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Name | Symbol | Market | Type |
---|---|---|---|
HUYA Inc | NYSE:HUYA | NYSE | Depository Receipt |
Price Change | % Change | Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.16 | -3.33% | 4.65 | 4.79 | 4.61 | 4.79 | 462,556 | 20:30:07 |
☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class |
Trading symbol(s) |
Name of each exchange on which registered | ||
American Depositary Shares, each |
HUYA |
New York Stock Exchange | ||
representing one Class A ordinary share, par value US$0.0001 per share |
||||
Class A ordinary shares, par value US$0.0001 per share* |
New York Stock Exchange |
(1)* |
t for trading, but only in connection with the listing on the New York Stock Exchange of our American depositary shares, each representing one Class A ordinary share. |
Large accelerated filer | ☒ |
Accelerated filer |
☐ |
Non-accelerated filer |
☐ | |||||
Emerging growth company |
☐ |
U.S. GAAP ☒ |
International Financial Reporting Standards as issued |
Other ☐ | ||||||
by the International Accounting Standards Board |
☐ |
1 |
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3 |
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ITEM 1. |
3 |
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ITEM 2. |
3 |
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ITEM 3. |
3 |
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ITEM 4. |
66 |
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ITEM 4.A. |
97 |
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ITEM 5. |
97 |
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ITEM 6. |
110 |
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ITEM 7. |
120 |
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ITEM 8. |
122 |
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ITEM 9. |
123 |
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ITEM 10. |
124 |
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ITEM 11. |
141 |
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ITEM 12. |
142 |
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143 |
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ITEM 13. |
143 |
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ITEM 14. |
143 |
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ITEM 15. |
144 |
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ITEM 16.A. |
145 |
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ITEM 16.B. |
145 |
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ITEM 16.C. |
145 |
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ITEM 16.D. |
145 |
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ITEM 16.E. |
146 |
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ITEM 16.F. |
146 |
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ITEM 16.G. |
146 |
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ITEM 16.H. |
146 |
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ITEM 16.I. |
146 |
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147 |
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ITEM 17. |
147 |
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ITEM 18. |
147 |
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ITEM 19. |
147 |
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150 |
• | “ADSs” refers to our American depositary shares, each of which represents one Class A ordinary share; |
• | “China” or “PRC” refers to the People’s Republic of China, excluding, for the purpose of this annual report only, Hong Kong, Macau and Taiwan; |
• | “Class A ordinary shares” refers to our Class A ordinary shares of par value US$0.0001 per share; |
• | “Class B ordinary shares” refers to our Class B ordinary shares of par value US$0.0001 per share; |
• | “JOYY” refers to JOYY Inc. (Nasdaq: YY), formerly known as YY Inc.; |
• | “the variable interest entity, ” “the PRC variable interest entity,” or “the VIE” refers to Guangzhou Huya Information Technology Co., Ltd., or Guangzhou Huya; |
• | “MAUs”, or “monthly active users” for any period refers to the sum of users who accessed our platform through our mobile apps, our websites, our PC clients, or YY Client, a PC client offered by JOYY (before early January 2021 when we ceased offering content through YY Client), at least once during such relevant period. The calculations of our MAUs may not reflect the actual number of people who accessed our platform, such as it is possible that some people may use more than one device, or some people may share one device, or some people may access our platform through multiple channels; |
• | “mobile MAUs” for any period refers to the sum of users who accessed our platform through our mobile apps at least once during such relevant period. The calculations of our mobile MAUs may not reflect the actual number of people who accessed our platform, such as it is possible that some people may use more than one device, or some people may share one device, or some people may access our platform through multiple channels. Average mobile MAUs for any period is calculated by dividing (i) the sum of our mobile MAUs for each month during such relevant period, by (ii) the number of months during such relevant period; |
• | “paying users” for any period refers to the sum of user accounts that purchased various products and services on our platform at least once during such relevant period. A paying user is not necessarily a unique user, however, as a unique user may set up multiple paying user accounts on our platform; |
• | “RMB” and “Renminbi” refer to the legal currency of China; |
• | “shares” or “ordinary shares” refers to our Class A and Class B ordinary shares, par value $0.0001 per share; |
• | “Tencent” refers to Tencent Holdings Limited and its subsidiaries; |
• | “US$,” “U.S. dollars,” “$,” and “dollars” refer to the legal currency of the United States; and |
• | “we,” “us,” “our company,” “our” and “Huya” refer to HUYA Inc., a Cayman Islands company, and its subsidiaries, and, in the context of describing our operations and combined and consolidated financial information, also include the VIE and its subsidiaries in the PRC. |
• | our goals and strategies; |
• | our future business development, financial conditions and results of operations; |
• | the expected growth of the live streaming market in China; |
• | our expectations regarding demand for and market acceptance of our products and services; |
• | our ability to retain and increase the number of users, broadcasters, talent agencies and advertisers, and expand our product and service offerings; |
• | competition in our industry; |
• | general economic and business condition in China and elsewhere; |
• | our ability to monetize the user base; |
• | relevant laws, government policies, regulations, rules and guidelines relating to our industry; |
• | the impact of the COVID-19 pandemic to our business operations and the economy in China and elsewhere generally; and |
• | assumptions underlying or related to any of the foregoing. |
ITEM 1. |
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
ITEM 2. |
OFFER STATISTICS AND EXPECTED TIMETABLE |
ITEM 3. |
KEY INFORMATION |
Tax calculation (1) |
||||
Hypothetical pre-tax earnings (2) |
100.00 | % | ||
Tax on earnings at statutory rate of 25% (3) |
(25.00 | )% | ||
Net earnings available for distribution |
75.00 | % | ||
Withholding tax at standard rate of 10% (4) |
(7.50 | )% | ||
Net distribution to Parent/Shareholders |
67.50 | % | ||
(1) | For purposes of this example, the tax calculation has been simplified. The hypothetical book pre-tax earnings amount, not considering timing differences, is assumed to equal taxable income in China. |
(2) | Under the terms of VIE agreements, our PRC subsidiaries may charge the VIE and the VIE’s subsidiaries for services provided to the VIE and the VIE’s subsidiaries. These service fees shall be recognized as expenses of the VIE and the VIE’s subsidiaries, with a corresponding amount as service income by our PRC subsidiaries and eliminate in consolidation. For income tax purposes, our PRC subsidiaries and the VIE and the VIE’s subsidiaries file income tax returns on a separate company basis. The service fees paid are recognized as a tax deduction by the VIE and the VIE’s subsidiaries and as income by our PRC subsidiaries and are tax neutral. |
(3) | Certain of our subsidiaries and the VIE qualifies for a 15% preferential income tax rate in China. However, such rate is subject to qualification, is temporary in nature, and may not be available in a future period when distributions are paid. For purposes of this hypothetical example, the table above reflects a maximum tax scenario under which the full statutory rate would be effective. |
(4) | The PRC’s Enterprise Income Tax Law imposes a withholding income tax of 10% on dividends distributed by a foreign invested enterprise, or Foreign Invested Enterprise (“FIE”) to its immediate holding company outside of Mainland China. A lower withholding income tax rate of 5% is applied if the FIE’s immediate holding company is registered in Hong Kong or other jurisdictions that have a tax treaty arrangement with Mainland China, subject to a qualification review at the time of the distribution. For purposes of this hypothetical example, the table above assumes a maximum tax scenario under which the full withholding tax would be applied. |
For the year ended December 31, |
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2017 |
2018 |
2019 |
2020 |
2021 |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(in thousands, except for share, ADS, per share and per ADS data) |
||||||||||||||||||||||||
Selected Consolidated Statements of Comprehensive (Loss) Income: |
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Net revenues: |
||||||||||||||||||||||||
Live streaming |
2,069,536 | 4,442,845 | 7,976,214 | 10,311,624 | 10,186,204 | 1,598,438 | ||||||||||||||||||
Advertising and others |
115,280 | 220,595 | 398,287 | 602,750 | 1,165,242 | 182,852 | ||||||||||||||||||
Total net revenues |
2,184,816 | 4,663,440 | 8,374,501 | 10,914,374 | 11,351,446 | 1,781,290 | ||||||||||||||||||
Cost of revenues (1) |
(1,929,864 | ) | (3,933,647 | ) | (6,892,579 | ) | (8,646,308 | ) | (9,751,160 | ) | (1,530,170 | ) | ||||||||||||
Gross profit |
254,952 | 729,793 | 1,481,922 | 2,268,066 | 1,600,286 | 251,120 | ||||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||
Research and development expenses (1) |
(170,160 | ) | (265,152 | ) | (508,714 | ) | (734,261 | ) | (818,882 | ) | (128,500 | ) | ||||||||||||
Sales and marketing expenses (1) |
(87,292 | ) | (189,207 | ) | (438,396 | ) | (558,012 | ) | (759,507 | ) | (119,183 | ) | ||||||||||||
General and administrative expenses (1) |
(101,995 | ) | (287,710 | ) | (352,824 | ) | (445,006 | ) | (326,772 | ) | (51,278 | ) | ||||||||||||
Total operating expenses |
(359,447 | ) | (742,069 | ) | (1,299,934 | ) | (1,737,279 | ) | (1,905,161 | ) | (298,961 | ) | ||||||||||||
Other income |
9,629 | 38,938 | 79,390 | 194,169 | 274,704 | 43,107 | ||||||||||||||||||
For the year ended December 31, |
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2017 |
2018 |
2019 |
2020 |
2021 |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(in thousands, except for share, ADS, per share and per ADS data) |
||||||||||||||||||||||||
Operating (loss) income |
(94,866 | ) | 26,662 | 261,378 | 724,956 | (30,171 | ) | (4,734 | ) | |||||||||||||||
Interest and short-term investments income |
14,049 | 156,549 | 304,491 | 313,366 | 247,009 | 38,761 | ||||||||||||||||||
Fair value loss on derivative liabilities |
— | (2,285,223 | ) | — | — | — | — | |||||||||||||||||
Gain on fair value change of investment |
— | — | — | 2,160 | 44,161 | 6,930 | ||||||||||||||||||
Other non-operating expenses |
— | — | — | (10,010 | ) | — | — | |||||||||||||||||
Foreign currency exchange gains (losses), net |
— | 51 | 1,157 | 2,056 | (1,480 | ) | (232 | ) | ||||||||||||||||
(Loss) income before income tax benefits (expenses) |
(80,817 | ) | (2,101,961 | ) | 567,026 | 1,032,528 | 259,519 | 40,725 | ||||||||||||||||
Income tax benefits (expenses) |
— | 50,943 | (96,078 | ) | (176,784 | ) | (55,227 | ) | (8,666 | ) | ||||||||||||||
(Loss) income before share of (loss) income in equity method investments, net of income taxes |
(80,817 | ) | (2,051,018 | ) | 470,948 | 855,744 | 204,292 | 32,059 | ||||||||||||||||
Share of (loss) income in equity method investments, net of income taxes |
(151 | ) | 113,329 | (2,775 | ) | 28,414 | 379,207 | 59,506 | ||||||||||||||||
Net (loss) income attributable to HUYA Inc. |
(80,968 | ) | (1,937,689 | ) | 468,173 | 884,158 | 583,499 | 91,565 | ||||||||||||||||
Accretion to Series A redeemable convertible preferred shares |
(19,842 | ) | (71,628 | ) | — | — | — | — | ||||||||||||||||
Deemed dividend to series A preferred shareholders |
— | (496,995 | ) | — | — | — | — | |||||||||||||||||
Net (loss) income attributable to ordinary shareholders |
(100,810 | ) | (2,506,312 | ) | 468,173 | 884,158 | 583,499 | 91,565 | ||||||||||||||||
Net (loss) income |
(80,968 | ) | (1,937,689 | ) | 468,173 | 884,158 | 583,499 | 91,565 | ||||||||||||||||
Foreign currency translation adjustments, net of nil tax |
308 | 366,259 | 157,568 | (451,873 | ) | (148,562 | ) | (23,313 | ) | |||||||||||||||
Total comprehensive (loss) income attributable to HUYA Inc. |
(80,660 | ) | (1,571,430 | ) | 625,741 | 432,285 | 434,937 | 68,252 | ||||||||||||||||
Net (loss) income per ADS (2) |
||||||||||||||||||||||||
Basic |
(1.01 | ) | (15.02 | ) | 2.18 | 3.89 | 2.45 | 0.38 | ||||||||||||||||
Diluted |
(1.01 | ) | (15.02 | ) | 2.02 | 3.71 | 2.41 | 0.38 | ||||||||||||||||
Weighted average number of ADSs used in calculating net (loss) income per ADS |
||||||||||||||||||||||||
Basic |
100,000,000 | 166,828,435 | 214,811,862 | 227,081,238 | 238,198,117 | 238,198,117 | ||||||||||||||||||
Diluted |
100,000,000 | 166,828,435 | 232,024,961 | 238,631,613 | 241,790,445 | 241,790,445 | ||||||||||||||||||
Net (loss) income per ordinary share |
||||||||||||||||||||||||
Basic |
(1.01 | ) | (15.02 | ) | 2.18 | 3.89 | 2.45 | 0.38 | ||||||||||||||||
Diluted |
(1.01 | ) | (15.02 | ) | 2.02 | 3.71 | 2.41 | 0.38 | ||||||||||||||||
Weighted average number of ordinary shares used in calculating net (loss) income per ordinary share |
||||||||||||||||||||||||
Basic |
100,000,000 | 166,828,435 | 214,811,862 | 227,081,238 | 238,198,117 | 238,198,117 | ||||||||||||||||||
Diluted |
100,000,000 | 166,828,435 | 232,024,961 | 238,631,613 | 241,790,445 | 241,790,445 |
(1) | Share-based compensation expenses were allocated in cost of revenues and operating expenses as follows: |
For the year ended December 31, |
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2017 |
2018 |
2019 |
2020 |
2021 |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
Cost of revenues |
2,877 | 10,472 | 31,593 | 64,942 | 56,629 | 8,886 | ||||||||||||||||||
Research and development expenses |
9,174 | 30,643 | 86,296 | 150,723 | 135,316 | 21,234 | ||||||||||||||||||
Sales and marketing expenses |
791 | 1,832 | 5,919 | 9,879 | 8,318 | 1,305 | ||||||||||||||||||
General and administrative expenses |
27,266 | 183,748 | 157,936 | 182,664 | 89,442 | 14,035 |
(2) | Each ADS represents one Class A ordinary share |
For the year ended December 31, |
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2017 |
2018 |
2019 |
2020 |
2021 |
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RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(in thousands) |
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Selected Consolidated Balance Sheet Data: |
||||||||||||||||||||||||
Cash and cash equivalents |
442,532 | 709,019 | 1,113,193 | 3,293,573 | 1,790,784 | 281,013 | ||||||||||||||||||
Short-term deposits |
593,241 | 4,983,825 | 6,743,445 | 5,974,790 | 8,351,945 | 1,310,602 | ||||||||||||||||||
Short-term investments |
— | 300,162 | 2,219,531 | 1,206,539 | 816,331 | 128,100 | ||||||||||||||||||
Total current assets |
1,250,307 | 6,595,187 | 10,591,820 | 11,270,938 | 11,916,269 | 1,869,921 | ||||||||||||||||||
Investments |
10,299 | 219,827 | 379,424 | 467,206 | 608,617 | 95,505 | ||||||||||||||||||
Total assets |
1,300,541 | 7,106,187 | 11,366,550 | 12,410,687 | 13,254,942 | 2,079,987 | ||||||||||||||||||
Total current liabilities |
685,650 | 1,380,446 | 2,446,677 | 2,384,795 | 2,576,085 | 404,240 | ||||||||||||||||||
Total liabilities |
730,674 | 1,461,180 | 2,681,700 | 2,633,909 | 2,744,741 | 430,706 | ||||||||||||||||||
Class A ordinary shares |
1 | 29 | 44 | 55 | 58 | 9 | ||||||||||||||||||
Class B ordinary shares |
66 | 104 | 100 | 100 | 99 | 16 | ||||||||||||||||||
Total shareholders’ equity |
60,199 | 5,645,007 | 8,684,850 | 9,776,778 | 10,510,201 | 1,649,281 | ||||||||||||||||||
For the year ended December 31, |
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2017 |
2018 |
2019 |
2020 |
2021 |
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RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
Selected Consolidated Cash Flows Data |
||||||||||||||||||||||||
Net cash provided by operating activities |
242,444 | 717,461 | 1,945,414 | 1,239,874 | 327,453 | 51,384 | ||||||||||||||||||
Net cash (used in)/provided by investing activities |
(559,561 | ) | (4,567,452 | ) | (3,684,971 | ) | 1,004,780 | (1,880,320 | ) | (295,064 | ) | |||||||||||||
Net cash provided by financing activities |
774,448 | 4,126,861 | 2,133,651 | 265,294 | 10,723 | 1,683 | ||||||||||||||||||
Net increase (decrease) in cash and cash equivalents and restricted cash |
