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Name | Symbol | Market | Type |
---|---|---|---|
Q and K International Group Ltd | NASDAQ:QK | NASDAQ | Depository Receipt |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 2.74 | 1.91 | 3.60 | 0 | 01:00:00 |
☐ |
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
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☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐ |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Title of each class
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Trading
Symbol(s)
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Name of each exchange
on which registered
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||
A
merican depositary shares
(one American depositary share representing thirty (30) Class A ordinary shares, par value US$0.00001 per share)
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QK
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NASDAQ Global Market
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||
Class A ordinary shares, par value US$0.00001 per share*
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*
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Not for trading, but only in connection with the listing of American depositary shares on the NASDAQ Global Market.
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Large accelerated filer ☐ | Accelerated filer ☒ |
Non-accelerated filer ☐
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||||||||
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.
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U.S. GAAP ☒ | International Financial Reporting Standards as issued | Other ☐ | ||||
by the International Accounting Standards Board ☐ |
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1
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3
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PART I
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5
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5
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5
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61
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99
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99
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128
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137
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138
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139
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139
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154
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155
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PART II
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158
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158
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158
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160
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160
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160
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160
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161
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161
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162
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162
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PART III
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163
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163
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163
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166
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• |
“ADSs” refers to our American depositary shares, each of which represents 30 Class A ordinary shares;
|
• |
“apartments contracted” or “rental units contracted” refer to apartments or rental units that we have leased in from landlords, as applicable;
|
• |
“available apartments” or “available rental units” refer to the apartments or rental units in operation, as applicable, which have been renovated and ventilated and are ready to rent to tenants;
|
• |
“average
month-end
occupancy rate” refers to the aggregate number of
leased-out
rental unit nights of the last day of each month in the relevant period as a percentage of the aggregate number of available rental unit nights of the last day of each month in the same period;
|
• |
“average monthly rental after discount for rental prepayment” refers to the total rental received by a rental operator from tenants for the relevant period the tenants stay in the rental operator’s apartments, net of value-added tax, divided by the number of
leased-out
rental unit nights for the same period times 30.5 (which represents the average number of days in a month); for avoidance of doubt, the total rental does not include any utility fees a rental operator charges tenants for the relevant period;
|
• |
“average monthly rental before discount for rental prepayment” refers to the total rental received by a rental operator from tenants for the relevant period the tenants stay in the rental operator’s apartments, net of value-added tax, adding back any discount the rental operator offers for rental prepayment, divided by the number of
leased-out
rental unit nights for the same period times 30.5 (which represents the average number of days in a month); for avoidance of doubt, the total rental does not include any utility fees a rental operator charges tenants for the relevant period;
|
• |
“China” or the “PRC” refers to the People’s Republic of China, excluding, for the purposes of this annual report only, Hong Kong, Macau and Taiwan;
|
• |
“leased-out
rental unit nights” refer to the number of nights that the rental units of a rental apartment were leased out for a relevant period;
|
• |
“long-term apartment rental” refers to apartment rental business in which the rents are normally collected on a monthly or quarterly basis, and the lease terms are normally over six months;
|
• |
“long-term apartment operator” refers to a company which operates long-term apartment rental business, collects vacant apartment resources and rents those apartments directly to tenants;
|
• |
“ordinary shares” refers to our Class A ordinary shares and Class B ordinary shares, par value US$0.00001 per share;
|
• |
“period-average occupancy rate” refers to the aggregate number of
leased-out
rental unit nights as a percentage of the aggregate number of available rental unit nights during the relevant period;
|
• |
“tenant renewal rate” refers to the percentage of tenants who choose to rent from the same operator after the end of the applicable
lock-in
period in the lease;
|
• |
“rental spread after discount for rental prepayment” refers to the difference between the average monthly rental after discount for rental prepayment on a lease to a tenant, and the monthly straight-lined rental that the rental operator pays to the landlord for the same space;
|
• |
“rental spread before discount for rental prepayment” refers to the difference between the average monthly rental before discount for rental prepayment on a lease to a tenant, and the monthly straight-lined rental that the rental operator pays to the landlord for the same space;
|
• |
“rental spread margin after discount for rental prepayment” refers to the rental spread after discount for rental prepayment as a percentage of the average monthly rental after discount for rental prepayment on a lease to a tenant on the same space;
|
• |
“rental spread margin before discount for rental prepayment” refers to the rental spread before discount for rental prepayment as a percentage of the average monthly rental before discount for rental prepayment on a lease to a tenant on the same space;
|
• |
“rental unit” refers to each bedroom in a rental apartment; we typically convert a
leased-in
apartment to add an additional bedroom, or the N+1 model, and rent each bedroom separately to individual tenants after standardized decoration and furnishing;
|
• |
“RMB” and “Renminbi” refer to the legal currency of China;
|
• |
“straight-lined rental” refer to the rental a rental operator pays to a landlord after adjustment to record rent holidays/rent-free period and rent escalation clauses on a straight-line basis over the term of the lease with the landlord;
|
• |
“tier 1 cities” refer to Beijing, Shanghai, Guangzhou and Shenzhen;
|
• |
“US$,” “U.S. dollars,” “$,” and “dollars” refer to the legal currency of the United States; and
|
• |
“we,” “us,” “our company,” “our” and “Qingke” refer to Q&K International Group Limited, its subsidiaries, variable interest entity and its subsidiaries.
|
• |
our mission and strategies;
|
• |
our ability to continue as a going concern;
|
• |
our ability to achieve or maintain profitability;
|
• |
general economic and business condition in China and elsewhere, particularly the long-term apartment rental market and government measures aimed at China’s real estate industry and apartment rental industry;
|
• |
health epidemics, pandemics and similar outbreaks, including
COVID-19;
|
• |
competition in the apartment rental industry;
|
• |
our future business development, financial condition and results of operations;
|
• |
our expectations regarding demand for and market acceptance of our apartments and services;
|
• |
our ability to attract and retain tenants and landlords, including tenants and landlords from our acquired lease contracts;
|
• |
our ability to control the quality of operations, including the operation of our rental apartments managed by our own apartment managers or by third-party contractors;
|
• |
our ability to integrate strategic investments, acquisitions and new business initiatives; and
|
• |
our relationship with financial institution partners and third-party product and service providers.
|
|
|||||||||||||||||||||
FY 2017
|
FY 2018
|
FY 2019
|
FY 2020
|
||||||||||||||||||
RMB
|
RMB
|
RMB
|
RMB
|
|
US$
|
||||||||||||||||
(in thousands, except for share, per share and per ADS data)
|
|||||||||||||||||||||
Selected Consolidated Statements of Comprehensive Loss Data:
|
|
||||||||||||||||||||
Net revenues:
|
|
||||||||||||||||||||
Rental service revenue
|
508,910 | 796,940 | 1,089,164 | 1,105,172 |
|
162,774 | |||||||||||||||
Value-added services and others
|
13,827 | 92,997 | 144,606 | 102,791 |
|
15,139 | |||||||||||||||
|
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|
|||||||||||
Total net revenues
|
522,737 | 889,937 | 1,233,770 | 1,207,963 |
|
177,913 | |||||||||||||||
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|
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Operating costs and expenses:
|
|
||||||||||||||||||||
Operating cost
|
(547,618 | ) | (897,959 | ) | (1,304,992 | ) | (1,203,415 |
|
) | (177,245 | ) | ||||||||||
Selling and marketing expenses
|
(42,008 | ) | (117,826 | ) | (135,413 | ) | (63,512 |
|
) | (9,354 | ) | ||||||||||
General and administrative expenses
|
(34,353 | ) | (84,953 | ) | (108,196 | ) | (102,769 |
|
) | (15,136 | ) | ||||||||||
Research and development expenses
|
(44,160 | ) | (51,947 | ) | (47,029 | ) | (24,934 |
|
) | (3,672 | ) | ||||||||||
Pre-operation
expenses
|
(19,934 | ) | (117,107 | ) | (42,661 | ) | (14,245 |
|
) | (2,098 | ) | ||||||||||
Impairment loss
|
(22,750 | ) | (50,614 | ) | (46,213 | ) | (846,766 |
|
) | (124,715 | ) | ||||||||||
Loss from disposal of property and equipment
|
— | — | — | (468,980 |
|
) | (69,073 | ) | |||||||||||||
Other (expense) income, net
|
(1,460 | ) | 4,034 | 2,427 | 15,881 |
|
2,339 | ||||||||||||||
|
|
|
|
|
|
|
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|
|||||||||||
Total operating costs and expenses
|
(712,283 | ) | (1,316,372 | ) | (1,682,077 | ) | (2,708,740 |
|
) | (398,954 | ) | ||||||||||
|
|
|
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|
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|
|||||||||||
Loss from operations
|
(189,546 | ) | (426,435 | ) | (448,307 | ) | (1,500,777 |
|
) | (221,041 | ) | ||||||||||
Interest expense, net
|
(50,136 | ) | (77,167 | ) | (91,914 | ) | (130,206 |
|
) | (19,177 | ) | ||||||||||
Foreign exchange gain (loss), net
|
3 | (91 | ) | (457 | ) | (62 |
|
) | (9 | ) | |||||||||||
Fair value change of contingent
earn-out
liabilities
|
(5,165 | ) | 6,164 | 42,404 | 97,417 |
|
14,348 | ||||||||||||||
|
|
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|
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|
|
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|
|||||||||||
Loss before income taxes
|
(244,844 | ) | (497,529 | ) | (498,274 | ) | (1,533,628 |
|
) | (225,879 | ) | ||||||||||
Income tax expense
|
(596 | ) | (2,393 | ) | (63 | ) | (13 |
|
) | (2 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss
|
(245,440 | ) | (499,922 | ) | (498,337 | ) | (1,533,641 |
|
) | (225,881 | ) | ||||||||||
Less: net income (loss) attributable to noncontrolling interests
|
35 | (63 | ) | (95 | ) | (49 |
|
) | (7 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss attributable to Q&K International Group Limited
|
(245,475 | ) | (499,859 | ) | (498,242 | ) | (1,533,592 |
|
) | (225,874 | ) | ||||||||||
Deemed dividend
|
(58,763 | ) | (135,545 | ) | (307,389 | ) | — |
|
— | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss attributable to ordinary shareholders
|
(304,238 | ) | (635,404 | ) | (805,631 | ) | (1,533,592 |
|
) | (225,874 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss per share attributable to ordinary shareholders of Q&K International Group Limited—Basic and diluted
|
(0.86 | ) | (1.55 | ) | (1.87 | ) | (1.14 |
|
) | (0.17 | ) | ||||||||||
Weighted average number of ordinary shares used in computing net loss per share—Basic and diluted
|
354,861,449 | 409,403,915 | 430,450,490 | 1,351,127,462 | 1,351,127,462 |
As of September 30,
|
||||||||||||||||||||
Selected Consolidated Balance Sheets Data:
|
2017
|
2018
|
2019
|
2020
|
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
RMB
|
RMB
|
RMB
|
RMB
|
US$
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Assets
|
||||||||||||||||||||
Current assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
365,115 | 103,752 | 159,799 | 22,879 | 3,370 | |||||||||||||||
Restricted cash
|
2,000 | 15,000 | 91,015 | 8,887 | 1,309 | |||||||||||||||
Accounts receivable
|
314 | 475 | 1,306 | 1,943 | 286 | |||||||||||||||
Amounts due from related parties
|
12,541 | 22,505 | 5,587 | 168 | 25 | |||||||||||||||
Prepaid rents and deposit
|
92,687 | 170,683 | 128,213 | 51,281 | 7,553 | |||||||||||||||
Advance to suppliers
|
27,270 | 17,079 | 64,028 | 16,043 | 2,363 | |||||||||||||||
Other current assets
|
42,118 | 118,445 | 146,559 | 101,803 | 14,994 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total current assets
|
542,045 | 447,939 | 596,507 | 203,004 | 29,900 | |||||||||||||||
Non-current
assets:
|
||||||||||||||||||||
Property and equipment—net
|
578,331 | 1,320,822 | 1,185,311 | 358,022 | 52,731 | |||||||||||||||
Intangible assets—net
|
1,714 | 1,232 | 1,248 | 222,123 | 32,715 | |||||||||||||||
Land use rights
|
11,307 | 11,021 | 10,734 | 10,448 | 1,539 | |||||||||||||||
Other assets
|
201 | 389 | 5,946 | 57,133 | 8,415 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets
|
1,133,598 | 1,781,403 | 1,799,746 | 850,730 | 125,300 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities and equity:
|
||||||||||||||||||||
Total current liabilities
|
1,173,179 | 1,969,883 | 1,697,111 | 1,961,740 | 288,935 | |||||||||||||||
Total
non-current
liabilities
|
386,389 | 590,654 | 913,501 | 883,440 | 130,115 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities
|
1,559,568 | 2,560,537 | 2,610,612 | 2,845,180 | 419,050 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total mezzanine equity
|
368,546 | 644,043 | 1,425,485 | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Q&K International Group Limited shareholders’ deficit
|
(812,351 | ) | (1,440,949 | ) | (2,246,028 | ) | (2,004,078 | ) | (295,168 | ) | ||||||||||
Noncontrolling interest
|
17,835 | 17,772 | 9,677 | 9,628 | 1,418 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total shareholders’ deficit
|
(794,516 | ) | (1,423,177 | ) | (2,236,351 | ) | (1,994,450 | ) | (293,750 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities, mezzanine equity and shareholders’ deficit
|
1,133,598 | 1,781,403 | 1,799,746 | 850,730 | 125,300 | |||||||||||||||
|
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|
FY 2017
|
FY 2018
|
FY 2019
|
FY 2020
|
|||||||||||||||||
RMB
|
RMB
|
RMB
|
RMB
|
US$
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Selected Consolidated Cash Flow Data:
|
||||||||||||||||||||
Net cash used in operating activities
|
(43,589 | ) | (117,048 | ) | (88,189 | ) | 54,841 | 8,078 | ||||||||||||
Net cash used in investing activities
|
(285,518 | ) | (674,298 | ) | (351,450 | ) | (138,670 | ) | (20,406 | ) | ||||||||||
Net cash provided by (used in) financing activities
|
649,451 | 539,528 | 569,569 | (134,924 | ) | (17,979 | ) | |||||||||||||
Effect of foreign exchange rate changes
|
(238 | ) | 3,455 | 2,132 | (295 | ) | (104 | ) | ||||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
320,106 | (248,363 | ) | 132,062 | (219,048 | ) | (30,411 | ) | ||||||||||||
Cash, cash equivalents and restricted cash at the beginning of the period
|
47,009 | 367,115 | 118,752 | 250,814 | 35,090 | |||||||||||||||
Cash, cash equivalents and restricted cash at the end of the period
|
367,115 | 118,752 | 250,814 | 31,766 | 4,679 |
• |
We have a limited operating history in an emerging and rapidly evolving market, which makes it difficult to evaluate our future prospects and results of operations and may increase the risk that we will not be successful. In addition, our historical growth and financial condition may not be indicative of our future growth, profitability, and financial condition.
|
• |
The report of our independent registered public accounting firm on our consolidated financial statements includes an explanatory paragraph questioning our ability to continue as a going concern. We recorded net losses in the past and may not be able to continue as a going concern or achieve or maintain profitability in the future.
|
• |
Our business requires significant capital expenditure for sourcing, renovation and maintenance of rental apartments. Inability to access financing on favorable terms in a timely manner or at all would materially and adversely affect our business, results of operations, financial condition and growth prospects.
|
• |
The
COVID-19
outbreak has adversely affected, and may continue to adversely affect, our business, results of operations and financial condition. We also face risks related to other health epidemics, natural disasters, civil and social disruptions and other outbreaks and catastrophes, which could materially and adversely affect our results of operations and financial condition.
|
• |
Tenants may terminate their leases during lease terms, exposing us to the risk of
re-leasing
our rental apartments, which we may be unable to do on a timely basis, on favorable terms or at all.
|
• |
We have relied on our tenants’ rental prepayments to finance our growth. To the extent a lease agreement is terminated during the rental period covered by the prepayment, we need to return the unused prepaid rentals. If a significant number of the lease agreements are terminated early, our liquidity and financial condition may be materially and adversely affected.
|
• |
We rely on our cooperation with a limited number of financial institutions.
