Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2019shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Period End Date | Dec. 31, 2019 |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 001-36140 |
Entity Registrant Name | 58.com Inc. |
Entity Incorporation, State or Country Code | E9 |
Entity Address, Address Line One | Building 105, 10 Jiuxianqiao North Road Jia |
Entity Address, Address Line Two | Chaoyang District |
Entity Address, City or Town | Beijing |
Entity Address, Postal Zip Code | 100015 |
Entity Address, Country | CN |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Emerging Growth Company | false |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Entity Central Index Key | 0001525494 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | FY |
Amendment Flag | false |
Business Contact | |
Document Information [Line Items] | |
Entity Address, Address Line One | Building 105, 10 Jiuxianqiao North Road Jia |
Entity Address, Address Line Two | Chaoyang District |
Entity Address, City or Town | Beijing |
Entity Address, Postal Zip Code | 100015 |
Entity Address, Country | CN |
Contact Personnel Name | Wei Ye |
City Area Code | 86 |
Local Phone Number | 10 5956-5858 |
ADR | |
Document Information [Line Items] | |
Title of 12(b) Security | American depositary shares, each representing two Class A ordinary shares |
Security Exchange Name | NYSE |
Trading Symbol | WUBA |
Class A Ordinary Shares | |
Document Information [Line Items] | |
Title of 12(b) Security | Class A ordinary shares, par value US$0.00001 per share* |
Security Exchange Name | NYSE |
Entity Common Stock, Shares Outstanding | 254,045,293 |
Trading Symbol | WUBA |
Ordinary shares | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 299,277,413 |
Common Class B | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 45,232,120 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands | Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2018CNY (¥) |
Current assets: | |||
Cash and cash equivalents | ¥ 5,293,206 | $ 758,752 | ¥ 2,387,478 |
Restricted cash-current | 477,099 | 68,390 | 812,000 |
Time Deposits | 70,000 | 10,034 | |
Short-term investments | 8,414,348 | 1,206,151 | 4,587,610 |
Accounts receivable (net of allowance for doubtful accounts of RMB65,620 and RMB95,765 as of December 31, 2018 and 2019, respectively) | 1,209,251 | 173,339 | 917,443 |
Prepayments and other current assets | 2,326,920 | 333,551 | 813,403 |
Total current assets | 17,790,824 | 2,550,217 | 9,517,934 |
Non-current assets: | |||
Property and equipment, net | 1,305,793 | 187,178 | 1,329,752 |
Intangible assets, net | 886,565 | 127,084 | 1,099,945 |
Right-of-use assets, net | 275,459 | 39,486 | |
Land use rights, net | 3,532 | 506 | 3,610 |
Goodwill | 15,874,220 | 2,275,482 | 15,874,220 |
Long-term investments | 6,086,511 | 872,468 | 3,365,906 |
Investment in convertible notes. | 669,715 | 96,000 | |
Long-term prepayments and other non-current assets | 469,592 | 67,314 | 639,478 |
Total non-current assets | 25,571,387 | 3,665,518 | 22,312,911 |
Total assets | 43,362,211 | 6,215,735 | 31,830,845 |
Current liabilities: | |||
Short-term loans | 0 | ||
Short-term loans | 812,794 | ||
Accounts payable (including accounts payable of the consolidated variable interest entities ("VIEs") without recourse to the Company of RMB297,774 and RMB383,504 as of December 31, 2018 and 2019, respectively) | 1,042,697 | 149,465 | 887,558 |
Deferred revenues (including deferred revenues of the consolidated VIEs without recourse to the Company of RMB803,140 and RMB595,045 as of December 31, 2018 and 2019, respectively) | 2,154,920 | 308,896 | 2,348,333 |
Customer advances (including customer advances of the consolidated VIEs without recourse to the Company of RMB239,622 and RMB337,952 as of December 31, 2018 and 2019, respectively) | 1,986,108 | 284,698 | 1,465,169 |
Taxes payable (including taxes payable of the consolidated VIEs without recourse to the Company of RMB35,583 and RMB77,417 as of December 31, 2018 and 2019, respectively) | 698,104 | 100,069 | 250,231 |
Salary and welfare payable (including salary and welfare payable of the consolidated VIEs without recourse to the Company of RMB295,430 and RMB320,769 as of December 31, 2018 and 2019, respectively) | 753,267 | 107,977 | 642,445 |
Operating lease liabilities-current(including operating lease liabilities-current of the consolidated VIEs without recourse to the Company of nil and RMB108,211 as of December 31, 2018 and 2019, respectively) | 137,310 | 19,683 | |
Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated VIEs without recourse to the Company of RMB312,681 and RMB535,823 as of December 31, 2018 and 2019, respectively) | 1,053,007 | 150,943 | 878,368 |
Total current liabilities | 7,825,413 | 1,121,731 | 7,284,898 |
Non-current liabilities: | |||
Deferred tax liabilities (including deferred tax liabilities of the consolidated VIEs without recourse to the Company of RMB246,858 and RMB208,050 as of December 31, 2018 and 2019, respectively) | 389,719 | 55,864 | 283,112 |
Operating lease liabilities-non-current(including operating lease liabilities-non-current of the consolidated VIEs without recourse to the Company of nil and RMB120,247 as of December 31, 2018 and 2019, respectively) | 138,554 | 19,861 | |
Other non-current liabilities (including other non-current liabilities of the consolidated VIEs without recourse to the Company of RMB nil as of both December 31, 2018 and 2019) | 1,675 | ||
Total non-current liabilities | 528,273 | 75,725 | 284,787 |
Total liabilities | 8,353,686 | 1,197,456 | 7,569,685 |
Commitments and contingencies (Note 26) | |||
Mezzanine equity: | |||
Mezzanine classified noncontrolling interests | 3,668,876 | 525,913 | 1,944,397 |
Total mezzanine equity | 3,668,876 | 525,913 | 1,944,397 |
58.com Inc. shareholders' equity: | |||
Ordinary shares (US$0.00001 par value, 5,000,000,000 (including 4,800,000,000 Class A and 200,000,000 Class B) shares authorized as of both December 31, 2018 and 2019; 296,444,579 (including 250,858,415 Class A and 45,586,164 Class B) and 299,277,413 (including 254,045,293 Class A and 45,232,120 Class B) shares issued and outstanding as of December 31, 2018 and 2019, respectively) | 19 | 3 | 19 |
Additional paid-in capital | 21,942,829 | 3,145,384 | 21,621,665 |
Retained earnings | 8,892,773 | 1,274,730 | 439,514 |
Accumulated other comprehensive income/(loss) | 95,903 | 13,747 | (40,622) |
Total 58.com Inc. shareholders' equity | 30,931,524 | 4,433,864 | 22,020,576 |
Noncontrolling interests | 408,125 | 58,502 | 296,187 |
Total shareholders' equity | 31,339,649 | 4,492,366 | 22,316,763 |
Total liabilities, mezzanine equity and shareholders' equity | ¥ 43,362,211 | $ 6,215,735 | ¥ 31,830,845 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands, $ in Thousands | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018CNY (¥)shares | Dec. 31, 2018$ / shares |
Allowance for doubtful accounts | ¥ 95,765 | ¥ 65,620 | ||
Accounts payable | 1,042,697 | $ 149,465 | 887,558 | |
Deferred revenues | 2,154,920 | 308,896 | 2,348,333 | |
Customer advances (including customer advances of the consolidated VIEs without recourse to the Company of RMB239,622 and RMB337,952 as of December 31, 2018 and 2019, respectively) | 1,986,108 | 284,698 | 1,465,169 | |
Taxes payable | 698,104 | 100,069 | 250,231 | |
Salary and welfare payable | 753,267 | 107,977 | 642,445 | |
Operating lease liabilities-current | 137,310 | 19,683 | ||
Accrued expenses and other current liabilities | 1,053,007 | 150,943 | 878,368 | |
Deferred tax liabilities | 389,719 | 55,864 | 283,112 | |
Operating lease liabilities-non-current | ¥ 138,554 | $ 19,861 | ||
Other non-current liabilities | ¥ 1,675 | |||
Common Stock, No Par Value | $ / shares | $ 0.00001 | $ 0.00001 | ||
Common Stock, Shares Authorized | shares | 5,000,000,000 | 5,000,000,000 | 5,000,000,000 | |
Common Stock, Shares, Issued | shares | 299,277,413 | 299,277,413 | 296,444,579 | |
Common Stock, Shares, Outstanding | shares | 299,277,413 | 299,277,413 | 296,444,579 | |
Variable Interest Entities [Member] | ||||
Accounts payable | ¥ 383,504 | ¥ 297,774 | ||
Deferred revenues | 595,045 | 803,140 | ||
Customer advances (including customer advances of the consolidated VIEs without recourse to the Company of RMB239,622 and RMB337,952 as of December 31, 2018 and 2019, respectively) | 337,952 | 239,622 | ||
Taxes payable | 77,417 | 35,583 | ||
Salary and welfare payable | 320,769 | 295,430 | ||
Operating lease liabilities-current | 108,211 | 0 | ||
Accrued expenses and other current liabilities | 535,823 | 312,681 | ||
Deferred tax liabilities | 208,050 | 246,858 | ||
Operating lease liabilities-non-current | 120,247 | 0 | ||
Other non-current liabilities | ¥ 0 | ¥ 0 | ||
Class A Ordinary Shares | ||||
Common Stock, Shares Authorized | shares | 4,800,000,000 | 4,800,000,000 | 4,800,000,000 | |
Common Stock, Shares, Issued | shares | 254,045,293 | 254,045,293 | 250,858,415 | |
Common Stock, Shares, Outstanding | shares | 254,045,293 | 254,045,293 | 250,858,415 | |
Common Class B | ||||
Common Stock, Shares Authorized | shares | 200,000,000 | 200,000,000 | 200,000,000 | |
Common Stock, Shares, Issued | shares | 45,232,120 | 45,232,120 | 45,586,164 | |
Common Stock, Shares, Outstanding | shares | 45,232,120 | 45,232,120 | 45,586,164 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019CNY (¥)¥ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018CNY (¥)¥ / sharesshares | Dec. 31, 2017CNY (¥)¥ / sharesshares | |
Total revenues | ¥ 15,576,523 | $ 2,232,809 | ¥ 13,137,815 | ¥ 10,068,780 |
Cost of revenues | (1,798,407) | (257,792) | (1,437,795) | (925,497) |
Gross profit | 13,778,116 | 1,975,017 | 11,700,020 | 9,143,283 |
Operating expenses: | ||||
Sales and marketing expenses | (8,049,662) | (1,153,875) | (6,861,845) | (5,212,360) |
Research and development expenses | (2,058,663) | (295,098) | (1,702,748) | (1,368,441) |
General and administrative expenses | (817,302) | (117,156) | (748,766) | (766,017) |
Total operating expenses | (10,925,627) | (1,566,129) | (9,313,359) | (7,346,818) |
Income from operations | 2,852,489 | 408,888 | 2,386,661 | 1,796,465 |
Other income/(expenses): | ||||
Interest income/(expense), net | 55,937 | 8,019 | 15,529 | (1,623) |
Investment income, net | 6,135,089 | 879,431 | 38,634 | 342,241 |
Share of results of equity investees | (9,423) | (1,351) | (91,497) | (687,400) |
Gain/(loss) on deconsolidation and disposal of businesses | 3,653 | 524 | (3,274) | 0 |
Foreign currency exchange (loss)/gain, net | (17,600) | (2,522) | 597 | 793 |
Others, net | 259,407 | 37,185 | 82,113 | 85,455 |
Income before income tax | 9,279,560 | 1,330,174 | 2,428,763 | 1,535,931 |
Income tax expenses | (834,334) | (119,597) | (299,705) | (146,689) |
Net income | 8,445,226 | 1,210,577 | 2,129,058 | 1,389,242 |
Net loss/(income) attributable to noncontrolling interests | 8,033 | 1,151 | 139 | (4,667) |
Net income attributable to 58.com Inc. | 8,453,259 | 1,211,728 | 2,129,197 | 1,384,575 |
Deemed dividend to mezzanine classified noncontrolling interests | (175,045) | (25,092) | (132,202) | (99,507) |
Net income attributable to 58.com Inc. ordinary shareholders | 8,278,214 | 1,186,636 | 1,996,995 | 1,285,068 |
Net income | 8,445,226 | 1,210,577 | 2,129,058 | 1,389,242 |
Other comprehensive income: | ||||
Foreign currency translation adjustment, net of nil tax | 137,371 | 19,691 | 15,486 | 82,926 |
Comprehensive income | 8,582,597 | 1,230,268 | 2,144,544 | 1,472,168 |
Comprehensive loss/(income) attributable to noncontrolling interests | 7,187 | 1,030 | (298) | (4,667) |
Deemed dividend to mezzanine classified noncontrolling interests | (175,045) | (25,092) | (132,202) | (99,507) |
Comprehensive income attributable to 58.com Inc. | ¥ 8,414,739 | $ 1,206,206 | ¥ 2,012,044 | ¥ 1,367,994 |
Net earnings per ordinary share attributable to ordinary shareholders - basic | (per share) | ¥ 27.79 | $ 3.98 | ¥ 6.77 | ¥ 4.41 |
Net earnings per ordinary share attributable to ordinary shareholders - diluted | (per share) | 27.46 | 3.94 | 6.66 | 4.35 |
Net earnings per ADS attributable to ordinary shareholders - basic (One ADS represents two ordinary shares) | (per share) | 55.59 | 7.97 | 13.54 | 8.82 |
Net earnings per ADS attributable to ordinary shareholders - diluted (One ADS represents two ordinary shares) | (per share) | ¥ 54.92 | $ 7.87 | ¥ 13.33 | ¥ 8.70 |
Weighted average number of ordinary shares used in computing basic earnings per share | 297,836,268 | 297,836,268 | 294,902,518 | 291,475,725 |
Weighted average number of ordinary shares used in computing diluted earnings per share | 301,449,100 | 301,449,100 | 299,711,258 | 295,304,995 |
Membership [Member] | ||||
Total revenues | ¥ 4,470,916 | $ 640,881 | ¥ 4,399,058 | ¥ 3,789,524 |
Online marketing services [Member] | ||||
Total revenues | 10,158,442 | 1,456,157 | 8,282,593 | 5,978,491 |
E-commerce services [Member] | ||||
Total revenues | 266,848 | 38,251 | 72,596 | 73,941 |
Other revenues [Member] | ||||
Total revenues | ¥ 680,317 | $ 97,520 | ¥ 383,568 | ¥ 226,824 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Foreign currency translation adjustment, tax | ¥ 0 | ¥ 0 | ¥ 0 | |
Cost of revenues [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share-based compensation expenses | 7,743 | $ 1,110 | 6,354 | 3,278 |
Sales and marketing expenses [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share-based compensation expenses | 109,011 | 15,626 | 90,919 | 69,926 |
Research and development expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share-based compensation expenses | 208,273 | 29,855 | 182,410 | 126,116 |
General and administrative expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share-based compensation expenses | ¥ 219,675 | $ 31,489 | ¥ 183,191 | ¥ 151,249 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY ¥ in Thousands, $ in Thousands | Ordinary sharesCNY (¥)shares | Additional paid-in capital [Member]CNY (¥) | Retained earnings/(Accumulated Deficit) [Member]CNY (¥) | Accumulated other comprehensive income/(loss) [Member]CNY (¥) | Noncontrolling Interests [Member]CNY (¥) | CNY (¥)shares | USD ($)shares |
Balance at Dec. 31, 2016 | ¥ 18 | ¥ 20,907,599 | ¥ (3,070,735) | ¥ (138,597) | ¥ 67,434 | ¥ 17,765,719 | |
Balance, shares at Dec. 31, 2016 | shares | 289,670,997 | ||||||
Net income/(loss) | ¥ 0 | 0 | 1,384,575 | 0 | 4,667 | 1,389,242 | |
Share-based compensation | 0 | 339,835 | 0 | 0 | 0 | 339,835 | |
Exercise of share options and restricted share units | ¥ 0 | 100,801 | 0 | 0 | 0 | 100,801 | |
Exercise of share options and restricted share units, shares | shares | 4,294,134 | ||||||
Deemed dividend to mezzanine classified noncontrolling interests | ¥ 0 | (99,507) | 0 | 0 | 0 | (99,507) | |
Foreign currency translation adjustment, net of nil tax | 0 | 0 | 0 | 82,926 | 0 | 82,926 | |
Contribution from noncontrolling interests | 0 | 0 | 0 | 0 | 164,589 | 164,589 | |
Disposal of subsidiaries | 0 | 87,781 | 0 | 0 | (15,004) | 72,777 | |
Others | 0 | 2,278 | (3,523) | 0 | 0 | (1,245) | |
Balance at Dec. 31, 2017 | ¥ 18 | 21,338,787 | (1,689,683) | (55,671) | 221,686 | 19,815,137 | |
Balance, shares at Dec. 31, 2017 | shares | 293,965,131 | ||||||
Net income/(loss) | ¥ 0 | 0 | 2,129,197 | 0 | (139) | 2,129,058 | |
Share-based compensation | 0 | 414,685 | 0 | 0 | 28,627 | 443,312 | |
Exercise of share options and restricted share units | ¥ 1 | 13,517 | 0 | 0 | 0 | 13,518 | |
Exercise of share options and restricted share units, shares | shares | 2,479,448 | ||||||
Deemed dividend to mezzanine classified noncontrolling interests | ¥ 0 | (132,202) | 0 | 0 | 0 | (132,202) | |
Foreign currency translation adjustment, net of nil tax | 0 | 0 | 0 | 15,049 | 437 | 15,486 | |
Capital injection from noncontrolling interests | 0 | 0 | 0 | 0 | 80,000 | 80,000 | |
Acquisition of noncontrolling interests in subsidiaries | 0 | (13,122) | 0 | 0 | (36,689) | (49,811) | |
Disposal of subsidiaries | 0 | 0 | 0 | 0 | 6,410 | 6,410 | |
Others | 0 | 0 | 0 | 0 | (4,145) | (4,145) | |
Balance at Dec. 31, 2018 | ¥ 19 | 21,621,665 | 439,514 | (40,622) | 296,187 | ¥ 22,316,763 | |
Balance, shares at Dec. 31, 2018 | shares | 296,444,579 | 296,444,579 | 296,444,579 | ||||
Net income/(loss) | ¥ 0 | 0 | 8,453,259 | 0 | (8,033) | ¥ 8,445,226 | $ 1,210,577 |
Share-based compensation | 0 | 499,128 | 0 | 0 | 27,866 | 526,994 | |
Exercise of share options and restricted share units | ¥ 0 | 4,108 | 0 | 0 | 0 | 4,108 | |
Exercise of share options and restricted share units, shares | shares | 2,832,834 | ||||||
Deemed dividend to mezzanine classified noncontrolling interests | ¥ 0 | (175,045) | 0 | 0 | 0 | (175,045) | |
Foreign currency translation adjustment, net of nil tax | 0 | 0 | 0 | 136,525 | 846 | 137,371 | 19,691 |
Capital injection from noncontrolling interests | 0 | 0 | 0 | 0 | 118,000 | 118,000 | |
Acquisition of noncontrolling interests in subsidiaries | 0 | (7,027) | 0 | 0 | (21,086) | (28,113) | |
Others | 0 | 0 | 0 | 0 | (5,655) | (5,655) | |
Balance at Dec. 31, 2019 | ¥ 19 | ¥ 21,942,829 | ¥ 8,892,773 | ¥ 95,903 | ¥ 408,125 | ¥ 31,339,649 | $ 4,492,366 |
Balance, shares at Dec. 31, 2019 | shares | 299,277,413 | 299,277,413 | 299,277,413 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Stockholders' Equity [Abstract] | |||
Foreign currency translation adjustment, tax | ¥ 0 | ¥ 0 | ¥ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Cash flows from operating activities: | ||||
Net income | ¥ 8,445,226 | $ 1,210,577 | ¥ 2,129,058 | ¥ 1,389,242 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Share-based compensation expenses | 544,702 | 78,080 | 462,874 | 350,569 |
Depreciation and amortization expenses | 399,668 | 57,290 | 413,092 | 435,627 |
Lease expense to reduce right-of-use assets | 147,391 | 21,128 | 0 | 0 |
Investment income, net | (4,790,453) | (686,685) | (24,305) | (319,739) |
Share of results of equity investees | 9,423 | 1,351 | 91,497 | 687,400 |
Interest expense | 12,365 | 1,772 | 28,086 | 51,404 |
Allowance for doubtful accounts and other current assets write-off | 33,021 | 4,733 | 5,974 | 16,762 |
Change in fair value of long-term investments and investment in convertible note | (1,139,844) | (163,390) | 139,250 | 0 |
Loss/(gain) on deconsolidation and disposal of businesses | (3,653) | (524) | 3,274 | 0 |
Impairment loss of long-term investments and other non-current assets | 14,403 | 2,065 | 40,000 | 37,300 |
Loss/(income) on disposal of property and equipment | (1,202) | (172) | (3,225) | 968 |
Deferred income taxes | 50,060 | 7,176 | (70,444) | (65,839) |
Foreign currency exchange loss/(gain), net | 17,600 | 2,522 | (597) | (793) |
Changes in operating assets and liabilities, net of acquisitions and disposals: | ||||
Accounts receivable | (377,771) | (54,151) | (261,151) | (260,265) |
Prepayments and other assets | (149,467) | (21,425) | 52,744 | (345,300) |
Accounts payable | 168,662 | 24,177 | 268,784 | 40,503 |
Deferred revenues | (193,412) | (27,725) | 224,578 | 285,352 |
Customer advances | 426,444 | 61,128 | 99,621 | 129,362 |
Salary and welfare payable | 111,910 | 16,042 | 106,483 | (13,897) |
Taxes payable | 531,793 | 76,230 | 64,152 | 122,653 |
Operating lease liabilities | (146,986) | (21,070) | 0 | 0 |
Accrued expenses and other liabilities | 244,548 | 35,055 | 29,836 | 238,571 |
Net cash provided by operating activities | 4,354,420 | 624,184 | 3,799,581 | 2,779,880 |
Cash flows from investing activities: | ||||
Purchase of property and equipment and intangible assets | (116,812) | (16,745) | (183,679) | (121,278) |
Cash received for disposal of property and equipment | 2,143 | 307 | 1,951 | 499 |
Purchase of long-term investments | (2,150,344) | (308,240) | (1,792,895) | (467,385) |
Cash received for disposal of long-term investments | 4,407,267 | 631,757 | 16,500 | 353,485 |
Cash paid to term deposits and other advances | (70,000) | (10,034) | 0 | (15,824) |
Proceeds from maturity of term deposits | 0 | 0 | 0 | 61,228 |
Purchase of short-term investments | (38,714,305) | (5,549,483) | (26,461,220) | (18,527,200) |
Proceeds from maturity of short-term investments | 34,916,005 | 5,005,018 | 25,320,170 | 15,931,400 |
Cash paid for step-acquisition of Ganji, net of acquisition of cash | 0 | 0 | 0 | (91,867) |
Cash paid for acquisitions of other subsidiaries, net of acquisition of cash | (38,356) | (5,499) | (9,796) | (3,100) |
Cash (paid)/received upon disposal of businesses | (5,249) | (752) | 22,004 | (330,248) |
Net cash used in investing activities | (1,769,651) | (253,671) | (3,086,965) | (3,210,290) |
Cash flows from financing activities: | ||||
Proceeds from exercise of share options | 4,108 | 589 | 13,518 | 100,866 |
Proceeds from short-term and long-term loans | 588,846 | 84,408 | 0 | 740,084 |
Repayment of short-term and long-term loans | (1,402,157) | (200,992) | (75,000) | (1,804,498) |
Proceeds from issuance of preference shares of a subsidiary to Tencent | 825,599 | 118,345 | 0 | 1,373,558 |
Contribution from noncontrolling interest holders | 118,000 | 16,915 | 80,000 | 164,589 |
Cash received/(paid) on behalf of a related party | (81,328) | (11,658) | 82,358 | 0 |
Cash paid for acquisitions of noncontrolling interests | (28,113) | (4,030) | (49,811) | 0 |
Other financing payment | (5,655) | (811) | (4,145) | (3,523) |
Net cash provided by financing activities | 19,300 | 2,766 | 46,920 | 571,076 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (33,242) | (4,765) | 29,610 | (82,731) |
Net increase in cash, cash equivalents and restricted cash | 2,570,827 | 368,514 | 789,146 | 57,935 |
Cash, cash equivalents and restricted cash at the beginning of the year | 3,199,478 | 458,628 | 2,410,332 | 2,352,397 |
Cash, cash equivalents and restricted cash at the end of the year | 5,770,305 | 827,142 | 3,199,478 | 2,410,332 |
Supplemental disclosure of cash flow information: | ||||
Income tax paid, net | 450,857 | 64,628 | 238,589 | 166,800 |
Interest expense paid | 12,760 | 1,829 | 43,877 | 66,336 |
Supplemental disclosure of non-cash activities: | ||||
Property and equipment in accounts payable | 40,319 | 5,780 | 4,434 | 9,001 |
Consideration receivable for disposal of Guazi preference shares | 497,837 | 71,362 | 0 | 0 |
Deemed dividend to mezzanine classified noncontrolling interests | 175,045 | 25,092 | 132,202 | 89,024 |
Non-cash consideration for investment in Sweetome Property Consulting Group Co.,Ltd. ("Sweetome") | 94,923 | 13,607 | 0 | 0 |
Non-cash consideration for disposal of Finance Business | 0 | 0 | 0 | 150,908 |
Non-cash contribution from Tencent for Zhuanzhuan preference share financing | ¥ 705,636 | $ 101,149 | ¥ 0 | ¥ 345,306 |
Organization and principal acti
Organization and principal activities | 12 Months Ended |
Dec. 31, 2019 | |
Organization and principal activities | |
Organization and principal activities | 1. Organization and principal activities 58.com Inc. (the “Company”), through its consolidated subsidiaries, including wholly-foreign owned enterprises (“WFOEs”), variable interest entities (“VIEs”) and VIEs’ subsidiaries (collectively, the “Group”), is primarily engaged in the operation of various multi-category online classifieds platforms and vertical listing platforms that enable local businesses and consumers to connect, share information and conduct business in the People’s Republic of China (the “PRC” or “China”). In 2019, the Company’s major consolidated subsidiaries, VIEs and VIEs’ subsidiaries are as follows: Percentage of direct or Date of indirect incorporation or Place of economic Name acquisition incorporation ownership Wholly owned and majority owned subsidiaries of the Company: China Classified Network Corporation (“CCNC BVI”) January 5, 2010 British Virgin Islands 100 % China Classified Information Corporation Limited (“CCIC HK”) January 18, 2010 Hong Kong 100 % Beijing Chengshi Wanglin Information Technology Co., Ltd. (“Wanglin”) March 8, 2010 PRC 100 % 58 Tongcheng Information Technology Co., Ltd. (“58 Technology”) March 15, 2012 PRC 100 % Anjuke Inc. (“Anjuke”) March 2, 2015 Cayman Island 100 % Ruiting Network Technology (Shanghai) Co., Ltd. (“Shanghai Ruiting”) March 2, 2015 PRC 100 % 58.com Holdings Inc. (“58 Holdings”) July 11, 2014 British Virgin Islands 100 % Falcon View Technology (“Ganji”) August 6, 2015 Cayman Island 100 % Beijing Yangguang Gudi Science Development Co., Ltd. (“Yangguang Gudi”) August 6, 2015 PRC 100 % Zhuan Spirit Holdings Limited (“Zhuan Zhuan Holding”) March 24, 2017 Cayman Island 63.5 % Zhuan Vision Holdings Limited (“Zhuan Vision”) April 20, 2017 Hong Kong 63.5 % Tianjin Zhuanzhuan World Technology Co., Ltd (“Tianjin Zhuanzhuan”) June 21, 2017 PRC 63.5 % VIEs and VIEs’ subsidiaries: Beijing 58 Information Technology Co., Ltd. (“Beijing 58”) December 12, 2005 PRC 100 % 58 Co., Ltd. July 28, 2011 PRC 100 % Shanghai Ruijia Information Technology Co., Ltd. March 2, 2015 PRC 100 % Beijing 58 Auto Technology Co., Ltd. (“Beijing 58 Auto”, formerly known as Beijing Leftbrain Network Technology Co., Ltd.) November 26, 2015 PRC 89.8 % Beijing Shanjing Kechuang Network Technology Co., Ltd. (“Shanjing Kechuang”) August 6, 2015 PRC 100 % Beijing Zhuanzhuan Spirit Technology Co., Ltd. (“Beijing Zhuanzhuan”) April 11, 2017 PRC 63.5 % Note: 58 Daojia Inc. (“58 Home”), which was established on January 26, 2015, completed its Series A equity financing in November 2015. As certain approval rights were granted to noncontrolling preference shareholders and such rights were considered as substantive participating rights in accordance with ASC 810-10, the Company deconsolidated 58 Home, its subsidiaries and VIEs upon completion of the transaction. See Note 5 for more information. a. Contractual arrangements with the Group’s VIEs In order to comply with the PRC laws and regulations which prohibit or restrict foreign control of companies involved in the provision of internet content and other restricted businesses, the Group operates its platforms and other restricted businesses in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members of the Group (“Nominee Shareholders”). The Group obtained control over these PRC domestic companies by entering into a series of contractual agreements with these PRC domestic companies and their respective Nominee Shareholders. These contractual agreements include loan agreements, exclusive purchase option agreements, exclusive technology consulting and services agreements, intellectual property rights license agreement, equity pledge agreements, powers of attorney, business cooperation agreements and business operation agreements. These contractual agreements can be extended at the Group’s relevant PRC subsidiaries’ options prior to the expiration dates. Management concludes that these PRC domestic companies are VIEs of the Group, of which the Group is the ultimate primary beneficiary. As such, the Group consolidated the financial results of these PRC domestic companies and their subsidiaries in the Group’s consolidated financial statements. Refer to Note 2(a) to the consolidated financial statements for the principles of consolidation. The following is a summary of the contractual agreements (collectively, “Contractual Agreements”) that the Group, through its subsidiaries, entered into with the VIEs and their Nominee Shareholders: (i) Contractual Arrangements with Beijing 58 The Company’s subsidiary Wanglin has entered into contractual arrangements with Beijing 58 and its shareholders described below, which are referred to as the Beijing 58 Agreements. Through the Beijing 58 Agreements, the Company exercises control over the operations of Beijing 58 and receives all its economic benefits and residual returns substantially. Through the amended and restated exclusive business cooperation agreement between Beijing 58 and Wanglin, Wanglin agrees to provide certain technical and business support and related consulting services to Beijing 58 in exchange for service fees. In addition, pursuant to the amended and restated exclusive option agreement, Beijing 58 is prohibited from declaring and paying any dividends without Wanglin’s prior consent and Wanglin enjoys an irrevocable and exclusive option to purchase Beijing 58 shareholders’ equity interests, to the extent permitted by the applicable PRC laws, at a nominal price from Beijing Wanglintong Information Technology Co., Ltd. (“Beijing Wanglintong”), which is one of the shareholders of Beijing 58, or at a specified price equal to the loan provided by Wanglin to the individual shareholders. If the lowest price permitted under PRC laws is higher than the above price, the lowest price permitted under PRC laws shall apply. Through the arrangements, the Company can obtain all of Beijing 58’s income and all of its residual interests, such as undistributed earnings, either through dividend distribution or purchase of Beijing 58’s equity interests from its existing shareholders. As a result of the contractual arrangements, the Company consolidates Beijing 58’s financial results in its consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Exclusive Business Cooperation Agreement Under the exclusive business cooperation agreement between Beijing 58 and Wanglin, as amended and restated, Wanglin has the exclusive right to provide, among other things, technical and business support and related consulting services to Beijing 58 and Beijing 58 agrees to accept all the advice and services provided by Wanglin. Without Wanglin’s prior written consent, Beijing 58 is prohibited from engaging any third party to provide any of the services under this agreement. In addition, Wanglin exclusively owns all intellectual property rights arising from or created during the performance of this agreement. Beijing 58 agrees to pay a quarterly service fee to Wanglin at an amount determined solely by Wanglin after taking into account factors including the complexity and difficulty of the services provided, the time consumed, the seniority of the Wanglin employees providing services to Beijing 58, the value of services provided, the market prices of comparable services and the operating conditions of Beijing 58. This agreement will remain effective unless Wanglin terminates the agreement in writing or a competent governmental authority rejects the renewal applications by either Beijing 58 or Wanglin to renew its respective business license upon expiration. Beijing 58 is not permitted to terminate this agreement in any events unless required by applicable laws. In 2017, 2018 and 2019, Wanglin provided technical support services to Beijing 58 and its subsidiaries and collected service fee payments of approximately RMB0.4 million, RMB18.7 million and RMB12.8 million, respectively. Powers of Attorney Pursuant to the powers of attorney, each shareholder of Beijing 58 irrevocably appointed Wanglin as the attorney-in-fact to act on their behalf on all matters pertaining to Beijing 58 and to exercise all of their rights as a shareholder of Beijing 58, including but not limited to attend shareholders’ meetings, vote on their behalf on all matters of Beijing 58 requiring shareholders’ approval under the PRC laws and regulations and the articles of association of Beijing 58, and designate and appoint directors and senior management members. Wanglin may authorize or assign its rights under this appointment to any other persons or entities at its sole discretion without prior notice to the shareholders of Beijing 58. Each power of attorney will remain in force until the shareholder ceases to hold any equity interests in Beijing 58. Equity Interest Pledge Agreements Under the equity interest pledge agreements among Wanglin, Beijing 58 and the shareholders of Beijing 58, as amended and restated, the shareholders pledged all of their equity interests in Beijing 58 to Wanglin to guarantee Beijing 58’s and Beijing 58’s shareholders’ performance of their obligations under the contractual arrangements including but not limited to the payments due to Wanglin for services provided. If Beijing 58 or any of Beijing 58’s shareholders breaches its contractual obligations under the contractual arrangements, Wanglin, as the pledgee, will be entitled to certain rights and entitlements, including receiving proceeds from the auction or sale of the whole or part of the pledged equity interests of Beijing 58 in accordance with the legal procedures. Wanglin has the right to receive dividends generated by the pledged equity interests during the term of the pledge. If any events of default as provided in the contractual arrangements occur, Wanglin, as the pledgee, will be entitled to dispose of the pledged equity interests in accordance with the PRC laws and regulations. The pledge will become effective on the date when the pledge of equity interests contemplated in these agreements are registered with the relevant local administration for industry and commerce and will remain binding until Beijing 58 and its shareholders discharge all their obligations under the contractual arrangements. These equity interest pledge agreements were registered with Chaoyang Branch of Beijing Administration for Industry and Commerce in July 2013. Exclusive Option Agreements Under the exclusive option agreements among Wanglin, Beijing 58 and each of the shareholders of Beijing 58, as amended and restated, irrevocably granted Wanglin or its designated representative(s) an exclusive option to purchase all or part of his, her or its equity interests in Beijing 58 to the extent permitted under PRC law. In addition, Wanglin has the option to acquire all the equity interests of Beijing 58 for either a nominal price from Beijing Wanglintong, or at a specified price equal to the loan provided by Wanglin to the individual shareholders. If the lowest price permitted under the PRC laws is higher than the above price, the lowest price permitted under the PRC laws shall apply. Wanglin and its designated representative(s) have sole discretion as to when to exercise such options, either in part or in full. Without Wanglin’s prior written consent, Beijing 58’s shareholders shall not transfer, donate, pledge, or dispose of any equity interests in Beijing 58. These agreements will remain effective until all equity interests held in Beijing 58 by the Beijing 58’s shareholders are transferred or assigned to Wanglin or Wanglin’s designated representatives. At the moment, the Company cannot exercise the exclusive option to purchase the current shareholders’ equity interests in Beijing 58 due to the PRC regulatory restrictions on foreign ownership in the value-added telecommunications services and internet content services. The Company intends to exercise such option once China opens up these industries to foreign investment. Loan Agreements Pursuant to the loan agreements between Wanglin and each individual shareholder of Beijing 58, Wanglin provided interest-free loans with an aggregate amount of approximately RMB7.8 million to the individual shareholders of Wanglin for the sole purpose of funding the capital of Beijing 58. The loans can be repaid by transferring the individual shareholders’ equity interests in Beijing 58 to Wanglin or its designated person pursuant to Exclusive Option Agreements. The term of each loan agreement is ten years from the date of the agreement, expiring on December 1, 2021 and can be extended with the written consent of both parties before expiration. (ii) Contractual Arrangements with Shanjing Kechuang Ganji, through its PRC subsidiary, Yangguang Gudi, has entered into contractual arrangements with Shanjing Kechuang and its shareholders with terms substantially similar to those under the Beijing 58 Agreements, which are referred to as the Shanjing Kechuang Agreements. Through the Shanjing Kechuang Agreements, Ganji exercises control over the operations of Shanjing Kechuang and receives all its economic benefits and residual returns substantially. Through the exclusive business cooperation agreement between Yangguang Gudi and Shanjing Kechuang, Yangguang Gudi agrees to provide certain technical and business support and related consulting services to Shanjing Kechuang in exchange for service fees. In addition, pursuant to the exclusive option agreements, Shanjing Kechuang is prohibited from declaring and paying any dividends without Yangguang Gudi’s prior consent and Yangguang Gudi enjoys an irrevocable and exclusive option to purchase Shanjing Kechuang shareholders’ equity interests, to the extent permitted by the applicable PRC laws, at a specified price equal to the loan amount provided by Yangguang Gudi to the shareholders. If the lowest price permitted under PRC law is higher than the above price, the lowest price permitted under the PRC laws shall apply. Through these arrangements, Ganji can obtain all of the income and the interests of Shanjing Kechuang, such as undistributed earnings, either through dividend distributions or purchase of equity interests of Shanjing Kechuang from its existing shareholders. As a result of the contractual arrangements, the Company, through Ganji, consolidates the financial results of Shanjing Kechuang in its consolidated financial statements in accordance with U.S. GAAP. In January 2018, Haoyong Yang, Chunyan Guo and Yang Liu, who previously held 0.3%, 20% and 30.7 % equity interests in Shanjing Kechuang transferred all their equity interests to 58 Co., Ltd, a wholly owned subsidiary of Beijing 58. Subsequent to the share transfer, Shanjing Kechuang is 100% owned by 58 Co., Ltd. (iii) Contractual Arrangements with Beijing Zhuanzhuan Zhuan Zhuan Holding, through its PRC subsidiary, Tianjin Zhuanzhuan, has entered into contractual arrangements with Beijing Zhuanzhuan and its shareholders with terms substantially similar to those under the Beijing 58 Agreements, which was referred to as the Beijing Zhuanzhuan Agreements. Through the Beijing Zhuanzhuan Agreements, Tianjin Zhuanzhuan exercises control over the operations of Beijing Zhuanzhuan and receives all its economic benefits and residual returns substantially. Through the exclusive business cooperation agreement between Tianjin Zhuanzhuan and Beijing Zhuanzhuan, Tianjin Zhuanzhuan agrees to provide certain technical and business support and related consulting services to Beijing Zhuanzhuan in exchange for service fees. In addition, pursuant to the exclusive option agreements, Beijing Zhuanzhuan is prohibited from declaring and paying any dividends without Tianjin Zhuanzhuan’s prior consent and Tianjin Zhuanzhuan enjoys an irrevocable and exclusive option to purchase Beijing Zhuanzhuan shareholders’ equity interests, to the extent permitted by applicable PRC laws, at a purchase price of RMB10 Yuan. If the lowest price permitted under PRC law is higher than the above price, the lowest price permitted under PRC law shall apply. Through these arrangements, Zhuan Zhuan Holding can obtain all of the income and the residual interests of Beijing Zhuanzhuan, such as undistributed earnings, either through dividend distributions or purchase of equity interests of Beijing Zhuanzhuan from its existing shareholders. As a result of the contractual arrangements, the Group, through Zhuan Zhuan Holding, consolidates the financial results of Beijing Zhuanzhuan in the Group’s consolidated financial statements in accordance with U.S. GAAP. b. Risks in Relation to the VIE Structure It is possible that the Group’s operations of certain of its businesses through the VIEs could be found by the PRC authorities to be in violation of the PRC laws and regulations prohibiting or restricting foreign ownership of companies that engage in such operations and businesses. While the Group’s management considers the possibility of such a finding by PRC regulatory authorities under current PRC law and regulations to be remote, on January 19, 2015, the Ministry of Commerce of the PRC (the “MOFCOM”) released on its Website for public comment a proposed PRC law (the “Draft FIE Law”) that appears to include VIEs within the scope of entities that could be considered to be foreign invested enterprises (or “FIEs”) that would be subject to restrictions under the existing PRC laws and regulations on foreign investments in certain categories of industries. Specifically, the Draft FIE Law introduces the concept of “actual control” for determining whether an entity is considered to be an FIE. In addition to control through direct or indirect ownership or equity, the Draft FIE Law includes control through contractual arrangements within the