
Share-based compensation | 2.18 Share-based compensation The Group grants share options and restricted share units (“RSUs”) to its management, other key employees and eligible nonemployees. Such compensation is accounted for in accordance with ASC 718, Compensation — Stock Compensation Improvements to Nonemployee Share-Based Payment Accounting Share-based awards with service conditions only are measured at the grant-date fair value of the awards and recognized as expenses using the straight-line method over the requisite service period. Share-based awards that are subject to both service conditions and the occurrence of an IPO or change of control as a performance condition, are measured at the grant-date fair value, and cumulative share-based compensation expenses for the awards that have satisfied the service condition were recorded upon the completion of the Company’s IPO in June 2021. The fair value of share options is estimated using the binomial option-pricing model. The determination of the fair value is affected by the fair value of the ordinary shares as well as assumptions regarding a number of complex and subjective variables, including the expected share price volatility, actual and projected employee and nonemployee share option exercise behavior, risk-free interest rates and expected dividend yield. Binomial option-pricing model incorporates the assumptions about grantees’ future exercise patterns. The fair value of these awards was determined by management with the assistance from an independent valuation firm using management’s estimates and assumptions. The fair value of the RSUs, which were granted subsequent to the completion of the Company’s IPO, is estimated based on the fair value of the underlying ordinary shares of the Company on the grant date. 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) 2.18 Share-based compensation (continued) The assumptions used in share-based compensation expense recognition represent management’s best estimates, but these estimates involve inherent uncertainties and application of management judgment. If factors change or different assumptions are used, the share-based compensation expenses could be materially different for any period. Moreover, the estimates of fair value of the awards are not intended to predict actual future events or the value that ultimately will be realized by grantees who receive share-based awards. | 2.5 Share-based compensation The Group grants share options and restricted share units (“RSUs”) to its management, other key employees and eligible nonemployees. Such compensation is accounted for in accordance with ASC 718, Compensation-Stock Compensation Improvements to Nonemployee Share-Based Payment Accounting Share-based awards with service conditions only are measured at the grant-date fair value of the awards and recognized as expenses using the straight-line method over the requisite service period. Share-based awards that are subject to both service conditions and the occurrence of an IPO or change of control as a performance condition, are measured at the grant-date fair value, and cumulative share-based compensation expenses for the awards that have satisfied the service condition were recorded upon the completion of the Company’s IPO in June 2021. The fair value of share options is estimated using the binomial option-pricing model. The determination of the fair value is affected by the fair value of the ordinary shares as well as assumptions regarding a number of complex and subjective variables, including the expected share price volatility, actual and projected employee and nonemployee share option exercise behavior, risk-free interest rates and expected dividend yield. Binomial option-pricing model incorporates the assumptions about grantees’ future exercise patterns. The fair value of these awards was determined by management with the assistance from an independent valuation firm using management’s estimates and assumptions. The fair value of the RSUs, which were granted subsequent to the completion of the Company’s IPO, is estimated based on the fair value of the underlying ordinary shares of the Company on the grant date. The assumptions used in share-based compensation expense recognition represent management’s best estimates, but these estimates involve inherent uncertainties and application of management judgment. If factors change or different assumptions are used, the share-based compensation expenses could be materially different for any period. Moreover, the estimates of fair value of the awards are not intended to predict actual future events or the value that ultimately will be realized by grantees who receive share-based awards. |
Operating leases | 2.19 Operating leases The Group applied ASC 842, Leases For operating lease with a term of one year or less, the Group has elected to not recognize a lease liability or lease right-of-use asset on its Consolidated Balance Sheets. Instead, it recognizes the lease payments as expenses on a straight-line basis over the lease term. Short-term lease expenses are immaterial to its Consolidated Statements of Comprehensive (Loss)/Income. | |
Taxation | 2.20 Taxation Current income taxes are recorded in accordance with the regulations of the relevant tax jurisdiction. The Group accounts for deferred income taxes under the liability method in accordance with ASC 740, Income Tax The Group recognizes in its consolidated financial statements the benefit of a tax position if the tax position is more likely than not to prevail based on the facts and technical merits of the position. Tax positions that meet the more likely than not recognition threshold is measured at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. The Group estimates its liability for unrecognized tax benefits which are periodically assessed and may be affected by changing interpretations of laws, rulings by tax authorities, changes and/or developments with respect to tax audits, and expiration of the statute of limitations. The ultimate outcome for a particular tax position may not be determined with certainty prior to the conclusion of a tax audit and, in some cases, appeal or litigation process. The actual benefits ultimately realized may differ from the Group’s estimates. As each audit is concluded, adjustments, if any, are recorded in the Group’s consolidated financial statements in the period in which the audit is concluded. Additionally, in future periods, changes in facts, circumstances and new information may require the Group to adjust the recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recognized in the period in which the changes occur. As of June 30, 2022, the Group did not have any significant unrecognized uncertain tax positions. | |
Statutory reserves | 2.21 Statutory reserves The Company’s subsidiaries, consolidated VIE and VIE’s subsidiaries established in the PRC are required to make appropriations to certain non-distributable reserve funds. In accordance with the laws applicable to the foreign investment enterprises established in the PRC, the Group’s subsidiaries registered as wholly owned foreign enterprises have to make appropriations from their after-tax profits as determined under the PRC GAAP to reserve funds including general reserve fund, enterprise expansion fund and staff bonus and welfare fund on an annual basis. The appropriation to the general reserve fund must be at least 10% of the after-tax profits calculated in accordance with the PRC GAAP. Appropriation is not required if the general reserve fund has reached 50% of the registered capital of the company. Appropriations to the enterprise expansion fund and staff bonus and welfare fund are made at the respective company’s discretion. In addition, in accordance with the PRC Company Law, the Group’s consolidated VIE and VIE’s subsidiaries, registered as Chinese domestic companies, must make appropriations from their after-tax profits as determined under the PRC GAAP to non-distributable reserve funds including statutory surplus fund and discretionary surplus fund on an annual basis. The appropriation to the statutory surplus fund must be 10% of the after-tax profits as determined under the PRC GAAP. Appropriation is not required if the statutory surplus fund has reached 50% of the registered capital of the company. Appropriation to the discretionary surplus fund is made at the discretion of the respective company. The use of the general reserve fund, enterprise expansion fund, statutory surplus fund and discretionary surplus fund are restricted to the offsetting of losses or increasing of the registered capital of the respective company. The staff bonus and welfare fund is a liability in nature and is restricted to fund payments of special bonus to employees and for the collective welfare of employees. None of these reserves are allowed to be transferred to the Company in terms of cash dividends, loans or advances, nor can they be distributed except under liquidation. No appropriation to any reserve fund was made for the six months ended June 30, 2021 and 2022. | |
Comprehensive income/(loss) | 2.22 Comprehensive income/(loss) Comprehensive income/(loss) is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding those resulting from investments by shareholders and distributions to shareholders. The Group recognizes foreign currency translation adjustments as other comprehensive income/(loss) in the consolidated financial statements. As such adjustments do not incur income tax obligations, there are no tax adjustments to arrive at other comprehensive income/(loss) on a net-of-tax basis. | |
Segment reporting | 2.23 Segment reporting In accordance with ASC 280, Segment Reporting | |
Net income/(loss) per share | 2.24 Net income/(loss) per share Basic net income/(loss) per share is computed by dividing net income/(loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. The net income/(loss) will be adjusted by deducting (1) dividends declared in the period on preferred shares (if any), (2) cumulative dividends on preferred shares (whether or not declared) and (3) deemed dividends as required by U.S. GAAP. Diluted net income/(loss) per share is calculated by dividing net income/(loss) attributable to ordinary shareholders by the weighted average number of ordinary shares and potential ordinary shares outstanding during the period. Potential ordinary shares consist of shares issuable upon the conversion of the preferred shares using the if-converted method, for periods prior to the completion of the Company’ IPO in June 2021, unvested RSUs and shares issuable upon the exercise of share options using the treasury stock method. The computation of diluted net income/(loss) per share does not assume conversion, exercise or contingent issuance of securities that would have an anti-dilutive effect. The two-class method is used for computing net income per share in the event the Group has net income available for distribution. Using the two-class method, net income is allocated between ordinary shares and other participating securities based on their participating rights, if applicable. Prior to the completion of the Company’ IPO in June 2021, the computation of basic net loss per share using the two-class method was not applicable as the Company was in a net loss position and the participating securities did not have contractual obligations to share in the loss of the Company. After the completion of the IPO, net income/(loss) per share is computed on Class A ordinary shares and Class B ordinary shares combined basis, because both classes have the same dividend rights in the Company’s undistributed net income. | |