|
• |
Capital and credit market conditions may adversely affect our access to capital and/or the cost of capital, which could impact our future prospects, results of operations and growth prospects.
|
• |
Our business is susceptible to China’s macro-economic conditions, particularly the long-term apartment rental market and government measures aimed at China’s real estate industry and apartment rental industry.
|
• |
Our expansion into new markets may present increased risk.
|
• |
Strategic investments, acquisitions or new business initiatives may disrupt our ability to effectively manage our business and adversely affect our operating results. In addition, to the extent we fund these business initiatives through the issuance of equity or convertible debt securities, the ownership interests of our shareholders could be significantly diluted.
|
• |
We have started and may continue to expand our business by acquiring lease contracts and related fixtures and equipment of rental units from other rental service companies, and have engaged and may engage more third-party contractors to manage these rental units. We may not be able to control the quality of sourcing, renovation, marketing, maintenance and other rental unit management activities or participate in the tenant screening process. The third-party contractors may not manage the rental units according to the terms of our contracts or otherwise below standard, or do not continue to maintain or expand their relationship with us. These may materially and adversely affect our business, results of operation, financial condition and reputation.
|
• |
We have been, and may from time to time be, subject to claims, controversies, lawsuits and other legal and administrative proceedings, which could have a material adverse effect on our business, results of operations, financial condition and reputation.
|
• |
If the PRC government deems that the contractual arrangements in relation to our variable interest entity do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations 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 variable interest entity and its shareholders for a significant portion of our business operations, which may not be as effective as direct ownership in providing operational control.
|
• |
Any failure by our variable interest entity or its shareholders to perform their obligations under our contractual arrangements with them would have a material adverse effect on our business.
|
• |
Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and results of operations.
|
• |
Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to us.
|
• |
We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of internet-related businesses and companies, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations.
|
• |
We rely on dividends and other distributions on equity paid by our PRC subsidiary to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiary to make payments to us could have a material adverse effect on our ability to conduct our business.
|
• |
The market price for the ADSs may be volatile.
|
• |
An active market for the ADSs may not be maintained.
|
• |
If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for the ADSs and trading volume could decline.
|
• |
Conversion of the convertible notes and exercise of the warrants we issued may dilute the ownership interest of existing shareholders, including holders who had previously converted their convertible notes.
|
• |
changes in national, regional or local economic, demographic or real estate market conditions;
|
• |
changes in laws and policies on rental housing, including but not limited to rent control laws or tenant protection laws;
|
• |
changes in job markets and employment levels on a national, regional and local basis;
|
• |
health epidemics, pandemics and similar outbreaks, including
COVID-19;
|
• |
overall conditions in the rental market, including:
|
• |
macroeconomic shifts in demand for rental homes;
|
• |
inability to lease or
re-lease
homes to tenants on a timely basis, on attractive terms or at all; and
|
• |
development of branded apartment rental industry in China;
|
• |
failure of tenants to pay rent when due or otherwise perform their obligations in connection with the lease;
|
• |
significant number of early terminations of leases;
|
• |
level of competition for suitable rental homes;
|
• |
our ability to expand and manage our apartment network and maintain rapid business growth;
|
• |
our ability to manage our procedures, control and systems under different business models, including for rental apartments managed by our apartment managers or by third-party contractors;
|
• |
our ability to maintain high occupancy rate and target rent levels;
|
• |
our ability to raise rents;
|
• |
costs and time period required to renovate rental homes;
|
• |
unanticipated repairs, capital expenditures or other costs;
|
• |
our ability to maintain or renew favorable terms with financing partners and other strategic partners;
|
• |
our ability to maintain, deepen and broaden cooperation with financial institutions, service providers and other third parties;
|
• |
our ability to develop more value-added products and services;
|
• |
our ability to effectively control our operating costs and expenses;
|
• |
our ability to maintain the proper functioning of our technology systems and infrastructure;
|
• |
disputes and potential negative publicity in connection with early termination of leases with landlords, rental collection, eviction proceedings, quality control and other aspects of our business;
|
• |
costs resulting from the
clean-up
of, and liability to third parties for damages resulting from, environmental or safety problems;
|
• |
decoration and supply capabilities;
|
• |
our ability to increase our brand awareness;
|
• |
our ability to attract and retain employees; and
|
• |
changes in U.S. accounting standards regarding operating leases.
|
• |
upfront capital outlay for apartment sourcing and renovation;
|
• |
ongoing capital needs to maintain and operate apartments; and
|
• |
mismatch between our lease term with landlords, which generally provides a
lease-in
contract
lock-in
period of five to six years, subject to the extension for another two to three years at the option of landlords, and our lease term with tenants, which generally has a contracted term of 12 to 26 months and an average
lock-in
period of 9.3 months in FY 2020.
|
• |
soaring prices of residential real estates and extremely stringent home-buying requirements in top tier cities in China that have made it more difficult to purchase apartments, particularly for our target customers;
|
• |
favorable rental-related policies and other government support for increased rental options;
|
• |
increased number of
“non-resident”
population in top tier cities in China;
|
• |
favorable interest rates for financing and a strong and healthy credit market; and
|
• |
mismatch of supply and demand in China’s long-term apartment rental market.
|
• |
ability to source suitable and sufficient apartments across multiple regions with favorable terms including contract length, rental-free period,
rent-in
costs, etc.;
|
• |
ability to use big data analytics to establish competitive lease terms with both landlords and tenants;
|
• |
ability to establish sustainable unit economic model;
|
• |
ability to renovate and operate rental apartments in an efficient and cost-effective manner;
|
• |
ability to achieve high standardization and manage a complex supply network;
|
• |
ability to maintain financial flexibility;
|
• |
geographic coverage and customer reach;
|
• |
ability to set up IT and internet infrastructure; and
|
• |
brand awareness and customer satisfaction, including the availability and range of value-added services to help foster a sense of community and loyalty among tenants.
|
• |
maintain the reliability of our system;
|
• |
provide well maintained apartments to tenants;
|
• |
provide appropriate and explicit terms, including rental, to landlords and tenants;
|
• |
timely and effectively manage and resolve tenants and landlords inquiries, requests and complaints, such as returning the deposit and unused rental in a timely manner after the lease with tenant is terminated; and
|
• |
effectively protect personal information and privacy of our tenants, landlords, employees and third party contractors and service providers.
|
• |
revoking our business and operating licenses;
|
• |
levying fines on us;
|
• |
confiscating any of our income that they deem to be obtained through illegal operations;
|
• |
shutting down our services;
|
• |
discontinuing or restricting our operations in China;
|
• |
imposing conditions or requirements with which we may not be able to comply;
|
• |
requiring us to change our corporate structure and contractual arrangements;
|
• |
restricting or prohibiting our use of the proceeds from overseas offering to finance our variable interest entity’s business and operations; and
|
• |
taking other regulatory or enforcement actions that could be harmful to our business.
|
(i) |
continue our business in China through our contractual arrangements with the VIE and shareholders of the VIE,
|
(ii) |
exert control over the VIE,
|
(iii) |
receive the economic benefits of the VIE under such contractual arrangements, or
|
(iv) |
consolidate the financial results of the VIE.
|
• |
the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form
10-Q
or current reports on Form
8-K;
|
• |
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.
|
• |
majority of independent directors on our board of directors;
|
• |
a minimum of three members in our audit committee;
|
• |
only independent directors being involved in the selection of director nominees and determination of executive officer compensation;
|
• |
regularly scheduled executive sessions of independent directors; and
|
• |
a quorum of annual general meeting which is no less than 33 1/3% of our outstanding shares.
|
• |
exercise effective control over Q&K
E-Commerce
and its subsidiaries;
|
• |
receive substantially all of the economic benefits of Q&K
E-Commerce
and its subsidiaries; and
|
• |
have an exclusive option to purchase all or part of the equity interests and assets in Q&K
E-Commerce
when and to the extent permitted by PRC law.
|
Total
leases
|
Leases expiring by the end of
|
|||||||||||||||||||||||||||||||||||||||||||
with
landlords
|
FY 2021
|
FY 2022
|
FY 2023
|
FY 2024
|
FY 2025
|
FY 2026
|
FY 2027
|
FY 2028
|
FY 2029
|
FY 2030
and after |
||||||||||||||||||||||||||||||||||
Number of rental apartments with
|
82,185 | 22,680 | 10,478 | 15,595 | 15,798 | 9,255 | 3,034 | 1,018 | 2,075 | 1,663 | 589 | |||||||||||||||||||||||||||||||||
Average annual straight-lined rental cost represented by (RMB in million)
|
61.2 | 89.1 | 100.2 | 140.6 | 133.0 | 76.8 | 25.0 | 8.8 | 17.7 | 14.2 | 6.9 | |||||||||||||||||||||||||||||||||
Percentage of total annual straight-lined rental cost (%)
|
100 | 4.1 | 9.2 | 19.4 | 24.4 | 17.6 | 6.9 | 2.8 | 6.5 | 5.9 | 3.2 |
Total leases
with tenants
|
Leases expiring by the end of
|
|||||||||||||||
FY 2021
|
FY 2022
|
FY 2023
|
||||||||||||||
Number of rental units with
|
68,755 | 67,203 | 1,552 | — | ||||||||||||
Average annual rental represented by (RMB in million)
|
502 | 460 | 42 | — | ||||||||||||
Percentage of total annual rental represented (%)
|
100 | % | 92 | % | 8 | % | — |
• |
Real-time analytics
lease-out
operating data.
|
• |
Scalability
|
• |
Stability
built-in
software and hardware redundancy and will automatically switch if any error is detected. We implement a real-time data backup mechanism to ensure the reliability of our information technology infrastructure. Our system adopts modular architecture that consists of multiple connected components, each of which can be separately upgraded and replaced without compromising the functioning of other components. In addition, we have implemented a disaster recovery plan that involves hosting our information technology infrastructure in separate locations in China, including third-party backup data servers for disaster recovery. We believe our information technology infrastructure is highly stable. We have not experienced any major interruption of our information technology infrastructure since inception.
|
• |
ability to source suitable and sufficient apartments across multiple regions with favorable lease terms, including contract length, rental-free period,
rent-in
costs, etc.;
|
• |
ability to use big data analysis to establish competitive lease terms with both landlords and tenants;
|
• |
ability to establish sustainable unit economic model;
|
• |
ability to renovate and operate rental apartments in an efficient and cost-effective manner;
|
• |
ability to achieve high standardization and manage a complex supply network;
|
• |
ability to maintain financial flexibility;
|
• |
geographic coverage and customer reach;
|
• |
ability to establish comprehensive IT and internet infrastructure to manage a large and fast-growing portfolio of rental apartments; and
|
• |
brand awareness and customer satisfaction, including the availability and range of value-added services to help foster a sense of community and loyalty among tenants.
|
• |
Application of a
pre-establishment
national treatment. According to the Foreign Investment Law, the PRC governments shall govern foreign investment according to the system of
pre-establishment
national treatment, which requires treatment given to foreign investors and their investments during the market access stage shall not be inferior to treatment afforded to PRC domestic investors and their investment except where a foreign investment falls into the orbit of the Negative List.
|
• |
Application of an updated Investment Management. Pursuant to the Foreign Investment Law, the State shall establish a foreign investment information report system. Foreign investors or FIEs shall submit investment information to the competent department for commerce through the enterprise registration system and the enterprise credit information publicity system. The content and scope of information subject to the reporting obligations shall be determined under the principle of necessity. In addition, the State shall establish a security review system for foreign investment, under which a security review shall be conducted for any foreign investment affecting or having the possibility to affect the state security.
|
• |
Transformation on properties for rental is allowed. Commercial properties are allowed to be transformed to rental homes with land use duration and plot ratio unchanged, the purpose of land use shall be adjusted from commercial to residential, and after the adjustment, the prices of utilities like water, electricity, and gas shall follow residential standards. Transformation on residential properties for rental according to the national and local housing design standards is allowed, and the transformation shall not alter existing fire-proof compartmentation, emergency evacuation or fire separation facilities so as to ensure the intactness and validation of fire protection facilities.
|
• |
Preferential policies encouraging individuals to rent out homes shall be implemented and individuals shall be encouraged to rent out their proprietary properties in accordance with the laws. Leasing of residential properties by individuals shall be regulated. Individuals are encouraged to entrust their homes to home-rental enterprises or intermediary agencies for rental.
|
• |
Local governments shall adopt preferential policies and measures to support leasing of residential properties by individuals, and guide urban residents to resolving housing issues through residential tenancy. Laws and regulations on residential tenancy shall clearly define the rights and obligations of the parties in residential tenancy, regulate market conducts, and stabilize landlord-tenant relationship. Exemplary residential lease texts and online execution of contract shall be implemented, and the residential lease registration and recordation system shall be implemented.
|
• |
Provincial-level governments shall strengthen the administration of home rental market within their respective administrative regions. Municipal governments shall take the general charge of the administration of the home-rental market within their respective administrative regions, establish a regulatory system with the cooperation of multiple departments. Local governments shall establish a residential tenancy information service and regulatory system to promote information sharing between government agencies.
|
• |
Local housing authorities shall be responsible for the administration and coordination of the home-rental market, strengthen the administration of residential tenancy market in coordination with relevant departments, improve the credit administration system of residential tenancy enterprises, intermediary agencies and professionals, and keep credit records of relevant market participants which shall be incorporated into the national credit information sharing platform for the regulation and punishment of market participants with serious loss of credit. The public security authorities shall strengthen the public security administration of rented properties, residential tenancy and the residence registration in rental homes residential tenancy, urge and guide neighborhood committees, villagers committees, property service enterprises and other administration entities in screening for potential safety risks. All related government agencies shall, according to their powers, duties and division of work, investigate and prosecute the engagement in illegal activities in rented homes.
|
• |
Landlords shall ensure the safety and basic function of rented homes. Residential tenancy enterprises shall screen the identity of tenants and keep a truthful record thereof. Landlords shall not evict the tenants through violence, threats, or other coercive methods to repossess the properties.
|
• |
Landlords shall ensure that each room in the rented homes conforms to certain standards regarding maximum of tenants and minimum floor space in a single room. Such standards shall be promulgated by local authorities.