definition of “actual control.” If the Draft FIE Law is passed by the People’s Congress of the PRC and becomes effective in its current form, these provisions regarding control through contractual arrangements construed to apply to the Group’s VIE arrangements may cause the Group’s VIEs to become explicitly subject to the current restrictions on foreign investments in certain categories of industries. The Draft FIE Law includes provisions that would exempt from the definition of foreign invested enterprises entities where the ultimate controlling shareholders are either entities organized under the PRC laws or individuals who are PRC citizens. The Draft FIE Law is silent as to what type of enforcement actions might be taken against existing VIEs that operate in restricted or prohibited industries and are not controlled by entities organized under PRC law or individuals who are PRC citizens. If the PRC authorities find out that the Group’s operations of certain of its operations and businesses through the VIEs are prohibited under the existing laws and regulations or under the Draft FIE Law assuming it becomes effective, the regulatory authorities with jurisdiction over the licensing and operations of such operations and businesses may have broad discretion in dealing with such violations, including levying fines, confiscating the Group’s income, revoking the businesses or operating licenses of the affected businesses, requiring the Group to restructure its ownership structure or operations, or requiring the Group to discontinue any or all portion of its operations. For example, the National People’s Congress approved the Foreign Investment Law on March 15, 2019 and the State Council approved the Regulation on Implementing the Foreign Investment Law (the “Implementation Regulations") on December 12, 2019, effective from January 1, 2020. The Supreme People's Court of China issued a judicial interpretation on the Foreign Investment Law on December 27, 2019, effective from January 1, 2020. The Foreign Investment Law and the Implementation Regulations do not touch upon the relevant concepts and regulatory regimes that were historically suggested for the regulation of VIE structures, and thus this regulatory topic remains unclear under the Foreign Investment Law. Since the Foreign Investment Law and the Implementation Regulations are new, there are substantial uncertainties exist with respect to its implementation and interpretation and it is also possible that variable interest entities will be deemed as foreign invested enterprises and be subject to restrictions in the future. Such restrictions may cause interruptions to our operations, products and services and may incur additional compliance cost, which may in turn materially and adversely affect our business, financial condition and results of operations. In addition, if the legal structure and contractual arrangements were found to be in violation of any other existing PRC laws and regulations, the PRC government could: ● revoke the Group’s business and operating licenses; ● require the Group to discontinue or restrict operations; ● restrict the Group’s right to collect revenues; ● block the Group’s platforms; ● require the Group to restructure the operations in such a way as to compel the Group to establish a new enterprise, re-apply for the necessary licenses or relocate its businesses, staff and assets; ● impose additional conditions or requirements with which the Group may not be able to comply; or ● take other regulatory or enforcement actions against the Group that could be harmful to the Group’s businesses. The imposition of any of these penalties may result in a material and adverse effect on the Group’s ability to conduct the Group’s businesses. In addition, if the imposition of any of these penalties causes the Group to lose the right to direct the activities of any of the VIEs (through its equity interests in its subsidiaries) or the right to receive their economic benefits, the Group will no longer be able to consolidate the relevant VIE and its subsidiaries, if any. In the opinion of management, the likelihood of loss in respect of the Group’s current ownership structure or the contractual arrangements with its VIEs is remote. There is no VIE for which the Company has variable interests but is not the primary beneficiary. As of December 31, 2019, the aggregate accumulated losses of the Group’s VIEs and VIEs’ subsidiaries were approximately RMB2.6 billion, which has been included in the consolidated financial statements. The following financial statement amounts and balances of the Group’s VIEs and VIEs’ subsidiaries were included in the accompanying consolidated financial statements as of December 31, 2018 and 2019 and for the three years ended December 31, 2017, 2018 and 2019: As of December 31, 2018 2019 RMB RMB Cash and cash equivalents 1,201,368 423,153 Short-term investments 1,162,694 3,282,743 Accounts receivable, net 437,985 466,317 Prepayments and other current assets 659,454 628,138 Property and equipment, net 140,600 169,242 Long-term investments 1,703,968 3,234,260 Intangible assets, net and goodwill 15,634,421 15,451,122 Right-of-use assets, net — 223,578 Long-term prepayments and other non-current assets 52,364 139,064 Total assets 20,992,854 24,017,617 Accounts payable 297,774 383,504 Deferred revenues 803,140 595,045 Customer advances 239,622 337,952 Taxes payable 35,583 77,417 Salary and welfare payable 295,430 320,769 Inter-company payable 4,326,185 7,168,608 Accrued expenses and other current liabilities 312,681 535,823 Operating lease liabilities-current — 108,211 Deferred tax liabilities 246,858 208,050 Operating lease liabilities-non-current — 120,247 Total liabilities 6,557,273 9,855,626 For the year ended December 31, 2017 2018 2019 RMB RMB RMB Revenue 4,086,645 4,244,322 4,480,963 Net (loss)/income 649,831 (603,099) (835,874) Net cash provided by operating activities 1,272,425 2,201,663 2,420,664 Net cash used in investing activities (1,449,482) (1,402,912) (3,745,087) Net cash provided by financing activities 3,485 80,000 545,841 Under the contractual arrangements with each of the VIEs and through their respective equity interests in their subsidiaries, the Group has the power to direct the activities of the VIEs and the VIEs’ subsidiaries and the transfer of assets out of the VIEs and the VIEs’ subsidiaries. Therefore, the Group considers that no asset of the VIEs and the VIEs’ subsidiaries can be used only to settle their obligations. As the consolidated VIEs and VIEs’ subsidiaries are incorporated as limited liability companies under the PRC Company Law, the creditors of the liabilities of the consolidated VIEs and the VIEs’ subsidiaries do not have recourse to the general credit of the Company. The Group believes that the contractual arrangements among each of the VIEs, their respective shareholders and relevant WFOE are in compliance with the PRC laws and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements and if the shareholders of VIEs were to reduce their interests in the Company, their interests may diverge from that of the Company and that may potentially increase the risk that they would seek to act contrary to the contractual terms. The Company’s ability to control the VIEs also depends on the power of attorney and that the WFOEs have to vote on all matters requiring shareholder approval in the VIEs. As noted above, the Company believes this power of attorney is legally enforceable but may not be as effective as direct equity ownership. Currently there is no contractual arrangement that could require the Company to provide additional financial support to VIEs. As the Company is conducting its businesses mainly through VIEs, the Company may provide such support on a discretionary basis in the future, which could expose the Company to a loss. c. Liquidity The Group’s principal sources of liquidity are cash and cash equivalents, short-term investments, term deposits and cash flows generated from its operations. Cash equivalents mainly consist of time deposits with original maturities of no more than three months, and highly liquid investments that are readily convertible to known amounts of cash. Short-term investments comprise investment instruments issued by commercial banks in mainland China, with variable interest rates indexed to the performances of underlying assets and maturity dates within one year. As of December 31, 2019, the Group had cash and cash equivalents, short-term investments and term deposits of approximately RMB13.8 billion, and the Group’s working capital was RMB10.0 billion. Net cash provided by the Group’s operating activities were RMB2.8 billion, RMB3.8 billion and RMB 4.4 The Group regularly monitors current and expected liquidity requirements to ensure that it maintains sufficient cash balances and adequate credit facilities to meet its liquidity requirements in the short and long term. The Group has adopted Accounting Standards Update (“ASU”) No.2014-15 “Presentation of Financial Statements – Going Concern” which addresses management’s responsibility to evaluate whether there is a substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures if the substantial doubt exists. Based on the Group’s operating plan without considering any mitigating plan as discussed in ASU No. 2014-15, or any guarantee by related party, the management is of the opinion that, the Group’s current cash and cash equivalents and anticipated cash flow from operations provide sufficient funds to meet the working capital requirements to fund planned operations and other commitments for at least the next twelve months from the date the consolidated financial statements for the year ended December 31, 2019 are issued. As a result, the consolidated financial statements of the Group for the year ended December 31, 2019 have been prepared on a going concern basis. |
Principal accounting policies
Principal accounting policies | 12 Months Ended |
Dec. 31, 2019 | |
Principal accounting policies | |
Principal accounting policies | Principal accounting policies (a) Principles of consolidation The consolidated financial statements of the Group have been prepared in accordance with U.S. GAAP. The consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIEs and VIEs’ subsidiaries for which the Company is the ultimate primary beneficiary. Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors. A VIE is an entity in which the Company or its subsidiary, through contractual arrangements, bears the risks of, and enjoys the rewards normally associated with, ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. All significant transactions and balances among the Company, its subsidiaries, the VIEs and VIEs’ subsidiaries have been eliminated upon consolidation. The results of subsidiaries and VIEs acquired or disposed of during the year are recorded in the consolidated statement of comprehensive income from the effective dates of acquisition or up to the effective dates of disposal, as appropriate. The Company deconsolidates its subsidiaries in accordance with ASC 810-10-40-4 as of the dates the Company ceases to have controlling financial interests in the subsidiaries. The Company accounts for the deconsolidation of its subsidiaries by recognizing a gain or loss in net income attributable to the Company in accordance with ASC 810-10-40-5. This gain or loss is measured at the date the subsidiaries are deconsolidated as the difference between (a) the aggregate of the fair values of any consideration received, the fair values of any retained noncontrolling interests in the subsidiaries being deconsolidated, and the carrying amounts of any noncontrolling interests in the subsidiaries being deconsolidated, including any accumulated other comprehensive income attributable to the noncontrolling interests, and (b) the carrying amounts of the assets and liabilities of the subsidiaries being deconsolidated. (b) Use of estimates The preparation of the Group’s consolidated financial statements in conformity with the U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities. Actual results could differ materially from those estimates. Significant accounting estimates reflected in the Group’s consolidated financial statements mainly include revenue recognition, the determination of the fair value of identifiable assets and liabilities acquired through business combination, the determination of the fair value of long-term investments, the determination of the fair value of mezzanine equity, the determination of fair value of noncontrolling interests, the valuation allowance of deferred tax assets, the determination of uncertain tax position, impairment of certain long-term investments, the valuation and recognition of share-based compensation, impairment of long-lived assets and the determination of the estimated useful lives of property and equipment and intangible assets. (c) Functional Currency and Foreign Currency Translation The functional currency of the Company and its subsidiaries incorporated outside of the PRC is the United States dollar (“US$”), while the functional currency of the PRC entities in the Group is Chinese Renminbi (“RMB”) as determined based on ASC 830, “Foreign Currency Matters”. Effective December 31, 2016, the Group changed its reporting currency from US$ to RMB. Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, and revenues, expenses, gains and losses are translated using the average rate for the periods. Translation adjustments arising from these are reported as foreign currency translation adjustments and are shown as a component of other comprehensive income/(loss) in the consolidated statement of changes in shareholders’ equity. For the years ended December 31, 2017, 2018 and 2019, foreign currency translation income, net of nil tax was RMB82.9 million, RMB15.5 million and RMB137.4 million respectively. Foreign currency transactions denominated in currencies other than the functional currencies are translated into the functional currencies using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currencies using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are included in “foreign currency exchange (loss)/gain, net” in the consolidated statements of comprehensive income. Foreign currency exchange gain was RMB0.8 million and RMB0.6 million for the years ended December 31, 2017 and 2018, respectively. Foreign currency exchange loss was RMB17.6 million for the year ended December 31, 2019. For the convenience of the reader, translations of amounts from RMB into US$ were calculated at the exchange rate of RMB6.9762 per US$1.00, the middle rate on December 31, 2019, the last business day in the year ended December 31, 2019, as published on the website of the State Administration of Foreign Exchange of the PRC. No representation is made that the RMB amounts could have been or could be converted into US$ at such rate. (d) Cash and cash equivalents Cash and cash equivalents represent cash on hand, demand deposits and highly liquid investments placed with banks or other financial institutions, which are unrestricted as to withdrawal or use, and which have original maturities of three months or less and are readily convertible to known amounts of cash. The following table sets forth a breakdown of the Group’s cash and cash equivalents by currency denomination, jurisdiction and geographical location as of December 31, 2018 and 2019: RMB in US$ in thousands RMB in thousands thousands Total Hong China- China Hong China- China translated to USA Singapore Kong Non-VIE VIE Total USA Singapore Kong Non-VIE VIE Total RMB December 31, 2018 3 — 122,704 2,534 4 125,245 272 — 128 326,156 1,201,340 1,527,896 2,387,478 December 31, 2019 3 1 597,829 6,275 4 604,112 273 1,019 146 654,241 423,125 1,078,804 5,293,206 (e) Restricted cash Restricted cash, which consisted of the cash pledged for bank loans to the Group and a related party of the Group and the cash legally restricted from withdrawal, is reported separately on the face of the Group’s consolidated balance sheets and is included in the total cash, cash equivalents and restricted cash in the consolidated statements of cash flows. Cash that is legally restricted from withdrawal amounted to RMB 15.7 million and RMB 60.1 million as of December 31, 2018 and 2019, respectively. Cash pledged with commercial banks for the Group’s bank loans amounted to RMB 796.3 million as of December 31, 2018 and released in 2019. Cash pledged with commercial banks as guarantee for short-term bank borrowings by a related party of the Group amounted to RMB 417.0 million as of December 31, 2019. All of the above restricted cash balances were included in the balance of restricted cash-current in the Group’s consolidated balance sheets as of December 31, 2018 and 2019, respectively. (f) Term deposits represent time deposits placed with banks with original maturities of more than three months to up to one year. Interest earned is recorded as interest income in the consolidated statements of comprehensive income during the periods presented. (g) Short-term investments Short-term investments include investments in variable rate financial instruments which primarily consists of wealth management products with variable interest rates or principal non-guaranteed which were purchased from commercial banks and other financial institutions. The Group carries these investments at fair value. Changes in the fair value are reflected in the consolidated statements of comprehensive income as investment income, net. Fair value is estimated based on quoted prices of similar products provided by banks at the end of each period. The Group classifies the valuation techniques that use these inputs as Level 2 of fair value measurements. Please see Note 20 for additional information. Variable-rate financial instruments are recorded at fair values based on the judgment that expected return will be obtained upon maturity. As of December 31, 2018 and 2019, the Group had short-term investments of RMB4.6 billion and RMB8.4 billion, respectively. (h) Accounts receivable, net Accounts receivable, net mainly represent amounts due from customers and online payment channels and are recorded net of an allowance for doubtful accounts. The carrying values of accounts receivable are reduced by allowances that reflects the Group’s best estimate of the amounts that will not be collected. The Group makes estimations for the collectability of accounts receivable considering many factors including but not limited to reviewing accounts receivable balances, historical bad debt rates, accounts aging, repayment patterns, customer credit worthiness, financial conditions of the customers and industry trend analysis. An accounts receivable is written off after all collection effort has ceased. The Group recognized RMB4.9 million and RMB31.1 million allowance for doubtful accounts for the years ended December 31, 2018 and 2019, respectively. (i) Property and equipment, net Property and equipment are stated at cost less accumulated depreciation and impairment. Property and equipment are depreciated over the estimated useful lives on a straight-line basis. The estimated useful lives are as follows: Buildings 30-50 years Computers and equipment 3-5 years Motor vehicles 4-5 years Furniture and fixtures 5 years Software 3-5 years Leasehold improvements Over the shorter of lease terms or the estimated useful lives of assets Expenditures for maintenance and repairs are expensed as incurred. The gains or losses on the disposal of property and equipment are the differences between the net sales proceeds and the carrying amounts of the relevant assets and are recognized in the consolidated statements of comprehensive income. (j) Intangible assets, net Intangible assets acquired through business acquisitions are recognized as assets separated from goodwill if they satisfy either the "contractual-legal" or "separability" criterion. Intangible assets purchased are recognized and measured at fair value upon acquisition. Intangible assets with finite lives are carried at cost less accumulated amortization. Separately identifiable intangible assets that have determinable lives continue to be amortized over their estimated useful lives using the straight-line method as follows: Customer relationships 2-3 years Domain names and trademarks 9-10 years Technology 4-5 years Licenses 10 years Intangible assets with infinite lives are evaluated to determine the fair value annually. An impairment loss is recognized if the carrying amount exceeds the fair value. Separately identifiable intangible assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of any impairment loss for identifiable intangible assets is based on the amounts by which the carrying amounts of the assets exceed the fair values of the assets. (k) Land use rights, net Land use rights are carried at cost less accumulated amortization. Amortization is provided to write off the cost of lease prepayments on a straight-line basis over the period of the shorter of estimated useful lives which are generally 50 years or the terms of the land use rights purchase agreements. (l) Goodwill Goodwill represents the excess of the purchase price over fair value of the identifiable assets and liabilities acquired in a business combination. Goodwill is not depreciated or amortized but is tested for impairment on an annual basis as of December 31 and in between annual tests when an event occurs or circumstances change that could indicate that the asset might be impaired. In accordance with the FASB guidance on Testing of Goodwill for Impairment, the Group first has the option to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Group decides, as a result of its qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is mandatory. Otherwise, no further testing is required. The quantitative impairment test consists of a comparison of the fair value of each reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss equal to the difference between the implied fair value of the reporting unit’s goodwill and the carrying amount of goodwill will be recorded. Application of a goodwill impairment test requires significant management judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value of each reporting unit. The judgment in estimating the fair value of reporting units includes estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit. The Group performs goodwill impairment testing at the reporting unit level on December 31 annually. No impairment of goodwill was recognized for the years ended December 31, 2017, 2018 and 2019, respectively. (m) Long-term investments and investment in convertible notes (i) Equity Investments Accounted for Using the Equity Method In accordance with ASC 323 Investment-Equity Method and Joint Ventures, the Group applies the equity method of accounting to equity investments, in common stock or in-substance common stock, over which it has significant influence but does not own a majority equity interests or otherwise control. Under the equity method, the Group initially records its investment at cost. The difference between the cost of the equity investment and the amount of the underlying equity in the net assets of the equity investee is recognized as equity method goodwill or as an intangible asset as appropriate. The Group subsequently adjusts the carrying amount of the investment to recognize the Group’s proportionate share of each equity investee’s net income or loss into consolidated statements of comprehensive income after the date of acquisition. The Group will discontinue applying equity method if the carrying amount of an investment (and additional financial supports to the investee, if any) has been reduced to zero. When the Group’s investment in common stock has been reduced to zero and it has other investments in the investee, the Group continues to record its share of income or loss in the equity investees in its consolidated statements of comprehensive income, to the extent of and as an adjustment to the adjusted basis of the other investments in the investee. The order in which those equity method income or loss should be applied to the other investments shall follow the seniority of the other investments (that is, priority in liquidation). In such instances, the Group recognizes investee income or loss based on the ownership level of the particular investee security or loan/advance held by the Group. An investment in in-substance common stock is an investment that has risk and reward characteristics that are substantially similar to that entity’s common stock. The Group considers subordination, risks and rewards of ownership and obligation to transfer value when determining whether an investment in an entity is substantially similar to one in that entity’s common stock. The equity method investments are subject to periodic testing for other-than-temporary impairment, by considering factors including, but not limited to, stock prices of public companies in which the Group has an equity investment, current economic and market conditions, operating performance of the investees such as current earnings trends and undiscounted cash flows, and other company-specific information, such as recent financing rounds. The fair value determination, particularly for investments in privately-held companies whose revenue model is still evolving, requires significant judgment to determine appropriate estimates and assumptions. Changes in these estimates and assumptions could affect the calculation of the fair value of the investments and the determination of whether any identified impairment is other-than-temporary. If any impairment is considered other-than-temporary, the Group will write down the asset to its fair value and take the corresponding charge to the consolidated statements of comprehensive income. The Group recorded RMB nil nil (ii) Equity Investment with Readily Determinable Fair Values According to ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), all equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) will generally be measured at fair value through the consolidated statements of comprehensive income. Equity investments with readily determinable fair values are valued using the market approach based on the quoted prices in active markets at the reporting dates. The Group classifies the valuation techniques that use these inputs as Level 1 of fair value measurements. (iii) Equity Investments without Readily Determinable Fair Values Based on ASU 2016-01, the Group will be able to elect to record equity investments without readily determinable fair values and not accounted for by the equity method either at fair value with changes in fair value recognized in net income or at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer (“measurement alternative”). An election to measure an equity security shall be made for each investment separately. If the Group elects to use this measurement alternative method, the Group should measure the equity security at fair value as of the date that observable transaction occurred and report changes in the carrying value of the equity investments in current earnings whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer. The values were estimated based on valuation methods using the observable transaction price at the transaction date and other unobservable inputs including volatility, as well as rights and obligations of the securities that the Group holds. For each reporting period, the Group would make a qualitative assessment considering impairment indicators to evaluate whether the equity investment without a readily determinable fair value is impaired. Impairment indicators that considered by the Group include, but are not limited to, 1) a significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee, 2) a significant adverse change in the regulatory, economic, or technological environment of the investee, 3) a significant adverse change in the general market condition of either the geographical area or the industry in which the investee operates, 4) a bona fide offer to purchase, an offer by the investee to sell, or a completed auction process for the same or similar investment for an amount less than the carrying amount of that investment, and 5) factors that raise significant concerns about the investee’s ability to continue as a going concern, such as negative cash flows from operations, working capital deficiencies, or noncompliance with statutory capital requirements or debt covenants. When indicators of impairment exist, the Group prepares quantitative assessments of the fair value of the equity investments. When the assessment indicates that an impairment exists, the Group will include an impairment loss in net income equal to the difference between the fair value of the investment and its carrying amount. Because certain investees’ operation metrics and financial performance did not meet the expectations, the Group recorded RMB37.3 million impairment for the cost method investments for the years ended December 31, 2017. The Group recorded RMB40.0 million and RMB11.8 million impairments for investments accounted for under the measurement alternative method for the year ended December 31, 2018 and 2019, respectively. The impairment was recorded in “investment income, net” in the Group’s consolidated statements of comprehensive income. (iv) Non-marketable equity security held by an investment company within the Group In accordance with ASC 946-320 Financial Services—Investment Companies, Investments—Debt and Equity Securities, the Group accounts for long-term equity investments in unlisted companies held by consolidated investment companies at fair value. These investments were initially recorded at their transaction price net of transaction costs, if any. Fair value of these investments are re-measured periodically in accordance with ASC 820. (v) In accordance with ASC 825 Financial Instruments, the Group applied the fair value option on an instrument-by-instrument basis. Such fair value option requires the irrevocable election on an instrument-by-instrument basis at initial recognition of an asset or upon an event that gives rise to a new basis of accounting for that instrument. The investments accounted for under the fair value option are carried at the fair value with realized or unrealized gains or losses recorded in the consolidated statements of comprehensive income. As of December 31, 2019, investments accounted for using fair value option amounted to RMB692.0 million, which mainly included investment in convertible notes of Uxin Limited ("Uxin"). Please see Note 15 for additional information. (n) Impairment of other long-lived assets In accordance with ASC 360-10-35, the Group’s other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of assets to future undiscounted net cash flows expected to be generated by the assets. Such assets are considered to be impaired if the sum of the expected undiscounted cash flow is less than the carrying amount of the assets. The impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. There were no impairment charges of other long-lived assets recognized for the years ended December 31, 2017, 2018 and 2019, respectively. (o) Fair value 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 measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and 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 The Group measures the fair value of assets and liabilities by two main approaches: (1) market approach and (2) income approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The Group’s financial instruments mainly include cash and cash equivalents, restricted cash, term deposits, short-term investments, accounts receivable, certain long-term investments, investment in convertible notes, loans, accounts payable, lease liabilities and certain financial liabilities recorded as accrued expenses and other current liabilities. The carrying value of the Group's aforementioned financial instruments included in current assets and liabilities approximate their fair value because of their short maturities. All equity investments in unconsolidated entities (other than those accounted for using the equity method and measurement alternative method of accounting) and investment in convertible notes are generally measured at fair value through earnings. Investments under the measurement alternative method and equity method are reviewed periodically for impairment using fair value measurement which requires significant unobservable inputs (Level 3). Investments under the measurement alternative method are also remeasured using fair value measurement which requires significant unobservable inputs (Level 3) when observable price change event occurs. Intangible assets, goodwill and fixed assets are marked to fair value when an impairment charge is recognized. Please see Note 20 for additional information. (p) Guarantee liabilities In accordance with ASC 460 Guarantees The guarantee liabilities are generally reduced by recording a credit to net income as the guarantor is released from the guaranteed risk. In addition to subsequently measuring and recognizing the noncontingent component of a guarantee, the Group continually assessed the contingent component of the guarantees. If recognition of a contingent component is required, the Group will record it at the amount required by ASC 450 Contingencies (q) Customer advances and deferred revenues In most cases, our customers pay in advance to purchase membership services and online marketing services. The cash proceeds received from customers are initially recorded as customer advances. When a specific service is selected and activated, the amount related to the service is transferred to deferred revenues. (r) Revenue recognition The Group adopted ASC 606, Revenue from Contracts with Customers (“ASC 606”), from January 1, 2018, applying the modified retrospective method to those contracts which were not completed as of January 1, 2018. Accordingly, revenues for the years ended December 31, 2018 and 2019 were presented under ASC 606, while revenues for the year ended December 31, 2017 were not adjusted and continued to be reported under ASC 605. The adoption had no material impact on the Group’s accumulated deficit as of January 1, 2018 and the Group’s consolidated financial statements for the year ended December 31, 2018 and 2019. The Group generates revenues primarily from membership and online marketing services. The Group sells its services through its direct sales teams, third party sales agencies and online self-serve channels. Under ASC 606, revenues are recognized when control of the promised goods or services is transferred to the Group’s customers, in an amount of consideration the Group expects to be entitled to in exchange for those goods or services. The Group determines revenue recognition through the following steps: ● identification of the contract, or contracts, with a customer; ● identification of the performance obligations in the contract; ● determination of the transaction price; ● allocation of the transaction price to the performance obligations in the contract; and ● recognition of revenue when, or as, we satisfy a performance obligation. The Group’s revenues have been subject to value added tax (“VAT”). To record VAT payable, the Group uses the net presentation method, which presents the difference between the output VAT on goods sold or taxable services and the available input VAT amount (at the rate applicable to the supplier). Revenues are recorded net of VAT in accordance with the ASC 606. The recognition of revenues involves certain management judgments. The amount and timing of our revenues could be materially different for any period if management made different judgments or utilized different estimates. (i) Membership A membership is a basic services package mainly consisting of the following services: customer certification, display of an online storefront on the Group’s platforms, preferential listing benefits such as limited daily priority listings and higher limit for free daily listings, access to the Group’s dedicated customer service support team and online account management system. As the receipt of membership fees is for services to be delivered over a period of time, the receipt is initially recorded as customer advances. When a specific subscription-based membership service is selected and activated, the amount related to the membership service is transferred to deferred revenues, and revenue is recognized ratably over the membership period as the service is rendered. (ii) Online marketing services The Group’s online marketing services include time-based services and performance-based services. Revenues from time-based services are recognized ratably over the service period. Revenues from performance-based services are recognized when the agreed performance criteria are achieved. For service arrangements that include multiple performance obligations, revenues are allocated to each performance obligation. The Group allocates arrangement consideration in multiple-deliverable revenue arrangements at the inception of an arrangement to all deliverables based on the relative selling price method, generally based on the best estimate of selling price of the Group. (iii) E-commerce services The Group’s e-commerce services refer to services provided to the real estate developers such as sale of discount coupons with which home buyers use to buy properties at a discounted price. It might also include tours to visit the properties, on site promotion activities and other services relating to property purchases. The coupon purchased by prospective home buyers is refundable before a purchase of the specified properties prior to the expiry date of the coupon. The Group recognizes revenues when home buyers apply the discount coupon to pay for the purchase price of the specified properties from real estate developers. Cash received in advance of the purchase of specified properties is recorded as customer advances, as a type of contract liability. (iv) Other revenues Other revenues are primarily derived from selling used goods and providing services on Zhuan Zhuan, the Group’s online used goods trading and service platform and providing various online to offline recruitment services. The Group recognizes other revenues when the related services are rendered or goods are sold. For all other arrangements that include multiple performance obligations, the Group would evaluate all the performance obligations in the arrangement to determine whether each performance obligation is distinct. Consideration is allocated to eac |
Credit risks and concentration
Credit risks and concentration | 12 Months Ended |
Dec. 31, 2019 | |
Credit risks and concentration | |
Credit risks and concentration | 3. Credit risks and concentration (a) Credit risk The Group’s credit risk arises from cash and cash equivalents, restricted cash, term deposits, short-term investments, as well as credit exposures to receivables due from its customers, related parties and other parties. The Group believes that there is no significant credit risk associated with cash and cash equivalents, term deposits, restricted cash and short-term investments, which were held by reputable financial institutions in the jurisdictions where the Company, its subsidiaries, the VIEs and VIEs’ subsidiaries are located. The Group has no significant concentrations of credit risk with respect to its customers and related parties and other parties. The Group assesses the credit quality of and sets credit limits on its customers by taking into account their financial position, the availability of guarantees from third parties, their credit history and other factors such as current market conditions. (b) Major customers There was no customer whose revenue represented over 10% of total revenues in the years ended December 31, 2017, 2018 and 2019. There was no accounts receivable from any customer that represented over 10% of total accounts receivable as of December 31, 2018 and 2019. (c) Foreign currency risk The Group’s operating transactions are mainly denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by laws to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (the “PBOC”). Remittances in currencies other than RMB by the Group in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to effect the remittance. The value of the RMB is subject to changes by the central government policies and to international economic and political developments. In July 2005, the PRC government changed its decades-old policy of pegging the value of RMB to US$ and RMB appreciated more than 20% against US$ over the following three years. Between July 2008 and June 2010, this appreciation halted and the exchange rate between RMB and US$ remained within a narrow band. Since June 2010, RMB has fluctuated against US$, at times significantly and unpredictably, and in recent years RMB has depreciated significantly against US$. 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. |