Recent accounting pronouncements | 2.25 Recent accounting pronouncements Recently adopted accounting pronouncements In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes Recent accounting pronouncements not yet adopted In June 2016, the FASB amended guidance related to the expected credit loss of financial instruments as part of ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments | 2.6 Recent accounting pronouncements Recently adopted accounting pronouncements In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes Recent accounting pronouncements not yet adopted In June 2016, the FASB amended guidance related to the expected credit loss of financial instruments as part of ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
PRINCIPAL ACTIVITIES AND ORGA_2
PRINCIPAL ACTIVITIES AND ORGANIZATION (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
PRINCIPAL ACTIVITIES AND ORGANIZATION | ||
Summary of principal subsidiaries and consolidated VIE | As of June 30, 2022, the Company’s principal subsidiaries and consolidated VIE are as follows: Attributable Place of Date of equity interest of Name of subsidiaries incorporation incorporation the Group Principal activities Techfish Limited Hong Kong, China February 14, 2014 100% Investment holding in Hong Kong Beijing Glory Wolf Co., Ltd. (“Glory”, or the “WFOE”) Beijing, China May 7, 2014 100% Management consultancy and technical services in the PRC Place of Date of Economic Name of VIE incorporation incorporation interest held Principal activities Beijing Huapin Borui Network Technology Co., Ltd. (“Huapin”) Beijing, China December 25, 2013 100% Online recruitment service in the PRC | |
Summary of principal subsidiaries and consolidated VIE | As of September 30, 2022, the Company’s principal subsidiaries and consolidated VIE are as follows: Attributable Place of Date of equity interest of Name of subsidiaries incorporation incorporation the Group Principal activities Techfish Limited Hong Kong, China February 14, 2014 100% Investment holding in Hong Kong Beijing Glory Wolf Co., Ltd. (“Glory”, or the “WFOE”) Beijing, China May 7, 2014 100% Management consultancy and technical service in the PRC Place of Date of Economic Name of VIE incorporation incorporation interest held Principal activities Beijing Huapin Borui Network Technology Co., Ltd. (“Huapin”) Beijing, China December 25, 2013 100% Online recruitment service in the PRC | |
Schedule of variable interest entities | As of December 31, As of June 30, 2021 2022 RMB RMB ASSETS Current assets Cash and cash equivalents 864,851 1,245,088 Short-term investments 864,557 802,159 Accounts receivable 1,002 1,946 Amounts due from Group companies 86,989 100,805 Amounts due from related parties 6,615 9,583 Prepayments and other current assets 487,598 450,841 Total current assets 2,311,612 2,610,422 Non-current assets Property, equipment and software, net 368,381 544,171 Intangible assets, net 458 413 Right-of-use assets, net 301,288 287,032 Other non-current assets 4,000 4,000 Total non-current assets 674,127 835,616 Total assets 2,985,739 3,446,038 LIABILITIES Current liabilities Accounts payable 52,938 135,098 Deferred revenue 1,958,570 1,979,019 Other payables and accrued liabilities 626,151 557,568 Amounts due to Group companies 27,223 37,362 Operating lease liabilities, current 124,464 139,625 Total current liabilities 2,789,346 2,848,672 Non-current liabilities Operating lease liabilities, non-current 178,844 155,954 Total non-current liabilities 178,844 155,954 Total liabilities 2,968,190 3,004,626 For the six months ended June 30, 2021 2022 RMB RMB Total revenues 1,956,717 2,250,118 Cost of revenues (250,007) (351,566) Net (loss)/income (41,429) 162,265 For the six months ended June 30, 2021 2022 RMB RMB Net cash generated from operating activities 861,135 486,939 Net cash used in investing activities (167,365) (106,702) Net cash used in financing activities (438,586) — Net increase in cash and cash equivalents 255,184 380,237 Cash and cash equivalents at beginning of the period 183,199 864,851 Cash and cash equivalents at end of the period 438,383 1,245,088 | As of December 31, As of September 30, 2021 2022 RMB RMB ASSETS Current assets Cash and cash equivalents 864,851 873,872 Short-term investments 864,557 1,329,802 Accounts receivable 1,002 3,929 Amounts due from Group companies 86,989 125,745 Amounts due from related parties 6,615 10,050 Prepayments and other current assets 487,598 480,213 Total current assets 2,311,612 2,823,611 Non-current assets Property, equipment and software, net 368,381 548,476 Intangible assets, net 458 390 Right-of-use assets, net 301,288 294,905 Other non-current assets 4,000 4,000 Total non-current assets 674,127 847,771 Total assets 2,985,739 3,671,382 LIABILITIES Current liabilities Accounts payable 52,938 51,678 Deferred revenue 1,958,570 2,036,728 Other payables and accrued liabilities 626,151 521,066 Amounts due to Group companies 27,223 12,576 Operating lease liabilities, current 124,464 143,389 Total current liabilities 2,789,346 2,765,437 Non-current liabilities Operating lease liabilities, non-current 178,844 154,775 Total non-current liabilities 178,844 154,775 Total liabilities 2,968,190 2,920,212 For the nine months ended September 30, 2021 2022 RMB RMB Total revenues 3,168,478 3,427,797 Cost of revenues (404,796) (552,380) Net income 274,608 319,165 For the nine months ended September 30, 2021 2022 RMB RMB Net cash generated from operating activities 1,158,919 777,516 Net cash used in investing activities (795,751) (733,351) Net cash used in financing activities (444,239) (35,144) Net (decrease)/increase in cash and cash equivalents (81,071) 9,021 Cash and cash equivalents at beginning of the period 183,199 864,851 Cash and cash equivalents at end of the period 102,128 873,872 |
PRINCIPAL ACCOUNTING POLICIES_2
PRINCIPAL ACCOUNTING POLICIES (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
PRINCIPAL ACCOUNTING POLICIES | ||
Summary of property, equipment and software | Category Estimated useful lives Electronic equipment 3-5 years Leasehold improvement Shorter of lease term or estimated useful life of the assets Furniture and fixtures 5 years Motor vehicles 3-5 years Software 5 years | |
Summary of intangible assets | Category Estimated useful lives Domains 10 years The estimated useful lives of domains are the periods over which they are expected to be available for use by the Group, which are mainly determined based on the periods of effective registration of the domains. 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) | |
Summary of total revenue | For the six months ended June 30, 2021 2022 RMB RMB Online recruitment services to enterprise customers – Key accounts 362,763 517,925 – Mid-sized accounts 633,685 910,848 – Small-sized accounts 943,471 798,411 Others 16,798 23,040 Total 1,956,717 2,250,224 | For the nine months ended September 30, 2021 2022 RMB RMB Online recruitment services to enterprise customers —Key accounts 643,114 775,037 —Mid-sized accounts 1,080,514 1,375,551 —Small-sized accounts 1,413,426 1,241,060 Others 31,424 37,139 Total 3,168,478 3,428,787 |
SHORT-TERM INVESTMENTS (Tables)
SHORT-TERM INVESTMENTS (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
SHORT-TERM INVESTMENTS | ||
Schedule of Short-Term Investments | As of December 31, As of June 30, 2021 2022 RMB RMB Wealth management products 884,996 812,225 | As of December 31, As of September 30, 2021 2022 RMB RMB Wealth management products 884,996 2,764,368 |
PREPAYMENTS AND OTHER CURRENT_2
PREPAYMENTS AND OTHER CURRENT ASSETS (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
PREPAYMENTS AND OTHER CURRENT ASSETS | ||
Schedule of Prepaid Expenses and Other Current Assets | As of December 31, As of June 30, 2021 2022 RMB RMB Prepaid advertising expenses and service fee 234,490 134,821 Receivables related to the exercise of share-based awards* 289,822 166,202 Receivables from third-party on-line payment platforms 63,866 77,608 Deposits 63,814 64,646 Staff loans and advances 52,695 53,798 Others 19,896 23,514 Total 724,583 520,589 * It mainly represented receivables from a third-party share option brokerage platform for the exercise of share-based awards due to the timing of settlement. | As of December 31, As of September 30, 2021 2022 RMB RMB Prepaid advertising expenses and service fee 234,490 233,392 Receivables from third-party on-line payment platforms 63,866 97,493 Deposits 63,814 71,678 Staff loans and advances 52,695 49,693 Receivables related to the exercise of share-based awards* 289,822 39,092 Others 19,896 57,826 Total 724,583 549,174 * It mainly represented receivables from a third-party share option brokerage platform for the exercise of share-based awards due to the timing of settlement. |
PROPERTY, EQUIPMENT AND SOFTW_2
PROPERTY, EQUIPMENT AND SOFTWARE, NET (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | ||
Schedule of Property, Equipment and Software, Net | As of December 31, As of June 30, 2021 2022 RMB RMB Electronic equipment 429,683 642,042 Leasehold improvement 65,885 86,129 Furniture and fixtures 12,784 15,912 Motor vehicles 3,904 3,904 Software 3,126 4,055 Total cost 515,382 752,042 Less: accumulated depreciation (146,256) (205,936) Total property, equipment and software, net 369,126 546,106 | As of December 31, As of September 30, 2021 2022 RMB RMB Electronic equipment 429,683 675,696 Leasehold improvement 65,885 94,034 Furniture and fixtures 12,784 16,922 Motor vehicles 3,904 3,904 Software 3,126 4,055 Total cost 515,382 794,611 Less: accumulated depreciation (146,256) (243,717) Total property, equipment and software, net 369,126 550,894 |
ACCOUNTS PAYABLE (Tables)
ACCOUNTS PAYABLE (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
ACCOUNTS PAYABLE | ||
Schedule of Accounts Payable | As of December 31, As of June 30, 2021 2022 RMB RMB Payables for purchase of property, equipment and software 19,987 84,323 Payables for advertising expenses 30,646 39,870 Others 2,330 11,080 Total 52,963 135,273 | As of December 31, As of September 30, 2021 2022 RMB RMB Payables for advertising expenses 30,646 26,777 Payables for purchase of property, equipment and software 19,987 19,450 Others 2,330 5,536 Total 52,963 51,763 |
OTHER PAYABLES AND ACCRUED LI_2
OTHER PAYABLES AND ACCRUED LIABILITIES (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
OTHER PAYABLES AND ACCRUED LIABILITIES | ||
Schedule of other payables and accrued liabilities | As of December 31, As of June 30, 2021 2022 RMB RMB Salary, welfare and bonus payable 373,286 359,477 Tax payable (1) 218,419 148,783 Virtual accounts used in the Group’s platform (2) 41,070 47,748 Contingent liability (Note 17) — 14,882 Others 12,363 8,091 Total 645,138 578,981 (1) Tax payable mainly included value-added tax, enterprise income tax and individual income tax payable mainly related to the exercise of share-based awards. (2) It represents the advance payments from customers that were refundable and stored in their own virtual accounts in the Group’s platform, which they have rights to exchange for services provided on the online recruitment platform. | As of December 31, As of September 30, 2021 2022 RMB RMB Salary, welfare and bonus payable 373,286 378,599 Tax payable (1) 218,419 84,864 Virtual accounts used in the Group’s platform (2) 41,070 53,616 Consideration payable for share repurchase — 67,443 Contingent liability (Note 16) — 14,882 Others 12,363 39,543 Total 645,138 638,947 (1) Tax payable as of December 31, 2021 mainly included value-added tax, enterprise income tax and individual income tax payable mainly related to the exercise of share-based awards. (2) It represents the advance payments from customers that were refundable and stored in their own virtual accounts in the Group’s platform, which they have rights to exchange for services provided on the online recruitment platform. |