Non-residence
space such as kitchens, bathrooms, balconies and basement storage space shall not be rented for residential purpose.
|
• |
Leases shall contain a duration clause. Duly executed leases that last over three years are encouraged and shall receive support by local governments.
|
• |
Landlords and tenants shall register signed leases at the local housing authorities within 15 days after the execution of the leases.
|
• |
Residential tenancy enterprises shall, within 30 days of its establishment, report to local housing authorities. Housing authorities shall publish information of residential tenancy enterprises in a timely manner and inspect residential tenancy enterprises.
|
• |
Institutionalized residential tenancy enterprises are encouraged. Home developers, realtors and property management enterprises are encouraged to expand its business into residential tenancy industry.
|
• |
Housing authorities shall establish an online lease recordation system. Housing authorities shall also regulate and supervise the rental process in the residential tenancy industry including ensuring the truthfulness of residential tenancy advertisements and standardizing the residential tenancy process.
|
• |
To increase the supply of rental homes, local governments are encouraged to provide new land zoned for residential tenancy properties. Financial institutions are encouraged to extend more loans to residential tenancy enterprises with controllable risks and sustainable business operation.
|
• |
Different departments in local governments shall jointly enforce laws and regulations regarding residential tenancy and maintain the order of the residential tenancy market.
|
• |
Beijing:
non-residence
space such as kitchens, bathrooms, balconies and basement storage space is not allowed to be rented for residential purpose; a room is not allowed to be divided into smaller sections for rental; the minimum rented floor space per capita is five square meters; a single rented room is not allowed to accommodate more than two persons. Only a room designed for residential purpose, including a living room, can be leased as a unit for rental and such room cannot be segmented into more rooms for rental.
|
• |
Shanghai: residential tenancy are banned if: (i) a single room is divided into smaller sections for rental;
(ii) non-residence
space such as kitchens, bathrooms, balconies and basement storage space is rented for residential purpose; (iii) rented floor space per capita is below five square meters; or (iv) a single rented room accommodates more than two persons. Living rooms are allowed to be rented only if the floor space exceeds 12 square meters.
|
• |
Hangzhou:
non-residence
space such as dining rooms, kitchens, bathrooms, balconies, corridors, storage room and basement storage space is not allowed to be rented for residential purpose; a single room is not allowed to be divided into smaller sections for rental; living rooms are allowed to be rented for residence purpose; the minimum rented floor space per capita is four square meters.
|
• |
Suzhou:
non-residence
space such as kitchens, bathrooms, balconies, garage and basement storage space is not allowed to be rented for residential purpose; a single room is not allowed to be divided into smaller sections for rental; living rooms with floor space over 12 square meters are allowed to be rented for residence purpose; the minimum rented floor space per capita is four square meters; a single rented room is not allowed to accommodate more than two persons.
|
• |
Wuhan:
non-residence
space such as dining rooms, kitchens, bathrooms, balconies, corridors, storage room and basement storage space is not allowed to be rented for residential purpose; a single room is not allowed to be divided into smaller sections for rental; living rooms with floor space over 12 square meters are allowed to be rented for residence purpose; the minimum rented floor space per capita is five square meters; a single rented room is not allowed to accommodate more than two persons.
|
• |
Nanjing:
non-residence
space such as kitchens, bathrooms, balconies, garage and basement storage space is not allowed to be rented for residential purpose; a room is not allowed to be divided into smaller sections for rental; the minimum rented floor space per capita is 15 square meters; a single rented room is not allowed to accommodate more than two persons.
|
• |
Rental loans shall be released by banks at same intervals as the payment of rent by tenants. Banks shall screen tenants applying for rental loans regarding their ability to repay loans and avoid the formation of cash pool by home-rental enterprises. Home-rental enterprises shall not require or solicit tenant to apply for rental loan by concealment, fraud, coercion or by offering discounts in rent.
|
• |
For home rental enterprises, the aggregate amount of rental loans shall not exceed 30% of their total rental income. Any
non-compliance
in this regard shall be rectified by the end of 2022.
|
• |
Residential rental operators are prohibited from inducing tenants to utilize rental installment loans by providing rental discounts or by including any terms of rental installment loans in the rental agreement.
|
• |
Commercial banks may extend a rental installment loan only if the lease agreement has been registered with local housing bureau and the term of the loan does not exceed the duration of the tenancy.
|
• |
MOHURD is empowered to set standards of qualification for residential rental operators on financial position, expertise and managing abilities.
|
• |
Municipal governments are empowered to promulgate local policies to regulate rental income and deposits received by residential rental operators with a regulatory focus on high-risk circumstances where (1) the rent paid to the landlord is higher than the rent received from the tenants; and (2) the credit term of rent payment to landlords are longer than the credit term of receiving rent payment from the tenants.
|
• |
to ensure that commodities and services up to certain safety requirements;
|
• |
to protect the safety of consumers;
|
• |
to disclose serious defects of a commodity or a service and to adopt preventive measures against occurrence of damage;
|
• |
to provide consumers with accurate information and to refrain from conducting false advertising;
|
• |
to obtain consents of consumers and to disclose the rules for the collection and/or use of information when collecting data or information from consumers; to take technical measures and other necessary measures to protect the personal information collected from consumers; not to divulge, sell, or illegally provide consumers’ information to others; not to send commercial information to consumers without the consent or request of consumers or with a clear refusal from consumers;
|
• |
not to set unreasonable or unfair terms for consumers or alleviate or release itself from civil liability for harming the legal rights and interests of consumers by means of standard contracts, circulars, announcements, shop notices or other means;
|
• |
to remind consumers in a conspicuous manner to pay attention to the quality, quantity and prices or fees of commodities or services, duration and manner of performance, safety precautions and risk warnings, after-sales service, civil liability and other terms and conditions vital to the interests of consumers under a standard form of agreement prepared by the business operators, and to provide explanations as required by consumers; and
|
• |
not to insult or slander consumers or to search the person of, or articles carried by, a consumer or to infringe upon the personal freedom of a consumer.
|
• |
gaining improper entry into a computer or system of national strategic importance;
|
• |
disseminating politically disruptive information;
|
• |
leaking government secrets;
|
• |
spreading false commercial information; or
|
• |
infringing intellectual property rights.
|
(1) |
Guangjie Jin, Xiamen Siyuan Investment Co., Ltd. and Bing Xiao are beneficial owners of the shares of Q&K
E-Commerce,
who hold 74.5%, 15.0% and 10.5% equity interests in Q&K
E-Commerce,
respectively.
|
(2) |
The remaining minority interests are ultimately owned by Mr. Guangjie Jin.
|
(3) |
The remaining minority interests are owned by third parties.
|
(4) |
0.1% of the shares of Chengdu Liwu Apartment Management Co., Ltd. are held by Chengcai Qu on behalf of Qingke (Shanghai) Artificial Intelligence Technology Co., Ltd.
|
• |
Shanghai Qingke Public Rental Housing Leasing Management Co., Ltd. and its subsidiary primarily focus on the apartment renovation and the procurement of furniture, appliances and other equipment in relation to our apartment rental service.
|
• |
Shanghai Qingke Trade Co., Ltd. primarily focuses on the operation of Qingke Select.
|
• |
Shanghai Qingke Creative Industry Supporting Property Management Co., Ltd and its subsidiary primarily focus on sourcing apartment units in Shanghai.
|
• |
the ownership structures of Q&K Investment Consulting and Q&K
E-Commerce,
both currently and immediately are not in any violation of applicable PRC laws or regulations currently in effect; and
|
• |
the contractual arrangements among Q&K Investment Consulting, Q&K
E-Commerce,
the shareholders of Q&K
E-Commerce
governed by PRC law are valid, binding and enforceable, and are not in any violation of PRC laws or regulations currently in effect.
|
• |
stringent
home-buying
requirements in top tier cities in China, which have made it more difficult to purchase apartments, particularly for our target customers; and
|
• |
favorable policies to incentivize and support the growth of the apartment rental sector.
|
• |
Our ability to expand our apartment network;
|
• |
Our ability to maintain and increase occupancy level and rental rate;
|
• |
Our ability to control operating costs and expenses and improve operational efficiency;
|
• |
Our ability to manage upfront capital outlay and expansion cost; and
|
• |
Seasonality.
|
As of September 30,
|
||||||||||||
2018
|
2019
|
2020
|
||||||||||
Number of rental units contracted
|
96,529 | 99,656 | 82,185 | |||||||||
Number of rental units under renovation
|
12,581 | 2,359 | 921 | |||||||||
Number of available rental units
|
83,948 | 97,297 | 81,264 | |||||||||
Number of occupied rental units
|
77,266 | 92,513 | 68,755 | |||||||||
Number of vacant available rental units
|
6,682 | 4,784 | 12,509 | |||||||||
Number of rental units managed but not contracted by us
(1)
|
— | — | 25,133 |
(1) |
refers to the number of rental units that (i) we provide our rental management service for and (ii) are leased in from landlords by third-parties
|
As of September 30,
|
||||||||||||
2018
|
2019
|
2020
|
||||||||||
East China
(1)
|
81,796 | 92,514 | 23,772 | |||||||||
North China
(2)
|
312 | 412 | 27,853 | |||||||||
Southwest China
(3)
|
— | — | 21,514 | |||||||||
Others
(4)
|
1,840 | 4,371 | 8,125 |
(1) |
includes Fuzhou, Hangzhou, Hefei, Nanjing, Ningbo, Shanghai, Suzhou, Jinan and Qingdao
|
(2) |
includes Beijing, Shijiazhuang, Tianjin and Xi’an
|
(3) |
includes Chengdu, Kunming and Chongqing
|
(4) |
includes Nanchang, Nanning, Wuhan and Changsha
|
FY 2018
|
FY 2019
|
FY 2020
|
||||||||||
Period-average
occupancy rate (%)
|
91.6 | 91.6 | 83.8 | |||||||||
Average monthly rental (RMB)
|
||||||||||||
before discount for rental prepayment
|
1,272 | 1,146 | 1,185 | |||||||||
after discount for rental prepayment
|
1,180 | 1,074 | 1,169 | |||||||||
Rental spread margin (%)
|
||||||||||||
before discount for rental prepayment
|
30.7 | 24.8 | 20.9 | |||||||||
after discount for rental prepayment
|
25.3 | 19.8 | 19.8 |
FY 2018
|
FY 2019
|
FY 2020
|
||||||||||||||||||||||||||
RMB
|
% of total
net
revenues
|
RMB
|
% of total
net
revenues
|
RMB
|
US$
|
% of total
net
revenues
|
||||||||||||||||||||||
(in thousands, except for percentages)
|
||||||||||||||||||||||||||||
Net revenues:
|
||||||||||||||||||||||||||||
Rental service
|
796,940 | 89.6 | 1,089,164 | 88.3 | 1,105,172 | 162,774 | 91.5 | |||||||||||||||||||||
Value-added
services and others
|
92,997 | 10.4 | 144,606 | 11.7 | 102,791 | 15,139 | 8.5 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total net revenues
|
|
889,937
|
|
|
100.0
|
|
|
1,233,770
|
|
|
100.0
|
|
|
1,207,963
|
|
|
177,913
|
|
|
100.0
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2018
|
FY 2019
|
FY 2020
|
||||||||||||||||||||||||||
RMB
|
% of revenue
from
value- added
services and
others
|
RMB
|
% of revenue
from
value- added
services and
others
|
RMB
|
US$
|
% of revenue
from
value- added
services and
others
|
||||||||||||||||||||||
(in thousands, except for percentages)
|
||||||||||||||||||||||||||||
Broadband internet
|
51,145 | 55.0 | 77,104 | 53.3 | 34,100 | 5,022 | 33.2 | |||||||||||||||||||||
Utility service
|
19,411 | 20.9 | 28,515 | 19.7 | 13,257 | 1,953 | 12.9 | |||||||||||||||||||||
Indemnity
|
18,329 | 19.7 | 34,860 | 24.1 | 32,782 | 4,828 | 31.9 | |||||||||||||||||||||
Others
|
4,112 | 4.4 | 4,127 | 2.9 | 22,652 | 3,336 | 22.0 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total
|
|
92,997
|
|
|
100.0
|
|
|
144,606
|
|
|
100.0
|
|
|
102,791
|
|
|
15,139
|
|
|
100.0
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2018
|
FY 2019
|
FY 2020
|
||||||||||||||||||||||||||
RMB
|
% of total
net
revenues
|
RMB
|
% of total
net
revenues
|
RMB
|
US$
|
% of total
net
revenues
|
||||||||||||||||||||||
(in thousands, except for percentages)
|
||||||||||||||||||||||||||||
Operating costs and expenses:
|
||||||||||||||||||||||||||||
Operating cost
|
897,959 | 100.9 | 1,304,992 | 105.8 | 1,203,415 | 177,245 | 99.6 | |||||||||||||||||||||
Selling and marketing expenses
|
117,826 | 13.2 | 135,413 | 11.0 | 63,512 | 9,354 | 5.3 | |||||||||||||||||||||
General and administrative expenses
|
84,953 | 9.5 | 108,196 | 8.8 | 102,769 | 15,136 | 8.5 | |||||||||||||||||||||
Research and development expenses
|
51,947 | 5.8 | 47,029 | 3.8 | 24,934 | 3,672 | 2.1 | |||||||||||||||||||||
Pre-operation
expenses
|
117,107 | 13.2 | 42,661 | 3.5 | 14,245 | 2,098 | 1.2 | |||||||||||||||||||||
Impairment loss on long-lived assets
|
50,614 | 5.7 | 46,213 | 3.8 | 846,766 | 124,715 | 70.1 | |||||||||||||||||||||
Loss from disposal of property and equipment
|
— | — | — | — | 468,980 | 69,073 | 38.8 | |||||||||||||||||||||
Other income, net
|
(4,034 | ) | (0.5 | ) | (2,427 | ) | (0.2 | ) | (15,881 | ) | (2,339 | ) | (1.3 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total operating costs and expenses
|
|
1,316,372
|
|
|
147.9
|
|
|
1,682,077
|
|
|
136.3
|
|
|
2,708,740
|
|
|
398,954
|
|
|
224.2
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2018
|
FY 2019
|
FY 2020
|
||||||||||||||||||||||||||
RMB
|
% of total
net revenues |
RMB
|
% of total
net revenues |
RMB
|
US$
|
% of total
net
revenues
|
||||||||||||||||||||||
(in thousands, except for percentages)
|
||||||||||||||||||||||||||||
Rental cost
|
664,732 | 74.7 | 975,342 | 79.1 | 813,773 | 119,856 | 67.4 | |||||||||||||||||||||
Depreciation expenses
|
145,768 | 16.4 | 207,814 | 16.8 | 256,056 | 37,713 | 21.2 | |||||||||||||||||||||
Personnel cost
|
21,092 | 2.4 | 23,698 | 1.9 | 77,392 | 11,399 | 6.4 | |||||||||||||||||||||
Cleaning cost
|
14,861 | 1.7 | 28,419 | 2.3 | 7,657 | 1,128 | 0.6 | |||||||||||||||||||||
Utility cost
|
14,116 | 1.6 | 20,823 | 1.7 | 14,446 | 2,128 | 1.2 | |||||||||||||||||||||
Broadband internet cost
|
28,236 | 3.2 | 37,096 | 3.0 | 31,920 | 4,701 | 2.6 | |||||||||||||||||||||
Others
|
9,154 | 0.9 | 11,800 | 1.0 | 2,171 | 320 | 0.2 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total
|
|
897,959
|
|
|
100.9
|
|
|
1,304,992
|
|
|
105.8
|
|
|
1,203,415
|
|
|
177,245
|
|
|
99.6
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2018
|
FY 2019
|
FY 2020
|
||||||||||||||||||||||||||
RMB
|
% of
interest expense, net |
RMB
|
% of
interest expense, net |
RMB
|
US$
|
% of
interest expense, net |
||||||||||||||||||||||
(in thousands, except for percentages)
|
||||||||||||||||||||||||||||
Interest on bank borrowings
|
(2,930 | ) | 3.8 | (4,930 | ) | 5.4 | (56,533 | ) | (8,326 | ) | 43.4 | |||||||||||||||||
Interest on rental installment loans
|
(73,936 | ) | 95.9 | (70,621 | ) | 76.8 | (37,004 | ) | (5,450 | ) | 28.4 | |||||||||||||||||
Interest on capital lease and other financing arrangement
|
(2,893 | ) | 3.7 | (18,827 | ) | 20.5 | (31,094 | ) | (4,580 | ) | 23.9 | |||||||||||||||||
Interest expense on convertible notes
|
— | — | — | — | (5,899 | ) | (869 | ) | 4.5 | |||||||||||||||||||
Interest income
|
2,592 | (3.4 | ) | 2,464 | (2.7 | ) | 324 | 48 | (0.2 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total
|
|
(77,167
|
)
|
|
100.0
|
|
|
(91,914
|
)
|
|
100.0
|
|
|
(130,206
|
)
|
|
(19,177
|
)
|
|
100.0
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date
|
Fair value per
share (US$) |
DLOM
|
Discount rate
|
Purpose of valuation
|
||||||||||
March 16, 2017
|
0.04 | 12 | % | 22 | % | To determine the fair value of RSU grant | ||||||||
July 31, 2017
|
0.05 | 12 | % | 22 | % | To determine the fair value of stock option grant and whether the series C convertible redeemable preferred shares contain any beneficial conversion feature | ||||||||
November 12, 2017
|
0.06 | 10 | % | 21 | % | To determine the fair value of RSU grant | ||||||||
March 29, 2018
|
0.10 | 8 | % | 19 | % |
To determine whether the series
C-1
convertible redeemable preferred shares contain any beneficial conversion feature
|
||||||||
April 1, 2018
|
0.10 | 8 | % | 19 | % | To determine the fair value of RSU grant | ||||||||
June 3, 2019
|
0.22 | 5 | % | 17 | % |
To determine whether the series
C-2
convertible redeemable preferred shares contain any beneficial conversion feature
|
||||||||
September 30, 2019
|
0.30 | 3 | % | 17 | % |
To determine the fair value of contingent
earn-out
liabilities
|
• |
Discount Rates. The discount rates listed out in the table above were based on the weighted average cost of capital, which was determined based on a number of factors including
risk-free
rate, company specific risk premium, equity risk premium, company size and
non-systemic
risk factors.
|
• |
Discount for Lack of Marketability, or DLOM. DLOM was quantified by the Black Scholes model. This model estimates a DLOM as a function of restricted transferability, using the value of an
average-strike
put option. This option pricing method is one of the methods commonly used in estimating DLOM as it takes into consideration factors like timing of a liquidity event, such as an initial public offering, and estimated volatility of our shares. The further the valuation date is from an expected liquidity event, the higher the put option value and thus the higher the implied DLOM. The lower the DLOM used for the valuation, the higher the determined fair value of the ordinary shares.