457,331 | 276,870 | 394,094 | 2,509,948 | (1,542,144 | ) | (241,997 | ) | ||||||||||||||||
Cash and cash equivalents and restricted cash at the beginning of the year |
6,187 | 442,532 | 709,019 | 1,114,585 | 3,458,462 | 542,708 | ||||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash |
(20,986 | ) | (10,383 | ) | 11,472 | (166,071 | ) | (69,864 | ) | (10,962 | ) | |||||||||||||
Cash and cash equivalents and restricted cash at the end of the year |
442,532 | 709,019 | 1,114,585 | 3,458,462 | 1,846,454 | 289,749 | ||||||||||||||||||
For the year ended December 31, 2021 |
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HUYA Inc. |
Other subsidiaries |
Primary beneficiary of VIE |
VIE and VIE’s subsidiaries |
Eliminating adjustments |
Consolidated Totals |
|||||||||||||||||||
(in thousands of RMB) |
||||||||||||||||||||||||
Third-party revenues |
— | 453,967 | — | 10,897,479 | — | 11,351,446 | ||||||||||||||||||
Inter-company revenues (1) |
— | 109,826 | 8,639,714 | — | (8,749,540 | ) | — | |||||||||||||||||
Total cost and expenses (2) |
(5,554 | ) | (796,935 | ) | (8,813,794 | ) | (10,789,307 | ) | 8,749,269 | (11,656,321 | ) | |||||||||||||
Share of income of subsidiaries, VIE and VIE’s subsidiaries (3) |
524,190 | 324,777 | 252,963 | — | (1,101,930 | ) | — | |||||||||||||||||
Others, net |
68,919 | 60,317 | 239,685 | 195,202 | 271 | 564,394 | ||||||||||||||||||
Income before income tax |
587,555 |
151,952 |
318,568 |
303,374 |
(1,101,930 |
) |
259,519 |
|||||||||||||||||
Income tax (expenses) benefits |
(4,056 | ) | (7,006 | ) | 6,209 | (50,374 | ) | — | (55,227 | ) | ||||||||||||||
Share of income (loss) from equity method investments |
— | 379,244 | — | (37 | ) | — | 379,207 | |||||||||||||||||
Net income |
583,499 |
524,190 |
324,777 |
252,963 |
(1,101,930 |
) |
583,499 |
|||||||||||||||||
For the year ended December 31, 2020 |
||||||||||||||||||||||||
HUYA Inc. |
Other subsidiaries |
Primary beneficiary of VIE |
VIE and VIE’s subsidiaries |
Eliminating adjustments |
Consolidated Totals |
|||||||||||||||||||
(in thousands of RMB) |
||||||||||||||||||||||||
Third-party revenues |
— | 176,300 | — | 10,738,074 | — | 10,914,374 | ||||||||||||||||||
Inter-company revenues (1) |
7,795 | 268,448 | 7,440,411 | — | (7,716,654 | ) | — | |||||||||||||||||
Total cost and expenses (2) |
(30,562 | ) | (590,340 | ) | (7,001,732 | ) | (10,477,605 | ) | 7,716,652 | (10,383,587 | ) | |||||||||||||
Share of income of subsidiaries, VIE and VIE’s subsidiaries (3) |
762,353 | 855,160 | 265,729 | — | (1,883,242 | ) | — | |||||||||||||||||
Others, net |
159,091 | 24,230 | 235,947 | 82,469 | 4 | 501,741 | ||||||||||||||||||
Income before income tax |
898,677 |
733,798 |
940,355 |
342,938 |
(1,883,240 |
) |
1,032,528 |
|||||||||||||||||
Income tax expenses |
(14,519 | ) | (676 | ) | (85,195 | ) | (76,394 | ) | — | (176,784 | ) | |||||||||||||
Share of income (loss) from equity method investments |
— | 29,231 | — | (817 | ) | — | 28,414 | |||||||||||||||||
Net income |
884,158 |
762,353 |
855,160 |
265,727 |
(1,883,240 |
) |
884,158 |
|||||||||||||||||
For the year ended December 31, 2019 |
||||||||||||||||||||||||
HUYA Inc. |
Other subsidiaries |
Primary beneficiary of VIE |
VIE and VIE’s subsidiaries |
Eliminating adjustments |
Consolidated Totals |
|||||||||||||||||||
(in thousands of RMB) |
||||||||||||||||||||||||
Third-party revenues |
— | 81,184 | — | 8,293,317 | — | 8,374,501 | ||||||||||||||||||
Inter-company revenues (1) |
— | — | 929,589 | — | (929,589 | ) | — | |||||||||||||||||
Total cost and expenses (2) |
(7,045 | ) | (536,061 | ) | (624,694 | ) | (7,954,302 | ) | 929,589 | (8,192,513 | ) | |||||||||||||
Share of income of subsidiaries, VIE and VIE’s subsidiaries (3) |
251,827 | 695,835 | 394,326 | — | (1,341,988 | ) | — | |||||||||||||||||
Others, net |
223,391 | 11,406 | 20,754 | 129,487 | — | 385,038 | ||||||||||||||||||
Income before income tax |
468,173 |
252,364 |
719,975 |
468,502 |
(1,341,988 |
) |
567,026 |
|||||||||||||||||
Income tax expenses |
— | (537 | ) | (24,140 | ) | (71,401 | ) | — | (96,078 | ) | ||||||||||||||
Share of loss from equity method investments |
— | — | — | (2,775 | ) | — | (2,775 | ) | ||||||||||||||||
Net income |
468,173 |
251,827 |
695,835 |
394,326 |
(1,341,988 |
) |
468,173 |
|||||||||||||||||
For the year ended December 31, 2021 |
||||||||||||||||||||||||
HUYA Inc. |
Other subsidiaries |
Primary beneficiary of VIE |
VIE and VIE’s subsidiaries |
Eliminating adjustments |
Consolidated Totals |
|||||||||||||||||||
(in thousands of RMB) |
||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||
Cash and cash equivalents |
302,673 | 472,428 | 541,540 | 474,143 | — | 1,790,784 | ||||||||||||||||||
Restricted cash |
— | — | 10,258 | 45,412 | — | 55,670 | ||||||||||||||||||
Short-term deposits |
3,703,677 | 2,188,268 | 2,460,000 | — | — | 8,351,945 | ||||||||||||||||||
Short-term investments |
— | — | 816,331 | — | — | 816,331 | ||||||||||||||||||
Accounts receivable, net |
— | 23,304 | 429 | 64,301 | — | 88,034 | ||||||||||||||||||
Prepayments and other current assets |
34,389 | 21,454 | 392,362 | 216,740 | — | 664,945 | ||||||||||||||||||
Amounts due from related parties |
67 | 10,689 | 8,440 | 129,364 | — | 148,560 | ||||||||||||||||||
Amounts due from Group companies (4) |
3,409,544 | — | 28,116 | 1,379,170 | (4,816,830 | ) | — | |||||||||||||||||
Investments |
— | 158,933 | — | 449,684 | — | 608,617 | ||||||||||||||||||
Investment in subsidiaries, VIE and VIE’s subsidiaries (3) |
3,099,424 | 3,532,364 | 1,677,392 | — | (8,309,180 | ) | — | |||||||||||||||||
Intangible assets, net |
— | 981 | 2,951 | 80,010 | — | 83,942 | ||||||||||||||||||
Right of use asset |
— | 334,177 | 59,493 | 1,701 | — | 395,371 | ||||||||||||||||||
Prepayments and other non-current assets |
343 | 1,499 | 147,822 | 1,223 | — | 150,887 | ||||||||||||||||||
Other assets |
— | 6,711 | 80,110 | 13,035 | — | 99,856 | ||||||||||||||||||
Total assets |
10,550,117 |
6,750,808 |
6,225,244 |
2,854,783 |
(13,126,010 |
) |
13,254,942 |
|||||||||||||||||
Deferred revenue and Advances from customers |
— | 15,225 | — | 563,259 | — | 578,484 | ||||||||||||||||||
Amounts due to Group companies (4) |
36,316 | 3,501,583 | 1,278,931 | — | (4,816,830 | ) | — | |||||||||||||||||
Accrued liabilities and other current liabilities |
2,508 | 98,286 | 1,244,128 | 500,530 | — | 1,845,452 | ||||||||||||||||||
Amount due to related parties |
— | 8,476 | 106,405 | 101,247 | — | 216,128 | ||||||||||||||||||
Other liabilities |
1,092 | 27,814 | 63,416 | 12,355 | — | 104,677 | ||||||||||||||||||
Total liabilities |
39,916 |
3,651,384 |
2,692,880 |
1,177,391 |
(4,816,830 |
) |
2,744,741 |
|||||||||||||||||
Total shareholders’ equity (3) |
10,510,201 |
3,099,424 |
3,532,364 |
1,677,392 |
(8,309,180 |
) |
10,510,201 |
|||||||||||||||||
For the year ended December 31, 2020 |
||||||||||||||||||||||||
HUYA Inc. |
Other subsidiaries |
Primary beneficiary of VIE |
VIE and VIE’s subsidiaries |
Eliminating adjustments |
Consolidated Totals |
|||||||||||||||||||
(in thousands of RMB) |
||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||
Cash and cash equivalents |
2,019,585 | 296,634 | 662,008 | 315,346 | — | 3,293,573 | ||||||||||||||||||
Restricted cash |
— | — | 27,900 | 136,989 | — | 164,889 | ||||||||||||||||||
Short-term deposits |
3,000,308 | 1,174,482 | 1,700,000 | 100,000 | — | 5,974,790 | ||||||||||||||||||
Short-term investments |
— | — | 1,206,539 | — | — | 1,206,539 | ||||||||||||||||||
Accounts receivable, net |
— | 23,686 | 54 | 47,497 | — | 71,237 | ||||||||||||||||||
Prepayments and other current assets |
60,497 | 37,800 | 317,901 | 78,910 | — | 495,108 | ||||||||||||||||||
Amounts due from related parties |
67 | 3,180 | 2,271 | 59,284 | — | 64,802 | ||||||||||||||||||
Amounts due from Group companies (4) |
2,488,734 | — | 931,231 | 1,472,386 | (4,892,351 | ) | — | |||||||||||||||||
Investments |
— | 235,895 | — | 231,311 | — | 467,206 | ||||||||||||||||||
Investment in subsidiaries, VIE and VIE’s subsidiaries (3) |
2,261,154 | 2,918,326 | 1,347,614 | — | (6,527,094 | ) | — | |||||||||||||||||
Intangible assets, net |
— | 200 | 750 | 61,846 | — | 62,796 |
For the year ended December 31, 2020 |
||||||||||||||||||||||||
HUYA Inc. |
Other subsidiaries |
Primary beneficiary of VIE |
VIE and VIE’s subsidiaries |
Eliminating adjustments |
Consolidated Totals |
|||||||||||||||||||
(in thousands of RMB) |
||||||||||||||||||||||||
Right of use asset |
— | 1,809 | 84,783 | 826 | — | 87,418 | ||||||||||||||||||
Prepayments and other non-current assets |
501 | 311,798 | 61,027 | 6,135 | — | 379,461 | ||||||||||||||||||
Other assets |
— | 602 | 70,271 | 71,995 | — | 142,868 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total assets |
9,830,846 |
5,004,412 |
6,412,349 |
2,582,525 |
(11,419,445 |
) |
12,410,687 |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Deferred revenue and Advances from customers |
— | 12,386 | — | 651,636 | — | 664,022 | ||||||||||||||||||
Amounts due to Group companies (4) |
36,274 | 2,615,780 | 2,240,297 | — | (4,892,351 | ) | — | |||||||||||||||||
Accrued liabilities and other current liabilities |
15,739 | 98,021 | 1,101,365 | 492,164 | — | 1,707,289 | ||||||||||||||||||
Amount due to related parties |
— | 1,611 | 62,055 | 31,791 | — | 95,457 | ||||||||||||||||||
Other liabilities |
2,055 | 15,460 | 90,306 | 59,320 | — | 167,141 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total liabilities |
54,068 |
2,743,258 |
3,494,023 |
1,234,911 |
(4,892,351 |
) |
2,633,909 |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total shareholders’ equity (3) |
9,776,778 |
2,261,154 |
2,918,326 |
1,347,614 |
(6,527,094 |
) |
9,776,778 |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31, 2021 |
||||||||||||||||||||||||
HUYA Inc. |
Other subsidiaries |
Primary beneficiary of VIE |
VIE and VIE’s subsidiaries |
Eliminating adjustments |
Consolidated Totals |
|||||||||||||||||||
(in thousands of RMB) |
||||||||||||||||||||||||
Net cash provided by/(used in) operating activities (5) |
190,341 |
(416,324 |
) |
(622,961 |
) |
1,176,397 |
— |
327,453 |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Capital contribution and advances from Group companies |
(993,969 | ) | — | (8,858 | ) | (911,916 | ) | 1,914,743 | — | |||||||||||||||
Other investing activities |
(761,429 | ) | (529,100 | ) | (392,530 | ) | (197,261 | ) | — | (1,880,320 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash used in investing activities |
(1,755,398 |
) |
(529,100 |
) |
(401,388 |
) |
(1,109,177 |
) |
1,914,743 |
(1,880,320 |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Capital contribution and advances to Group companies |
— | 1,028,503 | 886,240 | — | (1,914,743 | ) | — | |||||||||||||||||
Other financing activities |
10,723 | — | — | — | — | 10,723 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash provided by financing activities |
10,723 |
1,028,503 |
886,240 |
— |
(1,914,743 |
) |
10,723 |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31, 2020 |
||||||||||||||||||||||||
HUYA Inc. |
Other subsidiaries |
Primary beneficiary of VIE |
VIE and VIE’s subsidiaries |
Eliminating adjustments |
Consolidated Totals |
|||||||||||||||||||
(in thousands of RMB) |
||||||||||||||||||||||||
Net cash provided by/(used in) operating activities (5) |
278,860 |
(228,467 |
) |
959,277 |
230,204 |
— |
1,239,874 |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Capital contribution and advances to Group companies |
(1,511,573 | ) | (1,856 | ) | (592,551 | ) | (1,300,825 | ) | 3,406,805 | — | ||||||||||||||
Other investing activities |
3,058,990 | (1,589,677 | ) | (1,548,167 | ) | 1,083,634 | — | 1,004,780 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash provided by/(used in) investing activities |
1,547,417 |
(1,591,533 |
) |
(2,140,718 |
) |
(217,191 |
) |
3,406,805 |
1,004,780 |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Capital contribution and advances from Group companies |
— | 1,573,952 | 1,832,853 | — | (3,406,805 | ) | — | |||||||||||||||||
Other financing activities |
265,294 | — | — | — | — | 265,294 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash provided by financing activities |
265,294 |
1,573,952 |
1,832,853 |
— |
(3,406,805 |
) |
265,294 |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31, 2019 |
||||||||||||||||||||||||
HUYA Inc. |
Other subsidiaries |
Primary beneficiary of VIE |
VIE and VIE’s subsidiaries |
Eliminating adjustments |
Consolidated Totals |
|||||||||||||||||||
(in thousands of RMB) |
||||||||||||||||||||||||
Net cash provided by/(used in) operating activities (5) |
192,085 |
(435,777 |
) |
521,472 |
1,667,634 |
— |
1,945,414 |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Capital contribution and advances to Group companies |
(764,951 | ) | (47,829 | ) | — | (861,078 | ) | 1,673,858 | — | |||||||||||||||
Other investing activities |
(1,491,966 | ) | 270,360 | (1,439,487 | ) | (1,023,878 | ) | — | (3,684,971 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash (used in)/provided by investing activities |
(2,256,917 |
) |
222,531 |
(1,439,487 |
) |
(1,884,956 |
) |
1,673,858 |
(3,684,971 |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Capital contribution and advances from Group companies |
— | 757,878 | 915,980 | — | (1,673,858 | ) | — | |||||||||||||||||
Other financing activities |
2,135,681 | — | (1,511 | ) | (519 | ) | — | 2,133,651 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash provided by/(used in) financing activities |
2,135,681 |
757,878 |
914,469 |
(519 |
) |
(1,673,858 |
) |
2,133,651 |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | It represents the elimination of the inter-company service fees for technology support, business support and consulting fees (collectively defined as “VIE service fees”) that are charged pursuant to the exclusive business cooperation agreement. |
(2) | For the years ended December 31, 2019, 2020 and 2021, VIE service fees were charged by the primary beneficiary of the VIE and other subsidiaries to the VIE and VIE’s subsidiaries amounting to RMB929.6 million, RMB7,543.2 million and RMB8,664.1 million, respectively. These inter-company charges were eliminated in consolidation. |
(3) | It represents the elimination of the investments in the VIE, the VIE’s subsidiaries, the primary beneficiary of the VIE and other subsidiaries by HUYA Inc. |
(4) | It represents the elimination of inter-company balances among HUYA Inc., the VIE and the VIE’s subsidiaries, and other subsidiaries. As of December 31, 2019, 2020, and 2021, the outstanding balance of amounts due from/to Group companies related to inter-company advances. There were no outstanding balances at the balance sheet date related to VIE service fees charged to the VIE and the VIE’s subsidiaries. |
(5) | For the years ended December 31, 2019, 2020 and 2021, cash paid by the VIE and the VIE’s subsidiaries to the primary beneficiary of the VIE and other subsidiaries for VIE service fees were RMB929.6 million, RMB7,543.2 million and RMB8,664.1 million, respectively. |
B. |
Capitalization and Indebtedness |
C. |
Reasons for the Offer and Use of Proceeds |
D. |
Risk Factors |
• | If we fail to keep our existing users highly engaged, to acquire new users, or to increase the proportion of paying users, our business, profitability and prospects may be adversely affected; |
• | We may fail to attract and retain talented and popular broadcasters; |
• | We may fail to offer attractive content, in particular popular game content, on our platform; |
• | We are a relatively young company, and we may not be able to sustain our growth, effectively manage our growth or implement our business strategies; |
• | We face competition in several major aspects of our business. If we fail to compete effectively, our business, results of operations and financial condition may be negatively impacted; |
• | Intensified government regulations, rules or guidelines of the internet industry in China could restrict our ability to maintain or increase the level of user traffic to, and user spending on, our platform as well as our ability to tap into other market opportunities, and negatively impact our businesses, results of operations, or financial condition. |
• | If we fail to obtain and maintain the licenses and approvals required under the complex regulatory environment for internet-based businesses in China, our business, financial condition and results of operations may be materially and adversely affected; |
• | We cooperate with various talent agencies to manage and recruit our broadcasters. If we are not able to maintain our relationship with talent agencies, in particular the platinum talent agencies which possess the capacity to produce a large volume of high-quality content and manage a considerable pool of talent, our operations may be materially and adversely affected; |
• | We are subject to risks associated with operating in a rapidly changing industry and a relatively new market; |
• | Our revenue model for live streaming may not remain effective and we cannot guarantee that our future monetization strategies will be successfully implemented or generate sustainable revenues and profit. |
