Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2019shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Entity Registrant Name | Phoenix Tree Holdings Ltd |
Entity Central Index Key | 0001785154 |
Document Period End Date | Dec. 31, 2019 |
Entity Well Known Seasoned Issuer | No |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Shell Company | false |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Current Fiscal Year End Date | --12-31 |
Amendment Flag | false |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | FY |
Ordinary shares | |
Document Information [Line Items] | |
Entity Stock, Shares Outstanding | 281,290,000 |
Preferred shares | |
Document Information [Line Items] | |
Entity Stock, Shares Outstanding | 1,448,506,852 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Current assets: | |||
Cash | $ 98,434 | ¥ 685,277 | ¥ 1,087,258 |
Term deposits | 137,264 | ||
Restricted cash | 203,575 | 1,417,245 | 1,362,266 |
Accounts receivable, net | 408 | 2,837 | 1,456 |
Advance to landlords | 32,053 | 223,146 | 301,190 |
Prepayments and other current assets | 91,444 | 636,618 | 265,794 |
Total current assets | 425,914 | 2,965,123 | 3,155,228 |
Non-current assets: | |||
Restricted cash | 194,400 | 1,353,376 | 16,010 |
Property and equipment, net | 454,988 | 3,167,537 | 1,989,630 |
Intangible asset, net | 21,955 | 152,846 | 2,053 |
Goodwill | 49,909 | 347,455 | |
Deposits to landlords | 87,402 | 608,475 | 414,754 |
Other non-current assets | 58,994 | 410,703 | 251,936 |
Total non-current assets | 867,648 | 6,040,392 | 2,674,383 |
Total assets | 1,293,562 | 9,005,515 | 5,829,611 |
Current liabilities: | |||
Short-term borrowings and current portion of long-term borrowings | 654,193 | 4,554,362 | 2,890,842 |
Accounts payable | 104,349 | 726,455 | 718,890 |
Rental payable | 79,492 | 553,410 | 180,994 |
Advance from residents | 140,244 | 976,348 | 279,534 |
Amount due to a related party | 1,629 | 11,343 | 10,343 |
Deposits from residents | 86,954 | 605,356 | 287,304 |
Accrued expenses and other current liabilities | 71,172 | 495,484 | 214,170 |
Total current liabilities | 1,138,033 | 7,922,758 | 4,582,077 |
Non-current liabilities: | |||
Long-term borrowings, excluding current portion | 96,132 | 669,250 | 182,646 |
Deferred tax liabilities | 1,012 | 7,042 | |
Other non-current liabilities | 3,938 | 27,419 | 51,539 |
Total non-current liabilities | 101,082 | 703,711 | 234,185 |
Total liabilities | 1,239,115 | 8,626,469 | 4,816,262 |
MEZZANINE EQUITY | |||
Total mezzanine equity | 877,101 | 6,106,203 | 2,859,632 |
SHAREHOLDERS' DEFICIT | |||
Ordinary Shares (US$0.00002 par value, 1,386,190,398 shares and 1,051,493,148 shares authorized as of December 31, 2018 and 2019; 287,500,000 shares and 281,290,000 shares issued and outstanding as of December 31, 2018 and 2019) | 5 | 35 | 35 |
Accumulated other comprehensive income/(loss) | (8,310) | (57,852) | (3,061) |
Accumulated deficit | (813,535) | (5,663,670) | (1,839,123) |
Total shareholders' deficit attributable to ordinary shareholders | (821,840) | (5,721,487) | (1,842,149) |
Non-controlling interest | (814) | (5,670) | (4,134) |
Total shareholders' deficit | (822,654) | (5,727,157) | (1,846,283) |
Total liabilities, mezzanine equity and shareholders' deficit | 1,293,562 | 9,005,515 | 5,829,611 |
Series A1 Convertible Preferred Shares | |||
MEZZANINE EQUITY | |||
Total mezzanine equity | 204 | 1,425 | 1,402 |
Series A2 Redeemable Convertible Preferred Shares | |||
MEZZANINE EQUITY | |||
Total mezzanine equity | 5,000 | 34,806 | 32,156 |
Series A2I Redeemable Convertible Preferred Shares | |||
MEZZANINE EQUITY | |||
Total mezzanine equity | 1,035 | 7,208 | 6,826 |
Series A3 Redeemable Convertible Preferred Shares | |||
MEZZANINE EQUITY | |||
Total mezzanine equity | 17,176 | 119,576 | 118,316 |
Series B1 Redeemable Convertible Preferred Shares | |||
MEZZANINE EQUITY | |||
Total mezzanine equity | 68,554 | 477,259 | 440,721 |
Series B2 Redeemable Convertible Preferred Shares | |||
MEZZANINE EQUITY | |||
Total mezzanine equity | 80,153 | 558,008 | 510,802 |
Series C Redeemable Convertible Preferred Shares | |||
MEZZANINE EQUITY | |||
Total mezzanine equity | ¥ 1,749,409 | ||
Series C-1 Redeemable Convertible Preferred Shares | |||
MEZZANINE EQUITY | |||
Total mezzanine equity | 1,821 | 12,679 | |
Series C-2 Redeemable Convertible Preferred Shares | |||
MEZZANINE EQUITY | |||
Total mezzanine equity | 510,939 | 3,557,053 | |
Series D Redeemable Convertible Preferred Shares | |||
MEZZANINE EQUITY | |||
Total mezzanine equity | $ 192,219 | ¥ 1,338,189 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2018$ / shares | Dec. 31, 2018CNY (¥)shares |
Current liabilities: | ||||
Short-term borrowings and current portion of long-term borrowings | $ 654,193 | ¥ 4,554,362 | ¥ 2,890,842 | |
Accounts payable | 104,349 | 726,455 | 718,890 | |
Rental payable | 79,492 | 553,410 | 180,994 | |
Advance from residents | 140,244 | 976,348 | 279,534 | |
Amount due to a related party | 1,629 | 11,343 | 10,343 | |
Deposits from residents | 86,954 | 605,356 | 287,304 | |
Accrued expenses and other current liabilities | 71,172 | 495,484 | 214,170 | |
Non-current liabilities: | ||||
Long-term borrowings, excluding current portion | 96,132 | 669,250 | 182,646 | |
Deferred tax liabilities | 1,012 | 7,042 | ||
Other non-current liabilities | $ 3,938 | ¥ 27,419 | ¥ 51,539 | |
Ordinary Shares | ||||
Ordinary shares, par value per share | $ / shares | $ 0.00002 | $ 0.00002 | ||
Ordinary shares authorized | 1,051,493,148 | 1,051,493,148 | 1,386,190,398 | |
Ordinary shares issued | 281,290,000 | 281,290,000 | 287,500,000 | |
Ordinary shares outstanding | 281,290,000 | 281,290,000 | 287,500,000 | |
Series A1 Convertible Preferred Shares | ||||
MEZZANINE EQUITY | ||||
Par value per share | $ / shares | $ 0.00002 | 0.00002 | ||
Shares authorized | 118,750,000 | 118,750,000 | 118,750,000 | |
Shares issued | 118,750,000 | 118,750,000 | 118,750,000 | |
Shares outstanding | 118,750,000 | 118,750,000 | 118,750,000 | |
Liquidation value | ¥ | ¥ 1,425 | ¥ 1,402 | ||
Series A2 Redeemable Convertible Preferred Shares | ||||
MEZZANINE EQUITY | ||||
Par value per share | $ / shares | $ 0.00002 | 0.00002 | ||
Shares authorized | 143,750,000 | 143,750,000 | 143,750,000 | |
Shares issued | 143,750,000 | 143,750,000 | 143,750,000 | |
Shares outstanding | 143,750,000 | 143,750,000 | 143,750,000 | |
Redemption value | ¥ | ¥ 34,806 | ¥ 32,156 | ||
Liquidation value | ¥ | ¥ 36,102 | ¥ 35,517 | ||
Series A2I Redeemable Convertible Preferred Shares | ||||
MEZZANINE EQUITY | ||||
Par value per share | $ / shares | $ 0.00002 | 0.00002 | ||
Shares authorized | 16,967,466 | 16,967,466 | 16,967,466 | |
Shares issued | 16,967,466 | 16,967,466 | 16,967,466 | |
Shares outstanding | 16,967,466 | 16,967,466 | 16,967,466 | |
Redemption value | ¥ | ¥ 7,208 | ¥ 6,826 | ||
Liquidation value | ¥ | ¥ 7,523 | ¥ 7,401 | ||
Series A3 Redeemable Convertible Preferred Shares | ||||
MEZZANINE EQUITY | ||||
Par value per share | $ / shares | $ 0.00002 | 0.00002 | ||
Shares authorized | 256,065,251 | 256,065,251 | 283,220,939 | |
Shares issued | 256,065,251 | 256,065,251 | 275,076,555 | |
Shares outstanding | 256,065,251 | 256,065,251 | 275,076,555 | |
Redemption value | ¥ | ¥ 119,576 | ¥ 118,316 | ||
Liquidation value | ¥ | ¥ 156,964 | ¥ 149,981 | ||
Series B1 Redeemable Convertible Preferred Shares | ||||
MEZZANINE EQUITY | ||||
Par value per share | $ / shares | $ 0.00002 | 0.00002 | ||
Shares authorized | 183,823,115 | 183,823,115 | 183,823,115 | |
Shares issued | 183,823,115 | 183,823,115 | 183,823,115 | |
Shares outstanding | 183,823,115 | 183,823,115 | 183,823,115 | |
Redemption value | ¥ | ¥ 477,259 | ¥ 440,721 | ||
Liquidation value | ¥ | ¥ 627,858 | ¥ 617,688 | ||
Series B2 Redeemable Convertible Preferred Shares | ||||
MEZZANINE EQUITY | ||||
Par value per share | $ / shares | $ 0.00002 | 0.00002 | ||
Shares authorized | 141,000,686 | 141,000,686 | 141,000,686 | |
Shares issued | 141,000,686 | 141,000,686 | 141,000,686 | |
Shares outstanding | 141,000,686 | 141,000,686 | 141,000,686 | |
Redemption value | ¥ | ¥ 558,008 | ¥ 510,802 | ||
Liquidation value | ¥ | ¥ 743,516 | ¥ 731,473 | ||
Series C Redeemable Convertible Preferred Shares | ||||
MEZZANINE EQUITY | ||||
Par value per share | $ / shares | $ 0.00002 | 0.00002 | ||
Shares authorized | 0 | 0 | 226,297,396 | |
Shares issued | 0 | 0 | 226,297,396 | |
Shares outstanding | 0 | 0 | 226,297,396 | |
Redemption value | ¥ | ¥ 0 | ¥ 1,749,409 | ||
Liquidation value | ¥ | ¥ 0 | ¥ 1,715,800 | ||
Series C-1 Redeemable Convertible Preferred Shares | ||||
MEZZANINE EQUITY | ||||
Par value per share | $ / shares | $ 0.00002 | |||
Shares authorized | 27,155,688 | 27,155,688 | 0 | |
Shares issued | 27,155,688 | 27,155,688 | 0 | |
Shares outstanding | 27,155,688 | 27,155,688 | 0 | |
Redemption value | ¥ | ¥ 12,679 | ¥ 0 | ||
Liquidation value | ¥ | ¥ 15,050 | ¥ 0 | ||
Series C-2 Redeemable Convertible Preferred Shares | ||||
MEZZANINE EQUITY | ||||
Par value per share | $ / shares | $ 0.00002 | 0.00002 | ||
Shares authorized | 424,519,909 | 424,519,909 | 0 | |
Shares issued | 424,519,909 | 424,519,909 | 0 | |
Shares outstanding | 424,519,909 | 424,519,909 | 0 | |
Redemption value | ¥ | ¥ 3,557,053 | ¥ 0 | ||
Liquidation value | ¥ | ¥ 3,271,730 | ¥ 0 | ||
Series D Redeemable Convertible Preferred Shares | ||||
MEZZANINE EQUITY | ||||
Par value per share | $ / shares | $ 0.00002 | $ 0.00002 | ||
Shares authorized | 136,474,737 | 136,474,737 | 0 | |
Shares issued | 136,474,737 | 136,474,737 | 0 | |
Shares outstanding | 136,474,737 | 136,474,737 | 0 | |
Redemption value | ¥ | ¥ 1,338,189 | ¥ 0 | ||
Liquidation value | ¥ | 1,325,478 | 0 | ||
VIEs | ||||
Current liabilities: | ||||
Short-term borrowings and current portion of long-term borrowings | ¥ | 1,798,880 | 2,890,842 | ||
Accounts payable | ¥ | 73,289 | 358,466 | ||
Rental payable | ¥ | 118,500 | 180,994 | ||
Advance from residents | ¥ | 331,996 | 279,534 | ||
Amount due to a related party | ¥ | 11,343 | 10,343 | ||
Deposits from residents | ¥ | 221,646 | 287,304 | ||
Accrued expenses and other current liabilities | ¥ | 179,025 | 203,994 | ||
Non-current liabilities: | ||||
Long-term borrowings, excluding current portion | ¥ | 188,000 | 182,646 | ||
Deferred tax liabilities | ¥ | 0 | 0 | ||
Other non-current liabilities | ¥ | ¥ 3,356 | ¥ 51,539 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥)¥ / sharesshares | Dec. 31, 2018CNY (¥)¥ / sharesshares | Dec. 31, 2017CNY (¥)¥ / sharesshares | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
Revenues | $ 1,024,029 | ¥ 7,129,088 | ¥ 2,675,031 | ¥ 656,782 |
Operating expenses: | ||||
Rental cost | (919,300) | (6,399,982) | (2,171,755) | (511,697) |
Depreciation and amortization | (163,496) | (1,138,225) | (373,231) | (98,984) |
Other operating expenses | (108,928) | (758,333) | (295,141) | (46,456) |
Pre-opening expense | (32,169) | (223,955) | (270,399) | (62,119) |
Sales and marketing expenses | (149,127) | (1,038,191) | (471,026) | (80,991) |
General and administrative expenses | (75,767) | (527,479) | (203,847) | (49,960) |
Technology and product development expenses | (27,827) | (193,725) | (110,954) | (25,194) |
Operating loss | (452,585) | (3,150,802) | (1,221,322) | (218,619) |
Change in fair value of convertible loan | (6,962) | (441) | ||
Interest expenses | (50,620) | (352,408) | (163,357) | (55,013) |
Interest income | 9,169 | 63,831 | 20,226 | 831 |
Investment income | 1,778 | 1,606 | ||
Loss before income taxes | (494,036) | (3,439,379) | (1,369,637) | (271,636) |
Income tax benefit/(expense) | 311 | 2,167 | (112) | 112 |
Net loss | (493,725) | (3,437,212) | (1,369,749) | (271,524) |
Loss attributable to noncontrolling interest | (342) | (2,380) | (4,134) | |
Net loss | (493,383) | (3,434,832) | (1,365,615) | (271,524) |
Accretion and modification of redeemable convertible preferred shares | (50,096) | (348,756) | (111,132) | (14,123) |
Net loss attributable to ordinary shareholders of Phoenix Tree Holdings Limited | (543,479) | (3,783,588) | (1,476,747) | (285,647) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment, net of nil income taxes | (7,870) | (54,791) | (4,478) | 1,777 |
Unrealized gain on available-for-sale securities, net of income taxes of RMB112 | 337 | |||
Less: reclassification adjustment for gain on available-for-sale securities realized in net income, net of income taxes of RMB112 | (337) | |||
Comprehensive loss | (501,595) | (3,492,003) | (1,374,564) | (269,410) |
Comprehensive loss attributable to noncontrolling interest | (342) | (2,380) | (4,134) | |
Comprehensive loss attributable to ordinary shareholders of Phoenix Tree Holdings Limited | $ (501,253) | ¥ (3,489,623) | ¥ (1,370,430) | ¥ (269,410) |
Net loss per share | ||||
-Basic and diluted (per share) | (per share) | $ (2.16) | ¥ (15.05) | ¥ (7.95) | ¥ (2.55) |
Weighted average number of shares outstanding used in computing net loss per share | ||||
-Basic and diluted | shares | 251,347,723 | 251,347,723 | 185,677,083 | 111,848,958 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
Foreign currency translation adjustment, income taxes | $ 0 | ¥ 0 | ¥ 0 | ¥ 0 |
Unrealized gain on available-for-sale securities, income taxes | ¥ 112 | |||
Less: reclassification adjustment for gain on available-for-sale securities realized in net income, income taxes | ¥ 112 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT ¥ in Thousands, $ in Thousands | Shareholders' deficit attributable to Phoenix Tree Holdings LimitedUSD ($) | Shareholders' deficit attributable to Phoenix Tree Holdings LimitedCNY (¥) | Ordinary sharesUSD ($)shares | Ordinary sharesCNY (¥)shares | Additional Paid in CapitalCNY (¥) | Accumulated Other Comprehensive Income (Loss)USD ($) | Accumulated Other Comprehensive Income (Loss)CNY (¥) | Accumulated DeficitUSD ($) | Accumulated DeficitCNY (¥) | Non-controlling InterestUSD ($) | Non-controlling InterestCNY (¥) | USD ($) | CNY (¥) |
Balance, beginning of period at Dec. 31, 2016 | ¥ (91,431) | ¥ 35 | ¥ (360) | ¥ (91,106) | ¥ (91,431) | ||||||||
Shares outstanding, beginning of period at Dec. 31, 2016 | shares | 300,000,000 | 300,000,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net loss | (271,524) | (271,524) | (271,524) | ||||||||||
Cancellation of restricted shares forfeited | shares | (75,000,000) | (75,000,000) | |||||||||||
Share-based compensation | 8,569 | ¥ 8,569 | 8,569 | ||||||||||
Share-based compensation (in shares) | shares | 62,500,000 | 62,500,000 | |||||||||||
Foreign currency translation adjustment, net of nil income taxes | 1,777 | 1,777 | 1,777 | ||||||||||
Unrealized holding gains on availableforsale security, net of income taxes of RMB112 | 337 | 337 | 337 | ||||||||||
Accretion and modification of redeemable convertible preferred shares | (14,123) | (8,569) | (5,554) | (14,123) | |||||||||
Balance, end of period at Dec. 31, 2017 | (366,395) | ¥ 35 | 1,754 | (368,184) | (366,395) | ||||||||
Shares outstanding, end of period at Dec. 31, 2017 | shares | 287,500,000 | 287,500,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net loss | (1,365,615) | (1,365,615) | ¥ (4,134) | (1,369,749) | |||||||||
Share-based compensation | 5,808 | 5,808 | 5,808 | ||||||||||
Foreign currency translation adjustment, net of nil income taxes | (4,478) | (4,478) | (4,478) | ||||||||||
Reclassification adjustment for gain on available for sale securities, net of income taxes of RMB112 | (337) | (337) | (337) | ||||||||||
Accretion and modification of redeemable convertible preferred shares | (111,132) | (5,808) | (105,324) | (111,132) | |||||||||
Balance, end of period at Dec. 31, 2018 | (1,842,149) | ¥ 35 | (3,061) | (1,839,123) | (4,134) | (1,846,283) | |||||||
Shares outstanding, end of period at Dec. 31, 2018 | shares | 287,500,000 | 287,500,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net loss | (3,434,832) | (3,434,832) | (2,380) | $ (493,725) | (3,437,212) | ||||||||
Share-based compensation | 5,551 | 5,551 | 5,551 | ||||||||||
Cash contributed by non-controlling interest | 500 | 500 | |||||||||||
Foreign currency translation adjustment, net of nil income taxes | (54,791) | (54,791) | (7,870) | (54,791) | |||||||||
Repurchase of share | (46,510) | (46,510) | (46,510) | ||||||||||
Repurchase of shares (in shares) | shares | (6,210,000) | (6,210,000) | |||||||||||
Acquisition of subsidiaries | 344 | 344 | |||||||||||
Accretion and modification of redeemable convertible preferred shares | (348,756) | ¥ (5,551) | (343,205) | (348,756) | |||||||||
Balance, end of period at Dec. 31, 2019 | $ (821,840) | ¥ (5,721,487) | $ 5 | ¥ 35 | $ (8,310) | ¥ (57,852) | $ (813,535) | ¥ (5,663,670) | $ (814) | ¥ (5,670) | $ (822,654) | ¥ (5,727,157) | |
Shares outstanding, end of period at Dec. 31, 2019 | shares | 281,290,000 | 281,290,000 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT (Parenthetical) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT | ||||
Foreign currency translation adjustment, income taxes | $ 0 | ¥ 0 | ¥ 0 | ¥ 0 |
Unrealized holding gains on available-for-sale security, net of income taxes of RMB112 | ¥ 112 | |||
Reclassification adjustment for gain on available for sale securities, net of income taxes of RMB112 | ¥ 112 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net loss | $ (493,725) | ¥ (3,437,212) | ¥ (1,369,749) | ¥ (271,524) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation and amortization | 163,496 | 1,138,225 | 373,231 | 98,984 |
Share-based compensation | 797 | 5,551 | 5,808 | 8,569 |
Loss on disposal of property and equipment | 1,927 | 13,413 | 7,859 | 1,470 |
Foreign currency exchange loss, net | 543 | 3,777 | 2,971 | |
Deferred income tax benefits | (311) | (2,167) | ||
Investment income | (1,778) | (1,606) | ||
Change in fair value of convertible loan | 6,962 | 441 | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable | (198) | (1,377) | 2,272 | 3,505 |
Advance to landlords | 11,538 | 80,327 | (238,737) | (44,817) |
Prepayments and other current assets | (44,827) | (312,079) | (222,642) | (8,220) |
Deposits to landlords | (27,826) | (193,721) | (311,273) | (78,769) |
Other non-current assets | (26,510) | (184,558) | (156,612) | (35,302) |
Accounts payable | (10,373) | (72,212) | 16,984 | (24,830) |
Rental payable | 53,494 | 372,416 | 149,316 | 31,678 |
Advance from residents | 62,843 | 437,503 | 173,878 | 91,073 |
Deposits from residents | 45,685 | 318,052 | 196,857 | 62,638 |
Accrued expenses and other current liabilities | (5,492) | (38,234) | 161,576 | 39,422 |
Other non-current liabilities | (5,590) | (38,920) | 38,829 | 12,710 |
Net cash used in operating activities | (274,529) | (1,911,216) | (1,164,248) | (114,578) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Purchase of property and equipment | (281,831) | (1,962,048) | (1,291,460) | (340,788) |
Purchase of intangible assets | (2,175) | |||
Investment in term deposits | (19,783) | (137,724) | (137,264) | |
Proceeds from maturity of term deposits | 39,500 | 274,988 | ||
Payment for business acquisition | (28,287) | (196,930) | ||
Cash acquired through business acquisition | 1,039 | 7,235 | ||
Prepaid deposit for business acquisition | (45,000) | |||
Loan provided to a third party (Note 5(b)) | (3,391) | (23,610) | ||
Purchase of short-term investments | (80,000) | (490,100) | ||
Proceeds from sales of short-term investments | 231,878 | 341,606 | ||
Net cash used in investing activities | (292,753) | (2,038,089) | (1,324,021) | (489,282) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from borrowings | 1,454,922 | 10,128,876 | 5,637,551 | 1,725,476 |
Repayment of borrowings | (1,146,076) | (7,978,752) | (3,501,633) | (1,002,595) |
Payment for initial public offering ("IPO") costs | (695) | (4,837) | ||
Loan provided by related parties | 144 | 1,000 | 10,343 | |
Repurchase of ordinary shares | (6,681) | (46,510) | ||
Cash contribution from non-controlling interest | 72 | 500 | ||
Proceeds from issuance of convertible loan | 126,206 | |||
Net cash provided by financing activities | 710,316 | 4,945,078 | 4,692,659 | 822,440 |
Effect of foreign currency exchange rate changes on cash and restricted cash | (777) | (5,409) | 47,142 | (6,110) |
Net increase in cash and restricted cash | 142,257 | 990,364 | 2,251,532 | 212,470 |
Cash and restricted cash at the beginning of the year | 354,152 | 2,465,534 | 214,002 | 1,532 |
Cash and restricted cash at the end of the year | 496,409 | 3,455,898 | 2,465,534 | 214,002 |
Supplemental disclosure of cash flow information: | ||||
Interest paid | 50,496 | 351,541 | 161,833 | 55,013 |
Accrual of purchase of property and equipment | 104,265 | 725,873 | 701,906 | 129,825 |
Accrual for issurance cost of Series D Redeemable Convertible Preferred Shares | 1,013 | 7,053 | ||
Payable for business acquisition | 20,512 | 142,802 | ||
Accrual for IPO cost | 2,061 | 14,351 | ||
Series A2I Redeemable Convertible Preferred Shares | ||||
Supplemental disclosure of cash flow information: | ||||
Issuance of Redeemable Convertible Preferred Shares upon conversion of convertible loan | 6,250 | |||
Series A3 Redeemable Convertible Preferred Shares | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from issuance of redeemable convertible preferred stock | 436 | 3,038 | 100,559 | |
Payments of issuance cost of Series Redeemable Convertible Preferred Shares | ¥ (1,000) | |||
Series B1 Redeemable Convertible Preferred Shares | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from issuance of redeemable convertible preferred stock | 379,542 | |||
Payments of issuance cost of Series Redeemable Convertible Preferred Shares | (8,091) | |||
Series B2 Redeemable Convertible Preferred Shares | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from issuance of redeemable convertible preferred stock | 321,040 | |||
Payments of issuance cost of Series Redeemable Convertible Preferred Shares | (3,249) | |||
Supplemental disclosure of cash flow information: | ||||
Issuance of Redeemable Convertible Preferred Shares upon conversion of convertible loan | 133,168 | |||
Series C Redeemable Convertible Preferred Shares | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from issuance of redeemable convertible preferred stock | 1,737,750 | |||
Payments of issuance cost of Series Redeemable Convertible Preferred Shares | ¥ (6,800) | |||
Series C-2 Redeemable Convertible Preferred Shares | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from issuance of redeemable convertible preferred stock | 215,521 | 1,500,416 | ||
Payments of issuance cost of Series Redeemable Convertible Preferred Shares | (346) | (2,411) | ||
Series D Redeemable Convertible Preferred Shares | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from issuance of redeemable convertible preferred stock | $ 193,019 | ¥ 1,343,758 |
DESCRIPTION OF BUSINESS AND ORG
DESCRIPTION OF BUSINESS AND ORGANIZATION | 12 Months Ended |
Dec. 31, 2019 | |
DESCRIPTION OF BUSINESS AND ORGANIZATION | |
DESCRIPTION OF BUSINESS AND ORGANIZATION | 1. Description of Business and Organization (a) Phoenix Tree Holdings Limited (“Phoenix Tree” or “the Company”), through its wholly‑owned subsidiaries, consolidated variable interest entities (“VIEs”) and VIEs’ wholly‑owned subsidiaries (collectively referred to as “the Group”), leases apartments from landlords, designs, renovates and furnishes such apartments and rents them out to residents and corporate clients. The Group provides repair and maintenance for private rooms, common area maintenance and utilities to the residents. All of the Group’s principal operations and geographic markets are in the People’s Republic of China (“PRC”). (b) The Group used to operate its business in the PRC through Zi Wutong (Beijing) Asset Management Co., Ltd. (“Zi Wutong”) and Yishui (Shanghai) Information Technology Co., Ltd. (“Shanghai Yishui”) and their subsidiaries, which are limited liability companies established under the laws of the PRC in January 2015 and November 2016, respectively. Shanghai Yishui holds the license of telecommunications and information services, or ICP license, from the government in order to carry out online rental platform operations in China. The equity interests of Zi Wutong and Shanghai Yishui (the “VIEs”) are legally held by individuals who act as nominee equity holders of VIEs on behalf of Xiaofangjian (Shanghai) Internet Information Technology Co., Ltd. (“Xiaofangjian” or “WOFE”), the Company’s wholly-owned subsidiary. The recognized and unrecognized revenue-producing assets that were held by VIEs primarily consisted of leasehold improvement, furniture and appliance, leasehold improvements under construction, operating leases for the apartments and ICP license. A series of contractual agreements, including Exclusive Business Cooperation Agreement, Equity Pledge Agreement, Exclusive Call Option Agreement, Spousal Consent Letters and Power of Attorney Agreements (collectively, the “VIE Agreements”), were entered among Zi Wutong, Xiaofangjian and nominee equity holders of Zi Wutong and among Shanghai Yishui, Xiaofangjian and nominee equity holders of Shanghai Yishui. Through the VIE Agreements, the nominee equity holders of the VIEs have granted all their legal rights including voting rights and disposition rights of their equity interests in the VIEs to WOFE. The nominee equity holders of the VIEs do not participate significantly in income and loss and do not have the power to direct the activities of the VIEs that most significantly impact their economic performance. Accordingly, the VIEs are considered variable interest entities. Starting from February 2019, the Group began to transfer most of the operations from VIEs to the WOFE, through transferring the ownership of VIE’s subsidiaries to the WOFE at nil consideration. For the year ended December 31, 2019, nine of the VIE’s subsidiaries became the Company’s wholly-owned subsidiaries. As of December 31, 2019, there were 2 VIEs within the Group. In accordance with Accounting Standards Codification (“ASC”) 810‑10‑25‑38A, the Company, through the WOFE, has a controlling financial interest in the VIEs because the WOFE has (i) the power to direct activities of the VIEs that most significantly impact the economic performance of the VIEs; and (ii) the obligation to absorb the expected losses and the right to receive expected residual return of the VIEs that could potentially be significant to the VIEs. Thus, the Company, through the WOFE, is the primary beneficiary of the VIEs. Under the terms of the VIE Agreements, the WOFE has (i) the right to receive economic benefits that could potentially be significant to the VIE in the form of service fees under the Exclusive Business Cooperation Agreement; (ii) the right to receive all dividends declared by the VIE and the right to all undistributed earnings of the VIE; (iii) the right to receive the residual benefits of the VIE through its exclusive option to acquire 100% of the equity interests in the VIE, to the extent permitted under PRC law. Accordingly, the financial statements of the VIEs are consolidated in the Company’s consolidated financial statements. Under the terms of the VIE Agreements, the VIEs’ nominee equity holders have no rights to the net assets nor have the obligations to fund the deficit, and such rights and obligations have been vested to the Company. All of the deficit (net liabilities) and net loss of the VIEs are attributed to the Company. The principal terms of the VIE Agreements are further described below. 1) WOFE and the VIEs entered into an Exclusive Business Cooperation Agreement, whereby WOFE is appointed as the exclusive service provider for the provision of business support, technology and consulting services to the VIEs. Unless a written consent is given by WOFE, the VIEs are not allowed to engage a third party to provide such services, while WOFE is able to designate another party to render such services to the VIEs. WOFE shall bill the VIEs on a quarterly basis for the service fee at an amount determined by the workload and commercial value. WOFE have the rights to adjust the basis of calculation of the service fee amount according to service provided to the VIEs. WOFE owns the exclusive intellectual property rights, whether created by WOFE or the VIEs, as a result of the performance of the Exclusive Business Cooperation Agreement. The Exclusive Business Cooperation Agreement will be in effect until terminated upon written consent by WOFE and VIEs. 2) Pursuant to the equity pledge agreement, each nominee equity holder of the VIEs has pledged all of his equity interest in the VIEs to guarantee the nominee equity holders’ and the VIEs’ performance of their obligations under the contractual arrangements, which include the Power of Attorney Agreements, Exclusive Business Cooperation Agreements and Exclusive Call Option Agreements. If the VIEs or the nominee equity holders breach their contractual obligations under these agreements, WOFE, as pledgee, will be entitled to certain rights regarding the pledged interests, including receiving proceeds from the auction or sale of all or part of the pledged interests of the VIEs in accordance with the law. Each nominee equity holder of the VIEs agrees that, during the term of the equity pledge agreement, he will not dispose of the pledged equity interests or create or allow any encumbrance on the pledged equity interests without the prior written consent of WOFE. The equity pledge agreements remain effective until the VIEs and their nominee equity holders discharge all their obligations under the contractual arrangements or all secured indebtedness has been fully paid. The pledge was registered with the relevant local administration for industry and commerce in January 2019 and will remain binding until the VIEs and their nominee equity holders discharge all their obligations under the contractual arrangements. The registration of the equity pledge enables the WOFE to enforce the equity pledge against third parties who acquire the equity interests of the VIEs in good faith. 3) Pursuant to the exclusive call option agreement, each shareholder of the VIEs has irrevocably granted WOFE an exclusive option to purchase, or have its designated person or persons to purchase, at its discretion, to the extent permitted under PRC law, all or part of the equity interests in the VIEs. The purchase price shall be RMB1 or the minimum price permitted under PRC law. The equity holders should remit to the Company any amount that is paid by the Company or its designated person(s) in connection with the purchased equity interest. Without prior written consent of WOFE, the VIEs and the equity holders shall not amend its Memorandum and Articles of Association, increase or decrease the registered capital, sell, pledge or otherwise dispose of its assets, business or beneficial interest, create or allow any encumbrance on its assets, business or other beneficial interests, commit to any liabilities, provide any loans to any person, enter into any material contract with a value of more than RMB500,000 (except those contracts entered into in the ordinary course of business), conduct mergers or acquisitions or make any investments, liquidate the VIEs or distribute dividends to the equity holders. Each equity holder of the VIEs has agreed that, without prior written consent of WOFE, he will not sell, pledge or otherwise dispose his or her equity interests in the VIEs or create or allow any encumbrance on their equity interests. The VIEs and the equity holders shall appoint those individuals recommended by WOFE as directors of the VIEs. The agreement will remain effective until all equity interests in the VIEs held by the equity holders are transferred or assigned to WOFE or its designee. 