Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2017shares | |
Entity Registrant Name | Jianpu Technology Inc. |
Entity Central Index Key | 1,713,923 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2017 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | FY |
Ordinary Shares | |
Entity Common Stock, Shares Outstanding | 414,291,350 |
Class A ordinary shares | |
Entity Common Stock, Shares Outstanding | 68,750,000 |
Class B ordinary shares | |
Entity Common Stock, Shares Outstanding | 345,541,350 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) |
Current assets: | |||
Cash and cash equivalents | $ 237,279 | ¥ 1,543,811 | |
Accounts receivable, net (including amounts billed through RONG360 of RMB57,536 and RMB141,190 as of December 31, 2016 and 2017, respectively) | 27,987 | 182,090 | |
Prepayments and other current assets | 24,749 | 161,027 | |
Total current assets | 290,015 | 1,886,928 | |
Noncurrent assets: | |||
Property and equipment, net | 2,915 | 18,966 | |
Other noncurrent assets | 1,171 | 7,621 | |
Total noncurrent assets | 4,086 | 26,587 | |
Total assets | 294,101 | 1,913,515 | |
Current liabilities: | |||
Accounts payable (including amounts of the consolidated variable interest entity ("VIE") of RMB11,292 and RMB nil as of December 31, 2016 and 2017, respectively. Note1(d)) | 27,262 | 177,373 | |
Advances from customers (including amounts of the consolidated VIE of RMB4,051 and RMB491 as of December 31, 2016 and 2017, respectively. Note1(d)) | 10,995 | 71,538 | |
Tax payable (including amounts of the consolidated VIE of RMB87 and RMB305 as of December 31, 2016 and 2017, respectively. Note1(d)) | 2,748 | 17,876 | |
Amount due to related party | 5,444 | 35,427 | |
Accrued expenses and other current liabilities (including amounts of the consolidated VIE of RMB2,305 and RMB2,266 as of December 31, 2016 and 2017, respectively. Note1(d)) | 11,195 | 72,839 | |
Total current liabilities | 57,644 | 375,053 | |
Total liabilities | 57,644 | 375,053 | |
Commitments and contingencies (Note 14) | |||
Invested equity/Shareholders' equity: | |||
Ordinary shares (US$0.0001 par value, 1,500,000,000 shares authorized, 68,750,000 Class A ordinary shares and 345,541,350 Class B ordinary shares issued and outstanding as of December 31, 2017) | 42 | 275 | |
Additional Paid in Capital | 266,521 | 1,734,067 | |
Accumulated losses | (26,852) | (174,710) | |
Other comprehensive loss | (3,254) | (21,170) | |
Total invested equity/Shareholders' equity | 236,457 | 1,538,462 | 52,607 |
Total liabilities and invested equity /Shareholders' equity | $ 294,101 | ¥ 1,913,515 | |
Predecessor | |||
Current assets: | |||
Cash and cash equivalents | |||
Accounts receivable, net (including amounts billed through RONG360 of RMB57,536 and RMB141,190 as of December 31, 2016 and 2017, respectively) | 57,536 | ||
Amount due from related party | 21,128 | ||
Prepayments and other current assets | 50,415 | ||
Total current assets | 129,079 | ||
Noncurrent assets: | |||
Property and equipment, net | 4,591 | ||
Other noncurrent assets | 813 | ||
Total noncurrent assets | 5,404 | ||
Total assets | 134,483 | ||
Current liabilities: | |||
Accounts payable (including amounts of the consolidated variable interest entity ("VIE") of RMB11,292 and RMB nil as of December 31, 2016 and 2017, respectively. Note1(d)) | 32,433 | ||
Advances from customers (including amounts of the consolidated VIE of RMB4,051 and RMB491 as of December 31, 2016 and 2017, respectively. Note1(d)) | 18,149 | ||
Tax payable (including amounts of the consolidated VIE of RMB87 and RMB305 as of December 31, 2016 and 2017, respectively. Note1(d)) | 1,849 | ||
Accrued expenses and other current liabilities (including amounts of the consolidated VIE of RMB2,305 and RMB2,266 as of December 31, 2016 and 2017, respectively. Note1(d)) | 29,445 | ||
Total current liabilities | 81,876 | ||
Total liabilities | 81,876 | ||
Commitments and contingencies (Note 14) | |||
Invested equity/Shareholders' equity: | |||
Total invested equity/Shareholders' equity | 52,607 | ||
Total liabilities and invested equity /Shareholders' equity | ¥ 134,483 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands, $ in Thousands | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2016CNY (¥) |
Accounts receivable, amounts billed through RONG360 | ¥ 141,190 | ¥ 57,536 |
Accounts payable | 177,373 | |
Advances from customers | 71,538 | |
Tax payable | 17,876 | |
Accrued expenses and other current liabilities | ¥ 72,839 | |
Ordinary shares, shares authorized (in shares) | shares | 1,500,000,000 | |
Consolidated variable interest entity ("VIE") | ||
Accounts payable | ¥ 0 | |
Advances from customers | 491 | |
Tax payable | 305 | |
Accrued expenses and other current liabilities | ¥ 2,266 | |
Class A ordinary shares | ||
Ordinary shares, shares issued (in shares) | shares | 68,750,000 | |
Ordinary shares, shares outstanding (in shares) | shares | 68,750,000 | |
Class B ordinary shares | ||
Ordinary shares, shares issued (in shares) | shares | 345,541,350 | |
Ordinary shares, shares outstanding (in shares) | shares | 345,541,350 | |
Predecessor | ||
Accounts payable | 32,433 | |
Advances from customers | 18,149 | |
Tax payable | 1,849 | |
Accrued expenses and other current liabilities | 29,445 | |
Predecessor | Consolidated variable interest entity ("VIE") | ||
Accounts payable | 11,292 | |
Advances from customers | 4,051 | |
Tax payable | 87 | |
Accrued expenses and other current liabilities | ¥ 2,305 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2017CNY (¥)¥ / sharesshares | Dec. 31, 2016CNY (¥)¥ / sharesshares | Dec. 31, 2015CNY (¥)¥ / sharesshares | |
Recommendation services: | ||||
Loans (including revenues from related party of RMB nil, RMB19,932 and RMB102,997 for the years ended December 31, 2015, 2016 and 2017, respectively.) | $ 172,057 | ¥ 1,119,456 | ||
Credit cards | 35,182 | 228,905 | ||
Total recommendation services | 207,239 | 1,348,361 | ||
Advertising, marketing and other services | 14,972 | 97,412 | ||
Total revenues | 222,211 | 1,445,773 | ||
Cost of revenues | (22,106) | (143,828) | ||
Gross profit | 200,105 | 1,301,945 | ||
Operating expenses: | ||||
Sales and marketing | (188,724) | (1,227,896) | ||
Research and development | (23,655) | (153,905) | ||
General and administrative | (14,404) | (93,718) | ||
Loss from operations | (26,678) | (173,574) | ||
Others, net | (26) | (169) | ||
Loss before income tax | (26,704) | (173,743) | ||
Income tax expense | (4,362) | (28,382) | ||
Net loss | (31,066) | (202,125) | ¥ (182,125) | ¥ (196,174) |
Foreign currency translation adjustments | (3,254) | (21,170) | ||
Total other comprehensive loss | (3,254) | (21,170) | ||
Total comprehensive loss | $ (34,320) | ¥ (223,295) | ||
Net loss per share | ||||
Basic and diluted (in dollars per share) | (per share) | $ (0.09) | ¥ (0.57) | ||
Weighted average number of shares | ||||
Basic and diluted (in shares) | shares | 353,452,309 | 353,452,309 | ||
ADS | ||||
Net loss per share | ||||
Basic and diluted (in dollars per share) | (per share) | $ (0.23) | ¥ (1.43) | ||
Predecessor | ||||
Recommendation services: | ||||
Loans (including revenues from related party of RMB nil, RMB19,932 and RMB102,997 for the years ended December 31, 2015, 2016 and 2017, respectively.) | 238,846 | 116,738 | ||
Credit cards | 64,911 | 38,406 | ||
Total recommendation services | 303,757 | 155,144 | ||
Advertising, marketing and other services | 52,630 | 13,229 | ||
Total revenues | 356,387 | 168,373 | ||
Cost of revenues | (66,683) | (34,423) | ||
Gross profit | 289,704 | 133,950 | ||
Operating expenses: | ||||
Sales and marketing | (382,915) | (262,359) | ||
Research and development | (72,832) | (45,358) | ||
General and administrative | (16,273) | (22,419) | ||
Loss from operations | (182,316) | (196,186) | ||
Others, net | 191 | 12 | ||
Loss before income tax | (182,125) | (196,174) | ||
Net loss | ¥ (27,415) | (182,125) | (196,174) | |
Foreign currency translation adjustments | 0 | 0 | ||
Total comprehensive loss | ¥ (182,125) | ¥ (196,174) | ||
Net loss per share | ||||
Basic and diluted (in dollars per share) | ¥ / shares | ¥ (0.53) | ¥ (0.57) | ||
Weighted average number of shares | ||||
Basic and diluted (in shares) | shares | 345,541,350 | 345,541,350 | ||
Predecessor | ADS | ||||
Net loss per share | ||||
Basic and diluted (in dollars per share) | ¥ / shares | ¥ (1.33) | ¥ (1.43) |
CONSOLIDATED STATEMENTS OF COM5
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Loans recommendation services, revenues from related party | ¥ 102,997 | ||
Predecessor | |||
Loans recommendation services, revenues from related party | ¥ 19,932 | ¥ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN INVESTED/SHAREHOLDERS' (DEFICIT)/EQUITY ¥ in Thousands, $ in Thousands | Ordinary SharesCNY (¥)shares | Additional Paid-in CapitalCNY (¥) | Accumulated Other Comprehensive LossCNY (¥) | Accumulated lossesCNY (¥) | USD ($) | CNY (¥) |
Beginning balance (Predecessor) at Dec. 31, 2014 | ¥ 5,678 | |||||
Beginning balance at Dec. 31, 2014 | 5,678 | |||||
Changes in invested (deficit)/equity | ||||||
RONG360's contribution | Predecessor | 163,714 | |||||
RONG360's contribution | 163,714 | |||||
Share-based compensation | Predecessor | 13,216 | |||||
Share-based compensation | 13,216 | |||||
Net loss | Predecessor | (196,174) | |||||
Net loss | (196,174) | |||||
Currency translation adjustment | Predecessor | 0 | |||||
Ending balance (Predecessor) at Dec. 31, 2015 | (13,566) | |||||
Ending balance at Dec. 31, 2015 | (13,566) | |||||
Changes in invested (deficit)/equity | ||||||
RONG360's contribution | Predecessor | 243,481 | |||||
RONG360's contribution | 243,481 | |||||
Share-based compensation | Predecessor | 4,817 | |||||
Share-based compensation | 4,817 | |||||
Net loss | Predecessor | (182,125) | |||||
Net loss | (182,125) | |||||
Currency translation adjustment | Predecessor | 0 | |||||
Ending balance (Predecessor) at Dec. 31, 2016 | 52,607 | |||||
Ending balance at Dec. 31, 2016 | 52,607 | |||||
Ending balance (in shares) at Dec. 31, 2017 | shares | 414,291,350 | |||||
Changes in invested (deficit)/equity | ||||||
RONG360's contribution | Predecessor | 93,431 | |||||
RONG360's contribution | 93,431 | |||||
Share-based compensation | Predecessor | 1,727 | |||||
Share-based compensation | ¥ 106,039 | 107,766 | ||||
Net loss | Predecessor | (27,415) | |||||
Net loss | ¥ (174,710) | $ (31,066) | (202,125) | |||
Completion of reorganization(Note 1(b)) | Predecessor | (120,350) | |||||
Completion of reorganization(Note 1(b)) | ¥ 229 | 120,121 | ||||
Completion of reorganization(Note 1(b)) (in shares) | shares | 345,541,350 | |||||
Initial working capital contributed by RONG360 | 150,000 | 150,000 | ||||
Issuance of ordinary shares for the IPO and the concurrent private placements | ¥ 46 | 1,357,907 | 1,357,953 | |||
Shares issued for the IPO and the concurrent private placements (in shares) | shares | 68,750,000 | |||||
Share-based awards to employees of non-platform business (Note 10) | 8,851 | 8,851 | ||||
Deemed dividends to RONG360 in connection with the share-based awards to employees of non-platform business (Note 10) | (8,851) | (1,360) | (8,851) | |||
Currency translation adjustment | ¥ (21,170) | (3,254) | (21,170) | |||
Ending balance at Dec. 31, 2017 | ¥ 275 | ¥ 1,734,067 | ¥ (21,170) | ¥ (174,710) | $ 236,457 | ¥ 1,538,462 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Cash flows from operating activities: | ||||
Net loss | $ (31,066) | ¥ (202,125) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation and amortization expenses | 887 | 5,769 | ||
Share -based compensation expenses | 16,563 | 107,766 | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable | (19,144) | (124,554) | ||
Amount due from related party | 3,248 | 21,128 | ||
Prepayments and other current assets | (17,001) | (110,612) | ||
Other non current assets | (1,046) | (6,808) | ||
Accounts payable | 20,937 | 136,217 | ||
Advance from customers | 8,206 | 53,389 | ||
Amount due to related party | 5,444 | 35,427 | ||
Tax payable | 2,463 | 16,027 | ||
Accrued expenses and other current liabilities | 6,190 | 40,277 | ||
Net cash used in operating activities | (4,319) | (28,099) | ||
Cash flows from investing activities: | ||||
Purchases of property and equipment | (2,893) | (18,823) | ||
Net cash used in investing activities | (2,893) | (18,823) | ||
Cash flows from financing activities: | ||||
Proceeds from issuance of ordinary shares, net | 210,330 | 1,368,472 | ||
Initial working capital contributed by RONG360 | 23,055 | 150,000 | ||
Funding from RONG360 | 14,360 | 93,431 | ||
Net cash provided by financing activities | 247,745 | 1,611,903 | ||
Effect of exchange rate changes on cash and cash equivalents | (3,254) | (21,170) | ||
Net increase in cash and cash equivalents | 237,279 | 1,543,811 | ||
Cash and cash equivalents at beginning of the year | ||||
Cash and cash equivalents at end of the year | 237,279 | 1,543,811 | ||
Supplemental schedule of non-cash investing and financing activities: | ||||
Deemed dividends to RONG360 in connection with the share-based awards granted to employees of non-platform business (Note 10) | $ 1,360 | 8,851 | ||
Predecessor | ||||
Cash flows from operating activities: | ||||
Net loss | (182,125) | ¥ (196,174) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation and amortization expenses | 4,637 | 3,650 | ||
Share -based compensation expenses | 4,817 | 13,216 | ||
Allowance for doubtful accounts | 129 | 656 | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable | (15,967) | (32,962) | ||
Amount due from related party | (21,128) | |||
Prepayments and other current assets | (29,967) | (586) | ||
Other non current assets | 1,185 | 177 | ||
Accounts payable | (14,010) | 34,789 | ||
Advance from customers | 4,693 | 9,930 | ||
Tax payable | 1,138 | (746) | ||
Accrued expenses and other current liabilities | 7,469 | 9,194 | ||
Net cash used in operating activities | (239,129) | (158,856) | ||
Cash flows from investing activities: | ||||
Purchases of property and equipment | (4,352) | (4,858) | ||
Net cash used in investing activities | (4,352) | (4,858) | ||
Cash flows from financing activities: | ||||
Funding from RONG360 | 243,481 | 163,714 | ||
Net cash provided by financing activities | 243,481 | 163,714 | ||
Net increase in cash and cash equivalents | ||||
Cash and cash equivalents at beginning of the year | ||||
Cash and cash equivalents at end of the year |
Nature of operations and reorga
Nature of operations and reorganization | 12 Months Ended |
Dec. 31, 2017 | |
Nature of operations and reorganization | |
Nature of operations and reorganization | 1. Nature of operations and reorganization (a) Nature of operations Jianpu Technology Inc. (“Jianpu” or the “Company”) is a holding company and conducts its business mainly through its subsidiaries and variable interest entity (“VIE”). Jianpu, its subsidiaries, and VIE together are referred to as the “Group”. The Group is primarily engaged in the operation of its platform for providing online discovery and recommendation services of financial products. The individual users can have access to financial products through the platform, including consumer and other loans, credit cards, and wealth management products. The Group recommends loans and credit cards to individual users and assists the financial service providers in targeting users with specific characteristics based on the users’ financial needs and credit profile, as well as the products offerings and risk appetite of the financial service providers (“Recommendation Services”). The Group also provides advertising, marketing and other services primarily to financial service providers of credit cards and wealth management products. All these services together refer to as “Platform Business”. The Group’s principal operations and geographic markets are in the People’s Republic of China (“PRC”). (b) Reorganization Jianpu is an exempted company with limited liability incorporated in the Cayman Islands on June 1, 2017 in connection with a group reorganization (the “Reorganization”) of RONG360. The Platform Business is carried out by various subsidiaries and a VIE of RONG360 (the “Predecessor Operations”) prior to the Reorganization. In connection with the Reorganization, the Platform Business was transferred to the Group by the end of October 2017. And the subsidiaries and VIEs of RONG360 other than the Group continued to carry out the technology-enabled online lending business (the “non-platform business”) after the Reorganization. The Reorganization was approved by the Board of Directors and a restructuring framework agreement was entered into by the Group, RONG360, and the shareholders of RONG360 on August 11, 2017. As of December 31, 2016, the corporate structure of RONG360 prior to the initiation of the Reorganization is as follows: Corporate structure of RONG360 Date of Place of Percentage Principal Activities Parent: RONG360 Inc. February 21, 2012 The Cayman Islands Investment holding Wholly owned subsidiaries of RONG360: RONG360 (Hong Kong) Limited (“RONG360 HK”) February 29, 2012 Hong Kong % Investment holding Beijing Ronglian Shiji Information Technology Co. Limited (“RLSJ”) June 25, 2012 PRC % Platform Business and technology-enabled online lending business Tianjin Rongshiji Information Technology Co. Limited September 25, 2012 PRC % Platform Business and technology-enabled online lending business VIE of RONG360: Beijing Rongshiji Information Technology Co. Limited (“RSJ”) November 10, 2011 PRC % Platform Business and technology-enabled online lending business The Group has completed the steps of Reorganization as described below: Establishment of Jianpu, its subsidiaries and VIE The ownership structure of the subsidiaries and VIE of the Group has been established as below. The Group was a wholly owned subgroup of RONG360 upon completion of the Reorganization in October 2017. Date of Place of Percentage Principal Activities The Company: Jianpu June 1, 2017 The Cayman Islands Investment holding Wholly owned subsidiaries of the Company: Jianpu (Hong Kong) Limited (“Jianpu HK”) June 19, 2017 Hong Kong % Investment holding Beijing Rongqiniu Information Technology Co., Ltd. (“RQN”) August 21, 2017 PRC % Platform Business VIE of the Company: Beijing Rongdiandian Information Technology Co., Ltd. (“RDD”) March 3, 2017 PRC % Platform Business The major reorganization steps are described below: (1) Jianpu as the holding company for the Group was set up by RONG360 as a wholly owned subsidiary in June 2017. (2) Jianpu established a wholly owned subsidiary, Jianpu HK, in June 2017. (3) RDD was established in March 2017. RQN was established by RLSJ and RONG360 HK in August 2017. All equity interests in RQN held by rlsj and RONG360 HK were transferred to Jianpu HK subsequently. (4) RQN entered into a series of contractual arrangements with RDD and its then shareholders, i.e., certain founders and family member of a founder of Rong 360, through which Jianpu has become the ultimate primary beneficiary of RDD. Refer to Note 1(c) for more detailed information. Transfer of assets and liabilities relating to Platform Business to the Group Pursuant to a series of agreements entered into by the Group’s entities and RONG360 group entities in August and September 2017 in connection with the Reorganization, all operating assets and liabilities relating to the operation of the Platform Business were transferred from the Predecessor Operations to the Group as capital contribution, along with the establishment of Group’s entities as described above. The historical funding provided by RONG360 for the Platform Business is deemed and presented as a contribution to the Group from RONG360 in the consolidated financial statements. Allotment of shares Upon incorporation, the Company had 1,000,000,000 shares authorized, 1 ordinary share issued and outstanding with a par value of US$0.0001 per share, which was held by RONG360. Pursuant to a written resolution of the Company dated on September 25, 2017, 345,541,349 ordinary shares of par value US$0.0001 each were issued to RONG360 on the same day. Transitional services arrangement In September 2017, a transitional services agreement between the Group entities and Predecessor Operations entities was entered into with respect to various ongoing relationships between the Group and the Predecessor Operations entities. Pursuant to the transitional services agreement, the Group entities, during the transitional period which is initially 12 months after the effective date of the agreement, provide the Predecessor Operations entities with various corporate support services, including operational, administrative, human resources, legal, accounting and internal control support. The Predecessor Operations entities provide the Group entities with various support for these employees, business contracts and other business resources relating to the Platform Business during the transitional period. Furthermore, before the registration procedure of the title transfer of all intellectual property rights relating to the Platform Business from the Predecessor Operations entities to the Group entities is completed, Predecessor Operations entities grant the Group entities a license to use these rights. Subsequent to the transfer of all operating assets and liabilities relating to the operation of the Platform Business to the Group, the key employees, business contracts and operations relating to the Platform Business were transferred to the Group. The Reorganization was completed by the end of October 2017. Initial Public Offering In November 2017, the Company completed an initial public offering (the “IPO”) and private placements to certain investors concurrently with the IPO with new issuance of totalling 68,750,000 Class A ordinary shares. The company raised US$204.9 million (approximately equivalent to RMB1,358.0 million) net proceeds from the issuance of new shares from the IPO and the concurrent private placements. Immediately prior to the completion of the IPO, all the ordinary shares as issued and held by RONG360 Inc.