• | We are a Cayman Islands holding company with no equity ownership in the VIE and we conduct operations in China primarily through (i) our PRC subsidiaries and (ii) the VIE, with which we have maintained contractual arrangements, and its subsidiaries. Investors in our ADSs thus are not purchasing equity interest in the VIE in China but instead are purchasing equity interest in a Cayman Islands holding company. If the PRC government finds that the structure we have adopted for our business operations does not comply with PRC laws and regulations, or if these laws or regulations or interpretations of existing laws or regulations change in the future, we could be subject to severe penalties, including the shutting down of our platform and our business operations. Our holding company in the Cayman Islands, the VIE, and investors of our company face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with the VIE and, consequently, significantly affect the financial performance of the VIE and our company as a whole. The PRC regulatory authorities could disallow the VIE structure, which would likely result in a material adverse change in our operations, and our ADSs may decline significantly in value; |
• | We rely on contractual arrangements with the PRC variable interest entity and its shareholders for the operation of our business, which may not be as effective as direct ownership. If the PRC variable interest entity and its shareholders fail to perform their obligations under these contractual arrangements, we may have to resort to litigation to enforce our rights, which may be time-consuming, unpredictable, expensive and damaging to our operations and reputation; and |
• | The shareholders of the VIE may have potential conflicts of interest with us, and if any such conflicts of interest are not resolved in our favor, our business may be materially and adversely affected. |
• | The PCAOB is currently unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections over our auditor deprives our investors with the benefits of such inspections; |
• | Our ADSs will be prohibited from trading in the United States under the Holding Foreign Companies Accountable Act, or the HFCAA, in 2024 if the PCAOB is unable to inspect or fully investigate auditors located in China, or in 2023 if proposed changes to the law are enacted. The delisting of our ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment; |
• | The PRC government’s significant oversight and discretion over our business operation could result in a material adverse change in our operations and the value of our ADSs; |
• | Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and operations; |
• | Uncertainties with respect to the PRC legal system and the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to you and u s |
• | The approval of the CSRC or other PRC government authorities may be required in connection with our offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval. |
• | The trading price of our ADSs has been volatile and may be volatile regardless of our operating performance; |
• | Our dual-class share structure with different voting rights will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial; |
• | The dual-class structure of our ordinary shares may adversely affect the trading market for our ADSs; and |
• | We believe that we were a passive foreign investment company, or PFIC, for United States federal income tax purposes for the taxable year ended December 31, 2021, which could subject United States investors in our ADSs or Class A ordinary shares to significant adverse United States income tax consequences. |
• | challenges in formulating effective local sales and marketing strategies targeting internet and mobile users from various jurisdictions and cultures, who have a diverse range of preferences and demands; |
• | challenges in identifying appropriate local third-party business partners such as game developers and publishers, e-sports tournament and game event organizers, broadcasters and talent agencies, and establishing and maintaining good working relationships with them; |
• | challenges in recruiting quality local broadcasters to attract and engage local users; |
• | challenges in effectively managing overseas operations from our headquarters and establishing overseas IT systems and infrastructure; |
• | challenges in selecting suitable geographical regions for global expansion and the general economic condition of various regions we operate; |
• | challenges in increasing and diversifying revenues, controlling costs and expenses, and making profits; |
• | fluctuations in currency exchange rates; |
• | compliance with applicable foreign laws and regulations, including but not limited to internet content requirements, foreign exchange controls, cash repatriation restrictions, intellectual property protection rules, data privacy requirements, tax regulations and rules; |
• | the continued impact of COVID-19 in different parts of the world, and the various policies and social restrictions imposed in response thereto; and |
• | competition situations in various regions we operate. |
• | our technology, system, networks and our users’ devices have been subject to, and may continue to be the target of, cyber-attacks, computer viruses, malicious code, phishing attacks or information security breaches that could result in an unauthorized release, gathering, monitoring, misuse, loss or destruction of confidential, proprietary and other information of ours, our employees or sensitive information provided by our users, or otherwise disrupt our, our users’ or other third parties’ business operations; |
• | we periodically encounter attempts to create false accounts or use our platform to send targeted and untargeted spam messages to our users, or take other actions on our platform for purposes such as spamming or spreading misinformation, and we may not be able to repel spamming attacks; |
• | the use of encryption and other security measures intended to protect our systems and confidential data may not provide absolute security, and losses or unauthorized access to or releases of confidential information may still occur; |
• | our security measures may be breached due to employee error, malfeasance or unauthorized access to sensitive information by our employees, who may be induced by outside third parties, and we may not be able to anticipate any breach of our security or to implement adequate preventative measures; and |
• | we may be subject to information technology system failures or network disruptions caused by natural disasters, accidents, power disruptions, telecommunications failures, acts of terrorism or war, computer viruses, physical or electronic break-ins, or other events or disruptions. |
• | protecting the data in and hosted on our system, including against attacks on our system by outside parties or fraudulent behavior or improper use by our employees; |
• | addressing concerns related to privacy and sharing, safety, security and other factors; and |
• | complying with applicable laws, rules and regulations relating to the collection, use, storage, transfer, disclosure and security of personal information, including any requests from regulatory and government authorities relating to these data. |
• | In June 2021, the Standing Committee of the NPC promulgated the Data Security Law, which took effect in September 2021. The Data Security Law, among other things, provides for security review procedure for data-related activities that may affect national security. In July 2021, the state council promulgated the Regulations on Protection of Critical Information Infrastructure, which became effective on September 1, 2021. Pursuant to this regulation, critical information infrastructure means key network facilities or information systems of critical industries or sectors, such as public communication and information service, energy, transportation, water conservation, finance, public services, e-government affairs and national defense science, the damage, malfunction or data leakage of which may endanger national security, people’s livelihoods and the public interest. In December 2021, the CAC, together with other authorities, jointly promulgated the Cybersecurity Review Measures, which became effective on February 15, 2022 and replaces its predecessor regulation. Pursuant to the Cybersecurity Review Measures, critical information infrastructure operators that procure internet products and services must be subject to the cybersecurity review if their activities affect or may affect national security. The Cybersecurity Review Measures further stipulates that critical information infrastructure operators or network platform operators that hold personal information of over one million users shall apply with the Cybersecurity Review Office for a cybersecurity review before any initial public offering at a foreign stock exchange. As of the date of this annual report, no detailed rules or implementation rules have been issued by any authority and we have not been informed that we are a critical information infrastructure operator by any government authorities. Furthermore, the exact scope of “critical information infrastructure operators” under the current regulatory regime remains unclear, and the PRC government authorities may have wide discretion in the interpretation and enforcement of the applicable laws. Therefore, it is uncertain whether we would be deemed to be a critical information infrastructure operator under PRC law. If we are deemed to be a critical information infrastructure operator under the PRC cybersecurity laws and regulations, we may be subject to obligations in addition to what we have fulfilled under the PRC cybersecurity laws and regulations. |
• | In November 2021, the CAC released the Regulations on the Network Data Security (Draft for Comments), or the Draft Regulations. The Draft Regulations provide that data processors refer to individuals or organizations that, during their data processing activities such as data collection, storage, utilization, transmission, publication and deletion, have autonomy over the purpose and the manner of data processing. In accordance with the Draft Regulations, data processors shall apply for a cybersecurity review for certain activities, including, among other things, (i) the listing abroad of data processors that process the personal information of more than one million users and (ii) any data processing activity that affects or may affect national security. However, there have been no clarifications from the relevant authorities as of the date of this annual report as to the standards for determining whether an activity is one that “affects or may affect national security.” In addition, the Draft Regulations requires that data processors that process “important data” or are listed overseas must conduct an annual data security assessment by itself or commission a data security service provider to do so, and submit the assessment report of the preceding year to the municipal cybersecurity department by the end of January each year. As of the date of this annual report, the Draft Regulations was released for public comment only, and their respective provisions and anticipated adoption or effective date may be subject to change with substantial uncertainty. |
• | The Anti-monopoly Guidelines for the Platform Economy Sector published by the Anti-monopoly Committee of the State Council, effective on February 7, 2021, prohibits collection of user information through coercive means by online platforms operators. |
• | In August 2021, the Standing Committee of the NPC promulgated the Personal Information Protection Law, which integrates the scattered rules with respect to personal information rights and privacy protection and took effect on November 1, 2021. While we strive to comply with our privacy guidelines as well as all applicable data protection laws and regulations, the Personal Information Protection Law elevates the protection requirements for personal information processing, and many specific requirements of this law remain to be clarified by the CAC, other regulatory authorities, and courts in practice. We may be required to make further adjustments to our business practices to comply with the personal information protection laws and regulations. |
• | our market position and competitiveness in the live streaming service, in particular, game live streaming; |
• | our future profitability, overall financial condition, results of operations and cash flows; |
• | general market conditions for capital raising activities by live streaming and other internet companies in China; |
• | foreign currency restrictions; and |
• | economic, political and other conditions in China and internationally, including the continuous impact of the COVID-19 outbreak. |
• | Agreements with Tencent |
• | Developing business relationships with Tencent’s competitors |
• | Employee recruiting and retention |
• | Allocation of business opportunities |
• | Our directors may have conflicts of interest |
• | Sales of shares in our company |
• | revoke our business and operating licenses; |
• | levy fines on us; |
• | confiscate any of our income that they deem to be obtained through illegal operations; |
• | require us to discontinue or restrict operations; |
• | restrict our right to collect revenues; |
• | block our mobile apps, websites, or PC clients; |
• | require us to restructure the operations in such a way as to compel us to establish a new enterprise, re-apply for the necessary licenses or relocate our businesses, staff and assets; |
• | impose additional conditions or requirements with which we may not be able to comply; or |
• | take other regulatory or enforcement actions against us that could be harmful to our business. |
• | We only have contractual control over our platform. Guangzhou Huya, the PRC variable interest entity, owns our platform due to the restriction of foreign investment in businesses providing value-added telecommunication services in China, including internet content provision services. If Guangzhou Huya breaches its contractual arrangements with us and no longer remains under our control, this may significantly disrupt our business, subject us to sanctions, compromise enforceability of related contractual arrangements, or have other harmful effects on us. |
• | There are uncertainties relating to the regulation of the internet business in China, including evolving licensing practices and the requirement for real-name registrations and its implementation in actual practice. Permits, licenses or operations at some of our subsidiaries and PRC variable interest entity levels may be subject to challenge, or we may fail to obtain permits or licenses that may be deemed necessary for our operations or we may not be able to obtain or renew certain permits or licenses. See “Risks Related to Our Business and Our Industry—If we fail to obtain and maintain the licenses and approvals required under the complex regulatory environment for internet-based businesses in China, our business, financial condition and results of operations may be materially and adversely affected,” “Item 4. Information on the Company—C. Business Overview—Government Regulations—Internet Information Services,” “Item 4. Information on the Company—C. Business Overview—Government Regulations—Internet Publication and Cultural Products,” “Item 4. Information on the Company—C. Business Overview—Government Regulations—Online Music and Entertainment” and “Item 4. Information on the Company—C. Business Overview—Government Regulations—Online Transmission of Audio-Visual Programs.” In addition, if we were required to implement real-name registration system on our platform with stricter and higher standards, we may lose large numbers of registered user accounts for various reasons, because users may no longer maintain multiple accounts and users who dislike giving out their private information may cease to use our products and services altogether. |
• | The evolving PRC regulatory system for the internet industry may lead to the establishment of new regulatory agencies. For example, in May 2011, the State Council announced the establishment of a new department, the State Internet Information Office (now known as the Cyberspace Administration of China or Office of the Central Cyberspace Affairs Commission). The primary role of this new agency is to facilitate the policy-making and legislative development in this field to direct and coordinate with the relevant departments in connection with online content administration and to deal with cross-ministry regulatory matters in relation to the internet industry. We are unable to determine what policies this new agency or any new agencies to be established in the future may have or how they may interpret existing laws, regulations and policies and how they may affect us. Further, new laws, regulations or policies may be promulgated or announced that will regulate internet activities, including online video and online advertising businesses. If these new laws, regulations or policies are promulgated, additional licenses may be required for our operations. If our operations do not comply with these new regulations after they become effective, or if we fail to obtain any licenses required under these new laws and regulations, we could be subject to penalties. |
• | variations in our revenues, earnings, cash flow and operating metrics; |
• | announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors; |
• | announcements of new product and service offerings, solutions and expansions by us or our competitors; |
• | changes in financial estimates by securities analysts; |
• | regulatory developments affecting us or our industry; |