|
April 2016
|
October 2016
|
July 2017
|
||||||||||
Risk-free
rate of return
(1)
|
3.18 | % | 3.18 | % | 3.21 | % | ||||||
Contractual life of option
|
10 years | 10 years | 8.4 years | |||||||||
Estimated volatility rate
(2)
|
37 | % | 37 | % | 35 | % | ||||||
Expected dividend yield
|
0 | % | 0 | % | 0 | % | ||||||
Fair value of underlying ordinary shares
|
US$0.03 | US$0.04 | US$0.05 |
(1) |
The
risk-free
rate is based on the yield of US Treasuries, adjusted by country risk premium of China.
|
(2) |
The expected volatility is estimated based on historical price volatilities of ordinary shares of several comparable companies.
|
FY 2018
|
FY 2019
|
FY 2020
|
||||||||||||||||||||||||||
RMB
|
% of total
net
revenues
|
RMB
|
% of total
net
revenues |
RMB
|
US$
|
% of total
net
revenues
|
||||||||||||||||||||||
(in thousands, except for percentages)
|
||||||||||||||||||||||||||||
Net revenues:
|
||||||||||||||||||||||||||||
Rental service revenue
|
796,940 | 89.6 | 1,089,164 | 88.3 | 1,105,172 | 162,774 | 91.5 | |||||||||||||||||||||
Value-added
services and others
|
92,997 | 10.4 | 144,606 | 11.7 | 102,791 | 15,139 | 8.5 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total net revenues
|
889,937 | 100.0 | 1,233,770 | 100.0 | 1,207,963 | 177,913 | 100.0 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Operating costs and expenses:
|
||||||||||||||||||||||||||||
Operating cost
|
(897,959 | ) | (100.9 | ) | (1,304,992 | ) | (105.8 | ) | (1,203,415 | ) | (177,245 | ) | (99.6 | ) | ||||||||||||||
Selling and marketing expenses
|
(117,826 | ) | (13.2 | ) | (135,413 | ) | (11.0 | ) | (63,512 | ) | (9,354 | ) | (5.3 | ) | ||||||||||||||
General and administrative expenses
|
(84,953 | ) | (9.5 | ) | (108,196 | ) | (8.8 | ) | (102,769 | ) | (15,136 | ) | (8.5 | ) | ||||||||||||||
Research and development expenses
|
(51,947 | ) | (5.8 | ) | (47,029 | ) | (3.8 | ) | (24,934 | ) | (3,672 | ) | (2.1 | ) | ||||||||||||||
Pre-operation
expenses
|
(117,107 | ) | (13.2 | ) | (42,661 | ) | (3.5 | ) | (14,245 | ) | (2,098 | ) | (1.2 | ) | ||||||||||||||
Impairment loss on long-lived assets
|
(50,614 | ) | (5.7 | ) | (46,213 | ) | (3.7 | ) | (846,766 | ) | (124,715 | ) | (70.1 | ) | ||||||||||||||
Loss from disposal of property and equipment
|
— | — | — | — | (468,980 | ) | (69,073 | ) | (38.8 | ) | ||||||||||||||||||
Other income, net
|
4,034 | 0.5 | 2,427 | 0.2 | 15,881 | 2,339 | 1.3 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2018
|
FY 2019
|
FY 2020
|
||||||||||||||||||||||||||
RMB
|
% of total
net
revenues
|
RMB
|
% of total
net
revenues |
RMB
|
US$
|
% of total
net
revenues
|
||||||||||||||||||||||
Total operating costs and expenses
|
(1,316,372 | ) | (147.9 | ) | (1,682,077 | ) | (136.3 | ) | (2,708,740 | ) | (398,954 | ) | (224.2 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Loss from operation
|
(426,435 | ) | (47.9 | ) | (448,307 | ) | (36.3 | ) | (1,500,777 | ) | (221,041 | ) | (124.2 | ) | ||||||||||||||
Interest expense, net
|
(77,167 | ) | (8.7 | ) | (91,914 | ) | (7.4 | ) | (130,206 | ) | (19,177 | ) | (10.8 | ) | ||||||||||||||
Foreign exchange loss, net
|
(91 | ) | — | (457 | ) | — | (62 | ) | (9 | ) | — | |||||||||||||||||
Fair value change of contingent
earn-out
liabilities
|
6,164 | 0.7 | 42,404 | 3.4 | 97,417 | 14,348 | 8.1 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Loss before income taxes
|
(497,529 | ) | (55.9 | ) | (498,274 | ) | (40.4 | ) | (1,533,628 | ) | (225,879 | ) | (127.0 | ) | ||||||||||||||
Income tax expense
|
(2,393 | ) | (0.3 | ) | (63 | ) | — | (13 | ) | (2 | ) | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net loss
|
(499,922 | ) | (56.2 | ) | (498,337 | ) | (40.4 | ) | (1,533,641 | ) | (225,881 | ) | (127.0 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
• |
Operating cost
|
• |
Rental cost.
|
• |
Depreciation expenses.
|
• |
Personnel costs related to after
-rent
activities of apartment managers.
after-rent
services increased by 226.6% from RMB23.7 million in FY 2019 to RMB77.4 million (US$11.4 million) in FY 2020, primarily attributable to our increased effort in operating and maintaining the rental units during the COVID-19 pandemic in China and our asset acquisition in July 2020.
|
• |
Costs for value
-added
services and others.
|
• |
Selling and marketing expenses
|
• |
Our selling and marketing expenses as a percentage of total net revenues decreased from 11.0% in FY 2019 to 5.3% in FY 2020 due to our cost-saving efforts.
|
• |
General and administrative expenses
|
• |
Our general and administrative expenses as a percentage of total net revenues increased from 8.8% in FY 2019 to 8.5% in FY 2020 due to a decrease in our net revenues attributable to the
COVID-19
pandemic.
|
• |
Research and development expenses
|
• |
Pre
-operation
expenses
pre-operation
expenses decreased by 66.6% from RMB42.7 million in FY 2019 to RMB14.2 million (US$2.1 million) in FY 2020. The decrease was primarily attributable to a reduction of our renovation activities. These decreases were due to fewer new rental units being renovated in FY 2020, compared to the expansion in FY 2019.
|
• |
Our
pre-operation
expenses as a percentage of total net revenues decreased from 3.5% in FY 2019 to 1.2% in FY 2020 as fewer new rental units were developed in FY 2020 compared to FY 2019.
|
• |
Impairment loss on long-lived assets.
COVID-19
pandemic.
|
• |
L
oss
from disposal of property and equipment
.
|
• |
Operating cost
|
• |
Rental cost.
|
• |
Depreciation expenses.
|
• |
Personnel costs related to after
-rent
activities of our apartment managers.
after-rent
services increased by 12.4% from RMB21.1 million in FY 2018 to RMB23.7 million in FY 2019 primarily attributable to the increase in the number of occupied rental units.
|
• |
Costs for value
-added
services and others.
|
• |
Selling and marketing expenses
|
• |
General and administrative expenses
|
• |
Research and development expenses
|
• |
Pre
-operation
expenses
pre-operation
expenses decreased by 63.6% from RMB117.1 million in FY 2018 to RMB42.7 million in FY 2019. The decrease was primarily attributable to (i) a decrease in the
pre-operation
rental cost by 68.9% from RMB90.6 million in FY 2018 to RMB28.2 million in FY 2019, and (ii) a decrease in the
pre-operation
personnel cost by 45.5% from RMB26.5 million in FY 2018 to RMB14.4 million in FY 2019. These decreases were due to fewer new rental units being developed in FY 2019 compared to FY 2018.
|
• |
Impairment loss
on long-lived assets
|
FY 2018
|
FY 2019
|
FY 2020
|
||||||||||||||
RMB
|
RMB
|
RMB
|
US$
|
|||||||||||||
Net cash (used in) provided by operating activities
|
(117,048 | ) | (88,189 | ) | 54,841 | 8,078 | ||||||||||
Net cash (used in) investing activities
|
(674,298 | ) | (351,450 | ) | (138,670 | ) | (20,406 | ) | ||||||||
Net cash provided by (used in) financing activities
|
539,528 | 569,569 | (134,924 | ) | (17,979 | ) | ||||||||||
Effect of foreign exchange rate changes
|
3,455 | 2,132 | (295 | ) | (104 | ) | ||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(248,363 | ) | 132,062 | (219,048 | ) | (30,411 | ) | |||||||||
Cash, cash equivalents and restricted cash at the beginning of the period
|
367,115 | 118,752 | 250,814 | 35,090 | ||||||||||||
Cash, cash equivalents and restricted cash at the end of the period
|
118,752 | 250,814 | 31,766 | 4,679 |
Payment due by period
|
||||||||||||||||||||
Total
|
Less than 1
year |
1-2 years
|
3-5 years
|
More than 5
years |
||||||||||||||||
(in RMB thousands)
|
||||||||||||||||||||
Operating lease obligations
(1)
|
4,758,199 | 1,028,730 | 909,053 | 1,973,579 | 846,837 | |||||||||||||||
Long-term
debt
(2)
|
381,922 | 159,721 | 194,170 | 25,163 | 2,868 | |||||||||||||||
Short-term
debt
(2)
|
400,580 | 400,580 | — | — | — | |||||||||||||||
Rental installment loans
(3)
|
54,505 | 54,505 | — | — | — | |||||||||||||||
Capital lease and other financing arrangement payable
(4)
|
444,554 | 201,835 | 100,599 | 142,120 | — |
(1) |
related to the lease agreements we have entered into for properties which we operate
|
(2) |
excluding interests to be paid
|
(3) |
see note 2 of our consolidated financial statements included elsewhere in this annual report
|
(4) |
see notes 2 and 6 of our consolidated financial statements included elsewhere in this annual report
|
Directors and Executive Officers
|
Age
|
Position/Title
|
||
Chengcai Qu | 39 | Chairman of the board of directors, chief executive officer, chief operating officer and vice president | ||
Gang Xie | 48 | Director, chief technology officer | ||
Lin Lin | 48 | Director | ||
Bing Xiao | 52 | Director | ||
Chen Chen | 40 | Independent director | ||
Lin Zhou | 61 | Independent director | ||
Zhichen (Frank) Sun | 38 | Chief Financial Officer |
* |
Less than 1% of our total outstanding shares.
|
• |
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 advisers only after taking into consideration all factors relevant to that person’s independence from management.
|
• |
selecting and recommending 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 and extraordinary general 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 register of members.
|
Function
|
Number of Employees
|
|||
Sourcing
|
34 | |||
Apartment leasing, tenant relations and property maintenance
*
|
46 | |||
Research and development
|
53 | |||
Other
|
115 | |||
|
|
|||
Total
|
248 |
* |
Including 46 employees who were apartment managers. In addition to our own employees, we had 1,976 apartment managers from our outside contractors as of September 30, 2020.
|
• |
each of our directors and executive officers; and
|
• |
each person known to us to beneficially own more than 5% of our total outstanding ordinary shares.
|
Class A ordinary shares
|
Class B Ordinary Shares
|
Total ordinary shares on
an as-converted basis
|
Aggregate
voting
power*** |
|||||||||||||||||||||||||
Number
|
%
|
Number
|
%
|
Number
|
%
|
%
|
||||||||||||||||||||||
Directors
and
Executive
Officers
**
:
|
||||||||||||||||||||||||||||
Chengcai Qu
|
* | * | — | — | * | * | * | |||||||||||||||||||||
Gang Xie
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Lin Lin
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Bing Xiao
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Chen Chen
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Lin Zhou
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Zhichen (Frank) Sun
|
* | * | — | — | * | * | * | |||||||||||||||||||||
All Directors and Executive Officers as a Group
|
10,000,000 | 0.8 | % | — | — | 10,000,000 | 0.7 | % | 0.3 | % | ||||||||||||||||||
Principal Shareholders:
|
||||||||||||||||||||||||||||
Yijia Inc.
(1)
|
— | — | 180,389,549 | 100.0 | % | 180,389,549 | 12.6 | % | 59.0 | % | ||||||||||||||||||
Crescent Capital Investments Ltd. and its affiliated
entities
(2)
|
433,814,924 | 31.6 | % | — | — | 433,814,924 | 27.9 | % | 13.6 | % | ||||||||||||||||||
Newsion One Inc. and Newsion Two Inc.
(3)
|
125,361,929 | 10.0 | % | — | — | 125,361,929 | 8.7 | % | 4.1 | % | ||||||||||||||||||
North Haven Private Equity Asia Harbor Company
Limited
(4)
|
120,000,000 | 9.6 | % | — | — | 120,000,000 | 8.4 | % | 3.9 | % | ||||||||||||||||||
SAIF IV Consumer (BVI) Limited
(5)
|
120,000,000 | 9.6 | % | — | — | 120,000,000 | 8.4 | % | 3.9 | % | ||||||||||||||||||
Bill.Com Inc.
(6)
|
112,300,000 | 8.9 | % | — | — | 112,300,000 | 7.8 | % | 3.7 | % | ||||||||||||||||||
Great Global Ventures Ltd
(7)
|
96,491,652 | 7.7 | % | — | — | 96,491,652 | 6.7 | % | 3.2 | % |
* |
Less than 1% of our total outstanding shares.
|
** |
Except as indicated otherwise below, the business address of our directors and executive officers is Suite 1607, Building A, No.596 Middle Longhua Road, Xuhui District, Shanghai, 200032, People’s Republic of China.
|
*** |
For each person or group included in this column, percentage of total voting power represents voting power based on both Class A and Class B ordinary shares held by such person or group with respect to all outstanding shares of our Class A and Class B ordinary shares as a single class and on an
as-converted
basis. Each Class A ordinary shares is entitled to one vote per share. Each Class B ordinary share is entitled to ten (10) votes per share. Our Class B ordinary shares are convertible at any time by the holder into Class A ordinary shares on a
one-for-one
|
(1) |
Represents 180,389,549 Class B ordinary shares held by Yijia Inc., a British Virgin Islands company. According to the Schedule 13D filed by, among others, High Gate Investments Ltd. dated January 28, 2021, Yijia Inc. is a wholly-owned subsidiary of High Gate Investments Ltd., a Cayman Island company, which is in turn wholly owned by High Gate Holdings Ltd., a Cayman Islands company. High Gate Holdings Ltd. is wholly owned by Edmund Koon Kay Tang. On January 28, 2021, all outstanding share capital of Yijia Inc. was transferred from an affiliate of Mr. Guangjie Jin to High Gate Investment Ltd. Upon completion of this transfer, High Gate Investment Ltd. beneficially owns 180,389,549 Class B ordinary shares, representing 59.0% of our aggregating voting power. Information with respect to Yijia Inc., High Gate Investments Ltd. and High Gate Holdings Ltd. and relevant beneficial ownership information is derived from the Schedule 13D filed by, among others, High Gate Investments Ltd. dated February 2, 2021.
|
(2) |
Represents (i) 314,539,304 Class A ordinary shares held by CP QK Singapore Pte Ltd., a Singapore company, (ii) 114,855,780 Class A ordinary shares represented by 3,828,526 ADSs issuable upon the conversion of our series 1 and series 2 convertible notes held by Key Space (S) Pte Ltd., a Singapore company, excluding any accrued interest, and (iii) 4,419,840 Class A ordinary shares represented by 147,328 ADSs issuable upon the exercise of warrants granted to Key Space (S) Pte Ltd. The majority of CP QK Singapore Pte Ltd.’s voting power is held by Crescent Green Investments Ltd. All of the voting power of Crescent Green Investments Ltd. is held by Crescent Capital Investments Ltd. The majority of Crescent Capital Investments Ltd.’s voting power is held by CRESCENT GP LTD. The majority of CRESCENT GP LTD.’s voting power is held by David McKee Hand. All of the voting power of Key Space (S) Pte Ltd. is held by Crescent Capital Investments Ltd. The information set forth in this footnote is derived from the Schedule 13D filed by Crescent Capital Investments Ltd., among others, on February 16, 2021.