4) Pursuant to the Spousal Consent Letters executed by each spouse of each nominee equity holder of the VIEs, each signing spouse confirmed that she does not enjoy any right or interest in connection with the equity interests of the VIEs. The spouse also irrevocably agreed that she would not claim in the future any right or interest in connection with the equity interests in the VIEs held by her spouse. 5) Pursuant to the power of attorney agreements, each nominee equity holder of VIEs has irrevocably authorized the WOFE, or any individuals designated by the WOFE to act as such nominee equity holder’s exclusive attorney‑in‑fact to exercise all shareholder rights, including without limitation to: (1) the right to attend on shareholder’s meetings of the VIEs, (2) the right to exercise all the nominee equity holder’s rights and shareholder’s voting rights such shareholder is entitled to under the laws of China and the Articles of Association of the VIEs, including but not limited to the sale or transfer or pledge or disposition of their shareholding in part or in whole, and (3) designate and appoint on behalf of such nominee equity holder the legal representative, the directors, supervisors, the chief executive officer and other senior management members of the VIEs. Each power of attorney agreement is irrevocable and continuously effective from the execution date. The Company relies on the VIE Agreements to operate and control VIEs. All of the VIE Agreements are governed by PRC laws and provide for the resolution of disputes through arbitration in China. Accordingly, these contracts would be interpreted in accordance with PRC laws and any disputes would be resolved in accordance with PRC legal procedures. The legal environment in the PRC is not as developed as in some other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements. In the event that the Company is unable to enforce these contractual arrangements, or if the Company suffers significant time delays or other obstacles in the process of enforcing these contractual arrangements, it would be difficult to exert effective control over VIEs, and the Company’s ability to conduct its business and the results of operations and financial condition may be materially and adversely affected. In the opinion of management, based on the legal opinion obtained from the Company’s PRC legal counsel, the above contractual arrangements are legally binding and enforceable and do not violate current PRC laws and regulations. However, there are uncertainties regarding the interpretation and application of existing and future PRC laws and regulations. Accordingly, the Company cannot be assured that PRC regulatory authorities will not ultimately take a contrary view to its opinion. If the Company’s corporate structure and contractual arrangements are found to be in violation of any existing or future PRC laws or regulations, the relevant regulatory authorities would have broad discretion in dealing with such violations, including: · revoking the business and operating licenses of the Company; · levying fines on the Company; · confiscating any of the income that they deem to be obtained through illegal operations; · shutting down the Company’s services or imposing onerous conditions on the Company’s operation through any transactions between the Company’s PRC subsidiaries and VIEs; · discontinuing or restricting the Company’s operations in China; · imposing conditions or requirements with which the Company may not be able to comply; · requiring the Company to change its corporate structure and contractual arrangements; · restricting or prohibiting the use of the proceeds from overseas offering to finance the Company’s VIEs’ business and operations; and · taking other regulatory or enforcement actions that could be harmful to the Company’s business. If the imposition of any of these penalties or requirement to restructure the Company’s corporate structure causes it to lose the rights to direct the activities of the VIEs or the Company’s right to receive its economic benefits, the Company would no longer be able to consolidate the financial results of the VIEs in its consolidated financial statements. In the opinion of management, the likelihood of deconsolidation of the VIEs is remote based on current facts and circumstances. The equity interests of VIEs are legally held by Gao Jing and Cui Yan as nominee equity holders on behalf of the Company. Gao Jing and Cui Yan each holds 14.2% and 2% of the total ordinary shares and preferred shares issued and outstanding of the Company as of December 31, 2019, respectively, assuming the conversion of the Series A, Series B, Series C and Series D convertible redeemable preferred shares to ordinary shares and the vesting of all outstanding restricted shares held by Gao Jing and Cui Yan as of such date. The Company cannot assure that when conflicts of interest arise, either of the nominee equity holders will act in the best interests of the Company or such conflicts will be resolved in the Company’s favor. Currently, the Company does not have any arrangements to address potential conflicts of interest between the nominee equity holders and the Company, except that the Company could exercise the purchase option under the Exclusive Call Option agreement with the nominee equity holders to request them to transfer all of their equity ownership in VIEs to a PRC entity or individual designated by the Company. The Company relies on the nominee equity holders, who are both the Company’s directors and owe a fiduciary duty to the Company, to comply with the terms and conditions of the contractual arrangements. Such fiduciary duty requires directors to act in good faith and in the best interests of the Company and not to use their positions for personal gains. If the Company cannot resolve any conflict of interest or dispute between the Company and the nominee equity holders of VIEs, the Company would have to rely on legal proceedings, which could result in disruption of the Company’s business and subject the Company to substantial uncertainty as to the outcome of any such legal proceedings. The Company’s involvement with the VIEs under the VIE Agreements affected the Company’s consolidated financial position, results of operations and cash flows as indicated below. The following consolidated assets and liabilities of the Group’s VIEs as of December 31, 2018 and 2019, and consolidated revenues, net loss and cash flows for the years ended December 31, 2017,2018 and 2019, have been included in the accompanying consolidated financial statements. All intercompany transactions and balances with the Company, and its wholly-owned subsidiaries have been eliminated upon consolidation. As of December 31, 2018 2019 RMB RMB Cash 25,287 111,881 Restricted cash 139,581 91,012 Accounts receivable, net 1,456 208 Amounts due from related parties* 473,641 410,011 Advance to landlords 301,190 106,136 Prepayments and other current assets 258,269 485,765 Total current assets 1,199,424 1,205,013 Restricted cash 16,010 — Property and equipment, net 1,989,630 815,507 Intangible asset, net 2,053 1,846 Deposits to landlords 414,754 224,701 Other non‑current assets 251,936 169,965 Total non‑current assets 2,674,383 1,212,019 Total assets 3,873,807 2,417,032 Short‑term borrowings and current portion of long‑term borrowings 2,890,842 1,798,880 Accounts payable 358,466 73,289 Rental payable 180,994 118,500 Advance from residents 279,534 331,996 Amount due to related parties* 1,127,431 2,290,024 Deposits from residents 287,304 221,646 Accrued expenses and other current liabilities 203,994 179,025 Total current liabilities 5,328,565 5,013,360 Long‑term borrowings, excluding current portion 182,646 188,000 Other non-current liabilities 51,539 3,356 Total non‑current liabilities 234,185 191,356 Total liabilities 5,562,750 5,204,716 * For the Year Ended December 31, 2017 2018 2019 RMB RMB RMB Revenues 656,782 2,675,031 2,722,405 Net loss (263,474) (1,342,652) (1,791,913) Net cash (used)/provided in operating activities (110,867) (906,269) 596,345 Net cash used in investing activities (489,282) (1,183,378) (476,871) Net cash provided/(used) by financing activities 722,881 2,146,261 (11,388) Net increase in cash and restricted cash 122,732 56,614 108,086 Cash and restricted cash at the beginning of the year 1,532 124,264 94,807 Cash and restricted cash at the end of the year 124,264 180,878 202,893 In accordance with VIE Agreements, WOFE has the power to direct the activities of the VIEs. Therefore, the Company considers that there are no assets in the VIEs that can be used only to settle obligations of the VIEs, except for the restricted cash of RMB91,012 pledged to secure bank borrowings (Note 9) and registered capital of RMB11,000 as of December 31, 2019, The creditors of VIEs do not have recourse to the general credit of WOFE. During the periods presented, the Company and its wholly‑owned subsidiaries provided financial support to VIEs that they were not previously contractually required to provide in the form of advances. To the extent VIEs require financial support, the WOFE may, at its option and to the extent permitted under the PRC law, provide such support to VIEs through advances or loans to VIEs’ nominee equity holders or entrustment loans to VIEs. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) The accompanying consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying consolidated financial statements were prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Group has incurred losses since its inception. As of December 31, 2019, the Group had an accumulated deficit of RMB5,663,670 and its consolidated current liabilities exceeded current assets in the amount of RMB4,957,635. In addition, for the year ended December 31, 2019, the Group recorded operating cash outflows in the amount of RMB1,911,216. These factors raise substantial doubt about the Group’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Group is unable to continue as a going concern. Historically, the Group had relied principally on proceeds from the issuance of preferred shares and borrowings from banks and financial institutions. These include rent financing arrangements where the Group received cash at the beginning of the lease term from financial institutions the majority of rental fee of the underlying lease agreements the Group entered into with individual residents, to fund the Group’s working capital requirements and investing activities. In January 2020, the Company completed the initial public offering (“IPO”) of its ordinary shares on the New York Stock Exchange and issued 9,904,933 American Depositary Share (ADS) for a net proceeds of approximately US$128.4 million (equivalent to RMB884.5 million). Each ADS represents ten ordinary shares. Management believes that the amount of available cash balance as of December 31, 2019, cash proceeds from IPO subsequent to December 31, 2019, and forecasted net cash flows for a period of one year after the issuance of the consolidated financial statements will be sufficient for the Group to satisfy its obligations and commitments when they become due for a reasonable period of time. The forecasted cash flow has taken into account the expected available rent financing arrangements in the normal course of the Group’s business, and cash proceeds from IPO. Management also believes that the Group can adjust the pace of its business expansion and control operating expenses when necessary. The accompanying consolidated financial statements have been prepared on the basis the Group will be able to continue as a going concern for a period extending at least one year beyond the date that the consolidated financial statements are issued. (b) The consolidated financial statements of the Group have been prepared in accordance with U.S. GAAP. The consolidated financial statements include the financial statements of the Company, its wholly‑owned subsidiaries, VIEs in which the Company, through its WOFE, has a controlling financial interest, and VIEs’ wholly‑owned subsidiaries. All intercompany transactions and balances among the Company, its wholly‑owned subsidiaries, VIEs, and VIEs’ wholly‑owned subsidiaries have been eliminated upon consolidation. (c) The preparation of the consolidated financial statements in accordance with U.S. GAAP requires management 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 reported periods in the consolidated financial statements and accompanying notes. Significant accounting estimates include, but not limited to, useful lives and recoverability of property and equipment, the realization of deferred income tax assets, the fair value of share‑based compensation awards, convertible loan, ordinary shares, convertible redeemable preferred shares, identifiable assets acquired and liablities assumed in the business acquisition (see note 3). Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements. (d) Translations of the consolidated financial statements from RMB into US$ as of and for the year ended December 31, 2019 are solely for the convenience of the readers and were calculated at the rate of US$1.00=RMB6.9618 representing the noon buying rate in The City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York on December 31, 2019. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 31, 2019, or at any other rate. The US$ convenience translation is not required under U.S. GAAP and all US$ convenience translation amounts in the accompanying consolidated financial statements are unaudited. (e) In the normal course of business, the Group is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations, shareholder lawsuits, and non‑income tax matters. An accrual for a loss contingency is recognized when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. If a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, is disclosed. (f) Cash consist of cash on hand and cash at bank. Cash at bank are deposited in financial institutions at below locations: As of December 31, 2018 2019 RMB RMB Financial institutions in the mainland of the PRC —Denominated in RMB 148,222 386,773 —Denominated in USD 69,410 33,215 —Denominated in HKD — 1,260 Total cash balances held at mainland PRC financial institutions 217,632 421,248 Financial institutions in the United States —Denominated in USD 869,575 263,979 Total cash balances held at the United States financial institutions 869,575 263,979 Total cash balances held at financial institutions 1,087,207 685,227 (g) Term deposits represent deposit placed with bank with original maturities of more than three months but less than one year. The Group’s term deposits are denominated in USD and deposited at a financial institution in the mainland of the PRC. (h) Restricted cash is cash deposited with banks or financial institutions in conjunction with borrowings from the banks or financial institutions. Restriction on the use of such cash and the interest earned thereon is imposed by the banks or financial institutions and remains effective throughout the terms of the borrowings. Restricted cash that will be released to cash within the next 12 months is classified as current asset, while the remaining balance is classified as non‑current asset on the Company’s consolidated balance sheets. The Group’s restricted cash is denominated in USD and RMB and is deposited at banks and financial institutions in the mainland of the PRC. (i) The Group’s short‑term investments represent the Group’s investments in financial products managed by financial institutions in the PRC which are redeemable at the option of the Group on any working day. Short‑term investments are reported at fair value, with unrealized holding gains or losses, net of the related income tax effect, excluded from earnings and recorded as a separate component of accumulated other comprehensive income/(loss) until realized. Realized gains or losses from the sale of short‑term investments are determined on a specific identification basis and are recorded as investment income when earned. (j) Property and equipment are stated at cost less depreciation and any impairment. Property and equipment are depreciated using the straight‑line method over the estimated useful lives of the assets, as follows: Apartment leasehold improvement Shorter of 5 years or lease term Apartment furniture and appliances Shorter of useful life (3 - 5 years) or lease term Office leasehold improvement, furniture, electronic equipment, and software 3 - 5 years Costs incurred in the construction of property and equipment are capitalized and transferred into their respective asset category when the assets are ready for their intended use, at which time depreciation commences. Ordinary maintenance and repairs are charged to expenses as incurred, while replacements and betterments are capitalized. When items are retired or otherwise disposed of, income is charged or credited for the difference between net book value of the item disposed and proceeds realized thereon. (k) Property and equipment and intangible asset with finite lives are reviewed for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Recoverability of a long‑lived asset or asset group to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying value of an asset or asset group exceeds its estimated undiscounted future cash flows, an impairment loss is recognized by the amount that the carrying value exceeds the estimated fair value of the asset or asset group. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third party independent appraisals, as considered necessary. Assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell, and are no longer depreciated. No impairment of long‑lived assets was recognized for any of the years presented. (l) Goodwill Goodwill represents the excess of the purchase price and fair value of non-controlling interest over the fair value of identifiable net assets acquired in business combinations. Goodwill is not amortized, but tested for impairment annually as of December 31 or more frequently if event and circumstances indicate that they might be impaired. Accounting Standards Codification (“ASC”) 350-20 permits the Group to first assess qualitative factors to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative impairment test, using a two - step approach. If this is the case, the two-step goodwill impairment test is required. If it is more likely-than-not that the fair value of a reporting unit is greater than its carrying amount, the two-step goodwill impairment test is not required. If the two-step goodwill impairment test is required, the first step compares the fair values of each reporting unit to its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill is not considered impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of the affected reporting unit’s goodwill to the carrying value of that goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. This allocation process is only performed for purposes of evaluating goodwill impairment and does not result in an entry to adjust the value of any assets or liabilities. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill. In estimating the fair value of the reporting unit, the Group uses discounted cash flow methodology and has taken into consideration the overall and industry economic conditions and trends, market risk of the Group and historical information. No impairment of goodwill was recognized for the years ended December 31, 2017, 2018 and 2019. (m) The Company accounts for its business combinations using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations . The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any non-controlling interests. The excess of (i) the total of cost of acquisition, fair value of the non-controlling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in earning s. (n) The Company’s PRC subsidiaries are subject to value added tax (“VAT”) at the rate of 6%. The deductible input VAT balance is reflected in the prepayments and other current assets, and VAT payable balance is recorded in the accrued expenses and other current liabilities. (o) Fair value represents 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. As such, fair value is a market‑based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. Accounting guidance defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Accounting guidance establishes a three‑level fair value hierarchy and 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. The three levels of inputs are: Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Include other inputs that are directly or indirectly observable in the marketplace. Level 3—Unobservable inputs which are supported by little or no market activity. Accounting guidance also describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. Financial assets and liabilities of the Group primarily consist of cash, term deposits, restricted cash, short-term investments, accounts receivable, receivables from payment channels, interest receivable, deposits to landlords, other receivable, short-term and long-term borrowings, accounts payable, rental payable, advance from residents, amount due to a related party, deposits from residents, and accrued expenses and other current liabilities. The Group measures short-term investments at fair value on a recurring basis. Time deposits are valued based on the prevailing interest rates in the market and categorized as Level 2 measurement. The fair value of long-term borrowings is based on the amount of future cash flows associated with each debt instrument discounted at the Company’s current borrowing rate for similar debt instruments of comparable terms and categorized as Level 2 measurement. As of December 31, 2018 and 2019, the carrying values of the long-term borrowings approximate their fair values as the long-term borrowings’ interest rates approximate the rates currently offered by the Company’s bankers for similar debt instruments of comparable maturities. As of December 31, 2018 and 2019, the carrying values of other financial instruments approximated to their fair values due to the short maturity. (p) The Group enters into apartment rental agreements with residents. The terms of the agreements are generally one year, renewable upon consent of both parties on an annual basis. The agreements specify monthly billing, including rent, service charge based on a fixed percentage of rent and utilities charges at a fixed amount. The monthly service charge covers common area maintenance (e.g. cleaning), repair and maintenance for private room, internet access in the apartments and resident supports for twenty‑four hours seven days a week. The Group accounts for total billing under the rental agreements with residents as leases in accordance with ASC 840. Revenues from the lease is recorded on a straight‑line basis. If the resident terminates the lease prior to the end of the lease term, the Group is entitled to the rental deposits and part of the rental fee received in advance as penalties based on the rental agreements. The Group recognizes such amount as revenues when the resident terminates the lease. The Group offers incentives to attract residents, including rental discount and cash rebate, which are accounted for as a reduction of the lease revenue and amortized over the lease term on a straight‑line basis. For the years ended December 31, 2017, 2018 and 2019, the Company recorded such incentives of RMB7,295, RMB67,111 and RMB232,796 as a reduction of revenue, respectively. (q) The Group sources the apartments from landlords and lease to residents. The Group also leases offices for its own use. A lease is classified at the inception date as either a capital lease or an operating lease. A lease is a capital lease if any of the following conditions exist: a) ownership 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 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 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. The Group’s leases for apartments and offices are all accounted for as operating leases. The rental expenses relating to the apartments are recorded in rental cost and pre opening expense, whereas the rental expenses relating to the offices for own use are recorded in sales and marketing expenses, and general and administrative expenses. Free lease periods and rental cost escalation are recognized on a straight‑line basis commencing with the beginning of the lease term. The terms of leases with landlords are generally between four and six years with market based renewal options. There are no capital improvement funding, other lease concessions or contingent rent in the lease agreements. The Company has no significant asset retirement obligations at the end of the lease term. (r) The depreciation and amortization mainly consist of depreciation and amortization of leasehold improvement, furniture and appliances, electronic equipment and software. (s) Other operating expenses mainly consist of the cost of services provided to the Group’s residents and the commission fee charged by the Group’s agents based on the number of apartments they helped the Group successfully lease from the landlords. As the commission fee is the cost incurred as a result of entering into the lease agreement with the landlords, they are considered as part of rental cost and amortized using the straight line method over the lease terms with landlords. The cost of services provided to the Group’s residents mainly consist of apartments cleaning expenses, utilities, maintenance fee, processing fee charged by payment channel, costs related to warehouse, and low‑value consumables. (t) Pre‑opening expense represents the rental cost incurred before the leased apartment are available for use for residents. (u) Sales and marketing expenses mainly consist of payroll expenses for personnel engaged in sales and marketing activities, advertising costs, and commission fee paid to third parties based on the number of apartment units they helped the Group successfully leases to residents. Advertising expenses, which consist primarily of online and offline advertisements, are expensed as incurred. The advertising expenses were RMB31,572, RMB203,085 and RMB497,508 for the years ended December 31, 2017, 2018 and 2019, respectively. (v) General and administrative expenses mainly consist of payroll and related costs for employees involved in general corporate functions, professional fees and office rental expenses. (w) Technology and product development expenses, which are expensed as incurred, mainly consist of payroll and related costs for employees involved in developing or significantly improving a service or technique. (x) The Company periodically grants share‑based awards, including but not limited to, restricted ordinary shares and share options to eligible employees and directors, which are subject to service and performance conditions. The Company recognizes compensation cost for an equity classified award with only service conditions that has a graded vesting schedule on a straight‑line basis over the requisite service period for the entire award, provided that the cumulative amount of compensation cost recognized at any date at least equals the portion of the grant date fair value of such award that is vested at that date. For equity awards that contain both a service condition and a performance condition, the Company recognizes compensation cost on a tranche‑by‑tranche basis. To the extent the required vesting conditions are not met resulting in the forfeiture of the share‑based awards, previously recognized compensation expense relating to those awards is reversed. (y) The Company’s subsidiaries and VIEs and VIEs’ subsidiaries in PRC participate in a government mandated, defined contribution plan, pursuant to which certain retirement, medical, housing and other welfare benefits are provided to employees. PRC labor laws require the entities incorporated in China to pay to the local labor bureau a monthly contribution calculated at a stated contribution rate on the monthly basic compensation of qualified employees. The Group has no further commitments beyond its monthly contribution. Employee social benefits included as expenses in the accompanying consolidated statements of comprehensive loss amounted to RMB26,472, RMB144,018 and RMB229,586 for the years ended December 31, 2017, 2018 and 2019, respectively. (z) Current income taxes are provided on the basis of net income/(loss) for financial reporting purposes, and adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are provided using the liability method. Under this method, deferred income tax assets and liabilities are recognized for the tax effects of temporary differences and are determined by applying enacted tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates or tax laws is recognized in the consolidated statements of comprehensive loss in the period the change in tax rates or tax laws is enacted. A valuation allowance is provided to reduce the amount of deferred income tax assets if based on the weight of available evidence, it is more‑likely‑than‑not that some portion, or all, of the deferred income tax assets will not be realized. The effect on deferred income taxes arising from a change in tax rates is recognized in the consolidated statements of comprehensive loss in the period of change. The Group applies a “more likely than not” recognition threshold in the evaluation of uncertain tax positions. The Group recognizes the benefit of a tax position in its consolidated financial statements if the tax position is “more likely than not” to prevail based on the facts and technical merits of the position. Tax positions that meet the “more likely than not” recognition threshold are measured at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. Unrecognized tax benefits may be affected by changes in interpretation of laws, rulings of tax authorities, tax audits, and expiry of statutory limitations. In addition, changes in facts, circumstances and new information may require the Group to adjust the recognition and measurement estimates with regard to individual tax positions. Accordingly, unrecognized tax benefits are periodically reviewed and re‑assessed. Adjustments, if required, are recorded in the Group’s consolidated financial statements in the period in which the change that necessities the adjustments occurs. The ultimate outcome for a particular tax position may not be determined with certainty prior to the conclusion of a tax audit and, in certain circumstances, a tax appeal or litigation process. The Group records interest and penalties related to unrecognized tax benefits (if any) in interest expenses and general and administrative expenses, respectively. As of December 31, 2018 and 2019, the Group did not have any significant unrecognized uncertain tax positions. (aa) The Company’s reporting currency is Renminbi (“RMB”). The functional currency of the Company and its wholly‑owned subsidiary incorporated at Hong Kong S.A.R. is the United States dollars (“US$”). The functional currency of the Company’s PRC subsidiary, VIE and VIE’s subsidiaries is the RMB. Transactions denominated in currencies other than the functional currency are remeasured into the functional currency at the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in a foreign currency are remeasured into the functional currency using the applicable exchange rate at the balance sheet date. The resulted exchange differences are