• | our controlling shareholder’s business performance and the trading price of its stock; |
• | detrimental adverse publicity about us, our shareholders, affiliates, directors, officers or employees, our content offerings, our business model, our services or our industry; |
• | additions or departures of key personnel; and |
• | potential litigation or regulatory investigations. |
• | we have failed to timely provide the depositary with notice of meeting and related voting materials; |
• | we have instructed the depositary that we do not wish a discretionary proxy to be given; |
• | we have informed the depositary that there is substantial opposition as to a matter to be voted on at the meeting; |
• | a matter to be voted on at the meeting would have a material adverse impact on shareholders; or |
• | the voting at the meeting is to be made on a show of hands. |
• | 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; |
• | the selective disclosure rules by issuers of material nonpublic information under Regulation FD; and |
• | certain audit committee independence requirements in Rule10A-3 of the Exchange Act. |
ITEM 4. |
INFORMATION ON THE COMPANY |
D. |
Organizational Structure |
(1) | The shareholder of Guangzhou Huya is Linzhi Tencent Technology Co., Ltd., an affiliate of Tencent, holding 100% of Guangzhou Huya’s equity interest. |
• | exercise effective control over Guangzhou Huya and its subsidiaries; |
• | receive substantially all of the economic benefits of Guangzhou Huya and its subsidiaries; and |
• | have an exclusive option to purchase all or part of the equity interests in Guangzhou Huya when and to the extent permitted by PRC law. |
• | the ownership structures of Huya Technology and Guangzhou Huya are in compliance with PRC laws or regulations currently in effect; and |
• | the contractual arrangements among Huya Technology, Guangzhou Huya and Linzhi Tencent governed by PRC law, are valid, binding and enforceable under PRC law, and do not and will not result in any violation of applicable PRC laws or regulations currently in effect. |
E. |
Property, Plants and Equipment |
ITEM 4.A. |
UNRESOLVED STAFF COMMENTS |
ITEM 5. |
OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
A. |
Operating Results |
For the year ended December 31, |
||||||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Net revenues |
||||||||||||||||||||||||||||
Live streaming |
7,976,214 | 95.2 | 10,311,624 | 94.5 | 10,186,204 | 1,598,438 | 89.7 | |||||||||||||||||||||
Advertising and others |
398,287 | 4.8 | 602,750 | 5.5 | 1,165,242 | 182,852 | 10.3 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total net revenues |
8,374,501 | 100.0 | 10,914,374 | 100.0 | 11,351,446 | 1,781,290 | 100.0 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Cost of revenues (1) |
(6,892,579 | ) | (82.3 | ) | (8,646,308 | ) | (79.2 | ) | (9,751,160 | ) | (1,530,170 | ) | (85.9 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Gross profit |
1,481,922 | 17.7 | 2,268,066 | 20.8 | 1,600,286 | 251,120 | 14.1 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Operating expenses |
||||||||||||||||||||||||||||
Research and development expenses (1) |
(508,714 | ) | (6.1 | ) | (734,261 | ) | (6.7 | ) | (818,882 | ) | (128,500 | ) | (7.2 | ) | ||||||||||||||
Sales and marketing expenses (1) |
(438,396 | ) | (5.2 | ) | (558,012 | ) | (5.1 | ) | (759,507 | ) | (119,183 | ) | (6.7 | ) | ||||||||||||||
General and administrative expenses (1) |
(352,824 | ) | (4.2 | ) | (445,006 | ) | (4.1 | ) | (326,772 | ) | (51,278 | ) | (2.9 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total operating expenses |
(1,299,934 | ) | (15.5 | ) | (1,737,279 | ) | (15.9 | ) | (1,905,161 | ) | (298,961 | ) | (16.8 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Other income |
79,390 | 0.9 | 194,169 | 1.8 | 274,704 | 43,107 | 2.4 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Operating income (loss) |
261,378 | 3.1 | 724,956 | 6.7 | (30,171 | ) | (4,734 | ) | (0.3 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31, |
||||||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Interest and short-term investments income |
304,491 | 3.6 | 313,366 | 2.9 | 247,009 | 38,761 | 2.2 | |||||||||||||||||||||
Gain on fair value change of investment |
— | — | 2,160 | 0.0 | 44,161 | 6,930 | 0.4 | |||||||||||||||||||||
Other non-operating expenses |
— | — | (10,010 | ) | (0.1 | ) | — | — | — | |||||||||||||||||||
Foreign currency exchange gains (losses) net |
1,157 | 0.0 | 2,056 | 0.0 | (1,480 | ) | (232 | ) | 0.0 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Income before income tax expenses |
567,026 | 6.7 | 1,032,528 | 9.5 | 259,519 | 40,725 | 2.3 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Income tax expenses |
(96,078 | ) | (1.1 | ) | (176,784 | ) | (1.6 | ) | (55,227 | ) | (8,666 | ) | (0.5 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Income before share of (loss) income in equity method investments, net of income taxes |
470,948 | 5.6 | 855,744 | 7.9 | 204,292 | 32,059 | 1.8 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Share of (loss) income in equity method investments, net of income taxes |
(2,775 | ) | (0.0 | ) | 28,414 | 0.3 | 379,207 | 59,506 | 3.3 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income |
468,173 | 5.6 | 884,158 | 8.2 | 583,499 | 91,565 | 5.1 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Share-based compensation was allocated in cost of revenues and operating expenses as follows: |
For the year ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Cost of revenues |
31,593 | 64,942 | 56,629 | 8,886 |
For the year ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Research and development expenses |
86,296 | 150,723 | 135,316 | 21,234 | ||||||||||||
Sales and marketing expenses |
5,919 | 9,879 | 8,318 | 1,305 | ||||||||||||
General and administrative expenses |
157,936 | 182,664 | 89,442 | 14,035 |
For the year ended December 31, |
||||||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Cost of revenues: |
||||||||||||||||||||||||||||
Revenue sharing fees and content costs |
5,552,712 | 80.6 | 7,086,832 | 82.0 | 8,374,555 | 1,314,150 | 85.9 | |||||||||||||||||||||
Bandwidth costs |
800,827 | 11.6 | 879,172 | 10.2 | 713,672 | 111,991 | 7.3 | |||||||||||||||||||||
Salaries and welfare |
255,258 | 3.7 | 306,805 | 3.5 | 322,604 | 50,624 | 3.3 | |||||||||||||||||||||
Payment handling costs |
120,429 | 1.7 | 154,538 | 1.8 | 151,913 | 23,838 | 1.6 | |||||||||||||||||||||
Share-based compensation |
31,593 | 0.5 | 64,942 | 0.8 | 56,629 | 8,886 | 0.6 | |||||||||||||||||||||
Others |
131,760 | 1.9 | 154,019 | 1.7 | 131,787 | 20,681 | 1.3 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total cost of revenues |
6,892,579 | 100.0 | 8,646,308 | 100.0 | 9,751,160 | 1,530,170 | 100.0 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
• | Huya Technology was qualified as a Software Enterprise, and enjoyed the zero preferential tax rate starting from 2017 and 12.5% preferential tax rate from 2019 to 2021. |
• | Guangzhou Huya applied for the HNTE qualification and obtained approval in November 2018. It is entitled to enjoy the preferential tax rate of 15% as an HNTE for three years starting from 2018, and we have renewed the HNTE qualification in 2021. |
• | Hainan Huya Entertainment Information Technology Co., Ltd., who enterprises in encouraged industries registered in the Hainan Free Trade Port and engaging in substantive operations, entitled to enjoy the preferential tax rate of 15% for five years starting from 2020 pursuant to Cai Shui [2020] No. 31. |
• | Most of the remaining PRC subsidiaries and VIEs were subject to 25% EIT for the years reported. |
B. |
Liquidity and Capital Resources |
For the year ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Summary Consolidated Cash Flows Data |
||||||||||||||||
Net cash provided by operating activities |
1,945,414 | 1,239,874 | 327,453 | 51,384 | ||||||||||||
Net cash (used in) /provided by investing activities |
(3,684,971 | ) | 1,004,780 | (1,880,320 | ) | (295,064 | ) | |||||||||
Net cash provided by financing activities |
2,133,651 | 265,294 | 10,723 | 1,683 | ||||||||||||
Net increase (decrease) in cash and cash equivalents and restricted cash |
394,094 | 2,509,948 | (1,542,144 | ) | (241,997 | ) | ||||||||||
Cash and cash equivalents and restricted cash at the beginning of the year |
709,019 | 1,114,585 | 3,458,462 | 542,708 | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash |
11,472 | (166,071 | ) | (69,864 | ) | (10,962 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents and restricted cash at the end of the year |
1,114,585 | 3,458,462 | 1,846,454 | 289,749 | ||||||||||||
|
|
|
|
|
|
|
|
Payment due by period |
||||||||||||||||||||
Total |
Less than 1 year |
1 – 3 years |
4 – 5 years |
More than 5 years |
||||||||||||||||
(in RMB thousands) |
||||||||||||||||||||
Operating Lease Obligations (1) |
101,072 | 45,518 | 50,736 | 4,818 | — |
(1) | Represents our non-cancellable operating leases and property management fees for offices expiring on different dates. |
Net revenues (1) |
Total assets (1) |
|||||||||||||||||||
For the year ended December 31, |
As of December 31, |
|||||||||||||||||||
2019 |
2020 |
2021 |
2020 |
2021 |
||||||||||||||||
HUYA Inc. and its wholly-owned subsidiaries |
1.0 | % | 1.6 | % | 4.0 | % | 91.1 | % | 88.9 | % | ||||||||||
Variable interest entity and its subsidiaries |
99.0 | % | 98.4 | % | 96.0 | % | 8.9 | % | 11.1 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | The percentages exclude the inter-company transactions and balances between HUYA Inc. and its wholly-owned subsidiaries and variable interest entity and its subsidiaries. |
C. |
Research and Development, Patents and Licenses, etc. |
• | AI and big data analytics |
• | Live streaming technologies state-of-the low-latency and low-loss rates in delivering voice and video data on our platform, even with weak internet connection, which provides our users with superior viewing experience. Audio and video technologies have been our main focus since our inception. For instance, we offer stable 8-20M pixels Blu-ray quality and HDR (high-dynamic range) supported live streaming. |
• | Servers and other infrastructure back-end architecture that enables smooth and expedient upgrades of our platform software infrastructure. Our advanced peer-to-peer |
D. |
Trend Information |
E. |
Critical Accounting Estimates |
ITEM 6. |
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
A. |
Directors and Executive Officers |
Directors and Executive Officers |
Age |
Position/Title | ||||
Lingdong Huang |
45 | Chairman of Board of Directors | ||||
Rongjie Dong |
45 | Director, Chief Executive Officer | ||||
David Xueling Li |
47 | Director | ||||
Cheng Yun Ming Matthew |
52 | Director | ||||
Hai Tao Pu |
51 | Director | ||||
Guang Xu |
38 | Director | ||||
Lei Zheng |
45 | Director | ||||
Hongqiang Zhao |
45 | Independent Director | ||||
Tsang Wah Kwong |
69 | Independent Director | ||||
Ligao Lai |
43 | Chief Technology Officer | ||||
Ashley Xin Wu |
37 | Vice President of Finance |
B. |
Compensation of Directors and Executive Officers |
Name |
Class A Ordinary Shares Underlying Options Awarded |
Exercise Price (US$/Share) |
Date of Grant |
Date of Expiration | ||||
Ligao Lai | * | US$2.55 | August 9, 2017 | August 8, 2027 | ||||
Other individuals as a group | * | US$2.55 | August 9, 2017, March 15, 2018 and July 1, 2018 | August 8, 2027, March 14, 2028 and June 30, 2028 |
* | Less than 1% of our total outstanding shares. |
Name |
Class A Ordinary Shares Underlying Restricted Share Units Awarded |
Date of Grant |
Date of Expiration | |||
Rongjie Dong | * | March 31, 2018, and September 13, 2020 |
March 30, 2028, and September 12, 2030 | |||
Ashley Xin Wu | * | March 31, 2018, August 15, 2019, and May 29, 2020 | March 30, 2028, August 14, 2029, and May 28, 2030 | |||
Other individuals as a group | 6,369,439 | March 31, 2018 to December 15, 2021 | March 30, 2028 to December 14, 2031 |
* | Less than 1% of our total outstanding shares. |
Name |
Class A Ordinary Shares Underlying Restricted Share Units Awarded |
Date of Grant |
Date of Expiration | |||
Ashley Xin Wu | * | June 22, 2021, and September 15, 2021 |
June 21, 2031, and September 14, 2031 | |||
Other individuals as a group | 1,114,216 | June 22, 2021 to March 15, 2022 |
June 21, 2031 to March 14, 2032 |
* | Less than 1% of our total outstanding shares. |
C. |
Board Practices |
• | appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; |
• | reviewing with the independent auditors any audit problems or difficulties and management’s response; |
• | discussing the annual audited financial statements with management and the independent auditors; |
• | reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; |
• | reviewing and approving all proposed related party transactions; |
• | meeting separately and periodically with management and the independent auditors; and |
• | monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. |
• | reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; |
• | reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; |
• | reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements, and |
• | selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management. |
• | selecting and recommending 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; |
• | advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations; and |
• | making recommendations to the board on all matters of corporate governance and on any remedial action to be taken. |
• | convening shareholders’ annual general meetings and reporting its work to shareholders at such meetings; |
• | declaring dividends and distributions; |
• | appointing officers and determining the term of office and its responsibilities of the officers; |
• | exercising the borrowing powers of our company and mortgaging the property of our company; and |
• | approving the transfer of shares in our company, including the registration of such shares in our share register. |
D. |
Employees |
As of December 31, 2021 |
||||||||
Number |
% |
|||||||
Customer services and operations |
631 | 30.5 | ||||||
Research and development |
1,063 | 51.4 | ||||||
Sales and marketing |
126 | 6.1 | ||||||
General and administrative |
247 | 12.0 | ||||||
Total |
2,067 | 100.0 |
E. |
Share Ownership |
• | each of our directors and executive officers; and |
• | each person known to us to own beneficially 5% or more of our total outstanding ordinary shares. |
Ordinary Shares Beneficially Owned |
||||||||||||||||||||
Class A ordinary Shares(†) |
Class B ordinary Shares(††) |
Total ordinary shares on an as-converted basis |
% of total ordinary shares on an as converted basis |
% of aggregate voting power (†††) |
||||||||||||||||
Directors and Executive Officers:** |
||||||||||||||||||||
Lingdong Huang |
— | — | — | — | — | |||||||||||||||
Rongjie Dong (1) |
415,332 | 690,000 | 1,105,332 | 0.5 | 0.4 | |||||||||||||||
David Xueling Li (2) |
* | — | * | * | * | |||||||||||||||
Cheng Yun Ming Matthew (3) |
— | — | — | — | — | |||||||||||||||
Hai Tao Pu (4) |
— | — | — | — | — | |||||||||||||||
Guang Xu |
— | — | — | — | — | |||||||||||||||
Lei Zheng |
— | — | — | — | — | |||||||||||||||
Hongqiang Zhao (5) |
— | — | — | — | — | |||||||||||||||
Tsang Wah Kwong (6) |
— | — | — | — | — | |||||||||||||||
Ligao Lai |
* | — | * | * | * | |||||||||||||||
Ashley Xin Wu |
* | — | * | * | * | |||||||||||||||
All directors and executive officers as a group |
2,209,596 | 690,000 | 2,899,596 | 1.2 | 0.5 | |||||||||||||||
Principal Shareholders: |
||||||||||||||||||||
Tencent Holdings Limited (7) |
— | 112,012,054 | 112,012,054 | 47.0 | 70.1 | |||||||||||||||
JOYY (8) |
— | 38,374,463 | 38,374,463 | 16.1 | 24.0 | |||||||||||||||
Morgan Stanley (9) |
21,417,150 | — | 21,417,150 | 9.0 | 1.3 |
* | Less than 1% of total outstanding ordinary shares. |
** | Except for Mr. Lingdong Huang, Mr. Guang Xu and Mr. Lei Zheng, and as indicated otherwise below, the business address for our directors and executive officers listed in the table is Building A3, E-Park, 280 Hanxi Road, Panyu District, Guangzhou 511446, the People’s Republic of China. The business address of Mr. Lingdong Huang, Mr. Guang Xu and Mr. Lei Zheng is Building C, Kexing Science Park, Nanshan District, Shenzhen, the People’s Republic of China. |
† | For each person and group included in this column, percentage ownership is calculated by dividing the number of Class A ordinary shares beneficially owned by such person or group, including Class A ordinary shares that such person or group has the right to acquire within 60 days of March 31, 2022, by the sum of the total number of Class A ordinary shares outstanding as of March 31, 2022 and the number of Class A ordinary shares underlying the options held by such person or group that are exercisable within 60 days of March 31, 2022. |
†† | For each person and group included in this column, percentage ownership is calculated by dividing the number of Class B ordinary shares beneficially owned by such person or group, including Class B ordinary shares that such person or group has the right to acquire within 60 days of March 31, 2022, by the sum of the total number of Class B ordinary shares outstanding as of March 31, 2022 and the number of Class B ordinary shares underlying the options held by such person or group that are exercisable within 60 days of March 31, 2022. |