Business acquisitions and equit
Business acquisitions and equity investment transactions | 12 Months Ended |
Dec. 31, 2019 | |
Business acquisitions and equity investment transactions | |
Business acquisitions and equity investment transactions | 4. Business acquisitions For the years ended December 31, 2017, 2018 and 2019, cash paid for acquisitions of subsidiaries net of the cash obtained from these acquired subsidiaries were RMB3.1 million, RMB9.8 million and RMB38.4 million, respectively. |
Deconsolidation of 58 Home
Deconsolidation of 58 Home | 12 Months Ended |
Dec. 31, 2019 | |
Deconsolidation of 58 Home | |
Deconsolidation of 58 Home | 5. Deconsolidation of 58 Home 58 Home has been the holding company of the 58 Home business and a majority owned entity of the Company since its establishment in late 2014. On November 27, 2015, 58 Home completed its series A preference share equity financing ("58 Home Series A Preference Shares"). As certain approval rights were granted to a noncontrolling preference shareholder of 58 Home in relation to (i) annual budget and (ii) employment of certain key management members of 58 Home, these approval rights granted to the noncontrolling preference shareholders of 58 Home were considered as substantive participating rights in accordance with ASC 810-10. As a result, the Group has deconsolidated 58 Home since the completion of the transaction on November 27, 2015. Subsequent to the completion of the above transaction, the Group continued to retain equity interests in 58 Home through its ownership of 58 Home ordinary shares ("58 Home Ordinary Shares"), representing 87.9% ordinary share equity interests in 58 Home, and certain number of 58 Home Series A Preference Shares, representing 3.3% preference share equity interests in 58 Home. The Company’s investment in 58 Home Ordinary Shares was accounted for as equity method investment in accordance with ASC 323. The Company’s investment in the 58 Home Series A Preference Shares was accounted for under cost method, and measurement alternative after the Company adopted ASU 2016-01 from January 1, 2018 because the preference shares were not considered as in-substance common stock and the shares did not have readily determinable fair value or quoted market price. The Company shared 87.9% of the net loss of 58 Home according to the 58 Home Ordinary Shares equity ownership since November 27, 2015. Since January 2018, the carrying amount of the Group’s investment in 58 Home Ordinary Shares has been reduced to zero due to the accumulated losses picked up from 58 Home. The Group has continued to record its share of losses in 58 Home in its consolidated statements of comprehensive income to the extent of the Group’s investment in 58 Home’s Series A Preference Shares at 3.3% from January to July in 2018. In August 2018, 58 Freight Inc., a subsidiary of 58 Home, completed a round of financing from outside investors. Taobao China Holdings Limited, the original shareholders of 58 Home, also pushed down certain 58 Home Series A Preference Shares from 58 Daojia Inc. level to 58 Freight Inc. level. Following the closing of this round of financing, the Group’s shareholding of 58 Home Series A Preference Shares increased from 3.3% to 5.0%. The Group then started to share net loss of 58 Home at 5.0% since August 2018. As of December 31, 2018 and 2019, the Company held 68.8%of equity interests in 58 Home on an as converted basis, including 87.9% of the total outstanding 58 Home Ordinary Shares and 5.0% of the total outstanding 58 Home Series A Preference Shares. For the year ended December 31, 2017, 2018 and 2019, the Group recorded investment losses of RMB663.2 million, RMB79.6 million and RMB17.7 million, respectively, in share of results of equity investees in the consolidated statements of comprehensive income. As of December 31, 2019, the carrying amount of the Group's investment in 58 Home Series A Preference Shares were reduced to zero due to the accumulated losses picked up. |
Disposal of Guazi (subsequently
Disposal of Guazi (subsequently renamed to Che Hao Duo) and conversion of a convertible note issued by Guazi | 12 Months Ended |
Dec. 31, 2019 | |
Guazi [Member] | |
Disposal of Guazi (subsequently renamed to Che Hao Duo) and conversion of a convertible note issued by Guazi | Disposal of Guazi (subsequently renamed to Che Hao Duo) and conversion of a convertible note issued by Guazi From 2015 to 2017, the Group acquired Ganji business through a number of acquisitions and Ganji became a wholly owned subsidiary of the Group since September 2017. As part of the acquired Ganji business, Guazi was engaged in the business of operating an online consumer to consumer (“C2C”) platform for trading used cars and providing relevant services. In 2017, Guazi was renamed to Che Hao Duo. On December 31, 2015, the Company transferred 54.4% ownership interests in Guazi to Mr. Haoyong Yang, ex-founder and ex-chief executive officer of Ganji (the “Guazi Purchaser") in return for cash proceeds of RMB324.7 million (US$50.0 million). The Company concurrently used the proceeds of RMB324.7 million (US$50.0 million) to invest in a RMB324.7 million (US$50.0 million) non-interest-bearing convertible note issued by Guazi ("Guazi Convertible Note"). The Guazi Convertible Note is convertible into preference shares of Guazi to be issued in Guazi’s subsequent round of financing at the same price paid by other investors. The Company retained 45.6% ownership interest in Guazi by purchasing 38.8 million series A convertible and redeemable preference shares of Guazi (the “Series A Guazi Shares”) at the par value of the shares. The Company lost control over Guazi on December 31, 2015, and derecognized the assets and liabilities, including allocated goodwill attributable to Guazi, which amounted to RMB180.4 million. Subsequently, the investment in Series A Guazi Shares was accounted for under cost method, and measurement alternative after the Group adopted ASU 2016-01 since January 1, 2018, as the shares held by the Company were not considered in-substance common stock and the shares do not have readily determinable fair value. The Company also determined that the host contract of Series A Guazi Shares is equity in nature and there was no embedded derivative that needs to be separately accounted for in accordance with ASC 815-15-25-1. In March 2016, the Company converted the entire amount of Guazi Convertible Note into 62.5 million Guazi Series B1 preference shares (“Series B1 Guazi Shares”) based on a conversion price of US$0.80 per share. The Series B1 Guazi Shares was measured at fair value of RMB239.5 million on the date of conversion with the assistance of a third-party independent valuation specialist. The investment in Series B1 Guazi Shares was accounted for under cost method, and measurement alternative after the Group adopted ASU 2016-01 since January 1, 2018, as the shares invested by the Group were not considered as in-substance common stock and the shares did not have readily determinable fair value or quoted market price. In 2017, the Group sold certain number of Series A Guazi Shares and recognized the difference between the cash proceeds received and the carrying value of the Series A Guazi Shares disposed of as investment income amounted to RMB300.1 million. In 2019, the Group sold a portion of Series A Guazi Shares to a third-party investor for a total price of RMB4,978.2 million (US$713.6 million) in cash. The Group recognized the difference between the cash consideration for and the carrying value of the Series A Guazi Shares disposed of as investment income amounting to RMB4,760.5 million. In addition, the Group identified an observable price change in the disposal of Series A Guazi Shares, which was considered an orderly transaction, for the identical equity securities (i.e. Series A Guazi Shares) and similar equity securities (i.e. the Series B1 Guazi Shares). In accordance with ASC 321-10-35-2, the remaining Series A Guazi Shares and Series B1 Guazi Shares held by the Group should be re-measured at fair value as of the date that the observable transaction occurred. The Group recognized RMB1,381.1 million unrealized gains as a result of re-measuring the fair value of the remaining Series A Guazi Shares and Series B1 Guazi Shares held by the Group for the year ended December 31, 2019. The Group determined the fair values of the Series A Guazi Shares and Series B1 Guazi Shares by using a market approach and equity allocation model, which was based on significant inputs not observable in the market, including risk-free rate, lack of marketability discount and expected volatility. As of December 31, 2018 and 2019, the Group held 19.1% and 8.0% equity interests in Che Hao Duo on fully diluted basis, respectively. |
Preference share _warrant finan
Preference share /warrant financing of Zhuan Zhuan | 12 Months Ended |
Dec. 31, 2019 | |
Preference share /warrant financing of Zhuan Zhuan | |
Preferred share /warrant financing of Zhuan Zhuan | 7. Preference share /warrant financing of Zhuan Zhuan Zhuan Spirit Holding Limited (“Zhuan Zhuan Holding”) is a subsidiary of the Group incorporated in the Cayman Islands. Zhuan Zhuan Holding and its subsidiaries and consolidated VIEs (collectively "Zhuan Zhuan") are principally engaged in operating an online used goods trading and service platform in the PRC. On April 28, 2017, Zhuan Zhuan Holding completed a series A preference share financing by issuing series A preference shares ("Zhuan Zhuan Series A Shares") to Tencent for a combination of US$200 million in cash and additional business resources to be provided by Tencent. The Group is considered as the primary beneficiary of Zhuan Zhuan Holding subsequent to the Series A preference share financing in accordance with ASC 810-10-25-44. On September 9, 2019 (the "Zhuan Zhuan Series B Financing Closing Date"), Zhuan Zhuan Holding entered into definitive agreements for a series B preference share financing with Tencent, the Company and certain new investors (the "Zhuan Zhuan New Investors") for a combination of cash and additional business resources totaled approximately US$300 million. Pursuant to the agreements, Zhuan Zhuan Holding issued series B preference shares ("Zhuan Zhuan Series B Shares") to Tencent for a combination of cash and additional business resources amounted to approximately US$150 million, and issued series B warrants with onshore loans ("Zhuan Zhuan Series B Warrants") or Zhuan Zhuan Series B Shares to the Company and Zhuan Zhuan New Investors for total cash considerations of US$150 million. As of December 31, 2019, Zhuan Zhuan has received cash consideration of US$170 million from Tencent, the Company and Zhuan Zhuan New Investors. The Group is considered as the primary beneficiary of Zhuan Zhuan Holding and continues to consolidate Zhuan Zhuan Holding subsequent to the series B preference share financing in accordance with ASC 810-10-25-44. Pursuant to the memorandum and articles of association of Zhuan Zhuan Holding, the holders of Zhuan Zhuan Series A Shares, Zhuan Zhuan Series B Shares and Zhuan Zhuan Series B Warrants have the right to require Zhuan Zhuan Holding to redeem the preference shares or warrants that they held at their original issuance price plus 8% simple interest per annum if Zhuan Zhuan Holding does not complete a qualified initial public offering ("IPO") on or before the sixth year anniversary from the Zhuan Zhuan Series B Financing Closing Date. Accordingly, the Group accounted for Zhuan Zhuan Series A Shares, Zhuan Zhuan Series B Shares and Zhuan Zhuan Series B Warrants issued by Zhuan Zhuan Holding as a mezzanine classified noncontrolling interests because the noncontrolling interests can be contingently redeemed by Tencent and Zhuan Zhuan New Investors at a pre-determined value upon the resolution of the contingent event. The carrying amount of the mezzanine classified noncontrolling interests initially recognized was subsequently accreted using effective interest method to the accreted value pursuant to the share subscription agreement in accordance with ASR 268 Presentation in Financial Statements of "Redeemable Preferred Stocks". The Group accounted for the issuance of Zhuan Zhuan Series A Shares and Zhuan Zhuan Series B Shares in exchange for the business resources from Tencent as stock-based compensation with non-employee in accordance with ASC 718-10. Tencent’s business resources represent services to be provided over a period of time. Zhuan Zhuan Series A Shares and Zhuan Zhuan Series B Shares granted to Tencent were fully vested and nonforfeitable on their respective closing dates. Accordingly, the Group recognized a prepaid expense based on the fair value of corresponding portion of Zhuan Zhuan Series A Shares and Zhuan Zhuan Series B Shares on the respective closing dates. The prepaid expense was subsequently amortized over the period during which services were rendered by Tencent on a straight-line basis to reflect the same manner as if the Group paid cash to Tencent in exchange for these services over the contractual period of time. For the year ended December 31, 2017, 2018 and 2019, the Group recognized RMB42.0 million, RMB181.1 million and RMB317.9 million expenses, respectively, for the use of the business resources provided by Tencent. As of December 31, 2018 and 2019, the Group held 72.2% and 63.5% of equity interests in Zhuan Zhuan Holding on issued and outstanding basis, respectively. |
Disposal of finance business
Disposal of finance business | 12 Months Ended |
Dec. 31, 2019 | |
Finance business [Member] | |
Disposal of finance business | 8. Disposal of finance business In September 2017, the Group entered into a framework agreement with Mr. Jinbo Yao, the chief executive officer and a principal shareholder of the Company to dispose its financial services and other finance related business (the “Finance Business”). Tianjin Wuba Financial Service Co., Ltd. ("58 Finance ") is the holding company of the Finance Business, which is majority-owned by Mr. Jinbo Yao, who contributed RMB150 million in cash to 58 Finance. After completion of the disposal of the Finance Business, the Group holds neither legal ownership nor effective control over 58 Finance, but is entitled to a profit participation right, with fair value of approximately RMB151 million based on a discounted cash flow model, for a portion of the future pre-tax profit of 58 Finance when 58 Finance has a positive pre-tax income on a cumulative basis. Moreover, the total profit participation rights do not have an expiration date and the Group would be able to convert its profit participation rights with respect to 58 Finance into the same percentage of 58 Finance's equity interests, subject to applicable regulatory approvals. In addition to the profit participation right, as part of the disposal, (i) the Group’s original capital contribution to the Finance Business of approximately RMB286 million would be repaid to the Group by 58 Finance in installments, plus interest to be determined based on the market interest rate, over a 3-year term subsequent to the disposal date; and (ii) repayments from borrowers for automobile financing receivables that were outstanding as of the disposal date ("Automobile Financing Receivables"), amounting to RMB132 million, would be repaid to the Group no later than 3 years after the disposal date. Upon the completion of the transaction in October 2017, 58 Finance were assessed as VIEs and Mr. Yao was considered to be the primary beneficiary of 58 Finance because Mr. Yao held a majority equity stake in 58 Finance, and hence obtained majority voting rights in 58 Finance through his equity stake, possessed the power to direct the activities of 58 Finance that would most significantly impact its economic performance, and also was exposed to the benefits and losses of 58 Finance. Accordingly, 58 Finance was deconsolidated from the Group. As a result of the disposal, the Group recognized a gain amounted to RMB87.8 million in the consolidated statements of changes in equity as the difference between the net carrying amount of the derecognized assets and liabilities of the Finance Business and the profit participation right and the other receivables due from 58 Finance, and derecognized allocated goodwill amounting to RMB39.0 million attributable to Finance Business. Although the disposal of the Finance Business is not considered as a common control transaction because Mr. Yao has a controlling interest in 58 Finance but not in the Group, given he is a principal shareholder of the Group, the Group recorded the gain in equity as additional paid-in capital by Mr. Yao. The profit participation right is treated as contingent consideration received upon the disposal of the Finance Business and is recorded as a long-term asset carried at amortized cost less impairment. The Group has provided certain services to 58 Finance in exchange for further profit participation rights. The Group will recognize revenue for these services when all of the revenue recognition criteria are met. There was no revenue recognized under this arrangement for the years ended December 31, 2017, 2018 and 2019. The following is a summary of profit participation right, consideration and other receivables from 58 Finance. As of December 31, 2018 2019 RMB RMB Current: - Consideration receivable for original capital contribution to the Finance Business 57,000 171,000 - Automobile Financing Receivables — 132,000 - Guarantee fees receivable — 15,638 - Others 25,725 14,924 Total 82,725 333,562 Non-current: - Consideration receivable for original capital contribution to the Finance Business 171,000 — - Automobile Financing Receivables 132,000 — - Profit participation right 150,908 150,908 - Others 37,748 40,147 Total 491,656 191,055 In accordance with the agreed repayment schedule for the disposal of the Finance Business, 58 Finance repaid RMB57.0 million consideration along with RMB3.2 million interest to the Group in 2018 and repaid RMB57.0 million consideration along with RMB5.8 million interest in 2019. In addition, RMB171.0 million of consideration receivable for original capital contribution to the Finance Business and RMB132.0 million of automobile financing receivables as of December 31, 2018 were reclassified to “Prepayment and other current assets” as of December 31, 2019 since they will be due during the next twelve months. See Note 10 and Note 16 for more detail. In 2019, Golden Pacer, newly established in Cayman Islands, became the ultimate holding company of 58 Finance. |
Accounts receivable, net
Accounts receivable, net | 12 Months Ended |
Dec. 31, 2019 | |
Accounts receivable, net | |
Accounts receivable, net | 9. Accounts receivable, net Accounts receivable, net, consists of the following: As of December 31, 2018 2019 RMB RMB Accounts receivable 983,063 1,305,016 Allowance for doubtful accounts (65,620) (95,765) Accounts receivable, net 917,443 1,209,251 Movement of allowance for doubtful accounts is as follows: For the years ended December 31, 2017 2018 2019 RMB RMB RMB Balance at beginning of year 51,719 62,736 65,620 Provisions 16,450 8,380 32,050 Reversals (4,896) (3,447) (979) Write-offs (537) (2,049) (926) Balance at end of year 62,736 65,620 95,765 |
Prepayments and other current a
Prepayments and other current assets | 12 Months Ended |
Dec. 31, 2019 | |
Prepayments and other current assets | |
Prepayments and other current assets | 10. Prepayments and other current assets The following is a summary of prepayments and other current assets: As of December 31, 2018 2019 RMB RMB Consideration receivable for disposal of Guazi preference shares — 497,837 Prepaid advertising fee 227,057 445,415 Consideration and other receivables from 58 Finance (due from a related party (Note 8)) 82,725 333,562 Receivables on behalf of third parties 51,712 295,480 Distributor commission — 192,248 Input VAT 74,193 139,187 Prepayment for physical goods 11,172 101,352 Rental, advertising and other deposits 100,214 97,765 Employee advance 100,063 91,671 Prepayment for film investment 75,029 56,069 Prepaid rental fees 19,365 17,236 Prepayment for service fees 28,052 16,040 Interest receivable 38,296 9,581 Others 5,525 33,477 Total 813,403 2,326,920 The prepaid advertising fees consist of (i) prepayments to third parties for advertising services, mainly through television, internet and outdoor media; and (ii) unamortized business resources contributed by Tencent to Zhuan Zhuan amounting to RMB122.2 million and RMB348.5 million, respectively, as of December 31, 2018 and 2019. See Note 7 for more details. The advertising expenses and the amortization of business resources are recognized in sales and marketing expenses subsequently, when the services are received. Consideration and other receivables from 58 Finance represents consideration receivable from the disposal of the Finance Business completed in October 2017 and other receivables related to ordinary business operations. See Note 8 for more details. |
Property and equipment, net
Property and equipment, net | 12 Months Ended |
Dec. 31, 2019 | |
Property and equipment, net | |
Property and equipment, net | 11. Property and equipment, net The following is a summary of property and equipment, net: As of December 31, 2018 2019 RMB RMB Buildings 1,172,239 1,172,239 Computers and equipment 571,654 659,382 Leasehold improvements 155,801 151,760 Software 49,146 63,460 Furniture and fixtures 21,054 21,369 Motor vehicles 5,383 6,050 Total 1,975,277 2,074,260 Less: Accumulated depreciation (645,525) (768,467) Net book value 1,329,752 1,305,793 Depreciation expenses for the years ended December 31, 2017, 2018 and 2019 were RMB211.2 million, RMB190.6 million and RMB176.8 million, respectively. |
Intangible assets, net
Intangible assets, net | 12 Months Ended |
Dec. 31, 2019 | |
Intangible assets, net | |
Intangible assets, net | 12. Intangible assets, net The following is a summary of intangible assets, net: As of December 31, 2018 2019 RMB RMB Cost Domain names and trademarks 1,643,080 1,651,421 Technology 215,064 215,064 Customer relationship 26,586 26,586 Licenses 12,793 12,793 Total 1,897,523 1,905,864 Accumulated amortization Domain names and trademarks (605,014) (778,424) Technology (165,982) (212,690) Customer relationship (26,263) (26,586) Licenses (319) (1,599) Total (797,578) (1,019,299) Net book value 1,099,945 886,565 Amortization expenses for the years ended December 31, 2017, 2018 and 2019 were RMB224.4 million, RMB222.5 million and RMB222.8 million, respectively. During the corresponding periods, no impairment was recognized in the consolidated statements of comprehensive income. The estimated aggregate amortization expenses for each of the five succeeding fiscal years and thereafter are as follows: Amounts RMB For the year ended December 31, 2020 177,111 2021 174,736 2022 174,736 2023 174,736 2024 173,660 Thereafter 11,586 Total 886,565 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill | |
Goodwill | 13. Goodwill The changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2019 were as follows: Amounts RMB Balance as of December 31, 2017 15,864,655 Addition 9,565 Balance as of December 31, 2018 and 2019 15,874,220 As of December 31, 2017, the goodwill balance arose from the acquisition of Ganji and Anjuke, less the goodwill allocated to 58 Home, Guazi and Finance Business. All goodwill arising from business acquisitions completed was attributable to the Group. Goodwill was allocated to the disposed businesses such as 58 Home, Guazi and Finance Business according to the relative fair values of the businesses being disposed of and the portion of the Group that was retained as of the dates the businesses were disposed. In the annual impairment assessment of goodwill, the Company concluded that there was no impairment charge for the year ended December 31, 2017, 2018 and 2019. |
Long-term investments
Long-term investments | 12 Months Ended |
Dec. 31, 2019 | |
Long-term investments | |
Long-term investments | 14. Long-term investments The following is a summary of long-term investments: As of December 31, 2018 2019 RMB RMB Measurement alternative investments: Investment in Guazi (a) 583,284 1,897,877 Investment in Tujia (b) 273,568 278,071 Investment in investee A (c) 298,850 303,771 Investment in investee B (d) 300,000 300,000 Investment in investee C 231,442 235,253 Investment in investee D 137,264 139,524 Investment in investee E (e) — 150,000 Investment in Sweetome (f) 10,057 82,026 Investment in 58 Home Series A Preference Shares (g) 18,525 — Others (l) 297,270 486,051 Total measurement alternative investments 2,150,260 3,872,573 Equity method investments: Investment in investee F (h) — 704,806 Investment in investee G (i) 75,941 324,383 Investment in investee Ai Fang (j) — 120,025 Investment in investee Sweetome (f) — 102,954 Others 46,455 29,865 Total equity method investments 122,396 1,282,033 Fair value method investments: Investment in 5I5J (k) 910,650 840,450 Others 182,600 91,455 Total fair value method investments 1,093,250 931,905 Total long-term investments 3,365,906 6,086,511 (a) The investment in Guazi consists of investments in Series A Guazi Shares and Series B1 Guazi Shares, which are measured under measurement alternative, because the shares invested by the Group were not considered as in-substance common stock and the shares did not have readily determinable fair value or quoted market price. As disclosed in Note 6, the Company sold a portion of Series A Guazi Shares to a third-party investor in 2019. The Company recognized RMB4,760.5 million realized gains for the portion sold and recognized RMB1,381.1 million unrealized gains as a result of remeasuring the fair value of the remaining Series A Guazi Shares and Series B1 Guazi Shares held by the Group. (b) The Group invested in ordinary shares and series D preference shares of Tujia.com International (“Tujia”) in 2016. The investment in Tujia ordinary shares and series D preference shares was measured at fair value of RMB 276.5 million (US $39.9 million) on the date of investment and was subsequently accounted for under cost method, and measurement alternative after the Group adopted ASU 2016-01 since January 1, 2018 because the preference shares were not considered as in-substance common stock, the ordinary shares could not exert significant influence over the investee, and neither the preference shares nor the ordinary shares have readily determinable fair value or quoted market price. For the year ended December 31, 2018 and 2019, the Group did not identify any observable price change in this investment, which refer to the price changes in orderly transactions for an identical or similar investment in the investee. (c) In 2017, the Group acquired shares of investee A for cash consideration of RMB 284.5 million (US $43.5 million). Investee A is mainly engaged in the business of property management. The investment was accounted for under cost method, and measurement alternative after the Group adopted ASU 2016-01 since January 1, 2018 as the shares invested by the Group were not considered as in-substance common stock and the shares did not have readily determinable fair value. For the year ended December 31, 2018 and 2019, the Group did not identify any observable price change in this investment, which refer to the price changes in orderly transactions for an identical or similar investment in the investee. (d) In 2018, the Group invested RMB 300.0 million in a third-party company or Investee B. The Group’s shares invested in Investee B were not considered as in-substance common stock, and did not have readily determinable fair value or quoted market price, therefore, the investment was accounted for under measurement alternative according to ASC 323 and ASU 2016-01. For the year ended December 31, 2018 and 2019, the Group did not identify any observable price change in this investment, which refer to the price changes in orderly transactions for an identical or similar investment in the investee. (e) In 2019, the Group invested RMB 150.0 million in a third-party company or Investee E. The Group’s shares invested in Investee E were not considered as in-substance common stock and had no readily determinable fair value or quoted market price, therefore, the investment was accounted for under measurement alternative according to ASC 323 and ASU 2016-01. For the year ended December 31, 2019, the Group did not identify any observable price change in this investment, which refer to the price changes in orderly transactions for an identical or similar investment in the investee. (f) In 2017, the Group acquired preference shares and ordinary shares of Sweetome for cash consideration of RMB 2.0 million and RMB 8.0 million, respectively. Sweetome is mainly engaged in providing short-term leasing services and homestay hotels services. The investment in ordinary shares of Sweetome was accounted for under cost method, and measurement alternative after the Group adopted ASU 2016-01 since January 1, 2018 because the ordinary shares could not exert significant influence over the investee, and the ordinary shares did not have readily determinable fair value or quoted market price. The investment in preference shares of Sweetome was accounted for under cost method, and measurement alternative after the Group adopted ASU 2016-01 since January 1, 2018 because the preference shares were not considered as in-substance common stock and did not have readily determinable fair value or quoted market price. In 2019, the Group entered into a series of agreements to acquire additional preference shares and ordinary shares of Sweetome. Pursuant to the agreements, the Group would (i) pay cash consideration of RMB160.0 million in exchange for preference shares of Sweetome, (ii) provide business resources valued at RMB94.9 million on the transaction date over a four-year period in exchange for ordinary shares of Sweetome. As of December 31, 2019, the Group partially completed the transaction and obtained half of the agreed number of preference shares by paying cash consideration of RMB80.0 million and acquired ordinary shares by providing business resources valued at RMB94.9 million over a four-year period from January 2020. Following the completed part of the transaction, (i) the Group accounted for the preference shares in Sweetome under the measurement alternative according to ASC 321 because they were not considered as in-substance common stock and they have no readily determinable fair value or quoted market price; (ii) the Group accounted for the ordinary shares using equity method according to ASC 323 since the Group obtained significant influence over Sweetome. For the year ended December 31, 2018 and 2019, the Group did not identify any observable price change in this investment, which refer to the price changes in orderly transactions for an identical or similar investment in the investee. For the year ended December 31, 2019, the Group did not record any gain or loss under equity method since the amount was immaterial. (g) As a result of the deconsolidation of 58 Home on November 27, 2015, the Group continues to retain equity interests in 58 Home through its ownership of certain 58 Home Ordinary Shares and 58 Home Series A Preference Shares. The Group’s investment in 58 Home Ordinary Shares was accounted for as an equity method investment in accordance with ASC 323. The Group’s investment in 58 Home Series A Preference Shares was accounted for under the cost method, and measurement alternative after the Group adopted ASU 2016-01 from January 1, 2018 as 58 Home Series A Preference Shares were not considered as in-substance common stock and the shares did not have readily determinable fair value or quoted market price. Since January 2018, the carrying amount of the Group’s investment in 58 Home Ordinary Shares has been reduced to zero due to the accumulated losses picked up from 58 Home. The Group has continued to record its share of losses in 58 Home in its consolidated statements of comprehensive income to the extent of its investment in 58 Home Series A Preference Shares. For the year ended December 31, 2017, 2018 and 2019, the Group recorded investment losses of RMB 663.2 million, RMB 79.6 million and RMB 17.7 million, respectively, in share of results of equity investees in the consolidated statements of comprehensive income relating to the investments in 58 Home. In 2019, the carrying amount of the Group’s investment in 58 Home Series A Preference Shares was reduced to zero . (h) In 2019, the Group invested in common shares of Investee F, for cash consideration of RMB 700.0 million. The investment is accounted for under equity method as the Group can exert significant influence over the investee. For the year ended December 31, 2019, the Group recorded RMB 4.8 million gain in share of results of equity investees in the consolidated statements of comprehensive income. (i) In 2017 and 2019, the Group invested in common shares of Investee G for cash consideration of RMB 99.0 million and RMB 198.0 million, respectively. Investee G is mainly engaged in the consumer finance business. The investment is accounted for under equity method as the Group can exert significant influence over the investee. The Group recorded RMB 24.0 million loss, RMB 0.9 million gain and RMB 50.4 million gain in share of results of equity investees in the consolidated statements of comprehensive income, for the year ended December 31, 2017, 2018 and 2019, respectively. (j) In 2019, the Group invested in common shares of Shanghai Gengying Information Technology Co., Ltd. ("Ai Fang") for cash consideration of RMB 153.0 million and held 30% of the equity interests in Ai Fang as of December 31, 2019. Ai Fang is mainly engaged in real estate related business. The investment is accounted for under equity method as the Group can exert significant influence over the investee. For the year ended December 31, 2019, the Group recorded RMB 33.0 million loss in share of results of equity investees in the consolidated statements of comprehensive income. (k) In 2018, the Group acquired a minority stake of approximately 8.3% in 5I5J Holding Group Co., Ltd., or 5I5J, a major secondary and rental brokerage company listed on the Shanghai Stock Exchange in mainland China, for a consideration of approximately RMB 1.1 billion in cash. The Group classified this investment as equity investments with readily determinable fair values under long-term investments and reported the investment at fair value using a market approach based on the investee’s quoted market price. As of December 31, 2018 and 2019, the fair value of the investment held by the Group was RMB 910.7 million and RMB 840.5 million, respectively, and the Group recognized an unrealized loss in fair value of RMB 157.4 million and RMB 70.2 million, respectively, for the year ended December 31, 2018 and 2019 in investment income, net in the Group’s consolidated statements of comprehensive income. (l) As of December 31, 2019, the increase in “Others” under measurement alternative mainly included newly acquired shares of other companies for an aggregate cash consideration of RMB 199.9 million which were elected to be accounted for under measurement alternative because such investments were 1) not considered as in-substance common stock and did not have readily determinable fair values or quoted market price; or 2) the investments did not have readily determinable fair values or quoted market price and the Group did not have the ability to exercise significant influences over the investees. During the year ended December 31, 2019, a measurement alternative investment amounted to RMB 11.8 million was fully impaired (see Note 2 (m)). For the years ended December 31, 2019, equity method investments held by the Group in aggregate have met the significance criteria as defined under Rule 4-08 (g) of Regulation S-X. As such, the Group is required to present summarized financial information for all of its equity method investments as a group as follows: For the year ended For the year ended For the year ended December 31, 2017 December 31, 2018 December 31, 2019 RMB RMB RMB Operating result data: Total revenues 519,121 1,178,231 2,355,714 Gross profit 339,358 628,160 1,489,798 Loss from operations (836,811) (1,469,574) (1,120,644) Net loss (840,385) (1,478,234) (983,780) As of December 31, 2018 2019 RMB RMB Balance sheets data: Current assets 910,462 3,627,152 Non-current assets 4,345,855 11,694,180 Current liabilities 4,140,812 11,648,260 Non-current liabilities 193,534 658,950 Noncontrolling interests and mezzanine equity 2,755,258 3,647,147 |
Investment in convertible notes
Investment in convertible notes | 12 Months Ended |
Dec. 31, 2019 | |
Investment in convertible notes | |
Investment in convertible notes | 15. Investment in convertible notes In May 2019, the Group paid RMB689.3 million (US$100.0 million) to invest in convertible notes issued by Uxin. The convertible notes bear an annual interest rate of 3.75% and will mature in five years from the date of issuance. The Group has the right but not the obligation to convert the convertible notes into Class A ordinary shares of Uxin at a conversion price of US$1.03 per share after a 180-day period from the date when all closing conditions were met. The convertible notes will automatically terminate if the Group choses to convert it into Uxin’s Class A ordinary shares. The Group elected the fair value option in accordance with ASC 825 to account for the investment in convertible notes and recognized the fair value change in its consolidated statements of comprehensive income. For the year ended December 31, 2019, the Group recognized a fair value loss of RMB28.7 million and presented the loss as part of the “investment income, net” in the consolidated statement of the comprehensive income. |
Long-term prepayments and other
Long-term prepayments and other non-current assets | 12 Months Ended |
Dec. 31, 2019 | |
Long-term prepayments and other non-current assets | |
Long-term prepayments and other non-current assets | 16. Long-term prepayments and other non-current assets The following is a summary of long-term prepayments and other non-current assets: As of December 31, 2018 2019 RMB RMB Profit participation right, consideration and other receivables from 58 Finance (due from a related party (Note 8)) 491,656 191,055 Long-term prepaid advertising fee — 153,287 Deferred tax assets, net 42,953 85,023 Rental deposits 17,537 19,744 Prepayment for purchase of property and equipment 10,764 6,341 Prepayment for investments 75,000 — Others 1,568 14,142 Total 639,478 469,592 |
Short-term loans
Short-term loans | 12 Months Ended |
Dec. 31, 2019 | |
Short-term loans | |
Short-term loans | 17. Short-term loans In December 2016, the Group obtained a three-year interest-bearing bank loan of RMB150.0 million from Shanghai Pudong Development Bank Co., Ltd. (“Pudong Bank”), which was secured by an office building of the Group as collateral. The Group repaid RMB75.0 million of the loan pursuant to the payment schedule in 2018 and 2019, respectively. The loan was fully repaid in January 2019. In April 2017, the Group obtained a two-year interest-bearing US$ denominated loan (“CMB loan”) of US$107.5 million from China Merchant Bank Co., Ltd., (“CMB Bank”), which was due in April 2019. The CMB loan was secured by a two-year term deposit amounted to RMB792.0 million, which represents the loan-to-value ratio of no more than 94% and was classified as non-current restricted cash in the Group’s consolidated balance sheets. The Group would need to provide more term deposits or equivalent amount of cash to CMB Bank as a security when the loan-to-value ratio exceeds 98% due to appreciation of U.S. dollar against RMB. The CMB loan was fully repaid in April 2019. As of December 31, 2018, CMB loan amounted to RMB737.8 million (US$107.5 million) and RMB75.0 million loan from Pudong Bank were outstanding and recorded in short-term loans in the Group’s consolidated balance sheets. As of December 31, 2019, no short-term bank loan was outstanding. |
