REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of Each Class |
Trading Symbol(s) |
Name of Each Exchange On Which Registered | ||
Nasdaq Global Select Market |
* |
|
Accelerated filer ☐ |
Non-accelerated filer ☐ |
Emerging growth company |
† |
The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
International Financial Reporting Standards as issued |
Other ☐ | |||||||
by the International Accounting Standards Board ☐ |
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• | “ADRs” are to the American depositary receipts that evidence our ADSs; |
• | “ADSs” are to our American depositary shares, each of which represents one Class Z ordinary share; |
• | “average monthly interactions” for a period is calculated by dividing the total number of interactions based on our interactions features such as bullet chats, commentaries, following, favorites, sharing, bilibili moment posts and like, among other things, during the specified period by the number of months in such period; |
• | “average monthly revenue per paying user” for a period is calculated by dividing the sum of revenues from mobile games and VAS during the specified period by the total number of monthly paying users during such period; |
• | “average monthly revenue per MAU” for a period is calculated dividing the sum of revenues during the specified period by the total number of MAU during that period then further by the number of months in the specified period; |
• | “average daily time spent per active user on our mobile apps” for a period is calculated by dividing the total time spent on our mobile apps during the specified period (excluding time spent on Bilibili operating games, Bilibili Comic and Maoer) by the average number of active users per day during such period, further divided by the number of days during the specified period; |
• | “Bilibili,” “we,” “us,” “our company” and “our” are to Bilibili Inc., its subsidiaries and its consolidated affiliated entities; |
• | “bullet chat” or “bullet chatting” are to a commenting function that enables content viewers to send comments that fly across the screen like bullets, which we refer to as bullet chats herein. Bullet chats are context-based and can be viewed by the audiences who watch the same content, and therefore can intrigue interactive commenting among content viewers. Only official member can send bullet chats on our platform; |
• | “China” or the “PRC” are to the People’s Republic of China, excluding, for the purposes of this annual report only, Hong Kong, Macau and Taiwan; |
• | “Class Y ordinary shares” are to our Class Y ordinary shares, par value US$0.0001 per share; |
• | “Class Z ordinary shares” are to our Class Z ordinary shares, par value US$0.0001 per share; |
• | “Generation Z+” or “Gen Z+” are to, for the purposes of this annual report only, the demographic cohort of individuals in China born from 1985 to 2009; |
• | “monthly active users” or “MAU” are to the sum of our mobile apps MAU and PC MAU after eliminating duplicates so that each active registered user that logged on both our Bilibili mobile app and our Bilibili PC website would only be counted towards mobile apps MAU and not PC MAU during a given month. We calculate mobile apps MAU based on the number of mobile devices (including smart TV and other smart devices) that launched our mobile apps during a given month. Starting from the first quarter of 2019, we count mobile MAU of Bilibili Comic, a mobile app offering anime and comic content, and Maoer, an audio platform offering audio drama, towards our MAU. We calculate PC MAU by dividing the total number of IP addresses used by users to visit our PC website during a given month by an estimate of the average number of IP addresses used by each user. “Average MAU” for a period is calculated by dividing the sum of MAU during the specified period by the number of months in such period; |
• | “official members” are to users who pass our multiple-choice membership exam consisting of 100 questions, after which additional interactive and community features, such as bullet chatting and commenting, will become available to them; |
• | “our platform” are to “Bilibili” mobile apps, PC websites, Smart TV, Bilibili Comic, Maoer and a variety of related features, functionalities, tools and services that we provide to users and content creators; |
• | “occupationally generated videos” or “OGV” are to Bilibili-produced or jointly produced content and licensed content procured from third-party production companies; |
• | “paying users” on our platform are to users who make payments for various products and services on our platform, including purchases in mobile games offered on our platform and payments for VAS (excluding purchases on our e-commerce platform). A user who makes payments across different products and services offered on our platform using the same registered account is counted as one paying user and we add the number of paying users of Maoer towards our total paying users without eliminating duplicates. “Average monthly paying user” for a period is calculated by dividing the sum of monthly paying users during the specified period by the number of months in such period; |
• | “professional user generated videos” or “PUGV” are to videos generated by users that exhibits creativity as well as a certain level of professional production and editing capabilities; |
• | “retention rate”, as applied to any cohort of users who visit our platform in a given period, are to the percentage of these users who make at least one repeat visit after a certain duration; the “12th-month retention rate” for any cohort of users in a given month is the retention rate in the twelfth month after the applicable month; |
• | “premium members” are to members who have subscribed to our premium membership, which allow these members to enjoy exclusive or advance access to our premium content. We calculate premium members based on the number of members whose premium package is still valid by the last day of a given month; |
• | “RMB” and “Renminbi” are to the legal currency of China; |
• | “shares” or “ordinary shares” are to our Class Y and Class Z ordinary shares, par value US$0.0001 per share; |
• | “US$,” “U.S. dollars,” “$,” and “dollars” are to the legal currency of the United States; |
• | “VAS” are to value-added services, including premium membership, live broadcasting, Bilibili Comic, Maoer and other value-added services; |
• | “video-based content” are to, for the purposes of this annual report only, video content on video-centric platforms and non-video-centric platforms as well as mobile games. Non-video-centric platforms include social media, instant messaging, e-commerce, browser, and other kind of platforms; |
• | “videolization” are to the trend of video integrating into the scenarios of everyday life and; |
• | “young generations” are to, for the purposes of this annual report only, people aged 35 or below. |
• | our goals and strategies; |
• | our future business development, financial conditions and results of operations; |
• | the expected growth of the online entertainment and mobile games industries in China; |
• | our expectations regarding demand for and market acceptance of our products and services; |
• | our expectations regarding our relationships with users, content providers, game developers and publishers, advertisers and other partners; |
• | competition in our industry; |
• | relevant government policies and regulations relating to our industry; |
• | the outcome of any current and future litigation or legal or administrative proceedings; and |
• | other factors described under “Item 3. Key Information—D. Risk Factors.” |
A. |
Selected Financial Data |
For the Year Ended December 31, |
||||||||||||||||||||||||
2016 |
2017 |
2018 |
2019 |
2020 |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(in thousands, except for share and per share data) |
||||||||||||||||||||||||
Selected Consolidated Statements of Operations and Comprehensive Loss Data: |
||||||||||||||||||||||||
Net revenues |
523,310 | 2,468,449 | 4,128,931 | 6,777,922 | 11,998,976 | 1,838,924 | ||||||||||||||||||
Cost of revenues (1) |
(772,812 | ) | (1,919,241 | ) | (3,273,493 | ) | (5,587,673 | ) | (9,158,800 | ) | (1,403,648 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Gross (loss)/profit |
(249,502 |
) |
549,208 |
855,438 |
1,190,249 |
2,840,176 |
435,276 |
|||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||
Sales and marketing expenses (1) |
(102,659 | ) | (232,489 | ) | (585,758 | ) | (1,198,516 | ) | (3,492,091 | ) | (535,186 | ) | ||||||||||||
General and administrative expenses (1) |
(451,334 | ) | (260,898 | ) | (461,165 | ) | (592,497 | ) | (976,082 | ) | (149,592 | ) | ||||||||||||
Research and development expenses (1) |
(91,222 | ) | (280,093 | ) | (537,488 | ) | (894,411 | ) | (1,512,966 | ) | (231,872 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total operating expenses |
(645,215 | ) | (773,480 | ) | (1,584,411 | ) | (2,685,424 | ) | (5,981,139 | ) | (916,650 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss from operations |
(894,717 |
) |
(224,272 |
) |
(728,973 |
) |
(1,495,175 |
) |
(3,140,963 |
) |
(481,374 |
) |
For the Year Ended December 31, |
||||||||||||||||||||||||
2016 |
2017 |
2018 |
2019 |
2020 |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(in thousands, except for share and per share data) |
||||||||||||||||||||||||
Other income: |
||||||||||||||||||||||||
Investment income, net (including impairments) |
9,795 | 22,957 | 96,440 | 96,610 | 28,203 | 4,322 | ||||||||||||||||||
Interest income |
1,502 | 1,483 | 68,706 | 162,782 | 83,301 | 12,766 | ||||||||||||||||||
Interest expense |
— | — | — | (46,543 | ) | (108,547 | ) | (16,636 | ) | |||||||||||||||
Exchange (losses)/gains |
(21,267 | ) | 6,445 | (1,661 | ) | (11,789 | ) | 41,717 | 6,393 | |||||||||||||||
Others, net |
(3,668 | ) | 18,518 | 26,455 | 26,412 | 95,641 | 14,660 | |||||||||||||||||
Loss before tax |
(908,355 |
) |
(174,869 |
) |
(539,033 |
) |
(1,267,703 |
) |
(3,000,648 |
) |
(459,869 |
) | ||||||||||||
Income tax |
(3,141 | ) | (8,881 | ) | (25,988 | ) | (35,867 | ) | (53,369 | ) | (8,180 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss |
(911,496 |
) |
(183,750 |
) |
(565,021 |
) |
(1,303,570 |
) |
(3,054,017 |
) |
(468,049 |
) | ||||||||||||
Accretion to redeemable noncontrolling interests |
— | — | — | — | (4,292 | ) | (658 | ) | ||||||||||||||||
Accretion to Pre-IPO Preferred Shares redemption value |
(161,933 | ) | (258,554 | ) | (64,605 | ) | — | — | — | |||||||||||||||
Deemed dividend in connection with repurchase of Pre-IPO Preferred Shares |
(113,151 | ) | (129,244 | ) | — | — | — | — | ||||||||||||||||
Net loss attributable to noncontrolling interests |
1,430 | — | 13,301 | 14,597 | 46,605 | 7,143 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss attributable to the Bilibili Inc.’s shareholders |
(1,185,150 |
) |
(571,548 |
) |
(616,325 |
) |
(1,288,973 |
) |
(3,011,704 |
) |
(461,564 |
) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss |
(911,496 |
) |
(183,750 |
) |
(565,021 |
) |
(1,303,570 |
) |
(3,054,017 |
) |
(468,049 |
) | ||||||||||||
Other comprehensive income/(loss) |
||||||||||||||||||||||||
Foreign currency translation adjustments |
58,048 | (75,695 | ) | 296,030 | 140,152 | (325,100 | ) | (49,823 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total other comprehensive income/(loss) |
58,048 |
(75,695 |
) |
296,030 |
140,152 |
(325,100 |
) |
(49,823 |
) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total comprehensive loss |
(853,448 |
) |
(259,445 |
) |
(268,991 |
) |
(1,163,418 |
) |
(3,379,117 |
) |
(517,872 |
) | ||||||||||||
Accretion to redeemable noncontrolling interests |
— | — | — | — | (4,292 | ) | (658 | ) | ||||||||||||||||
Accretion to Pre-IPO Preferred Shares redemption value |
(161,933 | ) | (258,554 | ) | (64,605 | ) | — | — | — | |||||||||||||||
Deemed dividend in connection with repurchase of Pre-IPO Preferred Shares |
(113,151 | ) | (129,244 | ) | — | — | — | — | ||||||||||||||||
Net loss attributable to noncontrolling interests |
1,430 | — | 13,301 | 14,597 | 46,605 | 7,143 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Comprehensive loss attributable to the Bilibili Inc.’s shareholders |
(1,127,102 |
) |
(647,243 |
) |
(320,295 |
) |
(1,148,821 |
) |
(3,336,804 |
) |
(511,387 |
) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss per share, basic |
(20.42 | ) | (8.17 | ) | (2.64 | ) | (3.99 | ) | (8.71 | ) | (1.33 | ) | ||||||||||||
Net loss per share, diluted |
(20.42 | ) | (8.17 | ) | (2.64 | ) | (3.99 | ) | (8.71 | ) | (1.33 | ) | ||||||||||||
Net loss per ADS, basic |
— | — | (2.64 | ) | (3.99 | ) | (8.71 | ) | (1.33 | ) | ||||||||||||||
Net loss per ADS, diluted |
— | — | (2.64 | ) | (3.99 | ) | (8.71 | ) | (1.33 | ) | ||||||||||||||
Weighted average number of ordinary shares, basic |
58,038,570 | 69,938,570 | 233,047,703 | 323,161,680 | 345,816,023 | 345,816,023 | ||||||||||||||||||
Weighted average number of ordinary shares, diluted |
58,038,570 | 69,938,570 | 233,047,703 | 323,161,680 | 345,816,023 | 345,816,023 | ||||||||||||||||||