††† | 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, including Class A and Class B ordinary shares that such person or group has the right to acquire within 60 days of March 31, 2022, with respect to all outstanding shares of our Class A and Class B ordinary shares as a single class. Each holder of Class A ordinary shares is entitled to one vote per Class A ordinary share. Each holder of our Class B ordinary shares is entitled to ten votes per Class B ordinary share. Our Class B ordinary shares are convertible at any time by the holder into Class A ordinary shares on a share-for-share |
(1) | Represents (i) 690,000 Class B ordinary shares directly held by Oriental Luck International Limited, a British Virgin Islands company wholly owned by a family trust controlled by Mr. Rongjie Dong, and (ii) 415,332 Class A ordinary shares issuable upon the vesting of the restricted shares units within 60 days after March 31, 2022 held by Mr. Rongjie Dong. The registered office of Oriental Luck International Limited is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands. |
(2) | The business address of Mr. David Xueling Li is 30 Pasir Panjang Road #15-31A Mapletree Business City, Singapore 117440. |
(3) | The business address of Mr. Cheng Yun Ming Matthew is 29/F, Three Pacific Place, 1 Queen’s Road East, Wanchai, Hong Kong. |
(4) | The business address of Mr. Hai Tao Pu is 29/F, Three Pacific Place, 1 Queen’s Road East, Wanchai, Hong Kong. |
(5) | The business address of Mr. Hongqiang Zhao is No. 10 Furong Street, Chaoyang District, Beijing, the People’s Republic of China. |
(6) | The business address of Mr. Tsang Wah Kwong is Flat B, 11/F., Block 9, Vista Paradiso, 2 Hang Ming Street, Ma On Shan, New Territories, Hong Kong. |
(7) | Represents 112,012,054 Class B ordinary shares directly held by Linen Investment Limited, based on our register of members. Tencent Holdings Limited is a Cayman Islands company. Linen Investment Limited is a British Virgin Islands company and a direct wholly owned subsidiary of Tencent Holdings Limited. The principal business address of each of Tencent Holdings Limited and Linen Investment Limited is Level 29, Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong. |
(8) | Represents 38,374,463 Class B ordinary shares directly held by JOYY Inc., based on our register of members. JOYY Inc. is a Cayman Islands company. The principal business address of JOYY Inc. is 30 Pasir Panjang Road #15-31A Mapletree Business City, Singapore 117440. |
(9) | Represents 21,417,150 Class A ordinary shares in the form of ADSs held by Morgan Stanley and its affiliates, as reported in a Schedule 13G amendment filed by Morgan Stanley and its affiliates on February 11, 2022. The principal business address of Morgan Stanley is 1585 Broadway New York, NY 10036. |
ITEM 7. |
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
A. |
Major Shareholders |
B. |
Related Party Transactions |
For the year ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Content costs charged by Tencent |
123,204 | 127,224 | 485,988 | 76,262 | ||||||||||||
Operation support services provided by Tencent |
219,403 | 342,487 | 370,393 | 58,123 | ||||||||||||
Disposal gain of an investment |
— | — | 360,589 | 56,584 | ||||||||||||
Sub-licensing and other revenues from Tencent |
8,028 | 14,349 | 80,302 | 12,601 | ||||||||||||
Others |
31,739 | 30,540 | 14,617 | 2,294 |
For the year ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Operation support services provided by JOYY |
17,455 | 4,187 | 2,543 | 399 | ||||||||||||
Purchase of services by JOYY on behalf of Huya |
22,622 | 18,945 | 268 | 42 | ||||||||||||
Cash collected by JOYY as a payment platform for Huya |
1,362,489 | — | — | — | ||||||||||||
Repayment from JOYY in relation to the payment on behalf of Huya’s employees |
15,306 | — | — | — | ||||||||||||
Others |
12,637 | 1,054 | — | — |
• | Demand registration rights. |
• | Form F-3 registration rights.F-3, JOYY may request us to file a registration statement on Form F-3. We are not obligated to effect more than six registration statements on Form F-3 that have been declared and ordered effective. |
• | Piggyback registration rights. |
For the year ended December 31, |
||||||||||||
2020 |
2021 |
|||||||||||
RMB |
RMB |
US$ |
||||||||||
Sub-licensing and other revenues from Tencent and Huya’s related parties |
8,197 | 188,209 | 29,534 | |||||||||
Content cost and revenue sharing fees charged by Tencent and Huya’s related parties |
85,361 | 102,311 | 16,055 | |||||||||
Others |
34,044 | 21,013 | 3,297 |
C. |
Interests of Experts and Counsel Not applicable. |
ITEM 8. |
FINANCIAL INFORMATION |
A. |
Consolidated Statements and Other Financial Information |
B. |
Significant Changes |
ITEM 9. |
THE OFFER AND LISTING |
A. |
Offering and Listing Details. |
B. |
Plan of Distribution |
C. |
Markets |
D. |
Selling Shareholders |
E. |
Dilution |
F. |
Expenses of the Issue |
ITEM 10. |
ADDITIONAL INFORMATION |
A. |
Share Capital |
B. |
Memorandum and Articles of Association |
• | the instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer; |
• | the instrument of transfer is in respect of only one class of shares; |
• | the instrument of transfer is properly stamped, if required; |
• | in the case of a transfer to joint holders, the number of joint holders to whom the ordinary share is to be transferred does not exceed four; and |
• | a fee of such maximum sum as the NYSE may determine to be payable or such lesser sum as our directors may from time to time require is paid to us in respect thereof. |
• | the designation of the series; |
• | the number of shares of the series and the subscription price thereof if different from the par value thereof; |
• | the dividend rights, dividend rates, conversion rights, voting rights; and |
• | the rights and terms of redemption and liquidation preferences. |
• | subject to our fourth amended and restated memorandum and articles of association, authorize our board of directors to issue preferred shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preferred shares without any further vote or action by our shareholders; and |
• | limit the ability of shareholders to requisition and convene general meetings of shareholders |
• | increase our 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, provided that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in case of the share from which the reduced share is derived; 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 canceled. |
• | does not have to file an annual return of its shareholders with the Registrar of Companies; |
• | is not required to open its register of members for inspection; |
• | does not have to hold an annual general meeting; |
• | may issue negotiable or bearer shares or shares with no par value; |
• | may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance); |
• | may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands; |
• | may register as a limited duration company; and |
• | may register as a segregated portfolio company. |
• | the names and addresses of the members, together with a statement of the shares held by each member, and such statement shall confirm (i) the amount paid or agreed to be considered as paid, on the shares of each member, (ii) the number and category of shares held by each member, and (iii) whether each relevant category of shares held by a member carries voting rights under the articles of association of the company, and if so, whether such voting rights are conditional; |
• | the date on which the name of any person was entered on the register as a member; and |
• | the date on which any person ceased to be a member. |
• | 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 Act. |
• | an act which is ultra vires or illegal and is therefore incapable of ratification by the shareholders, |
• | an act which constitutes a fraud against the minority where the wrongdoers are themselves in control of the company, and |
• | an act which requires a resolution with a qualified (or special) majority (i.e. more than a simple majority) which has not been obtained. |
• | 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 required to be 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 30 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. |
C. |
Material Contracts |
D. |
Exchange Controls |
E. |
Taxation |
• | such excess distribution and/or gain will be allocated ratably over the U.S. holder’s holding period for the ADSs or ordinary shares; |
• | such amount allocated to the current taxable year and any taxable years in the U.S. holder’s holding period prior to the first taxable year in which we are a PFIC, or |
• | pre-PFIC year, will be taxable as ordinary income; |
• | such amount allocated to each prior taxable year, other than a pre-PFIC year, will be subject to tax at the highest tax rate in effect for that year; and |
• | an interest charge generally applicable to underpayments of tax will be imposed on the tax attributable to each prior taxable year, other than a pre-PFIC year. |
F. |
Dividends and Paying Agents |
G. |
Statement by Experts |
H. |
Documents on Display |
I. |
Subsidiary Information |
ITEM 11. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 12. |
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
A. |
Debt Securities |
B. |
Warrants and Rights |
C. |
Other Securities |
D. |
American Depositary Shares |
Service |
Fees | |
• To any person to which ADSs are issued or to any person to which a distribution is made in respect of ADS distributions pursuant to stock dividends or other free distributions of stock, bonus distributions, stock splits or other distributions (except where converted to cash) |
Up to US$0.05 per ADS issued | |
• Cancelation of ADSs, including the case of termination of the deposit agreement |
Up to US$0.05 per ADS canceled | |
• Distribution of cash dividends |
Up to US$0.05 per ADS held | |
• Distribution of cash entitlements (other than cash dividends) and/or cash proceeds from the sale of rights, securities and other entitlements |
Up to US$0.05 per ADS held | |
• Distribution of ADSs pursuant to exercise of rights |
Up to US$0.05 per ADS held | |
• Distribution of securities other than ADSs or rights to purchase additional ADSs |
Up to US$0.05 per ADS held | |
• Depositary services |
Up to US$0.05 per ADS held on the applicable record date(s) established by the depositary bank |
• | Fees for the transfer and registration of ordinary shares charged by the registrar and transfer agent for the ordinary shares in the Cayman Islands (i.e., upon deposit and withdrawal of ordinary shares). |
• | Expenses incurred for converting foreign currency into U.S. dollars. |
• | Expenses for cable, telex and fax transmissions and for delivery of securities. |
• | Taxes and duties upon the transfer of securities, including any applicable stamp duties, any stock transfer charges or withholding taxes (i.e., when ordinary shares are deposited or withdrawn from deposit). |
• | Fees and expenses incurred in connection with the delivery or servicing of ordinary shares on deposit. |
• | Fees and expenses incurred in connection with complying with exchange control regulations and other regulatory requirements applicable to ordinary shares, deposited securities, ADSs and ADRs. |
• | Any applicable fees and penalties thereon. |
ITEM 13. |
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES |
ITEM 14. |
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
ITEM 15. |
CONTROLS AND PROCEDURES |
ITEM 16.A. |
AUDIT COMMITTEE FINANCIAL EXPERT |
ITEM 16.B. |
CODE OF ETHICS |
ITEM 16.C. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
2020 |
2021 |
|||||||
RMB |
RMB |
|||||||
(in thousands) |
||||||||
Audit fees (1) |
12,500 | 11,000 | ||||||
Audit-related fees (2) |
1,050 | — | ||||||
Tax fees (3) |
987 | 960 |
(1) | “Audit fees” represent the aggregate fees billed for each of the fiscal years listed for professional services rendered by our principal auditor for the audit or review of our annual or quarterly financial statements and other SEC filings. |
(2) | “Audit-related fees” mean the aggregate fees billed for professional services rendered by our principal accounting firm for the assurance and related services. |
(3) | “Tax fees” mean the aggregate fees billed in each of the fiscal years listed for the professional tax services rendered by our principal auditors associated with certain permitted transfer pricing, tax consulting and other tax advisory services. |
ITEM 16.D. |
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
ITEM 16.E. |
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
ITEM 16.F. |
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT |
ITEM 16.G. |
CORPORATE GOVERNANCE |
• | an exemption from the rule that a majority of our board of directors must be independent directors; |
• | the requirement that the compensation committee be composed entirely of independent directors; and |
• | the requirement that the nominating committee be composed entirely of independent directors. |
ITEM 16.H. |
MINE SAFETY DISCLOSURE |
ITEM 16.I. |
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS |
ITEM 17. |
FINANCIAL STATEMENTS |
ITEM 18. |
FINANCIAL STATEMENTS |
ITEM 19. |
EXHIBITS |
* | Filed herewith. |
** | Furnished herewith. |
† | Portions of this exhibit have been omitted pursuant to Rule 406 under the Securities Act. |
HUYA Inc. | ||||
By: | /s/ Rongjie Dong | |||
Name: | Rongjie Dong | |||
Title: | Chief Executive Officer |
As of December 31, |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB | RMB | US$ | ||||||||||
(Note 2(e)) | ||||||||||||
Assets |
||||||||||||
Current assets |
||||||||||||
Cash and cash equivalents |
3,293,573 | 1,790,784 | 281,013 | |||||||||
Restricted cash |
164,889 | 55,670 | 8,736 | |||||||||
Short-term deposits |
5,974,790 | 8,351,945 | 1,310,602 | |||||||||
Short-term investments |
1,206,539 | 816,331 | 128,100 | |||||||||
Accounts receivable, net of allowance of RMB4,449 and RMB2,296 for 2020 and 2021, respectively |
71,237 | 88,034 | 13,814 | |||||||||
Amounts due from related parties, net of allowance of RMB299 and RMB393 for 2020 and 2021, respectively |
64,802 | 148,560 | 23,312 | |||||||||
Prepayments and other current assets, net of allowance of RMB324 and RMB23 for 2020 and 2021, respectively |
495,108 | 664,945 | 104,344 | |||||||||
Total current assets |
11,270,938 | 11,916,269 | 1,869,921 | |||||||||
Non-current assets |
||||||||||||
Deferred tax assets |
48,313 | 20,245 | 3,177 | |||||||||
Investments |
467,206 | 608,617 | 95,505 | |||||||||
Property and equipment, net |
94,555 | 79,611 | 12,493 | |||||||||
Intangible assets, net |
62,796 | 83,942 | 13,172 | |||||||||
Right-of-use |
87,418 | 395,371 | 62,042 | |||||||||
Prepayments and other non-current assets |
379,461 | 150,887 | 23,677 | |||||||||
Total non-current assets |
1,139,749 | 1,338,673 | 210,066 | |||||||||
Total assets |
12,410,687 | 13,254,942 | 2,079,987 | |||||||||
Liabilities and shareholders’ equity |
||||||||||||
Current liabilities (including amounts of the consolidated variable interest entity and its subsidiaries (“VIEs”) without recourse to the Company of RMB1,056,227 and RMB1,057,062 as of December 31, 2020 and 2021, respectively) |
||||||||||||
Accounts payable |
10,083 | 12,579 | 1,974 | |||||||||
Advances from customers and deferred revenue |
485,878 | 459,509 | 72,107 | |||||||||
Income taxes payable |
56,861 | 5,944 | 933 | |||||||||
Accrued liabilities and other current liabilities |
1,707,289 | 1,845,452 | 289,588 | |||||||||
Amounts due to related parties |
95,457 | 216,128 | 33,915 | |||||||||
Lease liabilities due within one year |
29,227 | 36,473 | 5,723 | |||||||||
Total current liabilities |
2,384,795 | 2,576,085 | 404,240 | |||||||||
Non-current liabilities (including amounts of the consolidated VIEs without recourse to the Company of RMB178,684 and RMB120,329 as of December 31, 2020 and 2021, respectively) |
||||||||||||
Lease liabilities |
57,620 | 45,084 | 7,075 | |||||||||
Deferred tax liabilities |
13,350 | 4,597 | 721 | |||||||||
Deferred revenue |
178,144 | 118,975 | 18,670 | |||||||||
Total non-current liabilities |
249,114 | 168,656 | 26,466 | |||||||||
Total liabilities |
2,633,909 |
2,744,741 |
430,706 |
|||||||||
Commitments and contingencies (Note 25) |
As of December 31, |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB | RMB | US$ | ||||||||||
(Note 2(e)) | ||||||||||||
Shareholders’ equity |
||||||||||||
Class A ordinary shares (US$0.0001 par value; 750,000,000 and 750,000,000 shares authorized, 83,490,841 and 86,993,764 shares issued and outstanding as of December 31, 2020 and 2021, respectively) |
55 | 58 | 9 | |||||||||
Class B ordinary shares (US$0.0001 par value; 200,000,000 and 200,000,000 shares authorized, 152,357,321 and 151,076,517 shares issued and outstanding as of December 31, 2020 and 2021, respectively) |
100 | 99 | 16 | |||||||||
Additional paid-in capital |
11,465,575 | 11,764,059 | 1,846,038 | |||||||||
Statutory reserves |
122,429 | 122,429 | 19,212 | |||||||||
Accumulated deficit |
(1,883,643 | ) | (1,300,144 | ) | (204,021 | ) | ||||||
Accumulated other comprehensive income (loss) |
72,262 | (76,300 | ) | (11,973 | ) | |||||||
|
|
|
|
|
|
|||||||
Total shareholders’ equity |
9,776,778 | 10,510,201 | 1,649,281 | |||||||||
|
|
|
|
|
|
|||||||
Total liabilities and shareholders’ equity |
12,410,687 | 13,254,942 | 2,079,987 | |||||||||
|
|
|
|
|
|
For the year ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