OPERATING LEASE (Tables)
OPERATING LEASE (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
OPERATING LEASE | ||
Summary of components of lease expenses | For the six months ended June 30, 2021 2022 RMB RMB Operating lease expenses 49,357 76,627 Expenses for short-term leases within 12 months 1,104 922 Total lease expenses 50,461 77,549 | For the nine months ended September 30, 2021 2022 RMB RMB Operating lease expenses 83,318 118,027 Expenses for short-term leases within 12 months 1,776 1,408 Total lease expenses 85,094 119,435 |
Summary of supplemental balance sheet information related to operating lease | As of December 31, As of June 30, 2021 2022 RMB RMB Right-of-use assets 309,085 303,609 Operating lease liabilities, current 127,531 146,134 Operating lease liabilities, non-current 183,365 166,309 Total operating lease liabilities 310,896 312,443 As of December 31, As of June 30, 2021 2022 RMB RMB Weighted average remaining lease term (in years) 3.26 2.90 Weighted average discount rate 4.82 % 4.82 % | As of December 31, As of September 30, 2021 2022 RMB RMB Right-of-use assets 309,085 310,445 Operating lease liabilities, current 127,531 150,513 Operating lease liabilities, non-current 183,365 163,800 Total operating lease liabilities 310,896 314,313 As of December 31, As of September 30, 2021 2022 RMB RMB Weighted average remaining lease term (in years) 3.26 2.75 Weighted average discount rate 4.82 % 4.81 % |
Summary of supplemental cash flow information related to operating lease | For the six months ended June 30, 2021 2022 RMB RMB Cash paid for amounts included in the measurement of operating lease liabilities 43,391 68,850 Right-of-use assets obtained in exchange for operating lease liabilities 87,503 63,934 | For the nine months ended September 30, 2021 2022 RMB RMB Cash paid for amounts included in the measurement of operating lease liabilities 70,602 113,978 Right-of-use assets obtained in exchange for operating lease liabilities 193,660 107,771 |
Summary of maturities of lease liabilities | As of June 30, 2022 RMB Succeeding period in 2022 80,485 2023 124,876 2024 64,381 2025 38,268 2026 25,451 2027 1,834 Thereafter — Total undiscounted lease payments 335,295 Less: imputed interest (22,852) Total operating lease liabilities 312,443 | As of September 30, 2022 RMB Succeeding period in 2022 38,417 2023 146,455 2024 78,142 2025 46,149 2026 25,451 2027 1,834 Thereafter — Total undiscounted lease payments 336,448 Less: imputed interest (22,135) Total operating lease liabilities 314,313 |
OTHER OPERATING INCOME, NET (Ta
OTHER OPERATING INCOME, NET (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
OTHER OPERATING INCOME, NET | |
Schedule of other operating income net | For the six months ended June 30, 2021 2022 RMB RMB VAT-in super deduction* 5,552 5,082 Others 2,105 5,661 Total 7,657 10,743 * In accordance with the Announcement on Relevant Policies for Deepening the Value-added Tax Reform and relevant government policies announced by the Ministry of Finance, the State Taxation Administration and the General Administration of Customs of China, Huapin, as a consumer service company, is allowed to enjoy additional 10% VAT-in deduction for any services or goods it purchased (“VAT-in super deduction”) from April 1, 2019 to December 31, 2021, which was then extended to December 31, 2022. The VAT-in super deduction obtained is considered as operating given that all VAT-in are derived from the purchases for daily operations, and therefore is presented in other operating income in the Consolidation Statements of Comprehensive (Loss)/Income. |
RELATED PARTIES BALANCES AND _2
RELATED PARTIES BALANCES AND TRANSACTIONS (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
RELATED PARTIES BALANCES AND TRANSACTIONS | ||
Summary of name of major related parties and their relationships with the group | Name of related parties Relationship with the Group Image Frame Investment (HK) Limited (under the control of Tencent Holdings Limited) Principal shareholder of the Group | Name of related parties Relationship with the Group Image Frame Investment (HK) Limited (under the control of Tencent Holdings Limited) Principal shareholder of the Group |
Summary of amounts due from related parties | As of December 31, As of June 30, 2021 2022 RMB RMB Receivables from Tencent Group’s on-line payment platform* 4,284 6,215 Prepaid cloud service fee to Tencent Group* 2,331 3,368 Total 6,615 9,583 | As of December 31, As of September 30, 2021 2022 RMB RMB Receivables from Tencent Group’s on-line payment platform* 4,284 6,698 Prepaid cloud service fee to Tencent Group* 2,331 3,352 Total 6,615 10,050 |
Summary of transactions with related parties | For the six months ended June 30, 2021 2022 RMB RMB Cloud services from Tencent Group* 7,715 11,402 On-line payment platform clearing services from Tencent Group* 2,887 2,355 Total 10,602 13,757 * Tencent Group represents companies under the control of Tencent Holdings Limited, including Image Frame Investment (HK) Limited. The Group purchases cloud services and on-line payment platform clearing services from Tencent Group, which are trade in nature. | For the nine months ended September 30, 2021 2022 RMB RMB Cloud services from Tencent Group* 12,445 18,877 On-line payment platform clearing services from Tencent Group* 4,344 3,652 Total 16,789 22,529 * Tencent Group represents companies under the control of Tencent Holdings Limited, including Image Frame Investment (HK) Limited. The Group purchases cloud services and on-line payment platform clearing services from Tencent Group, which are trade in nature. |
TAXATION (Tables)
TAXATION (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
TAXATION | |
Schedule of components of loss before tax | For the six months ended June 30, 2021 2022 RMB RMB (Loss)/income from PRC entities (40,300) 177,153 Loss from overseas entities (1,550,012) (82,709) Total (loss)/income before income tax (1,590,312) 94,444 |
Schedule of components of income tax expenses | For the six months ended June 30, 2021 2022 RMB RMB Current income tax expense — 14,123 |
Schedule of reconciliation between the PRC statutory income tax rate and effective income tax rate | For the six months ended June 30, 2021 2022 RMB RMB PRC statutory income tax rate 25.00 % 25.00 % Tax rate difference from statutory rate in other jurisdictions (1) (23.84) % 5.83 % Permanent difference (2) 0.46 % (6.53) % Effect of preferential tax rates (0.41) % (17.76) % Changes in valuation allowance (7.72) % 10.57 % Others 6.51 % (2.16) % Effective tax rate — 14.95 % (1) The tax rate difference for the six months ended June 30, 2021 was mainly attributed to net loss of the Company, which is located in the Cayman Islands and exempted from income tax. (2) The permanent difference was primarily related to additional tax deductions for qualified research and development expenses offset by non-deductible share-based compensation expenses. |
Summary of net deferred tax assets | As of December 31, As of June 30, 2021 2022 RMB RMB Net operating loss carry-forwards 70,985 82,028 Deductible advertising expenses 262,801 262,797 Others 1,062 — Total deferred tax assets 334,848 344,825 Less: valuation allowance (334,848) (344,825) Total deferred tax assets, net of valuation allowance — — |
Schedule of movements of valuation allowance | As of December 31, As of June 30, 2021 2022 RMB RMB Balance at beginning of the year/period 250,032 334,848 Additions 84,816 9,977 Balance at end of the year/period 334,848 344,825 |
CONVERTIBLE REDEEMABLE PREFER_2
CONVERTIBLE REDEEMABLE PREFERRED SHARES (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
CONVERTIBLE REDEEMABLE PREFERRED SHARES | ||
Summary of convertible redeemable preferred share | Series A Series B Series C Series D Series E Series F Preferred Shares Preferred Shares Preferred Shares Preferred Shares Preferred Shares Preferred Shares Total Number Number Number Number Number Number Number of shares Amount of shares Amount of shares Amount of shares Amount of shares Amount of shares Amount of shares Amount RMB RMB RMB RMB RMB RMB RMB Balance as of January 1, 2021 60,000,000 36,177 40,000,000 67,976 147,068,133 478,565 60,856,049 380,782 144,073,367 1,845,033 99,354,585 2,882,063 551,352,134 5,690,596 Accretion on convertible redeemable preferred shares to redemption value — 1,057 — 2,006 — 13,580 — 10,823 — 51,072 — 85,527 — 164,065 Conversion of Preferred Shares to ordinary shares (60,000,000) (37,234) (40,000,000) (69,982) (147,068,133) (492,145) (60,856,049) (391,605) (144,073,367) (1,896,105) (99,354,585) (2,967,590) (551,352,134) (5,854,661) Balance as of June 30, 2021 — — — — — — — — — — — — — — | Series A Series B Series C Series D Series E Series F Preferred Shares Preferred Shares Preferred Shares Preferred Shares Preferred Shares Preferred Shares Total Number Number Number Number Number Number Number of shares Amount of shares Amount of shares Amount of shares Amount of shares Amount of shares Amount of shares Amount RMB RMB RMB RMB RMB RMB RMB Balance as of January 1, 2021 60,000,000 36,177 40,000,000 67,976 147,068,133 478,565 60,856,049 380,782 144,073,367 1,845,033 99,354,585 2,882,063 551,352,134 5,690,596 Accretion on convertible redeemable preferred shares to redemption value — 1,057 — 2,006 — 13,580 — 10,823 — 51,072 — 85,527 — 164,065 Conversion of Preferred Shares to ordinary shares (60,000,000) (37,234) (40,000,000) (69,982) (147,068,133) (492,145) (60,856,049) (391,605) (144,073,367) (1,896,105) (99,354,585) (2,967,590) (551,352,134) (5,854,661) Balance as of September 30, 2021 — — — — — — — — — — — — — — |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
SHARE-BASED COMPENSATION | ||
Schedule of stock option activity | Weighted Weighted Weighted average average Aggregate average Number of exercise remaining intrinsic grant-date options price contractual life value fair value US$ In Years US$ US$ Outstanding as of January 1, 2021 107,133,353 1.16 6.84 226,639 0.64 Granted 32,701,729 4.14 Forfeited (2,463,934) 1.85 Outstanding as of June 30, 2021 137,371,148 1.85 7.45 2,468,589 1.93 Outstanding as of January 1, 2022 82,475,968 2.71 8.05 1,214,916 2.82 Granted 8,424 — Exercised (6,812,174) 1.30 Forfeited (1,113,600) 2.50 Outstanding as of June 30, 2022 74,558,618 2.84 7.68 767,897 2.90 Vested and expected to vest as of June 30, 2022 74,558,618 2.84 7.68 767,897 2.90 Exercisable as of June 30, 2022 30,629,972 2.12 6.93 337,665 1.79 | Weighted Weighted Weighted average average Aggregate average Number of exercise remaining intrinsic grant-date options price contractual life value fair value US$ In Years US$ US$ Outstanding as of January 1, 2021 107,133,353 1.16 6.84 226,639 0.64 Granted 32,710,153 4.08 Exercised (47,697,284) 0.54 Forfeited (2,924,868) 1.95 Outstanding as of September 30, 2021 89,221,354 2.53 8.21 1,379,942 2.77 Outstanding as of January 1, 2022 82,475,968 2.71 8.05 1,214,916 2.82 Granted 8,424 — Exercised (9,071,268) 1.45 Forfeited (1,356,950) 2.91 Outstanding as of September 30, 2022 72,056,174 2.86 7.45 410,810 2.93 Vested and expected to vest as of September 30, 2022 72,056,174 2.86 7.45 410,810 2.93 Exercisable as of September 30, 2022 32,174,348 2.07 6.70 204,988 1.71 |