Weighted average number of ADS, basic |
— | — | 233,047,703 | 323,161,680 | 345,816,023 | 345,816,023 | ||||||||||||||||||
Weighted average number of ADS, diluted |
— | — | 233,047,703 | 323,161,680 | 345,816,023 | 345,816,023 |
(1) | Share-based compensation expenses were allocated as follows: |
For the Year Ended December 31, |
||||||||||||||||||||||||
2016 |
2017 |
2018 |
2019 |
2020 |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
Cost of revenues |
3,775 | 7,936 | 28,173 | 23,281 | 37,087 | 5,684 | ||||||||||||||||||
Sales and marketing expenses |
3,029 | 3,423 | 11,499 | 14,269 | 40,808 | 6,254 | ||||||||||||||||||
General and administrative expenses |
353,806 | 56,746 | 102,544 | 68,497 | 181,753 | 27,855 | ||||||||||||||||||
Research and development expenses |
4,878 | 11,849 | 38,977 | 66,503 | 126,250 | 19,349 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
365,488 |
79,954 |
181,193 |
172,550 |
385,898 |
59,142 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
||||||||||||||||||||||||
2016 |
2017 |
2018 |
2019 |
2020 |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
Selected Consolidated Balance Sheet Data: |
||||||||||||||||||||||||
Current assets: |
||||||||||||||||||||||||
Cash and cash equivalents |
387,198 | 762,882 | 3,540,031 | 4,962,660 | 4,678,109 | 716,952 | ||||||||||||||||||
Time deposits |
— | 1,960 | 749,385 | 1,844,558 | 4,720,089 | 723,385 | ||||||||||||||||||
Accounts receivable, net |
110,666 | 392,942 | 324,392 | 744,845 | 1,053,641 | 161,478 | ||||||||||||||||||
Prepayments and other current assets |
185,378 | 477,265 | 990,851 | 1,315,901 | 1,765,787 | 270,619 | ||||||||||||||||||
Short-term investments |
712,564 | 488,391 | 945,338 | 1,260,810 | 3,357,189 | 514,511 | ||||||||||||||||||
Non-current assets: |
||||||||||||||||||||||||
Intangible assets, net |
282,472 | 426,292 | 1,419,435 | 1,657,333 | 2,356,959 | 361,220 | ||||||||||||||||||
Goodwill |
50,967 | 50,967 | 941,488 | 1,012,026 | 1,295,786 | 198,588 | ||||||||||||||||||
Long-term investments, net |
377,031 | 635,952 | 979,987 | 1,251,129 | 2,232,938 | 342,213 | ||||||||||||||||||
Total assets |
2,166,710 | 3,473,525 | 10,490,036 | 15,516,567 | 23,865,608 | 3,657,566 | ||||||||||||||||||
Total current liabilities |
628,100 | 1,397,994 | 3,298,834 | 4,272,597 | 7,391,548 | 1,132,805 | ||||||||||||||||||
Long-term debt |
— | — | — | 3,414,628 | 8,340,922 | 1,278,302 | ||||||||||||||||||
Total liabilities |
628,100 |
1,397,994 |
3,298,834 |
7,880,107 |
16,083,404 |
2,464,891 |
||||||||||||||||||
Net current assets |
772,706 | 755,106 | 3,251,163 | 6,051,467 | 8,347,999 | 1,279,386 | ||||||||||||||||||
Net assets |
1,538,610 | 2,075,531 | 7,191,202 | 7,636,460 | 7,782,204 | 1,192,675 | ||||||||||||||||||
Total mezzanine equity |
2,861,613 | 4,015,043 | — | — | — | — | ||||||||||||||||||
Noncontrolling interests |
357 | — | 240,406 | 583,976 | 182,004 | 27,893 | ||||||||||||||||||
Total shareholders’ (deficit)/equity |
(1,323,003 | ) | (1,939,512 | ) | 7,191,202 | 7,636,460 | 7,782,204 | 1,192,675 | ||||||||||||||||
Total liabilities and shareholders’ equity |
2,166,710 |
3,473,525 |
10,490,036 |
15,516,567 |
23,865,608 |
3,657,566 |
As of December 31, |
||||||||||||||||||||||||
2016 |
2017 |
2018 |
2019 |
2020 |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
Selected Consolidated Statements of Cash Flow Data: |
||||||||||||||||||||||||
Net cash (used in)/provided by operating activities |
(198,967 | ) | 464,550 | 737,286 | 194,551 | 753,103 | 115,418 | |||||||||||||||||
Net cash used in investing activities |
(1,187,300 | ) | (716,254 | ) | (3,196,394 | ) | (3,958,277 | ) | (8,906,821 | ) | (1,365,029 | ) | ||||||||||||
Net cash provided by financing activities |
1,024,087 | 675,533 | 4,974,810 | 5,078,842 | 8,335,419 | 1,277,458 | ||||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents held in foreign currencies |
49,606 | (48,145 | ) | 261,447 | 107,513 | (466,252 | ) | (71,456 | ) | |||||||||||||||
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|
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Net (decrease)/ increase in cash and cash equivalents |
(312,574 | ) | 375,684 | 2,777,149 | 1,422,629 | (284,551 | ) | (43,609 | ) | |||||||||||||||
Cash and cash equivalents at beginning of the year |
699,772 | 387,198 | 762,882 | 3,540,031 | 4,962,660 | 760,561 | ||||||||||||||||||
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Cash and cash equivalents at end of the year |
387,198 | 762,882 | 3,540,031 | 4,962,660 | 4,678,109 | 716,952 | ||||||||||||||||||
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B. |
Capitalization and Indebtedness |
C. |
Reasons for the Offer and Use of Proceeds |
D. |
Risk Factors |
• | We operate in a fast-evolving industry. We cannot guarantee that we will successfully implement our commercialization strategies or develop new ones, or generate sustainable revenues and profit. |
• | We have incurred significant losses and we may continue to experience losses in the future. |
• | If we fail to anticipate user preferences and provide products and services to attract and retain users, or if we fail to keep up with rapid changes in technologies and their impact on user behavior, we may not be able to attract sufficient user traffic to remain competitive, and our business and prospects may be materially and adversely affected. |
• | Our business depends on our ability to provide users with interesting and useful content, which in turn depends on the content contributed by the content creators on our platform. |
• | Increases in the costs of content on our platform may have an adverse effect on our business, financial condition and results of operations; |
• | Our auditor is not inspected by the PCAOB and, as such, you are deprived of the benefits of such inspection. In addition, various legislative and regulatory developments related to U.S.-listed China-based companies due to lack of PCAOB inspection and other developments may have a material adverse impact on our listing and trading in the U.S. and the trading prices of our ADSs. |
• | If the PRC government finds that the agreements that establish the structure for operating our businesses in China do not comply with PRC regulations on foreign investment in internet and other related businesses, or if these regulations or their interpretation change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations. |
• | We rely on contractual arrangements with our VIEs and their shareholders for our operations in China, which may not be as effective in providing operational control as direct ownership. |
• | We may lose the ability to use and enjoy assets held by our VIEs and their subsidiaries that are important to our business if our VIEs and their subsidiaries declare bankruptcy or become subject to a dissolution or liquidation proceeding. |
• | Contractual arrangements we have entered into with our VIEs may be subject to scrutiny by the PRC tax authorities. A finding that we owe additional taxes could negatively affect our financial condition and the value of your investment. |
• | Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to you and us. |
• | We face uncertainties with respect to the interpretation and implementation of the Anti-Monopoly Guidelines for the Internet Platform Economy Sector. |
• | Regulation and censorship of information disseminated over the mobile and internet in China may adversely affect our business and subject us to liability for content posted on our platform. |
• | Adverse changes in economic and political policies of the PRC government could have a material and adverse effect on overall economic growth in China, which could materially and adversely affect our business. |
• | The trading price of our listed securities has been and is likely to continue to be volatile, regardless of our operating performance, which could result in substantial losses to our investors. |
• | We may need additional capital, and the sale of additional Class Z ordinary shares and/or ADSs or other equity securities could result in additional dilution to our shareholders, and the incurrence of additional indebtedness could increase our debt obligations. |
• | Conversion of our convertible senior notes may dilute the ownership interest of the existing shareholders, including holders who had previously converted their notes. |
• | Provisions of our convertible senior notes could discourage an acquisition of us by a third-party. |
• | Our dual-class share structure with different voting rights will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class Z ordinary shares and ADSs may view as beneficial. |
• | the popularity, usefulness, ease of use, performance and reliability of our platform, products and services compared to those of our competitors; |
• | the amount, quality and timeliness of content on our platform, especially the amount and quality of the PUGV generated by our content creators; |
• | the environment and culture of our user communities; |
• | our ability, and the ability of our competitors, to develop new products and services and enhancements to existing products and services to keep up with user preferences and demands; |
• | the inventory size, quality and size of player base of the games we operate; |
• | our ability to establish and maintain relationships with content providers and partners; |
• | our ability to commercialize our services; |
• | changes mandated by legislation, regulations or government policies, some of which may have a disproportionate effect on us; |
• | acquisitions or consolidation within our industry, which may result in more formidable competitors; and |
• | our reputation and brand strength relative to our competitors. |
• | the integration of new operations and the retention of customers and personnel; |
• | significant volatility in our operating profit (loss) due to changes in the fair value of our contingent purchase consideration payable; |
• | unforeseen or hidden liabilities, including those associated with different business practices; |
• | the diversion of management’s attention and resources from our existing business and technology by acquisition, transition and integration activities; |
• | failure to achieve synergies with our existing business and generate revenues as anticipated; |
• | failure of the newly acquired businesses, technologies, services and products to perform as anticipated; |
• | inability to generate sufficient revenues to offset additional costs and expenses; |
• | breach or termination of key agreements by the counterparties; |
• | the costs of acquisitions; |
• | international operations conducted by some of our subsidiaries; |
• | any different interpretations on contingent purchase consideration; or |
• | the potential loss of, or harm to, relationships with both our employees and customers resulting from our integration of new businesses. |
• | our financial condition, results of operations and cash flows; |
• | general market conditions for financing activities by internet companies; and |
• | economic, political and other conditions in the PRC and elsewhere. |
• | revoking the business licenses and/or operating licenses of such entities; |
• | imposing fines on us; |
• | confiscating any of our income that they deem to be obtained through illegal operations; |
• | discontinuing or placing restrictions or onerous conditions on our operations; |
• | placing restrictions on our right to collect revenues; |
• | shutting down our servers or blocking our app/websites; |
• | requiring us to restructure the operations in such a way as to compel us to establish a new enterprise, re-apply for the necessary licenses or relocate our businesses, staff and assets; |
• | imposing additional conditions or requirements with which we may not be able to comply; or |
• | taking other regulatory or enforcement actions against us that could be harmful to our business. |
• | variations in our revenues, earnings, cash flow and data related to our user base or user engagement; |
• | announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors; |
• | announcements of new product and service offerings, solutions and expansions by us or our competitors; |
• | changes in financial estimates by securities analysts; |
• | detrimental adverse publicity about us, our products and services or our industry; |
• | additions or departures of key personnel; |
• | releases at any time, in some cases without notice, of lock-up or other transfer restrictions on our outstanding ordinary shares, ADSs or other equity related securities; |
• | sales of additional ADSs or other equity-related securities in the public markets, or issuance of ADSs upon conversion of convertible senior notes issued by us, or the perception of these events; and |
• | actual or potential litigation or regulatory investigations. |
• | the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q; |
• | or current reports on Form 8-K with the SEC; |
• | the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; |
• | the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and |