(Note 2(e)) | ||||||||||||||||
Net revenues |
||||||||||||||||
Live streaming |
7,976,214 | 10,311,624 | 10,186,204 | 1,598,438 | ||||||||||||
Advertising and others |
398,287 | 602,750 | 1,165,242 | 182,852 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total net revenues |
8,374,501 | 10,914,374 | 11,351,446 | 1,781,290 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cost of revenues (1) |
(6,892,579 | ) | (8,646,308 | ) | (9,751,160 | ) | (1,530,170 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross Profit |
1,481,922 | 2,268,066 | 1,600,286 | 251,120 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating expenses (1) |
||||||||||||||||
Research and development expenses |
(508,714 | ) | (734,261 | ) | (818,882 | ) | (128,500 | ) | ||||||||
Sales and marketing expenses |
(438,396 | ) | (558,012 | ) | (759,507 | ) | (119,183 | ) | ||||||||
General and administrative expenses |
(352,824 | ) | (445,006 | ) | (326,772 | ) | (51,278 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
(1,299,934 | ) | (1,737,279 | ) | (1,905,161 | ) | (298,961 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Other income |
79,390 | 194,169 | 274,704 | 43,107 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating income (loss) |
261,378 | 724,956 | (30,171 | ) | (4,734 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Interest and short-term investments income |
304,491 | 313,366 | 247,009 | 38,761 | ||||||||||||
Gain on fair value change of investment |
— | 2,160 | 44,161 | 6,930 | ||||||||||||
Other non-operating expenses |
— | (10,010 | ) | — | — | |||||||||||
Foreign currency exchange gains (losses), net |
1,157 | 2,056 | (1,480 | ) | (232 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income before income tax expenses |
567,026 | 1,032,528 | 259,519 | 40,725 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income tax expenses |
(96,078 | ) | (176,784 | ) | (55,227 | ) | (8,666 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Income before share of (loss) income in equity method investments, net of income taxes |
470,948 | 855,744 | 204,292 | 32,059 | ||||||||||||
Share of (loss) income in equity method investments, net of income taxes |
(2,775 | ) | 28,414 | 379,207 | 59,506 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income attributable to HUYA Inc. |
468,173 | 884,158 | 583,499 | 91,565 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income attributable to ordinary shareholders |
468,173 | 884,158 | 583,499 | 91,565 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income |
468,173 | 884,158 | 583,499 | 91,565 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income |
||||||||||||||||
Foreign currency translation adjustments, net of nil tax |
157,568 | (451,873 | ) | (148,562 | ) | (23,313 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total comprehensive income attributable to HUYA Inc. |
625,741 | 432,285 | 434,937 | 68,252 | ||||||||||||
|
|
|
|
|
|
|
|
For the year ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
(Note 2(e)) | ||||||||||||||||
Net income per ADS* |
||||||||||||||||
—Basic |
2.18 | 3.89 | 2.45 | 0.38 | ||||||||||||
—Diluted |
2.02 | 3.71 | 2.41 | 0.38 | ||||||||||||
Weighted average number of ADSs used in calculating net income per ADS |
||||||||||||||||
—Basic |
214,811,862 | 227,081,238 | 238,198,117 | 238,198,117 | ||||||||||||
—Diluted |
232,024,961 | 238,631,613 | 241,790,445 | 241,790,445 | ||||||||||||
Net income per ordinary share* |
||||||||||||||||
—Basic |
2.18 | 3.89 | 2.45 | 0.38 | ||||||||||||
—Diluted |
2.02 | 3.71 | 2.41 | 0.38 | ||||||||||||
Weighted average number of ordinary shares used in calculating net income per ordinary share |
||||||||||||||||
—Basic |
214,811,862 | 227,081,238 | 238,198,117 | 238,198,117 | ||||||||||||
—Diluted |
232,024,961 | 238,631,613 | 241,790,445 | 241,790,445 |
* | Each ADS represents one Class A ordinary share. |
(1) | Share-based compensation was allocated in cost of revenues and operating expenses as follows: |
For the year ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
(Note 2(e)) | ||||||||||||||||
Cost of revenues |
31,593 | 64,942 | 56,629 | 8,886 | ||||||||||||
Research and development expenses |
86,296 | 150,723 | 135,316 | 21,234 | ||||||||||||
Sales and marketing expenses |
5,919 | 9,879 | 8,318 | 1,305 | ||||||||||||
General and administrative expenses |
157,936 | 182,664 | 89,442 | 14,035 |
Class A ordinary shares |
Class B ordinary shares |
Additional paid-in |
Statutory |
Accumulated |
Accumulated other comprehensive |
Total shareholders’ |
||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
capital |
reserves |
deficit |
income (loss) |
equity |
||||||||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | RMB | RMB | ||||||||||||||||||||||||||||||
Balance as of December 31, 2018 |
44,639,737 | 29 | 159,157,321 | 104 | 7,667,855 | 34,634 | (2,424,182 | ) | 366,567 | 5,645,007 | ||||||||||||||||||||||||||
Share-based compensation related to JOYY’s Share-based Awards |
— | — | — | — | 1,996 | — | — | — | 1,996 | |||||||||||||||||||||||||||
Share-based compensation related to Huya Share-based Awards |
— | — | — | — | 279,748 | — | — | — | 279,748 | |||||||||||||||||||||||||||
Class B ordinary shares converted to Class A ordinary shares |
6,800,000 | 4 | (6,800,000 | ) | (4 | ) | — | — | — | — | — | |||||||||||||||||||||||||
Issuance of Class A ordinary shares upon the completion of the follow-on public offering |
13,600,000 | 9 | — | — | 2,110,057 | — | — | — | 2,110,066 | |||||||||||||||||||||||||||
Issuance of ordinary shares for exercised share options |
2,011,144 | 2 | — | — | 32,409 | — | — | — | 32,411 | |||||||||||||||||||||||||||
Issuance of ordinary shares for restricted share units |
50,433 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Deemed distribution to JOYY |
— | — | — | — | (10,119 | ) | — | — | — | (10,119 | ) | |||||||||||||||||||||||||
Appropriation to statutory reserves |
— | — | — | — | — | 30,045 | (30,045 | ) | — | — | ||||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | 468,173 | — | 468,173 | |||||||||||||||||||||||||||
Foreign currency translation adjustment, net of nil tax |
— | — | — | — | — | — | — | 157,568 | 157,568 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance as of December 31, 2019 |
67,101,314 | 44 | 152,357,321 | 100 | 10,081,946 | 64,679 | (1,986,054 | ) | 524,135 | 8,684,850 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A ordinary shares |
Class B ordinary shares |
Additional paid-in |
Statutory |
Accumulated |
Accumulated other comprehensive |
Total shareholders’ |
||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
capital |
reserves |
deficit |
income (loss) |
equity |
||||||||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | RMB | RMB | ||||||||||||||||||||||||||||||
Balance as of December 31, 2019 |
67,101,314 | 44 | 152,357,321 | 100 | 10,081,946 | 64,679 | (1,986,054 | ) | 524,135 | 8,684,850 | ||||||||||||||||||||||||||
Cumulative effect of initial adoption of ASC326 |
— | — | — | — | — | — | (3,067 | ) | — | (3,067 | ) | |||||||||||||||||||||||||
Balance at January 1, 2020 |
67,101,314 | 44 | 152,357,321 | 100 | 10,081,946 | 64,679 | (1,989,121 | ) | 524,135 | 8,681,783 | ||||||||||||||||||||||||||
Share-based compensation related to Huya Share-based Awards |
— | — | — | — | 408,208 | — | — | — | 408,208 | |||||||||||||||||||||||||||
Issuance of ordinary shares for exercised share options |
14,440,921 | 10 | — | — | 255,505 | — | — | — | 255,515 | |||||||||||||||||||||||||||
Issuance of ordinary shares for restricted share units |
1,948,606 | 1 | — | — | (1 | ) | — | — | — | — | ||||||||||||||||||||||||||
Deemed distribution to JOYY |
— | — | — | — | (1,013 | ) | — | — | — | (1,013 | ) | |||||||||||||||||||||||||
Appropriation to statutory reserves |
— | — | — | — | — | 57,750 | (57,750 | ) | — | — | ||||||||||||||||||||||||||
Increase in VIE’s share capital by transferring VIE’s retained earnings |
— | — | — | — | 720,930 | — | (720,930 | ) | — | — | ||||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | 884,158 | — | 884,158 | |||||||||||||||||||||||||||
Foreign currency translation adjustment, net of nil tax |
— | — | — | — | — | — | — | (451,873 | ) | (451,873 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance as of December 31, 2020 |
83,490,841 | 55 | 152,357,321 | 100 | 11,465,575 | 122,429 | (1,883,643 | ) | 72,262 | 9,776,778 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A ordinary shares |
Class B ordinary shares |
Additional paid-in |
Statutory |
Accumulated |
Accumulated other comprehensive |
Total shareholders’ |
||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
capital |
reserves |
deficit |
income (loss) |
equity |
||||||||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | RMB | RMB | ||||||||||||||||||||||||||||||
Balance as of December 31, 2020 |
83,490,841 | 55 | 152,357,321 | 100 | 11,465,575 | 122,429 | (1,883,643 | ) | 72,262 | 9,776,778 | ||||||||||||||||||||||||||
Share-based compensation related to Huya Share-based Awards |
— | — | |
— |
|
— | 289,705 | — | — | — | 289,705 | |||||||||||||||||||||||||
Class B ordinary shares converted to Class A ordinary shares |
1,280,804 | 1 | (1,280,804 | ) | (1 | ) | — | — | — | — | — | |||||||||||||||||||||||||
Issuance of ordinary shares for exercised share options |
533,425 | 1 | — | — | 8,779 | — | — | — | 8,780 | |||||||||||||||||||||||||||
Issuance of ordinary shares for restricted share units |
1,688,694 | 1 | — | — | — | — | — | — | 1 | |||||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | 583,499 | — | 583,499 | |||||||||||||||||||||||||||
Foreign currency translation adjustment, net of nil tax |
— | — | — | — | — | — | — | (148,562 | ) | (148,562 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance as of December 31, 2021 |
86,993,764 | 58 | 151,076,517 | 99 | 11,764,059 | 122,429 | (1,300,144 | ) | (76,300 | ) | 10,510,201 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB | RMB | RMB | US$ (Note 2(e)) |
|||||||||||||
Cash flows from operating activities |
||||||||||||||||
Net income attributable to HUYA Inc. |
468,173 | 884,158 | 583,499 | 91,565 | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities |
||||||||||||||||
Depreciation of property and equipment |
45,455 | 58,440 | 49,875 | 7,826 | ||||||||||||
Amortization of acquired intangible assets |
17,080 | 44,362 | 39,239 | 6,157 | ||||||||||||
Amortization of right-of-use |
25,229 | 28,376 | 35,901 | 5,634 | ||||||||||||
Allowance for (reversal of) expected credit losses |
— | 517 | (2,360 | ) | (370 | ) | ||||||||||
Gain on disposal of property and equipment and other long-term assets |
(1,621 | ) | (648 | ) | (1,504 | ) | (236 | ) | ||||||||
Share-based compensation |
281,744 | 408,208 | 289,705 | 45,460 | ||||||||||||
Share of loss (income) in equity method investments, net of income taxes |
2,775 | (28,414 | ) | (379,207 | ) | (59,506 | ) | |||||||||
Other non-cash income |
(10,119 | ) | (1,013 | ) | — | — | ||||||||||
Deferred income tax (benefits) expenses |
(14,871 | ) | 18,608 | 32,125 | 5,041 | |||||||||||
Gain on fair value changes of investments |
— | (2,160 | ) | (44,161 | ) | (6,930 | ) | |||||||||
Short-term investments income |
(21,497 | ) | (6,539 | ) | (16,331 | ) | (2,563 | ) | ||||||||
Foreign currency exchange (gains) losses, net |
(1,157 | ) | (2,056 | ) | 1,480 | 232 | ||||||||||
Changes in operating assets and liabilities: |
||||||||||||||||
Accounts receivable |
(17,909 | ) | (13,058 | ) | (16,059 | ) | (2,520 | ) | ||||||||
Prepayments and other assets |
(115,353 | ) | (59,336 | ) | (245,555 | ) | (38,533 | ) | ||||||||
Amounts due from related parties |
186,903 | (12,121 | ) | (83,847 | ) | (13,157 | ) | |||||||||
Accounts payable |
90 | 4,288 | 3,839 | 602 | ||||||||||||
Amounts due to related parties |
44,359 | 16,421 | 120,675 | 18,937 | ||||||||||||
Advances from customers and deferred revenue |
446,364 | (346,857 | ) | (85,538 | ) | (13,423 | ) | |||||||||
Lease liabilities |
(23,536 | ) | (28,623 | ) | (38,924 | ) | (6,108 | ) | ||||||||
Accrued liabilities and other current liabilities |
607,254 | 246,511 | 138,111 | 21,673 | ||||||||||||
Income tax payable |
26,051 | 30,810 | (53,510 | ) | (8,397 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash provided by operating activities |
1,945,414 | 1,239,874 | 327,453 | 51,384 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash flows from investing activities |
||||||||||||||||
Placements of short-term deposits |
(7,166,676 | ) | (7,903,107 | ) | (7,050,721 | ) | (1,106,412 | ) | ||||||||
Maturities of short-term deposits |
5,553,758 | 8,387,957 | 4,595,849 | 721,189 | ||||||||||||
Placement s of short-term investments |
(3,706,780 | ) | (2,200,000 | ) | (1,950,000 | ) | (305,998 | ) | ||||||||
Maturities of short-term investments |
1,808,908 | 3,208,602 | 2,350,000 | 368,766 | ||||||||||||
Purchase of property and equipment |
(61,210 | ) | (54,410 | ) | (39,483 | ) | (6,196 | ) | ||||||||
Purchase of intangible assets |
(10,186 | ) | (63,581 | ) | (58,583 | ) | (9,193 | ) | ||||||||
Prepayment for purchase of land use right |
— | (310,220 | ) | — |
— |
|||||||||||
Cash paid for long-term investments |
(92,944 | ) | (101,964 | ) | (284,118 | ) | (44,584 | ) | ||||||||
Cash received from an investee due to withdrawal of investment |
— | 2,000 | — | — | ||||||||||||
Cash received from an investee for its partial disposal of an investment |
— | 38,532 | — | — | ||||||||||||
Cash received from a disposal of an investment |
— | — | 554,889 |
87,074 |
||||||||||||
Proceeds from disposal of property and equipment |
159 | 971 | 1,847 | 290 | ||||||||||||
Loan to a third party |
(10,000 | ) | — | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash (used in)/provided by investing activities |
(3,684,971 | ) | 1,004,780 | (1,880,320 | ) | (295,064 | ) | |||||||||
|
|
|
|
|
|
|
|
For the year ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB | RMB | RMB | US$ (Note 2(e)) |
|||||||||||||
Cash flows from financing activities |
||||||||||||||||
Net proceeds from issuance of ordinary shares upon follow-on public offering |
2,110,715 | — | — | — | ||||||||||||
Proceeds from exercise of vested share options |
22,936 | 265,294 | 10,723 | 1,683 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash provided by financing activities |
2,133,651 | 265,294 | 10,723 | 1,683 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net increase (decrease) in cash and cash equivalents and restricted cash |
394,094 | 2,509,948 | (1,542,144 | ) | (241,997 | ) | ||||||||||
Cash and cash equivalents and restricted cash at the beginning of the year |
709,019 | 1,114,585 | 3,458,462 | 542,708 | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash |
11,472 | (166,071 | ) | (69,864 | ) | (10,962 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents and restricted cash at the end of the year |
1,114,585 | 3,458,462 | 1,846,454 | 289,749 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
For the year ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB | RMB | RMB | US$ (Note 2(e)) |
|||||||||||||
Supplemental disclosure of cash flows information: |
||||||||||||||||
- Income tax paid |
84,898 | 185,888 | 96,096 | 15,080 | ||||||||||||
- Acquisition of property and equipment in form of accounts payable and amounts due to a related party |
3,574 | 5,645 | 4,301 | 675 | ||||||||||||
- Non-cash transaction for acquiring an equity investment |
1,500 | — | — | — |
1. |
Organization and principal activities |
(a) |
Organization and principal activities |
(b) |
Public offering |
1. |
Organization and principal activities (continued) |
(c) |
Principal subsidiaries and VIE |
Name |
Place of incorporation |
Date of incorporation |
% of direct or indirect economic ownership |
Principal activities | ||||||||||
Principal subsidiaries |
||||||||||||||
Huya Limited |
Hong Kong | January 4, 2017 | 100 | % | Investment holding | |||||||||
Guangzhou Huya Technology Co., Ltd. (“Huya Technology”) |
PRC | June 16, 2017 | 100 | % | Software development | |||||||||
HUYA PTE. LTD. |
Singapore | July 23, 2018 | 100 | % | Internet value added services | |||||||||
Hainan Huya Entertainment Information Technology Co., Ltd. (“Hainan Huya”) |
PRC | December 4, 2019 | 100 | % | Cultural and Creative services | |||||||||
VIE |
||||||||||||||
Guangzhou Huya Information Technology Co., Ltd. (“Guangzhou Huya”) |
PRC | August 10, 2016 | 100 | % | Internet value added services |
1. |
Organization and principal activities (continued) |
(d) |
Variable interest entities |
• | exercise effective control over Guangzhou Huya and its subsidiaries; |
• | receive substantially all of the economic benefits of Guangzhou Huya and its subsidiaries; and |
• | have an exclusive option to purchase all or part of the equity interests in Guangzhou Huya when and to the extent permitted by PRC law. |
(i) |
VIE agreements amongst Huya Technology, Guangzhou Huya, Guangzhou Huaduo and Guangzhou Qinlv |
• | Exclusive Business Cooperation Agreement |
1. |
Organization and principal activities (continued) |
(d) |
Variable interest entities (continued) |
(i) |
VIE agreements amongst Huya Technology, Guangzhou Huya, Guangzhou Huaduo and Guangzhou Qinlv (continued) |
• |
Exclusive Purchase Option Agreement |
• | Equity Pledge Agreement |
• | Power of Attorney |
(ii) |
VIE agreements amongst Huya Technology, Guangzhou Huya and Linzhi Tencent |
• | Exclusive Business Cooperation Agreement |
1. |
Organization and principal activities (continued) |
(d) |