|
(3) |
Represents (i) 76,471,510 Class A ordinary shares held by Newsion One Inc., a British Virgin Islands company, among which 30,000,000 Class A ordinary shares were represented by ADSs, and (ii) 48,890,419 Class A ordinary shares held by Newsion Two Inc., a British Virgin Islands company, among which 30,000,000 Class A ordinary shares were represented by ADSs, according to the Schedule 13G filed by, among others, Youyang Li dated February 14, 2020. Newsion One Inc. and Newsion Two Inc. are wholly owned by Youyang Li.
|
(4) |
Represents 120,000,000 Class A ordinary shares held by North Haven Private Equity Asia Harbor Company Limited, a Cayman Islands company, as reported in the Schedule 13G filed by Morgan Stanley, among others, on February 12, 2020, which is ultimately controlled by Morgan Stanley, a Delaware company listed on New York Stock Exchange.
|
(5) |
Represents 120,000,000 Class A ordinary shares held by SAIF IV Consumer (BVI) Limited, a British Virgin Islands company. SAIF IV Consumer (BVI) Limited is wholly owned by SAIF Partners IV L.P. which is registered in Cayman Islands. The general partner of SAIF Partners IV L.P. is SAIF IV GP, L.P. The general partner of SAIF IV GP, L.P. is SAIF IV GP Capital Ltd. Andrew Y. Yan is the sole shareholder of SAIF IV GP Capital Ltd. The information set forth in this footnote is derived from the Schedule 13G filed by SAIF IV Consumer (BVI) Limited, among others, on March 2, 2020.
|
(6) |
Represents 112,300,000 Class A ordinary shares held by Bill.Com Inc., a British Virgin Islands company. Guangjie Jin, our founder and former chief executive officer, is the sole shareholder of Bill.Com Inc. All Class B ordinary shares held by Bill.Com Inc. were converted on a
one-for-one
|
(7) |
Represents 96,491,652 Class A ordinary shares held by Great Global Ventures Ltd, a British Virgin Islands company.
|
• |
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;
|
• |
a fee of such maximum sum as the Nasdaq 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.
|
• |
increase the share capital by such sum, to be divided into shares of such classes and amount, as the resolution shall prescribe;
|
• |
consolidate and divide all or any of our share capital into shares of a larger amount than our existing shares;
|
• |
sub-divide
our existing shares, or any of them into shares of a smaller amount; or
|
• |
cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and diminish the amount of our share capital by the amount of the shares so cancelled.
|
• |
an exempted company does not have to file an annual return of its shareholders with the Registrar of Companies;
|
• |
an exempted company’s register of members is not open to inspection;
|
• |
an exempted company does not have to hold an annual general meeting;
|
• |
an exempted company may issue no par value shares;
|
• |
an exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance);
|
• |
an exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;
|
• |
an exempted company may register as a limited duration company; and
|
• |
an exempted company may register as a segregated portfolio company.
|
• |
the statutory provisions as to the required majority vote have been met;
|
• |
the shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority to promote interests adverse to those of the class;
|
• |
the arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest; and
|
• |
the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Law.
|
• |
a company acts or proposes to act illegally or ultra vires;
|
• |
the act complained of, although not ultra vires, could only be effected duly if authorized by more than a simple majority vote that has not been obtained; and
|
• |
those who control the company are perpetrating a “fraud on the minority.”
|
• |
the Class A ordinary shares or ADSs on which the dividend is paid are readily tradable on an established securities market in the United States or we are eligible for the benefits of a comprehensive tax treaty with the United States that the U.S. Treasury determines is satisfactory for purposes of these rules and that includes an exchange of information program; and
|
• |
we were not, in the year prior to the year in which the dividend was paid, and are not, in the year in which the dividend is paid, a PFIC.
|
• |
75 percent or more of our gross income for the taxable year is passive income; or
|
• |
the average percentage of the value of our assets that produce or are held for the production of passive income is at least 50 percent or the asset test.
|
Persons depositing or withdrawing shares or ADS holders must pay:
|
For:
|
|
US$5.00 (or less) per 100 ADSs (or portion of 100 ADSs) |
Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property
Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates
|
|
US$.05 (or less) per ADS | Any cash distribution to ADS holders | |
A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of ADSs | Distribution of securities distributed to holders of deposited securities (including rights) that are distributed by the depositary to ADS holders | |
US$.05 (or less) per ADS per calendar year | Depositary services | |
Registration or transfer fees | Transfer and registration of shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares | |
Expenses of the depositary |
Cable (including SWIFT) and facsimile transmissions (when expressly provided in the deposit agreement)
Converting foreign currency to U.S. dollars
|
|
Taxes and other governmental charges the depositary or the custodian has to pay on any ADSs or shares underlying ADSs, such as stock transfer taxes, stamp duty or withholding taxes | As necessary | |
Any charges incurred by the depositary or its agents for servicing the deposited securities | As necessary |
FY 2019
|
FY 2020
|
|||||||||||||||
RMB
|
US$
|
RMB
|
US$
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Audit fees
(1)
|
5,575 | 780 | 4,074 | 600 | ||||||||||||
Total
|
5,575 | 780 | 4,074 | 600 |
(1) |
Audit fees include the aggregate fees billed in each of the fiscal period listed for professional services rendered by our independent public accountants in relation to the audit of our annual financial statements and services related to our earnings release.
|
Period
|
(a) Total
Number of
ADSs
Purchased
|
(b) Average
Price Paid per
ADS
|
(c) Total
Number of
ADSs
Purchased as
Part of
Publicly
Announced
Plans or
Programs
|
(d) Maximum
Approximate
Dollar Value
of ADSs That
May Yet Be
Purchased
Under the
Plans or
Programs
|
||||||||||||
July 1, 2020 through July 31, 2020
|
2,575,000 |
(1)
|
|
US$17.10
(RMB116.1) |
|
— | — | |||||||||
Total
|
2,575,000 |
(1)
|
|
US$17.10
(RMB116.1) |
|
— | — |
(1) |
We are in the process of completing the repurchase of 2,575,000 ADSs on the privately negotiated transactions. These ADSs will become treasury shares once they are transferred to our account.
|
• |
majority of independent directors on our board of directors;
|
• |
a minimum of three members in our audit committee;
|
• |
only independent directors being involved in the selection of director nominees and determination of executive officer compensation;
|
• |
regularly scheduled executive sessions of independent directors; and
|
• |
a quorum of annual general meeting which is no less than 33 1/3% of our outstanding shares.
|
* |
Filed herewith
|
** |
Furnished herewith
|
Q&K International Group Limited | ||
By: |
/s/ Chengcai Qu
|
|
Name: | Chengcai Qu | |
Title: | Chairman of the Board of Directors, Chief | |
Executive Officer, Chief Operating Officer and Vice President |
F-2
|
||||
F-4
|
||||
F-6
|
||||
F-8
|
||||
F-9
|
||||
F-11
|
/s/ Marcum Bernstein & Pinchuk LLP |
Marcum LLP |
/s/ Deloitte Touche Tohmatsu Certified Public Accountants LLP |
Deloitte Touche Tohmatsu Certified Public Accountants LLP
|
Shanghai, the People’s Republic of China
February 18, 2020
|
As of September 30,
|
||||||||||||
2019
|
2020
|
|||||||||||
RMB
|
RMB
|
USD
|
||||||||||
Commitments and contingencies (Note 1
7
)
|
||||||||||||
Mezzanine equity:
|
||||||||||||
Series B convertible redeemable preferred shares (US$0.00001 par value, 160,000,000 shares authorized, issued and outstanding; liquidation value of RMB233,350 and RMB nil as of September 30, 2019 and 2020, respectively)
|
316,765 | — | — | |||||||||
Series C convertible redeemable preferred shares (US$0.00001 par value, 120,000,000 shares authorized, issued and outstanding; liquidation value of RMB287,231 and RMB nil as of September 30, 2019 and 2020, respectively)
|
272,633 | — | — | |||||||||
Series
C-1
convertible redeemable preferred shares (US$0.00001 par value, 103,500,000 shares authorized, issued and outstanding; liquidation value of RMB255,213 and RMB nil as of September 30, 2019 and 2020, respectively)
|
236,320 | — | — | |||||||||
Series
C-2
convertible redeemable preferred shares (US$0.00001 par value, 273,360,850 shares authorized, issued and outstanding; liquidation value of RMB 595,962 and RMB nil as of September 30, 2019 and 2020, respectively)
|
599,767 | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total mezzanine equity
|
|
1,425,485
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|||||||
Shareholders’ deficit:
|
||||||||||||
Ordinary shares (US$0.00001 par value per share; 3,500,000,000
and 5,000,000,0000
shares authorized; 430,450,490 and 1,436,010,850 shares issued and outstanding as of September 30, 2019 and 2020
, respectively)
|
27 | 92 | 14 | |||||||||
Series A
non-redeemable
preferred shares (US$0.00001 par value; 255,549,510
and nil
shares authorized
,
issued and outstanding as of September 30, 2019 and 2020)
|
35,777 | — | — | |||||||||
Treasury shares, at cost
|
— | (298,110 | ) | (43,907 | ) | |||||||
Additional
paid-in
capital
|
— | 2,085,099 | 307,102 | |||||||||
Accumulated deficit
|
(2,275,924 | ) | (3,809,516 | ) | (561,081 | ) | ||||||
Accumulated other comprehensive
(loss)
income
|
(5,908 | ) | 18,357 | 2,704 | ||||||||
|
|
|
|
|
|
|||||||
Total Q&K International Group Limited shareholders’ deficit
|
|
(2,246,028
|
)
|
|
(2,004,078
|
)
|
|
(295,168
|
)
|
|||
Noncontrolling interest
|
9,677 | 9,628 | 1,418 | |||||||||
|
|
|
|
|
|
|||||||
Total shareholders’ deficit
|
|
(2,236,351
|
)
|
|
(1,994,450
|
)
|
|
(293,750
|
)
|
|||
|
|
|
|
|
|
|||||||
Total liabilities, mezzanine equity and shareholders’ deficit
|
|
1,799,746
|
|
|
850,730
|
|
|
125,300
|
|
|||
|
|
|
|
|
|
For the years ended September 30,
|
||||||||||||||||
2018
|
2019
|
2020
|
||||||||||||||
RMB
|
RMB
|
RMB
|
USD
|
|||||||||||||
Net revenues:
|
||||||||||||||||
Rental service
|
796,940 | 1,089,164 | 1,105,172 | 162,774 | ||||||||||||
Value-added services and others
|
92,997 | 144,606 | 102,791 | 15,139 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total net revenues
|
|
889,937
|
|
|
1,233,770
|
|
|
1,207,963
|
|
|
177,913
|
|
||||
|
|
|
|
|
|
|
|
|||||||||
Operating costs and expenses:
|
||||||||||||||||
Operating cost (including costs charged by related parties of RMB63,444, RMB52,034 and RMB 47,464 for the years ended September 30, 2018, 2019 and 2020, respectively)
|
(897,959 | ) | (1,304,992 | ) | (1,203,415 | ) | (177,245 | ) | ||||||||
Selling and marketing expenses (including expenses charged by related parties of RMB28,931, RMB55,774 and RMB nil for the years ended September 30, 2018, 2019 and 2020, respectively)
|
(117,826 | ) | (135,413 | ) | (63,512 | ) | (9,354 | ) | ||||||||
General and administrative expenses
|
(84,953 | ) | (108,196 | ) | (102,769 | ) | (15,136 | ) | ||||||||
Research and development expenses (including expenses charged by related parties of RMB154, nil and nil for the years ended September 30, 2018, 2019 and 2020, respectively)
|
(51,947 | ) | (47,029 | ) | (24,934 | ) | (3,672 | ) | ||||||||
Pre-operation
expenses (including expenses charged by related parties of RMB26,460, RMB 14,431and RMB nil for the years ended September 30, 2018, 2019 and 2020, respectively)
|
(117,107 | ) | (42,661 | ) | (14,245 | ) | (2,098 | ) | ||||||||
Impairment loss on long
-
lived assets
|
(50,614 | ) | (46,213 | ) | (846,766 | ) | (124,715 | ) | ||||||||
Loss from disposal of property and equipment
|
|
|
—
|
|
|
|
—
|
|
|
|
(468,980
|
)
|
|
|
(69,073
|
)
|
Other
i
(expense
ncome
),
net
|
4,034 | 2,427 | 15,881 | 2,339 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating costs and expenses
|
|
(1,316,372
|
)
|
|
(1,682,077
|
)
|
|
(2,708,740
|
)
|
|
(398,954
|
)
|
||||
|
|
|
|
|
|
|
|
|||||||||
Loss from operations
|
|
(426,435
|
)
|
|
(448,307
|
)
|
|
(1,500,777
|
)
|
|
(221,041
|
)
|
||||
Interest expense, net
|
(77,167 | ) | (91,914 | ) | (130,206 | ) | (19,177 | ) | ||||||||
Foreign exchange loss, net
|
(91 | ) | (457 | ) | (62 | ) | (9 | ) | ||||||||
Fair value change of contingent
earn-out
liabilities
|
6,164 | 42,404 | 97,417 | 14,348 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes
|
|
(497,529
|
)
|
|
(498,274
|
)
|
|
(1,533,628
|
)
|
|
(225,879
|
)
|
||||
Income tax expense
|
(2,393 | ) | (63 | ) | (13 | ) | (2 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
|
(499,922
|
)
|
|
(498,337
|
)
|
|
(1,533,641
|
)
|
|
(225,881
|
)
|
||||
Less: net loss attributable to noncontrolling interests
|
(63 | ) | (95 | ) | (49 | ) | (7 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to Q&K International Group Limited
|
|
(499,859
|
)
|
|
(498,242
|
)
|
|
(1,533,592
|
)
|
|
(225,874
|
)
|
||||
Deemed dividend
|
(135,545 | ) | (307,389 | ) | — | — | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to ordinary shareholders
|
|
(635,404
|
)
|
|
(805,631
|
)
|
|
(1,533,592
|
)
|
|
(225,874
|
)
|
||||
Net loss per share attributable to ordinary shareholders of Q&K International Group Limited—Basic and diluted
|
(1.55 | ) | (1.87 | ) | (1.14 | ) | (0.17 | ) | ||||||||
Weighted average number of ordinary shares used in computing net loss per share—Basic and diluted
|
409,403,915 | 430,450,490 | 1,351,127,462 | 1,351,127,462 |
For the years ended September 30,
|
||||||||||||||||
2018
|
2019
|
2020
|