• | the selective disclosure rules by issuers of material nonpublic information under Regulation FD. |
A. |
History and Development of the Company |
B. |
Business Overview |
Name |
Initial Launch Date |
Region |
Genre | |||
Fate/Grand Order | September 2016 |
China | ACG-related game | |||
Azur Lane | May 2017 |
China | ACG-related game | |||
Princess Connect! Re: Dive | April 2020 | China | ACG-related game |
C. |
Organizational Structure |
(1) | Mr. Rui Chen holds 100% equity interests in Shanghai Kuanyu. He is also the chairman of our board of directors and our chief executive officer. |
(2) | Shanghai Kuanyu has 4 subsidiaries. |
(3) | Mr. Rui Chen, Mr. Yi Xu and Ms. Ni Li hold 52.3%, 44.3%, and 3.4% equity interests in Hode Information Technology, respectively, as of the date of this annual report. Mr. Chen is our controlling shareholder, the chairman of our board of directors and our chief executive officer. Mr. Xu is our founder, director and president. Ms. Li is the vice chairwoman of our board of directors and chief operating officer. |
(4) | Hode Information Technology has 34 subsidiaries. |
• | research and development on relevant technologies required for Shanghai Kuanyu’s business; |
• | technical application and implementation in relation to Shanghai Kuanyu’s business operations; |
• | technical services including advertising design solutions, software design, page production, and management consulting advice in relation to Shanghai Kuanyu’s advertising business operations; |
• | daily maintenance, monitoring, debugging and troubleshooting of computer network equipment; |
• | consultancy services for the procurement of relevant equipment and software and hardware systems required by Shanghai Kuanyu to carry out its network operations; |
• | providing appropriate training and technical support and assistance to Shanghai Kuanyu’s employees; |
• | giving advice and solutions to technical questions raised by Shanghai Kuanyu; and |
• | other relevant services requested by Shanghai Kuanyu from time to time to the extent permitted under PRC laws and regulations. |
1. | the sale, transfer, mortgage or otherwise dispose of any assets (except for those of value less than RMB 1 million in the ordinary course of business of the consolidated affiliated entities), business, management right or beneficial interest of income or create any security interest on any assets, including but not limited to any mortgage, pledge, share options or other guarantee arrangements; |
2. | the provision of any guarantee or any fees to third parties or the occurrence of any indebtedness (except for those reasonable costs incurred in the ordinary course of business); |
3. | the entering into of any material contracts (except for those where contract amount is less than RMB1 million and those which are entered into within the ordinary course of business of the consolidated affiliated entities between Shanghai Kuanyu and Hode Shanghai and its related parties); |
4. | any merger, acquisition, restructuring or liquidation; and |
5. | cause any conflict of interest between Shanghai Kuanyu and Hode Shanghai as well as its shareholders. |
1. | Shanghai Kuanyu shall not in any manner supplement, change or alter its constitutional documents or increase or decrease its registered capital or change the structure of its registered capital in other manner; |
2. | Shanghai Kuanyu shall prudently and effectively operate its business and transactions in accordance with the good financial and business standards; |
3. | Shanghai Kuanyu shall not sell, transfer, mortgage or otherwise dispose of any assets, business, legal or beneficial interest of its income or allow any guarantee or security to be created on its assets except for those of value less than RMB 1 million required for normal business operations; |
4. | Shanghai Kuanyu shall not incur, inherit, guarantee or allow any indebtedness other than those having been disclosed to and consented by Hode Shanghai in writing or those made during the ordinary course of its business; |
5. | Shanghai Kuanyu shall not enter into any material contracts with an amount more than RMB1 million without Hode Shanghai’s prior written consent, except the contracts executed in the ordinary course of business or contracts entered between Shanghai Kuanyu and our Company (or any of our subsidiaries); |
6. | Shanghai Kuanyu shall operate its business in order to maintain its asset value or not allow any acts or omission which adversely affects its business or assets value; |
7. | Shanghai Kuanyu shall immediately inform Hode Shanghai if its assets or business involved in any disputes, litigations, arbitrations or administrative proceedings; |
8. | Shanghai Kuanyu shall not distribute any dividend to its shareholder without Hode Shanghai’s written consent. To the extent permitted under the relevant PRC laws and regulations, Mr. Rui Chen shall inform and transfer all distributable receivable by him to Hode Shanghai as soon as possible after receiving such interests; |
9. | Shanghai Kuanyu and its affiliates shall provide its operation and financial information to Hode Shanghai or its designated person upon Hode Shanghai’s request; |
10. | Shanghai Kuanyu shall not separate, or merge, or enter into joint operation agreements with other entities, or acquire or be acquired by other entities, or invest in any entities without Hode Shanghai’s written consent; |
11. | Shanghai Kuanyu shall sign all necessary and appropriate documents, take all necessary and proper acts, bring up all necessary and proper requests, or raise necessary and proper defenses against claims to maintain Shanghai Kuanyu and its affiliates’ ownership for all the assets; |
12. | if Mr. Rui Chen or Shanghai Kuanyu fails to perform the tax obligations under applicable laws and results in obstacles for Hode Shanghai to exercise its exclusive option right, Shanghai Kuanyu or Mr. Rui Chen shall pay the taxes or pay the same amount to Hode Shanghai so Hode Shanghai may pay the taxes instead; and |
13. | Shanghai Kuanyu shall take all necessary and proper acts to ensure that all government permits, licenses, authorizations, and approvals required by Shanghai Kuanyu and its affiliates to conduct their businesses are valid and make all necessary changes as required by the relevant PRC laws and regulations. |
D. |
Property, Plant and Equipment |
A. |
Operating Results |
For the Three Months Ended |
||||||||||||||||||||||||||||||||
March 31, 2019 |
June 30, 2019 |
September 30, 2019 |
December 31, 2019 |
March 31, 2020 |
June 30, 2020 |
September 30, 2020 |
December 31, 2020 |
|||||||||||||||||||||||||
(In millions) |
||||||||||||||||||||||||||||||||
Average MAU (1) |
101.3 | 110.4 | 127.9 | 130.3 | 172.4 | 171.6 | 197.2 | 202.0 |
(1) | Our MAU include mobile apps MAU and PC MAU after eliminating duplicates. |
For the Three Months Ended |
||||||||||||||||||||||||||||||||
March 31, 2019 |
June 30, 2019 |
September 30, 2019 |
December 31, 2019 |
March 31, 2020 |
June 30, 2020 |
September 30, 2020 |
December 31, 2020 |
|||||||||||||||||||||||||
(In millions) |
||||||||||||||||||||||||||||||||
Average MAU |
101.3 | 110.4 | 127.9 | 130.3 | 172.4 | 171.6 | 197.2 | 202.0 | ||||||||||||||||||||||||
Average monthly paying users |
5.7 | 6.3 | 7.9 | 8.8 | 13.4 | 12.9 | 15.0 | 17.9 | ||||||||||||||||||||||||
(In RMB) |
||||||||||||||||||||||||||||||||
Average monthly revenue per paying user |
67.6 | 66.4 | 58.1 | 54.5 | 48.3 | 53.8 | 50.1 | 44.2 |
For the Year Ended December 31, |
||||||||||||||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Net revenues: |
||||||||||||||||||||||||||||
Mobile games |
2,936,331 | 71.1 | % | 3,597,809 | 53.1 | % | 4,803,382 | 736,151 | 40.0 | % | ||||||||||||||||||
Value-added services |
585,643 | 14.2 | % | 1,641,043 | 24.2 | % | 3,845,663 | 589,374 | 32.0 | % | ||||||||||||||||||
Advertising |
463,490 | 11.2 | % | 817,016 | 12.1 | % | 1,842,772 | 282,417 | 15.4 | % | ||||||||||||||||||
E-commerce and others |
143,467 | 3.5 | % | 722,054 | 10.6 | % | 1,507,159 | 230,982 | 12.6 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total net revenues |
4,128,931 |
100.0 |
% |
6,777,922 |
100.0 |
% |
11,998,976 |
1,838,924 |
100.0 |
% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31, |
||||||||||||||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Cost of revenues: |
||||||||||||||||||||||||||||
Revenue-sharing costs |
1,630,881 | 49.8 | % | 2,494,416 | 44.6 | % | 4,366,490 | 669,194 | 47.7 | % | ||||||||||||||||||
Content costs |
543,009 | 16.6 | % | 1,001,600 | 17.9 | % | 1,875,546 | 287,440 | 20.5 | % | ||||||||||||||||||
Server and bandwidth costs |
618,737 | 18.9 | % | 919,753 | 16.5 | % | 1,141,257 | 174,905 | 12.5 | % | ||||||||||||||||||
E-commerce and others |
480,866 | 14.7 | % | 1,171,904 | 21.0 | % | 1,775,507 | 272,109 | 19.3 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total cost of revenues |
3,273,493 |
100 |
% |
5,587,673 |
100 |
% |
9,158,800 |
1,403,648 |
100 |
% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31, |
||||||||||||||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||||||
Sales and marketing expenses |
585,758 | 37.0 | % | 1,198,516 | 44.6 | % | 3,492,091 | 535,186 | 58.4 | % | ||||||||||||||||||
General and administrative expenses |
461,165 | 29.1 | % | 592,497 | 22.1 | % | 976,082 | 149,592 | 16.3 | % | ||||||||||||||||||
Research and development expenses |
537,488 | 33.9 | % | 894,411 | 33.3 | % | 1,512,966 | 231,872 | 25.3 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total operating expenses |
1,584,411 |
100 |
% |
2,685,424 |
100 |
% |
5,981,139 |
916,650 |
100 |
% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31, |
||||||||||||||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Sales and marketing expenses: |
||||||||||||||||||||||||||||
Marketing and promotional expenses |
436,487 | 74.5 | % | 934,701 | 78.0 | % | 3,005,965 | 460,684 | 86.1 | % | ||||||||||||||||||
Staff costs |
131,183 | 22.4 | % | 204,770 | 17.1 | % | 400,910 | 61,442 | 11.5 | % | ||||||||||||||||||
Others |
18,088 | 3.1 | % | 59,045 | 4.9 | % | 85,216 | 13,060 | 2.4 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total sales and marketing expenses |
585,758 |
100.0 |
% |
1,198,516 |
100.0 |
% |
3,492,091 |
535,186 |
100 |
% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31, |
||||||||||||||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Net revenues |
4,128,931 | 100.0 | % | 6,777,922 | 100.0 | % | 11,998,976 | 1,838,924 | 100.0 | % | ||||||||||||||||||
Cost of revenues (1) |
(3,273,493 | ) | (79.3 | )% | (5,587,673 | ) | (82.4 | )% | (9,158,800 | ) | (1,403,648 | ) | (76.3 | %) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Gross profit |
855,438 |
20.7 |
% |
1,190,249 |
17.6 |
% |
2,840,176 |
435,276 |
23.7 |
% | ||||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||||||
Sales and marketing expenses (1) |
(585,758 | ) | (14.2 | )% | (1,198,516 | ) | (17.7 | )% | (3,492,091 | ) | (535,186 | ) | (29.1 | )% | ||||||||||||||
General and administrative expenses (1) |
(461,165 | ) | (11.2 | )% | (592,497 | ) | (8.7 | )% | (976,082 | ) | (149,592 | ) | (8.1 | )% | ||||||||||||||
Research and development expenses (1) |
(537,488 | ) | (13.0 | )% | (894,411 | ) | (13.2 | )% | (1,512,966 | ) | (231,872 | ) | (12.6 | )% | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total operating expenses |
(1,584,411 |
) |
(38.4 |
)% |
(2,685,424 |
) |
(39.6 |
)% |
(5,981,139 |
) |
(916,650 |
) |
(49.8 |
)% | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Loss from operations |
(728,973 |
) |
(17.7 |
)% |
(1,495,175 |
) |
(22.0 |
)% |
(3,140,963 |
) |
(481,374 |
) |
(26.1 |
)% | ||||||||||||||
Other income/(expenses): |
||||||||||||||||||||||||||||
Investment income, net (including impairments) |
96,440 | 2.3 | % | 96,610 | 1.4 | % | 28,203 | 4,322 | 0.2 | % | ||||||||||||||||||
Interest income |
68,706 | 1.7 | % | 162,782 | 2.4 | % | 83,301 | 12,766 | 0.7 | % | ||||||||||||||||||
Interest expense |
— | — | (46,543 | ) | (0.7 | )% | (108,547 | ) | (16,636 | ) | (0.9 | %) | ||||||||||||||||
Exchange (losses)/gains |
(1,661 | ) | 0.0 | % | (11,789 | ) | (0.2 | )% | 41,717 | 6,393 | 0.3 | % | ||||||||||||||||
Others, net |
26,455 | 0.6 | % | 26,412 | 0.4 | % | 95,641 | 14,660 | 0.8 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Loss before tax |
(539,033 |
) |
(13.1 |
)% |
(1,267,703 |
) |
(18.7 |
)% |
(3,000,648 |
) |
(459,869 |
) |
(25.0 |
%) | ||||||||||||||
Income tax |
(25,988 | ) | (0.6 | )% | (35,867 | ) | (0.5 | )% | (53,369 | ) | (8,180 | ) | (0.4 | %) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net loss |
(565,021 |
) |
(13.7 |
)% |
(1,303,570 |
) |
(19.2 |
)% |
(3,054,017 |
) |
(468,049 |
) |
(25.4 |
%) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Share-based compensation expenses were allocated as follows: |
For the Year Ended December 31, |
||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Cost of revenues |
28,173 | 23,281 | 37,087 | 5,684 | ||||||||||||
Sales and marketing expenses |
11,499 | 14,269 | 40,808 | 6,254 | ||||||||||||
General and administrative expenses |