(“RONG360”) were redesignated into an equal number of the Class B ordinary shares (Note 11). Each Class A ordinary share is entitled to one vote per share and each Class B ordinary share is entitled to ten votes per share. Each Class B ordinary share can be converted into one Class A ordinary share at any time, while Class A ordinary shares cannot be converted into Class B ordinary shares. Upon transfer of Class B ordinary shares by RONG360 Inc. to other persons, (i) all shares transferred to Mr. Daqing (David) Ye, Mr. Caofeng Liu, and Mr. Jiayan Lu or their respective affiliates, will remain Class B ordinary shares; (ii) 27,100,830 shares transferred to Mr. Chenchao Zhuang or his affiliates will remain Class B ordinary shares; and (iii) all shares to any party other than those shares mentioned in the foregoing (i) and (ii) will automatically convert into an equal number of Class A ordinary shares. Upon further transfer of Class B ordinary shares by any of Mr. Daqing (David) Ye, Mr. Caofeng Liu, Mr, Jiayan Lu and Chenchao Zhuang (individually referred to as a “Founder” and collectively referred to as the “Founders”) to anyone other than his affiliates, such Class B Ordinary Shares will automatically be converted into an equal number of Class A ordinary shares. When a Founder, ceases to be a director or an officer of the Company, his Class B ordinary shares will automatically be converted into an equal number of Class A ordinary share, and that when the Founders collectively beneficially own less than 5% of the Company’s total issued and outstanding shares on an as-converted basis, all Class B ordinary shares will automatically be converted into an equal number of Class A ordinary shares. The Group concluded that the adoption of dual-class share structure did not have a material impact on its consolidated financial statements. As of December 31, 2017, all the Class B ordinary shares of 345,541,350 shares were solely held by RONG360. Basis of Presentation for the Reorganization Immediately before and after the Reorganization, all the legal entities involved in the Reorganization are ultimately controlled by RONG360. Since the Group and the Predecessor Operations were under common control, the accompanying consolidated financial statements include the assets, liabilities, revenue, expenses and cash flows that were directly attributable to the Predecessor Operations for all periods presented prior to the Reorganization. However, such presentation may not necessarily reflect the results of operations, financial position and cash flows if the Group had actually existed on a stand-alone basis during the periods presented prior to the Reorganization. The assets and liabilities had been stated at historical carrying amounts. Only those assets and liabilities that were specifically identifiable to the Platform Business were included in the Group’s consolidated balance sheets. Income tax liability was calculated on a separate return basis as if the Group had filed a separate tax return. The Group’s statements of comprehensive loss consisted all the revenues, costs and expenses of the Platform Business, including allocations to the cost of revenues, sales and marketing expenses, research and development expenses, and general and administrative expenses, which were incurred by RONG360 but related to the Platform Business prior to the Reorganization. These allocated costs and expenses were primarily related to workplace resources, information technology supports and certain corporate functions, including senior management, finance, legal and human resources, as well as share-based compensation expenses. These allocations were based on proportional cost allocation by considering proportion of headcount, transaction volume, among other things, attributable to the Group and were made on a basis considered reasonable by management. The following table sets forth the cost of revenues, sales and marketing expenses, research and development expenses, and general and administrative expenses allocated from RONG360 for all periods presented prior to the Reorganization: For the Year 2015 2016 2017 2017 RMB RMB RMB US$ Cost of revenues Sales and marketing expenses Research and development expenses General and administrative expenses Total The Platform Business was operated within RONG360’s corporate cash management program for all periods presented prior to the Reorganization. For purposes of presentation in the consolidated statements of cash flows, the cash flow from RONG360 to support the Platform Business is presented as funding from RONG360, which is included in cash flows from financing activities. Funding from RONG360 as disclosed under cash flows from financing activities also reflected the changes in contribution from RONG360 as presented in the consolidated statements of changes in invested/shareholders’ (deficit)/equity. (c) Variable interest entities (1) VIE arrangement before the Reorganization Prior to the Reorganization, in order to comply with the PRC laws and regulations which prohibit or restrict foreign control of companies involved in provision of internet content, the Predecessor Operations operated its websites and carried out other restricted businesses in the PRC through RSJ, whose equity interests are held by certain founders or family member of a founder of RONG360 as nominee shareholders. RONG360 obtained control over RSJ through RLSJ, a wholly owned subsidiary of RONG360, by entering into a series of contractual arrangements with RSJ and its nominee shareholders. To comply with PRC laws and regulations which prohibit or restrict foreign ownership of internet content, the nominee shareholders are legal owners of an entity. However, the rights of those nominee shareholders have been transferred to RLSJ through such contractual arrangements. These contractual arrangements include exclusive purchase option agreements, exclusive business cooperation agreement, equity pledge agreement and power of attorney. These contractual arrangements can be extended at the option of RLSJ, prior to the expiration date. Management concluded that RLSJ, through the contractual arrangements, has the power to direct the activities that most significantly impact RSJ’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of RSJ, and therefore RSJ is a VIE of RLSJ, of which RONG360 is the ultimate primary beneficiary. As such, RONG360 consolidated the financial statements of RSJ. Consequently, the financial results of RSJ directly attributable to the Predecessor Operations were included in the Group’s consolidated financial statements in accordance with the basis of presentation for the Reorganization as stated in Note1. The following is a summary of the contractual arrangements that RONG360, through its subsidiary, RLSJ, entered into with RSJ as a VIE: Exclusive option agreement The nominee shareholders of the VIE have granted RLSJ the exclusive and irrevocable option to purchase from the nominee shareholders, to the extent permitted under PRC laws and regulations, part or all of their equity interests in these entities for a purchase price equal to the actual capital contribution paid in the registered capital of the VIE by the nominee shareholders for their equity interests. RLSJ may exercise such option at any time. In addition, the VIE and its nominee shareholders have agreed that without prior written consent of RLSJ, they shall not sell, transfer, mortgage or dispose of any assets or equity interests of the VIE or declare any dividend. Exclusive business cooperation agreement RLSJ and the VIE entered into exclusive business cooperation agreement under which the VIE engages RLSJ as its exclusive provider of technical services and business consulting services. The VIE shall pay to RLSJ service fees, which is determined by RLSJ at their sole discretion. RLSJ shall have exclusive and proprietary rights and interests in all rights, ownership, interests and intellectual properties arising from the performance of the agreement. During the term of the agreement, the VIE shall not accept any consultations and/or services provided by any third party and shall not cooperate with any third party for the provision of identical or similar services without prior consent of RLSJ. Equity pledge agreement Pursuant to the relevant equity pledge agreement, the nominee shareholders of the VIE have pledged all of their equity interests in the VIE to RLSJ as collateral for all of the VIE’s payments due to RLSJ and to secure the VIE’ obligations under the exclusive business cooperation agreement. The nominee shareholders shall not transfer or assign the equity interests, the rights and obligations in the equity pledge agreement or create or permit to create any pledges which may have an adverse effect on the rights or benefits of RLSJ without RLSJ’ written consent. RLSJ are entitled to transfer or assign in full or in part the equity interests pledged. In the event of default, RLSJ as the pledgee, will be entitled to request immediate payment of the unpaid service fee and other amounts due to RONG360’s relevant PRC subsidiaries, and/or to dispose of the pledged equity. Power of attorney Pursuant to the irrevocable power of attorney, RLSJ is authorized by each of the nominee shareholders as their attorney in- fact to exercise all shareholder rights under PRC law and the relevant articles of association, including but not limited to, the sale or transfer or pledge or disposition of all or part of the nominee shareholders’ equity interests, and designate and appoint directors, chief executive officers and general manager, and other senior management members of the VIE. Each power of attorney will remain in force during the period when the nominee shareholder continues to be shareholder of the VIE, unless RQN issues adverse instructions in writing. Each nominee shareholders has waived all the rights which have been authorized to RLSJ under each power of attorney. (2) VIE arrangement after the Reorganization In connection with the Reorganization, similar contractual arrangements have been entered into among the Company’s wholly owned subsidiary, RQN, and RDD and RDD’s nominee shareholders. The Company obtained control over RDD through RQN, which is a wholly owned subsidiary of the Company, by entering into a series of contractual arrangements with RDD and its nominee shareholders. To comply with PRC laws and regulations which prohibit or restrict foreign ownership of internet content, the nominee shareholders are legal owners of an entity. However, the rights of those nominee shareholders have been transferred to RQN through such contractual arrangements. These contractual arrangements include exclusive purchase option agreement, exclusive business cooperation agreement, equity pledge agreement and powers of attorney. These contractual arrangements can be extended at the option of RQN, prior to the expiration date. Management concluded that RQN, through the contractual arrangements, has the power to direct the activities that most significantly impact RDD’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of RDD, and therefore RDD is a VIE of RQN, of which the Company is the ultimate primary beneficiary. Accordingly, the Company consolidates RDD’s results of operations, assets and liabilities in the Group’s consolidated financial statements pursuant to the accounting principles generally accepted in the United States of America (“U.S. GAAP”) since the establishment of RDD. Refer to Note 2(b) to the consolidated financial statements for the principles of consolidation. The following is a summary of the contractual arrangements that RQN entered into with RDD as a VIE: Exclusive Purchase Option Agreement The nominee shareholders of the VIE have granted RQN the exclusive and irrevocable option to purchase from the nominee shareholders, to the extent permitted under PRC laws and regulations, part or all of their equity interests in these entities at the lowest price permitted by the laws of the PRC applicable at the time of exercise. The nominee shareholders of the VIE have agreed RQN to grant the exclusive and irrevocable option to purchase, to the extent permitted under PRC laws and regulations, part or all of RDD’s assets at the price equal to the higher one of net book value of the purchased assets and the lowest price permitted by the applicable laws of the PRC. RQN may exercise such options at any time. In addition, the VIE and its nominee shareholders have agreed that without prior written consent of RQN, they shall not sell, transfer, mortgage or dispose of any assets or equity interests of the VIE or declare any dividend. Exclusive Business Cooperation Agreement RQN and the VIE entered into exclusive business cooperation agreement under which the VIE engages RQN as its exclusive provider of technical services and business consulting services. The VIE shall pay to RQN service fees, which is determined by RQN at their sole discretion. RQN shall have exclusive and proprietary rights and interests in all rights, ownership, interests and intellectual properties arising from the performance of the agreement. During the term of the agreement, the VIE shall not accept any consultations and/or services provided by any third party and shall not cooperate with any third party for the provision of identical or similar services without prior consent of RQN. Equity Pledge Agreement Pursuant to the relevant equity pledge agreement, the nominee shareholders of the VIE have pledged all of their equity interests in the VIE to RQN as collateral for all of the VIE’s payments due to RQN and to secure the VIE’ obligations under the exclusive business cooperation agreement, exclusive purchase option agreement and power of attorney. The nominee shareholders shall not transfer or assign the equity interests, the rights and obligations in the equity pledge agreement or create or permit to create any pledges which may have an adverse effect on the rights or benefits of RQN without RQN’ written consent. RQN are entitled to transfer or assign in full or in part the equity interests pledged. In the event of default, RQN as the pledgee, will be entitled to request immediate payment of the unpaid service fee and other amounts due to the Company’s relevant PRC subsidiaries, and/or to dispose of the pledged equity. Power of Attorney Pursuant to the irrevocable power of attorney, RQN is authorized by each of the nominee shareholders as their attorney in- fact to exercise all shareholder rights under PRC law and the relevant articles of association, including but not limited to, the sale or transfer or pledge or disposition of all or part of the nominee shareholders’ equity interests, and designate and appoint directors, chief executive officers and general manager, and other senior management members of the VIE. Each power of attorney will remain in force during the period when the nominee shareholder continues to be shareholder of the VIE, unless RQN issues adverse instructions in writing. Each nominee shareholders has waived all the rights which have been authorized to RQN under each power of attorney. (d) Risks in relation to the VIE structure Upon completion of the Reorganization, a significant part of the Group’s business was conducted through RDD, or the VIE. The Company became the primary beneficiary of RDD through contractual arrangements. In the opinion of management, the contractual arrangements with the VIE and the nominee shareholders are in compliance with PRC laws and regulations and are legally binding and enforceable. The nominee shareholders are also shareholders of the Group and therefore have no current interest in seeking to act contrary to the contractual arrangements. However, there are substantial uncertainties regarding the interpretation and application of PRC laws and regulations including those that govern the contractual arrangements, which could limit the Group’s ability to enforce these contractual arrangements and if the nominee shareholders of the VIE were to reduce their interests in the Group, their interest may diverge from that of the Group and that may potentially increase the risk that they would seek to act contrary to the contractual arrangements. In January 2015, the Ministry of Commerce (“MOFCOM”), released for public comment a proposed PRC law, the Draft Foreign Investment Enterprises (“FIE”) Law, that appears to include VIE within the scope of entities that could be considered to be FIEs, that would be subject to restrictions under existing PRC law on foreign investment in certain categories of industry. Specifically, the Draft FIE Law introduces the concept of “actual control” for determining whether an entity is considered to be an FIE. In addition to control through direct or indirect ownership or equity, the Draft FIE Law includes control through contractual arrangements within the definition of “actual control”. If the Draft FIE Law is passed by the People’s Congress of the PRC and goes into effect in its current form, these provisions regarding control through contractual arrangements could be construed to include the Group’s contractual arrangements with its VIE, and as a result, the Group’s VIE could become explicitly subject to the current restrictions on foreign investment in certain categories of industry. The Draft FIE Law includes provisions that would exempt from the definition of FIEs where the ultimate controlling shareholders are either entities organized under PRC law or individuals who are PRC citizens. The Draft FIE Law is silent as to what type of enforcement action might be taken against existing VIE, that operates in restricted or prohibited industries and is not controlled by entities organized under PRC law or individuals who are PRC citizens. If the restrictions and prohibitions on FIEs included in the Draft FIE Law are enacted and enforced in their current form, the Group’s ability to use the contractual arrangements with its VIE and the Group’s ability to conduct business through the VIE could be severely limited. The Group’s ability to control the VIE also depends on the power of attorney that the wholly owned subsidiary of the Group has to vote on all matters requiring shareholder approval in the VIE. As noted above, the Group believes these power of attorney are legally enforceable but may not be as effective as direct equity ownership. In addition, if the Group’s corporate structure and the contractual arrangements with the VIE through which the Group conducts its business in the PRC were found to be in violation of any existing or future PRC laws and regulations, the Group’s relevant PRC regulatory authorities could: · revoke or refuse to grant or renew the Group’s business and operating licenses; · restrict or prohibit related party transactions between the wholly owned subsidiary of the Group and the VIE; · impose fines, confiscate income or other requirements which the Group may find difficult or impossible to comply with; · require the Group to alter, discontinue or restrict its operations; · restrict or prohibit the Group’s ability to finance its operations, and; · take other regulatory or enforcement actions against the Group that could be harmful to the Group’s business. The imposition of any of these restrictions or actions could result in a material adverse effect on the Group’s ability to conduct its business. In such case, the Group may not be able to operate or control the VIE, which may result in deconsolidation of the VIE in the Group’s consolidated financial statements. In the opinion of management, the likelihood for the Group to lose such ability is remote based on current facts and circumstances. The Group’s operations depend on the VIE to honor their contractual arrangements with the Group. These contractual arrangements are governed by PRC law and disputes arising out of these agreements are expected to be decided by arbitration in the PRC. The management believes that each of the contractual arrangements constitutes valid and legally binding obligations of each party to such contractual arrangements under PRC laws. However, the interpretation and implementation of the laws and regulations in the PRC and their application to an effect on the legality, binding effect and enforceability of contracts are subject to the discretion of competent PRC authorities, and therefore there is no assurance that relevant PRC authorities will take the same position as the Group herein in respect of the legality, binding effect and enforceability of each of the contractual arrangements. Meanwhile, since the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involve uncertainties, which may limit legal protections available to the Group to enforce the contractual arrangements should the VIE or the nominee shareholders of the VIE fail to perform their obligations under those arrangements. The following financial information of the Group’s VIE or RONG360’s VIE directly attributable to the Predecessor Operations as of December 31, 2016 and 2017 and for the years ended December 31, 2015, 2016 and 2017 were included in the Group’s consolidated financial statements. As of December 31, 2016 2017 2017 RMB RMB US$ Cash and cash equivalent — Accounts receivable, net (including amounts billed through RONG360 of RMB8,075 and RMB15,356 as of December 31, 2016 and 2017, respectively) Amount due from the subsidiaries of the Group* — Prepayments and other current assets Property and equipment, net Total assets Accounts payable — — Advances from customers Tax payable Amount due to the subsidiaries of the Group* — — Accrued expenses and other current liabilities Total liabilities * The balances are eliminated through the consolidation in the preparation of the Group’s consolidated financial statements. For the Year Ended 2015 2016 2017 2017 RMB RMB RMB US$ Total revenue Net (loss)/income ) ) For the Year Ended 2015 2016 2017 2017 RMB RMB RMB US$ Net cash provided by/(used in) operating activities ) Net cash used in investing activities ) ) ) ) Net cash provided by/(used in) financing activities ) ) Net increase in cash and cash equivalents — — Cash and cash equivalents at beginning of the year — — — — Cash and cash equivalents at end of the year — — |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2017 | |
Summary of significant accounting policies | |