||||||||||||||
RMB
|
RMB
|
RMB
|
USD
|
|||||||||||||
Net loss
|
|
(499,922
|
)
|
|
(498,337
|
)
|
|
(1,533,641
|
)
|
|
(225,881
|
)
|
||||
Other comprehensive income (loss), net of tax of nil:
|
||||||||||||||||
Foreign currency translation adjustments
|
4,551 | (7,621 | ) | 24,265 | 3,574 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive loss
|
|
(495,371
|
)
|
|
(505,958
|
)
|
|
(1,509,376
|
)
|
|
(222,307
|
)
|
||||
Less: comprehensive loss attributable to noncontrolling interests
|
(63 | ) | (95 | ) | (49 | ) | (7 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive loss attributable to Q&K International Group Limited
|
|
(495,308
|
)
|
|
(505,863
|
)
|
|
(1,509,327
|
)
|
|
(222,300
|
)
|
||||
Deemed dividend
|
(135,545 | ) | (307,389 | ) | — | — | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive loss attributable to ordinary shareholders
|
|
(630,853
|
)
|
|
(813,252
|
)
|
|
(1,509,327
|
)
|
|
(222,300
|
)
|
||||
|
|
|
|
|
|
|
|
Q&K International Group Limited
shareholders’ deficit
|
||||||||||||||||||||||||||||||||||||||||||||
Ordinary shares
|
Series A non-redeemable
preferred shares
|
Treasury
stock |
Additional
paid in
capital
|
Accumulated
other
comprehensive
(loss) income
|
Accumulated
deficit
|
Total
|
Noncontrolling
interests
|
Total
shareholders’
deficit
|
||||||||||||||||||||||||||||||||||||
Number of
shares
|
Amount
|
|
Amount
|
|||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2017
|
|
384,450,490
|
|
|
24
|
|
|
255,549,510
|
|
|
35,777
|
|
|
—
|
|
|
—
|
|
|
(2,838
|
)
|
|
(845,314
|
)
|
|
(812,351
|
)
|
|
17,835
|
|
|
(794,516
|
)
|
|||||||||||
Capital contribution
|
46,000,000 | 3 | — | — | — |
|
—
|
|
— | — | 3 |
|
—
|
|
3 | |||||||||||||||||||||||||||||
Share-based
compensation |
—
|
—
|
—
|
—
|
— | 2,252 | — | — | 2,252 |
|
—
|
|
2,252 | |||||||||||||||||||||||||||||||
Deemed dividend
accretion |
— | — | — | — | — | (2,252 | ) | — | (133,293 | ) | (135,545 | ) |
|
—
|
|
(135,545 | ) | |||||||||||||||||||||||||||
Net loss
|
— | — | — | — |
|
—
|
|
— | (499,859 | ) | (499,859 | ) | (63 | ) | (499,922 | ) | ||||||||||||||||||||||||||||
Foreign currency translation adjustments
|
— | — | — |
—
|
—
|
|
—
|
|
4,551 | — | 4,551 |
|
—
|
|
4,551 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Balance at September 30, 2018
|
|
430,450,490
|
|
|
27
|
|
|
255,549,510
|
|
|
35,777
|
|
|
—
|
|
|
—
|
|
|
1,713
|
|
|
(1,478,466
|
)
|
|
(1,440,949
|
)
|
|
17,772
|
|
|
(1,423,177
|
)
|
|||||||||||
Acquisition of
noncontrolling |
— |
—
|
|
— | — |
—
|
— | — | — | — | (8,000 | ) | (8,000 | ) | ||||||||||||||||||||||||||||||
Share-based
compensation |
— | — | — | — | — | 8,173 | — | — | 8,173 | — | 8,173 | |||||||||||||||||||||||||||||||||
Deemed dividend accretion
|
— | — |
|
— | — | — | (8,173 | ) | — | (299,216 | ) | (307,389 | ) | — | (307,389 | ) | ||||||||||||||||||||||||||||
Net loss
|
— | — | — | — | — | — | — | (498,242 | ) | (498,242 | ) | (95 | ) | (498,337 | ) | |||||||||||||||||||||||||||||
Foreign currency translation adjustments
|
— | — | — | — | — | — | (7,621 | ) | — | (7,621 | ) | — | (7,621 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Balance at September 30, 2019
|
|
430,450,490
|
|
|
27
|
|
|
255,549,510
|
|
|
35,777
|
|
|
—
|
|
|
—
|
|
|
(5,908
|
)
|
|
(2,275,924
|
)
|
|
(2,246,028
|
)
|
|
9,677
|
|
|
(2,236,351
|
)
|
|||||||||||
Issuance of ordinary shares in connection with initial public offering (“IPO”), net off issuance of cost of RMB 29,289
|
93,150,000 | 6 | — | — | — | 289,021 |
|
—
|
|
— | 289,027 | — | 289,027 | |||||||||||||||||||||||||||||||
Conversion of Series A
non-redeemable
preferred shares into ordinary shares
|
255,549,510 | 17 | (255,549,510 | ) | (35,777 | ) |
—
|
35,760 |
|
—
|
|
— | — | — | — | |||||||||||||||||||||||||||||
Conversion of mezzanine equity into ordinary shares
|
|
|
656,860,850
|
|
|
|
42
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,425,436
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,425,478
|
|
|
|
—
|
|
|
|
1,425,478
|
|
Repurchase of American Depositary Shares (“ADS”) from certain investors
into treasury shares
|
— | — | — | — | (298,110 | ) |
|
—
|
|
|
—
|
|
— | (298,110 | ) | — | (298,110 | ) | ||||||||||||||||||||||||||
ADS to be issued in exchange for acquisition of certain assets from two third parties
|
— |
—
|
|
— | — | — | 312,273 |
|
—
|
|
— | 312,273 | — | 312,273 | ||||||||||||||||||||||||||||||
Share-based
compensation |
— | — | — | — | — | 16,045 |
|
—
|
|
— | 16,045 | — | 16,045 | |||||||||||||||||||||||||||||||
Warrants issued in connection with convertible notes
|
|
|
— |
|
|
|
—
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,564
|
|
|
|
— |
|
|
|
—
|
|
|
|
6,564
|
|
|
|
—
|
|
|
|
6,564
|
|
Net loss
|
— | — | — | — |
—
|
— |
|
— |
|
(1,533,592 | ) | (1,533,592 | ) | (49 | ) | (1,533,641 | ) | |||||||||||||||||||||||||||
Foreign currency translation adjustments
|
— | — |
|
— | — | — | — |
|
24,265 |
|
— | 24,265 | — | 24,265 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Balance at September 30, 2020
|
|
1,436,010,850
|
|
|
92
|
|
|
—
|
|
|
—
|
|
|
(298,110
|
)
|
|
2,085,099
|
|
|
18,357
|
|
|
(3,809,516
|
)
|
|
(2,004,078
|
)
|
|
9,628
|
|
|
(1,994,450
|
)
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the years ended September 30,
|
||||||||||||||||
2018
|
2019
|
2020
|
||||||||||||||
RMB
|
RMB
|
RMB
|
USD
|
|||||||||||||
Operating activities:
|
||||||||||||||||
Net loss
|
(499,922 | ) | (498,337 | ) | (1,533,641 | ) | (225,881 | ) | ||||||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
|
||||||||||||||||
Share-based compensation
|
2,252 | 8,173 | 16,045 | 2,363 | ||||||||||||
Depreciation and amortization
|
152,311 | 215,075 | 263,038 | 38,741 | ||||||||||||
Loss from disposal of property, plant and equipment
|
— | — | 468,980 | 69,073 | ||||||||||||
Accretion of interest expense
|
10,733 | 15,777 |
214
|
31
|
||||||||||||
Fair value change of contingent
earn-out
liabilities
|
(6,164 | ) | (42,404 | ) | (97,417 | ) | (14,348 | ) | ||||||||
Deferred rent
|
|
|
182,275
|
|
|
|
57,550
|
|
|
|
(201,127
|
)
|
|
|
(29,622
|
)
|
Impairment loss
|
50,614 | 46,213 | 846,766 | 124,715 | ||||||||||||
Changes in operating assets and liabilities:
|
||||||||||||||||
Accounts receivable
|
(160 | ) | (831 | ) | (644 | ) | (95 | ) | ||||||||
Amounts due from related parties
|
(9,963 | ) | 8,940 | 5,419 | 798 | |||||||||||
Prepaid rent and deposit
|
(75,939 | ) | 49,762 | 146,913 | 21,638 | |||||||||||
Advances to suppliers
|
(2,393 | ) | 4,891 | 47,985 | 7,067 | |||||||||||
Other current assets
|
(21,498 | ) | 1,960 | 44,756 | 6,592 | |||||||||||
Other assets
|
(188 | ) | (5,557 | ) | (51,187 | ) | (7,539 | ) | ||||||||
Accounts payable
|
3,543 | 16,306 | 115,201 | 16,967 | ||||||||||||
Amounts due to related parties
|
6,922 | (29,098 | ) | 3,473 | 512 | |||||||||||
Deferred revenue
|
22,182 | 17,489 | (127,947 | ) | (18,845 | ) | ||||||||||
Deposits from tenants
|
32,168 | 49,878 | (161,525 | ) | (23,790 | ) | ||||||||||
Accrued expenses and other current liabilities
|
36,179 | (3,976 | ) | 269,539 | 39,701 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash
(
used in
)
provided by operating activities
|
|
(117,048
|
)
|
|
(88,189
|
)
|
|
54,841
|
|
|
8,078
|
|
||||
|
|
|
|
|
|
|
|
|||||||||
Investing activities:
|
||||||||||||||||
Purchases of property and equipment
|
(674,298 | ) | (341,708 | ) | (99,172 | ) | (14,606 | ) | ||||||||
Payment
for asset acquisition (Note
8
)
|
— | — | (39,498 | ) | (5,800 | ) | ||||||||||
Purchases of intangible assets
|
— | (613 | ) | — | — | |||||||||||
Cash payment for renovation
|
— | (29,078 | ) | — | — | |||||||||||
Reimbursement received for renovation payment
|
— | 11,971 | — | — | ||||||||||||
Collection of amount due from related parties
|
— | 7,978 | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash used in investing activities
|
|
(674,298
|
)
|
|
(351,450
|
)
|
|
(138,670
|
)
|
|
(20,406
|
)
|
||||
|
|
|
|
|
|
|
|
|||||||||
Financing activities:
|
||||||||||||||||
Proceeds from issuance of ordinary shares
|
3 | — | — | — | ||||||||||||
Proceeds from IPO, net off issuance cost of
|
— | — | 289,027 | 44,534 | ||||||||||||
Proceeds from issuance of convertible
notes
|
— | — | 163,565 | 24,018 | ||||||||||||
Payment for repurchase of ADS from certain investors into treasury shares
|
— | — | (248,859 | ) | (36,653 | ) |
For the years ended September 30,
|
||||||||||||||||
2018
|
2019
|
2020
|
||||||||||||||
RMB
|
RMB
|
RMB
|
USD
|
|||||||||||||
Proceeds from short-term bank borrowings
|
100,000 | 84,000 | 351,046 | 51,703 | ||||||||||||
Repayment of short-term bank borrowings
|
(49,000 | ) | (79,000 | ) | (65,000 | ) | (9,573 | ) | ||||||||
Proceeds from long-term bank borrowings
|
— | 170,000 |
150,000
|
22,093
|
||||||||||||
Repayment of long-term bank borrowings
|
(108,130 | ) | (49,137 | ) | (122,548 | ) | (18,049 | ) | ||||||||
Proceeds from rental installment loans
|
1,886,187 | 1,084,324 | 258,097 | 38,014 | ||||||||||||
Repayment of rental installment loans
|
(1,523,136 | ) | (1,442,810 | ) | (924,171 | ) | (136,116 | ) | ||||||||
Acquisition of
non-controlling
interest
|
— | (8,000 | ) | — | — | |||||||||||
Proceeds from issuance of preferred shares, net of issuance costs
|
185,132 | 530,002 | — | — | ||||||||||||
Proceeds from capital lease and other financing arrangement payable
|
54,722 | 327,584 | 65,415 | 9,635 | ||||||||||||
Repayment of capital lease and other financing arrangement payable
|
(6,250 | ) | (47,394 | ) | (51,496 | ) | (7,585 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash provided by (used in) financing activities
|
|
539,528
|
|
|
569,569
|
|
|
(134,924
|
)
|
|
(17,979
|
)
|
||||
|
|
|
|
|
|
|
|
|||||||||
Effect of foreign exchange rate changes
|
3,455 | 2,132 | (295 | ) | (104 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net
increase
in cash, cash equivalents and restricted cash
|
(248,363 | ) | 132,062 | (219,048 | ) | (30,411 | ) | |||||||||
Cash, cash equivalents and restricted cash at the beginning of the year
|
367,115 | 118,752 | 250,814 | 35,090 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash, cash equivalents and restricted cash at the end of the year
|
118,752 | 250,814 | 31,766 | 4,679 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Supplemental disclosure of cash flow information:
|
||||||||||||||||
Interest paid, net of amounts capitalized
|
(68,636 | ) | (79,601 | ) | (16,628 | ) | (2,449 | ) | ||||||||
Income taxes paid
|
(1,222 | ) | (57 | ) | (90 | ) | (13 | ) | ||||||||
Reconciliation to amounts on the consolidated balance sheets:
|
||||||||||||||||
Cash and cash equivalents
|
103,752 | 159,799 | 22,879 | 3,370 | ||||||||||||
Restricted cash
|
15,000 | 91,015 | 8,887 | 1,309 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cash, cash equivalents and restricted cash
|
|
118,752
|
|
|
250,814
|
|
|
31,766
|
|
|
4,679
|
|
||||
|
|
|
|
|
|
|
|
|||||||||
Supplemental schedule of
non-cash
investing and financing activities:
|
||||||||||||||||
Purchases of property and equipment included in payables
|
(411,451 | ) | (253,447 | ) | (97,835 | ) | (14,410 | ) | ||||||||
Acquisition of rental assets financed by ADS (Note 4)
|
— | — | (22,540 | ) | (3,320 | ) | ||||||||||
Asset acquisition financed by payables and ADS
(Note 8)
|
|
|
—
|
|
|
|
—
|
|
|
|
(455,541
|
)
|
|
|
(65,873
|
)
|
Purchases of property and equipment included in new capital lease
|
— | (21,279 | ) | — | — | |||||||||||
Conversion of Series A
non-redeemable
preferred shares
and m
into ordinary shares
ezzanin
e
|
— | — | (1,425,478 | ) | (209,950 | ) | ||||||||||
Issuance of convertible notes to repurchase ADS from an investor
|
— | — | 49,251 | 7,232 |
1.
|
ORGANIZATION AND PRINCIPAL ACTIVITIES
|
Entity
|
Date of
incorporation
|
Place of
incorporation
|
Percentage of
legal/beneficial
ownership by the
Company
|
Principal
activities
|
||||||||||||
Subsidiaries:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
QK365.com INC. (BVI)
|
|
|
September 29, 2014 |
|
|
|
BVI |
|
|
|
100 |
%
|
|
|
Holding |
|
QingKe (China) Limited
|
|
|
July 7, 2014 |
|
|
|
Hong Kong |
|
|
|
100 |
%
|
|
|
Holding |
|
Q&K Investment Consulting Co., Ltd. (“Q&K Investment Consulting” or the “WFOE”)
|
|
|
April 2, 2015 |
|
|
|
PRC |
|
|
|
100 |
%
|
|
|
Holding and Operating |
|
Qingke (Shanghai) Artificial Intelligence Technology Co., Ltd. (“Q&K
|
|
|
May 13, 2019 |
|
|
|
PRC |
|
|
|
100 |
%
|
|
|
Holding and Operating |
|
Chengdu Liwu Apartment Management Co., Ltd
|
|
|
June 19, 2020
|
|
|
|
PRC
|
|
|
|
100
|
%
|
|
|
Operating |
|
VIE:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shanghai Qingke
E-Commerce
Co., Ltd. (“Q&K
E-commerce”
or the
|
|
|
August 2, 2013 |
|
|
|
PRC |
|
|
|
100 |
%
|
|
|
Holding and Operating |
|
Subsidiaries of the VIE:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shanghai Qingke Equipment Rental Co., Ltd. (“Q&K Rental”)
|
|
|
March 17, 2015 |
|
|
|
PRC |
|
|
|
100 |
%
|
|
|
Operating |
|
Shanghai Qingke Public Rental Housing Leasing Management Co.,
Ltd. (“Qingke Public Rental”)
|
|
|
November 5, 2014 |
|
|
|
PRC |
|
|
|
100 |
%
|
|
|
Operating |
|
Suzhou Qingke Information Technology Co., Ltd. (“Suzhou Qingke”)
|
|
|
April 3, 2014 |
|
|
|
PRC |
|
|
|
100 |
%
|
|
|
Operating |
|
2.
|
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
|
• |
In July 2020, the Company has executed a convertible note and warrant purchase agreement with two investors (Note
9
). By the date of this report, the Company issued the
several
instalment of Notes and raised proceeds aggregating $34,848 (equivalent to RMB 237,096) from the investors. No issuance cost were incurred. The Company raised $22,818 (RMB 155,393), $1,200 (RMB 8,172), $7,120 (RMB 48,342) and $3,710 (RMB 25,189) in July, September, October and December 2020, respectively;
|
• |
In December 2020, the Company entered into two new bank borrowing agreements with Shanghai Huarui Bank (the “SHRB”), pursuant to which the Company borrowed RMB 25,929 and RMB8,998, respectively.