102,544 | 68,497 | 181,753 | 27,855 | ||||||||||||
Research and development expenses |
38,977 | 66,503 | 126,250 | 19,349 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
181,193 |
172,550 |
385,898 |
59,142 |
||||||||||||
|
|
|
|
|
|
|
|
For the Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
(in millions, except as otherwise indicated) |
||||||||||||
Average MAU |
87.0 | 117.5 | 185.8 | |||||||||
Average monthly paying user |
3.4 | 7.2 | 14.8 | |||||||||
Paying ratio % (Average monthly paying user / MAU) |
3.9 | % | 6.1 | % | 8.0 | % | ||||||
Average monthly paying user for mobile games |
0.9 | 1.2 | 1.8 | |||||||||
Average monthly paying user for VAS (1) |
2.5 | 6.0 | 13.0 | |||||||||
Daily time spending per active user (minutes) |
over 75 minutes | over 80 minutes | over 80 minutes |
(1) | Average monthly paying user for VAS excludes the duplicative average monthly paying user for mobile games. |
For the Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
RMB |
RMB |
RMB |
||||||||||
Average monthly revenue per MAU (1) |
4.0 | 4.8 | 5.4 | |||||||||
Average monthly revenue per paying user (2) |
87.6 | 60.7 | 48.7 | |||||||||
Average monthly revenue per paying user for mobile games |
284.5 | 254.6 | 223.6 | |||||||||
Average monthly revenue per paying user for VAS |
19.6 | 22.7 | 24.6 |
(1) | Numerator is the total net revenues. |
(2) | Numerator includes only revenues from mobile games and VAS. |
• | Exclusively distributed mobile games |
• | Jointly operated mobile game distribution services |
• | Sales incentives to customers |
As of December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
RMB |
RMB |
RMB |
||||||||||
(in thousands) |
||||||||||||
Financial products |
858,021 | 1,070,113 | 2,866,643 | |||||||||
Investments in publicly traded companies |
— | 80,918 | 434,609 | |||||||||
Money market funds |
87,317 | 109,779 | 55,937 | |||||||||
|
|
|
|
|
|
|||||||
Total |
945,338 |
1,260,810 |
3,357,189 |
|||||||||
|
|
|
|
|
|
As of December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
RMB |
RMB |
RMB |
||||||||||
(in thousands) |
||||||||||||
Equity investments accounted for using the measurement alternative |
793,149 | 666,025 | 1,791,393 | |||||||||
Equity investments accounted for using the equity method |
— | 279,854 | 188,199 | |||||||||
Investments accounted for at fair value |
186,838 | 305,250 | 253,346 | |||||||||
|
|
|
|
|
|
|||||||
Total |
979,987 |
1,251,129 |
2,232,938 |
|||||||||
|
|
|
|
|
|
• | Equity investments accounted for using the measurement alternative |
• | Equity investments accounted for using the equity method |
• | Investments accounted for at fair value |
B. |
Liquidity and Capital Resources |
For the Year Ended December 31, |
||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Selected Consolidated Cash Flows Data: |
||||||||||||||||
Net cash provided by operating activities |
737,286 | 194,551 | 753,103 | 115,418 | ||||||||||||
Net cash used in investing activities |
(3,196,394 | ) | (3,958,277 | ) | (8,906,821 | ) | (1,365,029 | ) | ||||||||
Net cash provided by financing activities |
4,974,810 | 5,078,842 | 8,335,419 | 1,277,458 | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents held in foreign currencies |
261,447 | 107,513 | (466,252 | ) | (71,456 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net increase in cash and cash equivalents |
2,777,149 | 1,422,629 | (284,551 | ) | (43,609 | ) | ||||||||||
Cash and cash equivalents at beginning of the year |
762,882 | 3,540,031 | 4,962,660 | 760,561 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents at end of the year |
3,540,031 | 4,962,660 | 4,678,109 | 716,952 | ||||||||||||
|
|
|
|
|
|
|
|
C. |
Research and Development, Patents and Licenses, Etc. |
D. |
Trend Information |
E. |
Off-balance Sheet Arrangements |
F. |
Tabular Disclosure of Contractual Obligations |
Payment due by December 31, |
||||||||||||||||||||||||
Total |
2021 |
2022 |
2023 |
2024 |
After |
|||||||||||||||||||
(in RMB thousands) |
||||||||||||||||||||||||
Operating lease commitments (1) |
496,433 | 156,869 | 171,923 | 106,253 | 43,575 | 17,813 | ||||||||||||||||||
Long-term debt obligations (2) |
9,151,355 | 110,108 | 110,108 | 110,108 | 110,108 | 8,710,923 | ||||||||||||||||||
Purchase obligation (3) |
622,500 | 377,500 | 200,000 | 45,000 | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
10,270,288 | 644,477 | 482,031 | 261,361 | 153,683 | 8,728,736 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Operating lease commitments consist of the commitments under the lease agreements for our office premises. |
(2) | Long-term debt obligations consist of the principal amount and cash interests in connection with the 2026 Notes and 2027 Notes. |
(3) | Purchase obligation consists of the commitment under the contract signed in September 2020 to purchase the three-year license for live broadcasting the League of Legends World Championship in China starting from 2020 at an aggregate purchase price of RMB800 million (US$122.6 million). The unpaid purchase price was RMB622.5 million (US$95.4 million) as of December 31, 2020. |
G. |
Safe Harbor |
ITEM |
6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
A. |
Directors and Senior Management |
Directors and Executive Officers |
Age |
Position/Title | ||
Rui Chen | 43 | Chairman of the Board of Directors and Chief Executive Officer | ||
Yi Xu | 31 | Founder, Director and President | ||
Ni Li | 35 | Vice Chairwoman of the Board of Directors and Chief Operating Officer | ||
JP Gan | 49 | Independent Director | ||
Eric He | 60 | Independent Director | ||
Feng Li | 47 | Independent Director | ||
Guoqi Ding | 51 | Independent Director | ||
Xin Fan | 41 | Chief Financial Officer |
B. |
Compensation |
Name |
Ordinary Shares Underlying Options Awarded |
Exercise Price (US$/Share) |
Date of Grant |
Date of Expiration | ||||
Rui Chen |
* * |
From nominal to US$20.26 | March 2020 November 2020 |
March 2027 November 2027 | ||||
Yi Xu |
— | |||||||
Ni Li |
* | Nominal | November 2020 | November 2027 | ||||
Xin Fan |
* | From nominal to US$20.26 | Various dates from April 2016 to March 2020 | Various dates from April 2022 to March 2027 | ||||
Other grantees |
14,240,166 | From nominal to US$20.26 | Various dates from July 2014 to December 2020 |
Various dates from July 2020 to December 2027 | ||||
|
||||||||
Total |
22,265,166 | |||||||
|
* | Less than 1% of our total outstanding shares. |
C. |
Board Practices |
• | appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; |
• | reviewing with the independent auditors any audit problems or difficulties and management’s response; |
• | discussing the annual audited financial statements with management and the independent auditors; |
• | reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; |
• | reviewing and approving all proposed related party transactions; |
• | meeting separately and periodically with management and the independent auditors; and |
• | monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. |
• | reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; |
• | reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; |
• | reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and |
• | selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management. |
• | selecting and recommending to the board nominees for election by the shareholders or appointment by the board; |
• | reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; |
• | making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and |
• | advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken. |
• | convening shareholders’ annual general meetings and reporting its work to shareholders at such meetings; |
• | declaring dividends and distributions; |
• | appointing officers and determining the term of office of the officers; |
• | exercising the borrowing powers of our company and mortgaging the property of our company; and |
• | approving the transfer of shares in our company, including the registration of such shares in our share register. |
D. |
Employees |
As of December 31, 2020 |
||||
Function: |
||||
Platform operations |
641 | |||
Products and technology |
3,898 | |||
Content operations |
1,186 | |||
Content audit |
2,413 | |||
Management, sales, finance and administration |
508 | |||
|
|
|||
Total | 8,646 | |||
|
|
E. |
Share Ownership |
• | each of our directors and executive officers; and |
• | each person known to us to own beneficially more than 5% of our ordinary shares. |
Ordinary Shares Beneficially Owned |
||||||||||||||||||||
Class Y Ordinary Shares |
Class Z Ordinary Shares |
Total Ordinary Shares |
% of Beneficial Ownership |
% of Aggregate Voting Power† |
||||||||||||||||
Directors and Executive Officers**: |
||||||||||||||||||||
Rui Chen (1) |
49,299,006 | 629,745 | 49,928,751 | 14.2 | % | 44.6 | % | |||||||||||||
Yi Xu (2) |
27,216,108 | 1,096,100 | 28,312,208 | 8.0 | % | 24.7 | % | |||||||||||||
Ni Li (3) |
7,200,000 | 908,300 | 8,108,300 | 2.3 | % | 6.6 | % | |||||||||||||
JP Gan (4) |
— | * | * | * | * | |||||||||||||||
Eric He (5) |
— | * | * | * | * | |||||||||||||||
Feng Li (6) |
— | — | — | — | — | |||||||||||||||
Guoqi Ding (7) |
— | — | — | — | — | |||||||||||||||
Xin Fan |
— | * | * | * | * | |||||||||||||||
All Directors and Executive Officers as a Group |
83,715,114 | 3,601,345 | 87,316,459 | 24.8 | % | 76.0 | % | |||||||||||||
Principal Shareholders: |
||||||||||||||||||||
Entities affiliated with Rui Chen (8) |
49,299,006 | 629,745 | 49,928,751 | 14.2 | % | 44.6 | % | |||||||||||||
Tencent entities (9) |
— | 43,749,518 | 43,749,518 | 12.4 | % | 4.0 | % | |||||||||||||
Entity affiliated with Yi Xu (10) |
27,216,108 | 1,051,100 | 28,267,208 | 8.0 | % | 24.7 | % | |||||||||||||
Taobao China Holding Limited (11) |
— | 23,645,657 | 23,645,657 | 6.7 | % | 2.1 | % |
† | For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class Y and Class Z ordinary shares as a single class. Each holder of Class Z ordinary shares is entitled to one vote per share and each holder of our Class Y ordinary shares is entitled to ten votes per share on all matters submitted to them for a vote. Our Class Y ordinary shares and Class Z ordinary shares vote together as a single class on all matters submitted to a vote of our shareholders, except as may otherwise be required by law. Our Class Y ordinary shares are convertible at any time by the holder thereof into Class Z ordinary shares on a one-for-one |
* | Less than 1% of our total outstanding shares. |
** | Except as otherwise indicated below, the business address of our directors and executive officers is c/o Shanghai Hode Information Technology Co., Ltd., Building 3, Guozheng Center, No. 485 Zhengli Road, Yangpu District, Shanghai, People’s Republic of China. |
(1) | Represents (i) 49,299,006 Class Y ordinary shares and 495,800 Class Z ordinary shares directly held by Vanship Limited, a business company limited by shares incorporated in British Virgin Islands, and (ii) 133,945 Class Z ordinary shares directly held by Windforce Limited, a business company limited by shares incorporated in British Virgin Islands. Vanship Limited is controlled by The Le Petit Prince Trust, a trust established under the laws of Cayman Islands and managed by TMF (Cayman) Ltd. as the trustee. Mr. Chen is the settlor of The Le Petit Prince Trust, and Mr. Chen and his family members are the trust’s beneficiaries. Under the terms of this trust, Mr. Chen has the power to direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to, the shares held by Vanship Limited in our company, and, except for Mr. Chen, the other beneficiaries of the trust have no voting rights attached to such shares. There are certain limited circumstances in which the trustee would not be required to comply with such a direction (for example, where a direction may make the trustee subject to criminal sanction or civil liability or where a direction involves a transaction which might have an adverse impact on the reputation of the trustee). The above position would also not apply if Mr. Chen is incapacitated, has released his authority or nominated another person to have such authority in his place. Windforce Limited is controlled by Mr. Chen. |
(2) | Represents (i) 27,216,108 Class Y ordinary shares, 151,100 Class Z ordinary shares and 900,000 Class Z ordinary shares in the form of ADSs directly held by Kami Sama Limited, a business company limited by shares incorporated in British Virgin Islands, and (ii) 45,000 Class Z ordinary shares in the form of ADSs held by Mr. Xu. Kami Sama Limited is controlled by The Homur Trust, a trust established under the laws of Cayman Islands and managed by TMF (Cayman) Ltd. as the trustee. Mr. Yi Xu is the settlor of The Homur Trust, and Mr. Xu and his family members are the trust’s beneficiaries. Under the terms of this trust, Mr. Xu has the power to direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to, the shares held by Kami Sama Limited in our company, and, except for Mr. Xu, the other beneficiaries of the trust have no voting rights attached to such shares. There are certain limited circumstances in which the trustee would not be required to comply with such a direction (for example, where a direction may make the trustee subject to criminal sanction or civil liability or where a direction involves a transaction which might have an adverse impact on the reputation of the trustee). The above position would also not apply if Mr. Xu is incapacitated, has released his authority or nominated another person to have such authority in his place. |