recorded in general and administrative expenses in the consolidated statements of comprehensive loss. The financial statements of the Company and its wholly‑owned subsidiary incorporated at Hong Kong S.A.R. are translated from the functional currency into RMB. Assets and liabilities are translated into RMB using the applicable exchange rates at the balance sheet date. Equity accounts other than earnings (deficits) 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 resulted foreign currency translation adjustments are recorded as a component of other comprehensive income or losses in the consolidated statements of comprehensive loss, and the accumulated foreign currency translation adjustments are recorded as a component of accumulated other comprehensive income or losses in the consolidated statements of changes in shareholders’ deficit. RMB is not a freely convertible currency. The PRC State Administration for Foreign Exchange, under the authority of the PRC government, controls the conversion of RMB to foreign currencies. The value of the RMB is subject to changes of central government policies and international economic and political developments affecting supply and demand in the China foreign exchange trading system market. (bb) Concentration of customers and suppliers There are no customers or suppliers from whom revenue or purchases individually represent greater than 10% of the total revenues or the total purchases of the Group for the years ended December 31, 2017, 2018 and 2019. Concentration of credit risk Financial instruments that potentially expose the Group to concentrations of credit risk consist principally of cash, term deposits, restricted cash and short‑term investments. The Group’s investment policy requires cash, term deposits, restricted cash, and short‑term investments to be placed with high‑quality financial institutions and to limit the amount of credit risk from any one institution. The Group regularly evaluates the credit standing of the counterparties or financial institutions. Interest rate risk The Group’s exposure to interest rate risk primarily relates to the Group’s short‑term and long‑term borrowings. As part of its asset and liability risk management, the Group reviews and takes appropriate steps to manage its interest rate exposures on its interest‑bearing assets and liabilities. The Group has not been exposed to material risks due to changes in market interest rates, and not used any derivative financial instruments to manage the interest risk exposure during the year presented. (cc) Basic earnings / (loss) per share is computed by dividing net income/(loss) attributable to ordinary shareholders, taking into consideration the accretions to redemption value of the preferred shares (if any), by the weighted average number of ordinary shares outstanding during the year. Under the two‑class method, any net income is allocated between ordinary shares and other participating securities based on their participating rights, whereas any net loss is not allocated to participating securities as they do not have contractual obligation to share loss. Diluted loss per share is calculated by dividing net loss attributable to ordinary shareholders, as adjusted for the accretions to redemption value of the preferred shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of shares issuable upon the conversion of the preferred shares using the if‑converted method. Potential ordinary shares include options to purchase ordinary shares and restricted ordinary shares granted to founders, unless they were anti‑dilutive. The computation of diluted earnings/(loss) per share does not assume conversion, exercise, or contingent issuance of securities that would have an anti‑dilutive effect (i.e. an increase in earnings per share amounts or a decrease in loss per share amounts) on earnings/(loss) per share. (dd) The Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group. For the purpose of internal reporting and management’s operation review, the Company’s Chief Executive Officer does not segregate the Group’s business. All products and services are viewed as in one segment, which is residential rental segment. All the Group’s long‑lived assets were located in PRC as of December 31, 2018 and 2019. (ee) In accordance with the PRC Company Laws, the Group’s PRC subsidiary, VIE and VIEs’ subsidiaries must make appropriations from their after‑tax profits as determined under the generally accepted accounting principles in the PRC (“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 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 PRC companies. Appropriation to the discretionary surplus fund is made at the discretion of the PRC companies. The statutory surplus fund and discretionary surplus fund are restricted for use. They may only be applied to offset losses or increase the registered capital of the respective companies. These reserves are not allowed to be transferred to the Company by way of cash dividends, l |
BUSINESS COMBINATION
BUSINESS COMBINATION | 12 Months Ended |
Dec. 31, 2019 | |
BUSINESS COMBINATION | |
BUSINESS COMBINATIONS | 3. BUSINESS COMBINATION In December 2018, the Group entered into a share purchase agreement with the shareholders of Hangzhou Aishangzu Technology Co., Ltd. (“Aishangzu”) to acquire its subsidiaries. Aishangzu is primarily engaged in leasing apartments from landlords, designs, renovates and furnishes such apartments and then leases to residents. To facilitate the transaction, Aishangzu agreed to transfer all of the equity interests of its subsidiaries it held to Hangzhou Aishangdanke Technology Co., Ltd. (“Aishangzudanke”), a newly established wholly-owned subsidiary of Aishangzu. In March 2019, the Group completed the acquisition of Aishangzudanke and their wholly-owned and majority-owned subsidiaries. Before March 2019, the Group paid RMB189,643 to Aishangzu, for the purpose of settling payables of those subsidiaries due to Aishangzu. The Group agreed to pay RMB200,000 to the shareholders of Aishangzu by the instalments as: (i) RMB80,000 upon closing of the transaction; (ii) RMB60,000 within 6 months after closing; (iii) RMB40,000 within 12 months after closing; and (iv) RMB20,000 within 24 months after closing. As of acquisition date, the total fair value of the considerations for the acquisition amounted to RMB369,953. The fair value of non-controlling interest amounting to RMB344 was measured based on the purchase price, taking into account a discount reflective of the non-controlling nature of the interest. As of December 31, 2019, the outstanding consideration of RMB128,002 and RMB14,800 was recorded in accrued expenses and other current liabilities and other non-current liabilities in the consolidated balance sheets, respectively. The shareholders of Aishangzu initiated an arbitration proceeding against the Group at China International Economic and Trade Arbitration Commission to enforce the remaining payment obligations due under the share purchase agreement in the aggregate amount of RMB107 million plus accrued interest and their legal and other expenses. In accordance with ASC Topic 450, no accrual of loss contingency was accrued as of December 31, 2019 since it is not probable that a liability has been incurred and the amount of loss cannot be reasonably estimated. The transaction was accounted for as a business combination. The determination of fair values of the identifiable assets acquired and liabilities assumed is based on various assumptions and valuation methodologies requiring considerable management judgment. The most significant variables in these valuations are discount rates, terminal values, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows. Management determines discount rates to be used based on the risk inherent in the current business model and industry comparisons. Terminal values are based on the expected life of products and forecasted life cycle and forecasted cash flows over that period. The Company’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Any changes to provisional amounts identified during the measurement period are recognized in the reporting period in which the adjustment amounts are determined. The fair value of assets acquired and liabilities assumed as of the date of acquisition was as follows: RMB Cash consideration 369,953 Fair value of non-controlling interests 344 Fair values of identifiable assets acquired and liabilities assumed Current assets 56,699 Property and equipment, net 299,323 Intangible assets, net 195,000 Other current liabilities (518,971) Deferred income tax liabilities (9,209) Net assets acquired 22,842 Goodwill 347,455 The acquired intangible assets primarily consist of trademark and internet domain name, mobile application, non-compete agreements and customer relationships. Goodwill arising from this acquisition was attributable to the synergies expected from the combined business. The financial results of the Aishangzu have been included in the Group’s consolidated financial statements since the date the Group obtained control. For the period from the acquisition date through December 31, 2019, the business acquired in 2019 contributed RMB561,892 and RMB81,956 in revenues and net loss, respectively. Unaudited Pro Forma Financial Information: The following unaudited pro forma financial information presents the consolidated results of operations of the Group as if the acquisitions had been completed on January 1, 2018. The unaudited pro forma financial information is supplemental information only and is not necessarily indicative of the Group’s consolidated results of operations actually would have been had the acquisitions been completed on January 1, 2018. In addition, the unaudited pro forma financial information does not attempt to project the future consolidated results of operations of the Group after the acquisitions. Year Ended December 31, 2018 2019 RMB RMB Revenue 3,723,290 7,326,364 Net loss (1,672,198) (3,504,361) Net loss per share-basic and diluted (9.60) (15.33) |
CASH AND RESTRICTED CASH
CASH AND RESTRICTED CASH | 12 Months Ended |
Dec. 31, 2019 | |
CASH AND RESTRICTED CASH | |
CASH AND RESTRICTED CASH | 4. CASH AND RESTRICTED CASH A reconciliation of cash and restricted cash in the consolidated balance sheets to the amounts in the consolidated statement of cash flows is as follows: As of December 31, 2018 2019 RMB RMB Cash 1,087,258 685,277 Restricted cash‑current 1,362,266 1,417,245 Restricted cash‑non current 16,010 1,353,376 Total cash and restricted cash shown in the consolidated statement of cash flows 2,465,534 3,455,898 |
PREPAYMENTS AND OTHER CURRENT A
PREPAYMENTS AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
PREPAYMENTS AND OTHER CURRENT ASSETS | |
PREPAYMENTS AND OTHER CURRENT ASSETS | 5. PREPAYMENTS AND OTHER CURRENT ASSETS Prepayments and other current assets at December 31, 2018 and 2019 consisted of the following: As of December 31, 2018 2019 RMB RMB Deductible input VAT 118,850 329,439 Deferred rental commission (a) 48,731 80,641 Deposits to landlords 21,924 70,598 Prepaid marketing expense 21,532 34,410 Receivables from payment channels 23,127 18,553 Interest receivable 8,260 15,751 Other receivable (b) — 23,859 Others 23,370 63,367 Prepayments and Other Current Assets 265,794 636,618 (a) The Group pays commissions to its employees or third‑parties based on the number of apartments they help the Group successfully leases from the landlords or leases to the residents. As the commission fee is the cost incurred as a result of entering into the lease agreement with the landlords or residents, they are considered as part of rental cost or contract acquisition cost and amortized using the straight‑line method over the lease terms with landlords or residents. The amortization are recorded in other operating expenses for the commission related with the apartments leased from landlords, and in sales and marketing expenses for the commission related with the apartments leased to residents. The unamortized commissions with terms of more than one year is recorded in non‑current assets. (b) In January 2019, the Company made a deposit for a potential business acquisition in the amount of US$3,000 (equivalent to RMB20,624) to Bennet Holding Co., Ltd ("Bennet"). The Company subsequently determined not to continue the acquisition and entered into a loan agreement with Bennet to lend the above mentioned US$3,000 to Bennet with a maturity date of July 31, 2020. The Company also provided an additional loan of US$428 (equivalent to RMB2,986) to Bennet in November 2019 with a term of one year. The annual interest rate of the loans is 10% and were pledged by 7.44% equity shares of Bennet which were held by the controlling shareholder of Bennet. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2019 | |
PROPERTY AND EQUIPMENT, NET | |
PROPERTY AND EQUIPMENT, NET | 6. PROPERTY AND EQUIPMENT, NET Property, plant and equipment at December 31, 2018 and 2019 consisted of the following: As of December 31, 2018 2019 RMB RMB Apartment: —Leasehold improvement 1,529,995 3,073,719 —Furniture and appliances 900,379 1,606,593 —Leasehold improvement under construction 56,140 42,443 Office: —Leasehold improvement, furniture, electronic equipment, and software 6,698 36,295 Property and Equipment 2,493,212 4,759,050 Less: Accumulated depreciation (503,582) (1,591,513) Property and Equipment, net 1,989,630 3,167,537 Depreciation expenses of leasehold improvement, furniture and appliances for apartments were RMB98,453, RMB371,901 and RMB1,089,587 for the years ended December 31, 2017, 2018 and 2019, respectively. Depreciation expenses of leasehold improvement, furniture, electronic equipment and software for offices were RMB531, RMB1,330 and RMB4,241 for the years ended December 31, 2017, 2018 and 2019, respectively. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | 7. GOODWILL AND INTANGIBLE ASSETS The Group’s goodwill and intangible assets consist of the following: As of December 31, Useful life 2018 2019 RMB RMB Goodwill — 347,455 Intangible assets subject to amortization —Trademark and internet domain name 9 years 2,175 80,365 —Mobile application 3 years — 23,000 —Non‑compete 2 years — 10,000 —Customer relationships 2 years — 84,000 Total Intangible Assets 2,175 197,365 Less: accumulated amortization (122) (44,519) Total Intangible Assets, net 2,053 152,846 The amortization expenses incurred for the years ended December 31, 2017, 2018 and 2019 were nil, RMB122 and RMB44,397 respectively. The estimated amortization expense for intangible assets for the the years ending December 31, 2020, 2021, 2022, 2023 and 2024 are RMB58,873, RMB36,456, RMB10,790 and RMB8,873, and RMB8,873 respectively . |
OTHER NON-CURRENT ASSETS
OTHER NON-CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
OTHER NON-CURRENT ASSETS | |
OTHER NON-CURRENT ASSETS | 8. OTHER NON - CURRENT ASSETS Other non-current assets at December 31, 2018 and 2019 consisted of the following: As of December 31, 2018 2019 RMB RMB Deferred rental commission 5(a) 203,295 379,593 Prepaid deposit for business acquisition (a) 45,000 — Deferred IPO costs (b) — 19,209 Others 3,641 11,901 Other non-current assets 251,936 410,703 (a) (b) |
SHORT-TERM BORROWINGS AND CURRE
SHORT-TERM BORROWINGS AND CURRENT PORTION OF LONG-TERM BORROWINGS | 12 Months Ended |
Dec. 31, 2019 | |
SHORT-TERM BORROWINGS AND CURRENT PORTION OF LONG-TERM BORROWINGS | |
SHORT-TERM BORROWINGS AND CURRENT PORTION OF LONG-TERM BORROWINGS | 9. SHORT‑TERM BORROWINGS AND CURRENT PORTION OF LONG‑TERM BORROWINGS As of December 31, 2018 2019 RMB RMB Rent financing (a) 1,947,592 2,753,191 Loans from financial institutions (b) 742,000 1,771,171 Entrusted loan (c) 200,000 — Current portion of long‑term borrowing 11 1,250 30,000 Short‑term borrowings and current portion of long‑term borrowings 2,890,842 4,554,362 (a) Starting from 2016, the Group entered into agreements with financial institutions in China, pursuant to which the Group receives cash at the beginning of the lease term from financial institutions the majority rental fee of the underlying lease agreements the Group enters into with individual residents. Individual residents are evaluated by the financial institutions. Individual residents enter into the financing agreements with the financial institutions and pay the monthly rental fee to these financial institutions. The Group is responsible for the interest on the borrowings at annual interest rate between 6% and 10%. The Group is required to repay the principal to the financial institutions if the residents early terminate the lease agreements with the Group or if the residents are in default on repayment of monthly rental fee to the financial institutions. According to the agreements with the financial institutions, the Group is also required to deposit a certain percentage of the cash the Group receives from the financial institutions to an escrow account. The Group recognizes these payments to financial institutions as restricted cash. As of December 31, 2018 and 2019, the restricted cash of RMB155,591 and RMB267,983 was deposited to those financial institutions. As of December 31, 2019, the balance of short-term rent financing with one of the financial institutions accounted for 94% of total balance of short-term rent financing. The Group recognizes such arrangements as in substance sales of future lease revenue to the financial institutions, and proceeds from the financial institutions are classified as debt, in accordance with 470‑10‑25‑2, because (i) the Group, as a lessor in the underlying lease agreements with individual residents, has significant continuing involvement in the generation of the cash flows payable to the financial institutions and (ii) the financial institutions have recourse to the Group relating to the payments due to them. Cash received from the financial institutions are recorded as short‑term borrowings if the principal is due within one year, or long‑term borrowings if the principal is due beyond twelve months. Cash received from financial institutions are classified as financing cash inflows on the consolidated statements of cash flows. The monthly rental fee paid by residents to financial intuitions are classified as operating cash inflows and financing cash outflows on the consolidated statements of cash flows. (b) The Group borrowed short-term loans from commercial banks and other financial institutions. As of December 31, 2018, the outstanding short-term loans from financial institutions were RMB742,000, with the restricted cash of US$147,990 (equivelant to RMB 1,015,685) deposited to the banks to facilitate these borrowings. As of December 31, 2019, the outstanding loans from financial institutions were RMB1,771,171, among which RMB1,668,590 of cash were deposited to facilitate the loans. The balance of RMB67,581 was guaranteed by Jing Gao and Yan Cui, the co-founders of the Company, and the balance of RMB15,000 was guaranteed by Guangdong Join-Share Financing Guarantee Investment Co., Ltd, a third party. The weighted average interest rates for the outstanding short-term loans as of December 31, 2018 and 2019 were 5.62% and 3.48%, respectively. (c) In December 2018, a PRC VIE enter into an entrusted loan agreement with the trustee, Shanghai AJ Trust Co., Ltd with line of credit in the amount of RMB300,000 with a term of one year. To facilitate each borrowing, a restricted cash deposited to the trustor, Luso International Banking Ltd is required. In December 2018 and January 2019, the PRC VIE borrowed RMB200,000 and RMB100,000 at an annual interest rate of 5% with a term of one year and eleven months respectively. Restricted cash deposits of RMB207,000 and RMB102,100 were deposited to the trustor at an annual interest of 2% by a HK subsidiary for these borrowings. As of December 31, 2018 and 2019, the unused line of credit were RMB100,000 and nil, respectively. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2019 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 10. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES As of December 31, 2018 2019 RMB RMB Payroll payable 150,161 225,912 Payable for business acquisition (Note 3) — 128,002 Others 64,009 141,570 Accrued expenses and other current liabilities 214,170 495,484 Others mainly include VAT payable and deposits refundable to residents upon termination. |
LONG-TERM BORROWINGS, EXCLUDING
LONG-TERM BORROWINGS, EXCLUDING CURRENT PORTION | 12 Months Ended |
Dec. 31, 2019 | |
LONG-TERM BORROWINGS, EXCLUDING CURRENT PORTION | |
LONG-TERM BORROWINGS, EXCLUDING CURRENT PORTION | 11. LONG‑TERM BORROWINGS, EXCLUDING CURRENT PORTION As of December 31, 2018 2019 RMB RMB Long‑term bank loans (a) 4,500 699,250 Less: current portion (a) (1,250) (30,000) Rent financing 9(a) 179,396 — Long‑term borrowings, excluding current portion 182,646 669,250 (a) The Group borrowed long-term loans from commercial banks for terms of three years at the interest rate between 3.20%- 7.13%. As of December 31, 2018, the outstanding balance was RMB4,500 with a guarantee provided, among which the balance of RMB1,250 is classified as current portion of long-term borrowing. As of December 31, 2019, the outstanding balance was RMB699,250, among which RMB696,000 of cash were deposited to facilitate the loans and the balance of RMB 3,250 was guaranteed. The balance of RMB30,000 is classified as current portion of long term borrowing. The weighted average interest rates for the outstanding borrowings as of December 31, 2018 and 2019 were 7.13% and 4.14% , respectively. As of December 31, 2019, the future principal payments for the Group’s long‑term borrowings will be due according to the following payment schedule: Year ending December 31, RMB 2020 30,000 2021 29,250 2022 640,000 Total 699,250 |
CONVERTIBLE LOAN
CONVERTIBLE LOAN | 12 Months Ended |
Dec. 31, 2019 | |
CONVERTIBLE LOAN | |
CONVERTIBLE LOAN | 12. CONVERTIBLE LOAN On February 15, 2016, the Group entered into a convertible loan agreement with Mr. Luo Shaohu to borrow a one‑year loan in the amount of RMB5.0 million (the “2016 Convertible Loan”). During the period of the loan, Mr. Luo was entitled to convert all or part of the outstanding principal of the 2016 Convertible Loan into the Company’s shares upon next round of financing. The interest rate of 2016 Convertible Loan is 10% per annum. However, no interest shall be accrued on the outstanding principal amount, if any portion of the 2016 Convertible Loan is converted to the Company’s preferred shares. The conversion price is 80% of the per share price of the next round of financing if such financing is closed before December 31, 2016. On March 6, 2017, the Company issued 16,967,466 Series A‑2‑I Preferred Shares at the price of US$0.0420 per share, and the 2016 Convertible Loan agreement was terminated. (Note 13) On February 12, 2018, the Company entered into convertible loan agreements (the “2018 Convertible Loan”) with seven institutional investors (collectively “2018 Convertible Loan Holders”) to borrow a loan of US$20 million (equivalent to RMB126,206) in aggregate with a term of 18 months. 2018 Convertible Loan Holders are entitled to convert all or part of the outstanding principal of the 2018 Convertible Loan to the Company’s preferred shares upon next round of financing. The interest rate of 2018 convertible loan is 8% per annum. However, no interest shall be accrued on the outstanding principal amount, if any portion of the principal amount is converted to the Company’s preferred shares. The conversion price is 80% of the per share price of the next round of financing if the financing occurs within 12 months from closing or or 70% of the per share price of the next round of financing if the financing occurs after 12 months from the closing. The 2018 Convertible Loan was converted to 41,777,981 Series B‑2 Preferred Shares at the price of US$0.4787 per share on March 25, 2018 (Note 13). The 2016 Convertible Loan and the 2018 Convertible Loan contained variable‑share settlement which permits the holder to receive a variable number of shares of an unspecified future series of preferred shares with an aggregate fair value that is based on a fixed monetary amount. Because the payoff from such contingent exchange features is based on a fixed monetary amount, the Company considered such features are akin to contingent prepayment options that are settleable in a variable number of shares. The Company elected the fair value option for the 2016 Convertible Loan and the 2018 Convertible Loan. The Company adopted a scenario‑weighted average method to estimate the fair value of the convertible loan based on the probability of each scenario and pay‑off of convertible loan under each scenario. Changes in fair value of convertible loan in the amount of RMB441 and RMB6,962 for the years ended December 31, 2017 and 2018, respectively, are recognized in the consolidated statements of comprehensive loss. |
CONVERTIBLE PREFERRED SHARES
CONVERTIBLE PREFERRED SHARES | 12 Months Ended |
Dec. 31, 2019 | |
CONVERTIBLE PREFERRED SHARES. | |
CONVERTIBLE PREFERRED SHARES | 13. CONVERTIBLE PREFERRED SHARES The Company’s preferred shares activities consist of the following: Series A‑1 Series A‑2 Series A‑2‑I Series A‑3 Series B‑1 Series B‑2 Series C Series C-1 Series C-2 Series D Preferred Preferred Preferred Preferred Preferred Preferred Preferred Preferred Preferred Preferred Total Shares Shares Shares Shares Shares Shares Shares Shares Shares Shares equity RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB Balance as of January 1, 2017 1,417 27,123 — — — — — — — — 28,540 Issuance for cash — — — 100,559 — — — — — — 100,559 Conversion from convertible loan — — 6,250 — — — — — — — 6,250 Issuance cost — — — (1,000) — — — — — — (1,000) Accretion and modification of redeemable convertible preferred shares — 3,170 345 10,608 — — — — — — 14,123 Foreign currency translation adjustment (82) (1,678) (339) (5,712) — — — — — — (7,811) Balance as of December 31, 2017 1,335 28,615 6,256 104,455 — — — — — — 140,661 Issuance for cash — — — — 379,542 321,040 1,737,750 — — — 2,438,332 Conversion from convertible loan — — — — — 133,168 — — — — 133,168 Issuance costs — — — — (8,091) (3,249) (6,800) — — — (18,140) Accretion and modification of redeemable convertible preferred shares — 2,024 245 8,328 35,908 25,625 39,002 — — — 111,132 Foreign currency translation adjustment 67 1,517 325 5,533 33,362 34,218 (20,543) — — — 54,479 Balance as of December 31, 2018 1,402 32,156 6,826 118,316 440,721 510,802 1,749,409 — — — 2,859,632 Issuance for cash — — — — — — — Issuance costs — — — — — — (2,411) (7,053) Redesignated — — — (11,697) — — (1,755,247) — — Accretion and modification of redeemable convertible preferred shares — Foreign currency translation adjustment — (17,977) Balance as of December 31, 2019 — In March 2015, the Company issued 27,500,000 (pre share split) Series A‑1 convertible preferred shares (“Series A‑1 Preferred Shares”) at US$0.0086 per share to Napa Time Holdings Inc. The total proceeds from the issuance of Series A‑1 Preferred Shares was US$237 (equivalent to RMB1,500). No issuance cost was incurred. In November 2015, the Company issued 28,750,000 (pre share split) Series A‑2 redeemable convertible preferred shares (“Series A‑2 Preferred Shares”) at US$0.1200 to KIT Cube Limited, among which 3,750,000 Series A‑2 Preferred Shares redesigned from 3,750,000 Series A‑1 Preferred Shares. The total proceeds from the issuance of Series A‑2 Preferred Shares was US$3,000 (equivalent to RMB18,851). No issuance cost was incurred. Additionally, each Series A‑1 Preferred Share and Series A‑2 Preferred Share was splited into 5 shares in May 2016. In March 2017, the Company issued 16,967,466 Series A‑2‑I redeemable convertible preferred shares (“Series A‑2‑I Preferred Shares”) at US$0.0420 per share to Mr. Luo Shaohu (Note 12). Additionally, the Company issued 275,076,555 Series A‑3 redeemable convertible preferred shares (“Series A‑3 Preferred Shares”) at US$0.0530 per share to Mr. Luo Shaohu, Joy Capital I, L.P., KIT Cube Limited and Ucommune International Limited. The total proceeds from the issuance of Series A‑3 Preferred Shares was US$14,569 (equivalent to RMB100,559). The issuance cost was US$145 (equivalent to RMB1,000). In February 2018, the Company issued 183,823,115 Series B‑1 redeemable convertible preferred shares (“Series B‑1 Preferred Shares”) at US$0.3264 to CMC Downtown Holdings Limited, Banyan Partners Fund III, L.P., Banyan Partners Fund III‑A, L.P., Joy Capital II, L.P., Vision Plus Capital Fund II, L.P., BAI GmbH, G&M Capital Holding Limited and R Capital Growth Fund LP. The total proceeds from the issuance of Series B‑1 Preferred Shares was US$60,000 (equivalent to RMB379,542). The issuance cost was US$1,214 (equivalent to RMB8,091). In May 2018, the Company issued 141,000,686 Series B‑2 redeemable convertible preferred shares (“Series B‑2 Preferred Shares”) at US$0.5039 to CMC Downtown Holdings Limited, Banyan Partners Fund III, L.P., Banyan Partners Fund III‑A, L.P., Joy Capital II, L.P., R Capital Growh Fund LP, Vision Plus Capital Fund II, L.P., BAI GmbH, G&M Capital Holding Limited and Internet Fund IV Pte. Ltd., of which 41,777,981 Series B‑2 Preferred Shares were issued upon the conversion of the 2018 Convertible Loan (Note 11). The total proceeds from the issuance of Series B‑2 Preferred Shares was US$50,000 (equivalent to RMB321,040). The issuance cost was US$501 (equivalent to RMB3,249). In September 2018, the Company issued 226,297,396 Series C redeemable convertible preferred shares (“Series C Preferred Shares”) at US$1.1047 to Internet Fund IV Pte. Ltd. The total proceeds from the issuance of Series C Preferred Shares was US$250,000 (equivalent to RMB1,737,750). The issuance cost was US$1,000 (equivalent to RMB6,800). In January 2019, the Company redesignated 27,155,688 Series A-3 redeemable convertible preferred shares (“Series A-3 Preferred Shares”) from Joy Capital I, L.P. to 27,155,688 Series C-1 redeemable convertible preferred shares (“Series C-1 Preferred Shares”) to Success Golden Group Limited, an associated company of Joy Capital I, L.P. The key terms of Series C-1 Preferred Shares including redemption, conversion, dividend and liquidation, are the same as Series A-3 Preferred Shares. In January 2019, the Company issued 198,222,513 Series C-2 redeemable convertible preferred shares (“Series C-2 Preferred Shares”) at US$1.1047 to Antfin (Hong Kong) Holding Limited, Ducati Investment Limited, Joy Capital Opportunity, L P., CMC Downtown Holdings Limited, Banyan Partners Fund III, L.P., and Banyan Partners Fund III-A, L.P. The total proceeds from the issuance of Series C-2 Preferred Shares was US$218,985 (equivalent to RMB1,500,416). The issuance cost was RMB2,411. The Company also redesignated 226,297,396 Series C Preferred Shares to 226,297,396 Series C-2 Preferred Shares. The key terms of Series C-2 Preferred Shares including redemption, conversion, dividend and liquidation, are the same as Series C Preferred Shares. In August 2019, the Company received cash proceeds in the amount of $431 (equivalent to RMB3,038) from a third party individual for the subscription of 8,144,384 Series A-3 preferred shares, pursuant to a Series A-3 preferred shares agreement in November 2017. In October 2019, the Company issued 136,474,737 Series D redeemable convertible preferred shares (“Series D Preferred Shares”) at US$1.3922 to CMC Downtown II Holdings Limited and Juneberry Investment Holdings Limited. The total proceeds from the issuance of Series D Preferred Shares was US$190,000 (equivalent