Accounts payable
Accounts payable | 12 Months Ended |
Dec. 31, 2019 | |
Accounts payable | |
Accounts payable | 18. Accounts payable The following is a summary of accounts payable: As of December 31, 2018 2019 RMB RMB Payable for advertisement fees 701,629 791,705 Rebate payable to sales agents 142,663 137,982 Payable related to purchases of property and equipment 4,434 40,319 Others 38,832 72,691 Total 887,558 1,042,697 |
Accrued expenses and other curr
Accrued expenses and other current liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Accrued expenses and other current liabilities | |
Accrued expenses and other current liabilities | 19. Accrued expenses and other current liabilities The following is a summary of accrued expenses and other current liabilities: As of December 31, 2018 2019 RMB RMB Deposits from sales agents and others 202,265 302,727 Accrued office expenses 207,146 205,538 Other payable to platform users and merchants 43,413 118,840 Acquisition consideration payable 105,620 107,359 Payable to employees related to share-based awards 43,558 92,290 Accrued professional fees 78,315 88,198 Accrued telecom and bandwidth fees 40,078 31,841 Government subsidy 9,146 21,716 Cash received on behalf of a related party 82,358 — Others 66,469 84,498 Total 878,368 1,053,007 Acquisition consideration payable consists of consideration payable related to acquisitions of Ganji. The amount of cash received on behalf of a related party was settled in March 2019. |
Fair value measurements
Fair value measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair value measurements | |
Fair value measurements | 20. Fair value measurements Measured on recurring basis The Group measured its financial assets including cash equivalents, term deposits, short-term investments, certain long-term investments and investment in convertible notes at fair value on a recurring basis as of December 31, 2018 and 2019. The following table sets forth the financial instruments, measured at fair value at recurring basis, by level within the fair value hierarchy: As of December 31, Financial instruments Fair value hierarchy 2018 2019 RMB RMB Cash equivalents Significant other observable inputs (Level 2) 1,069,646 2,302,860 Term deposits Significant other observable inputs (Level 2) — 70,000 Short-term investments: - Variable-rate financial instruments Significant other observable inputs (Level 2) 4,587,610 8,414,348 Long-term investments: - Equity investments with readily determinable fair value Quoted prices in active markets for identical assets (Level 1) 910,650 841,754 - Non-marketable investments held by an investment company within the Group or accounted for using fair value option Significant unobservable inputs (Level 3) 182,600 90,151 Investment in convertible notes Significant unobservable inputs (Level 3) — 669,715 Cash equivalents and term deposits The Group measures cash equivalents and term deposits at fair value based on the pervasive interest rates in the market, which are also the interest rates as stated in the contracts with the banks. The Group classifies the valuation techniques that use the pervasive interest rates input as Level 2 of fair value measurements. Generally, there are no quoted prices in active markets for identical time deposits at the reporting date. In order to determine the fair value, the Group must use the discounted cash flow method and observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Short-term investments: Variable-rate financial instruments The Group measures variable-rate financial instruments at fair value. As the variable-rate financial instruments represent investments in wealth management products with variable interest rates and principal non-guaranteed which were purchased from commercial banks and other financial institutions. To estimate the fair value of investments in variable-rate financial instruments, the Group refers to the quoted rate of return provided by banks 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. Long-term investments and investment in convertible notes Effective as of January 1, 2018, all equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) will generally be measured at fair value through the consolidated statements of comprehensive income. There will no longer be an available-for-sale classification (changes in fair value previously reported in other comprehensive income) for equity securities. Equity investments with readily determinable fair values are valued using the market approach based on the quoted prices in active markets at the reporting date. The Group classifies the valuation techniques that use these inputs as Level 1 of fair value measurements. The change in fair value losses of this type of investment for the years ended December 31, 2018 and 2019 were RMB157.4 million and RMB75.8 million, which were recorded in “investment income, net” in the Group’s consolidated statements of comprehensive income. The Group estimated the fair value of non-marketable investments held by subsidiaries of the Group with the assistance from an independent third-party valuation firm. Based on the market approach, the Group determined the estimate of the fair value of non-marketable investments by using information including but not limited to liquidity factors and selection of the comparable companies. The Group classified the valuation techniques that use these significant unobservable inputs as Level 3 of fair value measurements. The Group recorded RMB18.1 million fair value gain and RMB136.7 million net fair value loss for the years ended December 31, 2018 and 2019 respectively, which were included in “investment income, net” in the Group’s consolidated statements of comprehensive income. The Group accounted for the investment in convertible notes using the fair value option. The fair value measurements of convertible notes are based on significant inputs not observable in the market, and thus represent Level 3 measurement. See Note 15 for further information on the convertible notes. The following are other financial instruments not measured at fair value in the consolidated balance sheets but for which the fair value is estimated for disclosure purposes. Measured on non-recurring basis The Group’s financial assets that are measured at fair value on a nonrecurring basis include equity investments under measurement alternative when observable price changes are identified, long-term investments, intangible assets and goodwill when they were determined to be impaired. Long-term investments The investments in Guazi were accounted for using measurement alternative after the Group adopted ASU 2016-01 from January 1, 2018. In 2019, the fair value measurements of the investments are based on significant inputs not observable in the market, and thus represent Level 3 measurement. See Note 14 for further information regarding the investments in Guazi. Intangible assets and goodwill The inputs used to measure the estimated fair value of goodwill are classified as Level 3 fair value measurement due to the significance of unobservable inputs used such as historical financial information and assumptions about future growth rates and discount rates, which require significant judgment and company-specific information. Financial instruments not measured at fair value Short-term receivables and payables Accounts receivable and other current assets are financial assets with carrying values that approximate fair value due to their short-term nature. Accounts payable and other current liabilities are financial liabilities with carrying values that approximate fair value due to their short-term nature. Non-current assets and non-current liabilities Non-current assets of receivables for rental deposits is a financial asset with carrying value that approximate fair value due to the impact of discounting is immaterial. Other liabilities, non-current portion is a financial liability with carrying value that approximate fair value due to the impact of discounting is immaterial. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income taxes | |
Income taxes | 21. Income taxes The Company is registered in the Cayman Islands. The Company generated substantially all of its income from its PRC operations for the years ended December 31, 2017, 2018 and 2019. Cayman Islands Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed. British Virgin Islands (“BVI”) The Group is exempted from income tax in the BVI on its foreign-derived income. There are no withholding taxes in the BVI. Hong Kong The Group's subsidiaries incorporated in Hong Kong are subject to 16.5% Hong Kong profit tax on their taxable income generated from operations in Hong Kong for the years of assessment 2015/2016, 2016/2017 and 2017/2018. Commencing from the year of assessment 2018/2019, the first Hong Kong dollars 2 million of profits earned by the Group's subsidiaries incorporated in Hong Kong will be taxed at half the current tax rate (i.e., 8.25)% while the remaining profits will continue to be taxed at the existing 16.5% tax rate. Under the Hong Kong tax laws, the Group is exempted from the Hong Kong income tax on its foreign-derived income. In addition, payments of dividends from the Group's incorporations in Hong Kong to 58.com Inc. are not subject to any Hong Kong withholding tax. The operations in Hong Kong have incurred net accumulated operating losses for income tax purposes. PRC On March 16, 2007, the National People’s Congress of PRC enacted an Enterprise Income Tax Law (“EIT Law”), under which FIEs and domestic companies would be subject to EIT at a uniform rate of 25%. The EIT law became effective on January 1, 2008. The Enterprise Income Tax Law and its implementation rules permit certain “high and new technology enterprises strongly supported by the state” that hold independent ownership of core intellectual property and simultaneously meet a list of other criteria, financial or non-financial, as stipulated in the implementation rules and other regulations, to enjoy a preferential enterprise income tax rate of 15% subject to certain new qualification criteria. The State Administration of Taxation, the Ministry of Science and Technology and the Ministry of Finance jointly issued the Administrative Rules for the Certification of High and New Technology Enterprises delineating the specific criteria and procedures for the “high and new technology enterprises” certification in April 2008. Enterprises recognized as “high and new technology enterprises” (“HNTE”) will enjoy a preferential enterprise income tax rate of 15% after they go through tax reduction application formalities with relevant tax authorities. Beijing 58, Wanglin, Shanghai Ruiting, 58 Technology, 58 Co., Ltd. and Shanghai Ruijia Information Technology Co., Ltd have all obtained the “high and new technology enterprise” certificate and maintained the “high and new technology enterprise” status and will be eligible for a preferential tax rate of 15% when they have taxable income under the Enterprise Income Tax Law, as long as they maintain the “high and new technology enterprise” status. In addition, qualified software enterprises are exempt from the enterprise income tax for two years beginning from their first profitable year and are entitled to a 50% tax rate reduction for the subsequent three years. The software enterprise qualification is subject to an annual assessment. Wanglin obtained its software enterprise qualification in 2014 and is entitled to a two-year exemption from 2014 to 2015 and enjoys a preferential tax rate of 12.5% from 2016 to 2018 as long as it is able to pass the annual assessment for software enterprise qualification for each of the respective years. 58 Technology qualified as a software enterprise in 2014 and was granted a two-year exemption from 2015 to 2016 and enjoyed a 12.5% preferential tax rate from 2017 to 2019 for so long as it maintains this qualification. According to a policy promulgated by the State Tax Bureau of the PRC and effective from 2008 onwards, enterprises engaging in research and development activities are entitled to claim 150% of the research and development expenses so incurred in a year as tax deductible expenses in determining its tax assessable profits for that year (“Super Deduction”). From January 1, 2018 to December 31, 2020, all Chinese resident enterprises will enjoy the Super Deduction of 175% in accordance with the updated policy promulgated by the Stated Tax Bureau of the PRC. Wanglin, Beijing 58, 58 Technology and Shanghai Ruiting claimed such Super Deduction in ascertaining its tax assessable profits for the years ended December 31, 2017, 2018 and 2019, respectively. Pursuant to the “Circular on Enterprise Income Tax Policy concerning Deductions for Equipment and Appliances” (Cai Shui [2018] 54) issued by the State Administration of Taxation, during the period from January 1, 2018 to December 31, 2020, the cost of newly purchased equipment with the original cost less than RMB5 million can be fully deducted against taxable profit in the next month after the asset is put into use, instead of being depreciated annually for tax filing (the “Fixed Assets One-time Expense”). The EIT Law also provides that an enterprise established under the laws of a foreign country or region but whose “de facto management body” is located in the PRC be treated as a resident enterprise for PRC tax purposes and consequently be subject to the PRC income tax at the rate of 25% for its global income. The Implementing Rules of the EIT Law merely define the location of the “de facto management body” as “the place where the exercising, in substance, of the overall management and control of the production and business operation, personnel, accounting, properties, etc., of a non-PRC company is located.” Based on a review of surrounding facts and circumstances, the Company does not believe that it is likely that its operations outside of the PRC should be considered a resident enterprise for PRC tax purposes. The EIT Law also imposes a withholding income tax of 10% on dividends distributed by an FIE to its immediate holding company outside of China, if such immediate holding company is considered as a non-resident enterprise without any establishment or place within China or if the received dividends have no connection with the establishment or place of such immediate holding company within China, unless such immediate holding company’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement. The Cayman Islands, where the Company was incorporated, does not have such tax treaty with China. According to the arrangement between Mainland China and Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion in August 2006, dividends paid by an FIE in China to its immediate holding company in Hong Kong will be subject to withholding tax at a rate of no more than 5% (if the foreign investor owns directly at least 25% of the shares of the FIE). The Group’s subsidiaries and VIEs had neither declared any dividend to their respective parent companies nor planned to declare or pay any dividends to the parent companies out of the accumulated undistributed earnings as of December 31, 2019 in the foreseeable future, and accordingly no withholding tax was accrued. As of December 31, 2019, the total amount of undistributed profits from the PRC subsidiaries and VIEs for which no withholding tax had been accrued was RMB8.7 billion, and the unrecognized tax liabilities were RMB865.9 million. The provisions for income tax expenses are summarized as follows: For the Year ended December 31, 2017 2018 2019 RMB RMB RMB Current tax expenses (212,528) (370,149) (784,274) Deferred tax (expenses)/benefit 65,839 70,444 (50,060) Income tax expenses (146,689) (299,705) (834,334) The following table sets forth reconciliation between the statutory EIT rate and the Group’s effective tax rate: For the Year ended December 31, 2017 2018 2019 Statutory income tax rates: 25.0 % 25.0 % 25.0 % Change in valuation allowance (7.5) % 10.1 % 3.8 % Permanent book-tax differences (a) 9.4 % (7.6) % (12.4) % Effect of preferential tax treatment and tax holiday (13.7) % (13.6) % (8.4) % Others (b) (3.6) % (1.6) % 1.0 % Effective tax rate 9.6 % 12.3 % 9.0 % (a) The permanent differences mainly consisted of additional deduction for research and development expenditures, effect on tax rates in different tax jurisdiction and other non-deductible expenses. (b) Others mainly consisted of fair value change, Fixed Assets One-time Expense and amortization of acquired intangible assets. The per share effect of the tax holidays mostly enjoyed by Shanghai Ruiting, Wangling and 58 Technology are as follows: For the Year ended December 31, 2017 2018 2019 RMB RMB RMB Net earnings per ordinary share attributable to ordinary shareholders effect – basic 0.45 1.01 0.93 Net earnings per ordinary share attributable to ordinary shareholders effect – diluted 0.45 0.99 0.92 The following table sets forth the significant components of the aggregate deferred tax assets and liabilities: As of December 31, 2018 2019 RMB RMB Deferred tax assets Provision for doubtful receivables 11,622 19,459 Net operating loss carry forwards 290,164 499,091 Advertising expenses in excess of deduction limit 306,510 466,090 Others 23,603 37,420 Total deferred tax assets 631,899 1,022,060 Less: Valuation allowance (588,946) (937,037) Total deferred tax assets, net 42,953 85,023 Deferred tax liabilities Acquired intangible assets 268,171 214,388 Fair value change — 152,223 Fixed Assets One-time Expense 14,941 23,108 Total deferred tax liabilities 283,112 389,719 Deferred tax assets of RMB43.0 million and RMB85.0 million were included in the long-term prepayments and other non-current assets of the Group’s consolidated balance sheets as of December 31, 2018 and 2019. Deferred tax liabilities of RMB268.2 million and RMB214.4 million as of December 31, 2018 and 2019 were mainly related to the intangible assets acquired during business acquisitions of Anjuke and Ganji in 2015. Deferred tax liabilities of RMB152.2 million as of December 31, 2019 were related to the fair value change of investment. Deferred tax liabilities of RMB14.9 million and RMB23.1 million as of December 31, 2018 and 2019 were related to the Fixed Assets One-time Expense. As of December 31, 2019, the Group had net operating loss carry forwards of approximately RMB2.3 billion, which will expire during the period between January 1, 2021 and December 31, 2028. There is no expiration for the advertising expenses that were in excess of annual deduction limit and carried forward. A valuation allowance is provided against deferred tax assets when the Group determines that it is more likely than not that some portion of or all of the deferred tax assets will not be utilized in the future. In making such determination, the Group evaluates a variety of factors including the Group’s operating history, accumulated deficit, existence of taxable temporary differences and reversal periods. The Group has recoverable accumulated operating losses for income tax purposes since its inception. The Group believes that it is more likely than not that most of these recoverable operating losses and other deferred tax assets will not be utilized in the future except for RMB85.0 million deferred tax assets recognized as of December 31, 2019. Therefore, the Group had valuation allowances of RMB343.6 million, RMB588.9 million and RMB937.0 million for the deferred tax assets as of December 31, 2017, 2018 and 2019, respectively. Movement of valuation allowance For the years ended December 31, 2017 2018 2019 RMB RMB RMB Balance at beginning of the period 458,433 343,590 588,946 Provision 81,904 308,811 349,781 Current period reversal (196,747) (63,455) (1,690) Balance at the end of the period 343,590 588,946 937,037 The provision of valuation allowance against the deferred tax assets as of December 31, 2019 was primarily associated with operating loss carry forwards of Beijing Zhuanzhuan and Tianjin Zhuanzhuan, and the advertising expenses in excess of deduction limit of Yangguang Gudi and Shanjing Kechuang, which may not be realized as a tax benefit. The current period reversal of valuation allowance is primarily attributed to the utilization of net operating losses and deductible advertising expenses carried forward from prior years of certain entities that started to make profits in the year ended December 31, 2019. As of December 31, 2019, the tax years ended December 31, 2015 through 2019 of the Company’s PRC subsidiaries and the variable interest entities are subjected to examination by the PRC tax authorities. |
Ordinary shares
Ordinary shares | 12 Months Ended |
Dec. 31, 2019 | |
Ordinary shares | |
Ordinary shares | 22. Ordinary shares The Company was incorporated in the Cayman Islands in May 2011. On August 30, 2013, the Group’s Board of Directors approved that the Group redesigned the share capital and adopted a dual class ordinary share structure immediately upon the completion of IPO. Upon completion of the Group’s IPO on November 5, 2013, the Company’s shares were divided into Class A ordinary shares and Class B ordinary shares, at par value of US $0.00001. Holders of Class A ordinary shares and Class B ordinary shares have the same rights except for voting and conversion rights. Holders of Class A ordinary shares are entitled to one vote per share, while holders of Class B ordinary shares are entitled to ten votes per share, voting together as one class on all matters subject to a shareholders’ vote. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstance. On April 20, 2015, the Group acquired certain number of ordinary and preference shares of Ganji from Ganji's shareholders, after which the Group held less than 50% equity stake in Gangi. On August 6, 2015, the Company committed RMB2.5 billion (US$406.7 million) cash and 46.5 million newly issued ordinary shares of the Company to several private equity funds, of which RMB1.7 billion (US$272.4 million) cash and 46.5 million ordinary shares were contributed to the funds in August 2015. These funds, together with Tencent, acquired the remaining equity interest in Ganji on August 6, 2015. On December 11, 2015, the Company issued 4.3 million Class A ordinary shares to Tencent to early repay RMB806.0 million (US$125.0 million) principal amount and settle the accrued interest payable of RMB47.0 million (US$7.3 million) of the convertible note to Tencent. As of December 31, 2018, 4,800,000,000 Class A ordinary shares and 200,000,000 Class B ordinary shares were authorized, 296,444,579 ordinary shares were issued shares shares As of December 31, 2019, 4,800,000,000 Class A ordinary shares and 200,000,000 Class B ordinary shares were authorized, 299,277,413 ordinary shares were issued shares shares |
Share-based compensation
Share-based compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based compensation | |
Share-based compensation | 23. Share-based compensation 58.com Share-based Awards In March 2010, the Group authorized an employment-related stock incentive plan (the “2010 Plan”). The 2010 Plan will terminate automatically 10 years after its adoption, unless terminated earlier at the Group’s shareholders’ approval. According to the resolutions of the Board of Directors of the Group in April, November 2011 and January 2013, the number of ordinary shares available for issuance under the 2010 Plan was increased to 20,173,225. The majority of options granted under 2010 plan were to be vested over three or four years, one fourth (1/4) of which shall vest and become exercisable upon the first anniversary of the date of grant and the remaining shall vest monthly thereafter in 24 or 36 equal monthly installments. The Group adopted a share incentive plan (the “2013 Plan”) on September 26, 2013. The 2013 Plan will terminate automatically 10 years after its adoption, unless terminated earlier at the Group’s shareholders’ approval. The maximum aggregate number of shares which may be issued pursuant to all awards under the 2013 Plan is 2,800,000 shares as of the date of its adoption. The number of shares reserved for future issuances under the 2013 Plan will be increased by a number equal to 1.5% of the total number of outstanding shares on the last day of the immediately preceding calendar year, on the first day of each calendar year during the term of the 2013 Plan beginning in 2015, or such lesser number of ordinary shares as determined by the Board of Directors. According to the resolutions of the Board of Directors of the Group in 2015 through 2019, the number of ordinary shares available for issuance under the 2013 Plan was increased to 31,133,369 as of January 1, 2019. The options and RSUs granted under the 2013 Plan were generally to be vested over three to five years, the majority of which shall have one fourth (1/4) vested and exercisable upon the first anniversary of the date of grant and the remaining shall vest every six months thereafter in equal installments, or subject to vesting in four equal installments over a period of four years. As of December 31, 2019, the Group has reserved approximately 7,420,000 ordinary shares available to be granted as share-based awards. A summary of the Group’s share option activities under the 2010 and 2013 Plan for the years ended December 31, 2017, 2018 and 2019 is presented below: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Life Value US$ In years US$ Outstanding as of December 31, 2016 5,447,800 7.78 6.39 43,531 Granted — — Forfeited and expired (99,344) 15.36 Exercised (2,403,566) 6.29 45,141 Outstanding as of December 31, 2017 2,944,890 8.74 5.31 79,662 Granted 17,328 0.01 Forfeited and expired (31,044) 7.03 Exercised (395,590) 5.28 12,293 Outstanding as of December 31, 2018 2,535,584 9.24 4.42 45,620 Granted — — Forfeited and expired (2) 2.50 Exercised (134,456) 4.51 3,411 Outstanding as of December 31, 2019 2,401,126 9.50 3.39 48,927 Exercisable as of December 31, 2019 2,197,930 8.53 3.17 46,910 Fully vested and expected to vest as of December 31, 2019 11,685,220 The weighted average grant date fair value of options granted for the year ended December 31, 2018 was US$37.86 per share. There were no options granted in 2017 and 2019. The following table sets forth the summary of RSUs activities for the years ended December 31, 2017, 2018 and 2019: Weighted Average Weighted Remaining Average Number of Contractual Grant Date RSUs Life Fair Value In years US$ Unvested as of December 31, 2016 7,050,138 9.09 Granted 4,381,182 23.53 Forfeited (2,104,716) Vested (1,890,568) Unvested as of December 31, 2017 7,436,036 8.85 Granted 3,166,236 33.15 Forfeited (813,520) Vested (2,083,858) Unvested as of December 31, 2018 7,704,894 8.60 Granted 4,894,310 25.41 Forfeited (545,618) Vested (2,698,378) Unvested as of December 31, 2019 9,355,208 8.77 Fully vested and expected to vest as of December 31, 2019 22,234,204 As of December 31, 2019, there were a total of RMB1.5 billion unrecognized compensation expenses, adjusted for estimated forfeitures, related to non-vested share-based compensation arrangement under the 2013 Plan. The expense is expected to be recognized over a weighted average period of 3.09 years. Total unrecognized compensation expenses may be adjusted for future changes in estimated forfeitures. Zhuan Zhuan Share-based Awards In September 2017, Zhuan Zhuan Holding, a subsidiary of the Group, adopted a share incentive plan, or the Zhuan Zhuan 2017 Plan. The Zhuan Zhuan 2017 Plan permits the awards of options, restricted share units and restricted shares. Awards of share rights may be granted under Zhuan Zhuan 2017 Plan to employees and management of Zhuan Zhuan Holding and of any present or future parents or subsidiaries or VIEs of Zhuan Zhuan Holding. The maximum term of any share right granted under the plan is ten years from the grant date. The Zhuan Zhuan 2017 Plan will expire on September 30, 2027. In October 2019, Zhuan Zhuan Holding adopted a share incentive plan, or the Zhuan Zhuan 2019 Plan. The Zhuan Zhuan 2019 Plan permits the awards of options. Awards of share rights may be granted under Zhuan Zhuan 2019 Plan to employees, consultants and directors of Zhuan Zhuan Holding and of any present or future parents or subsidiaries or variable interest entities of Zhuan Zhuan Holding. The maximum term of any share right granted under the plan is ten years from the grant date. The Zhuan Zhuan 2019 Plan will expire on October 1, 2029. Share Option awards of Zhuan Zhuan As of December 31, 2019, Zhuan Zhuan Holding had granted options for the purchase of certain ordinary shares to its employees and management. The options granted to the employees were to be vested over four years, one fourth (1/4) of which shall vest upon the first anniversary of the commencement date and the remaining shall vest every six months thereafter in equal installments. The options granted to management were to be vested over six years, 12.5% of which shall vest upon the second anniversary of the commencement date, 25% each shall vest on the third, fourth and fifth anniversary, respectively and the remaining 12.5% shall vest on the sixth anniversary. For the options awarded to the employees, the vested options will not be exercisable prior to Zhuan Zhuan Holding’s completion of a qualified IPO, therefore the completion of a qualified IPO is considered to be a performance condition and no compensation expense should be recognized until it becomes probable that the performance condition can be achieved. The options granted to management are exercisable once vested. As a result, the Group had only recognized the compensation expense for the options granted to the management for the years ended December 31, 2017, 2018 and 2019 and recognized no compensation expenses for the options granted to employees. Restricted Share Units (“RSUs”) awards of Zhuan Zhuan As of December 31, 2019, Zhuan Zhuan Holding had granted certain RSUs to the employees, for which one fourth (1/4) will become vested upon the first anniversary of the commencement date, and the remaining shall vest every six months thereafter in equal installments. The granted RSUs cannot be settled prior to Zhuan Zhuan Holding’s completion of a qualified IPO. The employees can keep holding the vested RSUs until Zhuan Zhuan Holding completes a qualified IPO or request Zhuan Zhuan Holding to redeem the vested RSUs upon the termination of their employment before they are able to be settled. Therefore, the award is akin to a tandem award with two components: (i) a cash settled feature at the redemption value; (ii) an equity settled feature as a call option on the vested RSUs. The Group recognized component (i) of this award over the requisite service period as a liability and did not recognize the compensation for component (ii) considering it is subject to the performance condition. Restricted Share (“RS”) Awards of Zhuan Zhuan As of December 31, 2019, Zhuan Zhuan Holding had granted certain restricted shares to management of Zhuan Zhuan Holding. The granted restricted shares are to be vested and settled over four years in equal installments. The management has the right to request Zhuan Zhuan Holding to redeem the vested RSs or to keep holding these vested RSs upon the termination of the employment, therefore this award is akin to a tandem award with two components: (i) a cash settled feature at the redemption value; (ii) an equity settled feature as a call option on the vested RSs. The Group recognized component (i) of this award over the requisite service period as liabilities and component (ii) as equities. For the years ended December 31, 2017, 2018 and 2019, the Group recognized RMB15.7 million, RMB32.0 million and RMB33.9 million share-based compensation expenses for Zhuan Zhuan 2017 Plan. As of December 31, 2019, there were a total of RMB168.5 million unrecognized compensation expenses, adjusted for estimated forfeitures, related to non-vested share-based compensation arrangement and arrangements that are subject to performance condition. The expense is expected to be recognized over a weighted average period of 1.95 years. Total unrecognized compensation expenses may be adjusted for future changes in estimated forfeitures and probability of achieving the performance condition. The Group recognized share-based compensation expenses under 58.com Share-based Awards, and Zhuan Zhuan Holding Share-based awards in total of RMB350.6 million, RMB462.9 million and RMB544.7 million for the years ended December 31, 2017, 2018 and 2019, respectively. |
Earnings per share
Earnings per share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings per share | |
Earnings per share | 24. Earnings per share The following table sets forth the computation of basic and diluted net earnings per share for the periods indicated: As of December 31, 2017 2018 2019 RMB RMB RMB Numerator: Net income 1,389,242 2,129,058 8,445,226 Net (income)/loss attributable to noncontrolling interests (4,667) 139 8,033 Deemed dividend to mezzanine classified noncontrolling interests (99,507) (132,202) (175,045) Numerator for basic and diluted net earnings per share 1,285,068 1,996,995 8,278,214 Denominator: Weighted average number of ordinary shares used in computing net earnings per share—basic 291,475,725 294,902,518 297,836,268 Weighted average number of ordinary shares used in computing net earnings per share—diluted 295,304,995 299,711,258 301,449,100 Net earnings per ordinary share attributable to ordinary shareholders - basic 4.41 6.77 27.79 Net earnings per ordinary share attributable to ordinary shareholders - diluted 4.35 6.66 27.46 Net earnings per ADS attributable to ordinary shareholders-basic 8.82 13.54 55.59 Net earnings per ADS attributable to ordinary shareholders - diluted 8.70 13.33 54.92 Basic net earnings per share is computed using the weighted average number of the ordinary shares outstanding during the period. Diluted net earnings per share is computed using the weighted average number of ordinary shares and dilutive ordinary share equivalents outstanding during the period. Class A and Class B ordinary shares are considered the same for the purposes of EPS calculation as they have identical earnings rights and preferences. For the years ended December 31, 2017, 2018 and 2019, options to purchase ordinary shares included in the calculation of diluted net income per share totaled 3,829,270, 4,808,740 and 3,612,832, respectively. For the years ended December 31, 2017, 2018 and 2019, the impact of share options granted under Zhuan Zhuan 2017 Plan was not dilutive, as Zhuan Zhuan has been in loss position. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Leases | 25. Leases Leases are classified as operating leases or finance leases in accordance with ASC 842. The Group’s leases are all operating leases mainly relating to corporate offices and outdoor billboards. For leases with terms greater than 12 months, the Group records the related asset and lease liability at the present value of lease payments over the term. The remaining lease terms for these operating leases are generally from 2 months to 8 years. Future lease payments under operating leases as of December 31, 2019 were as follows: As of December 31, 2019 RMB 2020 152,716 2021 68,812 2022 22,974 2023 16,104 2024 12,060 Thereafter 24,048 Total minimum lease payments 296,714 Less: imputed interest (20,850) Total lease liability balance 275,864 Rental expense under operating leases was RMB143.5 million and RMB177.1 million for the years ended December 31, 2017 and 2018, respectively. Operating lease expense for the year ended December 31, 2019 was RMB158.8 million, which excluded cost of short-term contracts. Short-term lease cost for the year ended December 31, 2019 was RMB35.9 million. For the Year ended December 31, 2019 RMB Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 152,156 Right-of-use assets obtained in exchange for new operating lease liabilities: Operating leases 120,271 Weighted-average remaining lease term-operating leases 3.51 years Weighted-average discount rate-operating 4.75 % As of December 31, 2018, the future minimum lease payments under the Group’s non-cancelable operating lease agreements based on ASC 840 are as follows: Operating leases RMB 2019 187,581 2020 103,807 2021 66,499 2022 15,243 Beyond 2022 65,142 |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and contingencies | |
Commitments and contingencies | 26. Commitments and contingencies (a) Commitments The Group engaged third parties for promoting its brand image through various advertising channels, including advertising on internet search engines, platforms and other traditional off-line media. The amount of advertising commitments relates to the committed advertising services that have not been delivered and paid. As of December 31, 2019, future minimum advertising commitments under non-cancelable agreements are RMB73.8 million. The Group’s investment commitments primarily relate to capital contributions obligation under certain arrangements. The total investment commitments contracted but not yet reflected in the financial statements amounted to RMB80 million. Other than those shown above, the Group did not have any significant capital or other commitments, or long-term obligations as of December 31, 2019. (b) Contingencies From time to time, the Group is involved in claims and legal proceedings that arise in the ordinary course of business. Based on currently available information, management does not believe that the ultimate outcome of the unresolved matters, individually and in the aggregate, are likely to have a material adverse effect on the Group’s financial position, results of operations or cash flows. However, litigations are subject to inherent uncertainties and the Group’s view of these matters may change in the future. When an unfavorable outcome to occur, there exists the possibility of a material adverse impact on the Group’s financial position and results of operations for the periods in which the unfavorable outcome occurs, and potentially in future periods. |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related party transactions | |
Related party transactions | 27. Related party transactions Related party transactions primarily related to the transactions with 58 Finance and Tencent, the natures and amounts of which have been disclosed in Note 7, Note 8 and Note 2(t), respectively. Other related party transactions, which were primarily with the Group’s investees, were insignificant for all periods presented. As of December 31, 2018 and 2019, amounts due from/to related parties are summarized as below: As of December 31, 2018 2019 RMB RMB Amounts due from related parties, current Tencent 167,963 133,201 58 Finance 82,725 339,415 Others 7,866 17,485 Total 258,554 490,101 Amounts due from related parties, non-current 58 Finance 491,656 191,055 Others — 13,500 Total 491,656 204,555 Amounts due to related parties, current Tencent 45,854 65,153 Others 10,758 33,655 Total 56,612 98,808 As of December 31, 2018 and 2019, the balances due from Tencent primarily included accounts receivables from Tenpay, which is a payment platform of Tencent. As of December 31, 2018 and 2019, the balances due to Tencent mainly related to payables for SMS cost and advertisement fees. In 2019, 58 Finance (the “Borrower”) borrowed RMB400 million with an interest rate of 4.25% per annum and one-year maturity from a third party Chinese local commercial bank. The Group has provided guarantees for the RMB400 million loan and deposited and pledged a total amount of RMB417 million to that bank as collateral against the loan. The Borrower shall pay the Group RMB16 million guarantee service fees and reimburse the Group for any payment to the bank in case of its default on the loan. According to ASC 460, the Group recognized guarantee liabilities amounting to RMB16 million which equals to the fair values of the guarantees at their inception. The guarantee liabilities were recorded as other current liabilities in the Group’s consolidated balance sheets. The Group adopted a rational amortization method over the life of the guarantee in the subsequent measurement and reduced the guarantee liability by recording a credit to net income. The Group recorded the RMB16 million guarantee service fees receivable as other current assets and the RMB417 million cash deposited and pledged to the bank as restricted cash-current, respectively in its consolidated balance sheets as of December 31, 2019. Net income for these guarantees for the year ended December 31, 2019 was immaterial to the consolidated financial statements. As of December 31, 2018 and 2019, the balances due from the disposal of Finance Business have been disclosed in Note 8 and Note 10. |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent events | |