Variable interest entities (continued) |
(ii) |
VIE agreements amongst Huya Technology, Guangzhou Huya and Linzhi Tencent (continued) |
• | Exclusive Option Agreement |
• | Equity Interest Pledge Agreement |
• | Shareholder Voting Rights Proxy Agreement |
1. |
Organization and principal activities (continued) |
(d) |
Variable interest entities (continued) |
• | revoke or refuse to grant or renew the Group’s business and operating licenses; |
• | restrict or prohibit related party transactions between the wholly owned subsidiary of the Group and the VIE; |
• | impose fines, confiscate income or other requirements which the Group may find difficult or impossible to comply with; |
• | require the Group to alter, discontinue or restrict its operations; |
• | restrict or prohibit the Group’s ability to finance its operations, and; |
• | take other regulatory or enforcement actions against the Group that could be harmful to the Group’s business. |
1. |
Organization and principal activities (continued) |
(d) |
Variable interest entities (continued) |
As of December 31, |
||||||||
2020 |
2021 |
|||||||
RMB |
RMB |
|||||||
Assets |
||||||||
Cash and cash equivalents |
315,346 |
474,143 |
||||||
Restricted cash |
136,989 |
45,412 |
||||||
Short-term deposits |
100,000 |
— |
||||||
Accounts receivable, net |
47,497 |
64,301 |
||||||
Prepayments and other current assets |
78,910 |
216,740 |
||||||
Amounts due from related parties |
59,284 |
129,364 |
||||||
Amounts due from Group companies (1) |
1,472,386 |
1,379,170 |
||||||
Investments |
231,311 |
449,684 |
||||||
Intangible assets, net |
61,846 |
80,010 |
||||||
Right of use asset |
826 |
1,701 |
||||||
Prepayments and other non-current assets |
6,135 |
1,223 |
||||||
Other assets |
71,995 |
13,035 |
||||||
|
|
|
|
|||||
Total assets |
2,582,525 |
2,854,783 |
||||||
|
|
|
|
|||||
Deferred revenue and Advances from customers |
651,636 |
563,259 |
||||||
Accrued liabilities and other current liabilities |
492,164 |
500,530 |
||||||
Amount due to related parties |
31,791 |
101,247 |
||||||
Other liabilities |
59,320 |
12,355 |
||||||
|
|
|
|
|||||
Total liabilities |
1,234,911 |
1,177,391 |
||||||
|
|
|
|
|||||
Total shareholders’ equity |
1,347,614 |
1,677,392 |
||||||
|
|
|
|
1. |
Organization and principal activities (continued) |
(d) |
Variable i nterest entities (continued) |
For the year ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
RMB |
RMB |
RMB |
||||||||||
Third-party revenues |
8,293,317 |
10,738,074 |
10,897,479 |
|||||||||
Total cost and expenses (2) |
(7,954,302 |
) |
(10,477,605 |
) |
(10,789,307 |
) | ||||||
Others, net |
129,487 |
82,469 |
195,202 |
|||||||||
|
|
|
|
|
|
|||||||
Income before income tax |
468,502 |
342,938 |
303,374 |
|||||||||
Income tax expenses |
(71,401 |
) |
(76,394 |
) |
(50,374 |
) | ||||||
Share of loss from equity method investments |
(2,775 |
) |
(817 |
) |
(37 |
) | ||||||
|
|
|
|
|
|
|||||||
Net income |
394,326 |
265,727 |
252,963 |
|||||||||
|
|
|
|
|
|
For the year ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
RMB |
RMB |
RMB |
||||||||||
Net cash provided by operating activities (3) |
1,667,634 |
230,204 |
1,176,397 |
|||||||||
|
|
|
|
|
|
|||||||
Capital contributions and advances to Group companies |
(861,078 |
) |
(1,300,825 |
) |
(911,916 |
) | ||||||
Other investing activities |
(1,023,878 |
) |
1,083,634 |
(197,261 |
) | |||||||
|
|
|
|
|
|
|||||||
Net cash used in investing activities |
(1,884,956 |
) |
(217,191 |
) |
(1,109,177 |
) | ||||||
|
|
|
|
|
|
|||||||
Other financing activities |
(519 |
) |
— |
— |
||||||||
|
|
|
|
|
|
|||||||
Net cash used in financing activities |
(519 |
) |
— |
— |
||||||||
|
|
|
|
|
|
(1) |
Inter-company service fees for technology support, business support and consulting fees (collectively defined as “VIE service fees”) are charged pursuant to the exclusive business cooperation agreement. As of December 31, 2019, 2020, and 2021, the outstanding balance of amounts due from Group companies were inter-company advances. There were no outstanding balances for VIE service fees charged to the VIEs. |
(2) |
For the years ended December 31, 2019, 2020 and 2021, VIE service fees were charged by WFOE and other subsidiaries to the VIEs amounting to RMB929.6 million, RMB7,543.2 million and RMB8,664.1 million. |
(3) |
For the years ended December 31, 2019, 2020 and 2021, cash paid by the VIEs to the WFOE and other subsidiaries for VIE service fees were RMB929.6 million, RMB7,543.2 million and RMB8,664.1 million. |
2. |
Principal accounting policies |
(a) |
Basis of presentation |
(b) |
Consolidation |
(c) |
Use of estimates |
(d) |
Foreign currency translation |
2. |
Principal accounting policies (continued) |
(e) |
Convenience translation |
(f) |
Cash and cash equivalents |
i) | Readily convertible to known amounts of cash throughout the maturity period; |
ii) | So near their maturity that they present insignificant risk of changes in value because of changes in interest rates. |
(g) |
Restricted cash |
(h) |
Short-term deposits |
(i) |
Short-term investments |
( j ) |
Receivables |
2. |
Principal accounting policies (continued) |
( k ) |
Investments |
2. |
Principal accounting policies (continued) |
(l) |
Property and equipment |
Estimated useful lives |
Residual rate |
|||||||
Servers, computers and equipment |
3 years |
0% |
||||||
Leasehold improvements |
Shorter of lease term or the estimated useful lives of the assets |
0% | ||||||
Others |
3-5 years |
0%-5% |
( m ) |
Intangible assets |
Estimated useful lives |
||||
Copyrights of video content |
1 – 4 years | |||
License |
15 years | |||
Software |
1 – 10 years | |||
Domain names |
15 years | |||
Trademarks |
5 years |
( n ) |
Impairment of long-lived assets |
2. |
Principal accounting policies (continued) |
(o) |
Revenue |
For the year ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
RMB | RMB | RMB | ||||||||||
Live streaming |
7,976,214 | 10,311,624 | 10,186,204 | |||||||||
Other revenues (i) |
398,287 | 602,750 | 1,165,242 | |||||||||
Total |
8,374,501 | 10,914,374 | 11,351,446 | |||||||||
(i) |
Other revenues mainly include advertising, sub-licensing and online games revenues. |
(i) |
Live streaming |
2. |
Principal accounting policies (continued) |
(o) |
Revenue (continued) |
(i) |
Live streaming (continued) |
2. |
Principal accounting policies (continued) |
(o) |
Revenue (continued) |
(ii) |
Sub-licensing |
(iii) |
Advertising |
2. |
Principal accounting policies (continued) |
(o) |
Revenue (continued) |
(iv) |
Online games revenues |
2. |
Principal accounting policies (continued) |
(o) |
Revenue (continued) |
2. |
Principal accounting policies (continued) |
(o) |
Revenue (continued) |
2022 |
2023 and after |
Total |
||||||||||
RMB | RMB | RMB | ||||||||||
Revenue expected to be recognized |
459,509 | 118,975 | 578,484 |
(p) |
Cost of revenues |
(q) |
Research and development expenses |
(r) |
Sales and marketing expenses |
(s) |
General and administrative expenses |
(t) |
Employee social security and welfare benefits |
2. |
Principal accounting policies (continued) |
(u) |
Share-based compensation |
2. |
Principal accounting policies (continued) |
(u) |
Share-based compensation (continued) |
2. |
Principal accounting policies (continued) |
(v) |
Leases |
(w) |
Government grants |
(x) |
Income taxes |
2. |
Principal accounting policies (continued) |
( y ) |
Statutory reserves |
( z ) |
Related parties |
( aa ) |
Dividends |
2. |
Principal accounting policies (continued) |
( bb ) |
Income per share |
( cc ) |
Segment reporting |
2. |
Principal accounting policies (continued) |
( dd ) |
Recently issued accounting pronouncements |
3. |
Certain risks |
(a) |
Foreign exchange risk |
(b) |
Credit risk |
4. |
Cash and cash equivalents |
December 31, 2020 |
December 31, 2021 |
|||||||||||||||
Amount |
RMB equivalent |
Amount |
RMB equivalent |
|||||||||||||
RMB |
989,824 | 989,824 | 1,341,236 | 1,341,236 | ||||||||||||
US$ |
344,450 | 2,247,500 | 66,204 | 422,096 | ||||||||||||
SGD |
11,131 | 54,892 | 5,642 | 26,617 | ||||||||||||
Others |
N/A | 1,357 | N/A |
835 | ||||||||||||
Total |
3,293,573 | 1,790,784 | ||||||||||||||
(i) |
As of December 31, 2020 and 2021, the other currencies consist of Hong Kong Dollar, Brazilian Real and Thai Baht. |
5. |
Restricted cash |
6. |
Short-term deposits |
December 31, 2020 |
December 31, 2021 |
|||||||||||||||
Amount |
RMB equivalent |
Amount |
RMB equivalent |
|||||||||||||
RMB |
1,800,000 | 1,800,000 | 2,460,000 | 2,460,000 | ||||||||||||
US$ |
639,824 | 4,174,790 | 924,125 | 5,891,945 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
5,974,790 | 8,351,945 | ||||||||||||||
|
|
|
|
7. |
Short-term investments |
8. |
Accounts receivable, net |
December 31, |
||||||||
2020 |
2021 |
|||||||
RMB | RMB | |||||||
Accounts receivable, gross |
75,686 | 90,330 | ||||||
Less: expected credit loss provision |
(4,449 | ) | (2,296 | ) | ||||
|
|
|
|
|||||
Accounts receivable, net |
71,237 | 88,034 | ||||||
|
|
|
|
For the years ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
RMB | RMB | RMB | ||||||||||
Beginning balance prior to ASC 326 |
— | (922 | ) | — | ||||||||
Impact of adoption to ASC326 |
— | (3,122 | ) | — | ||||||||
Balance at beginning of the year |
(922 | ) | (4,044 | ) | (4,449 | ) | ||||||
|
|
|
|
|
|
|||||||
Current year provision |
— | (1,907 | ) | (715 | ) | |||||||
Current year reversal |
— | 1,502 | 2,868 | |||||||||
|
|
|
|
|
|
|||||||
Balance at end of the year |
(922 | ) | (4,449 | ) | (2,296 | ) | ||||||
|
|
|
|
|
|
9. |
Prepayments and other current assets, net |
December 31, |
||||||||
2020 |
2021 |
|||||||
RMB | RMB | |||||||
Prepayments to vendors and content providers |
203,972 | 196,466 | ||||||
Input value-added tax to be deducted |
82,966 | 184,061 | ||||||
Interests receivable |
103,531 | 129,989 | ||||||
Prepayment of income tax |
58,601 | 78,101 | ||||||
Receivables from the exercise of vested share options and individual income tax paid on behalf of employees related to share-based awards |
13,285 |
45,217 | ||||||
Loan to a third party |
11,350 | 12,850 | ||||||
Prepayments to third-party payment platform |
6,093 | 8,710 | ||||||
Others |
15,634 | 9,574 | ||||||
Less: expected credit loss provision |
(324 | ) | (23 | ) | ||||
|
|
|
|
|||||
Total |
495,108 | 664,945 | ||||||
|
|
|
|
For the years ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
RMB | RMB | RMB | ||||||||||
Beginning balance prior to ASC 326 |
— | — | — | |||||||||
Impact of adoption to ASC326 |
— | (308 | ) | — | | |||||||
Balance at beginning of the year |
— | (308 | ) | (324 | ) | |||||||
|
|
|
|
|
|
|||||||
Current year provision |
— | (155 | ) | — | ||||||||
Current year reversal |
— | 139 | 301 | |||||||||
|
|
|
|
|
|
|||||||
Balance at end of the year |
— | (324 | ) | (23 | ) | |||||||
|
|
|
|
|
|
10. |
Investments |
December 31, |
||||||||
2020 |
2021 |
|||||||
RMB | RMB | |||||||
Equity investments without readily determinable fair values (i) |
279,818 | 450,937 | ||||||
Debt investments (ii) |
— | 157,160 | ||||||
Equity method investments (iii) |
187,388 |
520 | ||||||
467,206 | 608,617 | |||||||
(i) |
Equity investments without readily determinable fair values include investment in equity securities of private investee companies over which the Group has neither significant influence nor control through investments in common stock or in-substance common stock. |
(ii) |
In 2021, the Group made an investment in debt securities (i.e. certain preferred shares) of a privately-held investee company at a cash consideration of B157,160 RM (“Debt Investment”). Given that the preferred stock will become redeemable simply by the the passage of time and the intention of the Group is to hold and consider a future disposal, the investment is accounted for as an available-for-sale debt investment (see Note 2(k)), wherein the investment is carried at fair value with realized or unrealized gains or losses recorded in accumulative other comprehensive income (loss). As of December 31, 2021, the fair value of the Debt Investment is not materially different from the fair value at the acquisition date. |
(iii) |
In 2018, the Group invested as one of the limited partners with significant influence in an investment fund (the “Fund”) which owns an equity interest in an online game company, which was accounted for as an equity investment. For the year ended December 31, 2021, the Group disposed of its interest (through sales to two separate parties) in the Fund with a disposal gain of MB378,679 recognized, of which RMB360,589 was related to the transaction with an entity owned by Tencent.R The t otal cash con sideration was RMB554,889 , of wh ich RMB529,070 was related to a tra nsaction under taken with an entity owned by Tencent. |
11. |
Property and equipment, net |
December 31, |
||||||||
2020 |
2021 |
|||||||
RMB | RMB | |||||||
Gross carrying amount |
||||||||
Servers, computers and equipment |
186,874 | 204,082 | ||||||
Leasehold improvements |
34,244 | 34,653 | ||||||
Others |
11,002 | 19,211 | ||||||
Total |
232,120 | 257,946 | ||||||
Less: accumulated depreciation |
(137,565 | ) | (178,335 | ) | ||||
Property and equipment, net |
94,555 | 79,611 | ||||||
12. |
Intangible assets, net |
December 31, |
||||||||
2020 |
2021 |
|||||||
RMB | RMB | |||||||
Gross carrying amount |
||||||||
Copyrights of video content s |
83,865 | 133,865 | ||||||
License |
32,000 | 32,000 | ||||||
Software |
11,142 | 21,498 | ||||||
Domain names |
5,283 | 5,283 | ||||||
Trademark s |
1,132 | 1,132 | ||||||
Total |
133,422 | 193,778 | ||||||
Less: accumulated amortization |
||||||||
Copyrights of video content s |
(53,262 | ) | (82,312 | ) | ||||
License |
(5,689 | ) | (7,822 | ) | ||||
Software |
(8,728 | ) | (16,125 | ) | ||||
Domain names |
(2,022 | ) | (2,445 | ) | ||||
Trademark s |
(925 | ) | (1,132 | ) | ||||
Total accumulated amortization |
(70,626 | ) | (109,836 | ) | ||||
Intangible assets, net |
62,796 | 83,942 | ||||||
Year end ed December 31, |
Amortization expense of intangible assets |
|||
RMB | ||||
2022 |
32,042 | |||
2023 |
22,710 | |||
2024 |
7,943 | |||
2025 |
2,768 | |||
2026 |
2,734 |
December 31, |
||||||||
2020 |
2021 |
|||||||
Copyrights of video content s |
2 years | 3 years | ||||||
License |
15 years | 15 years | ||||||
Software |
2 years | 4 years | ||||||
Domain names |
15 years | 15 years | ||||||
Trademark s |
5 years | 5 years |
13. |
Prepayments and other non-current assets |
December 31, |
||||||||
2020 |
2021 |
|||||||
RMB | RMB | |||||||
Prepayments to vendors and content providers |
58,706 | 139,968 | ||||||
Refundable lease deposits |
8,173 | 8,519 | ||||||
Prepayments for purchase of land use right (i) |
310,220 | — | ||||||
Others |
2,362 | 2,400 | ||||||
|
|
|
|
|||||
Total |
379,461 | 150,887 | ||||||
|
|
|
|
(i) |
In November 2020, the Company had entered into an agreement for the acquisition of land use rights for its operations and the prepayment was amounted to B310,220 RM as of December 31, 2020. In July 2021, the Company obtained the effective land use certificate and accordingly recognized the prepayment of the land use right as right of use asset. |
14. |
Advances from customers and deferred revenue |
December 31, |
||||||||
2020 |
2021 |
|||||||
RMB | RMB | |||||||
Deferred revenue, current |
399,053 | 438,309 | ||||||
Advances from customers |
86,825 | 21,200 | ||||||
|
|
|
|
|||||
Total current advances from customers and deferred revenue |
485,878 | 459,509 | ||||||
|
|
|
|
|||||
Deferred revenue, non-current |
178,144 | 118,975 | ||||||
|
|
|
|
|||||
Total non-current deferred revenue |
178,144 | 118,975 | ||||||
|
|
|
|
15. |
Accrued liabilities and other current liabilities |
December 31, |
||||||||
2020 |
2021 |
|||||||
RMB |
RMB |
|||||||
Revenue sharing fees |
990,867 | 1,051,354 | ||||||
Salaries and welfare |
263,310 | 231,465 | ||||||
Marketing and promotion expenses |
152,010 | 175,357 | ||||||
Bandwidth costs |
86,967 | 136,444 | ||||||
Other taxes payable |
43,158 | 59,054 | ||||||
License fees |
40,749 | 52,624 | ||||||
Deposits from content providers, suppliers and advertising customers |
50,909 | 41,941 | ||||||
Others |
79,319 | 97,213 | ||||||
|
|
|
|
|||||
Total |
1,707,289 | 1,845,452 | ||||||
|
|
|
|
16. |
Cost of revenues |
For the year ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
RMB | RMB | RMB | ||||||||||
Revenue sharing fees and content costs |
5,552,712 | 7,086,832 | 8,374,555 | |||||||||
Bandwidth costs |
800,827 | 879,172 | 713,672 | |||||||||
Salaries and welfare |
255,258 | 306,805 | 322,604 | |||||||||
Payment handling costs |
120,429 | 154,538 | 151,913 | |||||||||
Share-based compensation |
31,593 | 64,942 | 56,629 | |||||||||
Others |
131,760 | 154,019 | 131,787 | |||||||||
|
|
|
|
|
|
|||||||
Total |
6,892,579 | 8,646,308 | 9,751,160 | |||||||||
|
|
|
|
|
|
17. |
Other income |
18. |
Taxation |
(a) |
PRC value-added tax and related surcharges |
(b) |
Income taxes |
18. |
Taxation (continued) |
(b) |
Income taxes (continued) |
• |
Huya Technology was qualified as a Software Enterprise, and enjoyed the zero preferential tax rate starting from 2017 and 12.5% preferential tax rate starting from 2019. In 2019, Huya Technology qualified as a KNSE and applied the income tax rate of 10% for 2019 pursuant to SAT Public Notice [2018] No.23 (“Circular 23”). |
• |