to RMB1,343,758). The issuance cost was RMB7,053. The Company classified Series A-1 Preferred Shares, Series A-2 Preferred Shares, Series A-2-I Preferred Shares, Series A-3 Preferred Shares, Series B-1 Preferred Shares, Series B-2 Preferred Shares and Series C Preferred Shares, Series C-1 Preferred Shares, Series C-2 Preferred Shares and Series D Preferred Shares (collectively “Preferred Shares”) as mezzanine equity on the consolidated balance sheets since they are contingently redeemable at the option of the holders after a specified time period. The Company evaluated the embedded conversion option in Preferred Shares to determine if the embedded conversion option require bifurcation and accounting for as a derivative. The Company concluded the embedded conversion and redemption option did not need to be bifurcated pursuant to ASC 815 because these terms do not permit net settlement, nor they can be readily settled net by a means outside the contract, nor they can provide for delivery of an asset that puts the holders in a position not substantially different from net settlement. The Company also determined that there was no beneficial conversion feature attributable to Preferred Shares because the initial effective conversion prices of Preferred Shares were higher than the fair value of the Company’s ordinary shares at the relevant commitment dates. The fair value of the Company’s ordinary shares on the commitment date was estimated by management with the assistance of an independent valuation firm. The Company also determined there was no other embedded features to be separated from Preferred Shares. In addition, the carrying values of the Preferred Shares were accreted from the share issuance dates to the redemption value on the earliest redemption dates. The accretions were recorded against retained earnings, or in the absence of retained earnings, by charges against additional paid‑in capital. Once additional paid‑in capital had been exhausted, additional charges were recorded by increasing the accumulated deficit. The rights, preferences and privileges of the redeemable convertible preferred shares are as follows: Redemption Rights Prior to the issuance of Series A‑2‑I and Series A‑3 Preferred Shares in March 2017, Series A‑2 Preferred Shares shall be redeemable at the option of holders of the Series A‑2 Preferred Shares if: (1) At any time after the fifth (5th) anniversary of the issuance date of Series A‑2, if the Company has not consummated a Qualified IPO by then. The redemption price equals to the amount at the issuance price of Series A‑2 Preferred Shares plus an annual internal rate of return of twelve percent (12%), plus all accrued but unpaid dividends from the issuance date of Series A‑2 Preferred Shares until the date of receipt by the preferred shareholder of the full redemption price. (2) In the event that (i) the Company has fulfilled the conditions for Qualified IPO approved by the Director designated by the Series A‑2 Preferred Shareholder, however, the Company has failed to consummate the Qualified IPO due to certain circumstances caused by any members other than the Series A‑2 Preferred Shareholder. The Company and the members other than Series A‑2 Preferred Shareholder shall redeem all or part of the then outstanding Series A‑2 Preferred Shares. The redemption price equals to the higher of: (A) the amount at the issuance price of Series A‑2 plus an annual internal rate of return of twenty five percent (25%), plus all accrued but unpaid dividends from the issuance date of Series A‑2 Preferred Shares until the date of receipt by the holder the full redemption price, proportionally adjusted for any share splits, share dividends, combinations, recapitalizations or similar transactions; and (B) fair market value of the Series A‑2 Preferred Shares of the Company evaluated by the international recognized third party investment bank. Upon the issuance of Series A‑2‑I and A‑3 Preferred Shares in March 2017, the redemption term of Series A‑2 Preferred Shares were modified to be the same as Series A‑2‑I and A‑3 Preferred Shares, in which they were redeemable at the option of holders of these preferred shares if: At any time after the fifth (5th) anniversary of the issuance date of Preferred Shares Series A‑3, if the Company has not consummated a Qualified IPO by then. The redemption price equals to the amount at the issuance price of Series A‑2 Preferred Shares plus an annual internal rate of return of twelve percent (12%), plus all accrued but unpaid dividends from the respective issuance date of preferred shares until the date of receipt by the holder of the full respective redemption price. In association with the issuance of the Series B‑1 Preferred Shares in February 2018, the redemption term of Series A‑2, A‑2‑I and A‑3 Preferred Shares were modified to be the same as Series B‑1 Preferred Shares, in which they were redeemable at the option of holders of these preferred shares if: (A) At any time after the fifth (5th) anniversary of the issuance date of Series B‑1 Preferred Shares, if the Company has not consummated a Qualified IPO by then, (B) in the event of any change in the applicable laws of the PRC that invalidates the cooperation documents or results in the Company no longer controlling the domestic companies, or any breach of the cooperation documents, and such invalidity or breach cannot be or is not cured or settled in any manner to the satisfaction of any holder of Preferred Shares within 30 days after the occurrence of such event, or (C) in the event of any material breach of the transaction documents which results in a material adverse effect, and such breach cannot be or is not cured or settled in any manner to the satisfaction of any holder of preferred shares within 30 days after the occurrence of such breach, at the written request to the Company made by the Majority Series A‑2 Shareholders and/or Majority Series A‑3 Shareholders and/or Majority Series A‑2‑I Shareholders and/or any holder of Series B‑1 Preferred Shares holding more than 2% of the then outstanding shares of the Company (on an as converted and fully diluted basis). The redemption price equals to the amount at the issuance price of preferred shares plus an annual internal rate of return of eight percent (8%), plus all accrued but unpaid dividends from the respective issuance date of preferred shares until the date of receipt by the holder of the full respective Redemption Price. The redemption term of Series B‑2 Preferred Shares were the same as the term of Series A‑2, A‑2‑I, A‑3 and B‑1 Preferred Shares. In association with the issuance of the Series C Preferred Shares in September 2018, the redemption term of Series A‑2, A‑2‑I, A‑3, B‑1, and B‑2 Preferred Shares were amended to change the term of the fifth (5th) anniversary of the issuance date of Series B‑1 Preferred Shares to after the fifth (5th) anniversary of the issuance date of Series C Preferred Shares. In association with the issuance of the Series C-2 Preferred Shares In January 2019, the redemption term of Series A-2, A-2-I, A-3, B-1, B-2 and C-1 Preferred Shares were modified to be the same as Series C-2 Preferred Shares, in which they were redeemable at the option of holders of these preferred shares if: (A) At any time after the fifth (5th) anniversary of the First Original Series C-2 Issue Date, if the Company has not consummated a Qualified IPO by then, (B) in the event of any change in the applicable laws of the PRC that invalidates the cooperation documents or results in the Company no longer controlling the domestic companies, or any breach of the cooperation documents, and such invalidity or breach cannot be or is not cured or settled in any manner to the satisfaction of any holder of Preferred Shares within 30 days after the occurrence of such event, or (C) in the event of any material breach of the transaction documents which results in a material adverse effect, and such breach cannot be or is not cured or settled in any manner to the satisfaction of any holder of preferred shares within 30 days after the occurrence of such breach, at the written request to the Company made by the Majority Series A-2 Shareholders and/or Majority Series A-3 Shareholders and/or Majority Series A-2-I Shareholders and/or any holder of Series B-1 Preferred Shares and/or any holder of Series B-2 Preferred Shares and/or any holder of Series C-1 Preferred Shares and/or any holder of Series C-2 Preferred Shares holding more than 2% of the then outstanding shares of the Company (on an as converted and fully diluted basis) and/or Primavera if it holds at least 36,207,583 Series C-2 Preferred Shares originally issued to Primavera (subject to appropriate adjustments for any subsequent bonus issue, share split, consolidation, subdivision, reclassification, recapitalization or similar arrangement). The redemption price equals to the amount at the issuance price of preferred shares plus an annual internal rate of return of eight percent (8%), plus all accrued but unpaid dividends from the respective issuance date of preferred shares until the date of receipt by the holder of the full respective Redemption Price. The redemption term of Series D Preferred Shares were the same as the term of Series A-2, A-2-I, A-3, B-1, B-2, C-1 and C-2 Preferred Shares. For the periods presented, the Company concluded that it was probable that Series A-2, A-2-I, A-3, B-1, B-2 and C, C-1, C-2 and D Preferred Shares will become redeemable. The Company accretes changes in the redemption value over the period from the date of issuance to the earliest redemption date using the interest method. The redemption amount of Series A-2, A-2-I, A-3, B-1, B-2 and C, C-1, C-2 and D Preferred Shares in each of the five years following December 31, 2019 assuming the Company has not consummated a Qualified IPO, are as follows: Year ending December 31, RMB 2020 — 2021 — 2022 — 2023 8,174,168 Conversion Rights Each preferred share is convertible, at the option of the holder, at any time after the date of issuance of such preferred shares according to a conversion ratio, subject to adjustments for share splits, combination, ordinary share dividends, distributions, reorganizations, mergers, consolidations, reclassifications, exchange, substitutions, sale of shares below the conversion price and other dilutive events. Each preferred share is convertible into a number of ordinary shares determined by dividing the applicable original issuance price by the conversion price. The conversion price of each preferred share is the same as its original issuance price and no adjustments to conversion price have occurred except the conversion price of Series A‑1 and A‑2. Preferred Shares was adjusted from original issuance price of US$0.0086 and US$0.1200 to US$0.0017 and US$0.0240 due to share splits, respectively, in May 2016. As of December 31, 2018 and 2019, each preferred share is convertible into one ordinary share. Each preferred share shall automatically be converted into ordinary shares, at the then applicable preferred share conversion price (i) upon the closing of a Qualified Initial Public Offering (“Qualified IPO”) or (ii) the date when the Company obtains the vote or consent of Majority Preferred Shareholders voting together as a separate class. Voting Rights Each preferred share shall be entitled to that number of votes corresponding to the number of ordinary shares on an as converted basis. Preferred shares shall vote separately as a class with respect to certain specified matters. Otherwise, the holders of preferred shares and ordinary shares shall vote together as a single class. Dividend Rights Prior to the issuance of Series A‑2‑I and A‑3 Preferred Shares in March 2017, each holder of a Series A‑2 Preferred Share shall be entitled to receive, on an annual basis, preferential, non‑cumulative dividends at the rate equal to eight percent (8%) of the Original Series A‑2 Preferred Issue Price, payable in cash when and as such cash becomes legally available therefor on parity with each other, prior and in preference to any dividend on any other Shares; provided that such dividends shall be payable only when, as, and if declared by the Board (including the approval of Series A‑2 Preferred Shareholder). All accrued but unpaid dividends shall be paid in cash when and as such cash becomes legally available to the holders of Series A‑2 Preferred Shares immediately prior to the closing of a Qualified IPO or a Liquidation Event. No dividends shall be declared or paid on Series A‑1 Preferred Shares, unless and until all declared dividends on each outstanding Series A‑2 Preferred Share has been paid or set aside for payment to the holders of each outstanding Series A‑2 Preferred Shares. Upon the issuance of Series A‑2‑I and A‑3 Preferred Shares in March 2017, the dividend term of 8% of the Original Issue Price for Series A‑2 Preferred Shares was removed. Upon the issuance of Series B‑1 Preferred Shares in February 2018, each holder of the preferred shares shall be entitled to receive, on a pro rata basis, out of any funds legally available therefor, non‑cumulative annual dividends at the simple rate of eight percent (8%) of the applicable Original Preferred Issue Price for each of its preferred shares (as adjusted from time to time for any share splits, share dividends, combinations, recapitalizations and similar transactions) per annum calculated from the closing date, payable if, as and when declared by the Board. Upon the issuance of Series C-2 and Series D Preferred Shares in January 2019 and in October 2019, each holder of the preferred shares shall be entitled to receive, on a pro rata basis, out of any funds legally available therefor, non-cumulative annual dividends at the simple rate of eight percent (8%) of the applicable Original Preferred Issue Price for each of its preferred shares (as adjusted from time to time for any share splits, share dividends, combinations, recapitalizations and similar transactions) per annum calculated from the closing date, payable if, as and when declared by the Board. Liquidation Preferences In the event of liquidation, dissolution or winding up of the Company or any deemed liquidation event as defined in the preferred shares agreements, the assets or surplus funds of the Company available for distribution will be distributed as follows: (a) The holders of Series D Preferred Shares are entitled to receive an amount equal to their respective purchase price as adjusted for any share splits, share dividends, combinations, recapitalizations and similar transactions, plus all declared but unpaid dividends (“Liquidation Preference Amount”), in preference to any distribution to any ordinary shareholders and any other preferred shareholders of the Company. If the liquidation amount, based on the assets of the Company or proceeds received by the Company or its shareholders available for distribution to shareholders, that each holder of the Series D Preferred Shares of the Company is entitled to receive per share, if the distribution is made on a pari passu and pro rata basis, will not be less than two point five (2.5) times the purchase price of Series D Preferred Shares (as adjusted for any share splits, share dividends, combinations, recapitalizations and similar transactions), the Series D Liquidation Preference Amount shall not apply, and all the assets and proceeds available for distribution shall be allocated to all the holders of the Shares of the Company on a pro‑rata and as‑converted basis. (b) After the full payment to the holders of Series D , holders of Series C-2 Preferred Shares are entitled to receive an amount equal to their respective purchase price as adjusted for any share splits, share dividends, combinations, recapitalizations and similar transactions, plus all declared but unpaid dividends (‘‘Liquidation Preference Amount’’), in preference to any distribution to any ordinary shareholders and any other preferred shareholders (except Series D) of the Company. If the liquidation amount, based on the assets of the Company or proceeds received by the Company or its shareholders available for distribution to shareholders, that each holder of the Series C-2 Preferred Shares of the Company is entitled to receive per share, if the distribution is made on a pari passu and pro rata basis, will not be less than two point five ( 2.5 ) times the purchase price of Series C-2 Preferred Shares (as adjusted for any share splits, share dividends, combinations, recapitalizations and similar transactions), the Series C-2 Liquidation Preference Amount shall not apply, and all the assets and proceeds available for distribution shall be allocated to all the holders of the Shares of the Company on a pro-rata and as-converted basis; (c) After the full payment to the holders of Series D and Series C-2 , holders of Series B-2, Series B-1, Series A-3 and Series C-1, Series A-2-I and Series A-2 Preferred Shares shall be entitled to receive a per share amount equal to 150% of the original preferred share issue price of the respective series of Preferred Shares, as adjusted for share dividends, share splits, combinations, recapitalizations and similar transactions, plus all accrued and declared but unpaid dividends thereon, in the sequence of Series B-2, Series B-1, Series A-3 and Series C-1, Series A-2-I and Series A-2 Preferred Shares. If the liquidation amount, based on the assets of the Company or proceeds received by the Company or its shareholders available for distribution to shareholders, that each holder of the Series B-2, Series B-1, Series A-3 and Series C-1, Series A-2-I and Series A-2 Preferred Shares of the Company is entitled to receive per share, if the distribution is made on a pari passu and pro rata basis, will not be less than four to six (4-6) times the purchase price of Series B-2, Series B-1, Series A-3 and Series C-1, Series A-2-I and Series A-2 Preferred Shares (as adjusted for any share splits, share dividends, combinations, recapitalizations and similar transactions), the Series B-2, Series B-1, Series A-3 and Series C-1, Series A-2-I and Series A-2 Liquidation Preference Amount shall not apply, and all the assets and proceeds available for distribution shall be allocated to all the holders of the Shares of the Company on a pro-rata and as-converted basis; (d) After the full payment to the holders of Series D, Series C-2, Series B-2, Series B-1, Series A-3 and Series C-1, Series A-2-I and Series A-2 Preferred Shares, the holders of Series A-1 Preferred Shares are entitled to receive an amount equal to their respective purchase price as adjusted for any share splits, share dividends, combinations, recapitalizations and similar transactions, plus all declared but unpaid dividends, in preference to any distribution to any ordinary shareholders of the Company, If the liquidation amount, based on the assets of the Company or proceeds received by the Company or its shareholders available for distribution to shareholders, that each holder of the Series A-1 Preferred Shares of the Company is entitled to receive per share, if the distribution is made on a pari passu and pro rata basis, will not be less than four to four (4) times the purchase price of Series B-2, Series A-1 Preferred Shares (as adjusted for any share splits, share dividends, combinations, recapitalizations and similar transactions), the Series A-1 Liquidation Preference Amount shall not apply, and all the assets and proceeds available for distribution shall be allocated to all the holders of the Shares of the Company on a pro-rata and as-converted basis. (e) After such liquidation amounts have been paid in full, the remaining assets of the Company or proceeds received by the Company or its Shareholders available for distribution to Shareholders shall be distributed on a pro rata, pari passu basis among the holders of the Preferred Shares, on an as-converted basis, together with the holders of the ordinary shares Upon the issuance of Series B‑1 Preferred Shares in February 2018, the liquidation term of Series A‑1 and A‑3 Preferred Shares were amended to add the term that the holder of Series A‑1 and A‑3 is also entitled to receive per share on a pari passu and pro rata basis will not be less than 4 and 6 times of the original issuance price, respectively, all the assets and proceeds available for distribution shall be allocated to all the holders of the Shares of the Company on a pro‑rata and as‑converted basis. The liquidation term of Series A‑2 Preferred Shares were amended that Series A‑2 Preferred Shares is entitled to receive per share on a pari passu and pro rata basis will not be less from 5 times of the original issuance price to 4 times of original issuance price. The Company determines whether an amendment or modification to the terms of Series A-1, A-2, A-2-I, A-3, B-1, C-1 and C-2 Preferred Shares represents an extinguishment based on a fair value approach. If the fair value of the preferred shares immediately before and after the amendment is significantly different (by more than 10%), the amendment or modification represents an extinguishment. The Company has determined that the amendment to the terms of Series A-1, A-2, A-2-I, A-3, B-1, C-1 and C-2 Preferred Shares did not represent an extinguishment, and therefore modification accounting was applied by analogy to the modification guidance contained in ASC 718-20, Compensation—Stock Compensation. The Company accounts for modifications that result in an increase to the fair value of the modified preferred shares as a deemed dividend reconciling net loss to net loss attributable to ordinary shareholders as there is a transfer of value from the ordinary shareholders to the preferred shareholders. Modifications that result in a decrease in the fair value of the modified preferred shares were not recognized. |
SHARE BASED COMPENSATION
SHARE BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2019 | |
SHARE BASED COMPENSATION | |
SHARE BASED COMPENSATION | 14. SHARE‑BASED COMPENSATION (a) In November 2015, all of the individual Founders entered into an arrangement with institutional investors of the Company, Pursuant to which all of their 300,000,000 ordinary shares (being retroactively adjusted to reflect the effect of the share split, which was approved by the Company’s board of directors in May 2016) became restricted and subject to service vesting conditions. 25% of the restricted shares vested and were released from restriction at the first anniversary of November 24, 2015, and the remaining 75% of the restricted shares vest monthly in equal instalments over the next thirty-six months. One of the Founders, who had 75,000,000 restricted shares, left the Company before November 24, 2016 and thus all of his restricted shares were forfeited. Such restricted shares were cancelled in March 2017 in accordance with the board of director’s resolution. In March 2017, pursuant to the board of director’s resolution, 62,500,000 restricted shares were granted to two individual Founders, which is subject to service vesting conditions. 19,531,250 shares were immediately vested and the remaining 42,968,750 shares will vest monthly in equal instalments over the thirty-three months starting from March 24, 2017. The following table sets forth the restricted shares’ activities for the years ended December 31, 2018 and 2019: Number of shares Unvested at December 31, 2017 137,760,417 Vested (71,875,000) Unvested at December 31, 2018 65,885,417 Vested (65,885,417) Unvested at December 31, 2019 — The amounts of stock compensation expense in relation to the restricted ordinary shares recognized in the years ended December 31, 2017, 2018 and 2019 were RMB8,569 , RMB5,808 and RMB5,551, respectively. As of December 31, 2019, there is no unrecognized compensation expense as all the restricted shares have been fully vested. (b) In 2017, the Company’s Board of Directors approved 2017 Stock Incentive Plan (the “2017 Plan”) under which a maximum aggregate number of ordinary shares that may be issued pursuant to all awards granted shall be 75,000,000 shares. Stock options granted to eligible employees under the 2017 Plan will be exercisable upon the Company’s completion of a Qualified IPO. The options are subject to a four year service schedule, under which an employee earns an entitlement to vest 25% of his/her option on the expiry date of a 12‑month period following the grant date, and the remaining 75% shall vest in equal monthly installments over the following three years commencing from the vesting date of the first installment. Before the Company completes a Qualified IPO, all stock options granted to an employee shall be forfeited at the time the employee terminates his employment with the Group. After the Company completes a Qualified IPO, vested options not exercised by an employee shall be forfeited 90 days after termination of employment of the employee. In April and December 2017, the Company granted 24,610,000 and 22,399,066 stock options to its employees, respectively. In June and December 2018, the Company granted 5,550,000 and 3,250,000 stock options to its employees, respectively. The exercise price is US$0.0500 for these stock options granted. In January 2019, the Company amended and restated the 2017 Stock Incentive Plan under which a maximum aggregate number of ordinary shares that may be issued pursuant to all awards granted shall be 180,849,469 shares. In October 2019, the Company further amended and restated the 2017 Stock Incentive Plan under which a maximum aggregate number of ordinary shares that may be issued pursuant to all awards granted shall be 274,226,921 shares. In June, July and September 2019, the Company granted 50,650,000, 15,300,000 and 84,065,148 stock options to its employees with an exercise price of US$0.0500, respectively. A summary of the share options activities for the year ended December 31, 2019 is presented below: Weighted Weighted remaining Aggregate Number of average contractual intrinsic shares exercise price years value US$ US$ Outstanding as of December 31, 2018 55,809,066 0.0500 Granted 150,015,148 0.0500 Repurchased (1,922,700) 0.0500 Forfeited (27,298,600) 0.0500 Outstanding as of December 31, 2019 176,602,914 0.0500 8.12 229,584 Vested and expected to vest as of December 31, 2019 174,531,664 0.0500 8.12 226,891 Exercisable as of December 31, 2019 — 0.0500 — — The fair value of the options granted is estimated on the dates of grant using the binomial option pricing model with the following assumptions used: Grant date: 2017 2018 2019 Risk‑free rate of return 2.30% ~ 2.37 % 2.85% ~ 3.01 % 1.60% ~ 5.00 % Volatility 50.7% ~ 52.0 % 41.1% ~ 50.2 % 39.5% ~ 42.5 % Expected dividend yield % % % Exercise multiple 2.2 ~ 2.8 2.2 ~ 2.8 2.2 ~ 2.8 Fair value of underlying ordinary share US$0.0231 ~ 0.1164 US$0.2479 ~ 0.9466 US$1.3471 ~ 1.3519 Expected term The expected volatility was estimated based on the historical volatility of comparable peer public companies with a period of time close to the expected term of the Company’s options. The risk‑free interest rate was estimated based on the yield to maturity of U.S. treasury bonds denominated in USD for a term consistent with the expected term of the Company’s options in effect at the option valuation date. The expected exercise multiple was estimated as the average ratio of the stock price to the exercise price of when employees would decide to voluntarily exercise their vested options. As the Company did not have sufficient information of past employee exercise history, it was estimated by referencing to a widely‑accepted academic research publication. Expected dividend yield is zero as the Company has never declared or paid any cash dividends on its shares, and the Company does not anticipate any dividend payments in the foreseeable future. Expected term is the contract life of the option. The fair value of the share options granted at the grant date amounted to RMB26,875 and RMB1,347,684 for the years ended December 31, 2018 and 2019, respectively. Since the exercisability is dependent upon the Company’s IPO, and it is not probable that this performance condition can be achieved until the IPO is effective, no compensation expense relating to the options was recorded for the years ended December 31, 2017, 2018 and 2019. As of December 31, 2019, the total unrecognized compensation costs associated with stock options is RMB1,256,732. In January 2019, the Company repurchased 1,922,700 share options issued to employees for cash in the amount of RMB14,400. Considering the option is exercisable upon the Company’s completion of a Qualified IPO, the repurchase of the unvested award is, in effect, a modification to immediately vest the award. RMB14,400 compensation cost was recorded as share-based compensation expense for the year ended December 31, 2019. |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended |
Dec. 31, 2019 | |
FAIR VALUE MEASUREMENT | |
FAIR VALUE MEASUREMENT | 15. FAIR VALUE MEASUREMENT The table below reflects changes of the balances for the years ended December 31, 2017 and 2018: For the Year Ended December 31, 2017 Change in January 1, Fair Value Foreign December 31, RMB 2017 loss Conversion Exchange 2017 Liabilities: Convertible loan (Note 11) 5,809 441 (6,250) — — For the Year Ended December 31, 2018 Change in January 1, Fair Value December 31, RMB 2018 Issuance loss Conversion 2018 Liabilities: Convertible loan (Note 11) — 126,206 6,962 (133,168) — |
INCOME TAX
INCOME TAX | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAX | |
INCOME TAX | 16. INCOME TAX a) 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 Company’s Hong Kong subsidiary is subject to Hong Kong profits tax at the rate of 16.5% on its taxable income generated from the operations in Hong Kong. Payments of dividends by the Hong Kong subsidiary to the Company is not subject to withholding tax in Hong Kong. A two‑tiered profits tax rates regime was introduced in 2018 where the first HK$2 million of assessable profits earned by a company will be taxed at half of the current tax rate (8.25%) whilst the remaining profits will continue to be taxed at 16.5%. There is an anti‑fragmentation measure where each group will have to nominate only one company in the group to benefit from the progressive rates. No provision for Hong Kong profits tax has been made in the financial statements as the subsidiaries in Hong Kong have no assessable profits for the three years ended December 31, 2019. PRC The Group’s PRC subsidiaries, the VIEs and VIEs’ subsidiaries are subject to the PRC Corporate Income Tax Law (“CIT Law”) and the statutory income tax rate is 25%. The components of earnings/(loss) before income taxes are as follows: For the Year Ended December 31, 2017 2018 2019 RMB RMB RMB Cayman (8,049) (5,064) (24,242) Hong Kong SAR — 6,744 14,091 PRC, excluding Hong Kong SAR (263,587) (1,371,317) (3,429,228) Total (271,636) (1,369,637) (3,439,379) The Group had no current income tax expense for the years ended December 31, 2017, 2018 and 2019, as the entities in the Group had no taxable income in the respective years. The deferred income tax benefit/expenses for the years ended December 31, 2017, 2018 and 2019 are from PRC, excluding Hong Kong SAR. Withholding tax on undistributed dividends The CIT Law also imposes a withholding income tax of 10% on dividends distributed by a foreign investment enterprise (“FIE”) to its immediate holding company outside of China, if such immediate holding company is considered as a non‑resident enterprise without any establishment or place within China or if the received dividends have no connection with the establishment or place of such immediate holding company within China, unless such immediate holding company’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement. The Cayman Islands, where the Company is incorporated, does not have such tax treaty with China. According to the arrangement between Mainland China and Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion in August 2006, dividends paid by an FIE in China to its immediate holding company in Hong Kong will be subject to withholding tax at a rate of no more than 5% (if the foreign investor owns directly at least 25% of the shares of the FIE). The Group did not record any dividend withholding tax, as the Group’s PRC entities have no retained earnings in any of the periods presented. The actual income tax expense reported in the consolidated statements of comprehensive loss differed from the expected income tax expense computed by applying the statutory PRC enterprise income tax rate of 25% to loss before income taxes for the years ended December 31, 2017, 2018 and 2019 as a result of the following: For the Year Ended December 31, 2017 2018 2019 RMB RMB RMB Computed expected income tax benefit (67,909) (342,409) (859,845) Non‑PRC entities not subject to income tax 2,060 3,423 2,538 Non‑deductible expenses 26,647 46,670 2,217 Change in valuation allowance 39,090 292,428 852,923 Income tax expense/(benefit) (112) 112 (2,167) b) As of December 31, 2018 2019 RMB RMB Deferred tax assets —Net operating loss carry forwards 304,553 1,055,305 —Advertising expense 33,679 135,850 Less: Valuation allowance (338,232) (1,191,155) Total deferred income tax assets — — Deferred tax liabilities — Intangible assets — (7,042) Total deferred income tax liability — (7,042) As of December 31, 2019, the Group had net operating loss carry forwards of approximately RMB4,221,220 attributable to the PRC subsidiaries, VIEs, and VIEs’ subsidiaries. The loss carried forward by the PRC companies will expire during the period from year 2020 to year 2024. A valuation allowance is provided against deferred income tax assets when the Group determines that it is more likely than not that the deferred income tax assets will not be utilized in the foreseeable future. The Group has incurred accumulated net operating losses for income tax purposes since its inception. The Group believes that it is more likely than not that these accumulated net operating losses and other deferred income tax assets will not be utilized in the foreseeable future. Accordingly, the Group has provided full valuation allowance for the deferred income tax assets as of December 31, 2018 and 2019. Changes in valuation allowance are as follows: For the Year Ended December 31, 2017 2018 2019 RMB RMB RMB Balance at the beginning of the year 6,714 45,804 338,232 Additions 39,090 292,428 852,923 Balance at the end of the year 45,804 338,232 1,191,155 According to the PRC Tax Administration and Collection Law, the statute of limitation is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitation is extended to five years under special circumstances where the underpayment of taxes is more than RMB100. In the case of transfer pricing issues, the statute of limitation is 10 years. There is no statute of limitation in the case of tax evasion. The income tax returns of the Company’s PRC subsidiaries, consolidated VIEs and VIEs’ subsidiaries for the years from 2014 to 2019 are open to examination by the PRC tax authorities. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2019 | |
NET LOSS PER SHARE | |
NET LOSS PER SHARE | 17. NET LOSS PER SHARE The following table sets forth the basic and diluted net loss per share computation and provides a reconciliation of the numerator and denominator for the periods presented: For the Year Ended December 31, 2017 2018 2019 RMB RMB RMB Numerator: Net loss attributable to Phoenix Tree Holdings Limited (271,524) (1,365,615) (3,434,832) Accretion and modification of redeemable convertible preferred shares (14,123) (111,132) (348,756) Numerator for basic and diluted net loss per share calculation (285,647) (1,476,747) (3,783,588) Denominator: Weighted average number of ordinary shares 111,848,958 185,677,083 251,347,723 Denominator for basic and diluted net loss per share calculation 111,848,958 185,677,083 251,347,723 Net loss per ordinary share —Basic and diluted (2.55) (7.95) (15.05) The potentially dilutive securities that have not been included in the calculation of diluted net loss per share as their inclusion would be anti‑dilutive are as follows: As of December 31, 2017 2018 2019 Restricted shares 137,760,417 65,885,417 — Convertible Preferred Shares 554,544,021 1,105,665,218 1,448,506,852 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES. | |
COMMITMENTS AND CONTINGENCIES | 18. COMMITMENTS AND CONTINGENCIES The Group leases apartments and offices under non‑cancelable operating lease agreements. Rental cost and rental expenses, including apartments and offices, were RMB574,178, RMB2,460,401 and RMB6,662,423 for the years ended December 31, 2017, 2018 and 2019, respectively. As of December 31, 2019, future minimum lease commitments, all under apartment and office non‑cancelable operating lease agreements, were as follows: Year ending December 31, Apartment Office Total 2020 7,966,226 39,006 8,005,232 2021 6,956,235 17,126 6,973,361 2022 5,373,594 4,547 5,378,141 2023 3,992,683 1,002 3,993,685 2024 and thereafter 3,445,786 209 3,445,995 Except for those disclosed above, the Group did not have any significant capital or other commitments or long‑term obligations as of December 31, 2018 and 2019. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2019 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 19. RELATED PARTY TRANSACTIONS During the year ended December 31, 2018, the Group obtained a loan of RMB10,343 from a shareholder of Series A‑3 Redeemable Convertible Preferred Shares. The amounts were unsecured, non‑interest bearing and due to demand. In August 2019, the Group obtained a loan of RMB1,000 from a shareholder of Series A-3 Redeemable Convertible Preferred Shares. The amount were unsecured, non-interest bearing and due to demand. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2019 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 20. SUBSEQUENT EVENTS (a) In January 2020, the Company completed its IPO on the New York stock exchange and issued 9,904,933 ADS for a net proceeds of approximately US$128.4 million (equivalent to RMB884.5 million) at an issuance price of US$13.5 per ADS. Each ADS represents ten ordinary shares. All of the issued and outstanding 1,448,506,852 preferred shares were converted to ordinary shares on a one-for-one-basis at the same time. (b) On March 18, 2020, one of the Company’s subsidiaries entered into investment and cooperation agreements with the local government of the Huaqiao Economic Development Zone (“Huaqiao EDZ”), in Kunshan, Jiangshu Province, China. Pursuant to the agreements, the Company established a wholly-owned subsidiary, Shan Wutong Co., Ltd (“Shan Wutong”) in the Huaqiao EDZ, which formed a joint venture with Kunshan Yinqiao Holding Group Co., Ltd., (“Kunshan Yinqiao”), an investment entity of the local government. In April 2020, Shan Wutong made a capital contribution of RMB625 million in exchange for 51.02% equity interest in the joint venture and Kunshan Yinqiao made a capital contribution of RMB600 million in exchange for the remaining 48.98% ownership. The joint venture is engaged in operating residential rental business. Pursuant to the agreements, Shan Wutong and Kunshan Yinqiao will not transfer their respective equity interests in the joint venture for a period of eight years after the capital contributions to the joint venture are completed. After the eight years, Kunshan Yinqiao will have the right to require the Company’s subsidiary or its designated party to repurchase all of Kunshan Yinqiao’s equity interest in the joint venture at a price equal to Kunshan Yinqiao’s initial capital contribution of RMB600 million plus interest with an annual interest rate equal to the People's Bank of China’s benchmark rate plus certain spread if Shan Wutong and its affiliates established in the Huaqiao EDZ contribute tax revenues to the local government of less than a certain amount in the aggregate in the eight-year period. To secure such repurchase obligation, Shan Wutong pledges all of its equity interest in the joint venture to Kunshan Yinqiao. (c) On April 14, 2020, the VIEs, the nominee equity holders of VIEs and Qing Wutong Co., Ltd (“Qing Wutong”), the Company’s wholly-owned subsidiary, entered into a series contractual agreements, including Exclusive Business Cooperation Agreement, Equity Pledge Agreement, Exclusive Call Option Agreement, Spousal Consent Letters and Power of Attorney Agreements that contain the same terms and conditions as those entered into with Xiaofangjian as detailed in Note 1(b), which was superseded at the same time. As a result, Qing Wutong became the primary beneficiary of the VIEs and the consolidated financial statements of the VIEs continues to be consolidated in the Company’s consolidated financial statements. The nominee equity holders of VIEs are still in the process of completing the registration of the equity pledge in accordance with the EquityPledge Agreements. (d) There was an outbreak of the novel coronavirus disease that has been designated as COVID-19 China and other countries. Chinese government implemented various measurements including travel restrictions, extended holidays, quarantining individuals and requirements that most business be conducted remotely, starting from the lockdown of the City of Wuhan on January 23, 2020. These measurements have interrupted the operation of Group’s businesses. This, in turn, has caused a decrease in the Group’s occupancy rate, slower pace of sourcing and renovating new apartment units and early termination of lease agreements with landlords, which have had an adverse effect on the Group’s results of operations. The Group’s total revenues declined by a single digital percentage for the first quarter of 2020 compared to the fourth quarter of 2019 due to the decline in the occupancy rate. The early termination of lease agreements with landlords resulted in a loss of approximately RMB 82.0 million for the related leasehold improvements and deposits to the landlords for the first quarter of 2020. As the COVID -19 outbreak has further spread outside the PRC and it is uncertain as to whether the COVID -19 outbreak will continue to be contained in the PRC, the Group is unable to reasonably estimate the magnitude of COVID -19's impact on its operations and the related financial impact for 2020 at this time. (e) On April 24, 2020, a complaint was filed in the United States District Court for the Southern District of New York, against the Company, certain of the Company’s directors and officers, and other defendants in a putative shareholder class action lawsuit in connection with the IPO. The complaint alleges that the prospectus for the IPO contains material misstatements and omissions and seeks remedies under the Securities Act of 1933. The Company has not accrued any loss contingencies related with the complaint as management cannot reasonably estimate the likelihood of an unfavorable outcome or provide any estimate of the amount or range of any potential loss as the case is in its preliminary stage. |
PARENT ONLY FINANCIAL INFORMATI
PARENT ONLY FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
PARENT ONLY FINANCIAL INFORMATION | |
PARENT ONLY FINANCIAL INFORMATION | 21. PARENT ONLY FINANCIAL INFORMATION For the presentation of the parent only condensed financial information, the Company records its investment in subsidiaries and VIEs which it effectively controls through contractual agreements, under the equity method of accounting as prescribed in ASC 323, Investments‑Equity Method and Joint Ventures . Such investments are fully impaired on the condensed balance sheets and subsidiaries and VIEs’ profit or loss as “Share of losses from subsidiaries, VIE and VIE’s subsidiaries” on the condensed statements of operations. The parent only condensed financial information should be read in conjunction with the Company’s consolidated financial statements. As of December 31, 2019, there were no material contingencies, significant provisions of long‑term obligations, mandatory dividend or redemption requirements of redeemable stocks of the Company, except for those, which have been separately disclosed in the consolidated financial statements. (a) As of December 31, 2018 2019 RMB RMB ASSETS Current assets Cash 962,692 275,702 Restricted cash 535,330 345,322 Prepayments and other current assets 4,261 24,010 Total current assets 1,502,283 645,034 Non-current assets Restricted cash — 195,334 Other non-current assets — 12,374 Total non-current assets — 207,708 Total assets 1,502,283 852,742 LIABILITIES Current liabilities Amount due to subsidiary and consolidated VIE 6,587 8,129 Accrued expenses and other current liabilities — 30,998 Total current liabilities and total liabilities 6,587 39,127 MEZZANINE EQUITY Series A-1 Convertible Preferred Shares 1,402 1,425 Series A-2 Redeemable Convertible Preferred Shares 32,156 34,806 Series A-2-I Redeemable Convertible Preferred Shares 6,826 7,208 Series A-3 Redeemable Convertible Preferred Shares 118,316 119,576 Series B-1 Redeemable Convertible Preferred Shares 440,721 477,259 Series B-2 Redeemable Convertible Preferred Shares 510,802 558,008 Series C Redeemable Convertible Preferred Shares 1,749,409 — Series C-1 Redeemable Convertible Preferred Shares — 12,679 Series C-2 Redeemable Convertible Preferred Shares — 3,557,053 Series D Redeemable Convertible Preferred Shares — 1,338,189 Total mezzanine equity 2,859,632 6,106,203 Shareholders’ deficit Ordinary Shares 35 35 Accumulated other comprehensive loss (4,291) (12,122) Accumulated deficit (1,359,680) (5,280,501) Total shareholders’ deficit (1,363,936) (5,292,588) Total liabilities, mezzanine equity and shareholders’ deficit 1,502,283 852,742 (b) For the Year Ended December 31, 2017 2018 2019 RMB RMB RMB General and administrative expenses (9,041) (13,052) (49,185) Operating loss (9,041) (13,052) (49,185) Share of losses from subsidiaries, VIE and VIE’s subsidiaries (9,350) (1,196,549) (3,506,864) Change in fair value of convertible loan 441 (6,962) — Interest income 551 14,950 24,943 Loss before income taxes (17,399) (1,201,613) (3,531,106) Income tax benefit/(expense) — — — Net loss (17,399) (1,201,613) (3,531,106) (c) For the Year Ended December 31, 2017 2018 2019 RMB RMB RMB Net cash provided by operating activities 509 9,424 3,752 Net cash used in investing activities (3,141) (1,196,639) (3,470,120) Net cash provided by financing activities 100,559 2,551,618 2,797,814 Effect of foreign currency exchange rate changes on cash and restricted cash (8,189) 43,881 (13,110) Net increase in cash and restricted cash 89,738 1,408,284 (681,664) Cash and restricted cash at the beginning of the year — 89,738 1,498,022 Cash and restricted cash at the end of the year 89,738 1,498,022 816,358 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of presentation | (a) The accompanying consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying consolidated financial statements were prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Group has incurred losses since its inception. As of December 31, 2019, the Group had an accumulated deficit of RMB5,663,670 and its consolidated current liabilities exceeded current assets in the amount of RMB4,957,635. In addition, for the year ended December 31, 2019, the Group recorded operating cash outflows in the amount of RMB1,911,216. These factors raise substantial doubt about the Group’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Group is unable to continue as a going concern. Historically, the Group had relied principally on proceeds from the issuance of preferred shares and borrowings from banks and financial institutions. These include rent financing arrangements where the Group received cash at the beginning of the lease term from financial institutions the majority of rental fee of the underlying lease agreements the Group entered into with individual residents, to fund the Group’s working capital requirements and investing activities. In January 2020, the Company completed the initial public offering (“IPO”) of its ordinary shares on the New York Stock Exchange and issued 9,904,933 American Depositary Share (ADS) for a net proceeds of approximately US$128.4 million (equivalent to RMB884.5 million). Each ADS represents ten ordinary shares. Management believes that the amount of available cash balance as of December 31, 2019, cash proceeds from IPO subsequent to December 31, 2019, and forecasted net cash flows for a period of one year after the issuance of the consolidated financial statements will be sufficient for the Group to satisfy its obligations and commitments when they become due for a reasonable period of time. The forecasted cash flow has taken into account the expected available rent financing arrangements in the normal course of the Group’s business, and cash proceeds from IPO. Management also believes that the Group can adjust the pace of its business expansion and control operating expenses when necessary. The accompanying consolidated financial statements have been prepared on the basis the Group will be able to continue as a going concern for a period extending at least one year beyond the date that the consolidated financial statements are issued. |
Principles of Consolidation | (b) The consolidated financial statements of the Group have been prepared in accordance with U.S. GAAP. The consolidated financial statements include the financial statements of the Company, its wholly‑owned subsidiaries, VIEs in which the Company, through its WOFE, has a controlling financial interest, and VIEs’ wholly‑owned subsidiaries. All intercompany transactions and balances among the Company, its wholly‑owned subsidiaries, VIEs, and VIEs’ wholly‑owned subsidiaries have been eliminated upon consolidation. |
Use of Estimates | (c) The preparation of the consolidated financial statements in accordance with U.S. GAAP requires management 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 reported periods in the consolidated financial statements and accompanying notes. Significant accounting estimates include, but not limited to, useful lives and recoverability of property and equipment, the realization of deferred income tax assets, the fair value of share‑based compensation awards, convertible loan, ordinary shares, convertible redeemable preferred shares, identifiable assets acquired and liablities assumed in the business acquisition (see note 3). Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements. |
Convenience Translation | (d) Translations of the consolidated financial statements from RMB into US$ as of and for the year ended December 31, 2019 are solely for the convenience of the readers and were calculated at the rate of US$1.00=RMB6.9618 representing the noon buying rate in The City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York on December 31, 2019. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 31, 2019, or at any other rate. The US$ convenience translation is not required under U.S. GAAP and all US$ convenience translation amounts in the accompanying consolidated financial statements are unaudited. |
Commitments and Contingencies | (e) In the normal course of business, the Group is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations, shareholder lawsuits, and non‑income tax matters. An accrual for a loss contingency is recognized when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. If a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, is disclosed. |
Cash | (f) Cash consist of cash on hand and cash at bank. Cash at bank are deposited in financial institutions at below locations: As of December 31, 2018 2019 RMB RMB Financial institutions in the mainland of the PRC —Denominated in RMB 148,222 386,773 —Denominated in USD 69,410 33,215 —Denominated in HKD — 1,260 Total cash balances held at mainland PRC financial institutions 217,632 421,248 Financial institutions in the United States —Denominated in USD 869,575 263,979 Total cash balances held at the United States financial institutions 869,575 263,979 Total cash balances held at financial institutions 1,087,207 685,227 |
Term deposits | (g) Term deposits represent deposit placed with bank with original maturities of more than three months but less than one year. The Group’s term deposits are denominated in USD and deposited at a financial institution in the mainland of the PRC. |
Restricted Cash | (h) Restricted cash is cash deposited with banks or financial institutions in conjunction with borrowings from the banks or financial institutions. Restriction on the use of such cash and the interest earned thereon is imposed by the banks or financial institutions and remains effective throughout the terms of the borrowings. Restricted cash that will be released to cash within the next 12 months is classified as current asset, while the remaining balance is classified as non‑current asset on the Company’s consolidated balance sheets. The Group’s restricted cash is denominated in USD and RMB and is deposited at banks and financial institutions in the mainland of the PRC. |
Short-term investments | (i) The Group’s short‑term investments represent the Group’s investments in financial products managed by financial institutions in the PRC which are redeemable at the option of the Group on any working day. Short‑term investments are reported at fair value, with unrealized holding gains or losses, net of the related income tax effect, excluded from earnings and recorded as a separate component of accumulated other comprehensive income/(loss) until realized. Realized gains or losses from the sale of short‑term investments are determined on a specific identification basis and are recorded as investment income when earned. |
Property and Equipment, net | (j) Property and equipment are stated at cost less depreciation and any impairment. Property and equipment are depreciated using the straight‑line method over the estimated useful lives of the assets, as follows: Apartment leasehold improvement Shorter of 5 years or lease term Apartment furniture and appliances Shorter of useful life (3 - 5 years) or lease term Office leasehold improvement, furniture, electronic equipment, and software 3 - 5 years Costs incurred in the construction of property and equipment are capitalized and transferred into their respective asset category when the assets are ready for their intended use, at which time depreciation commences. Ordinary maintenance and repairs are charged to expenses as incurred, while replacements and betterments are capitalized. When items are retired or otherwise disposed of, income is charged or credited for the difference between net book value of the item disposed and proceeds realized thereon. |
Impairment of Long-lived Assets | (k) Property and equipment and intangible asset with finite lives are reviewed for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Recoverability of a long‑lived asset or asset group to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying value of an asset or asset group exceeds its estimated undiscounted future cash flows, an impairment loss is recognized by the amount that the carrying value exceeds the estimated fair value of the asset or asset group. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third party independent appraisals, as considered necessary. Assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell, and are no longer depreciated. No impairment of long‑lived assets was recognized for any of the years presented. |
Goodwill | (l) Goodwill Goodwill represents the excess of the purchase price and fair value of non-controlling interest over the fair value of identifiable net assets acquired in business combinations. Goodwill is not amortized, but tested for impairment annually as of December 31 or more frequently if event and circumstances indicate that they might be impaired. Accounting Standards Codification (“ASC”) 350-20 permits the Group to first assess qualitative factors to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative impairment test, using a two - step approach. If this is the case, the two-step goodwill impairment test is required. If it is more likely-than-not that the fair value of a reporting unit is greater than its carrying amount, the two-step goodwill impairment test is not required. If the two-step goodwill impairment test is required, the first step compares the fair values of each reporting unit to its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill is not considered impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of the affected reporting unit’s goodwill to the carrying value of that goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. This allocation process is only performed for purposes of evaluating goodwill impairment and does not result in an entry to adjust the value of any assets or liabilities. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill. In estimating the fair value of the reporting unit, the Group uses discounted cash flow methodology and has taken into consideration the overall and industry economic conditions and trends, market risk of the Group and historical information. No impairment of goodwill was recognized for the years ended December 31, 2017, 2018 and 2019. |
Business combinations | (m) The Company accounts for its business combinations using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations . The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any non-controlling interests. The excess of (i) the total of cost of acquisition, fair value of the non-controlling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in earning s. |
Value added taxes | (n) The Company’s PRC subsidiaries are subject to value added tax (“VAT”) at the rate of 6%. The deductible input VAT balance is reflected in the prepayments and other current assets, and VAT payable balance is recorded in the accrued expenses and other current liabilities. |
Fair Value Measurements | (o) Fair value represents 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. As such, fair value is a market‑based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. Accounting guidance defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Accounting guidance establishes a three‑level fair value hierarchy and 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. The three levels of inputs are: Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Include other inputs that are directly or indirectly observable in the marketplace. Level 3—Unobservable inputs which are supported by little or no market activity. Accounting guidance also describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. Financial assets and liabilities of the Group primarily consist of cash, term deposits, restricted cash, short-term investments, accounts receivable, receivables from payment channels, interest receivable, deposits to landlords, other receivable, short-term and long-term borrowings, accounts payable, rental payable, advance from residents, amount due to a related party, deposits from residents, and accrued expenses and other current liabilities. The Group measures short-term investments at fair value on a recurring basis. Time deposits are valued based on the prevailing interest rates in the market and categorized as Level 2 measurement. The fair value of long-term borrowings is based on the amount of future cash flows associated with each debt instrument discounted at the Company’s current borrowing rate for similar debt instruments of comparable terms and categorized as Level 2 measurement. As of December 31, 2018 and 2019, the carrying values of the long-term borrowings approximate their fair values as the long-term borrowings’ interest rates approximate the rates currently offered by the Company’s bankers for similar debt instruments of comparable maturities. As of December 31, 2018 and 2019, the carrying values of other financial instruments approximated to their fair values due to the short maturity. |
Revenue recognition | (p) The Group enters into apartment rental agreements with residents. The terms of the agreements are generally one year, renewable upon consent of both parties on an annual basis. The agreements specify monthly billing, including rent, service charge based on a fixed percentage of rent and utilities charges at a fixed amount. The monthly service charge covers common area maintenance (e.g. cleaning), repair and maintenance for private room, internet access in the apartments and resident supports for twenty‑four hours seven days a week. The Group accounts for total billing under the rental agreements with residents as leases in accordance with ASC 840. Revenues from the lease is recorded on a straight‑line basis. If the resident terminates the lease prior to the end of the lease term, the Group is entitled to the rental deposits and part of the rental fee received in advance as penalties based on the rental agreements. The Group recognizes such amount as revenues when the resident terminates the lease. The Group offers incentives to attract residents, including rental discount and cash rebate, which are accounted for as a reduction of the lease revenue and amortized over the lease term on a straight‑line basis. For the years ended December 31, 2017, 2018 and 2019, the Company recorded such incentives of RMB7,295, RMB67,111 and RMB232,796 as a reduction of revenue, respectively. |
Leases | (q) The Group sources the apartments from landlords and lease to residents. The Group also leases offices for its own use. A lease is classified at the inception date as either a capital lease or an operating lease. A lease is a capital lease if any of the following conditions exist: a) ownership 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 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 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. The Group’s leases for apartments and offices are all accounted for as operating leases. The rental expenses relating to the apartments are recorded in rental cost and pre opening expense, whereas the rental expenses relating to the offices for own use are recorded in sales and marketing expenses, and general and administrative expenses. Free lease periods and rental cost escalation are recognized on a straight‑line basis commencing with the beginning of the lease term. The terms of leases with landlords are generally between four and six years with market based renewal options. There are no capital improvement funding, other lease concessions or contingent rent in the lease agreements. The Company has no significant asset retirement obligations at the end of the lease term. |
Depreciation and amortization | (r) The depreciation and amortization mainly consist of depreciation and amortization of leasehold improvement, furniture and appliances, electronic equipment and software. |