(3) | Represents 7,200,000 Class Y ordinary shares and 908,300 Class Z ordinary shares directly held by Saber Lily Limited, a business company limited by shares incorporated in British Virgin Islands. Saber Lily Limited is controlled by The Fortuna Trust, a trust established under the laws of Cayman Islands and managed by TMF (Cayman) Ltd. as the trustee. Ms. Li is the settlor of The Fortuna Trust, and Ms. Li and her family members are the trust’s beneficiaries. Under the terms of this trust, Ms. Li has the power to direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to, the shares held by Saber Lily Limited in our company, and, except for Ms. Li, the other beneficiaries of the trust have no voting rights attached to such shares. There are certain limited circumstances in which the trustee would not be required to comply with such a direction (for example, where a direction may make the trustee subject to criminal sanction or civil liability or where a direction involves a transaction which might have an adverse impact on the reputation of the trustee). The above position would also not apply if Ms. Li is incapacitated, has released her authority or nominated another person to have such authority in her place. |
(4) | The business address of Mr. JP Gan is Suite 909, Bank of America Tower, 12 Harcourt Road, Central, Hong Kong. |
(5) | The business address of Mr. Eric He is 2F-1, No. 495, Guangfu S. Road, Xinyi District, Taipei City 110007, Taiwan. |
(6) | The business address of Mr. Feng Li is Room 701, Tower 1, Liangmaqiao Diplomatic Office Building, No 19 Dongfangdong Road, Chaoyang District, Beijing, People’s Republic of China. |
(7) | The business address of Mr. Guoqi Ding is 1500 Changyi Road, Building 1, Room 902, Pudong New Area, Shanghai, People’s Republic of China. |
(8) | Represents (i) 49,299,006 Class Y ordinary shares and 495,800 Class Z ordinary shares directly held by Vanship Limited, a business company limited by shares incorporated in British Virgin Islands, and (ii) 133,945 Class Z ordinary shares directly held by Windforce Limited, a business company limited by shares incorporated in British Virgin Islands. Vanship Limited is controlled by The Le Petit Prince Trust, a trust established under the laws of Cayman Islands and managed by TMF (Cayman) Ltd. as the trustee. Mr. Chen is the settlor of The Le Petit Prince Trust, and Mr. Chen and his family members are the trust’s beneficiaries. Under the terms of this trust, Mr. Chen has the power to direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to, the shares held by Vanship Limited in our company, and, except for Mr. Chen, the other beneficiaries of the trust have no voting rights attached to such shares. There are certain limited circumstances in which the trustee would not be required to comply with such a direction (for example, where a direction may make the trustee subject to criminal sanction or civil liability or where a direction involves a transaction which might have an adverse impact on the reputation of the trustee). The above position would also not apply if Mr. Chen is incapacitated, has released his authority or nominated another person to have such authority in his place. Windforce Limited is controlled by Mr. Chen. |
(9) | Represents (i) 10,954,357 Class Z ordinary shares directly held by OPH B Limited, a company limited by shares incorporated in British Virgin Islands, and (ii) 32,795,161 Class Z ordinary shares directly held by Tencent Mobility Limited, a limited company incorporated in Hong Kong, based on the Schedule 13G/A filed on February 10, 2020. OPH B Limited and Tencent Mobility Limited are investing entities ultimately controlled by Tencent Holdings Limited, and are collectively referred to as Tencent entities. The registered address of OPH B Limited is P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands. The registered address of Tencent Mobility Limited is 27/F, Three Pacific Place, No.1 Queen’s Road East, Wanchai, Hong Kong. |
(10) | Represents 27,216,108 Class Y ordinary shares, 151,100 Class Z ordinary shares and 900,000 Class Z ordinary shares in the form of ADSs directly held by Kami Sama Limited, a business company limited by shares incorporated in British Virgin Islands. The registered address of Kami Sama Limited is Start Chambers, Wickham’s Cay II., P.O. Box 2221, Road Town, Tortola, British Virgin Islands. |
(11) | Represents 13,645,657 Class Z ordinary shares and 10,000,000 Class Z ordinary shares in the form of ADSs directly held by Taobao China Holding Limited, a business company limited by shares incorporated in Hong Kong, based on the Schedule 13G filed on February 14, 2019. Taobao China Holding Limited is a wholly-owned subsidiary of Taobao Holding Limited, a business company limited by shares incorporated in Cayman Islands, which is a wholly-owned subsidiary of Alibaba Group Holding Limited, a business company limited by shares incorporated in Cayman Islands. The principal business address of Alibaba Group Holding Limited, Taobao Holding Limited and Taobao China Holding Limited is c/o Alibaba Group Services Limited, 26/F Tower One, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong. |
A. |
Major Shareholders |
B. |
Related Party Transactions |
C. |
Interests of Experts and Counsel |
A. |
Consolidated Statements and Other Financial Information |
B. |
Significant Changes |
A. |
Offering and Listing Details |
B. |
Plan of Distribution |
C. |
Markets |
D. |
Selling Shareholders |
E. |
Dilution |
F. |
Expenses of the Issue |
A. |
Share Capital |
B. |
Memorandum and Articles of Association |
• | the instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer; |
• | the instrument of transfer is in respect of only one class of ordinary shares; |
• | the instrument of transfer is properly stamped, if required; |
• | in the case of a transfer to joint holders, the number of joint holders to whom the ordinary share is to be transferred does not exceed four; and |
• | a fee of such maximum sum as the Nasdaq Stock Market may determine to be payable or such lesser sum as our directors may from time to time require is paid to us in respect thereof. |
• | the designation of the series; |
• | the number of shares of the series; |
• | the dividend rights, dividend rates, conversion rights, voting rights; and |
• | the rights and terms of redemption and liquidation preferences. |
• | authorize our board of directors to issue preference shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preference shares without any further vote or action by our shareholders; and |
• | limit the ability of shareholders to requisition and convene general meetings of shareholders. |
• | does not have to file an annual return of its shareholders with the Registrar of Companies; |
• | is not required to open its register of members for inspection; |
• | does not have to hold an annual general meeting; |
• | may issue shares with no par value; |
• | may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance); |
• | may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands; |
• | may register as an exempted limited duration company; and |
• | may register as a segregated portfolio company. |
C. |
Material Contracts |
D. |
Exchange Controls |
E. |
Taxation |
• | that no law which is hereafter enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply to our company or its operations; and |
• | in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax shall be payable: |
• | on or in respect of the shares, debentures or other obligations of our company; or |
• | by way of the withholding, in whole or part, of any relevant payment as defined in Section 6(3) of the Tax Concessions Act (as amended). |
• | the excess distribution or gain will be allocated ratably over the U.S. Holder’s holding period for the ADSs or ordinary shares; |
• | the amount allocated to the current taxable year and any taxable years in the U.S. Holder’s holding period prior to the first taxable year in which we are classified as a PFIC (each, a “pre-PFIC year”), will be taxable as ordinary income; |
• | the amount allocated to each prior taxable year, other than a pre-PFIC year, will be subject to tax at the highest tax rate in effect for individuals or corporations, as appropriate, for that year; and |
• | the interest charge generally applicable to underpayments of tax will be imposed on the tax attributable to each prior taxable year, other than a pre-PFIC year. |
F. |
Dividends and Paying Agents |
G. |
Statement by Experts |
H. |
Documents on Display |
I. |
Subsidiary Information |
A. |
Debt Securities |
B. |
Warrants and Rights |
C. |
Other Securities |
D. |
American Depositary Shares |
Service |
Fees | |
To any person to which ADSs are issued or to any person to which a distribution is made in respect of ADS distributions pursuant to stock dividends or other free distributions of stock, bonus distributions, stock splits or other distributions (except where converted to cash) | Up to US$0.05 per ADS issued | |
Cancellation of ADSs, including the case of termination of the deposit agreement | Up to US$0.05 per ADS cancelled | |
Distribution of cash dividends | Up to US$0.05 per ADS held | |
Distribution of cash entitlements (other than cash dividends) and/or cash proceeds from the sale of rights, securities and other entitlements | Up to US$0.05 per ADS held | |
Distribution of ADSs pursuant to exercise of rights | Up to US$0.05 per ADS held | |
Distribution of securities other than ADSs or rights to purchase additional ADSs | Up to US$0.05 per ADS held | |
Depositary services | Up to US$0.05 per ADS held on the applicable record date(s) established by the depositary bank |
• | Fees for the transfer and registration of Class Z ordinary shares charged by the registrar and transfer agent for the Class Z ordinary shares in the Cayman Islands (i.e., upon deposit and withdrawal of Class Z ordinary shares). |
• | Expenses incurred for converting foreign currency into U.S. dollars. |
• | Expenses for cable, telex and fax transmissions and for delivery of securities. |
• | Taxes and duties upon the transfer of securities, including any applicable stamp duties, any stock transfer charges or withholding taxes (i.e., when Class Z ordinary shares are deposited or withdrawn from deposit). |
• | Fees and expenses incurred in connection with the delivery or servicing of Class Z ordinary shares on deposit. |
• | Fees and expenses incurred in connection with complying with exchange control regulations and other regulatory requirements applicable to Class Z ordinary shares, deposited securities, ADSs and ADRs. |
• | Any applicable fees and penalties thereon. |
For the Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
(RMB in thousands) |
||||||||||||
Audit fees (1) |
7,450 | 9,128 | 9,128 | |||||||||
Audit-related fees (2) |
— | 3,650 | 1,500 | |||||||||
Tax fees (3) |
1,090 | 1,050 | 385 | |||||||||
Other fees (4) |
180 | 150 | 150 |
(1) | “Audit fees” means the aggregate fees incurred for each of the fiscal years listed for professional services rendered by our principal auditors for the audit or review of our annual financial statements or quarterly financial information and review of documents filed with the SEC. In 2018, the audit refers to financial statement audit and assurance services rendered in connection with our IPO in 2018. In 2019 and 2020, the audit refers to financial statement audit and audit pursuant to Section 404 of the Sarbanes-Oxley Act of 2002. |
(2) | “Audit-related fees” means the aggregate fees incurred for the issuance of comfort letters in connection with the offering of the 2026 Notes and concurrent offering of additional ADSs in April 2019, and permissible services to review and comment on the design of internal control over financial reporting rendered by our principal auditors in 2019. In 2020, the audit-related fees refer to the aggregate fees incurred for the issuance of comfort letters in connection with the offering of the 2027 Notes in May 2020. |
(3) | “Tax fees” means the aggregate fees incurred in each of the fiscal years listed for the professional tax services rendered by our principal auditors. |
(4) | “Other fees” means the aggregate fees incurred in each of the fiscal years listed for services rendered by our principal auditors other than services reported under “Audit fees,” “Audit-related fees” and “Tax fees.” |
* | Filed with this Annual Report on Form 20-F. |
** | Furnished with this Annual Report on Form 20-F. |
Bilibili Inc. | ||
By: | /s/ Rui Chen | |
Name: | Rui Chen | |
Title: | Chairman of the Board of Directors and Chief Executive Officer |
F-2 |
||||
F-4 |
||||
F-6 |
||||
F-7 |
||||
F-10 |
||||