The Company used the bank
borrowings to repay the outstanding bank borrowings;
|
• |
In July and
November 2020, the Company entered into two bank borrowing extension agreements with SHRB, pursuant to which the bank extended due date of one borrowing with the principal
March
132,000 to
of
2022, and due date of one borrowing with the principal of RMB
October 202
; and
1
|
• |
In February 2021, a principal shareholder of the Company, has agreed to consider to provide necessary financial support in the form of debt and/or equity, to the Group to enable the Group to meet its other liabilities and commitments as they become due for at least twelve months from the issuance date of this consolidated financial statements.
|
• |
revoke the business and operating licenses of the Company’s PRC subsidiaries and VIE;
|
• |
discontinue or restrict the operations of any related-party transactions between the Company’s PRC subsidiaries and VIE;
|
• |
limit the Group’s business expansion in China by way of entering into contractual arrangements;
|
• |
impose fines or other requirements with which the Company’s PRC subsidiaries and VIE may not be able to comply;
|
• |
require the Company or the Company’s PRC subsidiaries or VIE to restructure the relevant ownership structure or operations; or
|
• |
restrict or prohibit the Company’s use of the proceeds of the additional public offering to finance the Group’s business and operations in China.
|
As of September 30,
|
||||||||||||
2019
|
2020
|
|||||||||||
RMB
|
RMB
|
USD
|
||||||||||
ASSETS
|
||||||||||||
Cash and cash equivalents
|
55,926 | 15,227 | 2,243 | |||||||||
Restricted cash
|
91,015 | 8,887 | 1,309 | |||||||||
Accounts receivable
|
1,306 | 1,943 | 286 | |||||||||
Amounts due from related parties
|
5,587 | 168 | 25 | |||||||||
Prepaid rent and deposit
|
127,096 | 51,281 | 7,553 | |||||||||
Advances to suppliers
|
64,028 | 32,122 | 4,731 | |||||||||
Other current assets
|
146,316 | 44,400 | 6,539 | |||||||||
Property and equipment, net
|
1,170,446 | 358,022 | 52,731 | |||||||||
Intangible assets, net
|
1,240 | 222,123 | 32,715 | |||||||||
Land use rights
|
10,734 | 10,448 | 1,539 | |||||||||
Other assets
|
— | 57,024 | 8,399 | |||||||||
|
|
|
|
|
|
|||||||
Total assets
|
|
1,673,694
|
|
|
801,645
|
|
|
118,070
|
|
|||
|
|
|
|
|
|
|||||||
Liabilities
|
||||||||||||
Accounts payable
|
277,103 | 294,469 | 43,371 | |||||||||
Amounts due to related parties
|
3,121 | 6,594 | 971 | |||||||||
Deferred revenue
|
78,540 | 152,619 | 22,478 | |||||||||
Short-term debt
|
319,103 | 540,808 | 79,653 | |||||||||
Rental installment loans
|
756,749 | 54,505 | 8,028 | |||||||||
Deposits from tenants
|
163,203 | 82,191 | 12,105 | |||||||||
Accrued expenses and other current liabilities
|
93,908 | 912,513 | 134,399 | |||||||||
Long-term debt
|
428,345 | 464,920 | 68,475 | |||||||||
Long-term deferred rent
|
387,739 | 212,054 | 31,232 | |||||||||
|
|
|
|
|
|
|||||||
Total liabilities
|
|
2,507,811
|
|
|
2,720,673
|
|
|
400,712
|
|
|||
|
|
|
|
|
|
For the years ended September 30
|
||||||||||||||||
2018
|
2019
|
2020
|
||||||||||||||
RMB
|
RMB
|
RMB
|
USD
|
|||||||||||||
Net revenues
|
|
889,937
|
|
|
1,233,770
|
|
|
1,207,963
|
|
|
177,914
|
|
||||
Net loss
|
|
(251,555
|
)
|
|
(177,738
|
)
|
|
(1,500,305
|
)
|
|
(220,971
|
)
|
|
|
|
|
|||||||||||||
|
|
For the years ended September 30
|
|
|||||||||||||
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|||||||
|
|
RMB
|
|
|
RMB
|
|
|
RMB
|
|
|
USD
|
|
||||
Net cash provided by operating activities
|
|
|
10,964
|
|
|
|
393,847
|
|
|
|
72,293
|
|
|
|
10,648
|
|
Net cash used in investing activities
|
|
|
(515,360
|
)
|
|
|
(351,450
|
)
|
|
|
(99,172
|
)
|
|
|
(14,606
|
)
|
Net cash provided by (used in) financing activities
|
|
|
411,219
|
|
|
|
39,567
|
|
|
|
(95,948
|
)
|
|
|
(14,132
|
)
|
Leasehold improvements | Shorter of the lease term or their estimated useful lives | |
Buildings | 45 years | |
Furniture, fixtures and equipment |
5-8
years
|
|
Motor vehicles | 8 years |
Apartment rental contracts | Shorter of the lease term or 8 years | |
Trademarks | 8 years | |
Software | 10 years |
|
|
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
|
|
|
|
|||||||||||
Years Ended September 30,
|
|
Description
|
|
Fair Value as of
September 30
RMB
|
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
RMB
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
RMB
|
|
|
Significant
Unobservable
Inputs
(Level 3)
RMB
|
|
|
Total Gain
for
the Year
Ended
September 30,
RMB
|
|
|||||
2019
|
Contingent earn-out
|
97,417 | 97,417 | 42,404 | ||||||||||||||||||
2020
|
liabilities | — | — | 97,417 |
|
|
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
|
||||||||||||||
Years Ended September 30,
|
|
Description
|
|
Fair Value
as of
September 30
RMB
|
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
RMB
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
RMB
|
|
|
Significant
Unobservable
Inputs
(Level 3)
RMB
|
|
|
Total
Loss for
the Year
Ended
September 30,
RMB
|
|
|||||
2018
|
Property and | 103,399 | 103,399 | 50,614 | ||||||||||||||||||
2019
|
equipment | 124,993 | 124,993 | 46,213 | ||||||||||||||||||
2020
|
93,635 | 93,635 | 313,354 | |||||||||||||||||||
2020
|
|
Apartment
rental agreements |
|
|
134,452
|
|
|
|
|
|
134,452
|
|
|
|
425,341
|
|
||||||
2020
|
|
Trademarks
|
|
|
86,900
|
|
|
|
|
|
86,900
|
|
|
|
108,071
|
|
|
•
|
|
The apartment rental agreements with both landlords and tenants were valued using the multiperiod excess earnings method, which incorporated certain assumptions including projected rooms’ revenue, growth rates and projected operating costs based on current economic condition, expectation of management and projected trends of current operating results. The revenue growth rate and the discount rate were the significant unobservable inputs used in the fair value measurement, which were negative 12.5% and 19%
, and
|
|
•
|
|
the trademarks were valued using the relief from royalty method, which incorporated certain assumptions including projected revenues contributed by trademarks, royalty savings and projected trends of operating results. The revenue growth rate and the discount rate were the significant unobservable inputs used in the fair value measurement, which were negative 10% and 19%
|
3.
|
OTHER CURRENT ASSETS
|
|
|
As of September 30,
|
|
|||||
|
|
2019
|
|
|
2020
|
|
||
Due from a rental service company
(
1
)
|
|
|
43,786
|
|
|
|
52,410
|
|
Deductible input
alue added tax
v
|
|
93,008
|
|
|
35,660
|
|
||
Due from a service provider
(2)
|
— | 9,501 | ||||||
Others
|
|
|
9,765
|
|
|
|
4,232
|
|
|
|
|
|
|||||
Total
|
|
146,559
|
|
|
101,803
|
|
||
|
|
|
|
(1) |
As of September 30, 2020 and 2019, the balance due from a rental service company represented the reimbursement renovation costs due from the rental service company. The Company started to cooperate with a rental service company to source and renovate apartments since August 2018. For certain identified newly sourced apartments, the rental service company reimburses the Company for costs incurred for the renovation. The Company then makes payments to the rental service company in installments equal to the reimbursed renovation costs plus interest and tax over a period of five years.
|
(2) |
Upon asset acquisition with Beautiful House (Note 8), the Group engaged a third party service provider to provide apartment operation services to the Group. To support the operation services, the Company made interest free loans to the service provider and the loans are repayable on demand.
|
4.
|
PROPERTY AND EQUIPMENT, NET
|
As of September 30,
|
||||||||
2019
|
2020
|
|||||||
Cost:
|
|
1,914,041
|
|
|
725,834
|
|
||
Buildings
|
|
40,167
|
|
|
40,167
|
|
||
Leasehold improvements
|
|
1,308,310
|
|
|
449,637
|
|
||
Furniture, fixtures and equipment used in apartments
|
|
542,855
|
|
|
212,483
|
|
||
Vehicle
|
|
1,710
|
|
|
3,043
|
|
||
Office furniture, fixtures and equipment
|
|
20,999
|
|
|
20,504
|
|
||
Less: Accumulated depreciation
|
|
(551,154
|
)
|
|
(217,582
|
)
|
||
Less: Impairment
|
|
(208,328
|
)
|
|
(223,284
|
)
|
||
Construction in progress
|
|
30,752
|
|
|
73,054
|
|
||
|
|
|
|
|||||
Property and equipment, net
|
|
1,185,311
|
|
|
358,022
|
|
||
|
|
|
|
5.
|
INTANGIBLE ASSETS, NET
|
As of September 30,
|
||||||||
2019
|
2020
|
|||||||
Cost:
|
2,275 | 832,223 | ||||||
Apartment rental contracts
|
— | 634,977 | ||||||
Trademarks
|
— | 194,971 | ||||||
Software
|
2,275 | 2,275 | ||||||
Less: Accumulated amortization
|
(1,027 | ) | (76,688 | ) | ||||
Less: Impairment
|
— | (533,412 | ) | |||||
|
|
|
|
|||||
Intangible assets, net
|
1,248
|
222,123
|
||||||
|
|
|
|
Amortization
expenses |
||||
Year ending September 30, 2021
|
60,880 | |||
Year ending September 30, 2022
|
46,343 | |||
Year ending September 30, 2023
|
36,079 | |||
Year ending September 30, 2024
|
24,150 | |||
Year ending September 30, 2025 and thereafter
|
54,671 | |||
|
|
|||
222,123
|
||||
|
|
6.
|
DEBT
|
As of September 30,
|
||||||||
2019
|
2020
|
|||||||
Short-term debt:
|
||||||||
Short-term bank borrowings
(1)
|
|
65,000
|
|
|
176,752
|
|
||
Long-term bank borrowings, current portion
(1)
|
|
150,653
|
|
|
159,721
|
|
||
Capital lease and other financing arrangement payable, current portion
(2)
|
|
103,450
|
|
|
201,835
|
|
||
Other short-term payable
(3)
|
|
|
—
|
|
|
|
223,828
|
|
|
|
|
|
|||||
Subtotal
|
|
319,103
|
|
|
762,136
|
|
||
|
|
|
|
|||||
Long-term debt:
|
||||||||
Long-term bank borrowings,
non-current
portion
(1)
|
|
102,473
|
|
|
196,682
|
|
||
Capital lease and other financing arrangement payable,
non-current
portion
(2)
|
|
298,682
|
|
|
242,719
|
|
||
Other long term payable
(3)
|
|
27,190
|
|
|
25,519
|
|
||
Subtotal
|
|
428,345
|
|
|
464,920
|
|
||
|
|
|
|
|||||
Total
|
|
747,448
|
|
|
1,227,056
|
|
||
|
|
|
|
September 30, 2020
|
||||
2021
|
35,459 | |||
2022
|
20,029 | |||
2023
|
12,747 | |||
2024
|
10,473 | |||
2025
|
3,328 | |||
2026 and there after
|
— | |||
|
|
|||
|
82,036
|
|
||
Less payment amount allocated to interest
|
8,606 | |||
|
|
|||
Present value of capital lease obligation
|
|
73,430
|
|
|
|
|
|||
Current portion of capital lease obligation
|
35,459 | |||
Long-term portion of capital lease obligation
|
37,971 | |||
|
|
|||
|
73,430
|
|
||
|
|
For the years ended
September 30,
|
||||||||||||
2018
|
2019
|
2020
|
||||||||||
Rental cost
|
664,732 | 975,342 | 813,773 | |||||||||
Depreciation expenses
|
145,768 | 207,814 | 256,056 | |||||||||
Personnel cost
|
21,092 | 23,698 | 77,392 | |||||||||
Cost for value-added services and others
|
66,367 | 98,138 | 56,194 | |||||||||
|
|
|
|
|
|
|||||||
Total
|
|
897,959
|
|
|
1,304,992
|
|
|
1,203,415
|
|
|||
|
|
|
|
|
|
RMB
|
||||
Apartment rental agreements
|
649,733 | |||
Trademarks
|
194,971 | |||
Liabilities assumed by the Compan
y
|
|
|
|
)
|
|
|
|||
|
495,039
|
|
||
|
|
(1) |
$11.2508 per ADS for the July Notes and $10.1003 per ADS for September Notes, or
|
(2) |
if the Company completes an ADS
offering
of at least $
50,000
|
July 29, 2020
|
September 25, 2020
|
|||||||
Terms of warrants
|
60 months | 60 months | ||||||
Exercise price
|
11.4618 | 10.2214 | ||||||
Risk free rate of interest
|
22.552 | % | 22.609 | % | ||||
Dividend yield
|
0.00 | % | 0.00 | % | ||||
Annualized volatility of underlying stock
|
40.0 | % | 39.0 | % |
Number of
shares
|
Weighted
average life
|
Expiration
dates
|
||||||||||
Balance of warrants outstanding as of September 30, 2019
|
— | |||||||||||
Grants of Warrants on July 2
9
, 2020
|
104,871 | 5 years |
July 29,
2025
|
|||||||||
Grants of Warrants on September 25, 2020
|
|
|
4,696
|
|
|
|
5 years
|
|
|
|
September 25,
2025
|
|
|
|
|||||||||||
Balance of warrants outstanding as of September 30, 2020
|
109,567 | 4.84 years | ||||||||||
|
|
|
|
As of September 30,
|
|
|||||
|
|
2019
|
|
|
2020
|
|
||
Due to a rental service company (1)
|
|
|
—
|
|
|
|
182,542
|
|
Tenant deposits
|
|
|
12,715
|
|
|
|
83,682
|
|
Payable to a constructor for leasehold improvements
|
|
|
—
|
|
|
|
53,623
|
|
Other tax payable
|
|
|
41,577
|
|
|
|
51,832
|
|
Accrued utilities
|
|
|
94
|
|
|
|
22,513
|
|
Interest payable
|
|
|
4,333
|
|
|
|
13,435
|
|
Accrued payroll and welfare
|
|
|
10,467
|
|
|
|
10,451
|
|
Operation service payable
|
— | 6,602 | ||||||
Deferred rent
|
|
|
28,415
|
|
|
|
2,503
|
|
Others
|
|
|
1,691
|
|
|
|
16,235
|
|
|
|
|
|
|
|
|
|
|
Total
|
99,292
|
443,418
|
||||||
|
|
|
|
|
|
|
|
(1)
|
As of September 30, 2020, the balance of due to a rental service company primarily represented the rental deposits and prepaid rental fee collected from tenants. The rental deposits and prepaid rental fee belonged to the rental service company, for which the Group provided apartment operation services since April 2020.