Other operating expenses | (s) Other operating expenses mainly consist of the cost of services provided to the Group’s residents and the commission fee charged by the Group’s agents based on the number of apartments they helped the Group successfully lease from the landlords. As the commission fee is the cost incurred as a result of entering into the lease agreement with the landlords, they are considered as part of rental cost and amortized using the straight line method over the lease terms with landlords. The cost of services provided to the Group’s residents mainly consist of apartments cleaning expenses, utilities, maintenance fee, processing fee charged by payment channel, costs related to warehouse, and low‑value consumables. |
Pre-opening expense | (t) Pre‑opening expense represents the rental cost incurred before the leased apartment are available for use for residents. |
Sales and marketing expenses And General and administrative expense | (u) Sales and marketing expenses mainly consist of payroll expenses for personnel engaged in sales and marketing activities, advertising costs, and commission fee paid to third parties based on the number of apartment units they helped the Group successfully leases to residents. Advertising expenses, which consist primarily of online and offline advertisements, are expensed as incurred. The advertising expenses were RMB31,572, RMB203,085 and RMB497,508 for the years ended December 31, 2017, 2018 and 2019, respectively. (v) General and administrative expenses mainly consist of payroll and related costs for employees involved in general corporate functions, professional fees and office rental expenses. |
Technology and product development expenses | (w) Technology and product development expenses, which are expensed as incurred, mainly consist of payroll and related costs for employees involved in developing or significantly improving a service or technique. |
Share-based compensation | (x) The Company periodically grants share‑based awards, including but not limited to, restricted ordinary shares and share options to eligible employees and directors, which are subject to service and performance conditions. The Company recognizes compensation cost for an equity classified award with only service conditions that has a graded vesting schedule on a straight‑line basis over the requisite service period for the entire award, provided that the cumulative amount of compensation cost recognized at any date at least equals the portion of the grant date fair value of such award that is vested at that date. For equity awards that contain both a service condition and a performance condition, the Company recognizes compensation cost on a tranche‑by‑tranche basis. To the extent the required vesting conditions are not met resulting in the forfeiture of the share‑based awards, previously recognized compensation expense relating to those awards is reversed. |
Employee benefits | y) The Company’s subsidiaries and VIEs and VIEs’ subsidiaries in PRC participate in a government mandated, defined contribution plan, pursuant to which certain retirement, medical, housing and other welfare benefits are provided to employees. PRC labor laws require the entities incorporated in China to pay to the local labor bureau a monthly contribution calculated at a stated contribution rate on the monthly basic compensation of qualified employees. The Group has no further commitments beyond its monthly contribution. Employee social benefits included as expenses in the accompanying consolidated statements of comprehensive loss amounted to RMB26,472, RMB144,018 and RMB229,586 for the years ended December 31, 2017, 2018 and 2019, respectively. |
Income taxes | (z) Current income taxes are provided on the basis of net income/(loss) for financial reporting purposes, and adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are provided using the liability method. Under this method, deferred income tax assets and liabilities are recognized for the tax effects of temporary differences and are determined by applying enacted tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates or tax laws is recognized in the consolidated statements of comprehensive loss in the period the change in tax rates or tax laws is enacted. A valuation allowance is provided to reduce the amount of deferred income tax assets if based on the weight of available evidence, it is more‑likely‑than‑not that some portion, or all, of the deferred income tax assets will not be realized. The effect on deferred income taxes arising from a change in tax rates is recognized in the consolidated statements of comprehensive loss in the period of change. The Group applies a “more likely than not” recognition threshold in the evaluation of uncertain tax positions. The Group recognizes the benefit of a tax position in its consolidated financial statements if the tax position is “more likely than not” to prevail based on the facts and technical merits of the position. Tax positions that meet the “more likely than not” recognition threshold are measured at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. Unrecognized tax benefits may be affected by changes in interpretation of laws, rulings of tax authorities, tax audits, and expiry of statutory limitations. In addition, changes in facts, circumstances and new information may require the Group to adjust the recognition and measurement estimates with regard to individual tax positions. Accordingly, unrecognized tax benefits are periodically reviewed and re‑assessed. Adjustments, if required, are recorded in the Group’s consolidated financial statements in the period in which the change that necessities the adjustments occurs. The ultimate outcome for a particular tax position may not be determined with certainty prior to the conclusion of a tax audit and, in certain circumstances, a tax appeal or litigation process. The Group records interest and penalties related to unrecognized tax benefits (if any) in interest expenses and general and administrative expenses, respectively. As of December 31, 2018 and 2019, the Group did not have any significant unrecognized uncertain tax positions. |
Foreign currency translation and foreign currency risks | (aa) The Company’s reporting currency is Renminbi (“RMB”). The functional currency of the Company and its wholly‑owned subsidiary incorporated at Hong Kong S.A.R. is the United States dollars (“US$”). The functional currency of the Company’s PRC subsidiary, VIE and VIE’s subsidiaries is the RMB. Transactions denominated in currencies other than the functional currency are remeasured into the functional currency at the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in a foreign currency are remeasured into the functional currency using the applicable exchange rate at the balance sheet date. The resulted exchange differences are recorded in general and administrative expenses in the consolidated statements of comprehensive loss. The financial statements of the Company and its wholly‑owned subsidiary incorporated at Hong Kong S.A.R. are translated from the functional currency into RMB. Assets and liabilities are translated into RMB using the applicable exchange rates at the balance sheet date. Equity accounts other than earnings (deficits) 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 resulted foreign currency translation adjustments are recorded as a component of other comprehensive income or losses in the consolidated statements of comprehensive loss, and the accumulated foreign currency translation adjustments are recorded as a component of accumulated other comprehensive income or losses in the consolidated statements of changes in shareholders’ deficit. RMB is not a freely convertible currency. The PRC State Administration for Foreign Exchange, under the authority of the PRC government, controls the conversion of RMB to foreign currencies. The value of the RMB is subject to changes of central government policies and international economic and political developments affecting supply and demand in the China foreign exchange trading system market. |
Concentration and risk | (bb) Concentration of customers and suppliers There are no customers or suppliers from whom revenue or purchases individually represent greater than 10% of the total revenues or the total purchases of the Group for the years ended December 31, 2017, 2018 and 2019. Concentration of credit risk Financial instruments that potentially expose the Group to concentrations of credit risk consist principally of cash, term deposits, restricted cash and short‑term investments. The Group’s investment policy requires cash, term deposits, restricted cash, and short‑term investments to be placed with high‑quality financial institutions and to limit the amount of credit risk from any one institution. The Group regularly evaluates the credit standing of the counterparties or financial institutions. Interest rate risk The Group’s exposure to interest rate risk primarily relates to the Group’s short‑term and long‑term borrowings. As part of its asset and liability risk management, the Group reviews and takes appropriate steps to manage its interest rate exposures on its interest‑bearing assets and liabilities. The Group has not been exposed to material risks due to changes in market interest rates, and not used any derivative financial instruments to manage the interest risk exposure during the year presented. |
Earnings/(Loss) per Share | (cc) Basic earnings / (loss) per share is computed by dividing net income/(loss) attributable to ordinary shareholders, taking into consideration the accretions to redemption value of the preferred shares (if any), by the weighted average number of ordinary shares outstanding during the year. Under the two‑class method, any net income is allocated between ordinary shares and other participating securities based on their participating rights, whereas any net loss is not allocated to participating securities as they do not have contractual obligation to share loss. Diluted loss per share is calculated by dividing net loss attributable to ordinary shareholders, as adjusted for the accretions to redemption value of the preferred shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of shares issuable upon the conversion of the preferred shares using the if‑converted method. Potential ordinary shares include options to purchase ordinary shares and restricted ordinary shares granted to founders, unless they were anti‑dilutive. The computation of diluted earnings/(loss) per share does not assume conversion, exercise, or contingent issuance of securities that would have an anti‑dilutive effect (i.e. an increase in earnings per share amounts or a decrease in loss per share amounts) on earnings/(loss) per share. |
Segment Reporting | (dd) The Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group. For the purpose of internal reporting and management’s operation review, the Company’s Chief Executive Officer does not segregate the Group’s business. All products and services are viewed as in one segment, which is residential rental segment. All the Group’s long‑lived assets were located in PRC as of December 31, 2018 and 2019. |
Statutory Reserves | (ee) In accordance with the PRC Company Laws, the Group’s PRC subsidiary, VIE and VIEs’ subsidiaries must make appropriations from their after‑tax profits as determined under the generally accepted accounting principles in the PRC (“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 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 PRC companies. Appropriation to the discretionary surplus fund is made at the discretion of the PRC companies. The statutory surplus fund and discretionary surplus fund are restricted for use. They may only be applied to offset losses or increase the registered capital of the respective companies. These reserves are not allowed to be transferred to the Company by way of cash dividends, loans or advances, nor can they be distributed except for liquidation. For the years ended December 31, 2017, 2018 and 2019, no appropriation was made to the statutory surplus fund by the Group’s PRC subsidiary, VIE and VIEs’ subsidiaries as these PRC companies did not earn any after‑tax profits as determined under PRC GAAP. |
Deferred initial public offering costs | (ff) Direct costs incurred by the Company attributable to its proposed IPO of ordinary shares in the United States have been deferred and recorded as other non-current assets and will be offset against the gross proceeds received from such offering. In the event the IPO is terminated or abandoned, all capitalized deferred IPO costs will be expensed. |
Recent Accounting Pronouncements | (gg) In February 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”), Leases (Topic 842) . ASU 2016-02 is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Additionally, the ASU will require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases, including qualitative and quantitative requirements. The update requires lessees to apply a modified retrospective approach for recognition and disclosure, beginning with the earliest period presented. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842)—Targeted Improvements , which allows an additional transition method to adopt the new lease standard at the adoption date, as compared to the beginning of the earliest period presented, and recognize a cumulative-effect adjustment to the beginning balance of retained earnings in the period of adoption. In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), which defers the effective date of Topic 842 for all non-public companies to fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. Early application continues to be allowed. As an emerging growth company (“EGC”), the Group has elected to apply ASU 2019-10 for the fiscal year ending December 31, 2021. However, the Group expects to lose its EGC status on December 31, 2020. Accordingly, the Group will adopt the guidance in ASC 842 in the consolidated financial statements for the year ending December 31, 2020. The Group will continue to evaluate the effect that this accounting standard will have on the consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which simplifies the accounting for goodwill impairment by eliminating Step two from the goodwill impairment test. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, versus determining an implied fair value in Step two to measure the impairment loss. The guidance is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019. Early adoption is permitted for all entities for annual and interim goodwill impairment testing dates on or after January 1, 2017. The guidance should be applied on a prospective basis. The Group will apply ASU 2017-04 for the fiscal year ending December 31, 2020. The Group does not believe the adoption of this standard will have a material impact on its consolidated financial statements. |
DESCRIPTION OF BUSINESS AND O_2
DESCRIPTION OF BUSINESS AND ORGANIZATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
DESCRIPTION OF BUSINESS AND ORGANIZATION | |
Schedule of Consolidated assets, liabilities, revenues, net loss and cash flows of the Group's VIEs | As of December 31, 2018 2019 RMB RMB Cash 25,287 111,881 Restricted cash 139,581 91,012 Accounts receivable, net 1,456 208 Amounts due from related parties* 473,641 410,011 Advance to landlords 301,190 106,136 Prepayments and other current assets 258,269 485,765 Total current assets 1,199,424 1,205,013 Restricted cash 16,010 — Property and equipment, net 1,989,630 815,507 Intangible asset, net 2,053 1,846 Deposits to landlords 414,754 224,701 Other non‑current assets 251,936 169,965 Total non‑current assets 2,674,383 1,212,019 Total assets 3,873,807 2,417,032 Short‑term borrowings and current portion of long‑term borrowings 2,890,842 1,798,880 Accounts payable 358,466 73,289 Rental payable 180,994 118,500 Advance from residents 279,534 331,996 Amount due to related parties* 1,127,431 2,290,024 Deposits from residents 287,304 221,646 Accrued expenses and other current liabilities 203,994 179,025 Total current liabilities 5,328,565 5,013,360 Long‑term borrowings, excluding current portion 182,646 188,000 Other non-current liabilities 51,539 3,356 Total non‑current liabilities 234,185 191,356 Total liabilities 5,562,750 5,204,716 * For the Year Ended December 31, 2017 2018 2019 RMB RMB RMB Revenues 656,782 2,675,031 2,722,405 Net loss (263,474) (1,342,652) (1,791,913) Net cash (used)/provided in operating activities (110,867) (906,269) 596,345 Net cash used in investing activities (489,282) (1,183,378) (476,871) Net cash provided/(used) by financing activities 722,881 2,146,261 (11,388) Net increase in cash and restricted cash 122,732 56,614 108,086 Cash and restricted cash at the beginning of the year 1,532 124,264 94,807 Cash and restricted cash at the end of the year 124,264 180,878 202,893 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of cash on hand and cash in bank | As of December 31, 2018 2019 RMB RMB Financial institutions in the mainland of the PRC —Denominated in RMB 148,222 386,773 —Denominated in USD 69,410 33,215 —Denominated in HKD — 1,260 Total cash balances held at mainland PRC financial institutions 217,632 421,248 Financial institutions in the United States —Denominated in USD 869,575 263,979 Total cash balances held at the United States financial institutions 869,575 263,979 Total cash balances held at financial institutions 1,087,207 685,227 |
Schedule of property and equipment estimated useful lives | Apartment leasehold improvement Shorter of 5 years or lease term Apartment furniture and appliances Shorter of useful life (3 - 5 years) or lease term Office leasehold improvement, furniture, electronic equipment, and software 3 - 5 years |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
BUSINESS COMBINATION | |
Schedule of fair value of assets acquired and liabilities assumed | RMB Cash consideration 369,953 Fair value of non-controlling interests 344 Fair values of identifiable assets acquired and liabilities assumed Current assets 56,699 Property and equipment, net 299,323 Intangible assets, net 195,000 Other current liabilities (518,971) Deferred income tax liabilities (9,209) Net assets acquired 22,842 Goodwill 347,455 |
Schedule of pro forma financial information | Year Ended December 31, 2018 2019 RMB RMB Revenue 3,723,290 7,326,364 Net loss (1,672,198) (3,504,361) Net loss per share-basic and diluted (9.60) (15.33) |
CASH AND RESTRICTED CASH (Table
CASH AND RESTRICTED CASH (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
CASH AND RESTRICTED CASH | |
Schedule of Reconciliation of cash and restricted cash on statement of cash flows | As of December 31, 2018 2019 RMB RMB Cash 1,087,258 685,277 Restricted cash‑current 1,362,266 1,417,245 Restricted cash‑non current 16,010 1,353,376 Total cash and restricted cash shown in the consolidated statement of cash flows 2,465,534 3,455,898 |
PREPAYMENTS AND OTHER CURRENT_2
PREPAYMENTS AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
PREPAYMENTS AND OTHER CURRENT ASSETS | |
Schedule of prepayments and other current assets | As of December 31, 2018 2019 RMB RMB Deductible input VAT 118,850 329,439 Deferred rental commission (a) 48,731 80,641 Deposits to landlords 21,924 70,598 Prepaid marketing expense 21,532 34,410 Receivables from payment channels 23,127 18,553 Interest receivable 8,260 15,751 Other receivable (b) — 23,859 Others 23,370 63,367 Prepayments and Other Current Assets 265,794 636,618 (a) The Group pays commissions to its employees or third‑parties based on the number of apartments they help the Group successfully leases from the landlords or leases to the residents. As the commission fee is the cost incurred as a result of entering into the lease agreement with the landlords or residents, they are considered as part of rental cost or contract acquisition cost and amortized using the straight‑line method over the lease terms with landlords or residents. The amortization are recorded in other operating expenses for the commission related with the apartments leased from landlords, and in sales and marketing expenses for the commission related with the apartments leased to residents. The unamortized commissions with terms of more than one year is recorded in non‑current assets. (b) In January 2019, the Company made a deposit for a potential business acquisition in the amount of US$3,000 (equivalent to RMB20,624) to Bennet Holding Co., Ltd ("Bennet"). The Company subsequently determined not to continue the acquisition and entered into a loan agreement with Bennet to lend the above mentioned US$3,000 to Bennet with a maturity date of July 31, 2020. The Company also provided an additional loan of US$428 (equivalent to RMB2,986) to Bennet in November 2019 with a term of one year. The annual interest rate of the loans is 10% and were pledged by 7.44% equity shares of Bennet which were held by the controlling shareholder of Bennet. |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of property, plant and equipment | As of December 31, 2018 2019 RMB RMB Apartment: —Leasehold improvement 1,529,995 3,073,719 —Furniture and appliances 900,379 1,606,593 —Leasehold improvement under construction 56,140 42,443 Office: —Leasehold improvement, furniture, electronic equipment, and software 6,698 36,295 Property and Equipment 2,493,212 4,759,050 Less: Accumulated depreciation (503,582) (1,591,513) Property and Equipment, net 1,989,630 3,167,537 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule Group's goodwill and intangible assets | As of December 31, Useful life 2018 2019 RMB RMB Goodwill — 347,455 Intangible assets subject to amortization —Trademark and internet domain name 9 years 2,175 80,365 —Mobile application 3 years — 23,000 —Non‑compete 2 years — 10,000 —Customer relationships 2 years — 84,000 Total Intangible Assets 2,175 197,365 Less: accumulated amortization (122) (44,519) Total Intangible Assets, net 2,053 152,846 |
OTHER NON-CURRENT ASSETS (Table
OTHER NON-CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
OTHER NON-CURRENT ASSETS | |
Schedule of other non-current assets | As of December 31, 2018 2019 RMB RMB Deferred rental commission 5(a) 203,295 379,593 Prepaid deposit for business acquisition (a) 45,000 — Deferred IPO costs (b) — 19,209 Others 3,641 11,901 Other non-current assets 251,936 410,703 (a) (b) |
SHORT-TERM BORROWINGS AND CUR_2
SHORT-TERM BORROWINGS AND CURRENT PORTION OF LONG-TERM BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SHORT-TERM BORROWINGS AND CURRENT PORTION OF LONG-TERM BORROWINGS | |
Schedule of short-term borrowings and current portion of long-term borrowings | As of December 31, 2018 2019 RMB RMB Rent financing (a) 1,947,592 2,753,191 Loans from financial institutions (b) 742,000 1,771,171 Entrusted loan (c) 200,000 — Current portion of long‑term borrowing 11 1,250 30,000 Short‑term borrowings and current portion of long‑term borrowings 2,890,842 4,554,362 (a) Starting from 2016, the Group entered into agreements with financial institutions in China, pursuant to which the Group receives cash at the beginning of the lease term from financial institutions the majority rental fee of the underlying lease agreements the Group enters into with individual residents. Individual residents are evaluated by the financial institutions. Individual residents enter into the financing agreements with the financial institutions and pay the monthly rental fee to these financial institutions. The Group is responsible for the interest on the borrowings at annual interest rate between 6% and 10%. The Group is required to repay the principal to the financial institutions if the residents early terminate the lease agreements with the Group or if the residents are in default on repayment of monthly rental fee to the financial institutions. According to the agreements with the financial institutions, the Group is also required to deposit a certain percentage of the cash the Group receives from the financial institutions to an escrow account. The Group recognizes these payments to financial institutions as restricted cash. As of December 31, 2018 and 2019, the restricted cash of RMB155,591 and RMB267,983 was deposited to those financial institutions. As of December 31, 2019, the balance of short-term rent financing with one of the financial institutions accounted for 94% of total balance of short-term rent financing. The Group recognizes such arrangements as in substance sales of future lease revenue to the financial institutions, and proceeds from the financial institutions are classified as debt, in accordance with 470‑10‑25‑2, because (i) the Group, as a lessor in the underlying lease agreements with individual residents, has significant continuing involvement in the generation of the cash flows payable to the financial institutions and (ii) the financial institutions have recourse to the Group relating to the payments due to them. Cash received from the financial institutions are recorded as short‑term borrowings if the principal is due within one year, or long‑term borrowings if the principal is due beyond twelve months. Cash received from financial institutions are classified as financing cash inflows on the consolidated statements of cash flows. The monthly rental fee paid by residents to financial intuitions are classified as operating cash inflows and financing cash outflows on the consolidated statements of cash flows. (b) The Group borrowed short-term loans from commercial banks and other financial institutions. As of December 31, 2018, the outstanding short-term loans from financial institutions were RMB742,000, with the restricted cash of US$147,990 (equivelant to RMB 1,015,685) deposited to the banks to facilitate these borrowings. As of December 31, 2019, the outstanding loans from financial institutions were RMB1,771,171, among which RMB1,668,590 of cash were deposited to facilitate the loans. The balance of RMB67,581 was guaranteed by Jing Gao and Yan Cui, the co-founders of the Company, and the balance of RMB15,000 was guaranteed by Guangdong Join-Share Financing Guarantee Investment Co., Ltd, a third party. The weighted average interest rates for the outstanding short-term loans as of December 31, 2018 and 2019 were 5.62% and 3.48%, respectively. (c) In December 2018, a PRC VIE enter into an entrusted loan agreement with the trustee, Shanghai AJ Trust Co., Ltd with line of credit in the amount of RMB300,000 with a term of one year. To facilitate each borrowing, a restricted cash deposited to the trustor, Luso International Banking Ltd is required. In December 2018 and January 2019, the PRC VIE borrowed RMB200,000 and RMB100,000 at an annual interest rate of 5% with a term of one year and eleven months respectively. Restricted cash deposits of RMB207,000 and RMB102,100 were deposited to the trustor at an annual interest of 2% by a HK subsidiary for these borrowings. As of December 31, 2018 and 2019, the unused line of credit were RMB100,000 and nil, respectively. |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of accrued expenses and other current liabilities | As of December 31, 2018 2019 RMB RMB Payroll payable 150,161 225,912 Payable for business acquisition (Note 3) — 128,002 Others 64,009 141,570 Accrued expenses and other current liabilities 214,170 495,484 |
LONG-TERM BORROWINGS, EXCLUDI_2
LONG-TERM BORROWINGS, EXCLUDING CURRENT PORTION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
LONG-TERM BORROWINGS, EXCLUDING CURRENT PORTION | |
Schedule of long-term borrowings, excluding current portion | As of December 31, 2018 2019 RMB RMB Long‑term bank loans (a) 4,500 699,250 Less: current portion (a) (1,250) (30,000) Rent financing 9(a) 179,396 — Long‑term borrowings, excluding current portion 182,646 669,250 (a) The Group borrowed long-term loans from commercial banks for terms of three years at the interest rate between 3.20%- 7.13%. As of December 31, 2018, the outstanding balance was RMB4,500 with a guarantee provided, among which the balance of RMB1,250 is classified as current portion of long-term borrowing. As of December 31, 2019, the outstanding balance was RMB699,250, among which RMB696,000 of cash were deposited to facilitate the loans and the balance of RMB 3,250 was guaranteed. The balance of RMB30,000 is classified as current portion of long term borrowing. The weighted average interest rates for the outstanding borrowings as of December 31, 2018 and 2019 were 7.13% and 4.14% , respectively. |
Schedule of future principal payments for the Group's long - term borrowings | Year ending December 31, RMB 2020 30,000 2021 29,250 2022 640,000 Total 699,250 |
CONVERTIBLE PREFERRED SHARES (T
CONVERTIBLE PREFERRED SHARES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
CONVERTIBLE PREFERRED SHARES. | |
Schedule of convertible preferred shares | Series A‑1 Series A‑2 Series A‑2‑I Series A‑3 Series B‑1 Series B‑2 Series C Series C-1 Series C-2 Series D Preferred Preferred Preferred Preferred Preferred Preferred Preferred Preferred Preferred Preferred Total Shares Shares Shares Shares Shares Shares Shares Shares Shares Shares equity RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB Balance as of January 1, 2017 1,417 27,123 — — — — — — — — 28,540 Issuance for cash — — — 100,559 — — — — — — 100,559 Conversion from convertible loan — — 6,250 — — — — — — — 6,250 Issuance cost — — — (1,000) — — — — — — (1,000) Accretion and modification of redeemable convertible preferred shares — 3,170 345 10,608 — — — — — — 14,123 Foreign currency translation adjustment (82) (1,678) (339) (5,712) — — — — — — (7,811) Balance as of December 31, 2017 1,335 28,615 6,256 104,455 — — — — — — 140,661 Issuance for cash — — — — 379,542 321,040 1,737,750 — — — 2,438,332 Conversion from convertible loan — — — — — 133,168 — — — — 133,168 Issuance costs — — — — (8,091) (3,249) (6,800) — — — (18,140) Accretion and modification of redeemable convertible preferred shares — 2,024 245 8,328 35,908 25,625 39,002 — — — 111,132 Foreign currency translation adjustment 67 1,517 325 5,533 33,362 34,218 (20,543) — — — 54,479 Balance as of December 31, 2018 1,402 32,156 6,826 118,316 440,721 510,802 1,749,409 — — — 2,859,632 Issuance for cash — — — — — — — Issuance costs — — — — — — (2,411) (7,053) Redesignated — — — (11,697) — — (1,755,247) — — Accretion and modification of redeemable convertible preferred shares — Foreign currency translation adjustment — (17,977) Balance as of December 31, 2019 — |
Schedule of redemption amounts | Year ending December 31, RMB 2020 — 2021 — 2022 — 2023 8,174,168 |
SHARED BASED COMPENSATION (Tabl
SHARED BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SHARE BASED COMPENSATION | |
Schedule of restricted shares' activities | Number of shares Unvested at December 31, 2017 137,760,417 Vested (71,875,000) Unvested at December 31, 2018 65,885,417 Vested (65,885,417) Unvested at December 31, 2019 — |
restricted shares' activities | Weighted Weighted remaining Aggregate Number of average contractual intrinsic shares exercise price years value US$ US$ Outstanding as of December 31, 2018 55,809,066 0.0500 Granted 150,015,148 0.0500 Repurchased (1,922,700) 0.0500 Forfeited (27,298,600) 0.0500 Outstanding as of December 31, 2019 176,602,914 0.0500 8.12 229,584 Vested and expected to vest as of December 31, 2019 174,531,664 0.0500 8.12 226,891 Exercisable as of December 31, 2019 — 0.0500 — — |
Schedule of fair value of the options granted is estimated on the dates of grant | Grant date: 2017 2018 2019 Risk‑free rate of return 2.30% ~ 2.37 % 2.85% ~ 3.01 % 1.60% ~ 5.00 % Volatility 50.7% ~ 52.0 % 41.1% ~ 50.2 % 39.5% ~ 42.5 % Expected dividend yield % % % Exercise multiple 2.2 ~ 2.8 2.2 ~ 2.8 2.2 ~ 2.8 Fair value of underlying ordinary share US$0.0231 ~ 0.1164 US$0.2479 ~ 0.9466 US$1.3471 ~ 1.3519 Expected term |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
FAIR VALUE MEASUREMENT | |