Summary of assumptions in the binomial option-pricing model used to determine the fair value of stock options | a For the six months ended June 30, 2021 Fair value of ordinary shares on the date of option grant 6.78 – Risk-free interest rate (1) 1.7% – 2.0% Expected term (in years) 10 Expected dividend yield (2) 0% Expected volatility (3) 58.8% – 59.8% Expected early exercise multiple 2.2x – 2.8x (1) The risk-free interest rate of periods within the contractual life of the share option is based on the market yield of U.S. Treasury Strips with a maturity life equal to the expected life to expiration. (2) The Company has no history or expectation of paying dividends on its ordinary shares. (3) Expected volatility is estimated based on the average of historical volatilities of the comparable companies in the same industry as at the valuation dates. | For the nine months ended September 30, 2021 Fair value of ordinary shares on the date of option grant 6.78 - 18.09 Risk-free interest rate (1) 1.6% - 2.0% Expected term (in years) 10 Expected dividend yield (2) 0 Expected volatility (3) 58.8% - 59.8% Expected early exercise multiple 2.2x - 2.8x (1) The risk-free interest rate of periods within the contractual life of the share option is based on the market yield of U.S. Treasury Strips with a maturity life equal to the expected life to expiration. (2) The Company has no history or expectation of paying dividends on its ordinary shares. (3) Expected volatility is estimated based on the average of historical volatilities of the comparable companies in the same industry as at the valuation dates. |
Summary of RSU activity | Number of Weighted average RSUs grant-date fair value US$ Outstanding as of January 1, 2022 3,521,118 19.05 Granted 8,118,214 Vested (257,420) Forfeited (242,012) Outstanding as of June 30, 2022 11,139,900 12.81 | Number of Weighted average RSUs grant-date fair value US$ Outstanding as of January 1, 2021 — — Granted 202,274 Vested — Forfeited — Outstanding as of September 30, 2021 202,274 19.40 Outstanding as of January 1, 2022 3,521,118 19.05 Granted 11,994,570 Vested (313,464) Forfeited (334,176) Outstanding as of September 30, 2022 14,868,048 12.35 |
Summary of stock-based compensation expense | For the six months ended June 30, 2021 2022 RMB RMB Cost of revenues 13,137 16,113 Sales and marketing expenses 26,922 63,817 Research and development expenses 58,633 115,117 General and administrative expenses* 1,610,559 87,999 Total 1,709,251 283,046 * In June 2021, the Company granted 24,745,531 Class B ordinary shares to TECHWOLF LIMITED, and recorded share- based compensation expenses of RMB1,506.4 million in general and administrative expenses upon the grant (Note 13). | For the nine months ended September 30, 2021 2022 RMB RMB Cost of revenues 24,568 25,204 Sales and marketing expenses 44,838 106,613 Research and development expenses 95,321 184,945 General and administrative expenses* 1,643,447 131,199 Total 1,808,174 447,961 * In June 2021, the Company granted 24,745,531 Class B ordinary shares to TECHWOLF LIMITED and recorded share- based compensation expenses of RMB1,506.4 million in general and administrative expenses upon the grant (Note 12). |
BASIC AND DILUTED NET (LOSS)__2
BASIC AND DILUTED NET (LOSS)/INCOME PER SHARE (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
BASIC AND DILUTED NET (LOSS)/INCOME PER SHARE | ||
Schedule of basic and diluted net (loss)/income per share | For the six months ended June 30, 2021 2022 RMB RMB Numerator Net (loss)/income (1,590,312) 80,321 Accretion on convertible redeemable preferred shares to redemption value (164,065) — Net (loss)/income attributable to ordinary shareholders (1,754,377) 80,321 Denominator Weighted average number of ordinary shares used in computing net (loss)/income per share, basic 147,308,942 869,427,036 Dilutive effect of share-based awards — 48,057,023 Weighted average number of ordinary shares used in computing net (loss)/income per share, diluted 147,308,942 917,484,059 Net (loss)/income per share attributable to ordinary shareholders – Basic (11.91) 0.09 – Diluted (11.91) 0.09 | For the nine months ended September 30, 2021 2022 RMB RMB Numerator Net (loss)/income (1,304,144) 292,038 Accretion on convertible redeemable preferred shares to redemption value (164,065) — Net (loss)/income attributable to ordinary shareholders (1,468,209) 292,038 Denominator Weighted average number of ordinary shares used in computing net (loss)/income per share, basic 420,605,543 870,385,113 Dilutive effect of share-based awards — 46,527,458 Weighted average number of ordinary shares used in computing net (loss)/income per share, diluted 420,605,543 916,912,571 Net (loss)/income per share attributable to ordinary shareholders —Basic (3.49) 0.34 —Diluted (3.49) 0.32 |
Schedule of antidilutive securities excluded from computation of earnings per share | For the six months ended June 30, 2021 RMB Preferred shares 502,881,617 Share options and RSUs 94,100,191 |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
FAIR VALUE MEASUREMENT | ||
Schedule of fair value, assets and liabilities measured on recurring basis | Fair value measurement at reporting date using Quoted prices in active Significant other Significant markets for identical assets observable inputs unobservable inputs Description Fair value (Level 1) (Level 2) (Level 3) RMB RMB RMB RMB Short-term investments As of December 31, 2021 884,996 — 884,996 — As of June 30, 2022 812,225 — 812,225 — | Fair value measurement at reporting date using Quoted prices in active Significant other Significant markets for identical assets observable inputs unobservable inputs Description Fair value (Level 1) (Level 2) (Level 3) RMB RMB RMB RMB Short-term investments As of December 31, 2021 884,996 — 884,996 — As of September 30, 2022 2,764,368 — 2,764,368 — |
PRINCIPAL ACTIVITIES AND ORGA_3
PRINCIPAL ACTIVITIES AND ORGANIZATION - Summary of principal subsidiaries and consolidated VIE (Details) | Sep. 30, 2022 | Jun. 30, 2022 |
Techfish Limited | Subsidiaries | ||
Schedule Of Subsidiaries And Consolidated Variable Interest Entity [Line Items] | ||
Equity interest held | 100% | 100% |
Beijing Glory Wolf Co., Ltd. | Subsidiaries | ||
Schedule Of Subsidiaries And Consolidated Variable Interest Entity [Line Items] | ||
Equity interest held | 100% | 100% |
Beijing Huapin Borui Network Technology Co., Ltd. | VIE | ||
Schedule Of Subsidiaries And Consolidated Variable Interest Entity [Line Items] | ||
Equity interest held | 100% | 100% |
PRINCIPAL ACTIVITIES AND ORGA_4
PRINCIPAL ACTIVITIES AND ORGANIZATION - Summary of group's consolidated financial statements (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | 9 Months Ended | ||||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Jan. 01, 2019 | |
Current assets | ||||||
Cash and cash equivalents | ¥ 12,174,097 | ¥ 11,158,756 | ¥ 11,341,758 | |||
Short-term investments | 812,225 | 2,764,368 | 884,996 | |||
Accounts receivable | 2,013 | 4,511 | 1,002 | |||
Amounts due from related parties | 9,583 | 10,050 | 6,615 | |||
Prepayments and other current assets | 520,589 | 549,174 | 724,583 | |||
Total current assets | 13,518,507 | 14,486,859 | 12,958,954 | |||
Non-current assets | ||||||
Property, equipment and software, net | 546,106 | 550,894 | 369,126 | |||
Intangible assets, net | 413 | 390 | 458 | |||
Right-of-use assets, net | 303,609 | 310,445 | 309,085 | ¥ 50,570 | ||
Other non-current assets | 4,000 | 4,000 | 4,000 | |||
Total non-current assets | 854,128 | 865,729 | 682,669 | |||
Total assets | 14,372,635 | 15,352,588 | 13,641,623 | |||
Current liabilities | ||||||
Accounts payable | 135,273 | 51,763 | 52,963 | |||
Deferred revenue | 1,979,056 | 2,038,669 | 1,958,570 | |||
Other payables and accrued liabilities | 578,981 | 638,947 | 645,138 | |||
Operating lease liabilities, current | 146,134 | 150,513 | 127,531 | |||
Total current liabilities | 2,839,444 | 2,879,892 | 2,784,202 | |||
Non-current liabilities | ||||||
Operating lease liabilities, non-current | 166,309 | 163,800 | 183,365 | |||
Total non-current liabilities | 166,309 | 163,800 | 183,365 | |||
Total liabilities | 3,005,753 | 3,043,692 | 2,967,567 | |||
Total revenues | 2,250,224 | ¥ 1,956,717 | 3,428,787 | ¥ 3,168,478 | ||
Cost of revenues | (351,578) | (250,029) | (552,466) | (404,863) | ||
Net (loss)/income | 80,321 | (1,590,312) | 292,038 | (1,304,144) | ||
Net cash generated from operating activities | 480,948 | 836,543 | 847,499 | 1,106,471 | ||
Net cash used in investing activities | (97,909) | (167,365) | (2,091,086) | (805,751) | ||
Net cash used in financing activities | (87,816) | 6,412,214 | (41,278) | 6,409,844 | ||
Cash and cash equivalents at beginning of the period | 11,341,758 | 11,341,758 | ||||
Cash and cash equivalents at end of the period | 12,174,097 | 11,158,756 | ||||
VIE and VIE's subsidiaries | ||||||
Current assets | ||||||
Cash and cash equivalents | 1,245,088 | 438,383 | 873,872 | 102,128 | 864,851 | |
Short-term investments | 802,159 | 1,329,802 | 864,557 | |||
Accounts receivable | 1,946 | 3,929 | 1,002 | |||
Amounts due from Group companies | 100,805 | 125,745 | 86,989 | |||
Amounts due from related parties | 9,583 | 10,050 | 6,615 | |||
Prepayments and other current assets | 450,841 | 480,213 | 487,598 | |||
Total current assets | 2,610,422 | 2,823,611 | 2,311,612 | |||
Non-current assets | ||||||
Property, equipment and software, net | 544,171 | 548,476 | 368,381 | |||
Intangible assets, net | 413 | 390 | 458 | |||
Right-of-use assets, net | 287,032 | 294,905 | 301,288 | |||
Other non-current assets | 4,000 | 4,000 | 4,000 | |||
Total non-current assets | 835,616 | 847,771 | 674,127 | |||
Total assets | 3,446,038 | 3,671,382 | 2,985,739 | |||
Current liabilities | ||||||
Accounts payable | 135,098 | 51,678 | 52,938 | |||
Deferred revenue | 1,979,019 | 2,036,728 | 1,958,570 | |||
Other payables and accrued liabilities | 557,568 | 521,066 | 626,151 | |||
Amounts due to Group companies | 37,362 | 12,576 | 27,223 | |||
Operating lease liabilities, current | 139,625 | 143,389 | 124,464 | |||
Total current liabilities | 2,848,672 | 2,765,437 | 2,789,346 | |||
Non-current liabilities | ||||||
Operating lease liabilities, non-current | 155,954 | 154,775 | 178,844 | |||
Total non-current liabilities | 155,954 | 154,775 | 178,844 | |||
Total liabilities | 3,004,626 | 2,920,212 | ¥ 2,968,190 | |||
Total revenues | 2,250,118 | 1,956,717 | 3,427,797 | 3,168,478 | ||
Cost of revenues | (351,566) | (250,007) | (552,380) | (404,796) | ||
Net (loss)/income | 162,265 | (41,429) | 319,165 | 274,608 | ||
Net cash generated from operating activities | 486,939 | 861,135 | 777,516 | 1,158,919 | ||
Net cash used in investing activities | (106,702) | (167,365) | (733,351) | (795,751) | ||
Net cash used in financing activities | (438,586) | (35,144) | (444,239) | |||
Net increase in cash and cash equivalents | 380,237 | 255,184 | 9,021 | (81,071) | ||
Cash and cash equivalents at beginning of the period | 864,851 | 183,199 | 864,851 | 183,199 | ||
Cash and cash equivalents at end of the period | ¥ 1,245,088 | ¥ 438,383 | ¥ 873,872 | ¥ 102,128 |
PRINCIPAL ACTIVITIES AND ORGA_5
PRINCIPAL ACTIVITIES AND ORGANIZATION - Additional information (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | 9 Months Ended | |
Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Principal Activities And Organization [Line Items] | |||
Effective term of exclusive purchase option agreement | 10 years | 10 years | |
VIE | |||
Principal Activities And Organization [Line Items] | |||
Threshold period for paying service fees | 30 days | ||
Registered capitals and statutory reserves of variable interest entity | ¥ 9,002 | ¥ 9,002 | ¥ 9,002 |
Equity pledge agreement | VIE | Nominee shareholder | |||
Principal Activities And Organization [Line Items] | |||
Percentage of equity interests pledged | 100% | ||