F-12 |
December 31, 2018 |
December 31, 2019 |
December 31, 2020 |
December 31, 2020 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Note 2(e) |
||||||||||||||||
Assets |
||||||||||||||||
Current assets: |
||||||||||||||||
Cash and cash equivalents |
||||||||||||||||
Time deposits |
||||||||||||||||
Accounts receivable, net |
||||||||||||||||
Amount due from related parties |
— | |||||||||||||||
Prepayments and other current assets |
||||||||||||||||
Short-term investments |
||||||||||||||||
Total current assets |
||||||||||||||||
Non-current assets: |
||||||||||||||||
Property and equipment, net |
||||||||||||||||
Production cost, net |
||||||||||||||||
Intangible assets, net |
||||||||||||||||
Deferred tax assets |
— | |||||||||||||||
Goodwill |
||||||||||||||||
Long-term investments, net |
||||||||||||||||
Other long-term assets |
— | |||||||||||||||
Total non-current assets |
||||||||||||||||
Total assets |
||||||||||||||||
Liabilities |
||||||||||||||||
Current liabilities: |
||||||||||||||||
Accounts payable |
||||||||||||||||
Salary and welfare payable |
||||||||||||||||
Taxes payable |
||||||||||||||||
Short-term loans |
— | — | ||||||||||||||
Deferred revenue |
||||||||||||||||
Accrued liabilities and other payables |
||||||||||||||||
Amount due to related parties |
— | — | — | |||||||||||||
Total current liabilities |
||||||||||||||||
Non-current liabilities: |
||||||||||||||||
Long-term debt |
— | |||||||||||||||
Other long-term liabilities |
— | |||||||||||||||
Total non-current liabilities |
— |
|||||||||||||||
Total liabilities |
||||||||||||||||
Commitments and contingencies |
December 31, 2018 |
December 31, 2019 |
December 31, 2020 |
December 31, 2020 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Note 2(e) |
||||||||||||||||
Shareholders’ equity |
||||||||||||||||
Ordinary shares: |
||||||||||||||||
Class Y Ordinary Shares (US$ |
||||||||||||||||
Class Z Ordinary Shares (US$ |
||||||||||||||||
Additional paid-in capital |
||||||||||||||||
Statutory reserves |
||||||||||||||||
Accumulated other comprehensive income |
||||||||||||||||
Accumulated deficit |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Total Bilibili Inc.’s shareholders’ equity |
||||||||||||||||
Noncontrolling interests |
||||||||||||||||
Total shareholders’ equity |
||||||||||||||||
Total liabilities and shareholders’ equity |
||||||||||||||||
For the Year Ended December 31, |
||||||||||||||||
2018 |
2019 |
2020 |
2020 |
|||||||||||||
RMB |
RMB |
RMB |
US$ Note 2(e) |
|||||||||||||
Net revenues |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cost of revenues |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
||||||||||||||||
Operating expenses: |
||||||||||||||||
Sales and marketing expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
General and administrative expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Research and development expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from operations |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Other income: |
||||||||||||||||
Investment income, net (including impairments) |
||||||||||||||||
Interest income |
||||||||||||||||
Interest expense |
— | ( |
) | ( |
) | ( |
) | |||||||||
Exchange (losses)/gains |
( |
) | ( |
) | ||||||||||||
Others, net |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other income, net |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before tax |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Income tax |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Accretion to redeemable noncontrolling interests |
— | — | ( |
) | ( |
) | ||||||||||
Accretion to Pre-IPO Preferred Shares redemption value |
( |
) | — | — | — | |||||||||||
Net loss attributable to noncontrolling interests |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to the Bilibili Inc.’s shareholders |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income/(loss): Foreign currency translation adjustments |
( |
) | ( |
) | ||||||||||||
Total other comprehensive income/(loss) |
( |
) |
( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total comprehensive loss |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Accretion to redeemable noncontrolling interests |
— | — | ( |
) | ( |
) | ||||||||||
Accretion to Pre-IPO Preferred Shares redemption value |
( |
) | — | — | — | |||||||||||
Net loss attributable to noncontrolling interests |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive loss attributable to the Bilibili Inc.’s shareholders |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss per share, basic |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Net loss per share, diluted |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Net loss per ADS, basic |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Net loss per ADS, diluted |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Weighted average number of ordinary shares, basic |
||||||||||||||||
Weighted average number of ordinary shares, diluted |
||||||||||||||||
Weighted average number of ADS, basic |
||||||||||||||||
Weighted average number of ADS, diluted |
||||||||||||||||
Share-based compensation expenses included in Cost of revenues |
||||||||||||||||
Sales and marketing expenses |
||||||||||||||||
General and administrative expenses |
||||||||||||||||
Research and development expenses |
Ordinary shares |
Other permanent equities |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class Y Ordinary Shares |
Class Z Ordinary Shares |
Pre-IPO Class AOrdinary Shares |
Pre-IPO Class BOrdinary Shares |
Pre-IPO Class COrdinary Shares |
Pre-IPO Class DOrdinary Shares |
Additional paid-in capital |
Statutory reserves |
Accumulated other comprehensive income |
Accumulated deficit |
Noncontrolling interests |
Total shareholders’ (deficit)/equity |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2017 |
— |
— |
— |
— |
( |
) |
— |
( |
) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share issuance upon initial public offering and follow-on offering, net of issuance costs of US$ |
— | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redesignation of Pre-IPO Ordinary Shares into Class Y and Class Z Ordinary Shares upon initial public offering |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Redesignation of Pre-IPO Preferred Shares into Class Y and Class Z Ordinary Shares upon initial public offering |
— | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pre-IPO Preferred Shares redemption value accretion |
— | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital injection in subsidiaries by noncontrolling interests |
— | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions of subsidiaries |
— | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share issuance from exercise of share options |
— | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Appropriation to statutory reserves |
— | — | — | — | — | — | — | — | — | — | — | — | — | — | ( |
) | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments |
— | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
Balance at December 31, 2018 |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares |
||||||||||||||||||||||||||||||||||||||||
Class Y Ordinary Shares |
Class Z Ordinary Shares |
Additional paid-in capital |
Statutory reserves |
Accumulated other comprehensive income |
Accumulated deficit |
Noncontrolling interests |
Total shareholders’ equity |
|||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
|||||||||||||||||||||||||||||||||
Balance at December 31, 2018 |
( |
) |
||||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of ordinary shares, net of issuance costs of US$ |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Acquisition of a subsidiary |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Consolidation of an entity under common control (Note 24) |
— | — | — | — | ( |
) | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Purchase of noncontrolling interests |
— | — | — | — | ( |
) | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||
Share issuance from exercise of share options |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Deconsolidation of a subsidiary |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Appropriation to statutory reserves |
— | — | — | — | — | — | ( |
) | — | — | ||||||||||||||||||||||||||||||
Foreign currency translation adjustments |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance at December 31, 2019 |
( |
) |
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares |
||||||||||||||||||||||||||||||||||||||||
Class Y Ordinary Shares |
Class Z Ordinary Shares |
Additional paid-in capital |
Statutory reserves |
Accumulated other comprehensive income |
Accumulated deficit |
Noncontrolling interests |
Total shareholders’ equity |
|||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
|||||||||||||||||||||||||||||||||
Balance at December 31, 2019 |
( |
) |
||||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||
Impact of adoption of credit loss guidance |
— | — | — | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Share issuance from exercise of share options |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Issuance ordinary shares related to long-term investment |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of ordinary shares, net of issuance costs of US$ |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Shares redesignation |
( |
) | ( |
) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Accretion to redeemable noncontrolling interests |
— | — | — | — | ( |
) | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||
Capital injection in subsidiaries by noncontrolling interests |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Acquisition of subsidiaries |
— | — | — | — | — | |||||||||||||||||||||||||||||||||||
Purchase of noncontrolling interests |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||
Appropriation to statutory reserves |
— | — | — | — | — | — | ( |
) | — | — | ||||||||||||||||||||||||||||||
Foreign currency translation adjustment |
— | — | — | — | — | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance at December 31, 2020 |
( |
) |
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | Less than 1. |
For the Year Ended December 31, |
||||||||||||||||
2018 |
2019 |
2020 |
2020 |
|||||||||||||
RMB |
RMB |
RMB |
US$ Note 2(e) |
|||||||||||||
Cash flows from operating activities: |
||||||||||||||||
Net loss |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||||||||||
Depreciation of property and equipment |
||||||||||||||||
Amortization of intangible assets |
||||||||||||||||
Amortization of right-of-use |
— | |||||||||||||||
Amortization of debt issuance costs |
— | |||||||||||||||
Share-based compensation expenses |
||||||||||||||||
Allowance for doubtful accounts |
||||||||||||||||
Inventory provision |
— | |||||||||||||||
Deferred income taxes |
— | ( |
) | ( |
) | ( |
) | |||||||||
Unrealized exchange losses /(gains) |
( |
) | ( |
) | ||||||||||||
Unrealized fair value changes of short-term investments |
( |
) | ( |
) | ( |
) | ||||||||||
Fair value changes of long-term investments |
( |
) | ( |
) | ||||||||||||
Gain on disposal of long-term investments and subsidiaries |
— | ( |
) | — | — | |||||||||||
Loss from equity method investments |
— | |||||||||||||||
Revaluation of previously held equity interests |
( |
) | — | — | — | |||||||||||
Impairments of long-term investments |
||||||||||||||||
Changes in operating assets and liabilities: |
||||||||||||||||
Accounts receivable |
( |
) | ( |
) | ( |
) | ||||||||||
Amount due from related parties |
||||||||||||||||
Prepayments and other assets |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Other long-term assets |
— | ( |
) | ( |
) | ( |
) | |||||||||
Accounts payable |
||||||||||||||||
Salary and welfare payable |
||||||||||||||||
Taxes payable |
||||||||||||||||
Amount due to related parties |
( |
) | — | — | ||||||||||||
Deferred revenue |
||||||||||||||||
Accrued liabilities and other payables |
||||||||||||||||
Other long-term liabilities |
— | |||||||||||||||
Net cash provided by operating activities |
||||||||||||||||
Cash flows from investing activities: |
||||||||||||||||
Purchase of property and equipment |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Purchase of intangible assets |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Purchase of short-term investments |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Maturities of short-term investments |
||||||||||||||||
Cash consideration paid for purchase of subsidiaries, net of cash acquired |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Cash paid for long-term investments including loans |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Repayment of loans from investees |
— | |||||||||||||||
Cash received from disposal of long-term investments |
||||||||||||||||
Impact to cash resulting from deconsolidation of a subsidiary |
— | ( |
) | — | — | |||||||||||
Placements of time deposits |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Maturities of time deposits |
||||||||||||||||