Schedule of changes in fair value | The table below reflects changes of the balances for the years ended December 31, 2017 and 2018: For the Year Ended December 31, 2017 Change in January 1, Fair Value Foreign December 31, RMB 2017 loss Conversion Exchange 2017 Liabilities: Convertible loan (Note 11) 5,809 441 (6,250) — — For the Year Ended December 31, 2018 Change in January 1, Fair Value December 31, RMB 2018 Issuance loss Conversion 2018 Liabilities: Convertible loan (Note 11) — 126,206 6,962 (133,168) — |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAX | |
Schedule of components of earnings/(loss) before income taxes | For the Year Ended December 31, 2017 2018 2019 RMB RMB RMB Cayman (8,049) (5,064) (24,242) Hong Kong SAR — 6,744 14,091 PRC, excluding Hong Kong SAR (263,587) (1,371,317) (3,429,228) Total (271,636) (1,369,637) (3,439,379) |
Schedule of actual income tax expense reported in the consolidated statements | For the Year Ended December 31, 2017 2018 2019 RMB RMB RMB Computed expected income tax benefit (67,909) (342,409) (859,845) Non‑PRC entities not subject to income tax 2,060 3,423 2,538 Non‑deductible expenses 26,647 46,670 2,217 Change in valuation allowance 39,090 292,428 852,923 Income tax expense/(benefit) (112) 112 (2,167) |
Schedule of deferred income tax assets and liabilities | As of December 31, 2018 2019 RMB RMB Deferred tax assets —Net operating loss carry forwards 304,553 1,055,305 —Advertising expense 33,679 135,850 Less: Valuation allowance (338,232) (1,191,155) Total deferred income tax assets — — Deferred tax liabilities — Intangible assets — (7,042) Total deferred income tax liability — (7,042) |
Schedule of Changes in valuation allowance | For the Year Ended December 31, 2017 2018 2019 RMB RMB RMB Balance at the beginning of the year 6,714 45,804 338,232 Additions 39,090 292,428 852,923 Balance at the end of the year 45,804 338,232 1,191,155 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
NET LOSS PER SHARE | |
Schedule of basic and diluted net loss per share computation | For the Year Ended December 31, 2017 2018 2019 RMB RMB RMB Numerator: Net loss attributable to Phoenix Tree Holdings Limited (271,524) (1,365,615) (3,434,832) Accretion and modification of redeemable convertible preferred shares (14,123) (111,132) (348,756) Numerator for basic and diluted net loss per share calculation (285,647) (1,476,747) (3,783,588) Denominator: Weighted average number of ordinary shares 111,848,958 185,677,083 251,347,723 Denominator for basic and diluted net loss per share calculation 111,848,958 185,677,083 251,347,723 Net loss per ordinary share —Basic and diluted (2.55) (7.95) (15.05) |
Schedule of potentially dilutive securities that have not been included in the calculation | As of December 31, 2017 2018 2019 Restricted shares 137,760,417 65,885,417 — Convertible Preferred Shares 554,544,021 1,105,665,218 1,448,506,852 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES. | |
Schedule of future minimum lease commitments | As of December 31, 2019, future minimum lease commitments, all under apartment and office non‑cancelable operating lease agreements, were as follows: Year ending December 31, Apartment Office Total 2020 7,966,226 39,006 8,005,232 2021 6,956,235 17,126 6,973,361 2022 5,373,594 4,547 5,378,141 2023 3,992,683 1,002 3,993,685 2024 and thereafter 3,445,786 209 3,445,995 |
PARENT ONLY FINANCIAL INFORMA_2
PARENT ONLY FINANCIAL INFORMATION (Table) | 12 Months Ended |
Dec. 31, 2019 | |
PARENT ONLY FINANCIAL INFORMATION | |
Condensed Balance Sheets | As of December 31, 2018 2019 RMB RMB ASSETS Current assets Cash 962,692 275,702 Restricted cash 535,330 345,322 Prepayments and other current assets 4,261 24,010 Total current assets 1,502,283 645,034 Non-current assets Restricted cash — 195,334 Other non-current assets — 12,374 Total non-current assets — 207,708 Total assets 1,502,283 852,742 LIABILITIES Current liabilities Amount due to subsidiary and consolidated VIE 6,587 8,129 Accrued expenses and other current liabilities — 30,998 Total current liabilities and total liabilities 6,587 39,127 MEZZANINE EQUITY Series A-1 Convertible Preferred Shares 1,402 1,425 Series A-2 Redeemable Convertible Preferred Shares 32,156 34,806 Series A-2-I Redeemable Convertible Preferred Shares 6,826 7,208 Series A-3 Redeemable Convertible Preferred Shares 118,316 119,576 Series B-1 Redeemable Convertible Preferred Shares 440,721 477,259 Series B-2 Redeemable Convertible Preferred Shares 510,802 558,008 Series C Redeemable Convertible Preferred Shares 1,749,409 — Series C-1 Redeemable Convertible Preferred Shares — 12,679 Series C-2 Redeemable Convertible Preferred Shares — 3,557,053 Series D Redeemable Convertible Preferred Shares — 1,338,189 Total mezzanine equity 2,859,632 6,106,203 Shareholders’ deficit Ordinary Shares 35 35 Accumulated other comprehensive loss (4,291) (12,122) Accumulated deficit (1,359,680) (5,280,501) Total shareholders’ deficit (1,363,936) (5,292,588) Total liabilities, mezzanine equity and shareholders’ deficit 1,502,283 852,742 |
Condensed Statements of Operations | For the Year Ended December 31, 2017 2018 2019 RMB RMB RMB General and administrative expenses (9,041) (13,052) (49,185) Operating loss (9,041) (13,052) (49,185) Share of losses from subsidiaries, VIE and VIE’s subsidiaries (9,350) (1,196,549) (3,506,864) Change in fair value of convertible loan 441 (6,962) — Interest income 551 14,950 24,943 Loss before income taxes (17,399) (1,201,613) (3,531,106) Income tax benefit/(expense) — — — Net loss (17,399) (1,201,613) (3,531,106) |
Condensed Statements of Cash Flows | For the Year Ended December 31, 2017 2018 2019 RMB RMB RMB Net cash provided by operating activities 509 9,424 3,752 Net cash used in investing activities (3,141) (1,196,639) (3,470,120) Net cash provided by financing activities 100,559 2,551,618 2,797,814 Effect of foreign currency exchange rate changes on cash and restricted cash (8,189) 43,881 (13,110) Net increase in cash and restricted cash 89,738 1,408,284 (681,664) Cash and restricted cash at the beginning of the year — 89,738 1,498,022 Cash and restricted cash at the end of the year 89,738 1,498,022 816,358 |
DESCRIPTION OF BUSINESS AND O_3
DESCRIPTION OF BUSINESS AND ORGANIZATION (Details) ¥ in Thousands | 12 Months Ended |
Dec. 31, 2019CNY (¥)subsidiaryitem | |
DESCRIPTION OF BUSINESS AND ORGANIZATION | |
Consideration for transferring the ownership of VIE's subsidiaries to the WOFE | ¥ 0 |
Number of VIE's subsidiaries became the Company's wholly-owned subsidiaries | subsidiary | 9 |
Number of Variable Interest Entities | item | 2 |
VIE, option to acquire equity interest percentage | 100.00% |
VIE, exclusive call option, purchase price | ¥ 1 |
VIE, exclusive call option, contract value limit | ¥ 500,000 |
DESCRIPTION OF BUSINESS AND O_4
DESCRIPTION OF BUSINESS AND ORGANIZATION - Ownership (Details) | Dec. 31, 2019 |
Gao Jing | Gao Jing | |
Ordinary shares and preferred shares ownership interest | 14.20% |
Cui Yan | Cui Yan | |
Ordinary shares and preferred shares ownership interest | 2.00% |
DESCRIPTION OF BUSINESS AND O_5
DESCRIPTION OF BUSINESS AND ORGANIZATION - VIEs Assets and Liabilities (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Variable Interest Entity | |||
Cash | $ 98,434 | ¥ 685,277 | ¥ 1,087,258 |
Restricted cash | 203,575 | 1,417,245 | 1,362,266 |
Accounts receivable, net | 408 | 2,837 | 1,456 |
Advance to landlords | 32,053 | 223,146 | 301,190 |
Prepayments and other current assets | 91,444 | 636,618 | 265,794 |
Total current assets | 425,914 | 2,965,123 | 3,155,228 |
Restricted cash | 194,400 | 1,353,376 | 16,010 |
Property and equipment, net | 454,988 | 3,167,537 | 1,989,630 |
Intangible asset, net | 21,955 | 152,846 | 2,053 |
Deposits to landlords | 87,402 | 608,475 | 414,754 |
Other non-current assets | 58,994 | 410,703 | 251,936 |
Total non-current assets | 867,648 | 6,040,392 | 2,674,383 |
Total assets | 1,293,562 | 9,005,515 | 5,829,611 |
Short-term borrowings and current portion of long-term borrowings | 654,193 | 4,554,362 | 2,890,842 |
Accounts payable | 104,349 | 726,455 | 718,890 |
Rental payable | 79,492 | 553,410 | 180,994 |
Advance from residents | 140,244 | 976,348 | 279,534 |
Amount due to related parties* | 1,629 | 11,343 | 10,343 |
Deposits from residents | 86,954 | 605,356 | 287,304 |
Accrued expenses and other current liabilities | 71,172 | 495,484 | 214,170 |
Total current liabilities | 1,138,033 | 7,922,758 | 4,582,077 |
Long-term borrowings, excluding current portion | 96,132 | 669,250 | 182,646 |
Other non-current liabilities | 3,938 | 27,419 | 51,539 |
Total non-current liabilities | 101,082 | 703,711 | 234,185 |
Total liabilities | $ 1,239,115 | 8,626,469 | 4,816,262 |
Elimination | |||
Variable Interest Entity | |||
Amount due to related parties* | 2,278,681 | 1,117,088 | |
VIEs | |||
Variable Interest Entity | |||
Short-term borrowings and current portion of long-term borrowings | 1,798,880 | 2,890,842 | |
Accounts payable | 73,289 | 358,466 | |
Rental payable | 118,500 | 180,994 | |
Advance from residents | 331,996 | 279,534 | |
Amount due to related parties* | 11,343 | 10,343 | |
Deposits from residents | 221,646 | 287,304 | |
Accrued expenses and other current liabilities | 179,025 | 203,994 | |
Long-term borrowings, excluding current portion | 188,000 | 182,646 | |
Other non-current liabilities | 3,356 | 51,539 | |
VIEs | Reportable Legal Entity | |||
Variable Interest Entity | |||
Cash | 111,881 | 25,287 | |
Restricted cash | 91,012 | 139,581 | |
Accounts receivable, net | 208 | 1,456 | |
Amounts due from related parties* | 410,011 | 473,641 | |
Advance to landlords | 106,136 | 301,190 | |
Prepayments and other current assets | 485,765 | 258,269 | |
Total current assets | 1,205,013 | 1,199,424 | |
Restricted cash | 16,010 | ||
Property and equipment, net | 815,507 | 1,989,630 | |
Intangible asset, net | 1,846 | 2,053 | |
Deposits to landlords | 224,701 | 414,754 | |
Other non-current assets | 169,965 | 251,936 | |
Total non-current assets | 1,212,019 | 2,674,383 | |
Total assets | 2,417,032 | 3,873,807 | |
Short-term borrowings and current portion of long-term borrowings | 1,798,880 | 2,890,842 | |
Accounts payable | 73,289 | 358,466 | |
Rental payable | 118,500 | 180,994 | |
Advance from residents | 331,996 | 279,534 | |
Amount due to related parties* | 2,290,024 | 1,127,431 | |
Deposits from residents | 221,646 | 287,304 | |
Accrued expenses and other current liabilities | 179,025 | 203,994 | |
Total current liabilities | 5,013,360 | 5,328,565 | |
Long-term borrowings, excluding current portion | 188,000 | 182,646 | |
Other non-current liabilities | 3,356 | 51,539 | |
Total non-current liabilities | 191,356 | 234,185 | |
Total liabilities | ¥ 5,204,716 | ¥ 5,562,750 |
DESCRIPTION OF BUSINESS AND O_6
DESCRIPTION OF BUSINESS AND ORGANIZATION - VIEs Consolidated Revenues, Net Loss and Cash Flows (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Variable Interest Entity | ||||
Revenues | $ 1,024,029 | ¥ 7,129,088 | ¥ 2,675,031 | ¥ 656,782 |
Net loss | (493,725) | (3,437,212) | (1,369,749) | (271,524) |
Net cash (used)/provided in operating activities | (274,529) | (1,911,216) | (1,164,248) | (114,578) |
Net cash used in investing activities | (292,753) | (2,038,089) | (1,324,021) | (489,282) |
Net cash provided/(used) by financing activities | 710,316 | 4,945,078 | 4,692,659 | 822,440 |
Net increase in cash and restricted cash | 142,257 | 990,364 | 2,251,532 | 212,470 |
Cash and restricted cash at the beginning of the year | 354,152 | 2,465,534 | 214,002 | 1,532 |
Cash and restricted cash at the end of the year | $ 496,409 | 3,455,898 | 2,465,534 | 214,002 |
VIEs | Reportable Legal Entity | ||||
Variable Interest Entity | ||||
Revenues | 2,722,405 | 2,675,031 | 656,782 | |
Net loss | (1,791,913) | (1,342,652) | (263,474) | |
Net cash (used)/provided in operating activities | 596,345 | (906,269) | (110,867) | |
Net cash used in investing activities | (476,871) | (1,183,378) | (489,282) | |
Net cash provided/(used) by financing activities | (11,388) | 2,146,261 | 722,881 | |
Net increase in cash and restricted cash | 108,086 | 56,614 | 122,732 | |
Cash and restricted cash at the beginning of the year | 180,878 | 124,264 | 1,532 | |
Cash and restricted cash at the end of the year | 180,878 | ¥ 124,264 | ||
Cash and restricted cash adjusted at the beginning of the year | 94,807 | |||
Cash and restricted cash adjusted at the end of the year | 202,893 | ¥ 94,807 | ||
VIEs | Elimination | ||||
Variable Interest Entity | ||||
Restricted cash pledged to secure bank borrowings and registered capital | 91,012 | |||
VIE registered capital | ¥ 11,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Jan. 31, 2020USD ($)shares | Jan. 31, 2020CNY (¥)shares | Dec. 31, 2019USD ($)$ / ¥ | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥)$ / ¥ | |
Accumulated deficit | $ (813,535) | ¥ (1,839,123) | ¥ (5,663,670) | ||||
Excess of current liabilities over current assets | ¥ | ¥ 4,957,635 | ||||||
Net cash used in operating activities | $ (274,529) | ¥ (1,911,216) | ¥ (1,164,248) | ¥ (114,578) | |||
Number of ordinary shares represented by each ADS | 10 | 10 | |||||
Convenience exchange rate | $ / ¥ | 6.9618 | 6.9618 | |||||
IPO | |||||||
Proceeds from issuance | $ 128,400 | ¥ 884,500 | |||||
Number of ordinary shares represented by each ADS | 10 | 10 | |||||
IPO | ADS | |||||||
Shares issued | shares | 9,904,933 | 9,904,933 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash and Cash Equivalents | ||
Cash held at financial institutions | ¥ 685,227 | ¥ 1,087,207 |
PRC | ||
Cash and Cash Equivalents | ||
Cash held at financial institutions | 421,248 | 217,632 |
PRC | RMB | ||
Cash and Cash Equivalents | ||
Cash held at financial institutions | 386,773 | 148,222 |
PRC | USD | ||
Cash and Cash Equivalents | ||
Cash held at financial institutions | 33,215 | 69,410 |
PRC | HKD | ||
Cash and Cash Equivalents | ||
Cash held at financial institutions | 1,260 | |
United States | ||
Cash and Cash Equivalents | ||
Cash held at financial institutions | 263,979 | 869,575 |
United States | USD | ||
Cash and Cash Equivalents | ||
Cash held at financial institutions | ¥ 263,979 | ¥ 869,575 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and equipment (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Apartment leasehold improvements | Maximum | |
Property, Plant and Equipment | |
Property, Plant and Equipment, Useful Life | 5 years |
Apartment furniture and appliances | Minimum | |
Property, Plant and Equipment | |
Property, Plant and Equipment, Useful Life | 3 years |
Apartment furniture and appliances | Maximum | |
Property, Plant and Equipment | |
Property, Plant and Equipment, Useful Life | 5 years |
Office leasehold improvement, furniture, electronic equipment, and software | Minimum | |
Property, Plant and Equipment | |
Property, Plant and Equipment, Useful Life | 3 years |
Office leasehold improvement, furniture, electronic equipment, and software | Maximum | |
Property, Plant and Equipment | |
Property, Plant and Equipment, Useful Life | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Others (Details) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2019CNY (¥)segment | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Impairment of long lived assets | ¥ 0 | ¥ 0 | ¥ 0 |
Goodwill Impairment | ¥ 0 | 0 | 0 |
Value added tax rate | 6.00% | ||
Lessor, rental agreement term | 1 year | ||
Rent incentives | ¥ 232,796 | 67,111 | 7,295 |
Advertising expenses | 497,508 | 203,085 | 31,572 |
Employee social benefits | 229,586 | 144,018 | 26,472 |
Uncertain tax positions | ¥ 0 | 0 | |
Number of segments | segment | 1 | ||
Appropriation to statutory surplus fund, percent | 10.00% | ||
Ratio of surplus fund to registered capital which halts appropriations | 50.00% | ||
Appropriation to statutory surplus fund | ¥ 0 | ¥ 0 | ¥ 0 |
Minimum | |||
Lessee, rental agreement term | 4 years | ||
Maximum | |||
Lessee, rental agreement term | 6 years |
BUSINESS COMBINATION (Details)
BUSINESS COMBINATION (Details) - Aishangdanke - CNY (¥) ¥ in Thousands | 1 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2019 | |
Business Combinations | ||
Cash paid for settling payables | ¥ 189,643 | |
Agreed payment for acquisition | 200,000 | |
Agreed payment for acquisition, due upon closing | 80,000 | |
Agreed payment for acquisition, due within six months after closing | 60,000 | |
Agreed payment for acquisition, due within 12 months after closing | 40,000 | |
Agreed payment for acquisition, due within 24 months after closing | 20,000 | |
Fair value of noncontrolling interest | ¥ 344 | |
Remaining payment obligations due | ¥ 107,000 | |
Accrued expenses and other current liabilities | ||
Business Combinations | ||
Amount of outstanding consideration | 128,002 | |
Other non-current liabilities | ||
Business Combinations | ||
Amount of outstanding consideration | ¥ 14,800 |
BUSINESS COMBINATION - Assets a
BUSINESS COMBINATION - Assets acquired and liabilities assumed (Details) ¥ / shares in Units, ¥ in Thousands, $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||
Mar. 31, 2019CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥)¥ / shares | Dec. 31, 2018CNY (¥)¥ / shares | Dec. 31, 2019CNY (¥) | |
Business Combinations | ||||||
Cash consideration | $ 28,287 | ¥ 196,930 | ||||
Fair values of identifiable assets acquired and liabilities assumed | ||||||
Goodwill | $ 49,909 | ¥ 347,455 | ||||
Aishangdanke | ||||||
Business Combinations | ||||||
Cash consideration | ¥ 369,953 | |||||
Fair value of noncontrolling interest | 344 | |||||
Fair values of identifiable assets acquired and liabilities assumed | ||||||
Current assets | 56,699 | |||||
Property and equipment, net | 299,323 | |||||
Intangible assets, net | 195,000 | |||||
Other current liabilities | (518,971) | |||||
Deferred tax income liabilities | (9,209) | |||||
Net assets acquired | 22,842 | |||||
Goodwill | ¥ 347,455 | |||||
Revenues contributed by acquiree | ¥ 561,892 | |||||
Net loss contributed by acquiree | ¥ 81,956 | |||||
Unaudited Pro Forma Financial Information | ||||||
Revenue | 7,326,364 | ¥ 3,723,290 | ||||
Net loss | ¥ (3,504,361) | ¥ (1,672,198) | ||||
Net loss per share-basic and diluted | ¥ / shares | ¥ (15.33) | ¥ (9.60) |
CASH AND RESTRICTED CASH (Detai
CASH AND RESTRICTED CASH (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) |
CASH AND RESTRICTED CASH | ||||||
Cash | $ 98,434 | ¥ 685,277 | ¥ 1,087,258 | |||
Restricted cash-current | 203,575 | 1,417,245 | 1,362,266 | |||
Restricted cash-non current | 194,400 | 1,353,376 | 16,010 | |||
Total cash and restricted cash shown in the consolidated statement of cash flows | $ 496,409 | ¥ 3,455,898 | $ 354,152 | ¥ 2,465,534 | ¥ 214,002 | ¥ 1,532 |
PREPAYMENTS AND OTHER CURRENT_3
PREPAYMENTS AND OTHER CURRENT ASSETS (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
PREPAYMENTS AND OTHER CURRENT ASSETS | |||
Deductible input VAT | ¥ 329,439 | ¥ 118,850 | |
Deferred rental commission | 80,641 | 48,731 | |
Deposits to landlords | 70,598 | 21,924 | |
Prepaid marketing expense | 34,410 | 21,532 | |
Receivables from payment channels | 18,553 | 23,127 | |
Interest receivable | 15,751 | 8,260 | |
Other receivables | 23,859 | ||
Others | 63,367 | 23,370 | |
Prepayments and Other Current Assets | $ 91,444 | ¥ 636,618 | ¥ 265,794 |
PREPAYMENTS AND OTHER CURRENT_4
PREPAYMENTS AND OTHER CURRENT ASSETS - Bennet Holding Co., LTD (Details) - Bennet ¥ in Thousands, $ in Thousands | 1 Months Ended | |||
Nov. 30, 2019USD ($) | Nov. 30, 2019CNY (¥) | Jan. 31, 2019USD ($) | Jan. 31, 2019CNY (¥) | |
Deposit for a potential business acquisition | $ 3,000 | ¥ 20,624 | ||
Loan provided to third party | $ 428 | ¥ 2,986 | $ 3,000 | |
Term of loan | 1 year | 1 year | ||
Interest rate | 10.00% | 10.00% | ||
Percent of pledged equity shares | 7.44% | 7.44% |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥) | |
Property, Plant and Equipment | |||||
Property and Equipment | ¥ 2,493,212 | ¥ 4,759,050 | |||
Less: Accumulated depreciation | (503,582) | (1,591,513) | |||
Property and Equipment, net | $ 454,988 | 1,989,630 | 3,167,537 | ||
Depreciation expense | $ 163,496 | ¥ 1,138,225 | 373,231 | ¥ 98,984 | |
Apartment leasehold improvement, furniture and appliances | |||||
Property, Plant and Equipment | |||||
Depreciation expense | 1,089,587 | 371,901 | 98,453 | ||
Apartment leasehold improvements | |||||
Property, Plant and Equipment | |||||
Property and Equipment | 1,529,995 | 3,073,719 | |||
Apartment furniture and appliances | |||||
Property, Plant and Equipment | |||||
Property and Equipment | 900,379 | 1,606,593 | |||
Leasehold improvements under construction | |||||
Property, Plant and Equipment | |||||
Property and Equipment | 56,140 | 42,443 | |||
Office leasehold improvement, furniture, electronic equipment, and software | |||||
Property, Plant and Equipment | |||||
Property and Equipment | 6,698 | ¥ 36,295 | |||
Depreciation expense | ¥ 4,241 | ¥ 1,330 | ¥ 531 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | |
GOODWILL AND INTANGIBLE ASSETS | |||||
Goodwill | $ 49,909 | ¥ 347,455 | |||
Intangible assets subject to amortization | ¥ 2,175 | 197,365 | |||
Less: accumulated amortization | (122) | (44,519) | |||
Total Intangible Assets, net | 2,053 | 152,846 | |||
Amortization expenses | ¥ 44,397 | 122 | ¥ 0 | ||
Estimated future amortization expense for intangible assets | |||||
2020 | 58,873 | ||||
2021 | 36,456 | ||||
2022 | 10,790 | ||||
2023 | 8,873 | ||||
2024 | 8,873 | ||||
Trademark and internet domain name | |||||
GOODWILL AND INTANGIBLE ASSETS | |||||
Useful life | 9 years | ||||
Intangible assets subject to amortization | ¥ 2,175 | 80,365 | |||
Mobile application | |||||
GOODWILL AND INTANGIBLE ASSETS | |||||
Useful life | 3 years | ||||
Intangible assets subject to amortization | 23,000 | ||||
Non-compete | |||||
GOODWILL AND INTANGIBLE ASSETS | |||||
Useful life | 2 years | ||||
Intangible assets subject to amortization | 10,000 | ||||
Customer relationships | |||||
GOODWILL AND INTANGIBLE ASSETS | |||||
Useful life | 2 years | ||||
Intangible assets subject to amortization | ¥ 84,000 |
OTHER NON-CURRENT ASSETS (Detai
OTHER NON-CURRENT ASSETS (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Deferred rental commission | ¥ 379,593 | ¥ 203,295 | |
Prepaid deposit for business acquisition | 45,000 | ||
Deferred IPO costs | 19,209 | ||
Others | 11,901 | 3,641 | |
Other non-current assets | $ 58,994 | ¥ 410,703 | 251,936 |
Aishangzu | |||
Prepaid deposit for business acquisition | ¥ 45,000 |
SHORT-TERM BORROWINGS AND CUR_3
SHORT-TERM BORROWINGS AND CURRENT PORTION OF LONG-TERM BORROWINGS (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||
Jan. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | |
Short-term Debt | |||||||||
Current portion of long-term borrowing | ¥ 30,000 | ¥ 1,250 | |||||||
Short-term borrowings and current portion of long-term borrowings | $ 654,193 | 4,554,362 | 2,890,842 | ||||||
Amount borrowed during the year | $ 1,454,922 | ¥ 10,128,876 | ¥ 5,637,551 | ¥ 1,725,476 | |||||
Rent financing | |||||||||
Short-term Debt | |||||||||
Short-term borrowing | 2,753,191 | 1,947,592 | |||||||
Restricted cash deposited to secure borrowings | ¥ 267,983 | 155,591 | |||||||
Percentage of balance with one of the financial institutions as total balance | 94.00% | 94.00% | |||||||
Rent financing | Minimum | |||||||||
Short-term Debt | |||||||||
Interest rate | 6.00% | 6.00% | |||||||
Rent financing | Maximum | |||||||||
Short-term Debt | |||||||||
Interest rate | 10.00% | 10.00% | |||||||
Bank loans | |||||||||
Short-term Debt | |||||||||
Short-term borrowing | ¥ 1,771,171 | 742,000 | |||||||
Entrusted loan | |||||||||
Short-term Debt | |||||||||
Short-term borrowing | ¥ 200,000 | ||||||||
Interest rate | 2.00% | 2.00% | 2.00% | ||||||
Restricted cash deposited to secure borrowings | ¥ 102,100 | ¥ 207,000 | |||||||
Line of credit amount | 300,000 | ||||||||
Term of loan | 11 months | 1 year | |||||||
Amount borrowed during the year | ¥ 100,000 | ¥ 200,000 | |||||||
Unused line of credit | 0 | 100,000 | |||||||
Line of credit interest rate | 5.00% | 5.00% | |||||||
Commercial banks and other financial institutions | |||||||||
Short-term Debt | |||||||||
Short-term borrowing | 1,771,171 | 742,000 | |||||||
Restricted cash deposited to secure borrowings | ¥ 1,668,590 | $ 147,990 | ¥ 1,015,685 | ||||||
Weighted average interest rates | 3.48% | 3.48% | 5.62% | 5.62% | |||||
Commercial banks and other financial institutions | Jing Gao and Yan Cui | |||||||||
Short-term Debt | |||||||||
Balance guaranteed | ¥ 67,581 | ||||||||
Commercial banks and other financial institutions | Guangdong Join-Share Financing Guarantee Investment Co., Ltd | |||||||||
Short-term Debt | |||||||||
Balance guaranteed | 15,000 | ||||||||
VIEs | |||||||||
Short-term Debt | |||||||||
Short-term borrowings and current portion of long-term borrowings | ¥ 1,798,880 | ¥ 2,890,842 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |||
Payroll payable | ¥ 225,912 | ¥ 150,161 | |
Payable for business acquisition | 128,002 | ||
Others | 141,570 | 64,009 | |
Accrued expenses and other current liabilities | $ 71,172 | ¥ 495,484 | ¥ 214,170 |
LONGTERM BORROWINGS, EXCLUDING
LONGTERM BORROWINGS, EXCLUDING CURRENT PORTION - Long-term borrowing , excluding current portion (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | |
Long-term borrowings, excluding current portion | |||
Long-term loan | ¥ 699,250 | ||
Less: current portion | (30,000) | ¥ (1,250) | |
Long-term borrowings, excluding current portion | $ 96,132 | 669,250 | 182,646 |
Bank loans | |||
Long-term borrowings, excluding current portion | |||
Long-term loan | 699,250 | 4,500 | |
Less: current portion | ¥ (30,000) | ¥ (1,250) | |
Weighted average interest rates | 4.14% | 4.14% | 7.13% |
Term of loan | 3 years | ||
Restricted cash deposited to secure borrowings | ¥ 696,000 | ||
Balance guaranteed | ¥ 3,250 | ||
Rent financing | |||
Long-term borrowings, excluding current portion | |||
Long-term loan | ¥ 179,396 | ||
Minimum | Bank loans | |||
Long-term borrowings, excluding current portion | |||
Weighted average interest rates | 3.20% | 3.20% | |
Maximum | Bank loans | |||
Long-term borrowings, excluding current portion | |||
Weighted average interest rates | 7.13% | 7.13% |
LONG-TERM BORROWINGS, EXCLUDI_3
LONG-TERM BORROWINGS, EXCLUDING CURRENT PORTION - Future principal payments (Details) ¥ in Thousands | Dec. 31, 2019CNY (¥) |
Maturities of long-term debt | |
2020 | ¥ 30,000 |
2021 | 29,250 |
2022 | 640,000 |
Long-term loan | ¥ 699,250 |
CONVERTIBLE LOAN (Details)
CONVERTIBLE LOAN (Details) - Convertible Debt $ / shares in Units, ¥ in Thousands, $ in Millions | Mar. 25, 2018$ / sharesshares | Feb. 12, 2018USD ($)individual | Mar. 06, 2017$ / sharesshares | Feb. 15, 2016CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Feb. 12, 2018CNY (¥) |
Debt Instrument [Line Items] | |||||||
Change in Fair Value loss | ¥ | ¥ 6,962 | ¥ 441 | |||||
Mr. Luo Shaohu | |||||||
Debt Instrument [Line Items] | |||||||
Term of loan | 1 year | ||||||
Loan amount | ¥ | ¥ 5,000 | ||||||
Debt interest rate | 10.00% | ||||||
Conversion price as percent of next round of financing | 80.00% | ||||||
Preferred Shares issued upon conversion of debt | shares | 16,967,466 | ||||||
Conversion price per share as percent of next round of financing | $ / shares | $ 0.0420 | ||||||
2018 Convertible Loan Holders | |||||||
Debt Instrument [Line Items] | |||||||
Number of institutional investors | individual | 7 | ||||||
Term of loan | 18 months | ||||||
Loan amount | $ 20 | ¥ 126,206 | |||||
Debt interest rate | 8.00% | 8.00% | |||||
Conversion price as percent of next round of financing | 80.00% | ||||||
Conversion price as percent of next round of financing if financing occurs after 12 months | 70.00% | ||||||
Preferred Shares issued upon conversion of debt | shares | 41,777,981 | ||||||
Conversion price per share as percent of next round of financing | $ / shares | $ 0.4787 |
CONVERTIBLE PREFERRED SHARES -
CONVERTIBLE PREFERRED SHARES - Preferred shares activities (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
CONVERTIBLE PREFERRED SHARES | ||||
Balance, beginning of period | ¥ 2,859,632 | ¥ 140,661 | ¥ 28,540 | |
Issuance for cash | 2,847,212 | 2,438,332 | 100,559 | |
Conversion from convertible loans | 133,168 | 6,250 | ||
Issuance cost paid | (9,464) | (18,140) | (1,000) | |
Accretion and modification of redeemable convertible preferred shares | 348,756 | 111,132 | 14,123 | |
Foreign currency translation adjustment | 60,067 | 54,479 | (7,811) | |
Balance end of period | $ 877,101 | 6,106,203 | 2,859,632 | 140,661 |
Series A1 Convertible Preferred Shares | ||||
CONVERTIBLE PREFERRED SHARES | ||||
Balance, beginning of period | 1,402 | 1,335 | 1,417 | |
Foreign currency translation adjustment | 23 | 67 | (82) | |
Balance end of period | 204 | 1,425 | 1,402 | 1,335 |
Series A2 Redeemable Convertible Preferred Shares | ||||
CONVERTIBLE PREFERRED SHARES | ||||
Balance, beginning of period | 32,156 | 28,615 | 27,123 | |
Accretion and modification of redeemable convertible preferred shares | 2,096 | 2,024 | 3,170 | |
Foreign currency translation adjustment | 554 | 1,517 | (1,678) | |
Balance end of period | 5,000 | 34,806 | 32,156 | 28,615 |
Series A2I Redeemable Convertible Preferred Shares | ||||
CONVERTIBLE PREFERRED SHARES | ||||
Balance, beginning of period | 6,826 | 6,256 | ||
Conversion from convertible loans | 6,250 | |||
Accretion and modification of redeemable convertible preferred shares | 267 | 245 | 345 | |
Foreign currency translation adjustment | 115 | 325 | (339) | |
Balance end of period | 1,035 | 7,208 | 6,826 | 6,256 |
Series A3 Redeemable Convertible Preferred Shares | ||||
CONVERTIBLE PREFERRED SHARES | ||||
Balance, beginning of period | 118,316 | 104,455 | ||
Issuance for cash | 3,038 | 100,559 | ||
Issuance cost paid | (1,000) | |||
Redesignated | (11,697) | |||
Accretion and modification of redeemable convertible preferred shares | 8,117 | 8,328 | 10,608 | |
Foreign currency translation adjustment | 1,802 | 5,533 | (5,712) | |
Balance end of period | 17,176 | 119,576 | 118,316 | ¥ 104,455 |
Series B1 Redeemable Convertible Preferred Shares | ||||
CONVERTIBLE PREFERRED SHARES | ||||
Balance, beginning of period | 440,721 | |||
Issuance for cash | 379,542 | |||
Issuance cost paid | (8,091) | |||
Accretion and modification of redeemable convertible preferred shares | 28,944 | 35,908 | ||
Foreign currency translation adjustment | 7,594 | 33,362 | ||
Balance end of period | 68,554 | 477,259 | 440,721 | |
Series B2 Redeemable Convertible Preferred Shares | ||||
CONVERTIBLE PREFERRED SHARES | ||||
Balance, beginning of period | 510,802 | |||
Issuance for cash | 321,040 | |||
Conversion from convertible loans | 133,168 | |||
Issuance cost paid | (3,249) | |||
Accretion and modification of redeemable convertible preferred shares | 38,349 | 25,625 | ||
Foreign currency translation adjustment | 8,857 | 34,218 | ||
Balance end of period | 80,153 | 558,008 | 510,802 | |
Series C Redeemable Convertible Preferred Shares | ||||
CONVERTIBLE PREFERRED SHARES | ||||
Balance, beginning of period | 1,749,409 | |||
Issuance for cash | 1,737,750 | |||
Issuance cost paid | (6,800) | |||
Redesignated | (1,755,247) | |||
Accretion and modification of redeemable convertible preferred shares | 5,838 | 39,002 | ||
Foreign currency translation adjustment | (20,543) | |||
Balance end of period | ¥ 1,749,409 | |||
Series C-1 Redeemable Convertible Preferred Shares | ||||
CONVERTIBLE PREFERRED SHARES | ||||
Redesignated | 11,697 | |||
Accretion and modification of redeemable convertible preferred shares | 761 | |||