Equity pledge agreement | VIE | Registered Shareholders | |||
Principal Activities And Organization [Line Items] | |||
Percentage of equity interests pledged | 100% | ||
Exclusive technology and service co-operation agreement | VIE | |||
Principal Activities And Organization [Line Items] | |||
Threshold period for paying service fees | 30 days |
PRINCIPAL ACCOUNTING POLICIES -
PRINCIPAL ACCOUNTING POLICIES - Additional information (Details) ¥ in Thousands | 6 Months Ended | 9 Months Ended | ||||
Jun. 30, 2022 CNY (¥) segment | Jun. 30, 2021 CNY (¥) | Sep. 30, 2022 CNY (¥) | Sep. 30, 2021 CNY (¥) | Dec. 31, 2021 CNY (¥) | Jan. 01, 2019 CNY (¥) | |
PRINCIPAL ACCOUNTING POLICIES | ||||||
Allowance for doubtful accounts receivable | ¥ 0 | ¥ 0 | ||||
Impairment of long-lived assets | 0 | 0 | ||||
Employee benefit expenses incurred | 171,116 | 109,040 | ||||
Operating lease right of use asset | 303,609 | ¥ 310,445 | ¥ 309,085 | ¥ 50,570 | ||
Operating lease liability | 312,443 | 314,313 | ¥ 310,896 | ¥ 50,089 | ||
Unrecognized tax benefits | 0 | |||||
Advertising expense | 348,594 | 723,724 | ||||
Appropriations to statutory reserves | 0 | ¥ 0 | ||||
Tax adjustments to arrive at other comprehensive income/(loss) | ¥ 0 | |||||
Number of reportable segment | segment | 1 | |||||
Foreign invested enterprise | General reserve fund | CHINA | ||||||
PRINCIPAL ACCOUNTING POLICIES | ||||||
Minimum percentage appropriation to general reserve fund required | 10% | |||||
Required general reserve registered capital ratio to deforce compulsory net profit allocation to general reserve | 50% | |||||
Domestic enterprise | Statutory surplus reserve | CHINA | ||||||
PRINCIPAL ACCOUNTING POLICIES | ||||||
Minimum percentage appropriation to statutory surplus fund required | 10% | |||||
Required statutory surplus registered capital ratio to deforce compulsory net profit allocation to statutory surplus | 50% | |||||
Key accounts | Minimum | ||||||
PRINCIPAL ACCOUNTING POLICIES | ||||||
Contributed revenue defines enterprise customers | ¥ 50 | |||||
Mid-sized accounts | Minimum | ||||||
PRINCIPAL ACCOUNTING POLICIES | ||||||
Contributed revenue defines enterprise customers | 5 | |||||
Mid-sized accounts | Maximum | ||||||
PRINCIPAL ACCOUNTING POLICIES | ||||||
Contributed revenue defines enterprise customers | 50 | |||||
Small-sized accounts | Maximum | ||||||
PRINCIPAL ACCOUNTING POLICIES | ||||||
Contributed revenue defines enterprise customers | ¥ 5 | |||||
Transferred over time | Online recruitment services to enterprise customers | ||||||
PRINCIPAL ACCOUNTING POLICIES | ||||||
Deferred revenue, revenue recognized | 2,509,702 | ¥ 2,207,283 | ||||
Transferred at point in time | Online recruitment services to enterprise customers | ||||||
PRINCIPAL ACCOUNTING POLICIES | ||||||
Deferred revenue, revenue recognized | ¥ 881,946 | ¥ 929,771 |
PRINCIPAL ACCOUNTING POLICIES_3
PRINCIPAL ACCOUNTING POLICIES - Summary of property, equipment and software (Details) | 6 Months Ended |
Jun. 30, 2022 | |
Leasehold improvement | |
PRINCIPAL ACCOUNTING POLICIES | |
Property, plant and equipment, estimated useful lives | Shorter of lease term or estimated useful life of the assets |
Furniture and fixtures | |
PRINCIPAL ACCOUNTING POLICIES | |
Property, plant and equipment, useful life | 5 years |
Software | |
PRINCIPAL ACCOUNTING POLICIES | |
Property, plant and equipment, useful life | 5 years |
Minimum | Electronic equipment | |
PRINCIPAL ACCOUNTING POLICIES | |
Property, plant and equipment, useful life | 3 years |
Minimum | Motor vehicles | |
PRINCIPAL ACCOUNTING POLICIES | |
Property, plant and equipment, useful life | 3 years |
Maximum | Electronic equipment | |
PRINCIPAL ACCOUNTING POLICIES | |
Property, plant and equipment, useful life | 5 years |
Maximum | Motor vehicles | |
PRINCIPAL ACCOUNTING POLICIES | |
Property, plant and equipment, useful life | 5 years |
PRINCIPAL ACCOUNTING POLICIES_4
PRINCIPAL ACCOUNTING POLICIES - Summary of intangible assets (Details) | 6 Months Ended |
Jun. 30, 2022 | |
Domains | |
PRINCIPAL ACCOUNTING POLICIES | |
Estimated useful lives | 10 years |
PRINCIPAL ACCOUNTING POLICIES_5
PRINCIPAL ACCOUNTING POLICIES - Summary of total Revenue (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
PRINCIPAL ACCOUNTING POLICIES | ||||
Revenues | ¥ 2,250,224 | ¥ 1,956,717 | ¥ 3,428,787 | ¥ 3,168,478 |
Online recruitment services to enterprise customers | ||||
PRINCIPAL ACCOUNTING POLICIES | ||||
Revenues | 2,227,184 | 1,939,919 | 3,391,648 | 3,137,054 |
Services over a particular subscription period | ||||
PRINCIPAL ACCOUNTING POLICIES | ||||
Revenues | 1,647,892 | 1,338,480 | ||
Services with definite and limited numbers | ||||
PRINCIPAL ACCOUNTING POLICIES | ||||
Revenues | 579,292 | 601,439 | ||
Others | ||||
PRINCIPAL ACCOUNTING POLICIES | ||||
Revenues | 23,040 | 16,798 | ¥ 37,139 | 31,424 |
Key accounts | ||||
PRINCIPAL ACCOUNTING POLICIES | ||||
Revenue, Judgment | revenue of RMB50 or more annually as key accounts | |||
Key accounts | Online recruitment services to enterprise customers | ||||
PRINCIPAL ACCOUNTING POLICIES | ||||
Revenues | 517,925 | 362,763 | ¥ 775,037 | 643,114 |
Mid-sized accounts | ||||
PRINCIPAL ACCOUNTING POLICIES | ||||
Revenue, Judgment | revenue between RMB5 and RMB50 annually as mid-sized accounts | |||
Mid-sized accounts | Online recruitment services to enterprise customers | ||||
PRINCIPAL ACCOUNTING POLICIES | ||||
Revenues | 910,848 | 633,685 | ¥ 1,375,551 | 1,080,514 |
Small-sized accounts | ||||
PRINCIPAL ACCOUNTING POLICIES | ||||
Revenue, Judgment | revenue of RMB5 or less annually as small-sized accounts | |||
Small-sized accounts | Online recruitment services to enterprise customers | ||||
PRINCIPAL ACCOUNTING POLICIES | ||||
Revenues | ¥ 798,411 | ¥ 943,471 | ¥ 1,241,060 | ¥ 1,413,426 |
CONCENTRATION AND RISKS (Detail
CONCENTRATION AND RISKS (Details) - Foreign Currency exchange rate risk - RMB Against US Dollar | 1 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jul. 31, 2005 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
CONCENTRATION AND RISKS | ||||||
Percentage of depreciation in foreign currency exchange rate | 5.30% | 11.40% | 1.70% | |||
Percentage of appreciation in foreign currency exchange rate | 2.30% | 6.50% | ||||
Minimum [Member] | ||||||
CONCENTRATION AND RISKS | ||||||
Minimum percent of appreciation of domestic currency against foreign currency over following three years | 20% |
SHORT-TERM INVESTMENTS (Details
SHORT-TERM INVESTMENTS (Details) - CNY (¥) ¥ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Short-term investments | ¥ 2,764,368 | ¥ 812,225 | ¥ 884,996 |
Wealth management products | |||
Short-term investments | ¥ 2,764,368 | ¥ 812,225 | ¥ 884,996 |
SHORT-TERM INVESTMENTS - Additi
SHORT-TERM INVESTMENTS - Additional Information (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net investment income | ¥ 17,075 | ¥ 8,629 | ¥ 31,112 | ¥ 15,791 |
Wealth management products | ||||
Net investment income | ¥ 17,075 | ¥ 8,629 | ¥ 31,112 | ¥ 15,791 |
PREPAYMENTS AND OTHER CURRENT_3
PREPAYMENTS AND OTHER CURRENT ASSETS (Details) - CNY (¥) ¥ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
PREPAYMENTS AND OTHER CURRENT ASSETS | |||
Prepaid advertising expenses and service fee | ¥ 233,392 | ¥ 134,821 | ¥ 234,490 |
Receivables related to the exercise of share-based awards | 39,092 | 166,202 | 289,822 |
Receivables from third-party on-line payment platforms | 97,493 | 77,608 | 63,866 |
Deposits | 71,678 | 64,646 | 63,814 |
Staff loans and advances | 49,693 | 53,798 | 52,695 |
Others | 57,826 | 23,514 | 19,896 |
Total | ¥ 549,174 | ¥ 520,589 | ¥ 724,583 |
PROPERTY, EQUIPMENT AND SOFTW_3
PROPERTY, EQUIPMENT AND SOFTWARE, NET (Details) - CNY (¥) ¥ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Total cost | ¥ 794,611 | ¥ 752,042 | ¥ 515,382 |
Less: accumulated depreciation | (243,717) | (205,936) | (146,256) |
Total property, equipment and software, net | 550,894 | 546,106 | 369,126 |
Electronic equipment | |||
Total cost | 675,696 | 642,042 | 429,683 |
Leasehold improvement | |||
Total cost | 94,034 | 86,129 | 65,885 |
Furniture and fixtures | |||
Total cost | 16,922 | 15,912 | 12,784 |
Motor vehicles | |||
Total cost | 3,904 | 3,904 | 3,904 |
Software | |||
Total cost | ¥ 4,055 | ¥ 4,055 | ¥ 3,126 |
PROPERTY, EQUIPMENT AND SOFTW_4
PROPERTY, EQUIPMENT AND SOFTWARE, NET - Additional Information (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | ||||
Depreciation | ¥ 59,703 | ¥ 35,094 | ¥ 97,954 | ¥ 55,396 |
ACCOUNTS PAYABLE (Details)
ACCOUNTS PAYABLE (Details) - CNY (¥) ¥ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
ACCOUNTS PAYABLE | |||
Payables for purchase of property, equipment and software | ¥ 19,450 | ¥ 84,323 | ¥ 19,987 |
Payables for advertising expenses | 26,777 | 39,870 | 30,646 |
Others | 5,536 | 11,080 | 2,330 |
Total | ¥ 51,763 | ¥ 135,273 | ¥ 52,963 |
OTHER PAYABLES AND ACCRUED LI_3
OTHER PAYABLES AND ACCRUED LIABILITIES - Schedule Of Other Payables And Accrued Liabilities (Details) - CNY (¥) ¥ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
OTHER PAYABLES AND ACCRUED LIABILITIES | |||
Salary, welfare and bonus payable | ¥ 378,599 | ¥ 359,477 | ¥ 373,286 |
Tax payable | 84,864 | 148,783 | 218,419 |
Virtual accounts used in the Group's platform | 53,616 | 47,748 | 41,070 |
Payables to shareholders | 67,443 | ||
Contingent liability | 14,882 | 14,882 | |
Others | 39,543 | 8,091 | 12,363 |
Total | ¥ 638,947 | ¥ 578,981 | ¥ 645,138 |
OPERATING LEASE - Summary Of Co
OPERATING LEASE - Summary Of Components Of Lease Expenses (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
OPERATING LEASE | ||||
Operating lease expenses | ¥ 76,627 | ¥ 49,357 | ¥ 118,027 | ¥ 83,318 |
Expenses for short-term leases within 12 months | 922 | 1,104 | 1,408 | 1,776 |
Total lease expenses | ¥ 77,549 | ¥ 50,461 | ¥ 119,435 | ¥ 85,094 |
OPERATING LEASE - Summary Of Su
OPERATING LEASE - Summary Of Supplemental Balance Sheet Information Related To Operating Lease (Details) - CNY (¥) ¥ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Jan. 01, 2019 |
OPERATING LEASE | ||||
Right-of-use assets | ¥ 310,445 | ¥ 303,609 | ¥ 309,085 | ¥ 50,570 |
Operating lease liabilities, current | 150,513 | 146,134 | 127,531 | |
Operating lease liabilities, non-current | 163,800 | 166,309 | 183,365 | |
Total operating lease liabilities | ¥ 314,313 | ¥ 312,443 | ¥ 310,896 | ¥ 50,089 |
Weighted average remaining lease term (in years) | 2 years 9 months | 2 years 10 months 24 days | 3 years 3 months 3 days | |
Weighted average discount rate | 4.81% | 4.82% | 4.82% |
OPERATING LEASE - Summary Of _2
OPERATING LEASE - Summary Of Supplemental Cash Flow Information Related To Operating Lease (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
OPERATING LEASE | ||||
Cash paid for amounts included in the measurement of operating lease liabilities | ¥ 68,850 | ¥ 43,391 | ¥ 113,978 | ¥ 70,602 |
Right-of-use assets obtained in exchange for operating lease liabilities | ¥ 63,934 | ¥ 87,503 | ¥ 107,771 | ¥ 193,660 |
OPERATING LEASE - Summary Of Ma
OPERATING LEASE - Summary Of Maturities Of Lease Liabilities (Details) - CNY (¥) ¥ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Jan. 01, 2019 |
OPERATING LEASE | ||||
Succeeding period in 2022 | ¥ 38,417 | ¥ 80,485 | ||
2023 | 146,455 | 124,876 | ||
2024 | 78,142 | 64,381 | ||
2025 | 46,149 | 38,268 | ||
2026 | 25,451 | 25,451 | ||
2027 | 1,834 | 1,834 | ||
Total undiscounted lease payments | 336,448 | 335,295 | ||
Less: imputed interest | (22,135) | (22,852) | ||
Total operating lease liabilities | ¥ 314,313 | ¥ 312,443 | ¥ 310,896 | ¥ 50,089 |
OTHER OPERATING INCOME, NET - S