Subsequent events | 28. Subsequent events In January 2020, pursuant to the arrangement in the framework agreement as discussed in Note 8, the Group contributed US$71.4 million as registered capital and helped Golden Pacer set up a financial guarantee company, and Golden Pacer will repay the amount of contribution in installments, plus interest to be determined based on the market interest rate, over the subsequent three-year period. In February 2020, the Company lent RMB104.7 million to 58 Home, which will be due within one-year from the date of lending. Meanwhile, 58 Daojia Limited, the majority owned subsidiary of 58 Home, also executed the transaction documents for its series B round of equity financing, which amounted to US$100 million, with external investors in the first quarter of 2020. On March 24, 2020, the Company entered into definitive agreements with Uxin to purchase certain assets and liabilities related to Uxin’s B2B online used car auction business for a total cash consideration of US$105 million. The transaction is expected to be closed in the first half of 2020. The Group is evaluating the accounting impact of this transaction. As disclosed in Note 14(j), the Company invested RMB153 million in cash and held 30% of the equity interests in Ai Fang as of December 31, 2019. In March 2020, the Company invested additional RMB139.1 million in Ai Fang's equity and RMB370.9 million in Ai Fang’s convertible notes, after that the Company’s equity interest in Ai Fang was increased to 45%. The Group is in the process of evaluating the accounting impact of this transaction. In September 2019, in order to provide the Finance Business with more flexibility in future fund raising and acquisitions, the Company entered into definitive agreements to convert its profit participation rights in Golden Pacer to certain number of shares of Golden Pacer. In parallel, Golden Pacer entered into definitive agreements with Uxin, pursuant to which Golden Pacer will acquire the loan facilitation related business from Uxin. In April 2020, the abovementioned transactions were completed when Golden Pacer and Uxin entered into supplementary agreements to modify their transactions in light of the changes in the regulatory environment and the impact of COVID-19 outbreak. The Company has converted the abovementioned profit participation rights into equity of Golden Pacer, and as of the date of this report, the Company holds 40% of the share capital of Golden Pacer on a fully diluted basis. The Group is in the process of evaluating the accounting impact of these transactions. The outbreak of COVID-19 began in January 2020 and was quickly declared as a Public Health Emergency of International Concern and subsequently a pandemic by the World Health Organization. To control the spread of COVID-19, PRC government has implemented a series of strict measures, including travel restrictions, quarantines, and a temporary shutdown of businesses which resulted in a decrease in activity level among our paying business users. In particular, paying business users that require in-person meetings to conduct their business, including those in the secondary housing and rental real estate sector, used auto dealers, local service providers, and recruiters, have been adversely and materially affected by these interruptions and delayed business resumption. As the Group’s revenues are generated primarily from these paying business users, most of whom are small and medium-sized local businesses, the outbreak of COVID-19 and subsequent prevention and control measures have adversely affected the Group’s business operations and financial conditions in the first quarter of 2020. For instance, the Group’s revenues for the first quarter of 2020 were estimated to decline significantly compared to the same period in 2019. The Group also scaled back certain expenses, particularly some discretionary advertising expenses to mitigate the adverse impact on its profit. During February 2020, a majority of the Group’s employees worked from home. As the Group’s customers, many of whom are migrant workers, took longer to resume normal businesses due to these quarantine measures, the Group also delayed hiring for its sales and customer services teams. The outbreak of COVID-19 also adversely affected the business operations of the Group’s investees, which will likely result in downward adjustments to the Group’s long-term investment, and if the impacts of the COVID-19 pandemic become other than temporary, impairment losses will be recognized for the Group’s long-term investments. Since the end of February 2020, the number of daily new cases of COVID-19 in China have been contained at a relatively low level, the quarantine measures have been gradually relaxed or lifted. Offline business activities have been recovering and the Group’s employees are going back to offices. Despite the recovering trend the Group has observed till the date of this report, there is still high uncertainty as to how the ongoing pandemic will develop and its impact on the Group’s business going forward. If the pandemic continues to impact economic activity subsequent to the date of this report, the uncertainty may continue to have adverse impact on the Group’s business, financial condition and results of operations for the remainder of the fiscal year ending December 31, 2020, which cannot be reasonably estimated at the current stage. The Group will regularly assess and adopt measures to offset any challenges created by the ongoing pandemic. |
Restricted net assets
Restricted net assets | 12 Months Ended |
Dec. 31, 2019 | |
Restricted net assets | |
Restricted net assets | 29. Restricted net assets PRC laws and regulations permit payments of dividends by the Company’s subsidiaries, the VIEs and VIEs’ subsidiaries incorporated in the PRC only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. In addition, the Company’s subsidiaries, the VIEs and VIEs’ subsidiaries incorporated in the PRC are required to annually appropriate 10% of their net after-tax income to the statutory general reserve fund prior to payment of any dividends, unless such reserve funds have reached 50% of their respective registered capital. As a result of these and other restrictions under PRC laws and regulations, the Company’s subsidiaries, the VIEs and VIEs’ subsidiaries incorporated in the PRC are restricted in their ability to transfer a portion of their net assets to the Company either in the form of dividends, loans or advances, which restricted portion amounted to RMB2.1 billion and RMB2.7 billion as of December 31, 2018 and 2019, respectively. Even though the Company currently does not require any such dividends, loans or advances from the PRC entities for working capital and other funding purposes, the Company may in the future require additional cash resources from them due to changes in business conditions, to fund future acquisitions and development, or merely to declare and pay dividends or distributions to its shareholders. Except for the above, there is no other restriction on the use of proceeds generated by the Company’s subsidiaries, the VIEs and VIEs’ subsidiaries to satisfy any obligations of the Company. The Group performed a test on the restricted net assets of its consolidated subsidiaries, the VIEs and VIEs’ subsidiaries (the "restricted net assets") in accordance with Securities and Exchange Commission Regulation S-X Rule 4-08 (e) (3), "General Notes to Financial Statements" and concluded that the restricted net assets did not exceed 25% of the consolidated net assets of the Group as of December 31, 2019. |
Principal accounting policies (
Principal accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Principal accounting policies | |
Principles of consolidation | (a) Principles of consolidation The consolidated financial statements of the Group have been prepared in accordance with U.S. GAAP. The consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIEs and VIEs’ subsidiaries for which the Company is the ultimate primary beneficiary. Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors. A VIE is an entity in which the Company or its subsidiary, through contractual arrangements, bears the risks of, and enjoys the rewards normally associated with, ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. All significant transactions and balances among the Company, its subsidiaries, the VIEs and VIEs’ subsidiaries have been eliminated upon consolidation. The results of subsidiaries and VIEs acquired or disposed of during the year are recorded in the consolidated statement of comprehensive income from the effective dates of acquisition or up to the effective dates of disposal, as appropriate. The Company deconsolidates its subsidiaries in accordance with ASC 810-10-40-4 as of the dates the Company ceases to have controlling financial interests in the subsidiaries. The Company accounts for the deconsolidation of its subsidiaries by recognizing a gain or loss in net income attributable to the Company in accordance with ASC 810-10-40-5. This gain or loss is measured at the date the subsidiaries are deconsolidated as the difference between (a) the aggregate of the fair values of any consideration received, the fair values of any retained noncontrolling interests in the subsidiaries being deconsolidated, and the carrying amounts of any noncontrolling interests in the subsidiaries being deconsolidated, including any accumulated other comprehensive income attributable to the noncontrolling interests, and (b) the carrying amounts of the assets and liabilities of the subsidiaries being deconsolidated. |
Use of estimates | (b) Use of estimates The preparation of the Group’s consolidated financial statements in conformity with the U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities. Actual results could differ materially from those estimates. Significant accounting estimates reflected in the Group’s consolidated financial statements mainly include revenue recognition, the determination of the fair value of identifiable assets and liabilities acquired through business combination, the determination of the fair value of long-term investments, the determination of the fair value of mezzanine equity, the determination of fair value of noncontrolling interests, the valuation allowance of deferred tax assets, the determination of uncertain tax position, impairment of certain long-term investments, the valuation and recognition of share-based compensation, impairment of long-lived assets and the determination of the estimated useful lives of property and equipment and intangible assets. |
Functional Currency and Foreign Currency Translation | (c) Functional Currency and Foreign Currency Translation The functional currency of the Company and its subsidiaries incorporated outside of the PRC is the United States dollar (“US$”), while the functional currency of the PRC entities in the Group is Chinese Renminbi (“RMB”) as determined based on ASC 830, “Foreign Currency Matters”. Effective December 31, 2016, the Group changed its reporting currency from US$ to RMB. Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, and revenues, expenses, gains and losses are translated using the average rate for the periods. Translation adjustments arising from these are reported as foreign currency translation adjustments and are shown as a component of other comprehensive income/(loss) in the consolidated statement of changes in shareholders’ equity. For the years ended December 31, 2017, 2018 and 2019, foreign currency translation income, net of nil tax was RMB82.9 million, RMB15.5 million and RMB137.4 million respectively. Foreign currency transactions denominated in currencies other than the functional currencies are translated into the functional currencies using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currencies using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are included in “foreign currency exchange (loss)/gain, net” in the consolidated statements of comprehensive income. Foreign currency exchange gain was RMB0.8 million and RMB0.6 million for the years ended December 31, 2017 and 2018, respectively. Foreign currency exchange loss was RMB17.6 million for the year ended December 31, 2019. For the convenience of the reader, translations of amounts from RMB into US$ were calculated at the exchange rate of RMB6.9762 per US$1.00, the middle rate on December 31, 2019, the last business day in the year ended December 31, 2019, as published on the website of the State Administration of Foreign Exchange of the PRC. No representation is made that the RMB amounts could have been or could be converted into US$ at such rate. |
Cash and cash equivalents | (d) Cash and cash equivalents Cash and cash equivalents represent cash on hand, demand deposits and highly liquid investments placed with banks or other financial institutions, which are unrestricted as to withdrawal or use, and which have original maturities of three months or less and are readily convertible to known amounts of cash. The following table sets forth a breakdown of the Group’s cash and cash equivalents by currency denomination, jurisdiction and geographical location as of December 31, 2018 and 2019: RMB in US$ in thousands RMB in thousands thousands Total Hong China- China Hong China- China translated to USA Singapore Kong Non-VIE VIE Total USA Singapore Kong Non-VIE VIE Total RMB December 31, 2018 3 — 122,704 2,534 4 125,245 272 — 128 326,156 1,201,340 1,527,896 2,387,478 December 31, 2019 3 1 597,829 6,275 4 604,112 273 1,019 146 654,241 423,125 1,078,804 5,293,206 |
Restricted cash | (e) Restricted cash Restricted cash, which consisted of the cash pledged for bank loans to the Group and a related party of the Group and the cash legally restricted from withdrawal, is reported separately on the face of the Group’s consolidated balance sheets and is included in the total cash, cash equivalents and restricted cash in the consolidated statements of cash flows. |
Term deposits | (f) Term deposits represent time deposits placed with banks with original maturities of more than three months to up to one year. Interest earned is recorded as interest income in the consolidated statements of comprehensive income during the periods presented. |
Short-term investments | (g) Short-term investments Short-term investments include investments in variable rate financial instruments which primarily consists of wealth management products with variable interest rates or principal non-guaranteed which were purchased from commercial banks and other financial institutions. The Group carries these investments at fair value. Changes in the fair value are reflected in the consolidated statements of comprehensive income as investment income, net. Fair value is estimated based on quoted prices of similar products provided by banks at the end of each period. The Group classifies the valuation techniques that use these inputs as Level 2 of fair value measurements. Please see Note 20 for additional information. Variable-rate financial instruments are recorded at fair values based on the judgment that expected return will be obtained upon maturity. As of December 31, 2018 and 2019, the Group had short-term investments of RMB4.6 billion and RMB8.4 billion, respectively. |
Accounts receivable, net | (h) Accounts receivable, net Accounts receivable, net mainly represent amounts due from customers and online payment channels and are recorded net of an allowance for doubtful accounts. The carrying values of accounts receivable are reduced by allowances that reflects the Group’s best estimate of the amounts that will not be collected. The Group makes estimations for the collectability of accounts receivable considering many factors including but not limited to reviewing accounts receivable balances, historical bad debt rates, accounts aging, repayment patterns, customer credit worthiness, financial conditions of the customers and industry trend analysis. An accounts receivable is written off after all collection effort has ceased. The Group recognized RMB4.9 million and RMB31.1 million allowance for doubtful accounts for the years ended December 31, 2018 and 2019, respectively. |
Property and equipment, net | (i) Property and equipment, net Property and equipment are stated at cost less accumulated depreciation and impairment. Property and equipment are depreciated over the estimated useful lives on a straight-line basis. The estimated useful lives are as follows: Buildings 30-50 years Computers and equipment 3-5 years Motor vehicles 4-5 years Furniture and fixtures 5 years Software 3-5 years Leasehold improvements Over the shorter of lease terms or the estimated useful lives of assets Expenditures for maintenance and repairs are expensed as incurred. The gains or losses on the disposal of property and equipment are the differences between the net sales proceeds and the carrying amounts of the relevant assets and are recognized in the consolidated statements of comprehensive income. |
Intangible assets, net | (j) Intangible assets, net Intangible assets acquired through business acquisitions are recognized as assets separated from goodwill if they satisfy either the "contractual-legal" or "separability" criterion. Intangible assets purchased are recognized and measured at fair value upon acquisition. Intangible assets with finite lives are carried at cost less accumulated amortization. Separately identifiable intangible assets that have determinable lives continue to be amortized over their estimated useful lives using the straight-line method as follows: Customer relationships 2-3 years Domain names and trademarks 9-10 years Technology 4-5 years Licenses 10 years Intangible assets with infinite lives are evaluated to determine the fair value annually. An impairment loss is recognized if the carrying amount exceeds the fair value. Separately identifiable intangible assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of any impairment loss for identifiable intangible assets is based on the amounts by which the carrying amounts of the assets exceed the fair values of the assets. |
Land use rights, net | (k) Land use rights, net Land use rights are carried at cost less accumulated amortization. Amortization is provided to write off the cost of lease prepayments on a straight-line basis over the period of the shorter of estimated useful lives which are generally 50 years or the terms of the land use rights purchase agreements. |
Goodwill | (l) Goodwill Goodwill represents the excess of the purchase price over fair value of the identifiable assets and liabilities acquired in a business combination. Goodwill is not depreciated or amortized but is tested for impairment on an annual basis as of December 31 and in between annual tests when an event occurs or circumstances change that could indicate that the asset might be impaired. In accordance with the FASB guidance on Testing of Goodwill for Impairment, the Group first has the option to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Group decides, as a result of its qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is mandatory. Otherwise, no further testing is required. The quantitative impairment test consists of a comparison of the fair value of each reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss equal to the difference between the implied fair value of the reporting unit’s goodwill and the carrying amount of goodwill will be recorded. Application of a goodwill impairment test requires significant management judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value of each reporting unit. The judgment in estimating the fair value of reporting units includes estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit. The Group performs goodwill impairment testing at the reporting unit level on December 31 annually. No impairment of goodwill was recognized for the years ended December 31, 2017, 2018 and 2019, respectively. |
Long-term investments and investment in convertible notes | (m) Long-term investments and investment in convertible notes (i) Equity Investments Accounted for Using the Equity Method In accordance with ASC 323 Investment-Equity Method and Joint Ventures, the Group applies the equity method of accounting to equity investments, in common stock or in-substance common stock, over which it has significant influence but does not own a majority equity interests or otherwise control. Under the equity method, the Group initially records its investment at cost. The difference between the cost of the equity investment and the amount of the underlying equity in the net assets of the equity investee is recognized as equity method goodwill or as an intangible asset as appropriate. The Group subsequently adjusts the carrying amount of the investment to recognize the Group’s proportionate share of each equity investee’s net income or loss into consolidated statements of comprehensive income after the date of acquisition. The Group will discontinue applying equity method if the carrying amount of an investment (and additional financial supports to the investee, if any) has been reduced to zero. When the Group’s investment in common stock has been reduced to zero and it has other investments in the investee, the Group continues to record its share of income or loss in the equity investees in its consolidated statements of comprehensive income, to the extent of and as an adjustment to the adjusted basis of the other investments in the investee. The order in which those equity method income or loss should be applied to the other investments shall follow the seniority of the other investments (that is, priority in liquidation). In such instances, the Group recognizes investee income or loss based on the ownership level of the particular investee security or loan/advance held by the Group. An investment in in-substance common stock is an investment that has risk and reward characteristics that are substantially similar to that entity’s common stock. The Group considers subordination, risks and rewards of ownership and obligation to transfer value when determining whether an investment in an entity is substantially similar to one in that entity’s common stock. The equity method investments are subject to periodic testing for other-than-temporary impairment, by considering factors including, but not limited to, stock prices of public companies in which the Group has an equity investment, current economic and market conditions, operating performance of the investees such as current earnings trends and undiscounted cash flows, and other company-specific information, such as recent financing rounds. The fair value determination, particularly for investments in privately-held companies whose revenue model is still evolving, requires significant judgment to determine appropriate estimates and assumptions. Changes in these estimates and assumptions could affect the calculation of the fair value of the investments and the determination of whether any identified impairment is other-than-temporary. If any impairment is considered other-than-temporary, the Group will write down the asset to its fair value and take the corresponding charge to the consolidated statements of comprehensive income. The Group recorded RMB nil nil (ii) Equity Investment with Readily Determinable Fair Values According to ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), all equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) will generally be measured at fair value through the consolidated statements of comprehensive income. Equity investments with readily determinable fair values are valued using the market approach based on the quoted prices in active markets at the reporting dates. The Group classifies the valuation techniques that use these inputs as Level 1 of fair value measurements. (iii) Equity Investments without Readily Determinable Fair Values Based on ASU 2016-01, the Group will be able to elect to record equity investments without readily determinable fair values and not accounted for by the equity method either at fair value with changes in fair value recognized in net income or at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer (“measurement alternative”). An election to measure an equity security shall be made for each investment separately. If the Group elects to use this measurement alternative method, the Group should measure the equity security at fair value as of the date that observable transaction occurred and report changes in the carrying value of the equity investments in current earnings whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer. The values were estimated based on valuation methods using the observable transaction price at the transaction date and other unobservable inputs including volatility, as well as rights and obligations of the securities that the Group holds. For each reporting period, the Group would make a qualitative assessment considering impairment indicators to evaluate whether the equity investment without a readily determinable fair value is impaired. Impairment indicators that considered by the Group include, but are not limited to, 1) a significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee, 2) a significant adverse change in the regulatory, economic, or technological environment of the investee, 3) a significant adverse change in the general market condition of either the geographical area or the industry in which the investee operates, 4) a bona fide offer to purchase, an offer by the investee to sell, or a completed auction process for the same or similar investment for an amount less than the carrying amount of that investment, and 5) factors that raise significant concerns about the investee’s ability to continue as a going concern, such as negative cash flows from operations, working capital deficiencies, or noncompliance with statutory capital requirements or debt covenants. When indicators of impairment exist, the Group prepares quantitative assessments of the fair value of the equity investments. When the assessment indicates that an impairment exists, the Group will include an impairment loss in net income equal to the difference between the fair value of the investment and its carrying amount. Because certain investees’ operation metrics and financial performance did not meet the expectations, the Group recorded RMB37.3 million impairment for the cost method investments for the years ended December 31, 2017. The Group recorded RMB40.0 million and RMB11.8 million impairments for investments accounted for under the measurement alternative method for the year ended December 31, 2018 and 2019, respectively. The impairment was recorded in “investment income, net” in the Group’s consolidated statements of comprehensive income. (iv) Non-marketable equity security held by an investment company within the Group In accordance with ASC 946-320 Financial Services—Investment Companies, Investments—Debt and Equity Securities, the Group accounts for long-term equity investments in unlisted companies held by consolidated investment companies at fair value. These investments were initially recorded at their transaction price net of transaction costs, if any. Fair value of these investments are re-measured periodically in accordance with ASC 820. (v) In accordance with ASC 825 Financial Instruments, the Group applied the fair value option on an instrument-by-instrument basis. Such fair value option requires the irrevocable election on an instrument-by-instrument basis at initial recognition of an asset or upon an event that gives rise to a new basis of accounting for that instrument. The investments accounted for under the fair value option are carried at the fair value with realized or unrealized gains or losses recorded in the consolidated statements of comprehensive income. As of December 31, 2019, investments accounted for using fair value option amounted to RMB692.0 million, which mainly included investment in convertible notes of Uxin Limited ("Uxin"). Please see Note 15 for additional information. |
Impairment of other long-lived assets | (n) Impairment of other long-lived assets In accordance with ASC 360-10-35, the Group’s other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of assets to future undiscounted net cash flows expected to be generated by the assets. Such assets are considered to be impaired if the sum of the expected undiscounted cash flow is less than the carrying amount of the assets. The impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. There were no impairment charges of other long-lived assets recognized for the years ended December 31, 2017, 2018 and 2019, respectively. |
Fair value | (o) Fair value 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 measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and 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 The Group measures the fair value of assets and liabilities by two main approaches: (1) market approach and (2) income approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The Group’s financial instruments mainly include cash and cash equivalents, restricted cash, term deposits, short-term investments, accounts receivable, certain long-term investments, investment in convertible notes, loans, accounts payable, lease liabilities and certain financial liabilities recorded as accrued expenses and other current liabilities. The carrying value of the Group's aforementioned financial instruments included in current assets and liabilities approximate their fair value because of their short maturities. All equity investments in unconsolidated entities (other than those accounted for using the equity method and measurement alternative method of accounting) and investment in convertible notes are generally measured at fair value through earnings. Investments under the measurement alternative method and equity method are reviewed periodically for impairment using fair value measurement which requires significant unobservable inputs (Level 3). Investments under the measurement alternative method are also remeasured using fair value measurement which requires significant unobservable inputs (Level 3) when observable price change event occurs. Intangible assets, goodwill and fixed assets are marked to fair value when an impairment charge is recognized. Please see Note 20 for additional information. |
Guarantee liabilities | (p) Guarantee liabilities In accordance with ASC 460 Guarantees The guarantee liabilities are generally reduced by recording a credit to net income as the guarantor is released from the guaranteed risk. In addition to subsequently measuring and recognizing the noncontingent component of a guarantee, the Group continually assessed the contingent component of the guarantees. If recognition of a contingent component is required, the Group will record it at the amount required by ASC 450 Contingencies |
Customer advances and deferred revenues | (q) Customer advances and deferred revenues In most cases, our customers pay in advance to purchase membership services and online marketing services. The cash proceeds received from customers are initially recorded as customer advances. When a specific service is selected and activated, the amount related to the service is transferred to deferred revenues. |
Revenue recognition | (r) Revenue recognition The Group adopted ASC 606, Revenue from Contracts with Customers (“ASC 606”), from January 1, 2018, applying the modified retrospective method to those contracts which were not completed as of January 1, 2018. Accordingly, revenues for the years ended December 31, 2018 and 2019 were presented under ASC 606, while revenues for the year ended December 31, 2017 were not adjusted and continued to be reported under ASC 605. The adoption had no material impact on the Group’s accumulated deficit as of January 1, 2018 and the Group’s consolidated financial statements for the year ended December 31, 2018 and 2019. The Group generates revenues primarily from membership and online marketing services. The Group sells its services through its direct sales teams, third party sales agencies and online self-serve channels. Under ASC 606, revenues are recognized when control of the promised goods or services is transferred to the Group’s customers, in an amount of consideration the Group expects to be entitled to in exchange for those goods or services. The Group determines revenue recognition through the following steps: ● identification of the contract, or contracts, with a customer; ● identification of the performance obligations in the contract; ● determination of the transaction price; ● allocation of the transaction price to the performance obligations in the contract; and ● recognition of revenue when, or as, we satisfy a performance obligation. The Group’s revenues have been subject to value added tax (“VAT”). To record VAT payable, the Group uses the net presentation method, which presents the difference between the output VAT on goods sold or taxable services and the available input VAT amount (at the rate applicable to the supplier). Revenues are recorded net of VAT in accordance with the ASC 606. The recognition of revenues involves certain management judgments. The amount and timing of our revenues could be materially different for any period if management made different judgments or utilized different estimates. (i) Membership A membership is a basic services package mainly consisting of the following services: customer certification, display of an online storefront on the Group’s platforms, preferential listing benefits such as limited daily priority listings and higher limit for free daily listings, access to the Group’s dedicated customer service support team and online account management system. As the receipt of membership fees is for services to be delivered over a period of time, the receipt is initially recorded as customer advances. When a specific subscription-based membership service is selected and activated, the amount related to the membership service is transferred to deferred revenues, and revenue is recognized ratably over the membership period as the service is rendered. (ii) Online marketing services The Group’s online marketing services include time-based services and performance-based services. Revenues from time-based services are recognized ratably over the service period. Revenues from performance-based services are recognized when the agreed performance criteria are achieved. For service arrangements that include multiple performance obligations, revenues are allocated to each performance obligation. The Group allocates arrangement consideration in multiple-deliverable revenue arrangements at the inception of an arrangement to all deliverables based on the relative selling price method, generally based on the best estimate of selling price of the Group. (iii) E-commerce services The Group’s e-commerce services refer to services provided to the real estate developers such as sale of discount coupons with which home buyers use to buy properties at a discounted price. It might also include tours to visit the properties, on site promotion activities and other services relating to property purchases. The coupon purchased by prospective home buyers is refundable before a purchase of the specified properties prior to the expiry date of the coupon. The Group recognizes revenues when home buyers apply the discount coupon to pay for the purchase price of the specified properties from real estate developers. Cash received in advance of the purchase of specified properties is recorded as customer advances, as a type of contract liability. (iv) Other revenues Other revenues are primarily derived from selling used goods and providing services on Zhuan Zhuan, the Group’s online used goods trading and service platform and providing various online to offline recruitment services. The Group recognizes other revenues when the related services are rendered or goods are sold. For all other arrangements that include multiple performance obligations, the Group would evaluate all the performance obligations in the arrangement to determine whether each performance obligation is distinct. Consideration is allocated to each performance obligation based on its standalone selling price. If a promised good or service does not meet the criteria to be considered distinct, it is combined with other promised goods or services until a distinct bundle of goods or services exists. Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. For certain services customers are required to pay before the services are delivered. The Group recognizes a contract asset or a contract liability in the consolidated balance sheet, depending on the relationship between the Group’s performance and the customer’s payment. The Group will recognize an account receivable in its consolidated balance sheets when it performs a service or transfers a good in advance of receiving consideration and if it has the unconditional right to receive consideration. Accounts receivable is presented netting of the allowance for doubtful accounts (See Note 2 (h)). Accounts receivable as of December 31, 2018 and 2019 were RMB917.4 million and RMB1.2 billion, respectively. Contract liabilities are recognized if the Group receives consideration in advance of performance. Customers pay in advance to purchase membership services and online marketing services. The cash proceeds received from customers are initially recorded as customer advances and then transferred to deferred revenues when they are used to purchase desired services. Customer advances and deferred revenues are considered as contract liability. The Group had customer advances and deferred revenues balances of RMB3.8 billion and RMB4.1 billion as of December 31, 2018 and December 31, 2019, respectively. The majority of the balances as of December 31, 2018 were recognized as revenue in the year ended December 31, 2019. Due to the generally short-term duration of the relevant contracts, a majority of the receipts in advance and deferred revenues are recognized in the following reporting period. Practical Expedients The Group generally expenses sales commissions for direct sales team when incurred for all contracts with contract terms of one year or less. These costs are recorded within sales and marketing expenses. Payment terms and conditions vary by contract type, although terms generally include a requirement for prepayment or payment within one year or less. In instances where the timing of revenue recognition differs from the timing of invoicing, the Group has determined that its contracts generally do not include a significant financing component. |
Cost of revenues | (s) Cost of revenues Cost of revenues mainly consists of (i) costs of goods sold and services rendered in various platforms of the Group, (ii) traffic acquisition cost paid to 58.com advertising union partner, and (iii) expenses associated with the operation of platforms, such as data center bandwidth fees, depreciation and maintenance expenses for computers, servers and other equipment, short message services (“SMS”) costs, salaries, bonuses, benefits and share-based compensation expense relating to web operation and information quality control personnel. |