Summary of significant accounting policies | 2. Summary of significant accounting policies (a) Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with U.S. GAAP. Significant accounting policies followed by the Group in the preparation of the accompanying consolidated financial statements are summarized below. (b) Principles of consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries and the VIE 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, exercises effective control over the activities that most impact the entity’s economic performance, 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 intercompany transactions and balances between the Company and its wholly-owned subsidiaries and the VIE have been eliminated upon consolidation. (c) Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Group to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities at the balance sheet date, and the reported revenues and expenses during the reporting period in the consolidated financial statements and accompanying notes. Significant accounting estimates reflected in the Group’s financial statements include valuation and recognition of share-based compensation expenses, allowance for doubtful accounts and valuation allowances for deferred tax assets. Actual results could differ from those estimates. (d) Foreign currency translation The Group’s reporting currency is Renminbi (“RMB”). The functional currency of the Company and the Group’s subsidiary incorporated in Hong Kong (“HK”) is United States dollars (“US$”). The Group’s PRC subsidiaries and VIE determined their functional currency to be RMB. The determination of the respective functional currency is based on the criteria set out by ASC 830, Foreign Currency Matters. Transactions denominated in foreign currencies other than functional currency are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies other than functional currency are remeasured into the functional currency at the exchange rates prevailing at the balance sheet date. Exchange gains or losses arising from foreign currency transactions are recorded in the consolidated statements of comprehensive loss. The financial statements of the Group’s non-PRC entities are translated from their respective functional currency into RMB. Assets and liabilities denominated in foreign currencies are translated into RMB using the applicable exchange rates at the balance sheet date. Equity accounts other than earnings generated in the current period are translated into RMB using the appropriate historical rates. Revenues, expenses, gains and losses are translated into RMB using the average exchange rates for the relevant period. The resulting foreign currency translation adjustments are recorded in other comprehensive loss in the consolidated statements of comprehensive loss, and the accumulated foreign currency translation adjustments are presented as a component of accumulated other comprehensive loss in the consolidated statements of changes in invested/shareholders’ (deficit)/equity. Total foreign currency translation adjustments included in the Group’s other comprehensive loss were nil, nil and RMB21,170 for the years ended December 31, 2015, 2016 and 2017, respectively. (e) Convenience translation Translations of the consolidated balance sheets, consolidated statements of comprehensive loss and consolidated statements of cash flows from RMB into US$ as of and for the year ended December 31, 2017 are solely for the convenience of the readers and were calculated at the rate of US$1.00=RMB6.5063, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on December 29, 2017. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 31, 2017, or at any other rate. (f) Cash and cash equivalents Cash and cash equivalents represent cash on hand, time deposits and highly-liquid investments placed with banks or other financial institutions, which are unrestricted to withdrawal or use, and which have original maturities of three months or less. (g) Accounts receivable, net Accounts receivable are stated at the historical carrying amount net of write-offs and allowance for doubtful accounts. The Group reviews the accounts receivable on a periodic basis and makes allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual accounts receivable balances, the Group considers several factors, including the age of the balance, the customer’s payment history, and current credit-worthiness, and current economic trends. Accounts receivable balances are written off after all collection efforts have been exhausted. (h) Property and equipment, net Property and equipment are stated at cost less accumulated depreciation and impairment, if any. Depreciation is calculated using the straight-line method over estimated useful lives of the assets as follows: Estimated useful life Office furniture and equipment 3 years Computer equipment 3 years Servers and network equipment 3 years Leasehold improvements Lesser of the term of the lease or the estimated useful lives of the leasehold improvement Repair and maintenance costs are charged to expenses as incurred, whereas the cost of renewals and betterment that extend the useful lives of property and equipment is capitalized as additions to the related assets. Retirements, sales and disposals of assets are recorded by removing the cost and accumulated depreciation from the assets and accumulated depreciation accounts with any resulting gain or loss reflected in the consolidated statements of comprehensive loss. (i) Impairment of long-lived assets The Group evaluates its long-lived assets with finite lives for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount of an asset may not be fully recoverable. When these events occur, the Group evaluates the impairment by comparing carrying amount of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the assets, the Group recognizes an impairment loss based on the excess of the carrying amount of the long-lived assets over their fair value. No impairment loss of long-lived assets was recognized for the years ended December 31, 2015, 2016 and 2017. (j) Fair value measurement Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value 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—Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2—Observable, market-based inputs, other than quoted prices, in active markets for identical assets or liabilities. Level 3—Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of assets or liabilities. Accounting guidance describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. Transfers into or out of fair value hierarchy classifications are made if the significant inputs used in the financial models measuring the fair value of the assets and liabilities became unobservable or observable in the current marketplace. These transfers are considered to be effective as of the beginning of the period in which they occur. The Group did not transfer any assets or liabilities in or out of Level 2 and Level 3 during the year ended December 31, 2017. The Group did not have any financial instruments measured at fair value on a recurring basis as of December 31, 2016 and 2017. The Group’s financial instruments including amount due from related party, receivables, payables and other current liabilities are not measured at fair value but for which the fair value is estimated for disclosure purposes, the carrying amount of which approximates the fair value due to their short-term nature. The Group’s non-financial assets, such as property and equipment, would be measured at fair value only if they were determined to be impaired. (k) Revenue recognition The Group generates revenues from Recommendation Services, advertising, marketing and other services. Consistent with the criteria of ASC 605, Revenue Recognition, the Group recognizes revenues when the following four revenue recognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the selling price is fixed or determinable, and (iv) collectability is reasonably assured. Revenue is measured at fair value of the consideration received or receivable. For service arrangements that involve multiple deliverables, revenues are allocated to each unit of accounting based on relative selling price of each unit of accounting according to the selling price hierarchy established by ASU No. 2009-13. The Group uses (a) vendor-specific objective evidence (“VSOE”) of selling price, if it exists, (b) otherwise, third-party evidence of selling price. If neither (a) nor (b) exists, the Group will use (c) the management’s best estimate of the selling price for that deliverable. For the periods presented, the Group primarily uses VSOE to allocate the arrangement consideration. The Group recognizes revenues net of discounts and return allowances when the services are delivered. Customers for recommendation services are entitled to apply for returns for invalid recommendations within a specified period after the recommendation is delivered under a limited circumstances, i.e., the applicant’s phone number cannot be connected, or the applicant is in the blacklist maintained by the financial service providers, etc. Return allowances are estimated as a reduction of revenues based on historical experiences of returns granted to customers. Revenue is recorded net of value-added taxes and related surcharges. Recommendation services: (i) Loans: The Group provides Recommendation Services in respect of loan products offered by the financial service providers on its platform, and assist the financial service providers or their loan sales representatives to identify qualified individual users or borrowers. The Group considers the financial service providers, including banks, micro-loan companies and other licensed financial institutions, consumer finance companies and emerging technology-enabled financial service providers, or their loan sales representatives to be its customers, and receives service fees from the customers primarily based on number of applications of qualified users. After the users or borrowers submit applications for the recommended products to the customers, the Group does not retain any further obligations. The price for each recommendation charged to the financial service providers is a fixed price as pre-agreed in the service contract, or pre-set in the bidding systems by the customers. The price is not determined by the size or duration of the loan underlying of each recommendation. Revenue is recognized when the user application is delivered to customers, net of returns, provided the collectability is reasonably assured. (ii) Credit card: The Group provides Recommendation Services in respect of credit card products offered by credit card issuers on its platform. The individual users can select and apply for the credit cards, and submit applications to credit card issuers. The Group is not involved in the credit card approval or issuance process. Service fee is charged to the customers, i.e., the credit card issuers, upon completion of an application, issuance or first usage of a credit card by the users (collectively referred to as “cost-per-success”). Revenue is recognized on a monthly basis when the customers confirm the number of card application, issuance or first usage with the Group, provided collectability is reasonably assured. Advertising and marketing services The Group also provides advertising, marketing and other services primarily to financial service providers of credit cards and wealth management products. The Group’s advertising and marketing services allow customers to place advertisements in particular areas of the Group’s platform and third-party advertising network, at performance-based or time-based fixed prices, in particular formats and over particular periods of time. Performance-based revenues are recognized based on effective clicks, or effective activations, depending on the relevant performance measures. The effective clicks refer to that users click on the advertisements. The effective activations primarily include providing contact information or completing a registration form by users on the advertisers’ websites redirected from the advertisements, and user’s application are successfully approved by the credit card issuers in the case of advertising and marketing services related to credit card products. Time-based revenues are recognized ratably over the service period, provided the collectability is reasonably assured. For service arrangements involved with third-party platforms, the Group considers whether it should report revenues on a gross or net basis by assessing all indicators set forth in ASC subtopic 605-45, and determine if the Group is acting as principal or agent. For arrangements where the Group has several strong indicators that it has risks and rewards of a principal, such as being the primary obligor, subject to inventory risk, and having latitude in establishing prices and selecting suppliers, revenue is recorded on a gross basis, and the related marketing costs charged by third party platforms that are directly attributable to the customers are recorded as costs of revenues. Otherwise, the revenue is record on a net basis. (l) Cost of revenues Cost of revenues consists primarily of costs associated with maintenance of the platform including bandwidth and server hosting costs, call center outsourcing costs, online payment processing fees, credit acquisition costs, direct marketing costs, depreciation, payroll and other related costs of operations. (m) Sales and marketing expenses Sales and marketing expenses consist primarily of advertising costs for the acquisition of traffic to the Group’s platform, depreciation, payroll and other related expenses for employees engaged in sales, business development and marketing activities. Advertising costs are expensed as incurred, and are included in sales and marketing expenses. For the years ended December 31, 2015, 2016 and 2017, total advertising expenditures were RMB201,727, RMB285,288 and RMB1,085,314, respectively. (n) Research and development expenses Research and development expenses consist primarily of payroll and related expenses for employees involved in developing and improving the Group’s platform, new products development and products enhancements. Since inception, the amount of costs qualifying for capitalization has been immaterial and, as a result, all development costs have been expensed as incurred. (o) General and administrative expenses General and administrative expenses consist primarily of payroll and related expenses for employees involved in general corporate functions, including finance, legal and human resources, costs associated with use by these functions of facilities and equipment, such as depreciation, rental and other general corporate related expenses. (p) Share-based compensation All share-based awards granted to employees, including restricted ordinary shares and share options, are measured at fair value on grant date. Share-based compensation expense is recognized using the straight-line vesting method for awards that contain only service conditions, and using graded vesting method for other awards, net of estimated forfeitures, over the requisite service period, which is the vesting period. The Group uses the Binomial option pricing model to estimate fair value of the share options. The determination of estimated fair value of share-based awards on the grant date using an option pricing model is affected by the fair value of underlying ordinary shares as well as assumptions regarding a number of complex and subjective variables. These variables include the expected value volatility of underlying ordinary shares over the expected term of the awards, actual and projected employee share option exercise behaviors, a risk-free interest rate and any expected dividends. The underlying ordinary shares which do not have quoted market prices, were valued based on the income approach. Determination of estimated fair value of the underlying ordinary shares requires complex and subjective judgments due to their limited financial and operating history, unique business risks and limited public information on companies in China similar to them. Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates. The Group uses historical data to estimate forfeitures of the pre-vesting options and records share-based compensation expenses only for those awards that are expected to vest. For shares options granted with performance condition, the share-based compensation expenses is recorded when the performance condition is considered probable. Where the occurrence of an initial public offering (“IPO”) is a performance condition, cumulative share-based compensation expenses for the options that have satisfied the service condition are recorded upon the completion of the IPO. The Company’s share-based awards granted to employees of the non-platform business should be recognized as a deemed dividend from the Group to its parent company, RONG360 at the fair value determined as of the grant date. (q) Income taxes Current income taxes are provided in accordance with the regulations of the relevant tax jurisdictions. The Group follows the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the temporary differences between the financial statements carrying amounts and tax basis of existing assets and liabilities by applying enacted statutory tax rates that will be in effect in the period in which the temporary differences are expected to reverse. The Group records a valuation allowance to reduce the amount of deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of comprehensive loss in the period of change. Income tax liability is calculated based on a separate return basis as if the Group had filed separate tax returns before the Reorganization. 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. As of December 31, 2015, 2016 and 2017, the Group did not have any significant unrecognized uncertain tax positions. (r) Leases Each lease is classified at the inception date as either a capital lease or an operating lease. For the lessee, a lease is a capital lease if any of the following conditions exist: a) ownership of the leased property is transferred to the lessee by the end of the lease term, b) there is a bargain purchase option, c) the lease term is at least 75% of the leased property’s estimated remaining economic life or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the leaser at the inception date. A capital lease is accounted for as if there was an acquisition of an asset and an incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases. Payments made under operating lease are charged to the consolidated statements of comprehensive Loss on a straight-line basis over the term of underlying lease. The Group has no capital lease for any of the periods presented. (s) Comprehensive loss Comprehensive loss is defined as the changes in equity of the Group during a period from transactions and other events and circumstances excluding transactions resulting from investments from shareholders and distributions to shareholders. Comprehensive loss for the periods presented includes net loss and foreign currency translation adjustments. (t) Segment reporting The Group’s chief operating decision maker has been identified as its Chief Executive Officer, who reviews the consolidated results when making decisions about allocating resources and assessing performance of the Group as a whole and hence, the Group has only one reportable segment. The Group does not distinguish between markets or segments for the purpose of internal reporting. The Group’s long-lived assets are substantially all located in the PRC and substantially all of the Group’s revenues are derived from the PRC. Therefore, no geographical segments are presented. (u) Statutory reserves The Company’s subsidiaries and VIE established in the PRC are required to make appropriations to certain non-distributable reserve funds. In accordance with the laws applicable to the Foreign Investment Enterprises established in the PRC, the Company’s subsidiaries registered as wholly-owned foreign enterprise have to make appropriations from their annual after-tax profits (as determined under generally accepted accounting principles in the PRC (“PRC GAAP”)) to reserve funds including general reserve fund, enterprise expansion fund and staff bonus and welfare fund. The appropriation to the general reserve fund must be at least 10% of the annual after-tax profits calculated in accordance with PRC GAAP. Appropriation is not required if the general reserve fund has reached 50% of the registered capital of the company. Appropriations to the enterprise expansion fund and staff bonus and welfare fund are made at the respective company’s discretion. In addition, in accordance with the PRC Company Laws, the Group’s VIE registered as Chinese domestic company must make appropriations from its annual after-tax profits as determined under the PRC GAAP to non-distributable reserve funds including statutory surplus fund and discretionary surplus fund. The appropriation to the statutory surplus fund must be 10% of the annual after-tax profits as determined under PRC GAAP. Appropriation is not required if the statutory surplus fund has reached 50% of the registered capital of the company. Appropriation to the discretionary surplus fund is made at the discretion of the company. The use of the general reserve fund, enterprise expansion fund, statutory surplus fund and discretionary surplus fund are restricted to offsetting of losses or increasing of the registered capital of the respective company. The staff bonus and welfare fund is a liability in nature and is restricted to fund payments of special bonus to employees and for the collective welfare of all employees. None of these reserves are allowed to be transferred to the company in terms of cash dividends, loans or advances, nor can they be distributed except under liquidation. No profit appropriation to above reserve funds was made for the Group’s entities established in the PRC for the years ended December 31, 2015, 2016 and 2017. |
Recent accounting pronouncement
Recent accounting pronouncements | 12 Months Ended |
Dec. 31, 2017 | |
Recent accounting pronouncements | |