OTHER OPERATING INCOME, NET - Schedule Of Other Operating Income, Net (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
OTHER OPERATING INCOME, NET | ||||
VAT-in super deduction | ¥ 5,082 | ¥ 5,552 | ||
Others | 5,661 | 2,105 | ||
Total | ¥ 10,743 | ¥ 7,657 | ¥ 14,245 | ¥ 10,948 |
OTHER OPERATING INCOME, NET - A
OTHER OPERATING INCOME, NET - Additional information (Details) | 6 Months Ended |
Jun. 30, 2022 | |
April 1, 2019 to December 31, 2022 | |
OTHER OPERATING INCOME, NET | |
Percentage of value added tax rate in super deduction | 10% |
RELATED PARTIES BALANCES AND _3
RELATED PARTIES BALANCES AND TRANSACTIONS - Schedule Of Amounts Due From Related Parties (Details) - CNY (¥) ¥ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
RELATED PARTIES BALANCES AND TRANSACTIONS | |||
Amounts due from related parties | ¥ 10,050 | ¥ 9,583 | ¥ 6,615 |
Receivables from Tencent Group's online payment platform | |||
RELATED PARTIES BALANCES AND TRANSACTIONS | |||
Amounts due from related parties | 6,698 | 6,215 | 4,284 |
Prepaid cloud service fee to Tencent Group | |||
RELATED PARTIES BALANCES AND TRANSACTIONS | |||
Amounts due from related parties | ¥ 3,352 | ¥ 3,368 | ¥ 2,331 |
RELATED PARTIES BALANCES AND _4
RELATED PARTIES BALANCES AND TRANSACTIONS - Summary Of Transactions With Related Parties (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
RELATED PARTIES BALANCES AND TRANSACTIONS | ||||
Major transactions with related parties | ¥ 13,757 | ¥ 10,602 | ¥ 22,529 | ¥ 16,789 |
Cloud services from Tencent Group | ||||
RELATED PARTIES BALANCES AND TRANSACTIONS | ||||
Major transactions with related parties | 11,402 | 7,715 | 18,877 | 12,445 |
On-line payment platform clearing services from Tencent Group | ||||
RELATED PARTIES BALANCES AND TRANSACTIONS | ||||
Major transactions with related parties | ¥ 2,355 | ¥ 2,887 | ¥ 3,652 | ¥ 4,344 |
TAXATION - Additional Informati
TAXATION - Additional Information (Details) - CNY (¥) ¥ in Millions | 6 Months Ended | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | |
TAXATION | |||
Value added tax rate | 6% | 6% | |
Statutory income tax rate | 25% | 25% | |
Accumulated tax losses | ¥ 331.9 | ||
Qualified High and New Technology Enterprise | |||
TAXATION | |||
Effective term of certificate | 3 years | 3 years | |
Tax losses carryforward expiration period | 10 years | ||
Qualified High and New Technology Enterprise | Expire in Two Thousand And Twenty Two | |||
TAXATION | |||
Preferential income tax rate | 15% | 15% | |
United States | California corporate franchise tax | |||
TAXATION | |||
Tax losses carryforward expiration period | 20 years | ||
HONG KONG | |||
TAXATION | |||
Statutory income tax rate | 16.50% | 16.50% | |
CHINA | |||
TAXATION | |||
Tax losses carryforward expiration period | 5 years | ||
Percentage of tax deduction on qualified research and development expenses | 175% | 175% | |
Percentage of additional deduction on qualified research and development expenses | 75% | 75% | |
CHINA | Qualified High and New Technology Enterprise | |||
TAXATION | |||
Preferential income tax rate | 15% | 15% | |
CHINA | New Enterprise Income Tax Law | |||
TAXATION | |||
Uniform tax rate for foreign investment enterprises and domestic | 25% | 25% | |
Effective date of new enterprise income tax law | Jan. 01, 2008 | Jan. 01, 2008 |
TAXATION- Schedule Of Component
TAXATION- Schedule Of Components Of Loss Before Tax (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
TAXATION | ||||
(Loss)/income from PRC entities | ¥ 177,153 | ¥ (40,300) | ||
Loss from overseas entities | (82,709) | (1,550,012) | ||
(Loss)/Income before income tax expense | ¥ 94,444 | ¥ (1,590,312) | ¥ 333,912 | ¥ (1,274,078) |
TAXATION - Schedule Of Componen
TAXATION - Schedule Of Components Of Income Tax Expenses (Details) ¥ in Thousands | 6 Months Ended |
Jun. 30, 2022 CNY (¥) | |
TAXATION | |
Current income tax expense | ¥ 14,123 |
TAXATION- Schedule Of Reconcili
TAXATION- Schedule Of Reconciliation Between The PRC Statutory Income Tax Rate And Effective Income Tax Rate (Details) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
TAXATION | ||
PRC statutory income tax rate | 25% | 25% |
Tax rate difference from statutory rate in other jurisdictions | 5.83% | (23.84%) |
Permanent difference | (6.53%) | 0.46% |
Effect of preferential tax rates | (17.76%) | (0.41%) |
Changes in valuation allowance | 10.57% | (7.72%) |
Others | (2.16%) | 6.51% |
Effective tax rate | 14.95% |
TAXATION- Summary Of Net Deferr
TAXATION- Summary Of Net Deferred Tax Assets (Details) - CNY (¥) ¥ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
TAXATION | |||
Net operating loss carry-forwards | ¥ 82,028 | ¥ 70,985 | |
Deductible advertising expenses | 262,797 | 262,801 | |
Others | 0 | 1,062 | |
Total deferred tax assets | 344,825 | 334,848 | |
Less: valuation allowance | ¥ (344,825) | ¥ (334,848) | ¥ (250,032) |
TAXATION - Schedule Of Movement
TAXATION - Schedule Of Movements Of Valuation Allowance (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
TAXATION | ||
Balance at beginning of the year/period | ¥ 334,848 | ¥ 250,032 |
Additions | 9,977 | 84,816 |
Balance at end of the year/period | ¥ 344,825 | ¥ 334,848 |
ORDINARY SHARES (Details)
ORDINARY SHARES (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | 1 Months Ended | 6 Months Ended | 9 Months Ended | ||||||||||||||||
Mar. 12, 2021 shares | Nov. 27, 2020 shares | Sep. 19, 2020 shares | Aug. 21, 2020 USD ($) shares | Feb. 10, 2020 | May 20, 2014 shares | Mar. 31, 2022 USD ($) | Jun. 30, 2021 CNY (¥) shares | Mar. 31, 2021 $ / shares shares | Jun. 30, 2022 CNY (¥) shares | Jun. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2021 CNY (¥) | Sep. 30, 2022 CNY (¥) shares | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 CNY (¥) | Dec. 31, 2021 $ / shares shares | Dec. 31, 2020 shares | Dec. 31, 2019 shares | Jan. 01, 2019 $ / shares shares | |
ORDINARY SHARES | |||||||||||||||||||
Common stock, shares authorized | 1,500,000,000 | 1,500,000,000 | 1,500,000,000 | 1,500,000,000 | 1,500,000,000 | 1,500,000,000 | |||||||||||||
Common stock, shares issued | 100,080,000 | 110,000,000 | |||||||||||||||||
Common stock, par value, (per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||||
Common stock, shares outstanding | 100,080,000 | ||||||||||||||||||
Proceeds from IPO, net of issuance cost | ¥ | ¥ 6,423,798 | ¥ 6,406,872 | |||||||||||||||||
Repurchase of ordinary shares | ¥ 268,000 | $ 40,000 | ¥ 346,500 | $ 51,200 | |||||||||||||||
Class A ordinary shares | |||||||||||||||||||
ORDINARY SHARES | |||||||||||||||||||
Common stock, shares issued | 749,323,103 | 749,323,103 | 748,953,103 | 11,533,640 | |||||||||||||||
Common stock, shares outstanding | 730,777,761 | 731,868,565 | 727,855,233 | 7,875,787 | |||||||||||||||
Conversion of convertible redeemable preferred shares, Shares | 551,352,134 | 551,352,134 | 551,352,134 | 551,352,134 | 551,352,134 | ||||||||||||||
Repurchase of ordinary shares (in shares) | 4,147,066 | 4,147,066 | 5,371,400 | 5,371,400 | |||||||||||||||
Class B ordinary shares | |||||||||||||||||||
ORDINARY SHARES | |||||||||||||||||||
Common stock, shares issued | 140,830,401 | 140,830,401 | 140,830,401 | 121,108,037 | |||||||||||||||
Common stock, shares outstanding | 140,830,401 | 140,830,401 | 140,830,401 | 121,108,037 | |||||||||||||||
Common stock voting rights | 15 | 10 | |||||||||||||||||
Number of ordinary shares voting rights was modified | 121,108,037 | ||||||||||||||||||
ADR | |||||||||||||||||||
ORDINARY SHARES | |||||||||||||||||||
Stock repurchase program, authorized amount | $ | $ 150,000 | ||||||||||||||||||
Stock repurchase program, period in force | 12 months | ||||||||||||||||||
Repurchase of ordinary shares (in shares) | 2,073,533 | 2,073,533 | 2,685,700 | 2,685,700 | |||||||||||||||
IPO | Class A ordinary shares | |||||||||||||||||||
ORDINARY SHARES | |||||||||||||||||||
Number of new stock issued during the period | 110,400,000 | ||||||||||||||||||
Proceeds from IPO, net of issuance cost | ¥ | ¥ 6,406,872 | ||||||||||||||||||
Index Capital International Limited | Class B ordinary shares | |||||||||||||||||||
ORDINARY SHARES | |||||||||||||||||||
Number of shares transferred from one investor to another investor | 1,965,361 | ||||||||||||||||||
Duckling Fund L.P | Class B ordinary shares | |||||||||||||||||||
ORDINARY SHARES | |||||||||||||||||||
Number of shares transferred from one investor to another investor | 1,876,467 | ||||||||||||||||||
Coatue PE Asia 26 LLC | Class A ordinary shares | |||||||||||||||||||
ORDINARY SHARES | |||||||||||||||||||
Number of new stock issued during the period | 4,122,853 | ||||||||||||||||||
Proceeds from issuance of Class A ordinary shares | $ | $ 11,431 | ||||||||||||||||||
Image Frame Investment (HK) Limited | Class B ordinary shares | |||||||||||||||||||
ORDINARY SHARES | |||||||||||||||||||
Number of shares transferred from one investor to another investor | 3,752,934 | ||||||||||||||||||
TWL Fellows Holding Limited | Treasury stock | |||||||||||||||||||
ORDINARY SHARES | |||||||||||||||||||
Issuance of ordinary shares for share award plan | 3,657,853 | ||||||||||||||||||
TECHWOLF LIMITED | Class B ordinary shares | |||||||||||||||||||
ORDINARY SHARES | |||||||||||||||||||
Number of new stock issued during the period | 24,745,531 | ||||||||||||||||||
Number of new stock issued during the period | 24,780,971 | 24,745,531 | |||||||||||||||||
Number of shares repurchased | 1,181,339 | ||||||||||||||||||
Repurchase price per share | $ / shares | $ 5.33 | ||||||||||||||||||
TECHWOLF LIMITED | Treasury stock | |||||||||||||||||||
ORDINARY SHARES | |||||||||||||||||||
Issuance of ordinary shares for share award plan | 9,920,000 |
CONVERTIBLE REDEEMABLE PREFER_3
CONVERTIBLE REDEEMABLE PREFERRED SHARES (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 6 Months Ended | 9 Months Ended | |||||||||||||||||
Nov. 27, 2020 USD ($) shares | Feb. 10, 2020 USD ($) shares | Jul. 04, 2019 USD ($) shares | Mar. 08, 2019 USD ($) shares | Dec. 18, 2018 USD ($) shares | Nov. 02, 2017 USD ($) shares | Nov. 01, 2017 USD ($) | Feb. 10, 2017 USD ($) shares | Aug. 15, 2016 USD ($) shares | Jul. 07, 2016 USD ($) shares | Apr. 08, 2015 USD ($) shares | Dec. 16, 2014 USD ($) shares | May 20, 2014 USD ($) shares | Jun. 30, 2021 shares | Jun. 30, 2022 CNY (¥) Vote shares | Jun. 30, 2021 CNY (¥) | Jun. 30, 2021 USD ($) | Sep. 30, 2022 CNY (¥) Vote shares | Sep. 30, 2021 CNY (¥) | Sep. 30, 2021 USD ($) | |
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Dividends declared | ¥ | ¥ 0 | ¥ 0 | ||||||||||||||||||
Prior to the Series D Preferred Shares issuance | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Threshold initial public offering gross proceeds for Qualified IPO | $ 60,000 | |||||||||||||||||||
Threshold capitalization for Qualified IPO | $ 350,000 | |||||||||||||||||||
Upon issuance of Series D Preferred Shares | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Threshold initial public offering gross proceeds for Qualified IPO | $ 90,000 | |||||||||||||||||||
Threshold capitalization for Qualified IPO | $ 900,000 | |||||||||||||||||||
Upon issuance of Series E Preferred Shares | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Threshold initial public offering gross proceeds for Qualified IPO | $ 100,000 | |||||||||||||||||||
Threshold capitalization for Qualified IPO | $ 2,000,000 | |||||||||||||||||||
Upon issuance of Series F Preferred Shares | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Threshold initial public offering gross proceeds for Qualified IPO | $ 100,000 | |||||||||||||||||||
Threshold capitalization for Qualified IPO | $ 3,300,000 | |||||||||||||||||||