The qualification as a KNSE is subject to annual evaluation and approval by the relevant authorities in China and we will only recognize the preferential tax treatment of KNSE status when approval from the relevant authorities is obtained, usually one year in arrears. In 2021, the NDRC, together with several other authorities, jointly published the Circular on the Requirements for the Formulation of the List of Integrated Circuit Enterprises or Project and Software Enterprises Enjoying Tax Preferences, which provides higher requirements on KNSE than before. Huya Technology was not able to maintain its KNSE qualification for the year of 2020 due to the changes in the relevant policies and was notified that it’s not qualified as a KNSE in May, 2021. The impact resulting from not being qualified as a KNSE is not material for the year of 2020. |
• |
Furthermore, Huya Technology is still qualified as a Software Enterprise and enjoyed 12.5% preferential tax rate in 2021. |
• |
Guangzhou Huya applied for the HNTE qualification and obtained approval in November 2018 and it is entitled to enjoy the preferential tax rate of 15% as an HNTE for three years starting from 2018. In 2021, Guangzhou Huya obtained renewal for HNTE qualification for next three years and should apply for HNTE qualification in 2024. |
• | Hainan Hu ya was qualified as an EIE in Hainan free trade port, and enjoyed the preferential tax rate of 15% for five years starting from 2020. |
• | Most of the remaining PRC subsidiaries and VIEs were subject to 25% EIT for the years reported. |
18. |
Taxation (continued) |
(b) |
Income taxes (continued) |
18. |
Taxation (continued) |
(b) |
Income taxes (continued) |
For the year ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
RMB | RMB | RMB | ||||||||||
PRC entities |
796,062 | 994,163 | 360,160 | |||||||||
Non-PRC entities |
(229,036 | ) | 38,365 | (100,641 | ) | |||||||
Total |
567,026 | 1,032,528 | 259,519 | |||||||||
For the year ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
RMB | RMB | RMB | ||||||||||
Income tax |
||||||||||||
Current income tax expenses |
110,408 | 142,710 | 16,046 | |||||||||
Deferred income tax (benefits) expenses |
(14,871 | ) | 18,818 | 28,119 | ||||||||
Subtotal income tax expenses |
95,537 | 161,528 | 44,165 | |||||||||
Income tax expenses applicable to Non-PRC operations |
||||||||||||
Current income tax expenses |
541 | 15,466 | 7,056 | |||||||||
Deferred income tax (benefits) expenses |
— | (210 | ) | 4,006 | ||||||||
Subtotal income tax Non-PRC operations |
541 | 15,256 | 11,062 | |||||||||
Total income tax expenses |
96,078 | 176,784 | 55,227 | |||||||||
18. |
Taxation (continued) |
(b) |
Income taxes (continued) |
For the year ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
PRC Statutory income tax rate |
25.0 | % | 25.0 | % | 25.0 | % | ||||||
Effect of tax holiday and preferential tax benefit s |
(18.9 | )% | (12.3 | )% | (15.6 | ) % | ||||||
Effect of varying tax rates available in different jurisdictions (i) |
(3.3 | )% | (1.6 | )% | (0.7 | ) % | ||||||
Permanent differences (ii) |
6.7 | % | 6.1 | % | 19.0 | % | ||||||
Change in valuation allowance |
15.8 | % | 4.8 | % | 10.7 | % | ||||||
Effect of Super Deduction available to the Group |
(8.3 | )% | (4.9 | )% | (17.1 | ) % | ||||||
|
|
|
|
|
|
|||||||
Effective income tax rate |
17.0 | % | 17.1 | % | 21.3 | % | ||||||
|
|
|
|
|
|
|||||||
Effect of tax holidays inside the PRC on basic earnings per share/ADS (RMB) |
(0.42 | ) | (0.56 | ) | (0.11 | ) | ||||||
|
|
|
|
|
|
(i) | For the years ended December 31, 2019, 2020 and 2021, the effect of varying tax rates in different jurisdictions is mainly driven by the interest income derived from f 0% short-term deposits which is subject to an income tax rate ounder the tax laws of Cayman Islands, partially offset by the losses arising from overseas business which is subject to an income tax rate o f 17 % under the ta x laws of Singapore. |
(ii) | Permanent differences mainly arise from expenses not deductible for tax purposes including primarily share-based compensation costs and expenses incurred by subsidiaries and VIEs. |
18. |
Taxation (continued) |
(b) |
Income taxes (continued) |
December 31, |
||||||||
2020 |
2021 |
|||||||
RMB |
RMB |
|||||||
Deferred tax assets |
||||||||
Tax loss carried forward |
142,408 | 181,860 | ||||||
Unrealized profit s arising from elimination of inter-company transactions |
45,354 | 5,420 | ||||||
Deferred revenue |
2,898 | 2,435 | ||||||
Others |
1,084 | 1,766 | ||||||
|
|
|
|
|||||
191,744 | 191,481 | |||||||
|
|
|
|
|||||
Less: Valuation allowance (i) |
(143,431 | ) | (171,236 | ) | ||||
|
|
|
|
|||||
Total deferred tax assets |
48,313 | 20,245 | ||||||
|
|
|
|
|||||
Deferred tax liabilities |
||||||||
Unrealized gains on investments |
13,350 | 4,597 | ||||||
|
|
|
|
|||||
Total deferred tax liabilities |
13,350 | 4,597 | ||||||
Net deferred tax assets |
34,963 | 15,648 | ||||||
|
|
|
|
(i) | Valuation allowance is provided against deferred tax assets wh e n the Group determines that it is more likely than not that the deferred tax assets will not be utilized in the future. In making such determination, the Group considered factors including future taxable income exclusive of reversing temporary differences and tax loss carry forwards. Valuation allowances as of December 31, 2020 and 2021 were provided for net operating loss carry forwards, which were mainly incurred by the overseas subsidiaries, because such deferred tax assets are not more likely than not to be realized based on the Group’s estimate of the future taxable income to be derived by the subsidiaries. If events including (i) future reversals of existing taxable temporary differences; (ii) future taxable income exclusive of reversing temporary differences and carry forwards; and (iii) tax planning strategies occur in the future that allow the Group to realize more of its deferred income tax than the presently recorded amounts, an adjustment to the valuation allowances will result in a decrease in tax expense when those events occur. |
18. |
Taxation (continued) |
(b) |
Income taxes (continued) |
For the year ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
RMB | RMB | RMB | ||||||||||
Balance at beginning of the year |
21,899 | 94,637 | 143,431 | |||||||||
Additions |
89,002 | 61,069 | 42,252 | |||||||||
Reversals/write-off |
(16,264 | ) | (12,275 | ) | (14,447 | ) | ||||||
Balance at end of the year |
94,637 | 143,431 | 171,236 | |||||||||
19. |
Ordinary shares |
20. |
Share-based compensation |
For the year ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
RMB | RMB | RMB | ||||||||||
Share-based compensation expenses |
||||||||||||
- Related to Huya Share-based Awards |
279,748 | 408,208 | 289,705 | |||||||||
- Related to JOYY’s Share-based Awards |
1,996 | — | — | |||||||||
Total |
281,744 | 408,208 | 289,705 | |||||||||
(a) |
Huya Share-based Awards |
20. |
Share-based compensation (continued) |
(a) |
Huya Share-based Awards (continued) |
Number of options |
Weighted average exercise price (US$) |
Weighted average remaining contractual life (years) |
Aggregate intrinsic value (US$) |
|||||||||||||
As of December 31, 2018 |
17,520,555 | 2.5210 | 8.82 | 227,049 | ||||||||||||
Forfeited |
(257,750 | ) | 2.5500 | |||||||||||||
Exercised |
(2,011,144 | ) | 2.3290 | |||||||||||||
As of December 31, 2019 |
15,251,661 | 2.5458 | 7.84 | 234,939 | ||||||||||||
Forfeited |
(18,000 | ) | 2.5500 | |||||||||||||
Exercised |
(14,440,921 | ) | 2.5456 | |||||||||||||
As of December 31, 2020 |
792,740 | 2.5500 | 6.61 | 13,778 | ||||||||||||
Forfeited |
— | — | ||||||||||||||
Exercised |
(533,425 | ) | 2.5500 | |||||||||||||
As of December 31, 2021 |
259,315 | 2.5500 | 5.60 | 1,138 | ||||||||||||
Expected to vest at December 31, 2021 |
— | — | — | — | ||||||||||||
Exercisable as of December 31, 2021 |
259,315 | 2.5500 | 5.60 | 1,138 | ||||||||||||
2018 |
||||
Weighted average fair value per option granted |
US$ | 5.2130 | ||
Weighted average exercise price |
US$ | 2.47 | ||
Risk-free interest rate (1) |
2.83 | % | ||
Expected term (in year) (2) |
10 | |||
Expected volatility (3) |
55 | % | ||
Dividend yield (4) |
— |
(1) | The risk-free interest rate of periods within the contractual life of the share option is based on the China Government Bond yield as at the valuation dates. |
20. |
Share-based compensation (continued) |
(a) |
Huya Share-based Awards (continued) |
(2) | The expected term is the contract life of the option. |
(3) | Expected volatility is estimated based on the average of historical volatilities of the comparable companies in the same industry as at the valuation dates. |
(4) | The Company has no history or expectation of paying dividend on its ordinary shares. The expected dividend yield was estimated based on the Company’s expected dividend policy over the expected term of the option. |
20. |
Share-based compensation (continued) |
(a) |
Huya Share-based Awards (continued) |
Number of restricted share units |
Weighted average grant-date fair value (US$) |
|||||||
Outstanding, December 31, 2018 |
4,107,185 | 9.0331 | ||||||
Granted |
2,908,370 | 22.7642 | ||||||
Forfeited |
(270,707 | ) | 14.8129 | |||||
Vested |
(465,000 | ) | 7.1600 | |||||
Outstanding, December 31, 2019 |
6,279,848 | 15.4350 | ||||||
Granted |
3,144,152 | 18.6180 | ||||||
Forfeited |
(603,929 | ) | 17.9943 | |||||
Vested |
(2,175,765 | ) | 13.6528 | |||||
Outstanding, December 31, 2020 |
6,644,306 | 17.1506 | ||||||
Granted |
3,550,617 | 13.9339 | ||||||
Forfeited |
(806,435 | ) | 17.9309 | |||||
Vested |
(2,547,290 | ) | 16.6645 | |||||
Outstanding, December 31, 2021 |
6,841,198 | 15.5702 | ||||||
Expected to vest at December 31, 2021 |
6,281,465 | 15.6133 | ||||||
(b) |
JOYY’s Share-based Awards |
21. |
Net income per share |
For the year ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
RMB | RMB | RMB |
||||||||||
Numerator: |
||||||||||||
Net income |
468,173 | 884,158 | 583,499 | |||||||||
|
|
|
|
|
|
|||||||
Numerator for basic and diluted net income per share |
468,173 | 884,158 | 583,499 | |||||||||
|
|
|
|
|
|
|||||||
Denominator: |
||||||||||||
Denominator for basic calculation—weighted average number of Class A and Class B ordinary shares outstanding |
214,811,862 | 227,081,238 | 238,198,117 | |||||||||
—Diluted effect of share option s |
14,060,031 | 8,076,339 | 497,861 | |||||||||
—Diluted effect of restricted share units |
3,153,068 | 3,474,036 | 3,094,467 | |||||||||
Denominator for diluted calculation |
232,024,961 | 238,631,613 | 241,790,445 | |||||||||
Net income per ordinary share |
||||||||||||
—Basic |
2.18 | 3.89 | 2.45 | |||||||||
—Diluted |
2.02 | 3.71 | 2.41 | |||||||||
Net income per ADS* |
||||||||||||
—Basic |
2.18 | 3.89 | 2.45 | |||||||||
—Diluted |
2.02 | 3.71 | 2.41 |
* | Each ADS represents one Class A ordinary share. |
22. |
Related party transactions |
For the year ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
RMB | RMB | RMB | ||||||||||
Content costs charged by Tencent (i) |
123,204 |
127,224 |
485,988 | |||||||||
Operation support services provided by Tencent |
219,403 | 342,487 | 370,393 | |||||||||
Disposal gain of an investment (Note 10) |
— |
— |
360,589 | |||||||||
Sub-licensing and other revenues from Tencent |
8,028 | 14,349 | 80,302 | |||||||||
Others |
31,739 | 30,540 | 14,617 |
(i) |
In April 2021, the Company entered into a related party transaction with a fellow subsidiary of Tencent to purchase an exclusive license for broadcasting League of Legends matches during the period from 2021 to 2025, with a total consideration of RMB2,013 million. |
For the year ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
RMB |
RMB |
RMB |
||||||||||
Operation support services provided by JOYY |
17,455 | 4,187 | 2,543 | |||||||||
Purchase of services by JOYY on behalf of Huya |
22,622 | 18,945 | 268 | |||||||||
Cash collected by JOYY as a payment platform for Huya |
1,362,489 | — | — | |||||||||
Repayment from JOYY in relation to the payment on behalf of Huya’s employees |
15,306 | — | — | |||||||||
Others |
12,637 | 1,054 | — |
For the year ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
RMB | RMB | RMB | ||||||||||
Sub-licensing and other revenues from Tencent and Huya’s related parties |
— | 8,197 | 188,209 | |||||||||
Content costs and revenue sharing fees charged by Tencent and Huya’s related parties |
— | 85,361 | 102,311 | |||||||||
Others |
— | 34,044 | 21,013 |
22. |
Related party transactions (continued) |
December 31, |
||||||||
2020 |
2021 |
|||||||
RMB | RMB | |||||||
Amounts due from related parties |
||||||||
Tencent |
59,832 | 108,686 | ||||||
JOYY |
4,913 | 27,817 | ||||||
Others |
356 | 12,450 | ||||||
Less: expected credit loss provision |
(299 | ) | (393 | ) | ||||
|
|
|
|
|||||
Total |
64,802 | 148,560 | ||||||
|
|
|
|
|||||
Amounts due to related parties |
||||||||
Tencent |
85,304 | 177,452 | ||||||
Others |
10,153 | 38,676 | ||||||
|
|
|
|
|||||
Total |
95,457 | 216,128 | ||||||
|
|
|
|
For the years ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
RMB | RMB | RMB | ||||||||||
Beginning balance prior to ASC 326 |
— | — | — | |||||||||
Impact of adoption to ASC326 |
— | (203 | ) | — | ||||||||
|
|
|
|
|
|
|||||||
Balance at beginning of the year |
— | (203 | ) | (299 | ) | |||||||
|
|
|
|
|
|
|||||||
Current year provision |
— | (180 | ) | (387 | ) | |||||||
Current year reversal |
— | 84 | 293 | |||||||||
|
|
|
|
|
|
|||||||
Balance at end of the year |
— | (299 | ) | (393 | ) | |||||||
|
|
|
|
|
|
23. |
Fair value measurements |
23. |
Fair value measurements (continued) |
As of December 31, 2020 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
RMB | RMB | RMB | RMB | |||||||||||||
Assets |
||||||||||||||||
Cash equivalents (i) |
401,269 | — | — | 401,269 | ||||||||||||
Short-term investments (ii) |
— | 1,206,539 | — | 1,206,539 | ||||||||||||
|
|
|
|
|
|
|
|
As of December 31, 2021 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
RMB |
RMB |
RMB |
RMB |
|||||||||||||
Assets |
||||||||||||||||
Cash equivalents (i) |
401,291 | — | — | 401,291 | ||||||||||||
Short-term investments (ii) |
— | 816,331 | — | 816,331 | ||||||||||||
Available-for-sale debt investments (iii) |
— | — | 157,160 | 157,160 | ||||||||||||
|
|
|
|
|
|
|
|
(i) |
Cash equivalents mainly consist of time deposits with original maturities of three months or less and highly liquid investments that are readily convertible to known amounts of cash. The fair values of cash equivalents are determined based on the pervasive interest rates in the market. The Company classifies the valuation techniques that use the pervasive interest rates input as Level 1 of fair value measurements. |
(ii) |
Short-term investments represented the investments issued by commercial banks and financial institution with a variable interest rate indexed to the performance of underlying assets within one year. For the instruments whose fair values are estimated based on quoted prices of similar products provided by banks at the end of each period, the Company classifies the valuation techniques that use these inputs as Level 2 of fair value measurements. |
(iii) |
Available-for-sale debt investments were investments made by the Group without readily determinable fair values as set out in Note 10, which were categorized as Level 3 in the fair value hierarchy. These investments were valued based on a model utilizing unobservable inputs requiring significant management judgment and estimation. The Company uses a combination of valuation methodologies, including income approaches based on the Company’s best estimate, which is determined by using information including but not limited to the pricing of recent rounds of financing of the investees, future cash flow forecasts, liquidity factors and multiples of a selection of comparable companies. |
Management determined the fair value of Level 3 investments based on income approach using various unobservable inputs. The determination of the fair value required significant judgement by management with respect to the assumptions and estimates for risk-free rate, weighted average cost of capital and probability in equity allocation. |
24. |
Leases |
For the year ended December 31, |
||||||||||
2019 |
2020 |
2021 |
||||||||
RMB |
RMB |
RMB |
||||||||
Operating lease expense |
30,540 |
32,781 |
40,001 |
|||||||
Short-term lease expense |
19,149 |
17,113 |
16,438 |
|||||||
Total lease expense |
49,689 |
49,894 |
56,439 |
|||||||
Weighted-average remaining lease term (in years) – operating leases |
2.6 |
|||||||||
Weighted-average discount rate – operating leases |
4.8 |
% |
For the year ending December 31, |
Future minimum payments |
|||
RMB | ||||
2022 |
37,485 | |||
2023 |
34,510 | |||
2024 |
10,100 | |||
2025 |
4,593 | |||
2026 and thereafter |
— | |||
Total undiscounted cash flows |
86,688 | |||
Less: imputed interest |
(5,131 | ) | ||
Total |
81,557 | |||
For the year end December 31, |
||||||||||
2019 |
2020 |
2021 |
||||||||
RMB |
RMB |
RMB |
||||||||
Cash paid for operating leases |
28,847 | 33,028 | 43,024 | |||||||
Lease liabilities arising from obtaining right-of-use |
33,399 | 21,024 | 26,077 |
25. |
Commitments and contingencies |
(a) |
Operating commitments |
Operating commitments |
||||
RMB | ||||
2022 |
8,033 | |||
2023 |
4,999 | |||
2024 |
1,127 | |||
2025 and thereafter |
225 | |||
14,384 | ||||
(b) |
Purchase obligations |
(c) |
Capital and other commitments |
Capital commitments |
||||
RMB |
||||
Construction in progress |
59,612 |
|||
Investments |
30,000 |
|||
89,612 |
||||
(d) |
Legal proceedings |
26. |
Subsequent events |
27. |
Restricted net assets |
1 Year HUYA Chart |
1 Month HUYA Chart |
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