Recent accounting pronouncements | 3. Recent accounting pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. The guidance substantially converges final standards on revenue recognition between the FASB and the International Accounting Standards Board, providing a framework on addressing revenue recognition issues and, upon its effective date, replaces almost all exiting revenue recognition guidance, including industry-specific guidance, in current U.S. GAAP. An entity has the option to apply the provisions of ASU 2014-09 either retrospectively to each prior reporting period presented (“full retrospective method”) or retrospectively with the cumulative effect of initially applying this standard recognized at the date of initial application (“modified retrospective method”). ASU 2014-09 is effective for fiscal years and interim periods within those years beginning after December 15, 2017, and early adoption is permitted but not earlier than the original effective date of December 15, 2016. The Group will adopt the standard from January 1, 2018 using the modified retrospective method. The Group has substantially completed the evaluation of the impact of the new standard in relation to the revenue recognition of all of its material revenue arrangements. Based on this evaluation, the Group does not expect the adoption to have a material impact on its consolidated financial statements except for the changes on the related disclosures. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expenses for such leases generally on a straight-line basis over the lease term. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Group is currently evaluating the impact of adopting this standard on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments”, which will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which a company recognizes an allowance based on the estimate of expected credit loss. The Group is currently evaluating the impact of adopting this standard on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments”. ASU 2016-15 provides guidance for targeted changes with respect to how cash receipts and cash payments are classified in the statements of cash flows, with the objective of reducing diversity in practice. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The Group does not expect the adoption to have a material impact on its consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, “Compensation—Stock Compensation (Topic 718), Scope of Modification Accounting”, which clarifies and reduces both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, to a change to the terms or conditions of a share-based payment award. The amendments are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption is permitted. The Group elected to early adopt this guidance from January 1, 2017. In July 2017, the FASB issued ASU 2017-11, “Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features. II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception”. This ASU affects all entities that issue financial instruments (for example, warrants or convertible instruments) that include down round features. Part I of this ASU relates to the recognition, measurement, and earnings per share of certain freestanding equity-classified financial instruments that include down round features affect entities that present earnings per share in accordance with the guidance in Topic 260, Earnings Per Share, while Part II does not have an accounting effect. The Part I is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The amendments in Part II of this update do not require any transition guidance because those amendments do not have an accounting effect. The Group is in the process of evaluating the impact of this accounting standard update on its consolidated financial statements. |
Concentration and risks
Concentration and risks | 12 Months Ended |
Dec. 31, 2017 | |
Concentration and risks | |
Concentration and risks | 4. Concentration and risks (a) Concentration of customers and suppliers There was one, one and nil customer accounted for more than 10% of the Company’s total revenues for the years ended December 31, 2015, 2016 and 2017. There were three and two customers which individually accounted for more than 10% of the Company’s net accounts receivable as of December 31, 2016 and 2017 respectively as follows: For the Year Revenues 2015 2016 2017 Customer A % % * As of Accounts receivable, net 2016 2017 Customer A % % Customer B % % Customer C % * There were three, three and two suppliers, e.g. advertising agencies and call center service provider, which individually accounted for more than 10% of the Company’s total costs and expenses for the years ended December 31, 2015, 2016 and 2017 respectively. Only one supplier individually accounted for more than 10% of the Company’s net accounts payable as of December 31, 2016 and 2017 respectively as follows: For the Year Costs and expenses 2015 2016 2017 Supplier I % % % Supplier II % % * Supplier III % * * Supplier IV * % % As of Accounts payable 2016 2017 Supplier V % * Supplier VI * % * (b) Credit risks The Group’s credit risk primarily arises from receivables due from its customers, related parties and other parties. The maximum exposure of such assets to credit risk is the assets’ carrying amounts as of the balance sheet dates. The Group believes that there is no significant credit risk associated with amount due from related parties. Receivables due from customers are typically unsecured in the PRC and the credit risk with respect to which is mitigated by credit evaluations the Group performs on its customers and its ongoing monitoring process of outstanding balances. (c) Foreign currency risk The Group’s operating transactions are mainly denominated in RMB. RMB is not freely convertible into foreign currencies. The value of the RMB is subject to changes by the central government policies and to international economic and political developments. In the PRC, certain foreign exchange transactions are required by law 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 PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to effect the remittance. |
Accounts receivable, net
Accounts receivable, net | 12 Months Ended |
Dec. 31, 2017 | |
Accounts receivable, net | |
Accounts receivable, net | 5. Accounts receivable, net Accounts receivable, net consists of the following: As of 2016 2017 RMB RMB Accounts receivable Less: allowance for doubtful accounts ) — Accounts receivable, net Accounts receivable are non-interest bearing and are generally on terms between 1 to 30 days. In some cases, these terms are extended for certain qualifying long-term customers who have met specific credit requirements. The movements in the allowance for doubtful accounts are as follows: For the Year 2016 2017 RMB RMB Balance at beginning of the year ) ) Additions ) — Reversals — — Write offs — Balance at end of the year ) — |
Prepayments and other current a
Prepayments and other current assets | 12 Months Ended |
Dec. 31, 2017 | |
Prepayments and other current assets | |
Prepayments and other current assets | 6. Prepayments and other current assets Prepayments and other current assets consist of the following: As of 2016 2017 RMB RMB Prepaid advertising expenses, rentals and others Deposits Staff advances Deductible VAT input Total |
Property and equipment, net
Property and equipment, net | 12 Months Ended |
Dec. 31, 2017 | |
Property and equipment, net | |
Property and equipment, net | 7. Property and equipment, net Property and equipment, net consists of the following: As of 2016 2017 RMB RMB Office furniture and equipment Computer equipment Servers and network equipment Leasehold improvements Total Accumulated depreciation ) ) Property and equipment, net Depreciation expenses were RMB 3,650, RMB 4,637 and RMB5,769, for the years ended December 31, 2015, 2016 and 2017, respectively. |
Accrued expenses and other curr
Accrued expenses and other current liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Accrued expenses and other current liabilities | |
Accrued expenses and other current liabilities | 8. Accrued expenses and other current liabilities Accrued expenses and other current liabilities consist of the following: As of 2016 2017 RMB RMB Accrued payroll Accrued expenses Other payables Total |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax | |
Income Tax | 9. Income tax Cayman Islands Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, the Cayman Islands does not impose a withholding tax on payments of dividends to shareholders. Hong Kong Under the current Hong Kong Inland Revenue Ordinance, the subsidiaries of the Group and Predecessor Operations in Hong Kong are subject to 16.5% Hong Kong profit tax on its taxable income generated from operations in Hong Kong. Additionally, payments of dividends by the subsidiary incorporated in Hong Kong to the Company are not subject to any Hong Kong withholding tax. PRC In accordance with the Enterprise Income Tax Law (“EIT Law”), Foreign Investment Enterprises (“FIEs”) and domestic companies are subject to Enterprise Income Tax (“EIT”) at a uniform rate of 25%. Preferential tax treatments are granted to certain entities qualified as High and New Technology Enterprises (‘‘HNTEs’’). RLSJ and RSJ obtained certificates of HNTEs and therefore are eligible to enjoy a preferential tax rate of 15% for three years, provided that they are qualified as HNTEs during such periods. The management expects that all the criteria to utilize this preferential tax treatment can be satisfied for the annual tax filing for the year ended December 31, 2017. Accordingly, a preferential tax rate of 15% was applied for these two Predecessor Operation entities. Except for the preferential treatment applied to RLSJ and RSJ, the subsidiaries and VIE of the Group and Predecessor Operations in the PRC are subject to a uniform income tax rate of 25% for all periods presented. 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 Group does not believe that it is likely that its operations outside of the PRC be considered a resident enterprise for PRC tax purposes. However, due to limited guidance and implementation history of the EIT Law, should the Company be treated as a resident enterprise for PRC tax purposes, the Company will be subject to PRC income tax on worldwide income at a uniform tax rate of 25%. Composition of income tax expenses: For the Year 2015 2016 2017 RMB RMB RMB Current income tax — — Deferred income tax — — ) Total — — Reconciliation of the differences between statutory income tax rate and the effective income tax rate for the years ended December 31, 2015, 2016 and 2017 are as below: For the Year 2015 2016 2017 RMB RMB RMB Statutory EIT rate % % % Tax effect of preferential tax treatment — — )% Tax effect of permanent differences )% )% )% Changes in valuation allowance )% )% )% Effective income tax rate — — )% The following table sets forth the effect of preferential tax: For the Year 2015 2016 2017 RMB RMB RMB Tax effect of preferential tax treatment — — Basic and diluted loss per share effect — — Composition of deferred tax assets: Deferred taxes arising from PRC subsidiaries and VIE were measured using the enacted tax rates for the periods in which they are expected to be reversed. The Group’s deferred tax assets consist of the following components: As of December 31, 2016 2017 RMB RMB Deferred tax assets Deferred revenue — Accrued payroll and expenses Allowances of doubtful accounts — Net operating loss carry-forwards — Advertising expenses in excess of deduction limit Total deferred tax assets Less: Valuation allowance ) ) Total deferred tax assets, net — A valuation allowance is provided against deferred tax assets when the Group determines that it is more likely than not that the deferred tax assets will not be utilized in the future. In making such determination, the Group evaluates a variety of factors including the Group’s operating history, accumulated (deficit)/equity, existence of taxable temporary differences and reversal periods. As of December 31, 2016, the Group believed that it is more likely than not that these net accumulated operating losses and other deferred tax assets will not be utilized in the future given the Group had incurred net accumulated operating losses for income tax purposes since its inception. Therefore, the Group provided full valuation allowances for the deferred tax assets. As of December 31, 2017, the Group believed that it is more likely than not that the advertising expenses in excess of deduction limit will not be utilized in the future given the Group expects its advertising expenses will continue to exceed the deduction limit in the foreseeable future. Therefore, the Group provided full valuation allowance for the deferred tax assets arising from such advertising expenses. The net deferred tax assets as recognized was included in the “Other non-current assets” in the consolidated balance sheets. Movement of valuation allowance: For the Year Ended 2016 2017 RMB RMB Balance at beginning of the year Derecognized* — ) Additions Reversals** — ) Balance at end of the year * Immediately upon the completion of the Reorganization, deferred tax assets from the accumulated net operating loss carry-forwards with full valuation allowances on that completion date were derecognized, as which are not allowed to be transferred to the Group’s VIE and subsidiaries under the tax laws and regulations. ** The reversal of valuation allowance for the year ended December 31, 2017 was primarily attributed to changes of the enacted income tax rate due to aforementioned preferential tax treatment of RLSJ and RSJ in 2017. |
Share-based compensation expens
Share-based compensation expenses | 12 Months Ended |
Dec. 31, 2017 | |
Share-based compensation expenses | |
Share-based compensation expenses | 10. Share-based compensation expenses The following table sets forth the share-based compensation expenses included in each of the relevant accounts: For the Year 2015 2016 2017 2017 RMB RMB RMB US$ Cost of revenues — — Sales and marketing expenses — — Research and development expenses — — General and administrative expenses Total (a) 2012 Share Plan of RONG360 Prior to the Reorganization, all of the options and restricted ordinary shares were granted by RONG360 under its 2012 Share Plan with its own underlying shares. The 2012 Share Plan of RONG360 provides for the grant of share options and other equity-based awards to eligible employees of RONG360 and its subsidiaries and VIE. Starting from 2013, RONG360 granted multiple tranches of share options with tiered vesting commencement dates to employees. Options granted under the 2012 Share Plan were subject to a service condition of four or seven years and a performance condition of occurrence of an IPO. The service condition requires one-fourth of the awards to vest on the first anniversary date of the specified vesting commencement date, and the remaining of the awards to vest in equal installments on a quarterly basis in the remaining vesting period. The grantees are entitled the rights to receive underlying shares that options are exercised only if the performance target of an IPO is achieved, provided the service condition is also met. Options granted typically expire in ten years from the respective vesting commencement date as stated in the grant letters. The Group did not recognize any share-based compensation expenses for the options granted under the 2012 Share Plan until the IPO as the vesting of the awards was contingent upon an IPO, which was not considered probable until it happened. The activities of share options granted under RONG360’s 2012 Share Plan for the years ended December 31, 2015, 2016 and for the period from December 31, 2016 to the IPO date are summarized as below ( * ) : Number of Weighted Aggregate Weighted average Outstanding as of January 1, 2015 Granted during the year Forfeited during the year ) Outstanding as of December 31, 2015 Granted during the year Forfeited during the year ) Outstanding as of December 31, 2016 Granted during the year Forfeited during the year ) Outstanding immediately prior to the IPO (*) Option activities include all activities of share options of RONG360. The share-based compensation expenses discussed below only include the expenses attributable to the Platform Business. No share-based compensation expenses in relation to share options granted were recognized for the years ended December 31, 2015 and 2016. The total share-based compensation expenses recognized by the Group for the year ended December 31, 2017 for which the service condition had been met and the performance target of IPO was achieved were RMB32,149. The fair values of the options granted under RONG360’s 2012 Share Plan in relation to the share-based compensation expenses attributable to the Platform Business for the years ended December 31, 2015, 2016 and 2017 are as follows: For the Year 2015 2016 2017 US$ US$ US$ Weighted average grant date fair value of option per share Aggregate grant date fair value of options granted The estimated fair value of each option granted under RONG360’s 2012 Share Plan is estimated on the date of grant using the binomial option-pricing model with the following assumptions: For the Year Ended December 31, 2015 2016 2017 Risk-free interest rate per annum 1.87% ~ 2.43% 1.59% ~ 1.79% 2.31% ~ 2.4% Expected term (in years) Expected volatility 55% ~ 58% 58% ~ 59% 55% ~ 57% Expected dividends yield — — — The Group estimated the risk-free interest rate based on the yield to maturity of U.S. treasury bonds denominated in US$ at the option valuation date. Expected term is the contract life of the option. The expected volatility at the grant date and each option valuation date was estimated based on the annualized standard deviation of the daily return embedded in historical share prices of comparable peer companies with a time horizon close to the expected expiry of the term of the options. RONG360 has never declared or paid any cash dividends on its capital stock, and the Group does not anticipate any dividend payments in the foreseeable future. (b) Global Share Plan The Company adopted a Global Share Plan, of which the terms are substantially identical to the 2012 Share Plan of RONG360, effective upon the completion of the Company’s initial public offering. Pursuant to the Global Share Plan, the Company assumed all outstanding 20,480,486 share options issued under the 2012 Share Plan of RONG360. Each one of the outstanding share options under the 2012 Share Plan with underlying shares of RONG360 were converted to one share option of the Company (i.e. the Platform Business) and one share option of RONG360’s other subsidiaries (i.e. the non-platform business) in a way that employees kept an equitable position immediately before and after the conversion. There was no significant incremental share-based compensation expense recorded as a result of the conversion. No new share awards were granted under the Global Share Plan after the IPO till December 31, 2017. No options have been exercised under this plan. As of December 31, 2017, 18,640,845 share options of the Company were held by the Group’s employees under Global Share Plan with the weighted average exercise price of US$0.21 per option and weighted remaining contractual years of 7.14 years, out of which 10,827,473 options were exercisable with the weighted average exercise price of US$0.10 per option and weighted remaining contractual years of 5.99 years. 16,725,096 share options were expected to be vested with the weighted average exercise price of US$0.20 per option and weighted remaining contractual years of 7.15 years. The aggregate intrinsic value of the outstanding options, exercisable options and share options expected to be vested as of December 31, 2017 are US$44,454, US$26,947 and US$39,924 respectively. There were RMB61,773 of unrecognized share-based compensation expenses, which are expected to be recognized over a weighted-average period of 7.14 years. As of December 31, 2017, 1,839,641 share options of the Company were held by the employees of non-platform business under the Global Share Plan with the weighted average exercise price of US$0.28 per option and weighted remaining contractual years of 7.57 years, out of which 1,136,338 options were exercisable with the weighted average exercise price of US$0.17 per option and weighted remaining contractual years of 6.91 years. 1,651,134 share options were expected to be vested with the weighted average exercise price of US$ 0.27 per option and weighted remaining contractual years of 7.54 years. The aggregate intrinsic value of the outstanding options, exercisable options and share options expected to be vested as of December 31, 2017 are US$4,251, US$2,755 and US$3,829 respectively. The share options granted to employees of non-platform business were accounted for as deemed dividends from the Company to its parent company, RONG360, as these employees do not provide services to the Company. The share awards were measured based on the fair value as of the grant date. The amount recognized as deemed dividends were RMB8,851 for the year ended December 31, 2017. As of December 31, 2017, 18,640,845 share options with underlying shares of non-platform business were held by the Group’s employees under the Global Share Plan. The vesting of such awards is conditional upon the fulfillment of requisite service conditions to the Company and listing of non-platform business. The cost relating to such share-based awards succeeded from 2012 Share Plan of RONG360 are recognized by the Company as a shareholder contribution as the award will ultimately be settled by RONG360. The award is accounted for as a financial derivative and initially measured at its fair value in accordance with ASC 815-10-55-46 through 55-48, and the related expense will be recognized over the requisite service period in the consolidated statements of comprehensive loss with a corresponding credit to additional paid-in capital. Subsequent changes in the fair value of the award are recorded in the consolidated statements of comprehensive loss through the date on which the underlying award are settled. The share-based compensation expenses recognized for the year ended December 31, 2017 in relation to share options with underlying share of non-platform business granted to the Group employees under the Global Share Plan were RMB 31,721. (c) Restriction of ordinary shares held by founders On February 21, 2012, an aggregate of 119,692,080 ordinary shares were issued to the founders of RONG360 at par value of US$0.0001 per share. In connection with RONG360’s issuance of Series A Preferred Shares on July 9, 2012, all of the 119,692,080 ordinary shares held by the founders became restricted pursuant to the shareholders’ agreement (“Restricted Founders’ Shares”). The Restricted Founders’ Shares vest over four years provided the founders remain employment relationship. One fourth of the awards vest on the first anniversary date of the specified service commencement date which is earlier than the grant date, and one forty-eighth of the restricted shares vest on a monthly basis in the remaining vesting period, subject to acceleration under certain circumstances including a successful IPO. Such restriction is deemed as a compensatory arrangement for services to be provided by the founders, and therefore accounted for as a share-based compensation arrangement. The activities of the Restricted Founders’ Shares for the years ended December 31, 2015, 2016 and 2017, are summarized as below(*): Number of Weighted-Average Unvested at January 1, 2015 Vested ) Unvested at December 31, 2015 — (*) Activities of Restricted Founders’ Shares include all activities of Restricted Founders’ shares of RONG360. The share-based compensation expenses discussed below only include the expenses attributable to the Platform Business. Total fair value or intrinsic value of Restricted Founders’ Shares vested on the respective vesting dates attributable to the Platform