Net cash used in investing activities |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Cash flows from financing activities: |
||||||||||||||||
Proceeds of short-term loans |
— | |||||||||||||||
Repayment of short-term loans |
— | ( |
) | ( |
) | ( |
) | |||||||||
P urchase of noncontrolling interests |
— | ( |
) | ( |
) | ( |
) | |||||||||
Capital injections from noncontrolling interests |
||||||||||||||||
Proceeds from exercise of employees’ share options |
||||||||||||||||
Proceeds from issuance of ordinary shares, net of issuance costs of US$ |
||||||||||||||||
Proceeds from issuance of convertible senior notes, net of issuance costs of US$ |
— | |||||||||||||||
Net cash provided by financing activities |
||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents held in foreign currencies |
( |
) | ( |
) | ||||||||||||
Net increase/(decrease) in cash and cash equivalents |
( |
) | ( |
) | ||||||||||||
Cash and cash equivalents at beginning of the year |
||||||||||||||||
Cash and cash equivalents at end of the year |
||||||||||||||||
Supplemental disclosures of cash flows information: |
||||||||||||||||
Cash paid for income taxes, net of tax refund |
||||||||||||||||
Cash paid for interest expense |
— | |||||||||||||||
Supplemental schedule of non-cash investing and financing activities: |
Accretion to Pre-IPO Preferred Shares redemption value |
— | — | — | |||||||||||||
Accretion to redeemable noncontrolling interests |
— | — | ||||||||||||||
Fixed assets purchases financed by accounts payable |
||||||||||||||||
Acquisitions and investments financed by accrued liabilities and other payables |
||||||||||||||||
Intangible assets purchases financed by accounts payable |
||||||||||||||||
Issuance of ordinary shares in the business combination, purchase of noncontrolling interests and investment addition |
— | — |
1. |
Operations and Reorganization |
Major Subsidiaries |
Place and Year of Incorporation |
Percentage of Direct or Indirect Economic Ownership |
Principal Activities | |||
Bilibili HK Limited |
||||||
Hode HK Limited |
||||||
Bilibili Co., Ltd. |
||||||
Hode Shanghai Limited (“Hode Shanghai”) |
||||||
Shanghai Bilibili Technology Co., Ltd. |
Major VIEs and VIEs’ subsidiaries |
Place and Year of Incorporation Acquisition |
Percentage of Direct or Indirect Economic Ownership |
Principal Activities | |||
Shanghai Hode Information Technology Co., Ltd. (“Hode Information Technology”) |
||||||
Shanghai Kuanyu Digital Technology Co., Ltd. (“Shanghai Kuanyu”) |
||||||
Sharejoy Network Technology Co., Ltd. (“Sharejoy Network”) |
||||||
Shanghai Hehehe Culture Communication Co., Ltd. (“Shanghai Hehehe”) |
||||||
Shanghai Anime Tamashi Cultural Media Co., Ltd. (“Shanghai Anime Tamashi”) |
• | Reorganization |
1. |
Operations and Reorganization (Continued) |
• | Initial public offering (“IPO”) and follow-on offerings |
1. |
Operations and Reorganization (Continued) |
1. |
Operations and Reorganization (Continued) |
1. |
Operations and Reorganization (Continued) |
1. |
Operations and Reorganization (Continued) |
• | revoke the Group’s business and/or operating licenses; |
• | impose fines on the Group; |
• | confiscate any of the Group’s income that they deem to be obtained through illegal operations; |
• | discontinue or place restrictions or onerous conditions on the Group’s operations |
• | restrict the Group’s right to collect revenues; |
• | shut down the Group’s servers or block the Group’s app/websites; |
• | require the Group to restructure the operations, re-apply for the necessary licenses or relocate the Group’s businesses, staff and assets; |
• | impose additional conditions or requirements with which the Group may not be able to comply; or |
• | take other regulatory or enforcement actions against the Group that could be harmful to the Group’s business. |
1. |
Operations and Reorganization (Continued) |
December 31, 2018 |
December 31, 2019 |
December 31, 2020 |
||||||||||
RMB in thousands |
||||||||||||
Current assets: |
||||||||||||
Cash and cash equivalents |
||||||||||||
Time deposits |
||||||||||||
Accounts receivable, net |
||||||||||||
Amount due from the Company and its subsidiaries |
||||||||||||
Amount due from related parties |
— | |||||||||||
Prepayments and other current assets |
||||||||||||
Short-term investments |
||||||||||||
Non-current assets: |
||||||||||||
Long-term investments, net |
||||||||||||
Other non-current assets |
||||||||||||
Total assets |
||||||||||||
Current liabilities: |
||||||||||||
Accounts payable |
||||||||||||
Salary and welfare payable |
||||||||||||
Taxes payable |
||||||||||||
Short-term loans |
— | — | ||||||||||
Deferred revenue |
||||||||||||
Amount due to the Company and its subsidiaries |
||||||||||||
Accrued liabilities and other payables |
||||||||||||
Amount due to related parties |
— | — | ||||||||||
Non-current liabilities: |
||||||||||||
Other long-term liabilities |
— | |||||||||||
Total liabilities |
||||||||||||
For the Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
RMB in thousands |
||||||||||||
Net revenues: |
||||||||||||
Revenue from third parties |
||||||||||||
Revenue from the Company and its subsidiaries |
||||||||||||
Net revenues |
||||||||||||
Net loss |
( |
) | ( |
) | ( |
) |
For the Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
RMB in thousands |
||||||||||||
Net cash provided by operating activities |
|
|
||||||||||
Net cash used in investing activities |
( |
) | ( |
) | ( |
) | ||||||
Net cash provided by financing activities |
1. |
Operations and Reorganization (Continued) |
2. |
Significant Accounting Policies |
a) |
Basis of presentation |
b) |
Principles of consolidation |
2. |
Significant Accounting Policies (Continued) |
c) |
Use of estimates |
d) |
Functional currency and foreign currency translation |
e) |
Convenience Translation |
2. |
Significant Accounting Policies (Continued) |
f) |
Fair value measurements |
a. | Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. |
b. | Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical asset or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. |
c. | Level 3 applies to asset or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. |
2. |
Significant Accounting Policies (Continued) |
g) |
Cash and cash equivalents and time deposits |
h) |
Receivables, net |
2. |
Significant Accounting Policies (Continued) |
h) |
Receivables, net (Continued) |
For the Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
RMB in thousands |
||||||||||||
Beginning balance prior to ASC 326 |
— | — | ||||||||||
Impact of adoption to ASC 326 |
— | — | ||||||||||
Beginning balance |
||||||||||||
|
|
|
|
|
|
|||||||
Provisions |
||||||||||||
Write-offs |
( |
) | ( |
) | ( |
) | ||||||
Ending balance |
||||||||||||
|
|
|
|
|
|
i) |
Inventories, net |
j) |
Property and equipment, net |
2. |
Significant Accounting Policies (Continued) |
k) |
Intangible assets, net |
Licensed copyrights of content |
shorter of the licensed period or projected useful life of the content, mainly vary from | |
License rights of mobile games |
shorter of the licensed period or projected useful life of mobile games, mainly vary from | |
Intellectual property and others |
- |
l) |
Goodwill |
2. |
Significant Accounting Policies (Continued) |
m) |
Impairment of long-lived assets other than goodwill |
n) |
Research and development expenses |
o) |
Sales and marketing expenses |
p) |
General and administrative expenses |
2. |
Significant Accounting Policies (Continued) |
q) |
Leases |
2. |
Significant Accounting Policies (Continued) |
q) |
Leases (Continued) |
December 31, 2020 |
||||
RMB in thousands |
||||
2021 |
||||
2022 |
||||
2023 |
||||
2024 |
||||
2025 and thereafter |
||||
|
|
|||
Total future lease payments |
||||
Impact of discounting remaining lease payments |
( |
) | ||
|
|
|||
|
||||
|
|
For the Year Ended December 31, |
||||||||
2019 |
2020 |
|||||||
RMB in thousands |
||||||||
Cash payments for operating leases |
||||||||
Right-of-use |
||||||||
|
|
|
|
2. |
Significant Accounting Policies (Continued) |
q) |
Leases (Continued) |
Operating Leases* |
||||
RMB in thousands |
||||
2019 |
||||
2020 |
||||
2021 |
||||
2022 |
||||
Beyond 2022 |
* | Amounts are based on ASC 840, Leases , Leases |
r) |
Share-based compensation |
2. |
Significant Accounting Policies (Continued) |
s) |
Employee benefits |
t) |
Investments |
2. |
Significant Accounting Policies (Continued) |
t) |
Investments (Continued) |
2. |
Significant Accounting Policies (Continued) |
u) |
Taxation |
v) |
Revenue recognition |
2. |
Significant Accounting Policies (Continued) |
v) |
Revenue recognition (continued) |
2. |
Significant Accounting Policies (Continued) |
v) |
Revenue recognition (continued) |
2. |
Significant Accounting Policies (Continued) |
v) |
Revenue recognition (continued) |
2. |
Significant Accounting Policies (Continued) |
v) |
Revenue recognition (continued) |
2. |
Significant Accounting Policies (Continued) |
v) |
Revenue recognition (continued) |
For the Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
RMB in thousands |
||||||||||||
Mobile games |
||||||||||||
Value-added services (formerly known as Live broadcasting and VAS) |
||||||||||||
Advertising |
||||||||||||
E-commerce and others |
||||||||||||
|
|
|
|
|
|
|||||||
Total net revenues |
||||||||||||
|
|
|
|
|
|
3. |
Significant Accounting Policies (Continued) |
w) |
Cost of revenues |
x) |
Related parties |
2. |
Significant Accounting Policies (Continued) |
y) |
Net loss per share |
z) |
Statutory reserves |
For the Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
RMB in thousands |
||||||||||||
Appropriations to general reserve funds and statutory surplus funds |
2. |
Significant Accounting Policies (Continued) |
aa) |
Noncontrolling interests |
bb) |
Comprehensive loss |
cc) |
Segment reporting |
dd) |
Business combinations |
2. |
Significant Accounting Policies (Continued) |
dd) |
Business combinations (Continued) |
ee) |
Recently issued accounting pronouncements |
3. |
Concentrations and Risks |
a) |
Telecommunications service provider |
For the Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Total number of telecommunications service providers |
||||||||||||
Number of service providers providing 10% or more of the Group’s servers and bandwidth expenditure |
||||||||||||
Total percentage of the Group’s servers and bandwidth expenditure provided by 10% or greater service providers |
% | % | % |
b) |
Foreign currency exchange rate risk |
c) |
Credit risk |
RMB in thousands |
December 31, 2018 |
December 31, 2019 |
December 31, 2020 |
|||||||||
Distribution channel A |
3. |
Concentrations and Risks (Continued) |
d) |
Major customers and supplying channels |
e) |
Mobile games |
For the Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Mobile game 1 |
% | % | % |
4. |
Prepayments and Other Current Assets |
December 31, 2018 |
December 31, 2019 |
December 31, 2020 |
||||||||||
RMB in thousands |
||||||||||||
Prepayments for revenue sharing cost* |
||||||||||||
Prepayments for content cost |
||||||||||||
Prepayments for sales tax |
||||||||||||
Interest income receivable |
||||||||||||
Inventories, net |
||||||||||||
Loans to investees or ongoing investments |
||||||||||||
Prepayments of marketing and other operational expenses |
||||||||||||
Prepayments /receivables relating to jointly invested content |
||||||||||||
Deposits |
||||||||||||
Prepayments to inventory suppliers |
||||||||||||
Others |
||||||||||||
Total |
||||||||||||
* | App stores retain commissions on each purchase made by the users through the App stores. The Group is also obligated to pay ongoing licensing fees in form of royalties to the third-party game developers. Licensing fees consist of fees that the Group pays to content owners for the use of licensed content, including trademarks and copyrights, in the development of games. Licensing fees are either paid in advance and recorded on the balance sheets as prepayments or accrued as incurred and subsequently paid. Additionally, the Group defers the revenue from licensed mobile games over the estimated average playing period of paying players given that there is an implied obligation to provide on-going services to end-users. The related direct and incremental platform commissions as well as game developers’ licensing fees are deferred and reported in “Prepayments and Other Current Assets” on the consolidated balance sheets. |
5. |
Short-term Investments |
December 31, 2018 |
December 31, 2019 |
December 31, 2020 |
||||||||||
RMB in thousands |
||||||||||||
Financial products |
||||||||||||
Investments in publicly traded companies |
— | |||||||||||
Money market funds |
||||||||||||
Total |
||||||||||||
6. |
Property and Equipment, Net |
December 31, 2018 |
December 31, 2019 |
December 31, 2020 |
||||||||||
RMB in thousands |
||||||||||||
Leasehold improvements |
||||||||||||
Servers and computers |
||||||||||||
Others |
||||||||||||
Total |
||||||||||||
Less: accumulated depreciation |
( |
) | ( |
) | ( |
) | ||||||
Net book value |
||||||||||||
7. |
Intangible Assets, Net |
As of December 31, 2018 |
||||||||||||
Gross carrying value |
Accumulated amortization |
Net carrying value |