Foreign currency translation adjustment | 221 | |||
Balance end of period | 1,821 | 12,679 | ||
Series C-2 Redeemable Convertible Preferred Shares | ||||
CONVERTIBLE PREFERRED SHARES | ||||
Issuance for cash | 1,500,416 | |||
Issuance cost paid | (2,411) | |||
Redesignated | 1,755,247 | |||
Accretion and modification of redeemable convertible preferred shares | 244,923 | |||
Foreign currency translation adjustment | 58,878 | |||
Balance end of period | 510,939 | 3,557,053 | ||
Series D Redeemable Convertible Preferred Shares | ||||
CONVERTIBLE PREFERRED SHARES | ||||
Issuance for cash | 1,343,758 | |||
Issuance cost paid | (7,053) | |||
Accretion and modification of redeemable convertible preferred shares | 19,461 | |||
Foreign currency translation adjustment | (17,977) | |||
Balance end of period | $ 192,219 | ¥ 1,338,189 |
CONVERTIBLE PREFERRED SHARES (D
CONVERTIBLE PREFERRED SHARES (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||||||||||||||||
Oct. 31, 2019USD ($)$ / sharesshares | Oct. 31, 2019CNY (¥)shares | Aug. 31, 2019USD ($)shares | Aug. 31, 2019CNY (¥)shares | Jan. 31, 2019USD ($)$ / sharesshares | Jan. 31, 2019CNY (¥)shares | Sep. 30, 2018USD ($)$ / sharesshares | Sep. 30, 2018CNY (¥)shares | May 31, 2018USD ($)$ / sharesshares | May 31, 2018CNY (¥)shares | Feb. 28, 2018USD ($)$ / sharesshares | Feb. 28, 2018CNY (¥)shares | Mar. 31, 2017USD ($)$ / sharesshares | Mar. 31, 2017CNY (¥)shares | May 31, 2016 | Nov. 30, 2015USD ($)$ / sharesshares | Nov. 30, 2015CNY (¥)shares | Mar. 31, 2015USD ($)$ / sharesshares | Mar. 31, 2015CNY (¥)shares | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Series A1 Convertible Preferred Shares | |||||||||||||||||||||||
CONVERTIBLE PREFERRED SHARES | |||||||||||||||||||||||
Shares issued for cash | 27,500,000 | 27,500,000 | |||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 0.0086 | ||||||||||||||||||||||
Proceeds from issuance of convertible preferred stock | $ 237 | ¥ 1,500 | |||||||||||||||||||||
Payment of issuance costs | ¥ | ¥ 0 | ||||||||||||||||||||||
Series A2 Redeemable Convertible Preferred Shares | |||||||||||||||||||||||
CONVERTIBLE PREFERRED SHARES | |||||||||||||||||||||||
Shares issued for cash | 28,750,000 | 28,750,000 | |||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 0.1200 | ||||||||||||||||||||||
Preferred shares redesigned from one class of shares to other class | 3,750,000 | 3,750,000 | |||||||||||||||||||||
Proceeds from issuance of redeemable convertible preferred stock | $ 3,000 | ¥ 18,851 | |||||||||||||||||||||
Payment of issuance costs | ¥ | ¥ 0 | ||||||||||||||||||||||
Temporary equity, stock split conversion ratio | 5 | ||||||||||||||||||||||
Series A3 Redeemable Convertible Preferred Shares | |||||||||||||||||||||||
CONVERTIBLE PREFERRED SHARES | |||||||||||||||||||||||
Shares issued for cash | 8,144,384 | 8,144,384 | 275,076,555 | 275,076,555 | |||||||||||||||||||
Shares issued, price per share | $ / shares | $ 0.0530 | ||||||||||||||||||||||
Preferred shares redesigned from one class of shares to other class | 27,155,688 | 27,155,688 | |||||||||||||||||||||
Proceeds from issuance of redeemable convertible preferred stock | $ 431 | ¥ 3,038 | $ 14,569 | ¥ 100,559 | $ 436 | ¥ 3,038 | ¥ 100,559 | ||||||||||||||||
Payment of issuance costs | $ 145 | ¥ 1,000 | ¥ 1,000 | ||||||||||||||||||||
Series B1 Redeemable Convertible Preferred Shares | |||||||||||||||||||||||
CONVERTIBLE PREFERRED SHARES | |||||||||||||||||||||||
Shares issued for cash | 183,823,115 | 183,823,115 | |||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 0.3264 | ||||||||||||||||||||||
Proceeds from issuance of redeemable convertible preferred stock | $ 60,000 | ¥ 379,542 | ¥ 379,542 | ||||||||||||||||||||
Payment of issuance costs | $ 1,214 | ¥ 8,091 | 8,091 | ||||||||||||||||||||
Series B2 Redeemable Convertible Preferred Shares | |||||||||||||||||||||||
CONVERTIBLE PREFERRED SHARES | |||||||||||||||||||||||
Shares issued for cash | 141,000,686 | 141,000,686 | |||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 0.5039 | ||||||||||||||||||||||
Proceeds from issuance of redeemable convertible preferred stock | $ 50,000 | ¥ 321,040 | 321,040 | ||||||||||||||||||||
Payment of issuance costs | $ 501 | ¥ 3,249 | 3,249 | ||||||||||||||||||||
Shares issued upon conversion of convertible debt | 41,777,981 | 41,777,981 | |||||||||||||||||||||
Series C Redeemable Convertible Preferred Shares | |||||||||||||||||||||||
CONVERTIBLE PREFERRED SHARES | |||||||||||||||||||||||
Shares issued for cash | 226,297,396 | 226,297,396 | |||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 1.1047 | ||||||||||||||||||||||
Preferred shares redesigned from one class of shares to other class | 226,297,396 | 226,297,396 | |||||||||||||||||||||
Proceeds from issuance of redeemable convertible preferred stock | $ 250,000 | ¥ 1,737,750 | 1,737,750 | ||||||||||||||||||||
Payment of issuance costs | $ 1,000 | ¥ 6,800 | ¥ 6,800 | ||||||||||||||||||||
Series C-1 Redeemable Convertible Preferred Shares | |||||||||||||||||||||||
CONVERTIBLE PREFERRED SHARES | |||||||||||||||||||||||
Preferred shares redesigned from one class of shares to other class | 27,155,688 | 27,155,688 | |||||||||||||||||||||
Series C-2 Redeemable Convertible Preferred Shares | |||||||||||||||||||||||
CONVERTIBLE PREFERRED SHARES | |||||||||||||||||||||||
Shares issued for cash | 198,222,513 | 198,222,513 | |||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 1.1047 | ||||||||||||||||||||||
Preferred shares redesigned from one class of shares to other class | 226,297,396 | 226,297,396 | |||||||||||||||||||||
Proceeds from issuance of redeemable convertible preferred stock | $ 218,985 | ¥ 1,500,416 | 215,521 | 1,500,416 | |||||||||||||||||||
Payment of issuance costs | ¥ 2,411 | 346 | 2,411 | ||||||||||||||||||||
Series D Redeemable Convertible Preferred Shares | |||||||||||||||||||||||
CONVERTIBLE PREFERRED SHARES | |||||||||||||||||||||||
Shares issued for cash | 136,474,737 | 136,474,737 | |||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 1.3922 | ||||||||||||||||||||||
Proceeds from issuance of redeemable convertible preferred stock | $ 190,000 | ¥ 1,343,758 | $ 193,019 | ¥ 1,343,758 | |||||||||||||||||||
Payment of issuance costs | ¥ | ¥ 7,053 | ||||||||||||||||||||||
Mr. Luo Shaohu | Series A2I Redeemable Convertible Preferred Shares | |||||||||||||||||||||||
CONVERTIBLE PREFERRED SHARES | |||||||||||||||||||||||
Shares issued for cash | 16,967,466 | 16,967,466 | |||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 0.0420 |
CONVERTIBLE PREFERRED SHARES _2
CONVERTIBLE PREFERRED SHARES - Rights (Details) ¥ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Oct. 31, 2019 | Jan. 31, 2019shares | Feb. 28, 2018 | Mar. 31, 2017 | Feb. 28, 2017 | May 31, 2016$ / shares | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2018shares | |
Redemption Rights | ||||||||
2023 | ¥ | ¥ 8,174,168 | |||||||
Conversion Rights | ||||||||
Conversion ratio | shares | 1 | 1 | ||||||
Liquidation Preference | ||||||||
Liquidation preference as a percentage of purchase price for second tier of stock | 150.00% | |||||||
Modification, percentage used to determine if qualifies as extinguishment | 10.00% | |||||||
Series A1 Convertible Preferred Shares | ||||||||
Conversion Rights | ||||||||
Original issuance price | $ 0.0086 | |||||||
Conversion price after stock split adjustment | 0.0017 | |||||||
Liquidation Preference | ||||||||
Liquidation preference as a multiple of purchase price | 4 | |||||||
Series A2 Redeemable Convertible Preferred Shares | ||||||||
Redemption Rights | ||||||||
Redemption price, annual internal rate of return without IPO | 12.00% | |||||||
Redemption price, annual internal rate of return with IPO | 25.00% | |||||||
Conversion Rights | ||||||||
Original issuance price | 0.1200 | |||||||
Conversion price after stock split adjustment | $ 0.0240 | |||||||
Dividend Rights | ||||||||
Dividend rate | 8.00% | |||||||
Series B1 Redeemable Convertible Preferred Shares | ||||||||
Redemption Rights | ||||||||
Period to cure change in PRC laws | 30 days | |||||||
Period to cure breach | 30 days | |||||||
Dividend Rights | ||||||||
Dividend rate | 8.00% | |||||||
Series B2 Redeemable Convertible Preferred Shares | ||||||||
Liquidation Preference | ||||||||
Liquidation preference as a multiple of purchase price | 4 | |||||||
Series C-2 Redeemable Convertible Preferred Shares | ||||||||
Redemption Rights | ||||||||
Period to cure breach | 30 days | |||||||
Minimum number of share held | shares | 36,207,583 | |||||||
Dividend Rights | ||||||||
Dividend rate | 8.00% | |||||||
Liquidation Preference | ||||||||
Liquidation preference as a multiple of purchase price | 2.5 | |||||||
Series D Redeemable Convertible Preferred Shares | ||||||||
Dividend Rights | ||||||||
Dividend rate | 8.00% | |||||||
Liquidation Preference | ||||||||
Liquidation preference as a multiple of purchase price | 2.5 | |||||||
Minimum | ||||||||
Liquidation Preference | ||||||||
Liquidation preference as a multiple of purchase price | 4 | |||||||
Minimum | Series B1 Redeemable Convertible Preferred Shares | ||||||||
Redemption Rights | ||||||||
Redemption price, annual internal rate of return in event of breach | 2.00% | |||||||
Minimum | Series C-2 Redeemable Convertible Preferred Shares | ||||||||
Redemption Rights | ||||||||
Redemption price, annual internal rate of return in event of breach | 2.00% | |||||||
Maximum | ||||||||
Liquidation Preference | ||||||||
Liquidation preference as a multiple of purchase price | 6 | |||||||
Maximum | Series B1 Redeemable Convertible Preferred Shares | ||||||||
Redemption Rights | ||||||||
Redemption price, annual internal rate of return in event of breach | 8.00% | |||||||
Maximum | Series C-2 Redeemable Convertible Preferred Shares | ||||||||
Redemption Rights | ||||||||
Redemption price, annual internal rate of return in event of breach | 8.00% |
SHARE BASED COMPENSATION (Detai
SHARE BASED COMPENSATION (Details) | Nov. 24, 2016shares | Mar. 31, 2017individualshares | Nov. 30, 2015shares | Dec. 31, 2019shares | Dec. 31, 2018shares | Dec. 31, 2017shares |
SHARE BASED COMPENSATION | ||||||
Vesting period (in months or years) | 4 years | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | |||||
Restricted shares | ||||||
SHARE BASED COMPENSATION | ||||||
Share based arrangement, shares | 65,885,417 | 137,760,417 | ||||
Share based arrangement, shares vested | 65,885,417 | 71,875,000 | ||||
Share based arrangement Founder | Restricted shares | ||||||
SHARE BASED COMPENSATION | ||||||
Share based arrangement, shares | 300,000,000 | |||||
Vesting percentage in first anniversary | 25.00% | |||||
Remaining vesting percentage | 75.00% | |||||
Vesting period (in months or years) | 33 months | 36 months | ||||
Share based arrangement, shares forfeited | 75,000,000 | |||||
Share based arrangement, shares granted | 62,500,000 | |||||
Number of grantees | individual | 2 | |||||
Share based arrangement, shares vested | 19,531,250 | |||||
Share based arrangement, remaining non-vested shares | 42,968,750 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 33 months | 36 months |
SHARE BASED COMPENSATION - Rest
SHARE BASED COMPENSATION - Restricted Ordinary Shared (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2018CNY (¥)shares | Dec. 31, 2019USD ($) |
Restricted shares' activities | ||||
Stock compensation expense | ¥ | ¥ 14,400 | |||
Total unrecognized compensation expense | $ | $ 0 | |||
Restricted shares | ||||
Restricted shares' activities | ||||
Unvested, beginning balance | 65,885,417 | 137,760,417 | ||
Vested | (65,885,417) | (71,875,000) | ||
Unvested, ending balance | 137,760,417 | 65,885,417 | ||
Stock compensation expense | ¥ | ¥ 8,569 | ¥ 5,551 | ¥ 5,808 |
SHARE BASED COMPENSATION - Stoc
SHARE BASED COMPENSATION - Stock Option plan (Details) - $ / shares | 1 Months Ended | 12 Months Ended | 21 Months Ended | ||||||||||
Oct. 31, 2019 | Sep. 30, 2019 | Jul. 31, 2019 | Jun. 30, 2019 | Jan. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Apr. 30, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | |
SHARE BASED COMPENSATION | |||||||||||||
Vesting period (in months or years) | 4 years | ||||||||||||
Share options | |||||||||||||
SHARE BASED COMPENSATION | |||||||||||||
Share based arrangement, shares authorized | 75,000,000 | 75,000,000 | 75,000,000 | ||||||||||
Vesting percentage in next year | 25.00% | ||||||||||||
Remaining vesting percentage after 12-months | 75.00% | ||||||||||||
Period for vested options forfeited on not exercised by employees | 90 days | ||||||||||||
Granted | 84,065,148 | 15,300,000 | 50,650,000 | 3,250,000 | 5,550,000 | 22,399,066 | 24,610,000 | 150,015,148 | |||||
Weighted average exercise price | $ 0.0500 | $ 0.0500 | $ 0.0500 | $ 0.0500 | $ 0.0500 | ||||||||
Maximum | Share options | |||||||||||||
SHARE BASED COMPENSATION | |||||||||||||
Granted | 274,226,921 | 180,849,469 |
SHARE BASED COMPENSATION - Shar
SHARE BASED COMPENSATION - Share Options Activities (Details) - Share options - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | 21 Months Ended | |||||||
Sep. 30, 2019 | Jul. 31, 2019 | Jun. 30, 2019 | Jan. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Apr. 30, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share options activities | ||||||||||
Number shares outstanding beginning balance | 55,809,066 | 55,809,066 | ||||||||
Granted | 84,065,148 | 15,300,000 | 50,650,000 | 3,250,000 | 5,550,000 | 22,399,066 | 24,610,000 | 150,015,148 | ||
Repurchased | (1,922,700) | (1,922,700) | ||||||||
Forfeited | (27,298,600) | |||||||||
Number shares outstanding ending balance | 55,809,066 | 176,602,914 | 55,809,066 | |||||||
Weighted average exercise price | ||||||||||
Weighted average exercise price beginning balance | $ 0.0500 | $ 0.0500 | ||||||||
Weighted average exercise price, granted | $ 0.0500 | $ 0.0500 | $ 0.0500 | $ 0.0500 | $ 0.0500 | |||||
Weighted average exercise price, repurchased | 0.0500 | |||||||||
Weighted average exercise price, forfeited | $ 0.0500 | |||||||||
Weighted average exercise price ending balance | $ 0.0500 | $ 0.0500 | $ 0.0500 | |||||||
Share options activities additional information | ||||||||||
Weighted average remaining contractual year | 8 years 1 month 13 days | |||||||||
Aggregate intrinsic value | $ 229,584 | |||||||||
Vested and expected to vest | ||||||||||
Number shares outstanding, vested and expected to vest | 174,531,664 | |||||||||
Weighted average exercise price, vested and expected to vest | $ 0.0500 | |||||||||
Weighted average remaining contractual year, vested and expected to vest | 8 years 1 month 13 days | |||||||||
Aggregate intrinsic value, vested and expected to vest | $ 226,891 | |||||||||
Exercisable | ||||||||||
Weighted average exercise price, exercisable | $ 0.0500 |
SHARE BASED COMPENSATION - Assu
SHARE BASED COMPENSATION - Assumptions (Details) ¥ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Jan. 31, 2019CNY (¥)shares | Dec. 31, 2019CNY (¥)$ / shares | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2018$ / shares | Dec. 31, 2018CNY (¥) | Dec. 31, 2017$ / shares | Dec. 31, 2017CNY (¥) | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||||||
Stock compensation expense | ¥ 14,400 | ||||||
Share options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||||||
Expected dividend yield | 0.00% | 0.00% | 0.00% | ||||
Expected term | 10 years | 10 years | 10 years | ||||
Fair value of options granted | ¥ 1,347,684 | ¥ 26,875 | |||||
Stock compensation expense | 0 | ¥ 0 | ¥ 0 | ||||
Unrecognized compensation | ¥ 1,256,732 | ¥ 1,256,732 | |||||
Repurchased | shares | 1,922,700 | 1,922,700 | |||||
Fair value of options repurchased | ¥ 14,400 | ||||||
Minimum | Share options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||||||
Risk-free rate of return, low end of range | 1.60% | 2.85% | 2.30% | ||||
Volatility, low end of range | 39.50% | 41.10% | 50.70% | ||||
Exercise multiple | 2.2 | 2.2 | 2.2 | ||||
Fair value of underlying ordinary shares | $ / shares | ¥ 1.3471 | $ 0.2479 | $ 0.0231 | ||||
Maximum | Share options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||||||
Risk-free rate of return, high end of range | 5.00% | 3.01% | 2.37% | ||||
Volatility, high end of range | 42.50% | 50.20% | 52.00% | ||||
Exercise multiple | 2.8 | 2.8 | 2.8 | ||||
Fair value of underlying ordinary shares | $ / shares | ¥ 1.3519 | $ 0.9466 | $ 0.1164 |
FAIR VALUE MEASUREMENT - Fair v
FAIR VALUE MEASUREMENT - Fair value hierarchy (Details) - Convertible Debt - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance, beginning of period | ¥ 5,809 | |
Issuance | ¥ 126,206 | |
Change in Fair Value loss | 6,962 | 441 |
Conversion | ¥ (133,168) | ¥ (6,250) |
INCOME TAX (Details)
INCOME TAX (Details) ¥ in Thousands, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2019HKD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Income Tax Disclosure Line Items | |||||
Number of companies that can use lowered rate | $ | $ 1 | ||||
Provision for profits tax | (311,000) | ¥ (2,167) | ¥ 112 | ¥ (112) | |
Loss before income taxes | $ (494,036,000) | (3,439,379) | (1,369,637) | (271,636) | |
Current income tax expense | ¥ 0 | 0 | 0 | ||
FIE percentage held by foreign investors for FIE withholding to apply | 25.00% | 25.00% | 25.00% | ||
CAYMAN ISLANDS | |||||
Income Tax Disclosure Line Items | |||||
Loss before income taxes | ¥ (24,242) | (5,064) | (8,049) | ||
HONG KONG | |||||
Income Tax Disclosure Line Items | |||||
Statutory income tax rate used for reconciliation | 16.50% | 16.50% | 16.50% | ||
Level of assessable profits taxed at lower rate | $ | $ 2 | ||||
Tax rate for first HK $2 million of assessable profits | 8.25% | 8.25% | 8.25% | ||
Provision for profits tax | ¥ 0 | ||||
Loss before income taxes | ¥ 14,091 | 6,744 | |||
Withholding tax rate on payments of dividends | 5.00% | 5.00% | 5.00% | ||
PRC | |||||
Income Tax Disclosure Line Items | |||||
Statutory income tax rate used for reconciliation | 25.00% | 25.00% | 25.00% | ||
Loss before income taxes | ¥ (3,429,228) | ¥ (1,371,317) | ¥ (263,587) | ||
Withholding tax rate on payments of dividends | 10.00% | 10.00% | 10.00% |
INCOME TAX - Undistributed divi
INCOME TAX - Undistributed dividends (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||||
Computed expected income tax expense (benefit) | ¥ (859,845) | ¥ (342,409) | ¥ (67,909) | |
Non-PRC entities not subject to income tax | 2,538 | 3,423 | 2,060 | |
Non-deductible expenses | 2,217 | 46,670 | 26,647 | |
Change in valuation allowance | 852,923 | 292,428 | 39,090 | |
Income Tax Expense (Benefit), Total | $ (311) | ¥ (2,167) | ¥ 112 | ¥ (112) |
INCOME TAX - Deferred income ta
INCOME TAX - Deferred income tax (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets | ||||
Net operating loss carry forwards | ¥ 1,055,305 | ¥ 304,553 | ||
Advertising expense | 135,850 | 33,679 | ||
Less: Valuation allowance | 1,191,155 | ¥ 338,232 | ¥ 45,804 | ¥ 6,714 |
Deferred tax liabilities | ||||
Intangible assets | (7,042) | |||
Total deferred income tax liability | (7,042) | |||
Operating loss carryforwards | ¥ 4,221,220 |
INCOME TAX - Changes in valuati
INCOME TAX - Changes in valuation (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Valuation Allowance [Abstract] | |||
Balance, beginning of period | ¥ 338,232 | ¥ 45,804 | ¥ 6,714 |
Additions | 852,923 | 292,428 | 39,090 |
Balance, end of period | ¥ 1,191,155 | ¥ 338,232 | ¥ 45,804 |
INCOME TAX - PRC (Details)
INCOME TAX - PRC (Details) - State Administration of Taxation, China ¥ in Thousands | 12 Months Ended |
Dec. 31, 2019CNY (¥) | |
Income tax | |
Statute of limitations, underpayment special circumstances minimum amount | ¥ 100 |
Statute of limitations, underpayment due to transfer pricing issues | 10 years |
NET LOSS PER SHARE - Basic and
NET 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, 2019USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥)¥ / sharesshares | Dec. 31, 2018CNY (¥)¥ / sharesshares | Dec. 31, 2017CNY (¥)¥ / sharesshares | |
Numerator: | ||||
Net loss attributable to Phoenix Tree Holdings Limited | $ (493,383) | ¥ (3,434,832) | ¥ (1,365,615) | ¥ (271,524) |
Accretion and modification of redeemable convertible preferred shares | (50,096) | (348,756) | (111,132) | (14,123) |
Net loss attributable to ordinary shareholders of Phoenix Tree Holdings Limited | $ (543,479) | ¥ (3,783,588) | ¥ (1,476,747) | ¥ (285,647) |
Denominator: | ||||
Weighted average number of ordinary shares | 251,347,723 | 251,347,723 | 185,677,083 | 111,848,958 |
Denominator for basic and diluted net loss per share calculation | 251,347,723 | 251,347,723 | 185,677,083 | 111,848,958 |
Net loss per ordinary share | ||||
-Basic and diluted (In CNY per share) | (per share) | $ (2.16) | ¥ (15.05) | ¥ (7.95) | ¥ (2.55) |
NET LOSS PER SHARE - Restricted
NET LOSS PER SHARE - Restricted shares (Details) - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Restricted shares | |||
Anti-dilutive securities | |||
Potentially dilutive securities excluded from calculation | 65,885,417 | 137,760,417 | |
Convertible Preferred Shares | |||
Anti-dilutive securities | |||
Potentially dilutive securities excluded from calculation | 1,448,506,852 | 1,105,665,218 | 554,544,021 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Rental cost and rental expenses | ¥ 6,662,423 | ¥ 2,460,401 | ¥ 574,178 |
COMMITMENTS AND CONTINGENCIES | |||
2020 | 8,005,232 | ||
2021 | 6,973,361 | ||
2022 | 5,378,141 | ||
2023 | 3,993,685 | ||
2024 and thereafter | 3,445,995 | ||
Apartment Building | |||
COMMITMENTS AND CONTINGENCIES | |||
2020 | 7,966,226 | ||
2021 | 6,956,235 | ||
2022 | 5,373,594 | ||
2023 | 3,992,683 | ||
2024 and thereafter | 3,445,786 | ||
Office Building | |||
COMMITMENTS AND CONTINGENCIES | |||
2020 | 39,006 | ||
2021 | 17,126 | ||
2022 | 4,547 | ||
2023 | 1,002 | ||
2024 and thereafter | ¥ 209 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - CNY (¥) ¥ in Thousands | 1 Months Ended | 12 Months Ended |
Aug. 31, 2019 | Dec. 31, 2018 | |
Shareholder of Series A-3 Redeemable Convertible Preferred Shares | ||
Related Party Transactions | ||
Loan obtained by Group | ¥ 1,000 | ¥ 10,343 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ / shares in Units, ¥ in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jan. 31, 2020USD ($)$ / sharesshares | Jan. 31, 2020CNY (¥)shares | Mar. 31, 2020CNY (¥) | Dec. 31, 2019 | Apr. 30, 2020CNY (¥) | |
Subsequent Events | |||||
Number of ordinary shares represented by each ADS | 10 | ||||
Shan Wutong and Kunshan Yinqiao | |||||
Subsequent Events | |||||
Agreement period of not to transfer respective equity interest in joint venture | 8 years | ||||
IPO | |||||
Subsequent Events | |||||
Proceeds from issuance | $ 128.4 | ¥ 884.5 | |||
Number of ordinary shares represented by each ADS | 10 | ||||
IPO | ADS | |||||
Subsequent Events | |||||
Shares issued | 9,904,933 | 9,904,933 | |||
Subsequent Event | Leasehold Improvements [Member] | |||||
Subsequent Events | |||||
Loss from early termination of lease agreements | ¥ | ¥ 82 | ||||
Subsequent Event | Shan Wutong | |||||
Subsequent Events | |||||
Capital contribution | ¥ | ¥ 625 | ||||
Equity interest, percentage | 51.02% | ||||
Subsequent Event | Kunshan Yinqiao | |||||
Subsequent Events | |||||
Capital contribution | ¥ | ¥ 600 | ||||
Equity interest, percentage | 48.98% | ||||
Subsequent Event | IPO | |||||
Subsequent Events | |||||
Proceeds from issuance | $ 128.4 | ¥ 884.5 | |||
Shares issued | 1,448,506,852 | ||||
Shares outstanding | 1,448,506,852 | ||||
Conversion of preferred stock to ordinary | 1 | 1 | |||
Subsequent Event | IPO | ADS | |||||
Subsequent Events | |||||
Shares issued | 9,904,933 | 9,904,933 | |||
Shares issued, price per share | $ / shares | $ 13.5 |
PARENT ONLY FINANCIAL INFORMA_3
PARENT ONLY FINANCIAL INFORMATION (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) |
Current assets | |||||
Cash | $ 98,434 | ¥ 685,277 | ¥ 1,087,258 | ||
Restricted cash | 203,575 | 1,417,245 | 1,362,266 | ||
Prepayments and Other Current Assets | 91,444 | 636,618 | 265,794 | ||
Total current assets | 425,914 | 2,965,123 | 3,155,228 | ||
Non-current assets: | |||||
Restricted cash-non current | 194,400 | 1,353,376 | 16,010 | ||
Other non-current assets | 58,994 | 410,703 | 251,936 | ||
Total non-current assets | 867,648 | 6,040,392 | 2,674,383 | ||
Total assets | 1,293,562 | 9,005,515 | 5,829,611 | ||
Current liability | |||||
Amount due to a related party | 1,629 | 11,343 | 10,343 | ||
Accrued expenses and other current liabilities | 71,172 | 495,484 | 214,170 | ||
Total current liabilities | 1,138,033 | 7,922,758 | 4,582,077 | ||
Mezzanine equity | |||||
Total mezzanine equity | 877,101 | 6,106,203 | 2,859,632 | ¥ 140,661 | ¥ 28,540 |
Shareholders' deficit | |||||
Ordinary Shares | 5 | 35 | 35 | ||
Accumulated other comprehensive income (loss) | (8,310) | (57,852) | (3,061) | ||
Accumulated deficit | (813,535) | (5,663,670) | (1,839,123) | ||
Total shareholders' deficit attributable to ordinary shareholders | (821,840) | (5,721,487) | (1,842,149) | ||
Total liabilities, mezzanine equity and shareholders' deficit | 1,293,562 | 9,005,515 | 5,829,611 | ||
Series A1 Convertible Preferred Shares | |||||
Mezzanine equity | |||||
Total mezzanine equity | 204 | 1,425 | 1,402 | 1,335 | 1,417 |
Series A2 Redeemable Convertible Preferred Shares | |||||
Mezzanine equity | |||||
Total mezzanine equity | 5,000 | 34,806 | 32,156 | 28,615 | ¥ 27,123 |
Series A2I Redeemable Convertible Preferred Shares | |||||
Mezzanine equity | |||||
Total mezzanine equity | 1,035 | 7,208 | 6,826 | 6,256 | |
Series A3 Redeemable Convertible Preferred Shares | |||||
Mezzanine equity | |||||
Total mezzanine equity | 17,176 | 119,576 | 118,316 | ¥ 104,455 | |
Series B1 Redeemable Convertible Preferred Shares | |||||
Mezzanine equity | |||||
Total mezzanine equity | 68,554 | 477,259 | 440,721 | ||
Series B2 Redeemable Convertible Preferred Shares | |||||
Mezzanine equity | |||||
Total mezzanine equity | 80,153 | 558,008 | 510,802 | ||
Series C Redeemable Convertible Preferred Shares | |||||
Mezzanine equity | |||||
Total mezzanine equity | 1,749,409 | ||||
Series C-1 Redeemable Convertible Preferred Shares | |||||
Mezzanine equity | |||||
Total mezzanine equity | 1,821 | 12,679 | |||
Series C-2 Redeemable Convertible Preferred Shares | |||||
Mezzanine equity | |||||
Total mezzanine equity | 510,939 | 3,557,053 | |||
Series D Redeemable Convertible Preferred Shares | |||||
Mezzanine equity | |||||
Total mezzanine equity | $ 192,219 | 1,338,189 | |||
Parent Company | |||||
Current assets | |||||
Cash | 275,702 | 962,692 | |||
Restricted cash | 345,322 | 535,330 | |||
Prepayments and Other Current Assets | 24,010 | 4,261 | |||
Total current assets | 645,034 | 1,502,283 | |||
Non-current assets: | |||||
Restricted cash-non current | 195,334 | ||||
Other non-current assets | 12,374 | ||||
Total non-current assets | 207,708 | ||||
Total assets | 852,742 | 1,502,283 | |||
Current liability | |||||
Amount due to a related party | 8,129 | 6,587 | |||
Accrued expenses and other current liabilities | 30,998 | ||||
Total current liabilities | 39,127 | 6,587 | |||
Mezzanine equity | |||||
Total mezzanine equity | 6,106,203 | 2,859,632 | |||
Shareholders' deficit | |||||
Ordinary Shares | 35 | 35 | |||
Accumulated other comprehensive income (loss) | (12,122) | (4,291) | |||
Accumulated deficit | (5,280,501) | (1,359,680) | |||
Total shareholders' deficit attributable to ordinary shareholders | (5,292,588) | (1,363,936) | |||
Total liabilities, mezzanine equity and shareholders' deficit | 852,742 | 1,502,283 | |||
Parent Company | Series A1 Convertible Preferred Shares | |||||
Mezzanine equity | |||||
Total mezzanine equity | 1,425 | 1,402 | |||
Parent Company | Series A2 Redeemable Convertible Preferred Shares | |||||
Mezzanine equity | |||||
Total mezzanine equity | 34,806 | 32,156 | |||
Parent Company | Series A2I Redeemable Convertible Preferred Shares | |||||
Mezzanine equity | |||||
Total mezzanine equity | 7,208 | 6,826 | |||
Parent Company | Series A3 Redeemable Convertible Preferred Shares | |||||
Mezzanine equity | |||||
Total mezzanine equity | 119,576 | 118,316 | |||
Parent Company | Series B1 Redeemable Convertible Preferred Shares | |||||
Mezzanine equity | |||||
Total mezzanine equity | 477,259 | 440,721 | |||
Parent Company | Series B2 Redeemable Convertible Preferred Shares | |||||
Mezzanine equity | |||||
Total mezzanine equity | 558,008 | 510,802 | |||
Parent Company | Series C Redeemable Convertible Preferred Shares | |||||
Mezzanine equity | |||||
Total mezzanine equity | ¥ 1,749,409 | ||||
Parent Company | Series C-1 Redeemable Convertible Preferred Shares | |||||
Mezzanine equity | |||||
Total mezzanine equity | 12,679 | ||||
Parent Company | Series C-2 Redeemable Convertible Preferred Shares | |||||
Mezzanine equity | |||||
Total mezzanine equity | 3,557,053 | ||||
Parent Company | Series D Redeemable Convertible Preferred Shares | |||||
Mezzanine equity | |||||
Total mezzanine equity | ¥ 1,338,189 |
PARENT ONLY FINANCIAL INFORMA_4
PARENT ONLY FINANCIAL INFORMATION - Operations (Detail) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Condensed Statements of Operations | ||||
General and administrative expenses | $ (75,767) | ¥ (527,479) | ¥ (203,847) | ¥ (49,960) |
Operating loss | (452,585) | (3,150,802) | (1,221,322) | (218,619) |
Interest income | 9,169 | 63,831 | 20,226 | 831 |
Loss before income taxes | (494,036) | (3,439,379) | (1,369,637) | (271,636) |
Provision for profits tax | (311) | (2,167) | 112 | (112) |
Net loss | $ (493,383) | (3,434,832) | (1,365,615) | (271,524) |
Parent Company | ||||
Condensed Statements of Operations | ||||
General and administrative expenses | (49,185) | (13,052) | (9,041) | |
Operating loss | (49,185) | (13,052) | (9,041) | |
Share of losses from subsidiaries, VIE and VIE's subsidiaries | (3,506,864) | (1,196,549) | (9,350) | |
Change in Fair Value loss | (6,962) | 441 | ||
Interest income | 24,943 | 14,950 | 551 | |
Loss before income taxes | (3,531,106) | (1,201,613) | (17,399) | |
Net loss | ¥ (3,531,106) | ¥ (1,201,613) | ¥ (17,399) |
PARENT ONLY FINANCIAL INFORMA_5
PARENT ONLY FINANCIAL INFORMATION - Cash Flow (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Condensed statements of cash flows | ||||
Net cash used in operating activities | $ (274,529) | ¥ (1,911,216) | ¥ (1,164,248) | ¥ (114,578) |
Net cash used in investing activities | (292,753) | (2,038,089) | (1,324,021) | (489,282) |
Net cash provided by financing activities | 710,316 | 4,945,078 | 4,692,659 | 822,440 |
Effect of foreign currency exchange rate changes on cash and restricted cash | (777) | (5,409) | 47,142 | (6,110) |
Net increase in cash and restricted cash | 142,257 | 990,364 | 2,251,532 | 212,470 |
Cash and restricted cash at the beginning of the year | 354,152 | 2,465,534 | 214,002 | 1,532 |
Cash and restricted cash at the end of the year | $ 496,409 | 3,455,898 | 2,465,534 | 214,002 |
Parent Company | ||||
Condensed statements of cash flows | ||||
Net cash used in operating activities | 3,752 | 9,424 | 509 | |
Net cash used in investing activities | (3,470,120) | (1,196,639) | (3,141) | |
Net cash provided by financing activities | 2,797,814 | 2,551,618 | 100,559 | |
Effect of foreign currency exchange rate changes on cash and restricted cash | (13,110) | 43,881 | (8,189) | |
Net increase in cash and restricted cash | (681,664) | 1,408,284 | 89,738 | |
Cash and restricted cash at the beginning of the year | 1,498,022 | 89,738 | ||
Cash and restricted cash at the end of the year | ¥ 816,358 | ¥ 1,498,022 | ¥ 89,738 |