Business during the year ended December 31, 2015, 2016 and 2017 was US$12,037, nil and nil. For the years ended December 31, 2015, 2016 and 2017, share-based compensation expenses recognized associated with the Restricted Founders’ Shares attributable to the Platform Business were RMB664, nil and nil. There were no unvested restricted shares or unrecognized share-based compensation expenses related to the Restricted Founders’ Shares as of December 31, 2016 and 2017, respectively. (d) Restricted shares granted to executive officers and director On July 16, 2014, RONG360 approved and granted of an aggregate of 14,000,000 restricted ordinary shares to three executive officers and a director, who are also founders of RONG360 (“Restricted Shares”). The Restricted Shares vest over seven years provided the grantees remain employment relationship with RONG360. One-fourth of the awards vest on the fourth anniversary date of the specified service commencement date, which is earlier than the grant date, and one forty-eighth of the awards vest on a monthly basis in the remaining vesting period, subject to acceleration under certain circumstances including a successful IPO. The activities of the Restricted Shares for the years ended December 31, 2015, 2016 and 2017, are summarized as below(*): Number of Weighted-Average Unvested at January 1, 2015 Vested ) Unvested at December 31, 2015 Vested ) Unvested at December 31, 2016 Vested ) Unvested at December 31, 2017 — (*) Activities of Restricted Shares include all activities of the Restricted Shares of RONG360. The share-based compensation expenses discussed below only include the expenses attributable to the Platform Business. Total fair value or intrinsic value of the Restricted Shares vested on the respective vesting dates attributable to the Platform Business during the years ended December 31, 2015, 2016 and 2017, was US$3,316, US$4,324 and US$15,223, respectively. For the years ended December 31, 2015, 2016 and 2017, share-based compensation expenses recognized associated with the Restricted Shares attributable to the Platform Business were RMB12,552, RMB4,817 and RMB2,388, respectively. As of December 31, 2017, there were no unrecognized share-based compensation expenses related to the Restricted Shares attributable to the Platform Business. There were no Restricted Shares granted during the years ended December 31, 2015, 2016 and 2017. (e) 2017 Share Incentive Plan In October 2017, the board of directors approved and adopted the 2017 Share Incentive Plan (the “2017 Plan”). The 2017 Plan permits the awards of share options, restricted shares or any other type of share-based awards. The maximum number of shares available for issuance under the 2017 Plan shall be 2% of the total number of shares issued and outstanding as of the closing of the Company’s initial public offering, plus an annual increase from the fiscal year beginning January 1, 2018 in according with the approved increasing scheme. On December 29, 2017, the Company approved and granted an aggregate of 8,285,827 share options to executive officers under the 2017 Plan. Options granted were subject to a service condition and a performance condition. The service condition requires one-fourth of the awards to vest on December 31, 2017, and the remaining of the awards to vest in equal installments on a quarterly basis in the three years starting from March 31, 2018. The performance condition was determined by the board of directors. An evaluation is made each quarter as to the likelihood of performance condition being met. The activities of the share options granted by the Company under the 2017 Plan for the year ended December 31, 2017 are summarized as below: Number of Weighted Aggregate Weighted average Outstanding as of January 1, 2017 — — Granted during the year Forfeited during the year — — Outstanding as of December 31, 2017 The aggregate grant date fair value of the options granted under the 2017 Plan was US$21,377 and US$2.58 per share based on the market price of the underlying ordinary share of the Company on the same date. No options were exercised for the year ended December 31, 2017, and no options were exercisable as of December 31, 2017. All of the options outstanding as of December 31, 2017 were expected to be vested. For the year ended December 31, 2017, share-based compensation expenses recognized associated with the share options granted by the Company under the 2017 Plan were RMB34,948. As of December 31, 2017, there were RMB104,845 of unrecognized share-based compensation expenses related to such share options granted, which are expected to be recognized over a weighted average period of 3 years. |
Loss per Share
Loss per Share | 12 Months Ended |
Dec. 31, 2017 | |
Loss per Share | |
Loss per Share | 11. Loss per share Basic net loss per share is computed using the weighted average number of ordinary shares outstanding during the period. Diluted net loss per share is computed using the weighted average number of ordinary shares and dilutive potential ordinary shares outstanding during the period. The Company issued ordinary shares to RONG360 in connection with the Reorganization in September 2017 (See Note 1). 345,541,350 ordinary shares were issued and outstanding upon the completion of the Reorganization (See Note 1 and Note 15) in October 2017, which are held by RONG360. Basic and diluted net loss per ordinary share reflecting the effect of the issuance of ordinary shares to RONG360 are presented as follows, as if they had been existed since January 1, 2015. Immediately prior to the completion of the IPO, all of the ordinary shares as issued and held by RONG360 were redesignated into an equal number of Class B ordinary shares the Company, and all of the shares as issued for the IPO and concurrent private placement are Class A ordinary shares. Because the Class A ordinary shares and Class B ordinary shares have the same dividend and other rights, except for voting and conversion rights for Class B ordinary shares to be converted into Class A ordinary shares on one-to-one basis as specified in Note 1(b), the two classes of ordinary shares have been presented on a combined basis in the consolidated statements of comprehensive Loss and in the computation of net loss per share. Basic and diluted net loss per ordinary share for each of the years are presented as follows: For the Year Ended 2015 2016 2017 2017 RMB RMB RMB USD Numerator : Net loss ) ) ) ) Numerator for basic and diluted net loss per share ) ) ) ) Denominator: Weighted average number of ordinary shares Denominator for basic and diluted net loss per share Net loss per ordinary share: Basic and diluted ) ) ) ) Diluted net loss per share is computed using the weighted average number of ordinary shares and dilutive potential ordinary shares outstanding during the respective year. The potential ordinary shares of restricted shares and share options were excluded from the diluted loss net per share calculations because to do so would be antidilutive for all the periods presented. The numbers of restricted shares and share options excluded from the calculation of diluted net loss per share of the Company were 10,266,667 and 14,084,659 as of December 31, 2015, 6,183,334 and 15,857,198 as of December 31, 2016, and nil and 28,766,313 as of December 31, 2017, respectively. |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related party transactions | |
Related party transactions | 12. Related party transactions The Group’s consolidated financial statements include costs and expenses allocated from RONG360 prior to the Reorganization, amounted to RMB 53,662, RMB65,276 and RMB74,952 for the years ended December 31, 2015, 2016 and 2017, respectively. In addition, RONG360 provided cash funding support to the Group to satisfy Platform Business’ working capital requirements. See Note 1 (b) for more detailed information. The following sets forth significant related party transactions of the Group during the years presented: For the year ended 2015 2016 2017 Revenues generated from RONG360 (a) — Administrative expenses charged to RONG360 (b) — — Collection handling services provided by RONG360 (c) — — ) Initial working capital contributed by RONG360 immediately before the IPO (d) — — The following sets forth related party outstanding balance: As of 2016 2017 Amount due from/(to) RONG360 (e) ) (a) RONG360’s business comprised the Platform Business segment and non-platform Business segment prior to the Reorganization, thus transactions between the Group’s Predecessor Operation, i.e. the Platform Business, and non Platform business segment of RONG360 are accounted for as related party transactions. The Group provided recommendation services to the non-platform Business segment of RONG360 and the related service fees were charged at a standard fee rate as that was charged to third party customers. (b) Following the Reorganization, the administrative expenses allocated to RONG360 consist of various expenses attributable to the non-platform business segment of RONG360, including expenses related to operational, administrative, human resources, legal, accounting and internal control support pursuant to the transitional services arrangement (see Note 1(b)). (c) Following the Reorganization, RONG360 charged the Group collection handling fees for the revenue amount billed to third parties through RONG360 by the Group. As of December 31, 2017, the accounts receivable billed through RONG360 amounted to RMB141,190. (d) RONG360 provided RMB150 million (US$23.1 million) of initial working capital to the Company in the form of a capital contribution. The Company received the related cash in November 2017. (e) The balance arose from the aforementioned related party transactions and various operational payments made by RONG360 on behalf of the Group, such as payroll costs, miscellaneous expenses, etc. |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2017 | |
Employee Benefits | |
Employee Benefits | 13. Employee Benefits Full time employees of the Group in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to the employees. Chinese labor regulations require that the PRC subsidiaries and VIE of the Group make contributions to the government for these benefits based on certain percentages of the employees’ salaries, up to a maximum amount specified by the local government. The Group has no legal obligation for the benefits beyond the contributions made. Total amounts of such employee benefit expenses, which were expensed as incurred, were approximately RMB 19,014, RMB 28,312 and RMB38,726 for the years ended December 31, 2015, 2016 and 2017, respectively. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and contingencies | |
Commitments and contingencies | 14. Commitments and contingencies Operating lease commitments The Group has leased office premises under non-cancellable operating lease agreements. These leases have varying terms and contain renewal rights. Future aggregate minimum lease payments under non-cancellable operating leases agreements are as follows: As of RMB Within one year After one year but within two years Later than two years Total For the years ended December 31, 2015, 2016 and 2017, the Group incurred rental expenses under operating leases of RMB 9,259, RMB 9,898 and RMB11,004, respectively. Advertising commitments The Group has engaged third party service providers for marketing and user traffic acquisitions through various advertising channels. The amount of advertising purchase commitments was RMB1,304 and RMB546 as of December 31, 2016 and 2017, respectively. Capital and other commitments The Group did not have significant capital and other commitments as of December 31, 2016 and 2017. Legal proceedings From time to time, the Group is subject to legal proceedings, investigations and claims incidental to the conduct of its business. As of December 31, 2017, the Group was not involved in any legal or administrative proceedings that may have a material adverse impact on the Group’s business, financial position or results of operations and cash flows. |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent events | |
Subsequent events | 15. Subsequent events In March 2018, The Company entered into a definitive agreement to acquire 65% of equity interests in a China-based technology company specializing in optimizing data-driven risk management decisions. The target company offers a suite of products and services helping financial service providers to enhance their risk management capabilities. The consideration of the transaction consists of cash, ordinary shares of the Company and options to purchase the Company’s ordinary shares. The cash portion of the consideration is approximately RMB110 million. The non-cash portion of the consideration will represent approximately 1.5% of the issued and outstanding share capital of the Company after giving effect to the issuance of shares and potential exercise of the options for the consideration. The transaction is expected to close in the second quarter of 2018, subject to the satisfaction of customary closing conditions. The Group is still in process of evaluating the accounting impact of this transaction. |
Restricted net assets
Restricted net assets | 12 Months Ended |
Dec. 31, 2017 | |
Restricted net assets | |
Restricted net assets | 16. Restricted net assets The Group’s ability to pay dividends is primarily dependent on the Group receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the Group’s subsidiaries and VIE incorporated in the PRC only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Group’s subsidiaries and VIE. In accordance with the PRC laws and regulations, statutory reserve funds shall be made and can only be used for specific purposes and are not distributable as cash dividends. See Note 2(u) for more detailed information. As a result of these PRC laws and regulations that require annual appropriation of 10% of net after-tax profits determined in accordance with PRC accounting standards and regulations to be set aside prior to payment of dividends as general reserve fund or statutory surplus fund, the Group’s PRC subsidiaries and VIE are restricted in their ability to transfer a portion of their net assets to the Company. The Company performed a test on the restricted net assets of its consolidated subsidiaries and VIE (the “restricted net assets”) in accordance with Securities and Exchange Commission Regulation S-X Rule 4-08 (e) (3), “General Notes to Financial Statements”. Such restricted net assets amounted to approximately RMB101.8 million, or 6.6% of the Company’s total consolidated net assets, as of December 31, 2017. Therefore, the Company concluded that it was not applicable for the Company to disclose the condensed financial information for the parent company for the year ended December 31, 2017. |
Summary of significant accoun24
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of significant accounting policies | |
Basis of presentation | (a) Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with U.S. GAAP. Significant accounting policies followed by the Group in the preparation of the accompanying consolidated financial statements are summarized below. |
Principles of consolidation | (b) Principles of consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries and the VIE 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, exercises effective control over the activities that most impact the entity’s economic performance, 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 intercompany transactions and balances between the Company and its wholly-owned subsidiaries and the VIE have been eliminated upon consolidation. |
Use of estimates | (c) Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Group to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities at the balance sheet date, and the reported revenues and expenses during the reporting period in the consolidated financial statements and accompanying notes. Significant accounting estimates reflected in the Group’s financial statements include valuation and recognition of share-based compensation expenses, allowance for doubtful accounts and valuation allowances for deferred tax assets. Actual results could differ from those estimates. |
Foreign currency translation | (d) Foreign currency translation The Group’s reporting currency is Renminbi (“RMB”). The functional currency of the Company and the Group’s subsidiary incorporated in Hong Kong (“HK”) is United States dollars (“US$”). The Group’s PRC subsidiaries and VIE determined their functional currency to be RMB. The determination of the respective functional currency is based on the criteria set out by ASC 830, Foreign Currency Matters. Transactions denominated in foreign currencies other than functional currency are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies other than functional currency are remeasured into the functional currency at the exchange rates prevailing at the balance sheet date. Exchange gains or losses arising from foreign currency transactions are recorded in the consolidated statements of comprehensive loss. The financial statements of the Group’s non-PRC entities are translated from their respective functional currency into RMB. Assets and liabilities denominated in foreign currencies are translated into RMB using the applicable exchange rates at the balance sheet date. Equity accounts other than earnings generated in the current period are translated into RMB using the appropriate historical rates. Revenues, expenses, gains and losses are translated into RMB using the average exchange rates for the relevant period. The resulting foreign currency translation adjustments are recorded in other comprehensive loss in the consolidated statements of comprehensive loss, and the accumulated foreign currency translation adjustments are presented as a component of accumulated other comprehensive loss in the consolidated statements of changes in invested/shareholders’ (deficit)/equity. Total foreign currency translation adjustments included in the Group’s other comprehensive loss were nil, nil and RMB21,170 for the years ended December 31, 2015, 2016 and 2017, respectively. |
Convenience translation | (e) Convenience translation Translations of the consolidated balance sheets, consolidated statements of comprehensive loss and consolidated statements of cash flows from RMB into US$ as of and for the year ended December 31, 2017 are solely for the convenience of the readers and were calculated at the rate of US$1.00=RMB6.5063, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on December 29, 2017. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 31, 2017, or at any other rate. |
Cash and cash equivalents | (f) Cash and cash equivalents Cash and cash equivalents represent cash on hand, time deposits and highly-liquid investments placed with banks or other financial institutions, which are unrestricted to withdrawal or use, and which have original maturities of three months or less. |
Accounts receivable, net | (g) Accounts receivable, net Accounts receivable are stated at the historical carrying amount net of write-offs and allowance for doubtful accounts. The Group reviews the accounts receivable on a periodic basis and makes allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual accounts receivable balances, the Group considers several factors, including the age of the balance, the customer’s payment history, and current credit-worthiness, and current economic trends. Accounts receivable balances are written off after all collection efforts have been exhausted. |
Property and equipment, net | (h) Property and equipment, net Property and equipment are stated at cost less accumulated depreciation and impairment, if any. Depreciation is calculated using the straight-line method over estimated useful lives of the assets as follows: Estimated useful life Office furniture and equipment 3 years Computer equipment 3 years Servers and network equipment 3 years Leasehold improvements Lesser of the term of the lease or the estimated useful lives of the leasehold improvement Repair and maintenance costs are charged to expenses as incurred, whereas the cost of renewals and betterment that extend the useful lives of property and equipment is capitalized as additions to the related assets. Retirements, sales and disposals of assets are recorded by removing the cost and accumulated depreciation from the assets and accumulated depreciation accounts with any resulting gain or loss reflected in the consolidated statements of comprehensive loss. |
Impairment of long lived assets | (i) Impairment of long-lived assets The Group evaluates its long-lived assets with finite lives for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount of an asset may not be fully recoverable. When these events occur, the Group evaluates the impairment by comparing carrying amount of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the assets, the Group recognizes an impairment loss based on the excess of the carrying amount of the long-lived assets over their fair value. No impairment loss of long-lived assets was recognized for the years ended December 31, 2015, 2016 and 2017. |
Fair value measurement | (j) Fair value measurement Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value 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—Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2—Observable, market-based inputs, other than quoted prices, in active markets for identical assets or liabilities. Level 3—Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of assets or liabilities. Accounting guidance describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. Transfers into or out of fair value hierarchy classifications are made if the significant inputs used in the financial models measuring the fair value of the assets and liabilities became unobservable or observable in the current marketplace. These transfers are considered to be effective as of the beginning of the period in which they occur. The Group did not transfer any assets or liabilities in or out of Level 2 and Level 3 during the year ended December 31, 2017. The Group did not have any financial instruments measured at fair value on a recurring basis as of December 31, 2016 and 2017. The Group’s financial instruments including amount due from related party, receivables, payables and other current liabilities are not measured at fair value but for which the fair value is estimated for disclosure purposes, the carrying amount of which approximates the fair value due to their short-term nature. The Group’s non-financial assets, such as property and equipment, would be measured at fair value only if they were determined to be impaired. |