Advertising expenses | (t) Advertising expenses Advertising expenses are generally prepaid to third parties for online traffic acquisition and offline advertising services such as television, outdoor and inner-building channels. Advertising expenses are expensed as sales and marketing expenses when the services are received. For the years ended December 31, 2017, 2018 and 2019, advertising expenses recognized in the consolidated statements of comprehensive income were RMB2.1 billion, RMB3.3 billion and RMB3.7 billion, respectively. Of the total advertising expenses, RMB422.3 million, RMB621.6 million and RMB800.4 million were charged by the Group’s related party Tencent Holdings Ltd. and its subsidiaries and affiliated entities (collectively referred to as “Tencent”), for the year ended December 31, 2017, 2018 and 2019, respectively. |
Research and development expenses | (u) Research and development expenses Research and development expenses mainly consist of personnel, rent and depreciation expenses associated with the development of and enhancement to the Group’s platforms and expenses associated with research and development. The research and development expenses are expensed as incurred for all the periods presented. Costs incurred for the preliminary project stage of internal use software are expensed when incurred in research and development expenses. Costs incurred during the application development stage are capitalized when certain criteria are met as stated in ASC 350-40. Costs incurred during the post-implementation-operation stage are also expensed as incurred. As the period qualified for capitalization has historically been very short and the development costs incurred during this period have been insignificant, development costs of internal use software to date have been expensed when incurred. |
Leases | (v) Leases The Group is a lessee in a number of noncancelable operating leases, primarily for corporate offices and outdoor billboards. As of December 31, 2019, the Group did not have any finance leases. Prior to the adoption of ASC 842, Lease ("ASC 842"), operating leases were not recognized on the balance sheet of the Group, but lease expenses were recognized in the consolidated statements of comprehensive income on a straight-line basis over the lease term. From January 1, 2019, the Group accounted for leases in accordance with ASC Topic 842, Leases by using the modified retrospective basis and did not restate comparative periods. The Group has elected the package of practical expedients, which allows the Group not to reassess (1) whether any expired or existing contracts are or contain leases, (2) lease classification of any expired or existing leases as of the adoption date, and (3) initial direct costs for any existing leases as of the adoption date. The Company also elected the short-term lease exemption for all contracts with lease term of 12 months or less. Upon the adoption of ASC 842, the Group recognized a right-of-use (“ROU”) asset and a lease liability at the lease commencement date. For operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As most of the Group’s leases do not provide an implicit rate, the Group uses its incremental borrowing rate as the discount rate for the lease. The Group’s incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments. The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. The Group’s lease terms may include options to extend or terminate the lease. Renewal options are considered within the ROU assets and lease liability when it is reasonably certain that the Group will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. ROU assets are periodically reduced by impairment losses. The Group uses the long-lived assets impairment guidance in ASC Subtopic 360-10, Property, Plant, and Equipment – Overall, to determine whether a ROU asset is impaired, and if so, the amount of the impairment loss to recognize. The Group monitors for events or changes in circumstances that require a reassessment of one of its leases. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero. As a result of the adoption, the Group recognized RMB317.4 million ROU assets in “right-of-use assets, net”, and the corresponding short-term lease liabilities and long-term leasing liabilities were recorded in “operating lease liabilities–current” and “operating lease liabilities–non–current”, respectively in the consolidated balance sheets as of January 1, 2019. The adoption had no material impact on the Group’s consolidated statements of comprehensive income for the year ended December 31, 2019 or the opening balances of retained earnings as of January 1, 2019. |
Share-based compensation | (w) Share-based compensation The Group has incentive plans for the granting of share-based awards, including share options, restricted share units (“RSUs”) and restricted shares (“RSs”), to its employees and directors. The Group accounts for share-based awards granted to employees in accordance with ASC 718 Compensation - Stock Compensation and share-based awards granted to nonemployees in accordance with ASC 505. On January 1, 2019, the Group adopted ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvement to Nonemployee Share-based Payment Accounting to amend the accounting for share-based payment awards issued to nonemployees. Under ASU 2018-07, the accounting for awards to non-employees are similar to the model for employee awards. Share-based compensation expenses are recognized as costs and expenses on a straight-line basis over the vesting period in the consolidated statements of comprehensive income based on the fair value of the related share-based awards on their grant date, if no performance conditions are required. Under ASC 718, compensation cost should be accrued if it is probable that the performance condition will be achieved and should not be accrued if it is not probable that the performance condition will be achieved. As a result, the Group recognizes no compensation expense for share-based awards with performance conditions unless the performance conditions become probable of being achieved. The Group uses the binominal option pricing model to determine the fair value of share options and account for share-based compensation expenses using an estimated forfeiture rate at the time of grant and revising the rate, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. Share-based compensation expenses are recorded net of estimated forfeitures such that expenses are recorded only for those share-based awards that are expected to vest. See Note 23 for further information regarding share-based compensation assumptions and expenses. |
Income taxes | (x) Income taxes Current income taxes are provided on the basis of net income for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are provided using the liability method. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purposes. The effect on deferred taxes of a change in tax rates is recognized in the statement of comprehensive income in the period of change. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the deferred tax assets will not be realized. Uncertain tax positions The Group adopts ASC740 "Income taxes" that prescribes a more likely than not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interests and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. In order to assess uncertain tax positions, the Group applies a more likely than not threshold and a two-step approach for the tax position measurement and financial statement recognition. Under the two-step approach, the first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. Significant judgment is required in evaluating the Group’s uncertain tax positions and determining its provision for income taxes. The Group recognizes interest and penalties, if any, under accrued expenses and other current liabilities on its balance sheet and under other expenses in its statement of comprehensive income. The Group did not have any significant interest or penalties associated with tax positions for the year ended December 31, 2017, 2018 and 2019. The Group did not have any significant unrecognized uncertain tax positions for the year ended December 31, 2017, 2018 and 2019. |
Employee benefits | (y) Employee benefits Full-time employees of the Group in mainland China are entitled to staff welfare benefits including pension, work-related injury benefits, maternity insurances, medical insurances, unemployment benefits and housing fund plans through a PRC government-mandated defined contribution plan. Chinese labor regulation requires that the Group makes contributions to the government for these benefits based on certain percentage 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 required contributions. The Group recorded employee benefit expenses of RMB476.3 million, RMB626.4 million and RMB708.3 million for the years ended December 31, 2017, 2018 and 2019, respectively. |
Government grants | (z) Government grants Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant will be received, and the Group will comply with all attached conditions. Government grants relating to costs are deferred and recognized in the consolidated statements of comprehensive income over the period necessary to match them with the costs that they are intended to compensate. Government grants relating to the property, plant and equipment and other non-current assets are presented in the consolidated balance sheets by deducting the grants in arriving at the assets carrying amount and are credited to consolidated statements of comprehensive income on a straight-line basis over the expected lives of the related assets. For the years ended December 31, 2017, 2018 and 2019, the Group recognized government grants of approximately RMB81.4 million, RMB59.9 million and RMB217.9 million, respectively, in others, net in the consolidated statements of comprehensive income. |
Ordinary shares | (aa) Ordinary shares The Group accounts for repurchased ordinary shares under the cost method and includes such treasury stock as a component of the common shareholders’ equity. Cancellation of treasury stock is recorded as a reduction of ordinary shares, additional paid-in capital and retained earnings, as applicable. An excess of purchase price over par value is allocated to additional paid-in capital first with any remaining excess charged entirely to retained earnings. |
Business combination, noncontrolling interests and mezzanine classified noncontrolling interests | (ab) Business combination, noncontrolling interests and mezzanine classified noncontrolling interests The Group accounts for its business combinations using the acquisition method of accounting in accordance with ASC 805 “Business Combinations”. The cost of an acquisition is measured as the aggregate of the acquisition date fair values of the assets transferred and liabilities incurred by the Group to the sellers and equity instruments issued. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets and liabilities acquired or assumed are measured separately at their fair values as of the acquisition date. The excess of (i) the total costs of acquisition, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interests in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference will be recognized directly in the consolidated statements of comprehensive income. During the measurement period, which can be up to one year from the acquisition date, the Group may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of comprehensive income. In a business combination achieved in stages, the Group re-measures the previously held equity interests in the acquiree immediately before obtaining control at its acquisition-date fair value and the re-measurement gain or loss, if any, is recognized in the consolidated statements of comprehensive income. For the Company’s majority-owned subsidiaries and VIEs, a noncontrolling interest is recognized to reflect the portion of their equity which is not attributable, directly or indirectly, to the Company. When the noncontrolling interests are contingently redeemable upon the occurrence of a conditional event, which is not solely within the control of the Company, the noncontrolling interests are classified as mezzanine classified noncontrolling interests. Consolidated net income on the consolidated statements of comprehensive income includes the net income attributable to noncontrolling interests and mezzanine equity holders when applicable. The cumulative results of operations attributable to noncontrolling interests are also recorded as noncontrolling interests in the Group’s consolidated balance sheets. Cash flows related to transactions with noncontrolling interests are presented under financing activities in the consolidated statements of cash flows. |
Statutory reserves | (ac) Statutory reserves The Group’s PRC subsidiaries, the VIEs and VIEs’ subsidiaries in the PRC are required to make appropriations to certain non-distributable reserve funds. In accordance with China’s Company Laws, the Company’s PRC subsidiaries, the VIEs and VIEs’ subsidiaries that are Chinese companies, must make appropriations from their after-tax profit (as determined under the Accounting Standards for Business Enterprises as promulgated by the Ministry of Finance of the People’s Republic of China (“PRC GAAP”)) to non-distributable reserve funds including (i) statutory surplus fund and (ii) discretionary surplus fund. The appropriation to the statutory surplus fund must be at least 10% of the after-tax profits calculated in accordance with PRC GAAP. Appropriation is not required if the statutory surplus fund has reached 50% of the registered capital of the respective company. Appropriation to the discretionary surplus fund is made at the discretion of the respective company. Pursuant to the laws applicable to China’s Foreign Investment Enterprises, the Company’s subsidiaries that are foreign investment enterprises in China have to make appropriations from their after-tax profit (as determined under PRC GAAP) to reserve funds including (i) general reserve fund, (ii) enterprise expansion fund and (iii) staff bonus and welfare fund. The appropriation to the general reserve fund must be at least 10% of the after-tax profits calculated in accordance with PRC GAAP. Appropriation is not required if the reserve fund has reached 50% of the registered capital of the respective company. Appropriations to the other two reserve funds are at the respective company’s discretion. The use of the general reserve fund, statutory surplus fund and discretionary surplus fund are restricted to offsetting of losses or increasing the registered capital of the respective company. These reserves are not allowed to be transferred out as cash dividends, loans or advances, nor can they be distributed except under liquidation. As of December 31, 2018 and 2019, the Group had statutory reserves amounted to RMB527.6 million and RMB609.0 million, respectively. |
Related parties | (ad) Related parties Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence of the same party, such as family member or relative, shareholder, or a related corporation. |
Earnings per share | (ae) Earnings per share The Group uses the two-class method to calculate net income per share though both classes share the same rights in dividends. Therefore, basic and diluted earnings per share are the same for both classes of ordinary shares. Basic earnings per share is computed by dividing net income attributable to 58.com Inc. ordinary shareholders by the weighted average number of ordinary shares outstanding during the period using the two-class method. Under the two-class method, net income is allocated between ordinary shares and other participating securities based on their participating rights. Net loss is not allocated to other participating securities if based on their contractual terms they are not obligated to share the losses. Diluted earnings per share is calculated by dividing net income attributable to 58.com Inc. ordinary shareholders, as adjusted for the accretions and allocation of net income related to the preference shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of shares issuable upon the conversion of the preference shares using the if-converted method and shares issuable upon the exercise of share options using the treasury stock method. Ordinary equivalent shares are not included in the denominator of the diluted earnings per share calculation when inclusion of such shares would be anti-dilutive. |
Comprehensive income | (af) Comprehensive income Comprehensive income is defined as the change in equity of the Group during a period arising from transactions and other events and circumstances excluding transactions resulting from investments by shareholders and distributions to shareholders. Comprehensive income or loss is reported in the consolidated statements of comprehensive income. Accumulated other comprehensive income, as presented on the accompanying consolidated balance sheets, mainly consists of accumulated foreign currency translation adjustment. |
Segment reporting | (ag) Segment reporting Based on the criteria established by ASC 280 “Segment Reporting”, the Group’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group. The Group has internal reporting of revenue by products but has internal reporting of cost and expenses that do not distinguish between segments, and costs and expenses of the Group is reported by nature as a whole. The Group does not distinguish between markets or segments for the purpose of internal reporting. Hence, the Group has only one operating and reportable segment. As the Group’s long-lived assets and revenue are substantially located in and derived from the PRC, no geographical segments are presented. |
Recently issued accounting pronouncements | (ah) Recently issued accounting pronouncements In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost and off-balance sheets credit exposures within the scope of ASU 2016-13. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2019. The Group does not expect the adoption to have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement " ("ASU 2018-13"), which eliminates, adds and modifies certain disclosure requirements for fair value measurements. Under the guidance, public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The guidance is effective for all entities for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years, but entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. The Group does not expect a significant impact on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, “Intangibles — Goodwill and Other—Internal-Used Software (Subtopic 350-40)” (“ASU 2018-15”). The guidance intended to align the requirements for capitalization of implementation costs incurred in a cloud computing arrangement that is a service contract with the existing guidance for internal-use software. Capitalized implementation costs should be amortized over the term of the hosting arrangement and recorded in the same financial statement line items as amounts for the hosting arrangement. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The guidance provides flexibility in adoption, allowing for either retrospective adjustment or prospective adjustment for all implementation costs incurred after the date of adoption. The Group does not expect the adoption to have a material impact on its consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic740): Simplifying the Accounting for Income Taxes" ("ASU 2019-12"). This ASU removes certain exceptions for recognizing deferred taxes for investments, performing intra period allocation and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020. The Group is currently in the process of evaluating the impact of the adoption of ASU 2019- 12 will have on its consolidated financial statements. In January 2020, the FASB issued ASU No. 2020-01, "Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815" ("ASU 2020-01"). ASU 2020-01 clarifies the interaction between accounting standards related to equity securities, equity method investments, and certain derivatives, and is expected to reduce diversity in practice and increase comparability of the accounting for these interactions. The amendments in ASU 2020-01 are effective for fiscal years beginning after December 15, 2020, including interim periods. The Group is currently in the process of evaluating the impact of the adoption of ASU 2020-01 will have on its consolidated financial statements. |
Organization and principal ac_2
Organization and principal activities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization and principal activities | |
Schedule of major consolidated subsidiaries, VIEs and VIEs' subsidiaries | In 2019, the Company’s major consolidated subsidiaries, VIEs and VIEs’ subsidiaries are as follows: Percentage of direct or Date of indirect incorporation or Place of economic Name acquisition incorporation ownership Wholly owned and majority owned subsidiaries of the Company: China Classified Network Corporation (“CCNC BVI”) January 5, 2010 British Virgin Islands 100 % China Classified Information Corporation Limited (“CCIC HK”) January 18, 2010 Hong Kong 100 % Beijing Chengshi Wanglin Information Technology Co., Ltd. (“Wanglin”) March 8, 2010 PRC 100 % 58 Tongcheng Information Technology Co., Ltd. (“58 Technology”) March 15, 2012 PRC 100 % Anjuke Inc. (“Anjuke”) March 2, 2015 Cayman Island 100 % Ruiting Network Technology (Shanghai) Co., Ltd. (“Shanghai Ruiting”) March 2, 2015 PRC 100 % 58.com Holdings Inc. (“58 Holdings”) July 11, 2014 British Virgin Islands 100 % Falcon View Technology (“Ganji”) August 6, 2015 Cayman Island 100 % Beijing Yangguang Gudi Science Development Co., Ltd. (“Yangguang Gudi”) August 6, 2015 PRC 100 % Zhuan Spirit Holdings Limited (“Zhuan Zhuan Holding”) March 24, 2017 Cayman Island 63.5 % Zhuan Vision Holdings Limited (“Zhuan Vision”) April 20, 2017 Hong Kong 63.5 % Tianjin Zhuanzhuan World Technology Co., Ltd (“Tianjin Zhuanzhuan”) June 21, 2017 PRC 63.5 % VIEs and VIEs’ subsidiaries: Beijing 58 Information Technology Co., Ltd. (“Beijing 58”) December 12, 2005 PRC 100 % 58 Co., Ltd. July 28, 2011 PRC 100 % Shanghai Ruijia Information Technology Co., Ltd. March 2, 2015 PRC 100 % Beijing 58 Auto Technology Co., Ltd. (“Beijing 58 Auto”, formerly known as Beijing Leftbrain Network Technology Co., Ltd.) November 26, 2015 PRC 89.8 % Beijing Shanjing Kechuang Network Technology Co., Ltd. (“Shanjing Kechuang”) August 6, 2015 PRC 100 % Beijing Zhuanzhuan Spirit Technology Co., Ltd. (“Beijing Zhuanzhuan”) April 11, 2017 PRC 63.5 % |
Schedule of financial statement amounts and balances of the Group's VIEs and VIEs' subsidiaries were included in the accompanying consolidated financial statements | As of December 31, 2018 2019 RMB RMB Cash and cash equivalents 1,201,368 423,153 Short-term investments 1,162,694 3,282,743 Accounts receivable, net 437,985 466,317 Prepayments and other current assets 659,454 628,138 Property and equipment, net 140,600 169,242 Long-term investments 1,703,968 3,234,260 Intangible assets, net and goodwill 15,634,421 15,451,122 Right-of-use assets, net — 223,578 Long-term prepayments and other non-current assets 52,364 139,064 Total assets 20,992,854 24,017,617 Accounts payable 297,774 383,504 Deferred revenues 803,140 595,045 Customer advances 239,622 337,952 Taxes payable 35,583 77,417 Salary and welfare payable 295,430 320,769 Inter-company payable 4,326,185 7,168,608 Accrued expenses and other current liabilities 312,681 535,823 Operating lease liabilities-current — 108,211 Deferred tax liabilities 246,858 208,050 Operating lease liabilities-non-current — 120,247 Total liabilities 6,557,273 9,855,626 For the year ended December 31, 2017 2018 2019 RMB RMB RMB Revenue 4,086,645 4,244,322 4,480,963 Net (loss)/income 649,831 (603,099) (835,874) Net cash provided by operating activities 1,272,425 2,201,663 2,420,664 Net cash used in investing activities (1,449,482) (1,402,912) (3,745,087) Net cash provided by financing activities 3,485 80,000 545,841 |
Principal accounting policies_2
Principal accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Principal accounting policies | |
Schedule of breakdown of the Group's cash and cash equivalents by currency denomination, jurisdiction and geographical location | The following table sets forth a breakdown of the Group’s cash and cash equivalents by currency denomination, jurisdiction and geographical location as of December 31, 2018 and 2019: RMB in US$ in thousands RMB in thousands thousands Total Hong China- China Hong China- China translated to USA Singapore Kong Non-VIE VIE Total USA Singapore Kong Non-VIE VIE Total RMB December 31, 2018 3 — 122,704 2,534 4 125,245 272 — 128 326,156 1,201,340 1,527,896 2,387,478 December 31, 2019 3 1 597,829 6,275 4 604,112 273 1,019 146 654,241 423,125 1,078,804 5,293,206 |
Schedule of property and equipment are depreciated over the estimated useful lives on a straight-line basis | Property and equipment are stated at cost less accumulated depreciation and impairment. Property and equipment are depreciated over the estimated useful lives on a straight-line basis. The estimated useful lives are as follows: Buildings 30-50 years Computers and equipment 3-5 years Motor vehicles 4-5 years Furniture and fixtures 5 years Software 3-5 years Leasehold improvements Over the shorter of lease terms or the estimated useful lives of assets |
Schedule of intangible assets that have determinable lives continue to be amortized over their estimated useful lives using the straight-line | Customer relationships 2-3 years Domain names and trademarks 9-10 years Technology 4-5 years Licenses 10 years |
Disposal of finance business (T
Disposal of finance business (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disposal of finance business | |
Disposal Groups, Including Discontinued Operations [Table Text Block] | As of December 31, 2018 2019 RMB RMB Current: - Consideration receivable for original capital contribution to the Finance Business 57,000 171,000 - Automobile Financing Receivables — 132,000 - Guarantee fees receivable — 15,638 - Others 25,725 14,924 Total 82,725 333,562 Non-current: - Consideration receivable for original capital contribution to the Finance Business 171,000 — - Automobile Financing Receivables 132,000 — - Profit participation right 150,908 150,908 - Others 37,748 40,147 Total 491,656 191,055 |
Accounts receivable, net (Table
Accounts receivable, net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounts receivable, net | |
Schedule of accounts receivable, net, and movement of allowance for doubtful accounts | Accounts receivable, net, consists of the following: As of December 31, 2018 2019 RMB RMB Accounts receivable 983,063 1,305,016 Allowance for doubtful accounts (65,620) (95,765) Accounts receivable, net 917,443 1,209,251 Movement of allowance for doubtful accounts is as follows: For the years ended December 31, 2017 2018 2019 RMB RMB RMB Balance at beginning of year 51,719 62,736 65,620 Provisions 16,450 8,380 32,050 Reversals (4,896) (3,447) (979) Write-offs (537) (2,049) (926) Balance at end of year 62,736 65,620 95,765 |
Prepayments and other current_2
Prepayments and other current assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Prepayments and other current assets | |
Schedule of prepayments and other current assets | The following is a summary of prepayments and other current assets: As of December 31, 2018 2019 RMB RMB Consideration receivable for disposal of Guazi preference shares — 497,837 Prepaid advertising fee 227,057 445,415 Consideration and other receivables from 58 Finance (due from a related party (Note 8)) 82,725 333,562 Receivables on behalf of third parties 51,712 295,480 Distributor commission — 192,248 Input VAT 74,193 139,187 Prepayment for physical goods 11,172 101,352 Rental, advertising and other deposits 100,214 97,765 Employee advance 100,063 91,671 Prepayment for film investment 75,029 56,069 Prepaid rental fees 19,365 17,236 Prepayment for service fees 28,052 16,040 Interest receivable 38,296 9,581 Others 5,525 33,477 Total 813,403 2,326,920 |
Property and equipment, net (Ta
Property and equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property and equipment, net | |
Schedule of property and equipment, net | The following is a summary of property and equipment, net: As of December 31, 2018 2019 RMB RMB Buildings 1,172,239 1,172,239 Computers and equipment 571,654 659,382 Leasehold improvements 155,801 151,760 Software 49,146 63,460 Furniture and fixtures 21,054 21,369 Motor vehicles 5,383 6,050 Total 1,975,277 2,074,260 Less: Accumulated depreciation (645,525) (768,467) Net book value 1,329,752 1,305,793 |
Intangible assets, net (Tables)
Intangible assets, net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Intangible assets, net | |
Schedule of intangible assets, net | The following is a summary of intangible assets, net: As of December 31, 2018 2019 RMB RMB Cost Domain names and trademarks 1,643,080 1,651,421 Technology 215,064 215,064 Customer relationship 26,586 26,586 Licenses 12,793 12,793 Total 1,897,523 1,905,864 Accumulated amortization Domain names and trademarks (605,014) (778,424) Technology (165,982) (212,690) Customer relationship (26,263) (26,586) Licenses (319) (1,599) Total (797,578) (1,019,299) Net book value 1,099,945 886,565 |
Schedule of estimated aggregate amortization expenses | The estimated aggregate amortization expenses for each of the five succeeding fiscal years and thereafter are as follows: Amounts RMB For the year ended December 31, 2020 177,111 2021 174,736 2022 174,736 2023 174,736 2024 173,660 Thereafter 11,586 Total 886,565 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill | |
Schedule of changes in the carrying amount of goodwill | The changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2019 were as follows: Amounts RMB Balance as of December 31, 2017 15,864,655 Addition 9,565 Balance as of December 31, 2018 and 2019 15,874,220 |
Long-term investments (Tables)
Long-term investments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Long-term investments | |
Schedule of summary of long-term investments | As of December 31, 2018 2019 RMB RMB Measurement alternative investments: Investment in Guazi (a) 583,284 1,897,877 Investment in Tujia (b) 273,568 278,071 Investment in investee A (c) 298,850 303,771 Investment in investee B (d) 300,000 300,000 Investment in investee C 231,442 235,253 Investment in investee D 137,264 139,524 Investment in investee E (e) — 150,000 Investment in Sweetome (f) 10,057 82,026 Investment in 58 Home Series A Preference Shares (g) 18,525 — Others (l) 297,270 486,051 Total measurement alternative investments 2,150,260 3,872,573 Equity method investments: Investment in investee F (h) — 704,806 Investment in investee G (i) 75,941 324,383 Investment in investee Ai Fang (j) — 120,025 Investment in investee Sweetome (f) — 102,954 Others 46,455 29,865 Total equity method investments 122,396 1,282,033 Fair value method investments: Investment in 5I5J (k) 910,650 840,450 Others 182,600 91,455 Total fair value method investments 1,093,250 931,905 Total long-term investments 3,365,906 6,086,511 (a) The investment in Guazi consists of investments in Series A Guazi Shares and Series B1 Guazi Shares, which are measured under measurement alternative, because the shares invested by the Group were not considered as in-substance common stock and the shares did not have readily determinable fair value or quoted market price. As disclosed in Note 6, the Company sold a portion of Series A Guazi Shares to a third-party investor in 2019. The Company recognized RMB4,760.5 million realized gains for the portion sold and recognized RMB1,381.1 million unrealized gains as a result of remeasuring the fair value of the remaining Series A Guazi Shares and Series B1 Guazi Shares held by the Group. (b) The Group invested in ordinary shares and series D preference shares of Tujia.com International (“Tujia”) in 2016. The investment in Tujia ordinary shares and series D preference shares was measured at fair value of RMB 276.5 million (US $39.9 million) on the date of investment and was subsequently accounted for under cost method, and measurement alternative after the Group adopted ASU 2016-01 since January 1, 2018 because the preference shares were not considered as in-substance common stock, the ordinary shares could not exert significant influence over the investee, and neither the preference shares nor the ordinary shares have readily determinable fair value or quoted market price. For the year ended December 31, 2018 and 2019, the Group did not identify any observable price change in this investment, which refer to the price changes in orderly transactions for an identical or similar investment in the investee. (c) In 2017, the Group acquired shares of investee A for cash consideration of RMB 284.5 million (US $43.5 million). Investee A is mainly engaged in the business of property management. The investment was accounted for under cost method, and measurement alternative after the Group adopted ASU 2016-01 since January 1, 2018 as the shares invested by the Group were not considered as in-substance common stock and the shares did not have readily determinable fair value. For the year ended December 31, 2018 and 2019, the Group did not identify any observable price change in this investment, which refer to the price changes in orderly transactions for an identical or similar investment in the investee. (d) In 2018, the Group invested RMB 300.0 million in a third-party company or Investee B. The Group’s shares invested in Investee B were not considered as in-substance common stock, and did not have readily determinable fair value or quoted market price, therefore, the investment was accounted for under measurement alternative according to ASC 323 and ASU 2016-01. For the year ended December 31, 2018 and 2019, the Group did not identify any observable price change in this investment, which refer to the price changes in orderly transactions for an identical or similar investment in the investee. (e) In 2019, the Group invested RMB 150.0 million in a third-party company or Investee E. The Group’s shares invested in Investee E were not considered as in-substance common stock and had no readily determinable fair value or quoted market price, therefore, the investment was accounted for under measurement alternative according to ASC 323 and ASU 2016-01. For the year ended December 31, 2019, the Group did not identify any observable price change in this investment, which refer to the price changes in orderly transactions for an identical or similar investment in the investee. (f) In 2017, the Group acquired preference shares and ordinary shares of Sweetome for cash consideration of RMB 2.0 million and RMB 8.0 million, respectively. Sweetome is mainly engaged in providing short-term leasing services and homestay hotels services. The investment in ordinary shares of Sweetome was accounted for under cost method, and measurement alternative after the Group adopted ASU 2016-01 since January 1, 2018 because the ordinary shares could not exert significant influence over the investee, and the ordinary shares did not have readily determinable fair value or quoted market price. The investment in preference shares of Sweetome was accounted for under cost method, and measurement alternative after the Group adopted ASU 2016-01 since January 1, 2018 because the preference shares were not considered as in-substance common stock and did not have readily determinable fair value or quoted market price. In 2019, the Group entered into a series of agreements to acquire additional preference shares and ordinary shares of Sweetome. Pursuant to the agreements, the Group would (i) pay cash consideration of RMB160.0 million in exchange for preference shares of Sweetome, (ii) provide business resources valued at RMB94.9 million on the transaction date over a four-year period in exchange for ordinary shares of Sweetome. As of December 31, 2019, the Group partially completed the transaction and obtained half of the agreed number of preference shares by paying cash consideration of RMB80.0 million and acquired ordinary shares by providing business resources valued at RMB94.9 million over a four-year period from January 2020. Following the completed part of the transaction, (i) the Group accounted for the preference shares in Sweetome under the measurement alternative according to ASC 321 because they were not considered as in-substance common stock and they have no readily determinable fair value or quoted market price; (ii) the Group accounted for the ordinary shares using equity method according to ASC 323 since the Group obtained significant influence over Sweetome. For the year ended December 31, 2018 and 2019, the Group did not identify any observable price change in this investment, which refer to the price changes in orderly transactions for an identical or similar investment in the investee. For the year ended December 31, 2019, the Group did not record any gain or loss under equity method since the amount was immaterial. (g) As a result of the deconsolidation of 58 Home on November 27, 2015, the Group continues to retain equity interests in 58 Home through its ownership of certain 58 Home Ordinary Shares and 58 Home Series A Preference Shares. The Group’s investment in 58 Home Ordinary Shares was accounted for as an equity method investment in accordance with ASC 323. The Group’s investment in 58 Home Series A Preference Shares was accounted for under the cost method, and measurement alternative after the Group adopted ASU 2016-01 from January 1, 2018 as 58 Home Series A Preference Shares were not considered as in-substance common stock and the shares did not have readily determinable fair value or quoted market price. Since January 2018, the carrying amount of the Group’s investment in 58 Home Ordinary Shares has been reduced to zero due to the accumulated losses picked up from 58 Home. The Group has continued to record its share of losses in 58 Home in its consolidated statements of comprehensive income to the extent of its investment in 58 Home Series A Preference Shares. For the year ended December 31, 2017, 2018 and 2019, the Group recorded investment losses of RMB 663.2 million, RMB 79.6 million and RMB 17.7 million, respectively, in share of results of equity investees in the consolidated statements of comprehensive income relating to the investments in 58 Home. In 2019, the carrying amount of the Group’s investment in 58 Home Series A Preference Shares was reduced to zero . (h) In 2019, the Group invested in common shares of Investee F, for cash consideration of RMB 700.0 million. The investment is accounted for under equity method as the Group can exert significant influence over the investee. For the year ended December 31, 2019, the Group recorded RMB 4.8 million gain in share of results of equity investees in the consolidated statements of comprehensive income. (i) In 2017 and 2019, the Group invested in common shares of Investee G for cash consideration of RMB 99.0 million and RMB 198.0 million, respectively. Investee G is mainly engaged in the consumer finance business. The investment is accounted for under equity method as the Group can exert significant influence over the investee. The Group recorded RMB 24.0 million loss, RMB 0.9 million gain and RMB 50.4 million gain in share of results of equity investees in the consolidated statements of comprehensive income, for the year ended December 31, 2017, 2018 and 2019, respectively. (j) In 2019, the Group invested in common shares of Shanghai Gengying Information Technology Co., Ltd. ("Ai Fang") for cash consideration of RMB 153.0 million and held 30% of the equity interests in Ai Fang as of December 31, 2019. Ai Fang is mainly engaged in real estate related business. The investment is accounted for under equity method as the Group can exert significant influence over the investee. For the year ended December 31, 2019, the Group recorded RMB 33.0 million loss in share of results of equity investees in the consolidated statements of comprehensive income. (k) In 2018, the Group acquired a minority stake of approximately 8.3% in 5I5J Holding Group Co., Ltd., or 5I5J, a major secondary and rental brokerage company listed on the Shanghai Stock Exchange in mainland China, for a consideration of approximately RMB 1.1 billion in cash. The Group classified this investment as equity investments with readily determinable fair values under long-term investments and reported the investment at fair value using a market approach based on the investee’s quoted market price. As of December 31, 2018 and 2019, the fair value of the investment held by the Group was RMB 910.7 million and RMB 840.5 million, respectively, and the Group recognized an unrealized loss in fair value of RMB 157.4 million and RMB 70.2 million, respectively, for the year ended December 31, 2018 and 2019 in investment income, net in the Group’s consolidated statements of comprehensive income. (l) As of December 31, 2019, the increase in “Others” under measurement alternative mainly included newly acquired shares of other companies for an aggregate cash consideration of RMB 199.9 million which were elected to be accounted for under measurement alternative because such investments were 1) not considered as in-substance common stock and did not have readily determinable fair values or quoted market price; or 2) the investments did not have readily determinable fair values or quoted market price and the Group did not have the ability to exercise significant influences over the investees. During the year ended December 31, 2019, a measurement alternative investment amounted to RMB 11.8 million was fully impaired (see Note 2 (m)). |