Upon issuance of Series F-plus Preferred Shares | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Threshold initial public offering gross proceeds for Qualified IPO | $ 300,000 | |||||||||||||||||||
Threshold capitalization for Qualified IPO | $ 5,000,000 | |||||||||||||||||||
Class A ordinary shares | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Conversion of preferred shares to ordinary shares (in shares) | shares | 551,352,134 | 551,352,134 | 551,352,134 | |||||||||||||||||
Series A Preferred Shares | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Accretion on convertible redeemable preferred shares to redemption value | ¥ | ¥ 1,057 | ¥ 1,057 | ||||||||||||||||||
Series B Preferred Shares | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Accretion on convertible redeemable preferred shares to redemption value | ¥ | 2,006 | 2,006 | ||||||||||||||||||
Series B Preferred Shares | TECHWOLF LIMITED | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Temporary equity issued during the period shares | shares | 13,333,333 | |||||||||||||||||||
Series C Preferred Shares | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Accretion on convertible redeemable preferred shares to redemption value | ¥ | 13,580 | 13,580 | ||||||||||||||||||
Series D Preferred Shares | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Accretion on convertible redeemable preferred shares to redemption value | ¥ | 10,823 | 10,823 | ||||||||||||||||||
Series E Preferred Shares | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Accretion on convertible redeemable preferred shares to redemption value | ¥ | 51,072 | 51,072 | ||||||||||||||||||
Series F Preferred Shares | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Number of votes in connection with preferred shares financing | Vote | 10 | 10 | ||||||||||||||||||
Accretion on convertible redeemable preferred shares to redemption value | ¥ | ¥ 85,527 | 85,527 | ||||||||||||||||||
Series F-plus Preferred Shares | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Number of votes in connection with preferred shares financing | Vote | 15 | 15 | ||||||||||||||||||
Redeemable preferred shares | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Preferred stock convertible, conversion ratio | 1 | 1 | 1 | 1 | 1 | |||||||||||||||
Temporary equity liquidation preference per share percentage | 100% | 100% | ||||||||||||||||||
Threshold shareholding percentage required for redemption notice | 50% | 50% | ||||||||||||||||||
Accretion on convertible redeemable preferred shares to redemption value | ¥ 164,065 | $ 25,284 | ¥ 164,065 | $ 25,284 | ||||||||||||||||
Redeemable preferred shares | Debt note to redeeming shareholder | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Debt instrument term | 2 years | 2 years | ||||||||||||||||||
Debt instrument interest rate | 10% | 10% | ||||||||||||||||||
Redeemable preferred shares | Prior to issuance of series F redeemable convertible preferred stock | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Temporary equity redemption price compound interest per annum | 10% | 10% | ||||||||||||||||||
Redeemable convertible preferred stock initial Redemption start date | Jul. 05, 2024 | |||||||||||||||||||
Redeemable preferred shares | Post issuance of series F redeemable convertible preferred stock | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Temporary equity redemption price simple interest per annum | 8% | 8% | ||||||||||||||||||
Redeemable convertible preferred stock modified Redemption start date | Feb. 10, 2025 | |||||||||||||||||||
Share purchase agreement with investors | Series A Preferred Shares | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Temporary equity issued during the period shares | shares | 60,000,000 | |||||||||||||||||||
Proceeds from Issuance of Redeemable Convertible Preferred Stock | $ 3,000 | |||||||||||||||||||
Stock issuance costs | $ 20 | |||||||||||||||||||
Share purchase agreement with investors | Series B Preferred Shares | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Temporary equity issued during the period shares | shares | 26,666,667 | |||||||||||||||||||
Proceeds from Issuance of Redeemable Convertible Preferred Stock | $ 4,000 | |||||||||||||||||||
Stock issuance costs | $ 41 | |||||||||||||||||||
Share purchase agreement with investors | Series C Preferred Shares | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Temporary equity issued during the period shares | shares | 48,000,000 | |||||||||||||||||||
Proceeds from Issuance of Redeemable Convertible Preferred Stock | $ 10,000 | |||||||||||||||||||
Stock issuance costs | $ 40 | |||||||||||||||||||
Share purchase agreement with investors | Series C-1 Preferred Shares | Tranche I | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Temporary equity issued during the period shares | shares | 45,319,316 | |||||||||||||||||||
Proceeds from Issuance of Redeemable Convertible Preferred Stock | $ 12,508 | |||||||||||||||||||
Stock issuance costs | $ 86 | |||||||||||||||||||
Share purchase agreement with investors | Series C-2 Preferred Shares | Tranche II | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Temporary equity issued during the period shares | shares | 42,251,744 | |||||||||||||||||||
Proceeds from Issuance of Redeemable Convertible Preferred Stock | $ 18,000 | |||||||||||||||||||
Stock issuance costs | $ 100 | |||||||||||||||||||
Share purchase agreement with investors | Series C-3 Preferred Shares | Tranche III | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Temporary equity issued during the period shares | shares | 11,497,073 | |||||||||||||||||||
Proceeds from Issuance of Redeemable Convertible Preferred Stock | $ 6,001 | |||||||||||||||||||
Stock issuance costs | $ 32 | |||||||||||||||||||
Share purchase agreement with investors | Series D Preferred Shares | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Temporary equity issued during the period shares | shares | 60,856,049 | |||||||||||||||||||
Proceeds from Issuance of Redeemable Convertible Preferred Stock | $ 43,394 | |||||||||||||||||||
Stock issuance costs | $ 1,132 | |||||||||||||||||||
Share purchase agreement with investors | Series E Preferred Shares | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Temporary equity issued during the period shares | shares | 83,474,263 | |||||||||||||||||||
Proceeds from Issuance of Redeemable Convertible Preferred Stock | $ 130,000 | |||||||||||||||||||
Stock issuance costs | $ 3,376 | |||||||||||||||||||
Share purchase agreement with investors | Series E-1 Preferred Shares | Tranche I | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Temporary equity issued during the period shares | shares | 32,373,031 | |||||||||||||||||||
Proceeds from Issuance of Redeemable Convertible Preferred Stock | $ 55,000 | |||||||||||||||||||
Stock issuance costs | $ 1,982 | |||||||||||||||||||
Share purchase agreement with investors | Series E-2 Preferred Shares | Tranche II | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Temporary equity issued during the period shares | shares | 28,226,073 | |||||||||||||||||||
Proceeds from Issuance of Redeemable Convertible Preferred Stock | $ 50,000 | |||||||||||||||||||
Stock issuance costs | $ 1,917 | |||||||||||||||||||
Share purchase agreement with investors | Series F Preferred Shares | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Temporary equity issued during the period shares | shares | 48,689,976 | |||||||||||||||||||
Proceeds from Issuance of Redeemable Convertible Preferred Stock | $ 150,000 | |||||||||||||||||||
Stock issuance costs | $ 1 | |||||||||||||||||||
Share purchase agreement with investors | Series F-plus Preferred Shares | ||||||||||||||||||||
Convertible Redeemable Preferred Shares [Line Items] | ||||||||||||||||||||
Temporary equity issued during the period shares | shares | 50,664,609 | |||||||||||||||||||
Proceeds from Issuance of Redeemable Convertible Preferred Stock | $ 270,000 | |||||||||||||||||||
Stock issuance costs | $ 3,080 |
CONVERTIBLE REDEEMABLE PREFER_4
CONVERTIBLE REDEEMABLE PREFERRED SHARES - Summary of convertible redeemable preferred share (Details) ¥ in Thousands, $ in Thousands | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 CNY (¥) shares | Jun. 30, 2021 USD ($) shares | Sep. 30, 2021 CNY (¥) shares | Sep. 30, 2021 USD ($) shares | |
Series A Preferred Shares | ||||
Temporary Equity [Line Items] | ||||
Balance Beginning | ¥ 36,177 | ¥ 36,177 | ||
Balance Beginning, Shares | shares | 60,000,000 | 60,000,000 | 60,000,000 | 60,000,000 |
Accretion on convertible redeemable preferred shares to redemption value | ¥ 1,057 | ¥ 1,057 | ||
Conversion of preferred shares to ordinary shares | ¥ (37,234) | ¥ (37,234) | ||
Conversion of preferred shares to ordinary shares, Shares | shares | (60,000,000) | (60,000,000) | (60,000,000) | (60,000,000) |
Balance Ending, Shares | shares | 0 | 0 | 0 | 0 |
Balance Ending | ¥ 0 | ¥ 0 | ||
Series B Preferred Shares | ||||
Temporary Equity [Line Items] | ||||
Balance Beginning | ¥ 67,976 | ¥ 67,976 | ||
Balance Beginning, Shares | shares | 40,000,000 | 40,000,000 | 40,000,000 | 40,000,000 |
Accretion on convertible redeemable preferred shares to redemption value | ¥ 2,006 | ¥ 2,006 | ||
Conversion of preferred shares to ordinary shares | ¥ (69,982) | ¥ (69,982) | ||
Conversion of preferred shares to ordinary shares, Shares | shares | (40,000,000) | (40,000,000) | (40,000,000) | (40,000,000) |
Balance Ending, Shares | shares | 0 | 0 | 0 | 0 |
Balance Ending | ¥ 0 | ¥ 0 | ||
Series C Preferred Shares | ||||
Temporary Equity [Line Items] | ||||
Balance Beginning | ¥ 478,565 | ¥ 478,565 | ||
Balance Beginning, Shares | shares | 147,068,133 | 147,068,133 | 147,068,133 | 147,068,133 |
Accretion on convertible redeemable preferred shares to redemption value | ¥ 13,580 | ¥ 13,580 | ||
Conversion of preferred shares to ordinary shares | ¥ (492,145) | ¥ (492,145) | ||
Conversion of preferred shares to ordinary shares, Shares | shares | (147,068,133) | (147,068,133) | (147,068,133) | (147,068,133) |
Balance Ending, Shares | shares | 0 | 0 | 0 | 0 |
Balance Ending | ¥ 0 | ¥ 0 | ||
Series D Preferred Shares | ||||
Temporary Equity [Line Items] | ||||
Balance Beginning | ¥ 380,782 | ¥ 380,782 | ||
Balance Beginning, Shares | shares | 60,856,049 | 60,856,049 | 60,856,049 | 60,856,049 |
Accretion on convertible redeemable preferred shares to redemption value | ¥ 10,823 | ¥ 10,823 | ||
Conversion of preferred shares to ordinary shares | ¥ (391,605) | ¥ (391,605) | ||
Conversion of preferred shares to ordinary shares, Shares | shares | (60,856,049) | (60,856,049) | (60,856,049) | (60,856,049) |
Balance Ending, Shares | shares | 0 | 0 | 0 | 0 |
Balance Ending | ¥ 0 | ¥ 0 | ||
Series E Preferred Shares | ||||
Temporary Equity [Line Items] | ||||
Balance Beginning | ¥ 1,845,033 | ¥ 1,845,033 | ||
Balance Beginning, Shares | shares | 144,073,367 | 144,073,367 | 144,073,367 | 144,073,367 |
Accretion on convertible redeemable preferred shares to redemption value | ¥ 51,072 | ¥ 51,072 | ||
Conversion of preferred shares to ordinary shares | ¥ (1,896,105) | ¥ (1,896,105) | ||
Conversion of preferred shares to ordinary shares, Shares | shares | (144,073,367) | (144,073,367) | (144,073,367) | (144,073,367) |
Balance Ending, Shares | shares | 0 | 0 | 0 | 0 |
Balance Ending | ¥ 0 | ¥ 0 | ||
Series F Preferred Shares | ||||
Temporary Equity [Line Items] | ||||
Balance Beginning | ¥ 2,882,063 | ¥ 2,882,063 | ||
Balance Beginning, Shares | shares | 99,354,585 | 99,354,585 | 99,354,585 | 99,354,585 |
Accretion on convertible redeemable preferred shares to redemption value | ¥ 85,527 | ¥ 85,527 | ||