Revenue recognition | (k) Revenue recognition The Group generates revenues from Recommendation Services, advertising, marketing and other services. Consistent with the criteria of ASC 605, Revenue Recognition, the Group recognizes revenues when the following four revenue recognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the selling price is fixed or determinable, and (iv) collectability is reasonably assured. Revenue is measured at fair value of the consideration received or receivable. For service arrangements that involve multiple deliverables, revenues are allocated to each unit of accounting based on relative selling price of each unit of accounting according to the selling price hierarchy established by ASU No. 2009-13. The Group uses (a) vendor-specific objective evidence (“VSOE”) of selling price, if it exists, (b) otherwise, third-party evidence of selling price. If neither (a) nor (b) exists, the Group will use (c) the management’s best estimate of the selling price for that deliverable. For the periods presented, the Group primarily uses VSOE to allocate the arrangement consideration. The Group recognizes revenues net of discounts and return allowances when the services are delivered. Customers for recommendation services are entitled to apply for returns for invalid recommendations within a specified period after the recommendation is delivered under a limited circumstances, i.e., the applicant’s phone number cannot be connected, or the applicant is in the blacklist maintained by the financial service providers, etc. Return allowances are estimated as a reduction of revenues based on historical experiences of returns granted to customers. Revenue is recorded net of value-added taxes and related surcharges. Recommendation services: (i) Loans: The Group provides Recommendation Services in respect of loan products offered by the financial service providers on its platform, and assist the financial service providers or their loan sales representatives to identify qualified individual users or borrowers. The Group considers the financial service providers, including banks, micro-loan companies and other licensed financial institutions, consumer finance companies and emerging technology-enabled financial service providers, or their loan sales representatives to be its customers, and receives service fees from the customers primarily based on number of applications of qualified users. After the users or borrowers submit applications for the recommended products to the customers, the Group does not retain any further obligations. The price for each recommendation charged to the financial service providers is a fixed price as pre-agreed in the service contract, or pre-set in the bidding systems by the customers. The price is not determined by the size or duration of the loan underlying of each recommendation. Revenue is recognized when the user application is delivered to customers, net of returns, provided the collectability is reasonably assured. (ii) Credit card: The Group provides Recommendation Services in respect of credit card products offered by credit card issuers on its platform. The individual users can select and apply for the credit cards, and submit applications to credit card issuers. The Group is not involved in the credit card approval or issuance process. Service fee is charged to the customers, i.e., the credit card issuers, upon completion of an application, issuance or first usage of a credit card by the users (collectively referred to as “cost-per-success”). Revenue is recognized on a monthly basis when the customers confirm the number of card application, issuance or first usage with the Group, provided collectability is reasonably assured. Advertising and marketing services The Group also provides advertising, marketing and other services primarily to financial service providers of credit cards and wealth management products. The Group’s advertising and marketing services allow customers to place advertisements in particular areas of the Group’s platform and third-party advertising network, at performance-based or time-based fixed prices, in particular formats and over particular periods of time. Performance-based revenues are recognized based on effective clicks, or effective activations, depending on the relevant performance measures. The effective clicks refer to that users click on the advertisements. The effective activations primarily include providing contact information or completing a registration form by users on the advertisers’ websites redirected from the advertisements, and user’s application are successfully approved by the credit card issuers in the case of advertising and marketing services related to credit card products. Time-based revenues are recognized ratably over the service period, provided the collectability is reasonably assured. For service arrangements involved with third-party platforms, the Group considers whether it should report revenues on a gross or net basis by assessing all indicators set forth in ASC subtopic 605-45, and determine if the Group is acting as principal or agent. For arrangements where the Group has several strong indicators that it has risks and rewards of a principal, such as being the primary obligor, subject to inventory risk, and having latitude in establishing prices and selecting suppliers, revenue is recorded on a gross basis, and the related marketing costs charged by third party platforms that are directly attributable to the customers are recorded as costs of revenues. Otherwise, the revenue is record on a net basis. |
Cost of revenues | (l) Cost of revenues Cost of revenues consists primarily of costs associated with maintenance of the platform including bandwidth and server hosting costs, call center outsourcing costs, online payment processing fees, credit acquisition costs, direct marketing costs, depreciation, payroll and other related costs of operations. |
Sales and marketing expenses | (m) Sales and marketing expenses Sales and marketing expenses consist primarily of advertising costs for the acquisition of traffic to the Group’s platform, depreciation, payroll and other related expenses for employees engaged in sales, business development and marketing activities. Advertising costs are expensed as incurred, and are included in sales and marketing expenses. For the years ended December 31, 2015, 2016 and 2017, total advertising expenditures were RMB201,727, RMB285,288 and RMB1,085,314, respectively. |
Research and development expenses | (n) Research and development expenses Research and development expenses consist primarily of payroll and related expenses for employees involved in developing and improving the Group’s platform, new products development and products enhancements. Since inception, the amount of costs qualifying for capitalization has been immaterial and, as a result, all development costs have been expensed as incurred. |
General and administrative expenses | (o) General and administrative expenses General and administrative expenses consist primarily of payroll and related expenses for employees involved in general corporate functions, including finance, legal and human resources, costs associated with use by these functions of facilities and equipment, such as depreciation, rental and other general corporate related expenses. |
Share based compensation | (p) Share-based compensation All share-based awards granted to employees, including restricted ordinary shares and share options, are measured at fair value on grant date. Share-based compensation expense is recognized using the straight-line vesting method for awards that contain only service conditions, and using graded vesting method for other awards, net of estimated forfeitures, over the requisite service period, which is the vesting period. The Group uses the Binomial option pricing model to estimate fair value of the share options. The determination of estimated fair value of share-based awards on the grant date using an option pricing model is affected by the fair value of underlying ordinary shares as well as assumptions regarding a number of complex and subjective variables. These variables include the expected value volatility of underlying ordinary shares over the expected term of the awards, actual and projected employee share option exercise behaviors, a risk-free interest rate and any expected dividends. The underlying ordinary shares which do not have quoted market prices, were valued based on the income approach. Determination of estimated fair value of the underlying ordinary shares requires complex and subjective judgments due to their limited financial and operating history, unique business risks and limited public information on companies in China similar to them. Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates. The Group uses historical data to estimate forfeitures of the pre-vesting options and records share-based compensation expenses only for those awards that are expected to vest. For shares options granted with performance condition, the share-based compensation expenses is recorded when the performance condition is considered probable. Where the occurrence of an initial public offering (“IPO”) is a performance condition, cumulative share-based compensation expenses for the options that have satisfied the service condition are recorded upon the completion of the IPO. The Company’s share-based awards granted to employees of the non-platform business should be recognized as a deemed dividend from the Group to its parent company, RONG360 at the fair value determined as of the grant date. |
Income taxes | (q) Income taxes Current income taxes are provided in accordance with the regulations of the relevant tax jurisdictions. The Group follows the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the temporary differences between the financial statements carrying amounts and tax basis of existing assets and liabilities by applying enacted statutory tax rates that will be in effect in the period in which the temporary differences are expected to reverse. The Group records a valuation allowance to reduce the amount of deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of comprehensive loss in the period of change. Income tax liability is calculated based on a separate return basis as if the Group had filed separate tax returns before the Reorganization. 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. As of December 31, 2015, 2016 and 2017, the Group did not have any significant unrecognized uncertain tax positions. |
Leases | (r) Leases Each lease is classified at the inception date as either a capital lease or an operating lease. For the lessee, a lease is a capital lease if any of the following conditions exist: a) ownership of the leased property is transferred to the lessee by the end of the lease term, b) there is a bargain purchase option, c) the lease term is at least 75% of the leased property’s estimated remaining economic life or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the leaser at the inception date. A capital lease is accounted for as if there was an acquisition of an asset and an incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases. Payments made under operating lease are charged to the consolidated statements of comprehensive Loss on a straight-line basis over the term of underlying lease. The Group has no capital lease for any of the periods presented. |
Comprehensive loss | (s) Comprehensive loss Comprehensive loss is defined as the changes in equity of the Group during a period from transactions and other events and circumstances excluding transactions resulting from investments from shareholders and distributions to shareholders. Comprehensive loss for the periods presented includes net loss and foreign currency translation adjustments. |
Segment reporting | (t) Segment reporting The Group’s chief operating decision maker has been identified as its Chief Executive Officer, who reviews the consolidated results when making decisions about allocating resources and assessing performance of the Group as a whole and hence, the Group has only one reportable segment. The Group does not distinguish between markets or segments for the purpose of internal reporting. The Group’s long-lived assets are substantially all located in the PRC and substantially all of the Group’s revenues are derived from the PRC. Therefore, no geographical segments are presented. |
Statutory reserves | (u) Statutory reserves The Company’s subsidiaries and VIE established in the PRC are required to make appropriations to certain non-distributable reserve funds. In accordance with the laws applicable to the Foreign Investment Enterprises established in the PRC, the Company’s subsidiaries registered as wholly-owned foreign enterprise have to make appropriations from their annual after-tax profits (as determined under generally accepted accounting principles in the PRC (“PRC GAAP”)) to reserve funds including general reserve fund, enterprise expansion fund and staff bonus and welfare fund. The appropriation to the general reserve fund must be at least 10% of the annual after-tax profits calculated in accordance with PRC GAAP. Appropriation is not required if the general reserve fund has reached 50% of the registered capital of the company. Appropriations to the enterprise expansion fund and staff bonus and welfare fund are made at the respective company’s discretion. In addition, in accordance with the PRC Company Laws, the Group’s VIE registered as Chinese domestic company must make appropriations from its annual after-tax profits as determined under the PRC GAAP to non-distributable reserve funds including statutory surplus fund and discretionary surplus fund. The appropriation to the statutory surplus fund must be 10% of the annual after-tax profits as determined under PRC GAAP. Appropriation is not required if the statutory surplus fund has reached 50% of the registered capital of the company. Appropriation to the discretionary surplus fund is made at the discretion of the company. The use of the general reserve fund, enterprise expansion fund, statutory surplus fund and discretionary surplus fund are restricted to offsetting of losses or increasing of the registered capital of the respective company. The staff bonus and welfare fund is a liability in nature and is restricted to fund payments of special bonus to employees and for the collective welfare of all employees. None of these reserves are allowed to be transferred to the company in terms of cash dividends, loans or advances, nor can they be distributed except under liquidation. No profit appropriation to above reserve funds was made for the Group’s entities established in the PRC for the years ended December 31, 2015, 2016 and 2017. |
Nature of operations and reor25
Nature of operations and reorganization (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Nature of operations and reorganization | |
Summary of ownership structure of the subsidiaries and VIE of the Group | Date of Place of Percentage Principal Activities The Company: Jianpu June 1, 2017 The Cayman Islands Investment holding Wholly owned subsidiaries of the Company: Jianpu (Hong Kong) Limited (“Jianpu HK”) June 19, 2017 Hong Kong % Investment holding Beijing Rongqiniu Information Technology Co., Ltd. (“RQN”) August 21, 2017 PRC % Platform Business VIE of the Company: Beijing Rongdiandian Information Technology Co., Ltd. (“RDD”) March 3, 2017 PRC % Platform Business |
Predecessor | |
Nature of operations and reorganization | |
Schedule of total cost and expenses allocated from RONG360 | For the Year 2015 2016 2017 2017 RMB RMB RMB US$ Cost of revenues Sales and marketing expenses Research and development expenses General and administrative expenses Total |
RONG360 Inc. | |
Nature of operations and reorganization | |
Summary of ownership structure of the subsidiaries and VIE of the Group | Date of Place of Percentage Principal Activities Parent: RONG360 Inc. February 21, 2012 The Cayman Islands Investment holding Wholly owned subsidiaries of RONG360: RONG360 (Hong Kong) Limited (“RONG360 HK”) February 29, 2012 Hong Kong % Investment holding Beijing Ronglian Shiji Information Technology Co. Limited (“RLSJ”) June 25, 2012 PRC % Platform Business and technology-enabled online lending business Tianjin Rongshiji Information Technology Co. Limited September 25, 2012 PRC % Platform Business and technology-enabled online lending business VIE of RONG360: Beijing Rongshiji Information Technology Co. Limited (“RSJ”) November 10, 2011 PRC % Platform Business and technology-enabled online lending business |
RONG360 Inc. | Predecessor | |
Nature of operations and reorganization | |
Schedule of financial information of RONG360's VIE directly attributable to the Predecessor Operations | As of December 31, 2016 2017 2017 RMB RMB US$ Cash and cash equivalent — Accounts receivable, net (including amounts billed through RONG360 of RMB8,075 and RMB15,356 as of December 31, 2016 and 2017, respectively) Amount due from the subsidiaries of the Group* — Prepayments and other current assets Property and equipment, net Total assets Accounts payable — — Advances from customers Tax payable Amount due to the subsidiaries of the Group* — — Accrued expenses and other current liabilities Total liabilities * The balances are eliminated through the consolidation in the preparation of the Group’s consolidated financial statements. For the Year Ended 2015 2016 2017 2017 RMB RMB RMB US$ Total revenue Net (loss)/income ) ) For the Year Ended 2015 2016 2017 2017 RMB RMB RMB US$ Net cash provided by/(used in) operating activities ) Net cash used in investing activities ) ) ) ) Net cash provided by/(used in) financing activities ) ) Net increase in cash and cash equivalents — — Cash and cash equivalents at beginning of the year — — — — Cash and cash equivalents at end of the year — — |
Summary of significant accoun26
Summary of significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of significant accounting policies | |
Schedule of estimated useful lives of the assets | Estimated useful life Office furniture and equipment 3 years Computer equipment 3 years Servers and network equipment 3 years Leasehold improvements Lesser of the term of the lease or the estimated useful lives of the leasehold improvement |
Concentration and risks (Tables
Concentration and risks (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Customer risk | |
Concentration and risks | |
Schedule of concentration and risks | For the Year Revenues 2015 2016 2017 Customer A % % * As of Accounts receivable, net 2016 2017 Customer A % % Customer B % % Customer C % * |
Supplier risk | |
Concentration and risks | |
Schedule of concentration and risks | For the Year Costs and expenses 2015 2016 2017 Supplier I % % % Supplier II % % * Supplier III % * * Supplier IV * % % As of Accounts payable 2016 2017 Supplier V % * Supplier VI * % * |
Accounts receivable, net (Table
Accounts receivable, net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounts receivable, net | |
Schedule of accounts receivable, net | As of 2016 2017 RMB RMB Accounts receivable Less: allowance for doubtful accounts ) — Accounts receivable, net |
Schedule of movements in allowance for doubtful accounts | For the Year 2016 2017 RMB RMB Balance at beginning of the year ) ) Additions ) — Reversals — — Write offs — Balance at end of the year ) — |
Prepayments and other current29
Prepayments and other current assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Prepayments and other current assets | |
Schedule of prepayments and other current assets | As of 2016 2017 RMB RMB Prepaid advertising expenses, rentals and others Deposits Staff advances Deductible VAT input Total |
Property and equipment, net (Ta
Property and equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property and equipment, net | |
Schedule of property and equipment, net | As of 2016 2017 RMB RMB Office furniture and equipment Computer equipment Servers and network equipment Leasehold improvements Total Accumulated depreciation ) ) Property and equipment, net |
Accrued expenses and other cu31
Accrued expenses and other current liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accrued expenses and other current liabilities | |
Schedule of accrued expenses and other current liabilities | As of 2016 2017 RMB RMB Accrued payroll Accrued expenses Other payables Total |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax | |
Summary of composition of income tax expenses | For the Year 2015 2016 2017 RMB RMB RMB Current income tax — — Deferred income tax — — ) Total — — |
Summary of reconciliation of the differences between statutory income tax rate and effective income tax rate | For the Year 2015 2016 2017 RMB RMB RMB Statutory EIT rate % % % Tax effect of preferential tax treatment — — )% Tax effect of permanent differences )% )% )% Changes in valuation allowance )% )% )% Effective income tax rate — — )% |
Schedule of effect of preferential tax | For the Year 2015 2016 2017 RMB RMB RMB Tax effect of preferential tax treatment — — Basic and diluted loss per share effect — — |
Schedule of deferred tax assets | As of December 31, 2016 2017 RMB RMB Deferred tax assets Deferred revenue — Accrued payroll and expenses Allowances of doubtful accounts — Net operating loss carry-forwards — Advertising expenses in excess of deduction limit Total deferred tax assets Less: Valuation allowance ) ) Total deferred tax assets, net — |
Schedule of movement of valuation allowance | For the Year Ended 2016 2017 RMB RMB Balance at beginning of the year Derecognized* — ) Additions Reversals** — ) Balance at end of the year * Immediately upon the completion of the Reorganization, deferred tax assets from the accumulated net operating loss carry-forwards with full valuation allowances on that completion date were derecognized, as which are not allowed to be transferred to the Group’s VIE and subsidiaries under the tax laws and regulations. ** The reversal of valuation allowance for the year ended December 31, 2017 was primarily attributed to changes of the enacted income tax rate due to aforementioned preferential tax treatment of RLSJ and RSJ in 2017. |
Share-based compensation expe33
Share-based compensation expenses (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Share-based compensation expenses | |
Schedule of share-based compensation expenses included in each of the relevant accounts | For the Year 2015 2016 2017 2017 RMB RMB RMB US$ Cost of revenues — — Sales and marketing expenses — — Research and development expenses — — General and administrative expenses Total |