Schedule of summarized financial information for equity method investments as a group | For the years ended December 31, 2019, equity method investments held by the Group in aggregate have met the significance criteria as defined under Rule 4-08 (g) of Regulation S-X. As such, the Group is required to present summarized financial information for all of its equity method investments as a group as follows: For the year ended For the year ended For the year ended December 31, 2017 December 31, 2018 December 31, 2019 RMB RMB RMB Operating result data: Total revenues 519,121 1,178,231 2,355,714 Gross profit 339,358 628,160 1,489,798 Loss from operations (836,811) (1,469,574) (1,120,644) Net loss (840,385) (1,478,234) (983,780) As of December 31, 2018 2019 RMB RMB Balance sheets data: Current assets 910,462 3,627,152 Non-current assets 4,345,855 11,694,180 Current liabilities 4,140,812 11,648,260 Non-current liabilities 193,534 658,950 Noncontrolling interests and mezzanine equity 2,755,258 3,647,147 |
Long-term prepayments and oth_2
Long-term prepayments and other non-current assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Long-term prepayments and other non-current assets | |
Schedule of long-term prepayments and other non-current assets | The following is a summary of long-term prepayments and other non-current assets: As of December 31, 2018 2019 RMB RMB Profit participation right, consideration and other receivables from 58 Finance (due from a related party (Note 8)) 491,656 191,055 Long-term prepaid advertising fee — 153,287 Deferred tax assets, net 42,953 85,023 Rental deposits 17,537 19,744 Prepayment for purchase of property and equipment 10,764 6,341 Prepayment for investments 75,000 — Others 1,568 14,142 Total 639,478 469,592 |
Accounts payable (Tables)
Accounts payable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounts payable | |
Schedule of accounts payable | The following is a summary of accounts payable: As of December 31, 2018 2019 RMB RMB Payable for advertisement fees 701,629 791,705 Rebate payable to sales agents 142,663 137,982 Payable related to purchases of property and equipment 4,434 40,319 Others 38,832 72,691 Total 887,558 1,042,697 |
Accrued expenses and other cu_2
Accrued expenses and other current liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accrued expenses and other current liabilities | |
Schedule of accrued expenses and other current liabilities | The following is a summary of accrued expenses and other current liabilities: As of December 31, 2018 2019 RMB RMB Deposits from sales agents and others 202,265 302,727 Accrued office expenses 207,146 205,538 Other payable to platform users and merchants 43,413 118,840 Acquisition consideration payable 105,620 107,359 Payable to employees related to share-based awards 43,558 92,290 Accrued professional fees 78,315 88,198 Accrued telecom and bandwidth fees 40,078 31,841 Government subsidy 9,146 21,716 Cash received on behalf of a related party 82,358 — Others 66,469 84,498 Total 878,368 1,053,007 |
Fair value measurements (Tables
Fair value measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair value measurements | |
Schedule of financial instruments, measured at fair value at recurring basis, by level within the fair value hierarchy | As of December 31, Financial instruments Fair value hierarchy 2018 2019 RMB RMB Cash equivalents Significant other observable inputs (Level 2) 1,069,646 2,302,860 Term deposits Significant other observable inputs (Level 2) — 70,000 Short-term investments: - Variable-rate financial instruments Significant other observable inputs (Level 2) 4,587,610 8,414,348 Long-term investments: - Equity investments with readily determinable fair value Quoted prices in active markets for identical assets (Level 1) 910,650 841,754 - Non-marketable investments held by an investment company within the Group or accounted for using fair value option Significant unobservable inputs (Level 3) 182,600 90,151 Investment in convertible notes Significant unobservable inputs (Level 3) — 669,715 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income taxes | |
Schedule of provisions for income tax expenses | The provisions for income tax expenses are summarized as follows: For the Year ended December 31, 2017 2018 2019 RMB RMB RMB Current tax expenses (212,528) (370,149) (784,274) Deferred tax (expenses)/benefit 65,839 70,444 (50,060) Income tax expenses (146,689) (299,705) (834,334) |
Schedule of reconciliation between the statutory EIT rate and the Group's effective tax rate | The following table sets forth reconciliation between the statutory EIT rate and the Group’s effective tax rate: For the Year ended December 31, 2017 2018 2019 Statutory income tax rates: 25.0 % 25.0 % 25.0 % Change in valuation allowance (7.5) % 10.1 % 3.8 % Permanent book-tax differences (a) 9.4 % (7.6) % (12.4) % Effect of preferential tax treatment and tax holiday (13.7) % (13.6) % (8.4) % Others (b) (3.6) % (1.6) % 1.0 % Effective tax rate 9.6 % 12.3 % 9.0 % (a) The permanent differences mainly consisted of additional deduction for research and development expenditures, effect on tax rates in different tax jurisdiction and other non-deductible expenses. (b) Others mainly consisted of fair value change, Fixed Assets One-time Expense and amortization of acquired intangible assets. |
Schedule of per share effect of the tax holidays mostly enjoyed by Wangling and 58 Technology | The per share effect of the tax holidays mostly enjoyed by Shanghai Ruiting, Wangling and 58 Technology are as follows: For the Year ended December 31, 2017 2018 2019 RMB RMB RMB Net earnings per ordinary share attributable to ordinary shareholders effect – basic 0.45 1.01 0.93 Net earnings per ordinary share attributable to ordinary shareholders effect – diluted 0.45 0.99 0.92 |
Schedule of significant components of the aggregate deferred tax assets and liabilities | The following table sets forth the significant components of the aggregate deferred tax assets and liabilities: As of December 31, 2018 2019 RMB RMB Deferred tax assets Provision for doubtful receivables 11,622 19,459 Net operating loss carry forwards 290,164 499,091 Advertising expenses in excess of deduction limit 306,510 466,090 Others 23,603 37,420 Total deferred tax assets 631,899 1,022,060 Less: Valuation allowance (588,946) (937,037) Total deferred tax assets, net 42,953 85,023 Deferred tax liabilities Acquired intangible assets 268,171 214,388 Fair value change — 152,223 Fixed Assets One-time Expense 14,941 23,108 Total deferred tax liabilities 283,112 389,719 |
Schedule of movement of valuation allowance | Movement of valuation allowance For the years ended December 31, 2017 2018 2019 RMB RMB RMB Balance at beginning of the period 458,433 343,590 588,946 Provision 81,904 308,811 349,781 Current period reversal (196,747) (63,455) (1,690) Balance at the end of the period 343,590 588,946 937,037 |
Share-based compensation (Table
Share-based compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based compensation | |
Schedule of share option activities | A summary of the Group’s share option activities under the 2010 and 2013 Plan for the years ended December 31, 2017, 2018 and 2019 is presented below: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Life Value US$ In years US$ Outstanding as of December 31, 2016 5,447,800 7.78 6.39 43,531 Granted — — Forfeited and expired (99,344) 15.36 Exercised (2,403,566) 6.29 45,141 Outstanding as of December 31, 2017 2,944,890 8.74 5.31 79,662 Granted 17,328 0.01 Forfeited and expired (31,044) 7.03 Exercised (395,590) 5.28 12,293 Outstanding as of December 31, 2018 2,535,584 9.24 4.42 45,620 Granted — — Forfeited and expired (2) 2.50 Exercised (134,456) 4.51 3,411 Outstanding as of December 31, 2019 2,401,126 9.50 3.39 48,927 Exercisable as of December 31, 2019 2,197,930 8.53 3.17 46,910 Fully vested and expected to vest as of December 31, 2019 11,685,220 |
Schedule of RSUs activities | The following table sets forth the summary of RSUs activities for the years ended December 31, 2017, 2018 and 2019: Weighted Average Weighted Remaining Average Number of Contractual Grant Date RSUs Life Fair Value In years US$ Unvested as of December 31, 2016 7,050,138 9.09 Granted 4,381,182 23.53 Forfeited (2,104,716) Vested (1,890,568) Unvested as of December 31, 2017 7,436,036 8.85 Granted 3,166,236 33.15 Forfeited (813,520) Vested (2,083,858) Unvested as of December 31, 2018 7,704,894 8.60 Granted 4,894,310 25.41 Forfeited (545,618) Vested (2,698,378) Unvested as of December 31, 2019 9,355,208 8.77 Fully vested and expected to vest as of December 31, 2019 22,234,204 |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings per share | |
Schedule of computation of basic and diluted net earnings/(loss) per share | The following table sets forth the computation of basic and diluted net earnings per share for the periods indicated: As of December 31, 2017 2018 2019 RMB RMB RMB Numerator: Net income 1,389,242 2,129,058 8,445,226 Net (income)/loss attributable to noncontrolling interests (4,667) 139 8,033 Deemed dividend to mezzanine classified noncontrolling interests (99,507) (132,202) (175,045) Numerator for basic and diluted net earnings per share 1,285,068 1,996,995 8,278,214 Denominator: Weighted average number of ordinary shares used in computing net earnings per share—basic 291,475,725 294,902,518 297,836,268 Weighted average number of ordinary shares used in computing net earnings per share—diluted 295,304,995 299,711,258 301,449,100 Net earnings per ordinary share attributable to ordinary shareholders - basic 4.41 6.77 27.79 Net earnings per ordinary share attributable to ordinary shareholders - diluted 4.35 6.66 27.46 Net earnings per ADS attributable to ordinary shareholders-basic 8.82 13.54 55.59 Net earnings per ADS attributable to ordinary shareholders - diluted 8.70 13.33 54.92 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Schedule of future lease payments under operating leases | As of December 31, 2019 RMB 2020 152,716 2021 68,812 2022 22,974 2023 16,104 2024 12,060 Thereafter 24,048 Total minimum lease payments 296,714 Less: imputed interest (20,850) Total lease liability balance 275,864 |
Summary of operating lease, cash flow and other information | For the Year ended December 31, 2019 RMB Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 152,156 Right-of-use assets obtained in exchange for new operating lease liabilities: Operating leases 120,271 Weighted-average remaining lease term-operating leases 3.51 years Weighted-average discount rate-operating 4.75 % |
Schedule of future minimum rental payments for operating leases | As of December 31, 2018, the future minimum lease payments under the Group’s non-cancelable operating lease agreements based on ASC 840 are as follows: Operating leases RMB 2019 187,581 2020 103,807 2021 66,499 2022 15,243 Beyond 2022 65,142 |
Related party transactions (Tab
Related party transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related party transactions | |
Schedule of amounts due from/to related parties | As of December 31, 2018 and 2019, amounts due from/to related parties are summarized as below: As of December 31, 2018 2019 RMB RMB Amounts due from related parties, current Tencent 167,963 133,201 58 Finance 82,725 339,415 Others 7,866 17,485 Total 258,554 490,101 Amounts due from related parties, non-current 58 Finance 491,656 191,055 Others — 13,500 Total 491,656 204,555 Amounts due to related parties, current Tencent 45,854 65,153 Others 10,758 33,655 Total 56,612 98,808 |
Organization and principal ac_3
Organization and principal activities (Schedule of Major Subsidiaries, Variable Interest Entities and Variable Interest Entities's Subsidiaries Ownership) (Details) | 12 Months Ended | |
Dec. 31, 2019 | Jan. 31, 2018 | |
Noncontrolling Interest [Line Items] | ||
Entity Incorporation, State or Country Code | E9 | |
China Classified Network Corporation ("CCNC BVI") [Member] | ||
Noncontrolling Interest [Line Items] | ||
Date of incorporation | Jan. 5, 2010 | |
Place of incorporation | British Virgin Islands | |
Percentage of direct or indirect economic ownership | 100.00% | |
China Classified Information Corporation Limited ("CCIC HK") [Member] | ||
Noncontrolling Interest [Line Items] | ||
Date of incorporation | Jan. 18, 2010 | |
Place of incorporation | Hong Kong | |
Percentage of direct or indirect economic ownership | 100.00% | |
Beijing Chengshi Wanglin Information Technology Co., Ltd. ("Wanglin") [Member] | ||
Noncontrolling Interest [Line Items] | ||
Date of incorporation | Mar. 8, 2010 | |
Place of incorporation | PRC | |
Percentage of direct or indirect economic ownership | 100.00% | |
58 Tongcheng Information Technology Co., Ltd. ("58 Technology") [Member] | ||
Noncontrolling Interest [Line Items] | ||
Date of incorporation | Mar. 15, 2012 | |
Place of incorporation | PRC | |
Percentage of direct or indirect economic ownership | 100.00% | |
Anjuke Inc [Member] | ||
Noncontrolling Interest [Line Items] | ||
Date of incorporation | Mar. 2, 2015 | |
Place of incorporation | Cayman Island | |
Percentage of direct or indirect economic ownership | 100.00% | |
Ruiting Network Technology (Shanghai) Co., Ltd. ("Shanghai Ruiting") [Member] | ||
Noncontrolling Interest [Line Items] | ||
Date of incorporation | Mar. 2, 2015 | |
Place of incorporation | PRC | |
Percentage of direct or indirect economic ownership | 100.00% | |
58.com Holdings Inc. ("58 Holdings") [Member] | ||
Noncontrolling Interest [Line Items] | ||
Date of incorporation | Jul. 11, 2014 | |
Place of incorporation | British Virgin Islands | |
Percentage of direct or indirect economic ownership | 100.00% | |
Falcon View Technology ("Ganji") [Member] | ||
Noncontrolling Interest [Line Items] | ||
Percentage of direct or indirect economic ownership | 100.00% | |
Falcon View Technology ("Ganji") [Member] | Majority owned subsidiaries of the company [Member] | ||
Noncontrolling Interest [Line Items] | ||
Date of incorporation | Aug. 6, 2015 | |
Place of incorporation | Cayman Island | |
Beijing Yangguang Gudi Science Development Co., Ltd. ("Yangguang Gudi") [Member] | ||
Noncontrolling Interest [Line Items] | ||
Percentage of direct or indirect economic ownership | 100.00% | |
Beijing Yangguang Gudi Science Development Co., Ltd. ("Yangguang Gudi") [Member] | Majority owned subsidiaries of the company [Member] | ||
Noncontrolling Interest [Line Items] | ||
Date of incorporation | Aug. 6, 2015 | |
Place of incorporation | PRC | |
Zhuan Spirit Holding Limited Zhuan Zhuan Holding" [Member] | ||
Noncontrolling Interest [Line Items] | ||
Date of incorporation | Mar. 24, 2017 | |
Place of incorporation | Cayman Island | |
Percentage of direct or indirect economic ownership | 63.50% | |
Zhuan Vision Holdings Limited Zhuan Vision" [Member] | ||
Noncontrolling Interest [Line Items] | ||
Date of incorporation | Apr. 20, 2017 | |
Place of incorporation | Hong Kong | |
Percentage of direct or indirect economic ownership | 63.50% | |
Tianjin Zhuanzhuan World Technology Co., Ltd Tianjin Zhuanzhuan" [Member] | ||
Noncontrolling Interest [Line Items] | ||
Date of incorporation | Jun. 21, 2017 | |
Place of incorporation | PRC | |
Percentage of direct or indirect economic ownership | 63.50% | |
Beijing 58 Information Technology Co., Ltd. ("Beijing 58") [Member] | ||
Noncontrolling Interest [Line Items] | ||
Date of incorporation | Dec. 12, 2005 | |
Beijing 58 Information Technology Co., Ltd. ("Beijing 58") [Member] | Variable Interest Entities [Member] | ||
Noncontrolling Interest [Line Items] | ||
Place of incorporation | PRC | |
Percentage of direct or indirect economic ownership | 100.00% | |
Shanghai Ruijia Information Technology Co., Ltd. [Member] | Variable Interest Entities [Member] | ||
Noncontrolling Interest [Line Items] | ||
Date of incorporation | Mar. 2, 2015 | |
Place of incorporation | PRC | |
Percentage of direct or indirect economic ownership | 100.00% | |
Beijing 58 Auto Technology Co., Ltd. (formerly known as Beijing Leftbrain Network Technology Co., Ltd. ("Leftbrain")) [Member] | Variable Interest Entities [Member] | ||
Noncontrolling Interest [Line Items] | ||
Date of incorporation | Nov. 26, 2015 | |
Place of incorporation | PRC | |
Percentage of direct or indirect economic ownership | 89.80% | |
Beijing Shanjing Kechuang Network Technology Co., Ltd. ("Shanjing Kechuang") [Member] | Majority owned subsidiaries of the company [Member] | ||
Noncontrolling Interest [Line Items] | ||
Date of incorporation | Aug. 6, 2015 | |
Place of incorporation | PRC | |
Percentage of direct or indirect economic ownership | 100.00% | |
Beijing Zhuanzhuan Spirit Technology Co., Ltd. Beijing Zhuanzhuan" [Member] | Variable Interest Entities [Member] | ||
Noncontrolling Interest [Line Items] | ||
Date of incorporation | Apr. 11, 2017 | |
Place of incorporation | PRC | |
Percentage of direct or indirect economic ownership | 63.50% | |
58 Co., Ltd. [Member] | ||
Noncontrolling Interest [Line Items] | ||
Percentage of direct or indirect economic ownership | 100.00% | |
58 Co., Ltd. [Member] | Variable Interest Entities [Member] | ||
Noncontrolling Interest [Line Items] | ||
Date of incorporation | Jul. 28, 2011 | |
Place of incorporation | PRC | |
Percentage of direct or indirect economic ownership | 100.00% |
Organization and principal ac_4
Organization and principal activities (Contractual arrangements with the Group's VIEs) (Details) - CNY (¥) ¥ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 31, 2018 | |
Noncontrolling Interest [Line Items] | ||||
Equity interests, ownership Percentage | 68.80% | 68.80% | ||
Accumulated losses | ¥ 2,600 | |||
58 Co., Ltd. [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Ownership percentage by parent | 100.00% | |||
Wanglin [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Proceeds from service fee | 12.8 | ¥ 18.7 | ¥ 0.4 | |
Amount of interest free loans | ¥ 7.8 | |||
Haoyong Yang [Member] | Beijing Shanjing Kechuang Network Technology Co., Ltd. ("Shanjing Kechuang") [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Equity interests, ownership Percentage | 0.30% | |||
Chunyan Guo [Member] | Beijing Shanjing Kechuang Network Technology Co., Ltd. ("Shanjing Kechuang") [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Equity interests, ownership Percentage | 20.00% | |||
Yang Liu [Member] | Beijing Shanjing Kechuang Network Technology Co., Ltd. ("Shanjing Kechuang") [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Equity interests, ownership Percentage | 30.70% |
Organization and principal ac_5
Organization and principal activities (Schedule of Financial Statement Amounts and Balances for Variable Interest Entities) (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019USD ($) | Jan. 01, 2019CNY (¥) | |
Variable Interest Entity [Line Items] | ||||||
Cash and cash equivalents | ¥ 5,293,206 | ¥ 2,387,478 | ||||
Short-term investments | 8,414,348 | 4,587,610 | $ 1,206,151 | |||
Accounts receivable, net | 1,209,251 | 917,443 | 173,339 | |||
Prepayments and other current assets | 2,326,920 | 813,403 | 333,551 | |||
Property and equipment, net | 1,305,793 | 1,329,752 | 187,178 | |||
Long-term investments | 6,086,511 | 3,365,906 | 872,468 | |||
Right-of-use assets, net | 275,459 | 39,486 | ¥ 317,400 | |||
Long-term prepayments and other non-current assets | 469,592 | 639,478 | 67,314 | |||
Total assets | 43,362,211 | 31,830,845 | 6,215,735 | |||
Accounts payable | 1,042,697 | 887,558 | 149,465 | |||
Deferred revenues | 2,154,920 | 2,348,333 | 308,896 | |||
Taxes payable | 698,104 | 250,231 | 100,069 | |||
Salary and welfare payable | 753,267 | 642,445 | 107,977 | |||
Due to Related Parties, Current | 98,808 | 56,612 | ||||
Accrued expenses and other current liabilities | 1,053,007 | 878,368 | 150,943 | |||
Operating lease liabilities-current | 137,310 | 19,683 | ||||
Deferred tax liabilities | 389,719 | 283,112 | 55,864 | |||
Operating lease liabilities-non-current | 138,554 | 19,861 | ||||
Total liabilities | 8,353,686 | 7,569,685 | $ 1,197,456 | |||
Revenue | 15,576,523 | $ 2,232,809 | 13,137,815 | ¥ 10,068,780 | ||
Net income/(loss) | 8,453,259 | 1,211,728 | 2,129,197 | 1,384,575 | ||
Net cash provided by operating activities | 4,354,420 | 624,184 | 3,799,581 | 2,779,880 | ||
Net cash provided/(used in) by investing activities | (1,769,651) | (253,671) | (3,086,965) | (3,210,290) | ||
Net cash provided by financing activities | 19,300 | $ 2,766 | 46,920 | 571,076 | ||
Variable Interest Entities [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Cash and cash equivalents | 423,153 | 1,201,368 | ||||
Short-term investments | 3,282,743 | 1,162,694 | ||||
Accounts receivable, net | 466,317 | 437,985 | ||||
Prepayments and other current assets | 628,138 | 659,454 | ||||
Property and equipment, net | 169,242 | 140,600 | ||||
Long-term investments | 3,234,260 | 1,703,968 | ||||
Intangible assets, net and goodwill | 15,451,122 | 15,634,421 | ||||
Right-of-use assets, net | 223,578 | |||||
Long-term prepayments and other non-current assets | 139,064 | 52,364 | ||||
Total assets | 24,017,617 | 20,992,854 | ||||
Accounts payable | 383,504 | 297,774 | ||||
Deferred revenues | 595,045 | 803,140 | ||||
Customer advances | 337,952 | 239,622 | ||||
Taxes payable | 77,417 | 35,583 | ||||
Salary and welfare payable | 320,769 | 295,430 | ||||
Due to Related Parties, Current | 7,168,608 | 4,326,185 | ||||
Accrued expenses and other current liabilities | 535,823 | 312,681 | ||||
Operating lease liabilities-current | 108,211 | 0 | ||||
Deferred tax liabilities | 208,050 | 246,858 | ||||
Operating lease liabilities-non-current | 120,247 | 0 | ||||
Total liabilities | 9,855,626 | 6,557,273 | ||||
Revenue | 4,480,963 | 4,244,322 | 4,086,645 | |||
Net income/(loss) | (835,874) | (603,099) | 649,831 | |||
Net cash provided by operating activities | 2,420,664 | 2,201,663 | 1,272,425 | |||
Net cash provided/(used in) by investing activities | (3,745,087) | (1,402,912) | (1,449,482) | |||
Net cash provided by financing activities | ¥ 545,841 | ¥ 80,000 | ¥ 3,485 |
Organization and principal ac_6
Organization and principal activities (Liquidity) (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Organization and principal activities | ||||
Net cash provided by operating activities | ¥ 4,354,420 | $ 624,184 | ¥ 3,799,581 | ¥ 2,779,880 |
Working capital | 10,000,000 | |||
Cash, cash equivalents and short-term investments | ¥ 13,800,000 |
Principal accounting policies_3
Principal accounting policies (Additional Information) (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2019CNY (¥)segment¥ / shares | Dec. 31, 2019USD ($)segment$ / shares | Dec. 31, 2018CNY (¥)segment | Dec. 31, 2017CNY (¥)segment | Dec. 31, 2019USD ($) | Jan. 01, 2019CNY (¥) | |
Provision for Doubtful Accounts, Net of Reversals | ¥ 31,100 | ¥ 4,900 | ||||
Cost-method Investments, Other than Temporary Impairment | 11,800 | 40,000 | ¥ 37,300 | |||
Equity method investments | 2,600 | 0 | 0 | |||
Impairment of long-lived assets | ¥ 0 | ¥ 0 | ¥ 0 | |||
Number of reporting units | segment | 1 | 1 | 1 | 1 | ||
Impairment of goodwill | ¥ 0 | ¥ 0 | ¥ 0 | |||
Investment accounted for using fair value option | 692,000 | |||||
Advertising expenses | 3,700,000 | 3,300,000 | 2,100,000 | |||
Employee benefit expenses | 708,300 | 626,400 | 476,300 | |||
Government grants | 217,900 | 59,900 | 81,400 | |||
Statutory Reserve | 609,000 | 527,600 | ||||
Cash Collateral for Borrowed Securities | ¥ 400,000 | |||||
Foreign Currency Per Share Exchange Rate, Translation | (per share) | ¥ 6.9762 | $ 1 | ||||
Foreign currency translation adjustment, net of nil tax | ¥ 137,371 | $ 19,691 | 15,486 | 82,926 | ||
Foreign Currency Transaction Gain (Loss), before Tax | (17,600) | $ (2,522) | 597 | 793 | ||
Right-of-use assets, net | 275,459 | $ 39,486 | ¥ 317,400 | |||
Short-term Investments | 8,414,348 | 4,587,610 | 1,206,151 | |||
Accounts Receivable, Net, Current | 1,209,251 | 917,443 | 173,339 | |||
Customer Advance | 4,100,000 | 3,800,000 | ||||
Deferred Revenue, Current | 2,154,920 | 2,348,333 | $ 308,896 | |||
Current Asset [Member] | ||||||
Cash Collateral for Borrowed Securities | 417,000 | |||||
Noncurrent Asset [Member] | ||||||
Cash Collateral for Borrowed Securities | 796,300 | |||||
Cash pledge released | 796,300 | |||||
Commercial Banks [Member] | ||||||
Cash restricted from withdrawal | 60,100 | 15,700 | ||||
Tencent [Member] | ||||||
Advertising expenses | ¥ 800,400,000 | ¥ 621,600,000 | ¥ 422,300,000 |
Principal accounting policies_4
Principal accounting policies (Schedule of Cash and Cash Equivalents) (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2018USD ($) |
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | ¥ 5,293,206 | ¥ 2,387,478 | ||
Variable Interest Entities [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 423,153 | 1,201,368 | ||
United States of America, Dollars | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ | $ 604,112 | $ 125,245 | ||
United States of America, Dollars | UNITED STATES | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ | 3 | 3 | ||
United States of America, Dollars | SINGAPORE | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ | 1 | |||
United States of America, Dollars | HONG KONG | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ | 597,829 | 122,704 | ||
United States of America, Dollars | CHINA | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ | 6,275 | 2,534 | ||
United States of America, Dollars | CHINA | Variable Interest Entities [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ | $ 4 | $ 4 | ||
China, Yuan Renminbi | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 1,078,804 | 1,527,896 | ||
China, Yuan Renminbi | UNITED STATES | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 273 | 272 | ||
China, Yuan Renminbi | SINGAPORE | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 1,019 | |||
China, Yuan Renminbi | HONG KONG | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 146 | 128 | ||
China, Yuan Renminbi | CHINA | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 654,241 | 326,156 | ||
China, Yuan Renminbi | CHINA | Variable Interest Entities [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | ¥ 423,125 | ¥ 1,201,340 |
Principal accounting policies_5
Principal accounting policies (Schedule of Property and Equipment Estimated Useful Lives) (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Buildings | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 30 years |
Buildings | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 50 years |
Computers and equipment | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Computers and equipment | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Motor vehicles | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 4 years |
Motor vehicles | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Furniture and fixtures | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Furniture and fixtures | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life description | Over the shorter of lease terms or the estimated useful lives of assets |
Software | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Principal accounting policies_6
Principal accounting policies (Schedule of Intangible Assets Estimated Useful Lives) (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Customer relationship [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, useful live | 2 years |
Customer relationship [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, useful live | 3 years |
Technology [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, useful live | 4 years |
Technology [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, useful live | 5 years |
Domain names and trademarks [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, useful live | 9 years |
Domain names and trademarks [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, useful live | 10 years |
Licenses [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, useful live | 10 years |
Business acquisitions and equ_2
Business acquisitions and equity investment transactions (Other acquisitions - Narrative) (Details) - CNY (¥) ¥ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Other Acquisitions [Member] | |||
Business Acquisition [Line Items] | |||
Payments to Acquire Businesses, Gross | ¥ 38.4 | ¥ 9.8 | ¥ 3.1 |
Deconsolidation of 58 Home - (D
Deconsolidation of 58 Home - (Details) - CNY (¥) ¥ in Millions | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Nov. 27, 2015 | |
Class of Stock [Line Items] | |||||
Investment loss recorded | ¥ 17.7 | ¥ 79.6 | ¥ 663.2 | ||
Ownership percentage acquired | 68.80% | 68.80% | 68.80% | ||
Percentage of preferred shares holding after deconsolidation | 3.30% | ||||
Minimum [Member] | |||||
Class of Stock [Line Items] | |||||
Percentage of preferred shares holding after deconsolidation | 3.30% | ||||
Maximum [Member] | |||||
Class of Stock [Line Items] | |||||
Percentage of preferred shares holding after deconsolidation | 5.00% | ||||
Fifty Eight Home Ordinary Shares [Member] | |||||
Class of Stock [Line Items] | |||||
Ownership percentage acquired | 87.90% | 87.90% | 87.90% | ||
58 Daojia Inc. [Member] | |||||
Class of Stock [Line Items] | |||||
Percentage of preferred shares holding after deconsolidation | 3.30% | ||||
Series A Preferred Stock [Member] | 58 Daojia Inc. [Member] | |||||
Class of Stock [Line Items] | |||||
Ownership percentage acquired | 5.00% | 5.00% |
Disposal of Guazi (subsequent_2
Disposal of Guazi (subsequently renamed to Che Hao Duo) and conversion of a convertible note issued by Guazi (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands, shares in Millions | 1 Months Ended | 12 Months Ended | |||||
Mar. 31, 2016CNY (¥)$ / sharesshares | Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2015CNY (¥)shares | Dec. 31, 2015USD ($)shares | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Ownership percentage interest in Guazi transferred by the company to Guazi Purchaser in return for cash | 54.40% | ||||||
Cash proceeds received by the company for return of ownership percentage in Guazi to the Guazi Purchaser | ¥ 324,700 | $ 50,000 | |||||
Investment In Convertible Note Converted To Shares | shares | 62.5 | ||||||
Investment In Convertible Note Converted To Shares Conversion Price | $ / shares | $ 0.80 | ||||||
Investment Income, Net | ¥ 6,135,089 | $ 879,431 | ¥ 38,634 | ¥ 342,241 | |||
Equity Method Investment, Ownership Percentage | 68.80% | 68.80% | 68.80% | ||||
Investment in Series A Guazi Shares [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 45.60% | ||||||
Number of Series A convertible and redeemable preference shares of Guazi the Series A Guazi Shares at the par value of the shares purchased by the Company | shares | 38.8 | 38.8 | |||||
Sale of Stock, Consideration Received Per Transaction | ¥ 4,978,200 | $ 713,600 | |||||
Unrealized gains on securities | 1,381,100 | ||||||
Investment Income, Net | ¥ 4,760,500 | ||||||
Guazi Series B1 Shares [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Cost Method Investments, Fair Value Disclosure | $ 239,500 | ||||||
Investment Income, Net | ¥ 300,100 | ||||||
Guazi [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Amount of the assets and liabilities, including allocated goodwill, attributable to Guazi derecognized | ¥ 180,400 | ||||||
Che Hao Duo [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Equity Method Investment, Ownership Percentage | 8.00% | 8.00% | 19.10% |
Preference share _warrant fin_2
Preference share /warrant financing of Zhuan Zhuan (Details) ¥ in Millions, $ in Millions | Sep. 09, 2019USD ($) | Apr. 28, 2017USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) |
Simple interest (as a percent) | 8.00% | ||||
Equity Method Investment, Ownership Percentage | 68.80% | 68.80% | |||
Zhuan Zhuan Series A | |||||
Proceeds from issuance of preference stock | $ 200 | ||||
Zhuan Zhuan Series B | |||||
Proceeds from issuance of preference stock | $ 150 | ||||
Zhuan Zhuan Series B Warrants | |||||
Proceeds from issuance of preference stock | 150 | ||||
Zhuan Zhuan [Member] | |||||
Equity Method Investment, Ownership Percentage | 63.50% | 72.20% | |||
Zhuan Zhuan [Member] | |||||
Proceeds from issuance of preference stock | 300 | ||||
Cost, Maintenance | ¥ | ¥ 317.9 | ¥ 181.1 | ¥ 42 | ||
Tencent [Member] | |||||
Proceeds from issuance of preference stock | $ 170 |
Disposal of finance business (D
Disposal of finance business (Details) ¥ in Thousands, $ in Millions | 12 Months Ended | |||
Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Disposal of finance business | ¥ 6,410 | ¥ 72,777 | ||
Capital Commitment | ¥ 150,000 | |||
Loans Receivable, Net | 132,000 | |||
Capital Contribution Receivable | 286,000 | |||
Disposal Group, Including Discontinued Operation, Consideration | 57,000 | $ 57 | ||
Disposal Group, Including Discontinued Operation, Accrued Liabilities | 5,800 | 3,200 | ||
Profit participation right asset and other consideration receivables for disposal of finance business | 151,000 | |||
Finance Business Unit | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Disposal Group, Including Discontinued Operation, Consideration Receivable, Noncurrent | 171,000 | |||
Disposal Group, Including Discontinued Operation, Automobile Financing Receivables, Noncurrent | 132,000 | |||
Goodwill de- recognized | 39,000 | |||
Additional paid-in capital [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Disposal of finance business | ¥ 0 | ¥ 87,781 | ||
Additional paid-in capital [Member] | Finance Business Unit | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Disposal of finance business | ¥ 87,800 |
Disposal of finance business -
Disposal of finance business - Consideration and other receivables (Details) - Finance Business Unit - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current: | ||
- Consideration receivable for original capital contribution to the Finance Business | ¥ 171,000 | ¥ 57,000 |
- Automobile Financing Receivables | 132,000 | 0 |
- Guarantee fees receivable | 15,638 | 0 |
- Others | 14,924 | 25,725 |
Total | 333,562 | 82,725 |
Non-current: | ||
- Consideration receivable for original capital contribution to the Finance Business | 0 | 171,000 |
- Automobile Financing Receivables | 0 | 132,000 |
- Profit participation right | 150,908 | 150,908 |
- Others | 40,147 | 37,748 |
Total | ¥ 191,055 | ¥ 491,656 |
Accounts receivable, net (Detai
Accounts receivable, net (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019USD ($) | |
Accounts Receivable, net | ||||
Accounts receivable | ¥ 1,305,016 | ¥ 983,063 | ||
Allowance for doubtful accounts | (95,765) | (65,620) | ||
Accounts receivable, net | 1,209,251 | 917,443 | $ 173,339 | |
Movement of Allowance for Doubtful Accounts | ||||
Balance at beginning of year | 65,620 | 62,736 | ¥ 51,719 | |
Provisions | 32,050 | 8,380 | 16,450 | |
Reversals | (979) | (3,447) | (4,896) | |
Write-offs | (926) | (2,049) | (537) | |
Balance at end of year | ¥ 95,765 | ¥ 65,620 | ¥ 62,736 |
Prepayments and other current_3
Prepayments and other current assets (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2018CNY (¥) |
Consideration receivable for disposal of Guazi preference shares | ¥ 497,837 | ||
Prepaid advertising fees | 445,415 | ¥ 227,057 | |
Other consideration receivables for disposal of Finance Business(due from a related party (Note 9)) | 333,562 | 82,725 | |
Distributor commission | 192,248 | ||
Receivables on behalf of third-parties | 295,480 | 51,712 | |
Input VAT | 139,187 | 74,193 | |
Prepayment For Physical Goods | 101,352 | 11,172 | |
Rental, advertising and other deposits | 97,765 | 100,214 | |
Employee advance | 91,671 | 100,063 | |
Prepayment for (film) investment | 56,069 | 75,029 | |
Prepaid rental fees | 17,236 | 19,365 | |
Prepayment for service fees | 16,040 | 28,052 | |
Interest receivable | 9,581 | 38,296 | |
Others | 33,477 | 5,525 | |
Total | 2,326,920 | $ 333,551 | 813,403 |
Tencent [Member] | Zhuan Zhuan [Member] | |||
Unamortized business resources | ¥ 348,500 | ¥ 122,200 |
Property and equipment, net (De
Property and equipment, net (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019USD ($) | |
Property, Plant and Equipment [Line Items] | ||||
Total | ¥ 2,074,260 | ¥ 1,975,277 | ||
Less: Accumulated depreciation | (768,467) | (645,525) | ||
Net book value | 1,305,793 | 1,329,752 | $ 187,178 | |
Depreciation expenses | 176,800 | 190,600 | ¥ 211,200 | |
Buildings | ||||
Property, Plant and Equipment [Line Items] | ||||
Total | 1,172,239 | 1,172,239 | ||
Computers and equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Total | 659,382 | 571,654 | ||
Leasehold improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Total | 151,760 | 155,801 | ||
Software | ||||
Property, Plant and Equipment [Line Items] | ||||
Total | 63,460 | 49,146 | ||
Furniture and fixtures | ||||
Property, Plant and Equipment [Line Items] | ||||
Total | 21,369 | 21,054 | ||
Motor vehicles | ||||
Property, Plant and Equipment [Line Items] | ||||
Total | ¥ 6,050 | ¥ 5,383 |
Intangible assets, net - Summar
Intangible assets, net - Summary of Intangible Assets (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2018CNY (¥) |
Finite-Lived Intangible Assets [Line Items] | |||
Cost | ¥ 1,905,864 | ¥ 1,897,523 | |
Accumulated amortization, Total | (1,019,299) | (797,578) | |
Net book value | 886,565 | $ 127,084 | 1,099,945 |
Domain names and trademarks [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 1,651,421 | 1,643,080 | |
Accumulated amortization, Total | (778,424) | (605,014) | |
Technology [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 215,064 | 215,064 | |
Accumulated amortization, Total | (212,690) | (165,982) | |
Customer relationship [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 26,586 | 26,586 | |
Accumulated amortization, Total | (26,586) | (26,263) | |
Licenses [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 12,793 | 12,793 | |
Accumulated amortization, Total | ¥ (1,599) | ¥ (319) |
Intangible assets, net - Summ_2
Intangible assets, net - Summary of Estimated Future Amortization Expense of Intangible Assets (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
For the year ended December 31, | |||
2020 | ¥ 177,111 | ||
2021 | 174,736 | ||
2022 | 174,736 | ||
2023 | 174,736 | ||
2024 | 173,660 | ||
Thereafter | 11,586 | ||
Total | 886,565 | ||
Amortization expense | ¥ 222,800 | ¥ 222,500 | ¥ 224,400 |
Goodwill - Summary of changes i
Goodwill - Summary of changes in the carrying amount of goodwill (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Goodwill | ||||
Beginning Balance | ¥ 15,874,220 | ¥ 15,864,655 | ||
Addition | 9,565 | |||
Ending Balance | 15,874,220 | $ 2,275,482 | 15,874,220 | ¥ 15,864,655 |
Goodwill, Impairment Loss | ¥ 0 | ¥ 0 | ¥ 0 |
Long-term investments (Summary
Long-term investments (Summary of long-term investments) (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||||||||
Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | ||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Cost method investments | ¥ 3,872,573 | ¥ 2,150,260 | |||||||||
Equity method investments | 1,282,033 | 122,396 | |||||||||
Fair value method investments with amount | 931,905 | 1,093,250 | |||||||||