Conversion of preferred shares to ordinary shares | ¥ (2,967,590) | ¥ (2,967,590) | ||
Conversion of preferred shares to ordinary shares, Shares | shares | (99,354,585) | (99,354,585) | (99,354,585) | (99,354,585) |
Balance Ending, Shares | shares | 0 | 0 | 0 | 0 |
Balance Ending | ¥ 0 | ¥ 0 | ||
Redeemable preferred shares | ||||
Temporary Equity [Line Items] | ||||
Balance Beginning | ¥ 5,690,596 | ¥ 5,690,596 | ||
Balance Beginning, Shares | shares | 551,352,134 | 551,352,134 | 551,352,134 | 551,352,134 |
Accretion on convertible redeemable preferred shares to redemption value | ¥ 164,065 | $ 25,284 | ¥ 164,065 | $ 25,284 |
Conversion of preferred shares to ordinary shares | ¥ (5,854,661) | ¥ (5,854,661) | ||
Conversion of preferred shares to ordinary shares, Shares | shares | (551,352,134) | (551,352,134) | (551,352,134) | (551,352,134) |
Balance Ending, Shares | shares | 0 | 0 | 0 | 0 |
Balance Ending | ¥ 0 | ¥ 0 |
SHARE-BASED COMPENSATION - Sche
SHARE-BASED COMPENSATION - Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of options | ||||||
Outstanding Beginning Balance | 82,475,968 | 107,133,353 | 82,475,968 | 107,133,353 | 107,133,353 | |
Granted | 8,424 | 32,701,729 | 8,424 | 32,710,153 | ||
Exercised | (6,812,174) | (9,071,268) | (47,697,284) | |||
Forfeited | (1,113,600) | (2,463,934) | (1,356,950) | (2,924,868) | ||
Outstanding Ending Balance | 74,558,618 | 137,371,148 | 72,056,174 | 89,221,354 | 82,475,968 | 107,133,353 |
Vested and expected to vest as of June 30, 2022 | 74,558,618 | 72,056,174 | ||||
Exercisable as of June 30, 2022 | 30,629,972 | 32,174,348 | ||||
Weighted average exercise price | ||||||
Outstanding Beginning Balance | $ 2.71 | $ 1.16 | $ 2.71 | $ 1.16 | $ 1.16 | |
Granted | 4.14 | 4.08 | ||||
Forfeited | 2.50 | 1.85 | 2.91 | 1.95 | ||
Exercised | 1.30 | 1.45 | 0.54 | |||
Outstanding Ending Balance | 2.84 | $ 1.85 | 2.86 | $ 2.53 | $ 2.71 | $ 1.16 |
Vested and expected to vest as of June 30, 2022 | 2.84 | 2.86 | ||||
Exercisable as of June 30, 2022 | $ 2.12 | $ 2.07 | ||||
Weighted average remaining contractual life | ||||||
Outstanding Ending | 7 years 8 months 4 days | 7 years 5 months 12 days | 7 years 5 months 12 days | 8 years 2 months 15 days | 8 years 18 days | 6 years 10 months 2 days |
Vested and expected to vest as of June 30, 2022 | 7 years 8 months 4 days | 7 years 5 months 12 days | ||||
Exercisable as of June 30, 2022 | 6 years 11 months 4 days | 6 years 8 months 12 days | ||||
Aggregate intrinsic value | ||||||
Outstanding Ending Balance | $ 767,897 | $ 2,468,589 | $ 410,810 | $ 1,379,942 | $ 1,214,916 | $ 226,639 |
Vested and expected to vest as of June 30, 2022 | 767,897 | 410,810 | ||||
Exercisable as of June 30, 2022 | $ 337,665 | $ 204,988 | ||||
Weighted average grant-date fair value | ||||||
Outstanding Ending Balance | $ 2.90 | $ 1.93 | $ 2.93 | $ 2.77 | $ 2.82 | $ 0.64 |
Vested and expected to vest as of June 30, 2022 | 2.90 | 2.93 | ||||
Exercisable as of June 30, 2022 | $ 1.79 | $ 1.71 |
SHARE-BASED COMPENSATION - Summ
SHARE-BASED COMPENSATION - Summary of Assumptions in the Binomial Option-Pricing Model used to Determine the Fair Value of Stock Options (Details) - $ / shares | 6 Months Ended | 9 Months Ended | |
Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 10 years | 10 years | |
Expected dividend yield | 0% | 0% | |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of ordinary shares on the date of option grant | $ 18.09 | ||
Risk-free interest rate | 2% | ||
Expected volatility | 59.80% | ||
Expected early exercise multiple | 2.8 | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of ordinary shares on the date of option grant | $ 6.78 | ||
Risk-free interest rate | 1.70% | ||
Expected volatility | 58.80% | ||
Expected early exercise multiple | 2.2 | 2.2x - 2.8x |
SHARE-BASED COMPENSATION - Su_2
SHARE-BASED COMPENSATION - Summary of RSU activity (Details) - $ / shares | 6 Months Ended | 9 Months Ended | |||
Jun. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Weighted average grant-date fair value | |||||
Outstanding balance | $ 19.40 | $ 0 | |||
Restricted Stock Units (RSUs) | |||||
Number of RSUs | |||||
Outstanding beginning balance | 3,521,118 | 3,521,118 | 0 | ||
Granted | 8,118,214 | 11,994,570 | 202,274 | ||
Vested | (257,420) | (313,464) | |||
Forfeited | (242,012) | (334,176) | |||
Outstanding ending balance | 11,139,900 | 14,868,048 | 202,274 | ||
Weighted average grant-date fair value | |||||
Outstanding balance | $ 12.81 | $ 12.35 | $ 19.05 |
SHARE-BASED COMPENSATION - Su_3
SHARE-BASED COMPENSATION - Summary of Stock-Based Compensation Expense (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
stockbased compensation expense [Line Items] | ||||
share-based compensation expenses | ¥ 283,046 | ¥ 1,709,251 | ¥ 447,961 | ¥ 1,808,174 |
Cost of revenues | ||||
stockbased compensation expense [Line Items] | ||||
share-based compensation expenses | 16,113 | 13,137 | 25,204 | 24,568 |
Sales and marketing expenses | ||||
stockbased compensation expense [Line Items] | ||||
share-based compensation expenses | 63,817 | 26,922 | 106,613 | 44,838 |
Research and development expenses | ||||
stockbased compensation expense [Line Items] | ||||
share-based compensation expenses | 115,117 | 58,633 | 184,945 | 95,321 |
General and administrative expenses | ||||
stockbased compensation expense [Line Items] | ||||
share-based compensation expenses | ¥ 87,999 | ¥ 1,610,559 | ¥ 131,199 | ¥ 1,643,447 |
SHARE-BASED COMPENSATION - Su_4
SHARE-BASED COMPENSATION - Summary of Stock-Based Compensation Expense (Parenthetical) (Details) - CNY (¥) ¥ in Thousands | 1 Months Ended | 6 Months Ended | 9 Months Ended | |||
Nov. 27, 2020 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
stockbased compensation expense [Line Items] | ||||||
share-based compensation expenses | ¥ 283,046 | ¥ 1,709,251 | ¥ 447,961 | ¥ 1,808,174 | ||
General and administrative expenses | ||||||
stockbased compensation expense [Line Items] | ||||||
share-based compensation expenses | ¥ 87,999 | ¥ 1,610,559 | ¥ 131,199 | ¥ 1,643,447 | ||
TECHWOLF LIMITED | Class B ordinary shares | ||||||
stockbased compensation expense [Line Items] | ||||||
Number of new stock issued during the period | 24,780,971 | 24,745,531 | ||||
TECHWOLF LIMITED | General and administrative expenses | ||||||
stockbased compensation expense [Line Items] | ||||||
share-based compensation expenses | ¥ 1,506,400 |
SHARE-BASED COMPENSATION - Addi
SHARE-BASED COMPENSATION - Additional Information (Details) - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 158,726,695 | |
Share options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 158,726,695 | |
Contractual term | 10 years | 10 years |
Unrecognized compensation expenses | $ 146,502 | $ 130,916 |
Weighted average period expected to be recognized | 2 years 8 months 19 days | 2 years 5 months 23 days |
Share options | Vested on each anniversary of the vesting commencement date for four years thereafter | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of vesting rights | 25% | 25% |
Award vesting period | 4 years | 4 years |
Share options | Vested on each anniversary of the vesting commencement date for two years thereafter | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of vesting rights | 50% | 50% |
Award vesting period | 2 years | 2 years |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average period expected to be recognized | 3 years 7 months 17 days | 3 years 6 months 14 days |
Share-based Compensation Arrangement by Share-based Payment Award, Description | One RSU represents a right relating to one Class A ordinary share | One RSU represents a right relating to one Class A ordinary share |
Share based payment arrangement nonvested award excluding option cost not yet recognized amount | $ 128,950 | $ 161,259 |
BASIC AND DILUTED NET (LOSS)__3
BASIC AND DILUTED NET (LOSS)/INCOME PER SHARE (Details) - CNY (¥) ¥ / shares in Units, ¥ in Thousands | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator | ||||
Net (loss)/income | ¥ 80,321 | ¥ (1,590,312) | ¥ 292,038 | ¥ (1,304,144) |
Accretion on convertible redeemable preferred shares to redemption value | (164,065) | (164,065) | ||
Net (loss)/income attributable to ordinary shareholders | ¥ 80,321 | ¥ (1,754,377) | ¥ 292,038 | ¥ (1,468,209) |
Denominator | ||||
Weighted average number of ordinary shares used in computing net (loss)/income per share, basic | 869,427,036 | 147,308,942 | 870,385,113 | 420,605,543 |
Dilutive effect of share-based awards | ¥ 46,527,458 | |||
Dilutive effect of share-based awards | 48,057,023 | |||
Weighted average number of ordinary shares used in computing net (loss)/income per share, diluted | 917,484,059 | 147,308,942 | 916,912,571 | 420,605,543 |
Net (loss)/income per share attributable to ordinary shareholders | ||||
Basic | ¥ 0.09 | ¥ (11.91) | ¥ 0.34 | ¥ (3.49) |
Diluted | ¥ 0.09 | ¥ (11.91) | ¥ 0.32 | ¥ (3.49) |
BASIC AND DILUTED NET (LOSS)__4
BASIC AND DILUTED NET (LOSS)/INCOME PER SHARE - Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) | 6 Months Ended |
Jun. 30, 2021 shares | |
Preferred shares | |
BASIC AND DILUTED NET (LOSS)/INCOME PER SHARE | |
Antidilutive securities excluded from computation of earnings per share amount | 502,881,617 |
Share options and RSUs | |
BASIC AND DILUTED NET (LOSS)/INCOME PER SHARE | |
Antidilutive securities excluded from computation of earnings per share amount | 94,100,191 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) ¥ in Thousands, $ in Thousands | Nov. 10, 2022 USD ($) | Sep. 30, 2022 CNY (¥) | Jun. 30, 2022 CNY (¥) |
COMMITMENTS AND CONTINGENCIES | |||
Contingent liability | ¥ | ¥ 14,882 | ¥ 14,882 | |
Court granted preliminary approval of the parties settlement agreement | $ | $ 2,250 | ||
Subsequent Event | |||
COMMITMENTS AND CONTINGENCIES | |||
Court granted preliminary approval of the parties settlement agreement | $ | $ 2,250 | ||
Future minimum advertising commitments | |||
COMMITMENTS AND CONTINGENCIES | |||
Non cancellable contractual obligation | ¥ | ¥ 110,500 | ¥ 110,300 |
FAIR VALUE MEASUREMENT (Details
FAIR VALUE MEASUREMENT (Details) - Short-term Investments - Fair value recurring - CNY (¥) ¥ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
FAIR VALUE MEASUREMENT | |||
Short-term investments | ¥ 2,764,368 | ¥ 812,225 | ¥ 884,996 |
Significant other observable inputs (Level 2) | |||
FAIR VALUE MEASUREMENT | |||
Short-term investments | ¥ 2,764,368 | ¥ 812,225 | ¥ 884,996 |
RESTRICTED NET ASSETS (Details)
RESTRICTED NET ASSETS (Details) ¥ in Millions | 6 Months Ended |
Jun. 30, 2022 CNY (¥) | |
RESTRICTED NET ASSETS | |
Annual appropriations of net after tax profits to be set aside as general reserve fund or statutory surplus fund | 10% |
Restricted net assets | ¥ 938 |
Percentage of total restricted net assets to total consolidated net assets | 8.25% |
Foreign Invested Enterprise | General Reserve Fund | CHINA | |
RESTRICTED NET ASSETS | |
Appropriation of after-tax profits to non distributable reserve funds, percentage | 10% |
Required general reserve registered capital ratio to deforce compulsory net profit allocation to general reserve | 50% |
Domestic Enterprise | Statutory Surplus Reserve | CHINA | |
RESTRICTED NET ASSETS | |
Appropriation of after tax profit to statutory surplus fund required percentage minimum | 10% |
Required statutory surplus registered capital ratio to deforce compulsory net profit allocation to statutory surplus | 50% |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Details) - ADR $ in Millions | 1 Months Ended |
Mar. 31, 2022 USD ($) | |
Stock repurchase program, authorized amount | $ 150 |
Stock repurchase program, period in force | 12 months |