Predecessor | 2012 Share Plan of RONG 360 | |
Share-based compensation expenses | |
Schedule of activities of share options | The activities of share options granted under RONG360’s 2012 Share Plan for the years ended December 31, 2015, 2016 and for the period from December 31, 2016 to the IPO date are summarized as below ( * ) : Number of Weighted Aggregate Weighted average Outstanding as of January 1, 2015 Granted during the year Forfeited during the year ) Outstanding as of December 31, 2015 Granted during the year Forfeited during the year ) Outstanding as of December 31, 2016 Granted during the year Forfeited during the year ) Outstanding immediately prior to the IPO (*) Option activities include all activities of share options of RONG360. The share-based compensation expenses discussed below only include the expenses attributable to the Platform Business. |
Schedule of fair values of the options granted in relation to the share based compensation expenses attributable to the Platform Business | For the Year 2015 2016 2017 US$ US$ US$ Weighted average grant date fair value of option per share Aggregate grant date fair value of options granted |
Schedule of estimated fair value of binomial option-pricing model | For the Year Ended December 31, 2015 2016 2017 Risk-free interest rate per annum 1.87% ~ 2.43% 1.59% ~ 1.79% 2.31% ~ 2.4% Expected term (in years) Expected volatility 55% ~ 58% 58% ~ 59% 55% ~ 57% Expected dividends yield — — — |
Founders | |
Share-based compensation expenses | |
Schedule of activities of Restricted Shares | The activities of the Restricted Founders’ Shares for the years ended December 31, 2015, 2016 and 2017, are summarized as below(*): Number of Weighted-Average Unvested at January 1, 2015 Vested ) Unvested at December 31, 2015 — (*) Activities of Restricted Founders’ Shares include all activities of Restricted Founders’ shares of RONG360. The share-based compensation expenses discussed below only include the expenses attributable to the Platform Business. |
Executive officers and director | |
Share-based compensation expenses | |
Schedule of activities of Restricted Shares | The activities of the Restricted Shares for the years ended December 31, 2015, 2016 and 2017, are summarized as below(*): Number of Weighted-Average Unvested at January 1, 2015 Vested ) Unvested at December 31, 2015 Vested ) Unvested at December 31, 2016 Vested ) Unvested at December 31, 2017 — (*) Activities of Restricted Shares include all activities of the Restricted Shares of RONG360. The share-based compensation expenses discussed below only include the expenses attributable to the Platform Business. |
Executive Officers | 2017 Share Incentive Plan | |
Share-based compensation expenses | |
Schedule of activities of share options | Number of Weighted Aggregate Weighted average Outstanding as of January 1, 2017 — — Granted during the year Forfeited during the year — — Outstanding as of December 31, 2017 |
Loss per Share (Tables)
Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Loss per Share | |
Schedule of basic and diluted net loss per ordinary share | For the Year Ended 2015 2016 2017 2017 RMB RMB RMB USD Numerator : Net loss ) ) ) ) Numerator for basic and diluted net loss per share ) ) ) ) Denominator: Weighted average number of ordinary shares Denominator for basic and diluted net loss per share Net loss per ordinary share: Basic and diluted ) ) ) ) |
Related party transactions (Tab
Related party transactions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related party transactions | |
Summary of significant related party transactions | For the year ended 2015 2016 2017 Revenues generated from RONG360 (a) — Administrative expenses charged to RONG360 (b) — — Collection handling services provided by RONG360 (c) — — ) Initial working capital contributed by RONG360 immediately before the IPO (d) — — The following sets forth related party outstanding balance: As of 2016 2017 Amount due from/(to) RONG360 (e) ) (a) RONG360’s business comprised the Platform Business segment and non-platform Business segment prior to the Reorganization, thus transactions between the Group’s Predecessor Operation, i.e. the Platform Business, and non Platform business segment of RONG360 are accounted for as related party transactions. The Group provided recommendation services to the non-platform Business segment of RONG360 and the related service fees were charged at a standard fee rate as that was charged to third party customers. (b) Following the Reorganization, the administrative expenses allocated to RONG360 consist of various expenses attributable to the non-platform business segment of RONG360, including expenses related to operational, administrative, human resources, legal, accounting and internal control support pursuant to the transitional services arrangement (see Note 1(b)). (c) Following the Reorganization, RONG360 charged the Group collection handling fees for the revenue amount billed to third parties through RONG360 by the Group. As of December 31, 2017, the accounts receivable billed through RONG360 amounted to RMB141,190. (d) RONG360 provided RMB150 million (US$23.1 million) of initial working capital to the Company in the form of a capital contribution. The Company received the related cash in November 2017. |
Summary of related party outstanding balance | As of 2016 2017 Amount due from/(to) RONG360 (e) ) (e) The balance arose from the aforementioned related party transactions and various operational payments made by RONG360 on behalf of the Group, such as payroll costs, miscellaneous expenses, etc. |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and contingencies | |
Schedule of future aggregate minimum lease payments under non-cancellable operating leases agreements | As of RMB Within one year After one year but within two years Later than two years Total |
Nature of operations and reor37
Nature of operations and reorganization - Corporate structure of RONG360 (Details) - RONG360 Inc. | 12 Months Ended |
Dec. 31, 2016 | |
RONG360 HK | |
Nature of operations and reorganization | |
Percentage of direct or Indirect economic interest | 100.00% |
RLSJ | |
Nature of operations and reorganization | |
Percentage of direct or Indirect economic interest | 100.00% |
Tianjin Rongshiji Information Technology Co. Limited | |
Nature of operations and reorganization | |
Percentage of direct or Indirect economic interest | 100.00% |
RSJ | |
Nature of operations and reorganization | |
Percentage of direct or Indirect economic interest in VIEs | 100.00% |
Nature of operations and reor38
Nature of operations and reorganization - Establishment of Jianpu, its subsidiaries and VIE(Details) - $ / shares | Sep. 25, 2017 | Oct. 31, 2017 | Dec. 31, 2017 | Jun. 01, 2017 |
Establishment of Jianpu, its subsidiaries and VIE | ||||
Common Stock, Shares Authorized | 1,500,000,000 | 1,000,000,000 | ||
Ordinary shares, shares issued (in shares) | 1 | |||
Shares outstanding (in shares) | 345,541,350 | 1 | ||
Par value of a share (in dollar per share) | $ 0.0001 | $ 0.0001 | ||
Shares issued for the IPO and the concurrent private placements (in shares) | 345,541,349 | 345,541,350 | ||
RDD | ||||
Establishment of Jianpu, its subsidiaries and VIE | ||||
Percentage of direct or Indirect economic interest in VIEs | 100.00% | |||
Jianpu HK | ||||
Establishment of Jianpu, its subsidiaries and VIE | ||||
Percentage of direct or Indirect economic interest | 100.00% | |||
RQN | ||||
Establishment of Jianpu, its subsidiaries and VIE | ||||
Percentage of direct or Indirect economic interest | 100.00% |
Nature of operations and reor39
Nature of operations and reorganization (Details) - Initial Public Offering ¥ in Thousands, $ in Thousands | Sep. 25, 2017shares | Nov. 30, 2017USD ($)Voteshares | Nov. 30, 2017CNY (¥)Voteshares | Oct. 31, 2017shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2017CNY (¥)shares | Jun. 01, 2017shares |
Shares issued for the IPO and the concurrent private placements (in shares) | 345,541,349 | 345,541,350 | |||||
Proceeds from issuance of new shares | $ 210,330 | ¥ 1,368,472 | |||||
Shares outstanding (in shares) | 345,541,350 | 1 | |||||
IPO and private placement | |||||||
Proceeds from issuance of new shares | $ 204,900 | ¥ 1,358,000 | |||||
Class A ordinary shares | |||||||
Number of votes per share | Vote | 1 | 1 | |||||
Shares outstanding (in shares) | 68,750,000 | 68,750,000 | |||||
Class A ordinary shares | IPO and private placement | |||||||
Shares issued for the IPO and the concurrent private placements (in shares) | 68,750,000 | 68,750,000 | |||||
Class B ordinary shares | |||||||
Number of votes per share | Vote | 10 | 10 | |||||
Conversion ratio of Class B share to Class A share | 1 | 1 | |||||
Number of shares transferred to Mr. Chenchao Zhuang or his affiliates | 27,100,830 | 27,100,830 | |||||
Minimum ownership of Founder, all Class B ordinary shares will automatically convert into an equal number of Class A ordinary shares (as a percent) | 5.00% | 5.00% | |||||
Shares outstanding (in shares) | 345,541,350 | 345,541,350 | |||||
Class B ordinary shares | RONG360 Inc. | |||||||
Shares outstanding (in shares) | 345,541,350 | 345,541,350 |
Nature of operations and reor40
Nature of operations and reorganization - Statement of Operations (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Transitional services arrangement | |||||
Transitional service arrangement period | 12 months | ||||
RONG360 Inc. | |||||
Basis of Presentation for the Reorganization | |||||
Expenses allocated from RONG360 | ¥ 74,952 | ||||
Predecessor | RONG360 Inc. | |||||
Basis of Presentation for the Reorganization | |||||
Expenses allocated from RONG360 | $ 11,520 | 74,952 | ¥ 65,276 | ¥ 53,662 | |
Predecessor | RONG360 Inc. | Cost of revenues | |||||
Basis of Presentation for the Reorganization | |||||
Expenses allocated from RONG360 | 1,242 | 8,081 | 7,930 | 6,112 | |
Predecessor | RONG360 Inc. | Sales and marketing expenses | |||||
Basis of Presentation for the Reorganization | |||||
Expenses allocated from RONG360 | 3,850 | 25,049 | 23,785 | 16,785 | |
Predecessor | RONG360 Inc. | Research and development expenses | |||||
Basis of Presentation for the Reorganization | |||||
Expenses allocated from RONG360 | 4,602 | 29,940 | 18,175 | 11,161 | |
Predecessor | RONG360 Inc. | General and administrative expenses | |||||
Basis of Presentation for the Reorganization | |||||
Expenses allocated from RONG360 | $ 1,826 | ¥ 11,882 | ¥ 15,386 | ¥ 19,604 |
Nature of operations and reor41
Nature of operations and reorganization - Financial Position and Cash Flows (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
Balance Sheet information of RONG360's VIE | |||||||
Cash and cash equivalents | $ 237,279 | ¥ 1,543,811 | |||||
Accounts receivable, net | 27,987 | 182,090 | |||||
Prepayments and other current assets | 24,749 | 161,027 | |||||
Property and equipment, net | 2,915 | 18,966 | |||||
Total assets | 294,101 | 1,913,515 | |||||
Accounts payable | 27,262 | 177,373 | |||||
Advances from customers | 10,995 | 71,538 | |||||
Accrued expenses and other current liabilities | 11,195 | 72,839 | |||||
Total liabilities | 57,644 | 375,053 | |||||
Accounts receivable, amounts billed through RONG360 | 141,190 | 57,536 | |||||
Results of operations of the VIEs and its subsidiaries | |||||||
Total revenue | 222,211 | 1,445,773 | |||||
Net (loss)/income | (31,066) | (202,125) | (182,125) | ¥ (196,174) | |||
Cash flows of the VIEs and its subsidiaries | |||||||
Net cash provided by/(used in) operating activities | (4,319) | (28,099) | |||||
Net cash used in investing activities | (2,893) | (18,823) | |||||
Net cash provided by/(used in) financing activities | 247,745 | 1,611,903 | |||||
Net increase in cash and cash equivalents | 237,279 | 1,543,811 | |||||
Cash and cash equivalents at beginning of the year | |||||||
Cash and cash equivalents at end of the year | 237,279 | 1,543,811 | |||||
Consolidated variable interest entity ("VIE") | |||||||
Balance Sheet information of RONG360's VIE | |||||||
Accounts payable | 0 | ||||||
Advances from customers | 491 | ||||||
Accrued expenses and other current liabilities | 2,266 | ||||||
Predecessor | |||||||
Balance Sheet information of RONG360's VIE | |||||||
Cash and cash equivalents | |||||||
Accounts receivable, net | 57,536 | ||||||
Prepayments and other current assets | 50,415 | ||||||
Property and equipment, net | 4,591 | ||||||
Total assets | 134,483 | ||||||
Accounts payable | 32,433 | ||||||
Advances from customers | 18,149 | ||||||
Accrued expenses and other current liabilities | 29,445 | ||||||
Total liabilities | 81,876 | ||||||
Results of operations of the VIEs and its subsidiaries | |||||||
Total revenue | 356,387 | 168,373 | |||||
Net (loss)/income | (27,415) | (182,125) | (196,174) | ||||
Cash flows of the VIEs and its subsidiaries | |||||||
Net cash provided by/(used in) operating activities | (239,129) | (158,856) | |||||
Net cash used in investing activities | (4,352) | (4,858) | |||||
Net cash provided by/(used in) financing activities | 243,481 | 163,714 | |||||
Net increase in cash and cash equivalents | |||||||
Cash and cash equivalents at beginning of the year | |||||||
Cash and cash equivalents at end of the year | |||||||
Predecessor | Consolidated variable interest entity ("VIE") | |||||||
Balance Sheet information of RONG360's VIE | |||||||
Accounts payable | 11,292 | ||||||
Advances from customers | 4,051 | ||||||
Accrued expenses and other current liabilities | 2,305 | ||||||
RONG360 Inc. | Predecessor | Consolidated variable interest entity ("VIE") | |||||||
Balance Sheet information of RONG360's VIE | |||||||
Cash and cash equivalents | 127 | 826 | 127 | 826 | |||
Accounts receivable, net | 2,761 | 17,966 | 8,075 | ||||
Amount due from the subsidiaries of the Group | 13,911 | 90,510 | |||||
Prepayments and other current assets | 24 | 154 | 6,830 | ||||
Property and equipment, net | 1,261 | 8,206 | 3,970 | ||||
Total assets | 18,084 | 117,662 | 18,875 | ||||
Accounts payable | 11,292 | ||||||
Advances from customers | 75 | 491 | 4,051 | ||||
Tax payable | 47 | 305 | 87 | ||||
Amounts due to the subsidiaries of the Group | 124,215 | ||||||
Accrued expenses and other current liabilities | 348 | 2,266 | 2,305 | ||||
Total liabilities | $ 470 | 3,062 | 141,950 | ||||
Accounts receivable, amounts billed through RONG360 | ¥ 15,356 | ¥ 8,075 | |||||
Results of operations of the VIEs and its subsidiaries | |||||||
Total revenue | 62,777 | 408,445 | 30,054 | 46,362 | |||
Net (loss)/income | 35,624 | 231,781 | (43,866) | (5,770) | |||
Cash flows of the VIEs and its subsidiaries | |||||||
Net cash provided by/(used in) operating activities | 5,380 | 35,002 | (39,240) | 2,133 | |||
Net cash used in investing activities | (1,088) | (7,076) | (2,266) | (3,700) | |||
Net cash provided by/(used in) financing activities | (4,165) | (27,100) | ¥ 41,506 | ¥ 1,567 | |||
Net increase in cash and cash equivalents | 127 | 826 | |||||
Cash and cash equivalents at end of the year | $ 127 | ¥ 826 |
Summary of significant accoun42
Summary of significant accounting policies (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)$ / ¥ | Dec. 31, 2017CNY (¥)$ / ¥ | |
Foreign currency translation | ||
Foreign currency translation adjustments | $ (3,254) | ¥ (21,170) |
Translation rate calculated the noon buying rate set for on June 30, 2017 | 6.5063 | 6.5063 |
Summary of significant accoun43
Summary of significant accounting policies - Property and equipment, net (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Office furniture and equipment | |
Property and equipment, net | |
Estimated useful life | 3 years |
Computer equipment | |
Property and equipment, net | |
Estimated useful life | 3 years |
Servers and network equipment | |
Property and equipment, net | |
Estimated useful life | 3 years |
Summary of significant accoun44
Summary of significant accounting policies - others (Details) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2017CNY (¥)segment | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Impairment of long-lived assets | |||
Impairment loss of long-lived assets | ¥ 0 | ¥ 0 | ¥ 0 |
Sales and marketing expenses | |||
Advertising expenditure | ¥ 1,085,314 | ||
Capital lease obligations | |||
Capital Lease Obligations | 0 | 0 | |
Segment reporting | |||
Number of reportable segments | segment | 1 | ||
Statutory reserves | |||
Appropriation to the general reserve fund (as a percent) | 10.00% | ||
Required general reserve fund to avoid net profit allocation to general reserve (as a percent) | 50.00% | ||
Portion of after-tax profit to be allocated to statutory surplus fund under PRC law (as a percent) | 10.00% | ||
Required statutory surplus fund/registered capital ratio to avoid net profit allocation to statutory surplus fund (as a percent) | 50.00% | ||
Profit appropriation to reserve funds | ¥ 0 | 0 | 0 |
Predecessor | |||
Sales and marketing expenses | |||
Advertising expenditure | ¥ 285,288 | ¥ 201,727 |
Concentration and risks (Detail
Concentration and risks (Details) | 12 Months Ended | ||
Dec. 31, 2017itemcustomer | Dec. 31, 2016itemcustomer | Dec. 31, 2015itemcustomer | |
Accounts payable risk | |||
Concentration and risks | |||
Number of major suppliers | item | 1 | 1 | |
Revenues | |||
Concentration and risks | |||
Number of major customers | customer | 0 | 1 | 1 |
Revenues | Customer risk | Customer A | |||
Concentration and risks | |||
Significant credit risk | 19.00% | 19.00% | |
Accounts Receivable, net | |||
Concentration and risks | |||
Number of major customers | customer | 2 | 3 | |
Accounts Receivable, net | Customer risk | Customer A | |||
Concentration and risks | |||
Significant credit risk | 13.00% | 37.00% | |
Accounts Receivable, net | Accounts receivable risk | Customer B | |||
Concentration and risks | |||
Significant credit risk | 32.00% | 14.00% | |
Accounts Receivable, net | Accounts receivable risk | Customer C | |||
Concentration and risks | |||
Significant credit risk | 10.00% | ||
Costs and expenses | |||
Concentration and risks | |||
Number of major suppliers | item | 2 | 3 | 3 |
Costs and expenses | Supplier risk | Supplier I | |||
Concentration and risks | |||
Significant credit risk | 13.00% | ||
Costs and expenses | Supplier risk | Supplier IV | |||
Concentration and risks | |||
Significant credit risk | 14.00% | ||
Accounts payable | Accounts payable risk | Supplier VI | |||
Concentration and risks | |||
Significant credit risk | 31.00% | ||
Predecessor | Costs and expenses | Supplier risk | Supplier I | |||
Concentration and risks | |||
Significant credit risk | 20.00% | 25.00% | |
Predecessor | Costs and expenses | Supplier risk | Supplier II | |||
Concentration and risks | |||
Significant credit risk | 14.00% | 12.00% | |
Predecessor | Costs and expenses | Supplier risk | Supplier III | |||
Concentration and risks | |||
Significant credit risk | 12.00% | ||
Predecessor | Costs and expenses | Supplier risk | Supplier IV | |||
Concentration and risks | |||
Significant credit risk | 16.00% | ||
Predecessor | Accounts payable | Accounts payable risk | Supplier V | |||
Concentration and risks | |||
Significant credit risk | 11.00% |
Accounts receivable, net (Detai
Accounts receivable, net (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2014CNY (¥) |
Accounts receivable | ¥ 182,090 | |||
Less: allowance for doubtful accounts | ¥ (785) | |||
Accounts receivable, net | $ 27,987 | ¥ 182,090 | ||
Predecessor | ||||
Accounts receivable | 58,321 | |||
Less: allowance for doubtful accounts | (785) | ¥ (656) | ||
Accounts receivable, net | ¥ 57,536 |
Accounts receivable, net - Move
Accounts receivable, net - Movements in allowance for doubtful accounts (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Beginning balance | ¥ (785) | ||
Write offs | 785 | ||
Ending balance | ¥ (785) | ||
Predecessor | |||
Beginning balance | ¥ (785) | ¥ (656) | |
Additions | (129) | ¥ (656) | |
Ending balance | ¥ (785) |
Prepayments and other current48
Prepayments and other current assets (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) |
Prepaid advertising expenses, rentals and others | ¥ 136,603 | ||
Deposits | 20,506 | ||
Staff advances | 1,321 | ||
Deductible VAT input | 2,597 | ||
Total | $ 24,749 | ¥ 161,027 | |
Predecessor | |||
Prepaid advertising expenses, rentals and others | ¥ 34,708 | ||
Deposits | 11,582 | ||
Staff advances | 463 | ||
Deductible VAT input | 3,662 | ||
Total | ¥ 50,415 |
Property and equipment, net (De
Property and equipment, net (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2017CNY (¥) | |
Property and equipment, net | |||||
Total | ¥ 33,301 | ||||
Accumulated depreciation | (14,335) | ||||
Property and equipment, net | $ 2,915 | 18,966 | |||
Depreciation expenses | $ 887 | ¥ 5,769 | |||
Office furniture and equipment | |||||
Property and equipment, net | |||||
Total | 1,187 | ||||
Computer equipment | |||||
Property and equipment, net | |||||
Total | 6,930 | ||||
Servers and network equipment | |||||
Property and equipment, net | |||||
Total | 17,991 | ||||
Leasehold improvements | |||||
Property and equipment, net | |||||
Total | ¥ 7,193 | ||||
Predecessor | |||||
Property and equipment, net | |||||
Total | ¥ 14,454 | ||||
Accumulated depreciation | (9,863) | ||||
Property and equipment, net | 4,591 | ||||
Depreciation expenses | 4,637 | ¥ 3,650 | |||
Predecessor | Office furniture and equipment | |||||
Property and equipment, net | |||||
Total | 860 | ||||
Predecessor | Computer equipment | |||||
Property and equipment, net | |||||
Total | 3,380 | ||||
Predecessor | Servers and network equipment | |||||
Property and equipment, net | |||||
Total | 4,145 | ||||
Predecessor | Leasehold improvements | |||||
Property and equipment, net | |||||
Total | ¥ 6,069 |
Accrued expenses and other cu50
Accrued expenses and other current liabilities (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) |
Accrued payroll | ¥ 64,526 | ||
Accrued expenses | 7,176 | ||
Other payables | 1,137 | ||
Total | $ 11,195 | ¥ 72,839 | |
Predecessor | |||
Accrued payroll | ¥ 24,926 | ||
Accrued expenses | 4,176 | ||
Other payables | 343 | ||
Total | ¥ 29,445 |
Income Taxes (Details)
Income Taxes (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016 | Dec. 31, 2015 | |
Income tax | ||||
Income tax rate (as a percent) | 25.00% | 25.00% | ||
Composition of income tax expenses | ||||
Current income tax | ¥ 31,467 | |||
Deferred income tax | (3,085) | |||
Total | $ 4,362 | ¥ 28,382 | ||
Hong Kong | ||||
Income tax | ||||
Income tax rate (as a percent) | 16.50% | 16.50% | ||
PRC | ||||
Income tax | ||||
Income tax rate (as a percent) | 25.00% | 25.00% | ||
Preferential tax rate | 15.00% | 15.00% | ||