|
•
|
Series B convertible redeemable preferred shares
|
•
|
Series
C/C-1/C-2
|
RMB
|
||||
Balance as of September 30, 2017
|
368,546 | |||
Issuance of Series
C-1
convertible redeemable preferred shares to investors
|
139,952 | |||
Accretion on Series B convertible redeemable preferred shares to redemption value
|
43,818 | |||
Accretion on Series C convertible redeemable preferred shares to redemption value
|
29,038 | |||
Accretion on Series
C-1
convertible redeemable preferred shares to redemption value
|
62,689 | |||
|
|
|||
Balance as of September 30, 2018
|
644,043 | |||
Issuance of Series
C-2
convertible redeemable preferred shares to investors
|
474,053 | |||
Accretion on Series B convertible redeemable preferred shares to redemption value
|
111,041 | |||
Accretion on Series C convertible redeemable preferred shares to redemption value
|
36,952 | |||
Accretion on Series
C-1
convertible redeemable preferred shares to redemption value
|
33,681 | |||
Accretion on Series
C-2
convertible redeemable preferred shares to redemption value
|
125,715 | |||
|
|
|||
Balance as of September 30, 2019
|
1,425,485 | |||
Exercise of conversion of Series B convertible redeemable preferred shares
|
(316,765 | ) | ||
Exercise of conversion of Series C convertible redeemable preferred shares
|
(272,633 | ) | ||
Exercise of conversion of Series
C-1
convertible redeemable preferred shares
|
(236,320 | ) | ||
Exercise of conversion of Series
C-2
convertible redeemable preferred shares
|
(599,767 | ) | ||
|
|
|||
Balance as of September 30, 2020
|
— | |||
|
|
RMB
|
||||
Balance as of September 30, 2017
|
44,856 | |||
Increase in accordance with Series
C-1
convertible redeemable preferred shares issuance
|
45,180 | |||
Fair value change included in earnings
|
(6,164 | ) | ||
|
|
|||
Balance as of September 30, 2018
|
83,872 | |||
Increase in accordance with Series
C-2
convertible redeemable preferred shares issuance
|
55,949 | |||
Fair value change included in earnings
|
(42,404 | ) | ||
|
|
|||
Balance as of September 30, 2019
|
97,417 | |||
Fair value change included in earnings
|
(97,417 | ) | ||
|
|
|||
Fair value change included in earnings
|
— | |||
|
|
April 2016
|
October 2016
|
July 2017
|
||||||||||
Risk-free rate of return
|
3.18 | % | 3.18 | % | 3.21 | % | ||||||
Contractual life of option
|
10 years | 10 years | 8.4 years | |||||||||
Estimated volatility rate
|
37 | % | 37 | % | 35 | % | ||||||
Expected dividend yield
|
0 | % | 0 | % | 0 | % | ||||||
Fair value of underlying ordinary shares
|
US$ | 0.03 | US$ | 0.04 | US$ | 0.05 |
Number of
Options
|
Exercise Price
RMB
|
Remaining
Contractual
Life
|
||||||||||
Outstanding, as of September 30, 2017
|
70,000,000 | 2 | 8.73 | |||||||||
Granted
|
— | — | — | |||||||||
Forfeited
|
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Outstanding, as of September 30, 2018
|
70,000,000 | 2 | 7.73 | |||||||||
Granted
|
— | — | — | |||||||||
Forfeited
|
(1,780,000 | ) | 2 | 7.73 | ||||||||
|
|
|
|
|
|
|||||||
Outstanding, as of September 30, 2019
|
68,220,000 | 2 | 6.74 | |||||||||
Granted
|
— | — | — | |||||||||
Exercised
|
— | — | — | |||||||||
Forfeited
|
(26,470,000 | ) | 2 | 6.74 | ||||||||
|
|
|
|
|
|
|||||||
Outstanding, as of September 30, 2020
|
41,750,000 | 2 | 6.10 | |||||||||
|
|
|
|
|
|
|||||||
Vested or expected to vest as of September 30, 2020
|
41,750,000 | 2 | 6.10 | |||||||||
|
|
|
|
|
|
For the years ended September 30,
|
||||||||||||
2018
|
2019
|
2020
|
||||||||||
Numerator:
|
||||||||||||
Net loss attributable to Q&K International Group Limited
|
(499,859 | ) | (498,242 | ) | (1,533,592 | ) | ||||||
Deemed dividend
|
(135,545 | ) | (307,389 | ) | — | |||||||
|
|
|
|
|
|
|||||||
Net loss attributable to ordinary shareholders—basic and diluted
|
(635,404 | ) | (805,631 | ) | (1,533,592 | ) | ||||||
Denominator:
|
||||||||||||
Weighted average ordinary shares outstanding—basic and diluted
|
409,403,915 | 430,450,490 | 1,351,127,462 | |||||||||
Net loss per share—basic and diluted
|
(1.55 | ) | (1.87 | ) | (1.14 | ) |
For the years ended
September 30,
|
||||||||||||
2018
|
2019
|
2020
|
||||||||||
Current tax
|
2,393 | 63 | 13 | |||||||||
Deferred tax
|
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total
|
|
2,393
|
|
|
63
|
|
|
13
|
|
|||
|
|
|
|
|
|
|
|
For the years ended
September 30,
|
|
|||||||||
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|||
PRC statutory tax rate
|
|
|
25 |
%
|
|
|
25 |
%
|
|
|
25 |
%
|
Effect of different tax rates of group entities operating in other jurisdictions and preferential tax rates of group entities
|
|
|
—
|
|
|
|
—
|
|
|
|
0.5
|
%
|
Tax effect of other expenses that are not deductible in determining taxable profit
|
|
|
(1.2 |
%)
|
|
|
(2.4 |
%)
|
|
|
(0.3 |
%)
|
Tax effect of loss on disposal of long-term assets
|
|
|
—
|
|
|
|
—
|
|
|
|
(7.6
|
%)
|
Effect of change in valuation allowance
|
|
|
(24.3 |
%)
|
|
|
(22.6 |
%)
|
|
|
(17.6 |
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate
|
|
|
(0.5
|
%)
|
|
|
(0.0
|
%)
|
|
|
(0.0
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30,
|
||||||||
2019
|
2020
|
|||||||
Deferred tax assets:
|
||||||||
Net losses carryforward
|
166,302 |
268,477
|
|
|||||
Impairment loss on long-term assets
|
|
|
—
|
|
|
|
263,774
|
|
Other accrued expenses
|
160,075 |
21,322
|
|
|||||
Deferred rent
|
|
|
—
|
|
|
|
53,757
|
|
Advertising expenses
|
12,587 |
12,592
|
|
|||||
Valuation allowance
|
(338,964 | ) |
(619,922
|
)
|
||||
|
|
|
|
|||||
Total deferred tax assets
|
— | — | ||||||
|
|
|
|
Balance as of September 30, 2017
|
112,256 | |||
Addition
|
120,935 | |||
Write off
|
— | |||
|
|
|||
Balance as of September 30, 2018
|
233,191 | |||
Addition
|
105,773 | |||
Write off
|
— | |||
|
|
|||
Balance as of September 30, 2019
|
338,964 | |||
Addition
|
280,958
|
|||
Write off
|
— | |||
|
|
|||
Balance as of September 30, 2020
|
619,922
|
|||
|
|
Related Party
|
Relationship with the Group
|
|
Shanghai Yijia Chuangye Investment Center LLP (“Yijia Chuangye”) | An entity controlled by Mr. Jin Guangjie (“Founder and CEO of the Group”) | |
Shanghai Laiguan Property Management Co., Ltd. (“Laiguan”) | An entity controlled by certain shareholders of the Group | |
Shanghai Ziniu Property Management Co., Ltd. (“Ziniu Property”) | An entity controlled by certain shareholders of the Group | |
Shanghai Q&K Fashion Life Co., Ltd. (“Q&K Fashion”) | An entity controlled by Founder and CEO of the Group | |
Shanghai Qingke Robot Technology Co., Ltd. (“Robot”)
(i)
|
An affiliate of Founder and CEO of the Group | |
Shanghai Yijia Property Management Co., Ltd. (“Yijia Property”) | An entity controlled by certain shareholders of the Group | |
Shanghai Xulong Trading Co., Ltd. (“Xulong”)
(ii)
|
An entity controlled by the parents of Founder and CEO of the Group | |
Shanghai Youzhen Information Technology Co., Ltd. (“Youzhen”) | An entity controlled by the parents of Founder and CEO of the Group | |
Shanghai Qingji Property Management Co., Ltd. (“Qingji”) | An entity controlled by certain shareholders of the Group |
Key Space(S) Ptd. Ltd. (“Key Space”)
|
|
|
(i) |
Robot ceased to be a related party of the Group in April 2019.
|
(ii) |
Xulong ceased to be a related party of the Group in March 2019.
|
For the years ended
September 30,
|
||||||||||||
2018
|
2019
|
2020
|
||||||||||
Purchases of property and equipment from Xulong.
|
77,676 | 12,205 | — | |||||||||
Labor outsourcing service expense to Laiguan
|
48,861 | 43,003 | 25,059 | |||||||||
Labor outsourcing service expense to Qingji.
|
19,258 | 41,180 | 22,405 | |||||||||
Value-added service cost to Robot
|
42,352 | 28,336 | — | |||||||||
Storage and logistic service expense to Xulong
|
14298 | 4,582 | — | |||||||||
Marketing service expense to Xulong.
|
8,364 | 9,720 | — | |||||||||
Research and development expense to Robot
|
154 | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total
|
|
210,963
|
|
|
139,026
|
|
|
47,464
|
|
|||
|
|
|
|
|
|
As of September 30,
|
||||||||
2019
|
2020
|
|||||||
Yijia Chuangye
(i)
|
4,400 | — | ||||||
Laiguan
|
1,024 | — | ||||||
Youzhen.
|
125 | 125 | ||||||
Others
|
38 | 43 | ||||||
|
|
|
|
|||||
Total
|
|
5,587
|
|
|
168
|
|
||
|
|
|
|
(i) |
Represents related party loans to Yijia Chuangye, which were interest free and payable on demand. During the year ended September 30, 2020, the Company fully collected the balance from the related party as well as the balance due from Laiguan.
|
As of September 30,
|
||||||||
2019
|
2020
|
|||||||
Yijia Property.
|
2,366 | 4,156 | ||||||
Qingji
|
743 | 1,539 | ||||||
Laiguan
|
— | 882 | ||||||
Others
|
12 | 17 | ||||||
|
|
|
|
|||||
Total
|
|
3,121
|
|
|
6,594
|
|
||
|
|
|
|
|
|
|
|
|
2021
|
|
1,028,730
|
|
|
2022
|
909,053 | |||
2023
|
782,914 | |||
2024
|
651,316 | |||
2025
|
539,349 | |||
Thereafter
|
846,837 | |||
|
|
|||
Total
|
|
4,758,199
|
|
|
|
|
|
•
|
|
Certain landlords had disputes on the early termination and entered into legal proceedings against the Group for compensation aggregating RMB
5
,
211
. The Company estimated it exposed to the compensation of RMB 5,211 and recorded the contingent liability in the account of “accrued expenses and other current liabilities”.
|
|
•
|
|
Certain landlords had disputes but did not enter into legal proceedings against the Company. These landlords had rights to file legal proceedings against the Group within 3 years from the short message notification, for a maximum compensation of RMB 51,924, which is three times of the rental agreement value. However the Group estimated the likelihood of the legal
proceeding as reasonably possible though these
landlords has not initiated legal proceedings as of the
report date. In addition, the compensation amount will be negotiated with each individual landlord, the amount of compensation cannot be reasonably estimated as of the date of report date. As of September 30, 2020, the Group did not accrue the contingent liability in the balance sheet.
|
|
•
|
|
Certain landlords did not reply to the Group’s short message within three months, which legally implied that they agreed with the termination, and the Group is not obliged to compensation for these landlords.
|
As of September 30,
|
||||||||||||
2019
|
2020
|
|||||||||||
RMB
|
RMB
|
USD
|
||||||||||
Assets
|
||||||||||||
Cash and cash equivalents
|
101,157 | 6,015 | 886 | |||||||||
Other receivables, deposits and other assets
|
1 | — | — | |||||||||
Amounts due from subsidiaries and consolidated
VIE and VIE’s subsidiaries
|
522,124 | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total assets
|
|
623,282
|
|
|
6,015
|
|
|
886
|
|
|||
|
|
|
|
|
|
|||||||
Liabilities
|
||||||||||||
Short-term borrowings
|
|
|
—
|
|
|
|
221,328
|
|
|
|
32,598
|
|
Accrued expenses and other current liabilities
|
— | 13,126 | 1,933 | |||||||||
Contingent
earn-out
liabilities
|
97,417 | — | — | |||||||||
Convertible
notes
|
|
|
—
|
|
|
|
206,251
|
|
|
|
30,377
|
|
Deficit of investments in subsidiaries and consolidated
VIE and VIE’s subsidiaries
|
1,346,408 | — | — | |||||||||
Amounts due to subsidiaries and consolidated VIE and VIE’s subsidiaries
|
|
|
—
|
|
|
|
1,569,388
|
|
|
|
231,146
|
|
|
|
|
|
|
|
|||||||
Total liabilities
|
|
1,443,825
|
|
|
2,010,093
|
|
|
296,054
|
|
|||
|
|
|
|
|
|
|||||||
Series B convertible redeemable preferred shares (US$0.00001 par value, 160,000,000 shares authorized, issued and outstanding; liquidation value of RMB233,350 and RMB nil as of September 30, 2019 and 2020, respectively)
|
316,765 | — | — | |||||||||
Series C convertible redeemable preferred shares (US$0.00001 par value, 120,000,000 shares authorized, issued and outstanding; liquidation value of RMB287,231 and RMB nil as of September 30, 2019 and 2020, respectively)
|
272,633 | — | — | |||||||||
Series
C-1
convertible redeemable preferred shares (US$0.00001 par value, 103,500,000 shares authorized, issued and outstanding; liquidation value of RMB255,213 and RMB nil as of September 30, 2019 and 2020, respectively)
|
236,320 | — | — | |||||||||
Series C-2 convertible redeemable preferred shares (US$0.00001 par value, 273,360,850 shares authorized, issued and outstanding; liquidation value of
RMB595,962 and
RMB nil as of September 30,
2019 and
2020
,
respectively
)
|
599,767 | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total mezzanine equity
|
|
1,425,485
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|||||||
Shareholders’ deficit:
|
||||||||||||
Ordinary shares
|
27 | 92 | 14 | |||||||||
Series A
non-redeemable
preferred shares
|
35,777 | — | — | |||||||||
Treasury stock
|
(298,110
|
) |
(43,907
|
) | ||||||||
Additional paid-in capital
|
— | 2,085,099 | 307,102 | |||||||||
Accumulated deficits
|
(2,275,924 | ) | (3,809,516 | ) | (561,081 | ) | ||||||
Accumulated other comprehensive
(loss)
income
|
(5,908 | ) | 18,357 | 2,704 | ||||||||
|
|
|
|
|
|
|||||||
Total shareholders’ deficit
|
|
(2,246,028
|
)
|
|
(2,004,078
|
)
|
|
(295,168
|
)
|
|||
|
|
|
|
|
|
|||||||
Total liabilities, mezzanine equity and shareholders’ deficit
|
|
623,282
|
|
|
6,015
|
|
|
886
|
|
|||
|
|
|
|
|
|
For the Years Ended September 30,
|
||||||||||||||||
2018
|
2019
|
2020
|
2020
|
|||||||||||||
RMB
|
RMB
|
RMB
|
USD
|
|||||||||||||
Selling, general and administrative expenses
|
(5,247 | ) | (15,888 | ) | (37,557 | ) | (5,530 | ) | ||||||||
Interest income (expenses)
|
2,096 | 1,761 | (42,507 | ) | (6,260 | ) | ||||||||||
Fair value change of contingent
earn-out
liabilities
|
6,164 | 42,404 |
97,417
|
14,348
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income before equity in losses of subsidiaries and consolidated VIEs
and VIE’s subsidiaries
|
|
3,013
|
|
|
28,277
|
|
|
17,353
|
|
|
2,558
|
|
||||
Equity in losses of subsidiaries and consolidated
VIE and VIE’s subsidiaries
|
(502,935 | ) | (526,614 | ) | (1,550,994 | ) | (228,439 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
(499,922 | ) | (498,337 | ) |
(1,533,641
|
) |
(225,881
|
) | ||||||||
Foreign currency translation adjustments
|
4,551 | (7,621 | ) | 24,265 | 3,574 | |||||||||||
Deemed dividend
|
(135,547 | ) | (307,389 | ) | — | — | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive loss
|
|
(630,918
|
)
|
|
(813,347
|
)
|
|
(1,509,376
|
)
|
|
(222,307
|
)
|
||||
|
|
|
|
|
|
|
|
For the Years Ended September 30,
|
||||||||||||||||
2018
|
2019
|
2020
|
2020
|
|||||||||||||
RMB
|
RMB
|
RMB
|
USD
|
|||||||||||||
Net cash
used in
operating activities
|
(3,805 | ) | (20,149 | ) | (17,452 | ) | (2,570 | ) | ||||||||
Net cash used in investing activities
|
(341,213 | ) | (460,663 | ) | (478,685 | ) | (70,503 | ) | ||||||||
Net cash provided by financing activities
|
185,133 | 530,002 | 401,227 | 60,987 | ||||||||||||
Effect of exchange rate changes
|
3,455 | 2,087 | (232 | ) | (1,180 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net (decrease) increase in cash and cash equivalents
|
(156,430 | ) | 51,277 | (95,142 | ) | (13,266 | ) | |||||||||
Cash and cash equivalents and restricted cash at the beginning of the year
|
206,310 | 49,880 | 101,157 | 14,152 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents and restricted cash at the end of the year
|
49,880 | 101,157 | 6,015 | 886 | ||||||||||||
|
|
|
|
|
|
|
|
1 Year Q and K Chart |
1 Month Q and K Chart |
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