||||||||||
RMB in thousands |
||||||||||||
Licensed copyrights of content |
( |
) | ||||||||||
License rights of mobile games |
( |
) | ||||||||||
Intellectual property and others |
( |
) | ||||||||||
Total |
( |
) |
||||||||||
As of December 31, 2019 |
||||||||||||
Gross carrying value |
Accumulated amortization |
Net carrying value |
||||||||||
RMB in thousands |
||||||||||||
Licensed copyrights of content |
( |
) | ||||||||||
License rights of mobile games |
( |
) | ||||||||||
Intellectual property and others |
( |
) | ||||||||||
Total |
( |
) |
||||||||||
As of December 31, 2020 |
||||||||||||
Gross carrying value |
Accumulated amortization |
Net carrying value |
||||||||||
RMB in thousands |
||||||||||||
Licensed copyrights of content |
( |
) | ||||||||||
License rights of mobile games |
( |
) | ||||||||||
Intellectual property and others |
( |
) | ||||||||||
Total |
( |
) |
||||||||||
Intangible assets amortization expense |
||||
RMB in thousands |
||||
2021 |
||||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
Total expected amortization expense |
||||
8. |
Goodwill |
December 31, 2018 |
December 31, 2019 |
December 31, 2020 |
||||||||||
RMB in thousands |
||||||||||||
Beginning balance |
||||||||||||
Additions (Note 24) |
||||||||||||
Ending balance |
||||||||||||
9. |
Long-term Investments, Net |
December 31, 2018 |
December 31, 2019 |
December 31, 2020 |
||||||||||
RMB in thousands |
||||||||||||
Equity investments accounted for using the measurement alternative |
||||||||||||
Equity investments accounted for using the equity method |
— | |||||||||||
Investments accounted for at fair value |
||||||||||||
Total |
||||||||||||
10. |
Taxation |
For the Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
RMB in thousands |
||||||||||||
Current income tax expenses |
||||||||||||
Withholding income tax expenses |
||||||||||||
Deferred tax benefits |
— | ( |
) | ( |
) | |||||||
Total |
||||||||||||
a) |
Income taxes |
10. |
Taxation (Continued) |
a) |
Income taxes (Continued) |
For the Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
% |
% |
% |
||||||||||
Statutory income tax rate |
||||||||||||
Permanent differences |
( |
) | ( |
) | ||||||||
Tax rate difference from statutory rate in other jurisdictions* |
( |
) | ( |
) | ( |
) | ||||||
Tax effect of preferential tax treatments |
( |
) | ( |
) | ( |
) | ||||||
Withholding tax |
( |
) | ( |
) | ( |
) | ||||||
Change in valuation allowance |
( |
) | ( |
) | ( |
) | ||||||
Effective income tax rate |
( |
) |
( |
) |
( |
) | ||||||
* | It is primarily due to the tax effect of the Company as a tax-exempt entity incorporated in the Cayman Islands. |
RMB in thousands |
||||
Loss expiring in 2021 |
||||
Loss expiring in 2022 |
||||
Loss expiring in 2023 |
||||
Loss expiring in 2024 |
||||
Loss expiring in 2025 and thereafter |
||||
Total |
||||
10. |
Taxation (Continued) |
b) |
Sales tax |
c) |
Deferred tax assets and liabilities |
December 31, 2018 |
December 31, 2019 |
December 31, 2020 |
||||||||||
RMB in thousands |
||||||||||||
Deferred tax assets: |
||||||||||||
Deferred revenue |
||||||||||||
Accrued expenses and other payables |
||||||||||||
Advertising expenses in excess of deduction limit |
||||||||||||
Net operating tax loss carry forwards |
||||||||||||
Others |
||||||||||||
Total deferred tax assets |
||||||||||||
Less: valuation allowance |
( |
) | ( |
) | ( |
) | ||||||
Net deferred tax assets |
— |
|||||||||||
Deferred tax liabilities |
||||||||||||
Acquired intangible assets (Note 24) |
— |
— |
( |
) | ||||||||
Total deferred tax liabilities |
— |
— |
( |
) | ||||||||
Balance at January 1 |
Re-measurement due to applicable preferential tax rate |
Addition |
Expiration of loss carry forward and impact of disposal of subsidiaries |
Balance at December 31 |
||||||||||||||||
RMB in thousands |
||||||||||||||||||||
2018 | ( |
) | ( |
) | ( |
) | ||||||||||||||
2019 | ( |
) | — | ( |
) | ( |
) | |||||||||||||
2020 | ( |
) | ( |
) | ( |
) |
10. |
Taxation (Continued) |
d) |
Withholding income tax on dividends |
11. |
Taxes Payable |
December 31, 2018 |
December 31, 2019 |
December 31, 2020 |
||||||||||
RMB in thousands |
||||||||||||
VAT payable |
||||||||||||
EIT payable |
||||||||||||
Withholding individual income taxes for employees |
||||||||||||
Withholding income tax payable |
||||||||||||
Others |
||||||||||||
Total |
||||||||||||
12. |
Accrued Liabilities and Other Payable s |
December 31, 2018 |
December 31, 2019 |
December 31, 2020 |
||||||||||
RMB in thousands |
||||||||||||
Accrued marketing expenses |
||||||||||||
Leasing liabilities - |
— | |||||||||||
Consideration payable for acquisitions and investments |
||||||||||||
Payables to producers and licensors |
||||||||||||
Professional fees |
||||||||||||
Other staff related cost |
||||||||||||
Interest payable |
— | |||||||||||
Advances from/payables to third parties |
||||||||||||
Others |
||||||||||||
Total |
||||||||||||
13. |
Long-term Debt |
13. |
Long-term Debt (Continued) |
December 31, 2019 |
December 31, 2020 |
Effective interest rate |
||||||||||
Amounts |
Amounts |
|||||||||||
RMB in thousands |
||||||||||||
US$500,000 1.375% notes due 2026 |
% | |||||||||||
US$800,000 1.25% notes due 2027 |
— | % | ||||||||||
Carrying value |
||||||||||||
Unamortized discount and debt issuance costs |
||||||||||||
Total principal amounts of unsecured senior notes |
||||||||||||
14. |
Ordinary Shares |
15. |
Pre-IPO Preferred Shares |
15. |
Pre-IPO Preferred Shares (Continued) |
Pre-IPO Series APreferred Shares |
Pre-IPO Series A+Preferred Shares |
Pre-IPO Series BPreferred Shares |
Pre-IPO Series CPreferred Shares |
Pre-IPO Series C1Preferred Shares |
Pre-IPO Series C2 Preferred Shares |
Pre-IPO Series D1Preferred Shares |
Pre-IPO Series D2Preferred Shares |
Total Mezzanine Equity |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares |
Amount |
Number of shares |
Amount |
Number of shares |
Amount |
Number of shares |
Amount |
Number of shares |
Amount |
Number of shares |
Amount |
Number of shares |
Amount |
Number of shares |
Amount |
Number of shares |
Amount |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
RMB in thousands, except for share data |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2017 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accretion to Pre-IPO Preferred Shares redemption value |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redesignation of Pre-IPO Preferred Shares into Class Y Ordinary Shares |
— | — | — | — | — | — | — | — | ( |
) | ( |
) | — | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Redesignation of Pre-IPO Preferred Shares into Class Z Ordinary Shares |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2018 |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16. |
Employee Benefits |
For the Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
RMB in thousands |
||||||||||||
Contributions to medical and pension schemes |
||||||||||||
Other employee benefits |
||||||||||||
|
|
|
|
|
|
|||||||
Total |
||||||||||||
|
|
|
|
|
|
17. |
Share-based Compensation |
a) |
Description of share option plans |
b) |
Valuation assumptions |
For the Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Expected volatility |
||||||||||||
Weighted average volatility |
||||||||||||
Expected dividends |
— | — | ||||||||||
Risk-free rate |
||||||||||||
Contractual term (in years) |
17. |
Share-based Compensation (Continued) |
(b) |
Valuation assumptions (continued) |
(c) |
Share options activities |
Employees |
Senior Management |
Consultants |
Total |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Life |
Aggregate Intrinsic Value |
||||||||||||||||||||||
(In thousands) |
(In thousands) |
(In thousands) |
(In thousands) |
US$ |
(In years) |
(RMB in thousands) |
||||||||||||||||||||||
Outstanding at January 1, 2018 |
||||||||||||||||||||||||||||
Granted |
— | |||||||||||||||||||||||||||
Exercised |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
Forfeited |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Outstanding at December 31, 2018 |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Outstanding at January 1, 2019 |
||||||||||||||||||||||||||||
Granted |
— | |||||||||||||||||||||||||||
Exercised |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||
Forfeited |
( |
) | ( |
) | — | ( |
) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Outstanding at December 31, 2019 |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Outstanding at January 1, 2020 |
||||||||||||||||||||||||||||
Granted |
||||||||||||||||||||||||||||
Exercised |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||
Forfeited |
( |
) | — | — | ( |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Outstanding at December 31, 2020 |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Exercisable at December 31, 2020 |
||||||||||||||||||||||||||||
|
|
|
|
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18. |
Net Loss per Share |
18. |
Net Loss per Share (Continued) |
For the Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
RMB in thousands, except for share and per share data |
||||||||||||
Numerator: |
||||||||||||
Net loss |
( |
) | ( |
) | ( |
) | ||||||
Accretion to redeemable noncontrolling interests |
— | — | ( |
) | ||||||||
Accretion to Pre-IPO Preferred Shares redemption value |
( |
) | — | — | ||||||||
Net loss attributable to noncontrolling interests |
||||||||||||
Net loss attributable to Bilibili Inc.’s shareholders for basic/dilutive net loss per share calculation |
( |
) | ( |
) | ( |
) | ||||||
Denominator: |
||||||||||||
Weighted average number of ordinary shares outstanding, basic |
||||||||||||
Weighted average number of ordinary shares outstanding, diluted |
||||||||||||
Net loss per share, basic |
( |
) | ( |
) | ( |
) | ||||||
Net loss per share, diluted |
( |
) | ( |
) | ( |
) |
19. |
Commitments and Contingencies |
(a) |
Commitments |
(b) |
Litigation |
20. |
Related Party Transactions and Balances |
For the Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
RMB in thousands |
||||||||||||
Purchases of goods and services |
||||||||||||
Transfer of/ |
( |
) | ||||||||||
Purchase of noncontrolling interests of Chaodian Inc. (“Chaodian”) (See note 24) |
— | — | ||||||||||
Investment income* |
— | — |
December 31, 2018 |
December 31, 2019 |
December 31, 2020 |
||||||||||
RMB in thousands |
||||||||||||
Amount due from related parties |
||||||||||||
Due from an investment fund* |
— | |||||||||||
Due from an equity investee** |
— | |||||||||||
Total |
— | |||||||||||
Amount due to related parties |
— | — | ||||||||||
* | The transactions in 2018 referred to the investments transferred to an entity controlled by the Group’s major shareholders. In June 2019, to focus the Company’s efforts and resources on its core businesses, the Company transferred several equity investments of the Group to an investment fund. The Group contributed a total of RMB , which is non-trade in nature. |
** | The balances as of December 31, 2020 mainly represent interest-bearing loans and interest expenses of RMB , which is non-trade in nature The annual interest rates of the loans were and partially offset by the trade payables to the equity investee. |
Amount due to related parties as of December 31, 2018 was trade in nature. |
21. |
Segment Information |
22. |
Fair Value Measurement |
23. |
Restricted Net Assets |
24. |
Acquisitions |
Amount |
Amortization Period |
|||||||
RMB in thousands |
||||||||
Net assets acquired |
||||||||
Intangible assets |
||||||||
—Tradename |
||||||||
—Non-compete clause |
||||||||
Noncontrolling interests |
( |
) | ||||||
Goodwill |
||||||||
Total |
||||||||
Amount |
||||
RMB in thousands |
||||
Cash consideration |
||||
Fair value of previously held equity interests |
||||
Total |
||||
24. |
Acquisitions (Continued) |
Amount |
||||
RMB in thousands |
||||
Consideration |
||||
Cash and cash equivalents |
||||
Accounts receivable, net |
||||
Goodwill |
||||
Other asset acquired |
||||
Total assets acquired |
||||
Accrued liabilities and other payables |
( |
) | ||
Other liabilities assumed |
( |
) | ||
Total liability assumed |
( |
) | ||
Noncontrolling interests |
( |
) | ||
Deemed dividend |
||||
Total |
||||
24. |
Acquisitions (Continued) |
For the Year Ended December 31, |
Amortization Period |
|||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||
Amount |
||||||||||||||||
RMB in thousands |
||||||||||||||||
Net assets acquired |
||||||||||||||||
Intangible assets |
||||||||||||||||
—Tradename |
— | — | ||||||||||||||
—User base |
— | |||||||||||||||
—Copyrights |
— | |||||||||||||||
—Technology |
— | — | ||||||||||||||
—Vendor relationship |
— | — | ||||||||||||||
—On-going projects |
— | — | ||||||||||||||
Noncontrolling interests |
( |
) | ( |
) | ( |
) | ||||||||||
Deferred tax liabilities |
— | — | ( |
) | ||||||||||||
Goodwill |
||||||||||||||||
Total |
||||||||||||||||
Amount |
||||||||||||||
RMB in thousands |
||||||||||||||
Cash consideration |
||||||||||||||
Share consideration |
— |
— |
||||||||||||
Fair value of previously held equity interests |
— |
— |
||||||||||||
Total |
||||||||||||||
25. |
Subsequent Events |