Number of years to enjoy preferential tax rate | 3 years | 3 years | ||
Predecessor | ||||
Income tax | ||||
Income tax rate (as a percent) | 25.00% | 25.00% |
Income Tax - Reconciliation of
Income Tax - Reconciliation of Statutory Tax Rate and Effective Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of the differences between statutory income tax rate and the effective income tax rate | |||
Statutory EIT rate (as a percent) | 25.00% | ||
Tax effect of preferential tax treatment | (3.76%) | ||
Tax effect of permanent differences (as a percent) | (1.72%) | ||
Changes in valuation allowance (as a percent) | (35.86%) | ||
Effective income tax rate | (16.34%) | ||
Predecessor | |||
Reconciliation of the differences between statutory income tax rate and the effective income tax rate | |||
Statutory EIT rate (as a percent) | 25.00% | 25.00% | |
Tax effect of permanent differences (as a percent) | (0.80%) | (1.76%) | |
Changes in valuation allowance (as a percent) | (24.20%) | (23.24%) |
Income Tax - effect of preferen
Income Tax - effect of preferential tax (Details) ¥ / shares in Units, ¥ in Thousands | 12 Months Ended |
Dec. 31, 2017CNY (¥)¥ / shares | |
Income Tax | |
Tax effect of preferential tax treatment | ¥ | ¥ 6,535 |
Basic and diluted loss per share effect | ¥ / shares | ¥ 0.02 |
Income Tax - Deferred Tax Asset
Income Tax - Deferred Tax Assets (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets | |||
Deferred revenue | ¥ 1,153 | ||
Accrued payroll and expenses | 1,932 | ||
Advertising expenses in excess of deduction limit | 33,980 | ||
Total deferred tax assets | 37,065 | ||
Less: Valuation allowance | (33,980) | ¥ (123,938) | |
Total deferred tax assets, net | ¥ 3,085 | ||
Predecessor | |||
Deferred tax assets | |||
Accrued payroll and expenses | 1,478 | ||
Allowances of doubtful accounts | 196 | ||
Net operating loss carryforwards | 12,942 | ||
Advertising expenses in excess of deduction limit | 109,322 | ||
Total deferred tax assets | 123,938 | ||
Less: Valuation allowance | ¥ (123,938) | ¥ (79,869) |
Income Taxes - Movement of Valu
Income Taxes - Movement of Valuation Allowance (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Movement of valuation allowance: | ||
Balance at beginning of the year | ¥ 123,938 | |
Derecognized | (110,153) | |
Additions | 78,542 | |
Reversals | (58,347) | |
Balance at end of the year | 33,980 | ¥ 123,938 |
Predecessor | ||
Movement of valuation allowance: | ||
Balance at beginning of the year | ¥ 123,938 | 79,869 |
Additions | 44,069 | |
Balance at end of the year | ¥ 123,938 |
Share-based compensation expe56
Share-based compensation expenses - Share Options (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | 10 Months Ended | 12 Months Ended | ||||||
Oct. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2016USD ($)$ / shares | Dec. 31, 2016CNY (¥)shares | Dec. 31, 2015USD ($)$ / shares | Dec. 31, 2015CNY (¥)shares | Dec. 31, 2014USD ($)$ / sharesshares | |
Share-based compensation expenses | ||||||||
Share-based compensation expenses | $ 16,563 | ¥ 107,766 | ||||||
Cost of revenues | ||||||||
Share-based compensation expenses | ||||||||
Share-based compensation expenses | 653 | 4,246 | ||||||
Sales and marketing expenses | ||||||||
Share-based compensation expenses | ||||||||
Share-based compensation expenses | 2,738 | 17,817 | ||||||
Research and development expenses | ||||||||
Share-based compensation expenses | ||||||||
Share-based compensation expenses | 4,934 | 32,104 | ||||||
General and administrative expenses | ||||||||
Share-based compensation expenses | ||||||||
Share-based compensation expenses | $ 8,238 | ¥ 53,599 | ||||||
2012 Share Plan of RONG 360 | ||||||||
Share-based compensation expenses | ||||||||
Vesting rights (as a percentage) | 25.00% | 25.00% | ||||||
Options granted expiration period (in years) | 10 years | 10 years | ||||||
Aggregate intrinsic value and Weighted average remaining contractual years | ||||||||
Total share-based compensation expense recognized | ¥ | ¥ 32,149 | |||||||
2012 Share Plan of RONG 360 | Minimum | ||||||||
Share-based compensation expenses | ||||||||
Service condition for options granted | 4 years | 4 years | ||||||
2012 Share Plan of RONG 360 | Maximum | ||||||||
Share-based compensation expenses | ||||||||
Service condition for options granted | 7 years | 7 years | ||||||
Predecessor | ||||||||
Share-based compensation expenses | ||||||||
Share-based compensation expenses | ¥ | ¥ 4,817 | ¥ 13,216 | ||||||
Predecessor | General and administrative expenses | ||||||||
Share-based compensation expenses | ||||||||
Share-based compensation expenses | ¥ | ¥ 4,817 | ¥ 13,216 | ||||||
Predecessor | 2012 Share Plan of RONG 360 | ||||||||
Number of shares | ||||||||
Outstanding at the beginning of the period (in shares) | shares | 15,857,198 | 15,857,198 | 15,857,198 | 14,084,659 | 10,770,155 | |||
Granted during the year (in shares) | shares | 5,370,319 | 3,130,891 | 4,663,004 | |||||
Forfeited during the year (in shares) | shares | (747,031) | (1,358,352) | (1,348,500) | |||||
Outstanding at the end of the period (in shares) | shares | 20,480,486 | 15,857,198 | 14,084,659 | 10,770,155 | ||||
Weighted average exercise prices | ||||||||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 0.24 | $ 0.24 | $ 0.13 | $ 0.05 | ||||
Granted during the year (in dollars per share) | $ / shares | 0.52 | 0.75 | 0.30 | |||||
Forfeited during the year (in dollars per share) | $ / shares | 0.41 | 0.27 | 0.12 | |||||
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 0.31 | $ 0.24 | $ 0.13 | $ 0.05 | ||||
Aggregate intrinsic value and Weighted average remaining contractual years | ||||||||
Aggregate intrinsic value | $ | $ 103,295 | $ 36,826 | $ 16,380 | $ 6,981 | ||||
Weighted average remaining contractual years | 7 years 4 months 6 days | 7 years 6 months | 8 years 1 month 10 days | 8 years 6 months 26 days | ||||
Total share-based compensation expense recognized | ¥ | ¥ 0 | ¥ 0 |
Share-based compensation expe57
Share-based compensation expenses -Fair value of Options (Details) - 2012 Share Plan of RONG 360 - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based compensation expenses | |||
Weighted average grant date fair value of option per share | $ 3.03 | ||
Aggregate grant date fair value of options granted | $ 9,013 | ||
Predecessor | |||
Share-based compensation expenses | |||
Weighted average grant date fair value of option per share | $ 1.25 | $ 0.65 | |
Aggregate grant date fair value of options granted | $ 2,425 | $ 2,453 |
Share-based compensation expe58
Share-based compensation expenses - Valuation Assumption (Details) - 2012 Share Plan of RONG 360 | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Assumptions used in calculation of estimated fair value of options | |||
Risk-free interest rate per annum, Minimum | 2.31% | ||
Risk-free interest rate per annum, Maximum | 2.40% | ||
Expected term (in years) | 10 years | ||
Expected volatility rate, Minimum (as a percent) | 55.00% | ||
Expected volatility rate, Maximum (as a percent) | 57.00% | ||
Predecessor | |||
Assumptions used in calculation of estimated fair value of options | |||
Risk-free interest rate per annum, Minimum | 1.59% | 1.87% | |
Risk-free interest rate per annum, Maximum | 1.79% | 2.43% | |
Expected term (in years) | 10 years | 10 years | |
Expected volatility rate, Minimum (as a percent) | 58.00% | 55.00% | |
Expected volatility rate, Maximum (as a percent) | 59.00% | 58.00% |
Share-based compensation expe59
Share-based compensation expenses - Global Share Plan (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | 2 Months Ended | 12 Months Ended | ||
Dec. 31, 2017$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2017CNY (¥)shares | |
Share-based compensation expenses | ||||
Deemed dividends | $ 1,360 | ¥ 8,851 | ||
Share-based compensation expenses | $ 16,563 | ¥ 107,766 | ||
Global Share Plan | ||||
Share-based compensation expenses | ||||
Number shares authorized | 20,480,486 | |||
Options Granted (in shares) | 0 | |||
Options exercised (in shares) | 0 | 0 | 0 | |
Unrecognized share-based compensation expenses | ¥ | ¥ 61,773 | |||
Weighted average period over which share-based compensation expense is expected to be recognized | 7 years 1 month 21 days | 7 years 1 month 21 days | ||
Global Share Plan | RONG360 Inc. | ||||
Share-based compensation expenses | ||||
Conversion ratio of share options | 1 | |||
Deemed dividends | ¥ | ¥ 8,851 | |||
Global Share Plan | Non-platform business | ||||
Share-based compensation expenses | ||||
Conversion ratio of share options | 1 | |||
Share-based compensation expenses | ¥ | ¥ 31,721 | |||
Global Share Plan | Group's employees | ||||
Share-based compensation expenses | ||||
Outstanding share options | 18,640,845 | |||
Weighted average exercise price of options outstanding (in dollars per share) | $ / shares | $ 0.21 | $ 0.21 | ||
Weighted average remaining contractual years of options outstanding | 7 years 1 month 21 days | 7 years 1 month 21 days | ||
Options exercisable | 10,827,473 | |||
Weighted average exercise price of options exercisable (in dollars per share) | $ / shares | 0.10 | $ 0.10 | ||
Weighted average remaining contractual years of options exercisable | 5 years 11 months 27 days | 5 years 11 months 27 days | ||
Share options expected to be vested | 16,725,096 | |||
Weighted average exercise price of share options expected to be vested (in dollars per share) | $ / shares | 0.20 | $ 0.20 | ||
Weighted average remaining contractual years of share options expected to be vested | 7 years 1 month 24 days | 7 years 1 month 24 days | ||
Aggregate intrinsic value of options outstanding | ¥ | ¥ 44,454 | |||
Aggregate intrinsic value of options exercisable | ¥ | 26,947 | |||
Aggregate intrinsic value of options expected to be vested | ¥ | ¥ 39,924 | |||
Global Share Plan | Group's employees | Non-platform business | ||||
Share-based compensation expenses | ||||
Outstanding share options | 18,640,845 | |||
Global Share Plan | Employees of non-platform business | ||||
Share-based compensation expenses | ||||
Outstanding share options | 1,839,641 | |||
Weighted average exercise price of options outstanding (in dollars per share) | $ / shares | 0.28 | $ 0.28 | ||
Weighted average remaining contractual years of options outstanding | 7 years 6 months 26 days | 7 years 6 months 26 days | ||
Options exercisable | 1,136,338 | |||
Weighted average exercise price of options exercisable (in dollars per share) | $ / shares | 0.17 | $ 0.17 | ||
Weighted average remaining contractual years of options exercisable | 6 years 10 months 28 days | 6 years 10 months 28 days | ||
Share options expected to be vested | 1,651,134 | |||
Weighted average exercise price of share options expected to be vested (in dollars per share) | $ / shares | $ 0.27 | $ 0.27 | ||
Weighted average remaining contractual years of share options expected to be vested | 7 years 6 months 15 days | 7 years 6 months 15 days | ||
Aggregate intrinsic value of options outstanding | ¥ | ¥ 4,251 | |||
Aggregate intrinsic value of options exercisable | ¥ | 2,755 | |||
Aggregate intrinsic value of options expected to be vested | ¥ | ¥ 3,829 |
Share-based compensation expe60
Share-based compensation expenses - Restriction of Ordinary Shares Held by Founders (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | Jul. 09, 2012shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2016USD ($)shares | Dec. 31, 2016CNY (¥)shares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2015CNY (¥)shares | Sep. 25, 2017$ / shares | Jun. 01, 2017$ / sharesshares | Feb. 21, 2012$ / sharesshares |
Restriction of ordinary shares held by founders | ||||||||||
Ordinary shares issued (in shares) | 1 | |||||||||
Par value of a share (in dollar per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||
Additional disclosures | ||||||||||
Share-based compensation expenses | $ 16,563 | ¥ 107,766 | ||||||||
Founders | ||||||||||
Restriction of ordinary shares held by founders | ||||||||||
Ordinary shares issued (in shares) | 119,692,080 | |||||||||
Par value of a share (in dollar per share) | $ / shares | $ 0.0001 | |||||||||
Founders | Restricted shares | ||||||||||
Restriction of ordinary shares held by founders | ||||||||||
Ordinary shares reserved for restricted stock (in shares) | 119,692,080 | |||||||||
Vesting period (in years) | 4 years | |||||||||
Number of shares | ||||||||||
Unvested at the beginning of the period (in shares) | 0 | 0 | 17,026,510 | 17,026,510 | ||||||
Vested (in shares) | (17,026,510) | (17,026,510) | ||||||||
Unvested at the end of the period (in shares) | 0 | 0 | 0 | 0 | ||||||
Weighted-Average Grant-Date Fair Value | ||||||||||
Unvested at the beginning of the period (in dollars per share) | $ / shares | $ 0.06 | |||||||||
Vested (in dollars per share) | $ / shares | $ 0.06 | |||||||||
Additional disclosures | ||||||||||
Total fair value of Restricted Founders' Shares vested | $ | $ 0 | $ 12,037 | ||||||||
Total intrinsic value of Restricted Founders' Shares vested | $ | $ 0 | 0 | $ 12,037 | |||||||
Share-based compensation expenses | ¥ | ¥ 0 | ¥ 0 | ¥ 664 | |||||||
Unrecognized share-based compensation expense related to awards other than options | $ | $ 0 | $ 0 | ||||||||
Founders | Restricted shares | First anniversary | ||||||||||
Restriction of ordinary shares held by founders | ||||||||||
Vesting rights (as a percentage) | 25.00% | |||||||||
Founders | Restricted shares | Monthly basis for the remaining vesting period | ||||||||||
Restriction of ordinary shares held by founders | ||||||||||
Vesting rights (as a percentage) | 2.00% |
Share-based compensation expe61
Share-based compensation expenses - Restricted Shares Granted to Executive Officers and Director (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | Jul. 16, 2014itemshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2016CNY (¥)shares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2015CNY (¥)shares |
Additional disclosures | |||||||
Share-based compensation expenses | $ 16,563 | ¥ 107,766 | |||||
Executive officers and director | Restricted shares | |||||||
Share-based compensation expenses | |||||||
Granted (in shares) | 14,000,000 | ||||||
Number of executive officers | item | 3 | ||||||
Vesting period (in years) | 7 years | ||||||
Number of shares | |||||||
Unvested at the beginning of the period (in shares) | 6,183,334 | 6,183,334 | 10,266,667 | 10,266,667 | 14,000,000 | 14,000,000 | |
Vested (in shares) | (6,183,334) | (6,183,334) | (4,083,333) | (4,083,333) | (3,733,333) | (3,733,333) | |
Unvested at the end of the period (in shares) | 6,183,334 | 6,183,334 | 10,266,667 | 10,266,667 | |||
Weighted-Average Grant-Date Fair Value | |||||||
Unvested at the beginning of the period (in dollars per share) | $ / shares | $ 0.45 | $ 0.45 | $ 0.45 | ||||
Vested (in dollars per share) | $ / shares | $ 0.45 | 0.45 | 0.45 | ||||
Unvested at the end of the period (in dollars per share) | $ / shares | $ 0.45 | $ 0.45 | |||||
Additional disclosures | |||||||
Total fair value of the Restricted Shares vested | $ | $ 15,223 | $ 4,324 | $ 3,316 | ||||
Total intrinsic value of Restricted Shares vested | $ | $ 15,223 | $ 4,324 | $ 3,316 | ||||
Share-based compensation expenses | ¥ | ¥ 2,388 | ¥ 4,817 | ¥ 12,552 | ||||
Unrecognized share-based compensation expense | ¥ | ¥ 0 | ||||||
Granted (in shares) | 0 | 0 | 0 | 0 | 0 | 0 | |
Executive officers and director | Restricted shares | Fourth anniversary | |||||||
Share-based compensation expenses | |||||||
Vesting rights (as a percentage) | 25.00% | ||||||
Executive officers and director | Restricted shares | Monthly basis for the remaining vesting period | |||||||
Share-based compensation expenses | |||||||
Vesting rights (as a percentage) | 2.00% |
Share-based compensation expe62
Share-based compensation expenses - 2017 Share Incentive Plan (Details) - Executive Officers - 2017 Share Incentive Plan $ / shares in Units, ¥ in Thousands, $ in Thousands | Dec. 29, 2017shares | Oct. 31, 2017 | Dec. 31, 2017CNY (¥)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2017CNY (¥)shares |
Share-based compensation expenses | |||||
Maximum percent of shares available for issuance | 2.00% | ||||
Vesting rights (as a percentage) | 25.00% | 25.00% | |||
Vesting period (in years) | 3 years | 3 years | |||
Number of shares | |||||
Granted during the year (in shares) | 8,285,827 | 8,285,827 | 8,285,827 | ||
Outstanding at the end of the period (in shares) | 8,285,827 | 8,285,827 | 8,285,827 | ||
Weighted average exercise prices | |||||
Granted during the year (in dollars per share) | $ / shares | $ 0.01 | ||||
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||
Aggregate intrinsic value and Weighted average remaining contractual years | |||||
Aggregate intrinsic value | ¥ | $ 21,394 | ¥ 21,394 | |||
Weighted average remaining contractual years of options outstanding | 10 years | 10 years | |||
Aggregate grant date fair value of options granted | $ | $ 21,377 | ||||
Aggregate grant date fair value of options granted (per share) | $ / shares | $ 2.58 | ||||
Options exercised (in shares) | 0 | 0 | |||
Options exercisable (in shares) | 0 | 0 | |||
Total share-based compensation expense recognized | ¥ | ¥ 34,948 | ||||
Unrecognized share-based compensation expenses expected to be recognized when the performance target of an IPO is achieved | ¥ | $ 104,845 | ¥ 104,845 | |||
Weighted average period over which share-based compensation expense is expected to be recognized | 3 years | 3 years |
Loss per Share (Details)
Loss per Share (Details) - shares | Sep. 25, 2017 | Oct. 31, 2017 | Jun. 01, 2017 |
Loss per Share | |||
Shares issued for the IPO and the concurrent private placements (in shares) | 345,541,349 | 345,541,350 | |
Shares outstanding (in shares) | 345,541,350 | 1 |
Loss per Share - Basic and dilu
Loss per Share - Basic and diluted net loss per share (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2017CNY (¥)¥ / sharesshares | Dec. 31, 2016CNY (¥)¥ / sharesshares | Dec. 31, 2015CNY (¥)¥ / sharesshares | |
Numerator : | ||||
Net loss | $ (31,066) | ¥ (202,125) | ||
Numerator for basic and diluted net loss per share | $ (31,066) | ¥ (202,125) | ||
Denominator : | ||||
Weighted average number of ordinary shares | 353,452,309 | 353,452,309 | ||
Denominator for basic and diluted net loss per share | 353,452,309 | 353,452,309 | ||
Net loss per ordinary share: | ||||
Basic and diluted | (per share) | $ (0.09) | ¥ (0.57) | ||
Restricted shares | ||||
Net loss per ordinary share: | ||||
Numbers of shares excluded from calculation of diluted net loss per share | 0 | 0 | ||
Share options | ||||
Net loss per ordinary share: | ||||
Numbers of shares excluded from calculation of diluted net loss per share | 28,766,313 | 28,766,313 | ||
Predecessor | ||||
Numerator : | ||||
Net loss | ¥ | ¥ (182,125) | ¥ (196,174) | ||
Numerator for basic and diluted net loss per share | ¥ | ¥ (182,125) | ¥ (196,174) | ||
Denominator : | ||||
Weighted average number of ordinary shares | 345,541,350 | 345,541,350 | ||
Denominator for basic and diluted net loss per share | 345,541,350 | 345,541,350 | ||
Net loss per ordinary share: | ||||
Basic and diluted | ¥ / shares | ¥ (0.53) | ¥ (0.57) | ||
Predecessor | Restricted shares | ||||
Net loss per ordinary share: | ||||
Numbers of shares excluded from calculation of diluted net loss per share | 6,183,334 | 10,266,667 | ||
Predecessor | Share options | ||||
Net loss per ordinary share: | ||||
Numbers of shares excluded from calculation of diluted net loss per share | 15,857,198 | 14,084,659 |
Related party transactions (Det
Related party transactions (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2017CNY (¥) | |
Material related party transactions | |||||
Revenues generated from related party transactions | ¥ 102,997 | ||||
Initial working capital contributed by RONG360 immediately before the IPO | 150,000 | ||||
Material amount of due to or due from related parties | |||||
Due to Related Parties, Current, Total | $ (5,444) | ¥ (35,427) | |||
Accounts receivable, amounts billed through RONG360 | ¥ 57,536 | 141,190 | |||
RONG360 Inc. | |||||
Related party transactions | |||||
Expenses allocated from RONG360 | 74,952 | ||||
Material related party transactions | |||||
Revenues generated from related party transactions | 102,997 | ||||
Initial working capital contributed by RONG360 immediately before the IPO | 23,100 | 150,000 | |||
Material amount of due to or due from related parties | |||||
Accounts receivable, amounts billed through RONG360 | ¥ 141,190 | ||||
Administrative expenses | |||||
Material related party transactions | |||||
Revenues generated from related party transactions | 2,691 | ||||
Collection handling services | RONG360 Inc. | |||||
Material related party transactions | |||||
Collection handling services provided by RONG360 to Jianpu | (1,564) | ||||
Predecessor | |||||
Material related party transactions | |||||
Revenues generated from related party transactions | 19,932 | ¥ 0 | |||
Material amount of due to or due from related parties | |||||
Due from Related Parties, Current, Total | 21,128 | ||||
Predecessor | RONG360 Inc. | |||||
Related party transactions | |||||
Expenses allocated from RONG360 | $ 11,520 | ¥ 74,952 | 65,276 | ¥ 53,662 | |
Material related party transactions | |||||
Revenues generated from related party transactions | ¥ 19,932 |
Employee Benefits (Details)
Employee Benefits (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employee benefit expenses incurred | ¥ 38,726 | ||
Predecessor | |||
Employee benefit expenses incurred | ¥ 28,312 | ¥ 19,014 |
Commitments and contingencies67
Commitments and contingencies (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Within one year | ¥ 20,452 | ||
After one year but within two years | 18,451 | ||
Later than two years | 15,915 | ||
Total | 54,818 | ||
Rental expenses incurred under operating leases | 11,004 | ||
Advertising purchase commitments | ¥ 546 | ||
Predecessor | |||
Rental expenses incurred under operating leases | ¥ 9,898 | ¥ 9,259 | |
Advertising purchase commitments | ¥ 1,304 |
Subsequent events (Details)
Subsequent events (Details) - China-based technology company - Subsequent events ¥ in Millions | 1 Months Ended |
Mar. 31, 2018CNY (¥) | |
Subsequent events | |
Equity interest to be acquired | 65.00% |
Cash portion of the consideration | ¥ 110 |
Non cash portion of the consideration, percentage of the issued and outstanding share capital | 1.50% |
Restricted net assets (Details)
Restricted net assets (Details) ¥ in Millions | Dec. 31, 2017CNY (¥) |
Restricted net assets | |
Restricted net assets | ¥ 101.8 |
Restricted net assets to total consolidated net assets (as a percent) | 6.60% |