Total long-term investments | 6,086,511 | 3,365,906 | $ 872,468 | ||||||||
Income (Loss) from Equity Method Investments | (9,423) | $ (1,351) | ¥ (91,497) | ¥ (687,400) | |||||||
Equity method investments | ¥ 11,800 | ||||||||||
Ownership percentage acquired | 68.80% | 68.80% | 68.80% | ||||||||
Investment In 5I5 J [Member] | |||||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Fair value method investments with amount | [1] | ¥ 840,450 | ¥ 910,650 | ||||||||
Noncontrolling Interest, Ownership Percentage by Parent | 8.30% | ||||||||||
Equity investments with readily determinable fair values | ¥ 1,100,000 | ||||||||||
Unrealized Gain (Loss) on Investments | 70,200 | 157,400 | |||||||||
Preferred shares | |||||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Cash consideration | 80,000 | ||||||||||
Ordinary shares | |||||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Value of business resources | 94,900 | ||||||||||
Others [Member] | |||||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Fair value method investments with amount | 91,455 | 182,600 | |||||||||
Others [Member] | Investment In 5I5 J [Member] | |||||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Equity Securities Without Readily Determinable Fair Value Amount Other | 199,900 | ||||||||||
Investment in investee F [Member] | |||||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Equity method investments | [2] | 704,806 | 0 | ||||||||
Payment of cash consideration | 700,000 | ||||||||||
Income (Loss) from Equity Method Investments | 4,800 | ||||||||||
Investment In Investee G [Member] | |||||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Equity method investments | 324,383 | [3] | 75,941 | [3] | 99,000 | ||||||
Payment of cash consideration | 198,000 | ||||||||||
Income (Loss) from Equity Method Investments | 50,400 | 900 | 24,000 | ||||||||
Investment in investee H [Member] | |||||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Equity method investments | [4] | 120,025 | 0 | ||||||||
Investment In Sweetome Investee [Member] | |||||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Total cash consideration | 160,000 | ||||||||||
Value of business resources | ¥ 94,900 | ||||||||||
Term for exchange of shares | 4 years | 4 years | |||||||||
Ai Fang | |||||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Payment of cash consideration | ¥ 153,000 | ||||||||||
Income (Loss) from Equity Method Investments | ¥ 33,000 | ||||||||||
Ownership percentage acquired | 30.00% | 30.00% | |||||||||
Investment in Series A Guazi Shares [Member] | |||||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Cost method investments | [5] | ¥ 1,897,877 | 583,284 | ||||||||
Realized gains on securities | 4,760,500 | ||||||||||
Unrealized gains on securities | 1,381,100 | ||||||||||
Investment in Investee Tujia [Member] | |||||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Cost method investments | [6] | 278,071 | 273,568 | ||||||||
Investment in Investee Tujia [Member] | Preferred shares | Cost-method Investments [Member] | |||||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Cost method investments | ¥ 276,500 | $ 39,900 | |||||||||
Investment In Investee A [Member] | |||||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Cost method investments | 303,771 | [7] | 298,850 | [7] | 284,500 | $ 43,500 | |||||
Investment In Investee B [Member] | |||||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Cost method investments | [8] | 300,000 | 300,000 | ||||||||
Investment In Investee C [Member] | |||||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Cost method investments | 235,253 | 231,442 | |||||||||
Investment In Investee D [Member] | |||||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Cost method investments | 139,524 | 137,264 | |||||||||
Investment In Investee E [Member] | |||||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Cost method investments | 150,000 | 0 | |||||||||
Investment in Sweetome [Member] | |||||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Cost method investments | [9] | 82,026 | 10,057 | ||||||||
Equity method investments | [9] | 102,954 | 0 | ||||||||
Investment in Sweetome [Member] | Preferred shares | |||||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Cash consideration | 2,000 | ||||||||||
Investment in Sweetome [Member] | Ordinary shares | |||||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Cash consideration | 8,000 | ||||||||||
Investment in 58 Home Series A Preference Shares [Member] | |||||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Cost method investments | [10] | 0 | 18,525 | ||||||||
Equity method investments | 0 | ||||||||||
Variable Interest Entity, Initial Consolidation, Gain (Loss) | 79,600 | ¥ 663,200 | |||||||||
Others [Member] | |||||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Cost method investments | [11] | 486,051 | 297,270 | ||||||||
Equity method investments | 29,865 | 46,455 | |||||||||
Investment in 58 Home Ordinary Shares [Member] | |||||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||||
Equity method investments | ¥ 0 | ||||||||||
Variable Interest Entity, Initial Consolidation, Gain (Loss) | ¥ 17,700 | ||||||||||
[1] | In 2018, the Group acquired a minority stake of approximately 8.3% in 5I5J Holding Group Co., Ltd., or 5I5J, a major secondary and rental brokerage company listed on the Shanghai Stock Exchange in mainland China, for a consideration of approximately RMB 1.1 billion in cash. The Group classified this investment as equity investments with readily determinable fair values under long-term investments and reported the investment at fair value using a market approach based on the investee’s quoted market price. As of December 31, 2018 and 2019, the fair value of the investment held by the Group was RMB 910.7 million and RMB 840.5 million, respectively, and the Group recognized an unrealized loss in fair value of RMB 157.4 million and RMB 70.2 million, respectively, for the year ended December 31, 2018 and 2019 in investment income, net in the Group’s consolidated statements of comprehensive income. | ||||||||||
[2] | In 2019, the Group invested in common shares of Investee F, for cash consideration of RMB 700.0 million. The investment is accounted for under equity method as the Group can exert significant influence over the investee. For the year ended December 31, 2019, the Group recorded RMB 4.8 million gain in share of results of equity investees in the consolidated statements of comprehensive income. | ||||||||||
[3] | In 2017 and 2019, the Group invested in common shares of Investee G for cash consideration of RMB 99.0 million and RMB 198.0 million, respectively. Investee G is mainly engaged in the consumer finance business. The investment is accounted for under equity method as the Group can exert significant influence over the investee. The Group recorded RMB 24.0 million loss, RMB 0.9 million gain and RMB 50.4 million gain in share of results of equity investees in the consolidated statements of comprehensive income, for the year ended December 31, 2017, 2018 and 2019, respectively. | ||||||||||
[4] | In 2019, the Group invested in common shares of Shanghai Gengying Information Technology Co., Ltd. ("Ai Fang") for cash consideration of RMB 153.0 million and held 30% of the equity interests in Ai Fang as of December 31, 2019. Ai Fang is mainly engaged in real estate related business. The investment is accounted for under equity method as the Group can exert significant influence over the investee. For the year ended December 31, 2019, the Group recorded RMB 33.0 million loss in share of results of equity investees in the consolidated statements of comprehensive income. | ||||||||||
[5] | The investment in Guazi consists of investments in Series A Guazi Shares and Series B1 Guazi Shares, which are measured under measurement alternative, because the shares invested by the Group were not considered as in-substance common stock and the shares did not have readily determinable fair value or quoted market price. | ||||||||||
[6] | The Group invested in ordinary shares and series D preference shares of Tujia.com International (“Tujia”) in 2016. The investment in Tujia ordinary shares and series D preference shares was measured at fair value of RMB 276.5 million (US $39.9 million) on the date of investment and was subsequently accounted for under cost method, and measurement alternative after the Group adopted ASU 2016-01 since January 1, 2018 because the preference shares were not considered as in-substance common stock, the ordinary shares could not exert significant influence over the investee, and neither the preference shares nor the ordinary shares have readily determinable fair value or quoted market price. For the year ended December 31, 2018 and 2019, the Group did not identify any observable price change in this investment, which refer to the price changes in orderly transactions for an identical or similar investment in the investee. | ||||||||||
[7] | In 2017, the Group acquired shares of investee A for cash consideration of RMB 284.5 million (US $43.5 million). Investee A is mainly engaged in the business of property management. The investment was accounted for under cost method, and measurement alternative after the Group adopted ASU 2016-01 since January 1, 2018 as the shares invested by the Group were not considered as in-substance common stock and the shares did not have readily determinable fair value. For the year ended December 31, 2018 and 2019, the Group did not identify any observable price change in this investment, which refer to the price changes in orderly transactions for an identical or similar investment in the investee. | ||||||||||
[8] | In 2018, the Group invested RMB 300.0 million in a third-party company or Investee B. The Group’s shares invested in Investee B were not considered as in-substance common stock, and did not have readily determinable fair value or quoted market price, therefore, the investment was accounted for under measurement alternative according to ASC 323 and ASU 2016-01. For the year ended December 31, 2018 and 2019, the Group did not identify any observable price change in this investment, which refer to the price changes in orderly transactions for an identical or similar investment in the investee. | ||||||||||
[9] | In 2017, the Group acquired preference shares and ordinary shares of Sweetome for cash consideration of RMB 2.0 million and RMB 8.0 million, respectively. Sweetome is mainly engaged in providing short-term leasing services and homestay hotels services. The investment in ordinary shares of Sweetome was accounted for under cost method, and measurement alternative after the Group adopted ASU 2016-01 since January 1, 2018 because the ordinary shares could not exert significant influence over the investee, and the ordinary shares did not have readily determinable fair value or quoted market price. The investment in preference shares of Sweetome was accounted for under cost method, and measurement alternative after the Group adopted ASU 2016-01 since January 1, 2018 because the preference shares were not considered as in-substance common stock and did not have readily determinable fair value or quoted market price. | ||||||||||
[10] | As a result of the deconsolidation of 58 Home on November 27, 2015, the Group continues to retain equity interests in 58 Home through its ownership of certain 58 Home Ordinary Shares and 58 Home Series A Preference Shares. The Group’s investment in 58 Home Ordinary Shares was accounted for as an equity method investment in accordance with ASC 323. The Group’s investment in 58 Home Series A Preference Shares was accounted for under the cost method, and measurement alternative after the Group adopted ASU 2016-01 from January 1, 2018 as 58 Home Series A Preference Shares were not considered as in-substance common stock and the shares did not have readily determinable fair value or quoted market price. Since January 2018, the carrying amount of the Group’s investment in 58 Home Ordinary Shares has been reduced to zero due to the accumulated losses picked up from 58 Home. The Group has continued to record its share of losses in 58 Home in its consolidated statements of comprehensive income to the extent of its investment in 58 Home Series A Preference Shares. For the year ended December 31, 2017, 2018 and 2019, the Group recorded investment losses of RMB 663.2 million, RMB 79.6 million and RMB 17.7 million, respectively, in share of results of equity investees in the consolidated statements of comprehensive income relating to the investments in 58 Home. In 2019, the carrying amount of the Group’s investment in 58 Home Series A Preference Shares was reduced to zero . | ||||||||||
[11] | As of December 31, 2019, the increase in “Others” under measurement alternative mainly included newly acquired shares of other companies for an aggregate cash consideration of RMB 199.9 million which were elected to be accounted for under measurement alternative because such investments were 1) not considered as in-substance common stock and did not have readily determinable fair values or quoted market price; or 2) the investments did not have readily determinable fair values or quoted market price and the Group did not have the ability to exercise significant influences over the investees. During the year ended December 31, 2019, a measurement alternative investment amounted to RMB 11.8 million was fully impaired (see Note 2 (m)). |
Long-term investments (Summar_2
Long-term investments (Summary of financial information for equity method investments) (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating result data: | |||
Total revenues | ¥ 2,355,714 | ¥ 1,178,231 | ¥ 519,121 |
Gross profit | 1,489,798 | 628,160 | 339,358 |
Gain/(loss) from operations | (1,120,644) | (1,469,574) | (836,811) |
Net income/(loss) | (983,780) | (1,478,234) | ¥ (840,385) |
Balance sheets data: | |||
Current assets | 3,627,152 | 910,462 | |
Non-current assets | 11,694,180 | 4,345,855 | |
Current liabilities | 11,648,260 | 4,140,812 | |
Non-current liabilities | 658,950 | 193,534 | |
Noncontrolling interests and mezzanine equity | ¥ 3,647,147 | ¥ 2,755,258 |
Investment in convertible not_2
Investment in convertible notes - Narrative (Details ) $ / shares in Units, ¥ in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | |
May 31, 2019USD ($)$ / shares | May 31, 2019CNY (¥) | Dec. 31, 2019CNY (¥) | |
Schedule of Investments [Line Items] | |||
Debt term | 5 years | ||
Notes interest rate | 8.00% | ||
Convertible Notes | |||
Schedule of Investments [Line Items] | |||
Payments acquire in investments | $ 100 | ¥ 689.3 | |
Notes interest rate | 3.75% | ||
Class A Ordinary Shares | |||
Schedule of Investments [Line Items] | |||
Conversion period of notes into shares | 180 days | ||
Class A Ordinary Shares | Convertible Notes | |||
Schedule of Investments [Line Items] | |||
Conversion price | $ / shares | $ 1.03 | ||
Fair value of gain loss | ¥ | ¥ 28.7 |
Long-term prepayments and oth_3
Long-term prepayments and other non-current assets (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2018CNY (¥) |
Long-term prepayments and other non-current assets | |||
Profit participation right, consideration and other receivables from 58 Finance (due from a related party (Note 8)) | ¥ 191,055 | ¥ 491,656 | |
Long-term prepaid advertising fee | 153,287 | 0 | |
Deferred tax assets, net | 85,023 | 42,953 | |
Rental deposits | 19,744 | 17,537 | |
Prepayment for purchase of property and equipment | 6,341 | 10,764 | |
Prepayment for investments | 0 | 75,000 | |
Others | 14,142 | 1,568 | |
Total | ¥ 469,592 | $ 67,314 | ¥ 639,478 |
Short-term loans (Details)
Short-term loans (Details) ¥ in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | ||||
Apr. 30, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2017CNY (¥) | |
Short-term Debt [Line Items] | ||||||
Debt term | 5 years | |||||
Debt Instrument, Collateral Amount | $ | $ 107.5 | |||||
Short-term loans | ¥ 0 | ¥ 75 | ||||
China Merchants Bank Co., Ltd [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Debt term | 2 years | |||||
Loans Payable to Bank, Noncurrent | ¥ 792 | |||||
Debt Instrument, Collateral | The CMB loan was secured by a two-year term deposit amounted to RMB792.0 million, which represents the loan-to-value ratio of no more than 94% and was classified as non-current restricted cash in the Group’s consolidated balance sheets. The Group would need to provide more term deposits or equivalent amount of cash to CMB Bank as a security when the loan-to-value ratio exceeds 98% due to appreciation of U.S. dollar against RMB. The CMB loan was fully repaid in April 2019. | |||||
Short-term loans | ¥ 737.8 | $ 107.5 | ||||
Shanghai Pudong Development Bank Co Ltd [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Debt term | 3 years | |||||
Debt Instrument, Collateral Amount | ¥ 150 | |||||
Loans Payable to Bank, Current | ¥ 75 | ¥ 75 |
Accounts payable (Details)
Accounts payable (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2018CNY (¥) |
Accounts payable | |||
Payable for advertisement fees | ¥ 791,705 | ¥ 701,629 | |
Rebate payable to sales agents | 137,982 | 142,663 | |
Payable related to purchases of property and equipment | 40,319 | 4,434 | |
Others | 72,691 | 38,832 | |
Total | ¥ 1,042,697 | $ 149,465 | ¥ 887,558 |
Accrued expenses and other cu_3
Accrued expenses and other current liabilities (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2018CNY (¥) |
Accrued expenses and other current liabilities | |||
Deposits from sales agents and others | ¥ 302,727 | ¥ 202,265 | |
Accrued office expenses | 205,538 | 207,146 | |
Other payable to platform users and merchants | 118,840 | 43,413 | |
Acquisition consideration payable | 107,359 | 105,620 | |
Payable to employees related to share-based awards | 92,290 | 43,558 | |
Accrued professional fees | 88,198 | 78,315 | |
Accrued telecom and bandwidth fees | 31,841 | 40,078 | |
Government subsidy | 21,716 | 9,146 | |
Cash received on behalf of a related party | 0 | 82,358 | |
Others | 84,498 | 66,469 | |
Total | ¥ 1,053,007 | $ 150,943 | ¥ 878,368 |
Fair value measurements (Detail
Fair value measurements (Details) ¥ in Thousands, shares in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2016shares | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2018CNY (¥)shares | Dec. 31, 2019USD ($) | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Investments, Fair Value Disclosure | ¥ 931,905 | ¥ 1,093,250 | ||
Short-term Investments | 8,414,348 | 4,587,610 | $ 1,206,151 | |
Long-term Investments | 6,086,511 | 3,365,906 | $ 872,468 | |
Investment in convertible notes | shares | 62,500 | |||
Equity Investments With Readily Determinable Fair Value [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term Investments | 75,800 | 157,400 | ||
Fair Value, Inputs, Level 1 [Member] | Equity Investments With Readily Determinable Fair Value [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Investments, Fair Value Disclosure | 841,754 | 910,650 | ||
Fair Value, Inputs, Level 2 [Member] | Variable-rate financial instruments [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Short-term Investments | ¥ 8,414,348 | ¥ 4,587,610 | ||
Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Investment in convertible notes | shares | 669,715 | 0 | ||
Fair value gain | ¥ 18,100 | |||
Fair value loss | ¥ 136,700 | |||
Fair Value, Inputs, Level 3 [Member] | NonMarketable Equity Security Held By An Investment Company Within The Group [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Investments, Fair Value Disclosure | 90,151 | 182,600 | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash equivalents | 2,302,860 | 1,069,646 | ||
Term deposits | ¥ 70,000 | ¥ 0 |
Income taxes (Narrative) (Detai
Income taxes (Narrative) (Details) ¥ in Thousands, $ in Thousands, $ in Millions | 12 Months Ended | ||||||
Dec. 31, 2019HKD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2001 | Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2015CNY (¥) | |
Statutory income tax rates: | 25.00% | 25.00% | 25.00% | ||||
Effective Income Tax Rate Reconciliation, Percent | 9.00% | 12.30% | 9.60% | ||||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent | 25.00% | 25.00% | |||||
Percentage Of Eligibility For Preferential Tax Rate | 15.00% | ||||||
Percentage Of Decrease In Taxable Income Under Enterprise Income Tax Law | 50.00% | ||||||
Percentage Of Preferential Tax Rate | 12.50% | ||||||
Percentage Deductible On Research and Development Expenses | 150.00% | ||||||
Percentage Of Withholding Tax Rate On Dividends | 10.00% | ||||||
Description Of Withholding Tax Rate | dividends paid by an FIE in China to its immediate holding company in Hong Kong will be subject to withholding tax at a rate of no more than 5% (if the foreign investor owns directly at least 25% of the shares of the FIE). | ||||||
Deferred Tax Liabilities, Net, Noncurrent | ¥ 283,112 | ¥ 389,719 | $ 55,864 | ||||
Operating Loss Carryforwards | 2,300,000 | ||||||
Description Of Operating Loss Carry forwards Expiration Date | which will expire during the period between January 1, 2021 and December 31, 2028. | ||||||
Deferred Tax Assets, Net of Valuation Allowance | 42,953 | 85,023 | |||||
Deferred Tax Assets, Valuation Allowance | ¥ 588,946 | ¥ 343,590 | 937,037 | ¥ 458,433 | |||
Undistributed Earnings of Foreign Subsidiaries | $ | 8,700,000 | ||||||
Undistributed Earnings of Domestic Subsidiaries | $ | $ 865,900 | ||||||
State Administration of Taxation, China [Member] | |||||||
Description Of Deductible Expenses | Pursuant to the “Circular on Enterprise Income Tax Policy concerning Deductions for Equipment and Appliances” (Cai Shui [2018] 54) issued by the State Administration of Taxation, during the period from January 1, 2018 to December 31, 2020, the cost of newly purchased equipment with the original cost less than RMB5 million can be fully deducted against taxable profit in the next month after the asset is put into use, instead of being depreciated annually for tax filing (the “Fixed Assets One-time Expense”). | ||||||
Anjuke and Ganji [Member] | |||||||
Percentage Deductible On Research and Development Expenses | 175.00% | ||||||
Deferred Tax Liabilities, Net, Noncurrent | ¥ 268,200 | ¥ 214,400 | |||||
Two Zero One Seven To Two Zero One Nine [Member] | |||||||
Percentage Of Preferential Tax Rate | 12.50% | ||||||
HONG KONG | |||||||
Statutory income tax rates: | 16.50% | ||||||
Profit earned by subsidiary | $ | $ 2 | ||||||
Tax rate difference from statutory rate in other jurisdictions | 8.25% | ||||||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent | 16.50% |
Income taxes (Schedule of the P
Income taxes (Schedule of the Provision for Income Taxes) (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Income taxes | ||||
Current tax expenses | ¥ (784,274) | ¥ (370,149) | ¥ (212,528) | |
Deferred tax benefit | (50,060) | 70,444 | 65,839 | |
Income tax benefit/(expenses) | ¥ (834,334) | $ (119,597) | ¥ (299,705) | ¥ (146,689) |
Income taxes (Schedule of the E
Income taxes (Schedule of the Effective Tax Rate) (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income taxes | |||
Statutory income tax rates: | 25.00% | 25.00% | 25.00% |
Change in valuation allowance | 3.80% | 10.10% | (7.50%) |
Permanent book-tax differences | (12.40%) | (7.60%) | 9.40% |
Effect of preferential tax treatment and tax holiday | (8.40%) | (13.60%) | (13.70%) |
Others | 1.00% | (1.60%) | (3.60%) |
Effective tax rate | 9.00% | 12.30% | 9.60% |
Income taxes (Summary Of Per Sh
Income taxes (Summary Of Per Share Effect Of The Tax Holidays) (Details) - ¥ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income taxes | |||
Net earnings/(loss) per ordinary share attributable to ordinary shareholders effect - basic | ¥ 0.93 | ¥ 1.01 | ¥ 0.45 |
Net earnings/(loss) per ordinary share attributable to ordinary shareholders effect - diluted | ¥ 0.92 | ¥ 0.99 | ¥ 0.45 |
Income taxes (Schedule of Defer
Income taxes (Schedule of Deferred Tax Assets and Liabilities) (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2015 |
Deferred tax assets | ||||
Provision for doubtful receivables | ¥ 19,459 | ¥ 11,622 | ||
Net operating loss carry forwards | 499,091 | 290,164 | ||
Advertising expenses in excess of deduction limit | 466,090 | 306,510 | ||
Others | 37,420 | 23,603 | ||
Deferred Tax Assets, Gross | 1,022,060 | 631,899 | ||
Less: Valuation allowance | (937,037) | (588,946) | ¥ (343,590) | ¥ (458,433) |
Total deferred tax assets, net | 85,023 | 42,953 | ||
Deferred tax liabilities | ||||
Acquired intangible assets | 214,388 | 268,171 | ||
Fair value change | 152,223 | 0 | ||
Fixed Assets One-time Expense | 23,108 | 14,941 | ||
Total deferred tax liabilities | ¥ 389,719 | ¥ 283,112 |
Income taxes (Schedule of Movem
Income taxes (Schedule of Movement of Valuation Allowance) (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income taxes | |||
Balance at beginning of the period | ¥ 588,946 | ¥ 343,590 | |
Provision | 349,781 | 308,811 | ¥ 81,904 |
Current period reversal | (1,690) | (63,455) | (196,747) |
Balance at the end of the period | ¥ 937,037 | ¥ 588,946 | ¥ 343,590 |
Ordinary shares (Details)
Ordinary shares (Details) $ / shares in Units, ¥ in Millions, $ in Millions | Dec. 11, 2015USD ($)shares | Dec. 11, 2015CNY (¥)shares | Aug. 06, 2015USD ($)shares | Aug. 06, 2015CNY (¥)shares | Dec. 31, 2019$ / sharesshares | Dec. 31, 2018shares | Dec. 31, 2017shares | Dec. 31, 2016shares |
Class of Stock [Line Items] | ||||||||
Ordinary share, shares authorized | 5,000,000,000 | 5,000,000,000 | ||||||
Ordinary shares, issued | 299,277,413 | 296,444,579 | ||||||
Ordinary share, shares outstanding | 299,277,413 | 296,444,579 | ||||||
Ordinary shares | ||||||||
Class of Stock [Line Items] | ||||||||
Ordinary share, shares outstanding | 299,277,413 | 296,444,579 | 293,965,131 | 289,670,997 | ||||
Original convertible note issued to Tencent [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of Class A ordinary shares issued as early repayment of portion of outstanding debt | 4,300,000 | 4,300,000 | ||||||
Portion of outstanding debt principal repaid through issuance of Class A Ordinary shares | $ 125 | ¥ 806 | ||||||
Portion of accrued interest repaid with issuance of Class A ordinary shares | $ 7.3 | ¥ 47 | ||||||
Falcon View Technology ("Ganji") [Member] | Ordinary shares | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued for acquisition | 46,500,000 | 46,500,000 | ||||||
Total cash consideration given | ¥ | ¥ 1,700 | |||||||
Total ordinary shares issued as commitment for acquisition | 46,500,000 | 46,500,000 | ||||||
Committed cash for acquisition | $ 406.7 | ¥ 2,500 | ||||||
Class A Ordinary Shares | ||||||||
Class of Stock [Line Items] | ||||||||
Ordinary share, shares authorized | 4,800,000,000 | 4,800,000,000 | ||||||
Ordinary share, par value per share | $ / shares | $ 0.00001 | |||||||
Ordinary shares, issued | 254,045,293 | 250,858,415 | ||||||
Ordinary share, shares outstanding | 254,045,293 | 250,858,415 | ||||||
Class A Ordinary Shares | Falcon View Technology ("Ganji") [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Total cash consideration given | $ | $ 272.4 | |||||||
Common Class B | ||||||||
Class of Stock [Line Items] | ||||||||
Ordinary share, shares authorized | 200,000,000 | 200,000,000 | ||||||
Ordinary shares, issued | 45,232,120 | 45,586,164 | ||||||
Ordinary share, shares outstanding | 45,232,120 | 45,586,164 |
Share-based compensation (Narra
Share-based compensation (Narrative) (Details) ¥ in Millions | 1 Months Ended | 12 Months Ended | 36 Months Ended | |||||
Sep. 30, 2017 | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2018CNY (¥)shares | Dec. 31, 2018$ / shares | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2019CNY (¥)shares | Sep. 26, 2013shares | Jan. 31, 2013shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock incentive plan, description | In March 2010, the Group authorized an employment-related stock incentive plan (the “2010 Plan”). The 2010 Plan will terminate automatically 10 years after its adoption, unless terminated earlier at the Group’s shareholders’ approval. | |||||||
Options vesting terms | The options granted to the employees were to be vested over four years, one fourth (1/4) of which shall vest upon the first anniversary of the commencement date and the remaining shall vest every six months thereafter in equal installments. The options granted to management were to be vested over six years, 12.5% of which shall vest upon the second anniversary of the commencement date, 25% each shall vest on the third, fourth and fifth anniversary, respectively and the remaining 12.5% shall vest on the sixth anniversary. | |||||||
Number of shares available for grant | shares | 7,420,000 | 7,420,000 | ||||||
Weighted average grant date fair value of options granted | $ / shares | $ 37.86 | |||||||
Options granted | shares | 0 | 17,328 | 0 | 0 | ||||
Unrecognized compensation expenses | ¥ | ¥ 1,500 | ¥ 1,500 | ||||||
Unrecognized compensation expenses, recognition period | 3 years 1 month 2 days | |||||||
Restricted Stock Units (RSUs) [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period | 4 years | |||||||
2013 Plan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of ordinary shares available for issuance | shares | 31,133,369 | 31,133,369 | 2,800,000 | |||||
Stock incentive plan, description | The Group adopted a share incentive plan (the “2013 Plan”) on September 26, 2013. The 2013 Plan will terminate automatically 10 years after its adoption, unless terminated earlier at the Group’s shareholders’ approval. | |||||||
Options vesting terms | The options and RSUs granted under the 2013 Plan were generally to be vested over three to five years, the majority of which shall have one fourth (1/4) vested and exercisable upon the first anniversary of the date of grant and the remaining shall vest every six months thereafter in equal installments, or subject to vesting in four equal installments over a period of four years. | |||||||
Share incentive plan, annual increase of shares reserved, percentage | 1.50% | |||||||
2010 [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of ordinary shares available for issuance | shares | 20,173,225 | |||||||
Options vesting terms | The majority of options granted under 2010 plan were to be vested over three or four years, one fourth (1/4) of which shall vest and become exercisable upon the first anniversary of the date of grant and the remaining shall vest monthly thereafter in 24 or 36 equal monthly installments. | |||||||
Two Thousand seventeen Share Incentive Plan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based compensation expenses | ¥ | ¥ 33.9 | ¥ 32 | ¥ 15.7 | |||||
Unrecognized compensation expenses | ¥ | ¥ 168.5 | ¥ 168.5 | ||||||
Unrecognized compensation expenses, recognition period | 1 year 11 months 12 days | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date | Sep. 30, 2027 | |||||||
Zhuan Zhuan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based compensation expenses | ¥ | ¥ 544.7 | ¥ 462.9 | ¥ 350.6 |
Share-based compensation (Sched
Share-based compensation (Schedule of Share Option Activities) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | 36 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2019 | |
Number of Options | |||||
Outstanding, Beginning Balance | 2,535,584 | 2,944,890 | 5,447,800 | 5,447,800 | |
Granted | 0 | 17,328 | 0 | 0 | |
Forfeited and expired | (2) | (31,044) | (99,344) | ||
Exercised | (134,456) | (395,590) | (2,403,566) | ||
Outstanding, Ending Balance | 2,401,126 | 2,535,584 | 2,944,890 | 5,447,800 | 2,401,126 |
Exercisable as of December 31, 2019 | 2,197,930 | 2,197,930 | |||
Fully vested and expected to vest as of December 31, 2019 | 11,685,220 | 11,685,220 | |||
Weighted Average Exercise Price | |||||
Outstanding, Beginning Balance | $ 9.24 | $ 8.74 | $ 7.78 | $ 7.78 | |
Granted | 0.01 | ||||
Forfeited and expired | 2.50 | 7.03 | 15.36 | ||
Exercised | 4.51 | 5.28 | 6.29 | ||
Outstanding, Ending Balance | 9.50 | $ 9.24 | $ 8.74 | $ 7.78 | 9.50 |
Exercisable as of December 31, 2019 | $ 8.53 | $ 8.53 | |||
Weighted Average Remaining Contractual Life | |||||
Outstanding | 3 years 4 months 20 days | 4 years 5 months 1 day | 5 years 3 months 21 days | 6 years 4 months 20 days | |
Exercisable as of December 31, 2019 | 3 years 2 months 1 day | ||||
Aggregate Intrinsic Value | |||||
Exercised | $ 3,411 | $ 12,293 | $ 45,141 | ||
Outstanding | 48,927 | $ 45,620 | $ 79,662 | $ 43,531 | $ 48,927 |
Exercisable as of December 31, 2019 | $ 46,910 | $ 46,910 |
Share-based compensation (Summa
Share-based compensation (Summary of RSUs Activities) (Details) - $ / shares | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Fully vested and expected to vest as of December 31, 2019 | 11,685,220 | |||
Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Unvested, Beginning Balance | 7,704,894 | 7,436,036 | 7,050,138 | |
Granted | 4,894,310 | 3,166,236 | 4,381,182 | |
Forfeited | (545,618) | (813,520) | (2,104,716) | |
Vested | (2,698,378) | (2,083,858) | (1,890,568) | |
Unvested, Ending Balance | 9,355,208 | 7,704,894 | 7,436,036 | 7,050,138 |
Fully vested and expected to vest as of December 31, 2019 | 22,234,204 | |||
Weighted Average Remaining Contractual Life, Outstanding | 8 years 9 months 7 days | 8 years 7 months 6 days | 8 years 10 months 6 days | 9 years 1 month 2 days |
Weighted Average Grant Date Fair Value, Granted | $ 25.41 | $ 33.15 | $ 23.53 |
Earnings per share (Narrative)
Earnings per share (Narrative) (Details) - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings per share | |||
Options to purchase ordinary shares included in the calculation of diluted net income per share | 3,612,832 | 4,808,740 | 3,829,270 |
Earnings per share (Computation
Earnings per share (Computation of Basic and Diluted Net Loss Per Share) (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019CNY (¥)¥ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018CNY (¥)¥ / sharesshares | Dec. 31, 2017CNY (¥)¥ / sharesshares | |
Numerator: | ||||
Net income | ¥ 8,445,226 | $ 1,210,577 | ¥ 2,129,058 | ¥ 1,389,242 |
Net (income)/loss attributable to noncontrolling interests | ¥ | 8,033 | 139 | (4,667) | |
Deemed dividend to mezzanine classified noncontrolling interests | ¥ | (175,045) | (132,202) | (99,507) | |
Net income attributable to 58.com Inc. ordinary shareholders | ¥ 8,278,214 | $ 1,186,636 | ¥ 1,996,995 | ¥ 1,285,068 |
Denominator: | ||||
Weighted average number of ordinary shares used in computing net earnings/(loss) per share-basic | shares | 297,836,268 | 297,836,268 | 294,902,518 | 291,475,725 |
Weighted average number of ordinary shares used in computing net earnings/(loss) per share-diluted | shares | 301,449,100 | 301,449,100 | 299,711,258 | 295,304,995 |
Net earnings/(loss) per ordinary share attributable to ordinary shareholders - basic | (per share) | ¥ 27.79 | $ 3.98 | ¥ 6.77 | ¥ 4.41 |
Net earnings/(loss) per ordinary share attributable to ordinary shareholders - diluted | (per share) | 27.46 | 3.94 | 6.66 | 4.35 |
Net earnings/(loss) per ADS attributable to ordinary shareholders-basic | (per share) | 55.59 | 7.97 | 13.54 | 8.82 |
Net earnings/(loss) per ADS attributable to ordinary shareholders -diluted | (per share) | ¥ 54.92 | $ 7.87 | ¥ 13.33 | ¥ 8.70 |
Leases - Future lease payments
Leases - Future lease payments and rent expense (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Future lease payments under operating leases | |||
2020 | ¥ 152,716 | ||
2021 | 68,812 | ||
2022 | 22,974 | ||
2023 | 16,104 | ||
2024 | 12,060 | ||
Thereafter | 24,048 | ||
Total minimum lease payments | 296,714 | ||
Less: imputed interest | (20,850) | ||
Total lease liability balance | 275,864 | ||
Rental expense | ¥ 177,100 | ¥ 143,500 | |
Operating lease expense | 158,800 | ||
Short-term lease cost | ¥ 35,900 | ||
2019 | 187,581 | ||
2020 | 103,807 | ||
2021 | 66,499 | ||
2022 | 15,243 | ||
Beyond 2022 | ¥ 65,142 | ||
Minimum [Member] | |||
Leases | |||
Remaining lease term for operating lease | 2 months | ||
Maximum [Member] | |||
Leases | |||
Remaining lease term for operating lease | 8 years |
Leases - Additional Information
Leases - Additional Information (Details) ¥ in Thousands | 12 Months Ended |
Dec. 31, 2019CNY (¥) | |
Leases | |
Operating cash flows from operating leases | ¥ 152,156 |
Operating leases | ¥ 120,271 |
Weighted-average remaining lease term-operating leases | 3 years 6 months 3 days |
Weighted-average discount rate-operating | 4.75% |
Commitments and contingencies (
Commitments and contingencies (Details) ¥ in Millions | Dec. 31, 2019CNY (¥) |
advertising commitments | ¥ 73.8 |
Investment Commitments [Member] | |
investment commitments | ¥ 80 |
Related party transactions (Det
Related party transactions (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Related Party Transaction [Line Items] | ||
Amounts due from related parties, current | ¥ 490,101 | ¥ 258,554 |
Amounts due from related parties, non-current | 204,555 | 491,656 |
Amounts due to related parties, current | 98,808 | 56,612 |
Tencent [Member] | ||
Related Party Transaction [Line Items] | ||
Amounts due from related parties, current | 133,201 | 167,963 |
Amounts due to related parties, current | 65,153 | 45,854 |
58 Finance [Member] | ||
Related Party Transaction [Line Items] | ||
Amounts due from related parties, current | 339,415 | 82,725 |
Amounts due from related parties, non-current | 191,055 | 491,656 |
Others [Member] | ||
Related Party Transaction [Line Items] | ||
Amounts due from related parties, current | 17,485 | 7,866 |
Amounts due from related parties, non-current | 13,500 | |
Amounts due to related parties, current | ¥ 33,655 | ¥ 10,758 |
Related party transactions - Na
Related party transactions - Narrative (Details) ¥ in Millions | 12 Months Ended |
Dec. 31, 2019CNY (¥) | |
Related Party Transaction [Line Items] | |
Notes interest rate | 8.00% |
Debt term | 5 years |
Cash Collateral for Borrowed Securities | ¥ 400 |
Related Party Transaction, Guarantee Service Fees Receivable | 16 |
Related Party Transaction, Guarantee Liabilities | 16 |
Other Current Assets [Member] | |
Related Party Transaction [Line Items] | |
Related Party Transaction, Guarantee Service Fees Receivable | 16 |
Restricted Cash Current [Member] | |
Related Party Transaction [Line Items] | |
Cash Collateral for Borrowed Securities | 417 |
58 Finance [Member] | |
Related Party Transaction [Line Items] | |
Cash Collateral for Borrowed Securities | ¥ 417 |
Borrowings From Chinese Local Commercial Bank [Member] | |
Related Party Transaction [Line Items] | |
Debt term | 1 year |
58 Finance [Member] | Borrowings From Chinese Local Commercial Bank [Member] | |
Related Party Transaction [Line Items] | |
Face amount | ¥ 400 |
Notes interest rate | 4.25% |
Subsequent events (Details)
Subsequent events (Details) ¥ in Millions, $ in Millions | Mar. 24, 2020USD ($) | Mar. 31, 2020CNY (¥) | Feb. 29, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019CNY (¥) | Jan. 31, 2020USD ($) | Dec. 31, 2018 |
Subsequent Event [Line Items] | |||||||
Ownership percentage acquired | 68.80% | 68.80% | |||||
Che Hao Duo [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Ownership percentage acquired | 8.00% | 19.10% | |||||
Ai Fang | |||||||
Subsequent Event [Line Items] | |||||||
Payment of cash consideration | ¥ | ¥ 153 | ||||||
Ownership percentage acquired | 30.00% | ||||||
Ai Fang | Equity | |||||||
Subsequent Event [Line Items] | |||||||
Payment of cash consideration | ¥ | ¥ 153 | ||||||
Ownership percentage acquired | 30.00% | ||||||
Ai Fang | Convertible notes | |||||||
Subsequent Event [Line Items] | |||||||
Payment of cash consideration | ¥ | ¥ 370.9 | ||||||
Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Registered capital | $ | $ 71.4 | ||||||
Amount lent by the company | $ | $ 104.7 | ||||||
Total cash consideration | $ | $ 105 | ||||||
Subsequent Event [Member] | Equity | |||||||
Subsequent Event [Line Items] | |||||||
Investment owned by subsidiary | $ | $ 100 | ||||||
Subsequent Event [Member] | Ai Fang | Equity | |||||||
Subsequent Event [Line Items] | |||||||
Payment of cash consideration | ¥ | ¥ 139.1 | ||||||
Ownership percentage acquired | 45.00% | 45.00% |
Restricted net assets (Details)
Restricted net assets (Details) - CNY (¥) ¥ in Billions | Dec. 31, 2019 | Dec. 31, 2018 |
Restricted net assets | ||
Restricted net assets | ¥ 2.7 | ¥ 2.1 |