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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 20-F

(Mark One)

 

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

 

OR

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended March 31, 2023.

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

OR

 

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Date of event requiring this shell company report

 

 

 

For the transition period from

 

to

 

 

 

Commission file number: 001-38748

MOGU Inc.

(Exact name of Registrant as specified in its charter)

N/A

(Translation of Registrant’s name into English)

Cayman Islands

(Jurisdiction of incorporation or organization)

Huanglong Wanke Center, 23/F, Building No. G, No. 77 Xueyuan Road

Xihu District, Hangzhou, 310012

People’s Republic of China

(Address of principal executive offices)

Qi Feng, Financial Controller

Huanglong Wanke Center, 23/F, Building No. G, No. 77 Xueyuan Road

Xihu District, Hangzhou, 310012

People’s Republic of China

Tel: +86 571 8530 8201

Email: ir@mogu.com

(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

American depositary shares (one American depositary share representing 300 Class A ordinary shares, par value US$0.00001 per share)

Class A ordinary shares, par value

US$0.00001 per share*

MOGU

The New York Stock Exchange

(The New York Stock Exchange)

* Not for trading, but only in connection with the listing on The New York Stock Exchange of American depositary shares.

 


Table of Contents

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 2,161,314,900 Class A ordinary shares, par value US$0.00001 per share, and 303,234,004 Class B ordinary shares, par value US$0.00001 per share, were outstanding as of March 31, 2023.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes No

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Emerging growth company

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.

 

The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

 

U.S. GAAP

 

International Financial Reporting Standards as issued

by the International Accounting Standards Board

 

Other

 

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No

 

 


Table of Contents

 

TABLE OF CONTENTS

INTRODUCTION

1

FORWARD-LOOKING INFORMATION

2

PART I

3

ITEM 1

Identity of Directors, Senior Management and Advisers

3

ITEM 2

Offer Statistics and Expected Timetable

3

ITEM 3

Key Information

3

ITEM 4

Information on the Company

62

Item 4A.

Unresolved Staff Comments

89

Item 5.

Operating and Financial Review and Prospects

89

Item 6.

Directors, Senior Management and Employees

106

Item 7.

Major Shareholders and Related Party Transactions

113

Item 8.

Financial Information

115

Item 9.

The Offer and Listing

115

Item 10.

Additional Information

116

Item 11.

Quantitative and Qualitative Disclosures about Market Risk

129

Item 12.

Description of Securities Other than Equity Securities

130

PART II

131

Item 13.

Defaults, Dividend Arrearages and Delinquencies

131

Item 14.

Material Modifications to the Rights of Security Holders and Use of Proceeds

131

Item 15.

Controls and Procedures

132

Item 16.

Reserved

133

Item 16A.

Audit Committee Financial Expert

133

Item 16B.

Code of Ethics

133

Item 16C.

Principal Accountant Fees and Services

134

Item 16D.

Exemptions from the Listing Standards for Audit Committees

134

Item 16E.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

134

Item 16F.

Change in Registrant’s Certifying Accountant

135

Item 16G.

Corporate Governance

135

Item 16H.

Mine Safety Disclosure

135

Item 16I.

Disclosure Regarding Foreign Jurisdictions Than Prevent Inspections

135

Item 16J.

Inside Trading Polices

136

PART III

137

Item 17.

Financial Statements

137

Item 18.

Financial Statements

137

Item 19.

Exhibits

137

SIGNATURES

139

 

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INTRODUCTION

Unless otherwise indicated or the context otherwise requires, references in this annual report to:

“active buyer through LVB” in a given period are to registered user account that placed one or more orders in one of the LVB channels on our platform, regardless of whether the ordered products are sold, delivered or returned (If a buyer registered two or more user accounts on our platform and placed orders on our platform through those different registered user accounts, the number of active buyers would, under this methodology, be counted as the number of the registered user accounts that such buyer used to place the orders);
“ADRs” are to the American depositary receipts which may evidence the ADSs;
“ADSs” are to our American depositary shares, each of which represents 300 Class A ordinary shares;
“Beijing Meilishikong” are to Beijing Meilishikong Network and Technology Co., Ltd.;
“BVI” are to the British Virgin Islands;
“China” or the “PRC” are to the People’s Republic of China, excluding, for the purposes of this annual report only, Hong Kong, Macau and Taiwan;
“Class A ordinary shares” are to our Class A ordinary shares, par value US$0.00001 per share;
“Class B ordinary shares” are to our Class B ordinary shares, par value US$0.00001 per share;
“established LVB host” are to LVB host above a certain level of fan following and product sales in our LVB host incubation system;
“Group” are to the Company and its subsidiaries, and the VIEs and their subsidiaries.
“KOL” are to key opinion leader;
“GMV” are to gross merchandise volume, which is the total value of orders placed on our platform regardless of whether the products are sold, delivered or returned, calculated based on the listed prices of the ordered products without taking into consideration any discounts on the listed prices. Buyers on our platform are not charged for shipping fees in addition to the listed price of a product. If merchants include certain shipping fees in the listed price of a product, such shipping fees will be included in our GMV. As a prudent matter aimed at eliminating any influence on our GMV of irregular transactions, we exclude from our calculation of GMV transactions over a certain amount (RMB100,000) and transactions by users over a certain amount (RMB1,000,000) per day;
“Hangzhou Juangua” are to Hangzhou Juangua Network Co., Ltd.;
“Hangzhou Shiqu” are to Hangzhou Shiqu Information and Technology Co., Ltd.;
“LVB” are to live video broadcast;
“MOGU,” the “Company,” “we,” “us,” “our company” and “our” are to MOGU Inc., our Cayman Islands holding company and its subsidiaries;
“Meilishuo Beijing” are to Meilishuo (Beijing) Network Technology Co., Ltd.;
“primary beneficiary” are to an entity that has (i) the power to direct the activities of a VIE that have the most significant impact on the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE, resulting in the consolidation of the operative VIE under generally accepted accounting principles;
“Ruisha Technology” are to Hangzhou Ruisha Technology Co. Ltd.;
“RMB” and “Renminbi” are to the legal currency of China;
“US$,” “U.S. dollars,” “$,” and “dollars” are to the legal currency of the United States;
“VIEs, each a ‘VIE’” are to the variable interest entities, namely, Hangzhou Juangua and Beijing Meilishikong and their subsidiaries; and
“Weixin Mini Program” “Mini Program” are to the innovative platform built into Wechat, a Chinese instant messaging, social media, and mobile payment app developed by Tencent Holdings Ltd.

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Unless otherwise noted, all translations from Renminbi to U.S. dollars and from U.S. dollars to Renminbi in this annual report are made at a rate of RMB6.8676 to US$1.0000, the exchange rate in effect as of March 31, 2023 as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System. We make no representation that any Renminbi or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or Renminbi, as the case may be, at any particular rate, or at all.

We have prepared our financial statements in accordance with U.S. GAAP. Our fiscal year ends on March 31 and references to the fiscal years of 2021, 2022 and 2023 are to the fiscal years ended March 31, 2021, 2022 and 2023, respectively.

FORWARD-LOOKING INFORMATION

This annual report contains forward-looking statements that relate to our current expectations and views of future events. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigations Reform Act of 1995.

You can identify some of these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “potential,” “continue” or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements include statements relating to:

our mission, goals and strategies;
our future business development, financial conditions and results of operations;
the expected growth of the online retail and fashion industries in China;
our expectations regarding demand for and market acceptance of our products and services;
our expectations regarding keeping and strengthening our relationships with users, KOLs, merchants, brand and strategic partners and other stakeholders;
competition in our industry;
our proposed use of proceeds; and
relevant government policies and regulations relating to our industry.

You should read this annual report and the documents that we refer to in this annual report and have filed as exhibits to this annual report completely and with the understanding that our actual future results may be materially different from what we expect. Other sections of this annual report discuss factors which could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements.

You should not rely upon forward-looking statements as predictions of future events. The forward-looking statements made in this annual report relate only to events or information as of the date on which the statements are made in this annual report. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

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PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

Our Company

We are an online service provider in China, operating a KOL-driven online fashion and lifestyle platform Mogujie and providing customized online branding solutions to businesses. Through our Mogujie platform, we provide individuals with a more accessible and enjoyable shopping experience for everyday fashion, with features to allow them to live their lives online. Our KOLs contributed to most of our contents on the platform, which are mostly in live-streaming format. The contents are rich and diverse, intended to convey the latest fashion styles and trends. We also feature products from our merchants in the contents, which has led our users to purchase those products along with their shopping journey and exploration of our platform. Users can conveniently access our platform through mobile applications, including our flagship Mogujie mobile app and Mini Programs on Weixin. We actively pursue higher operational efficiency and better user experience by ways such as continuously providing users, especially female users, with more products based on their fashion and beauty consumption needs including fashion apparel, beauty makeup, personal care, food, medical beauty products on our platform. Concurrently, we have adjusted our product offering and enriched our product portfolio with a variety of healthcare products, grocery, household suppliers and foods. In addition, with the acquisition of Ruisha Technology, a platform solution provider, we expect to expand our business operations to further serve business customers and deepen our business cooperation with them by providing customized solutions for their online operations.

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Our Holding Company Structure and Contractual Arrangements with the VIEs

Corporate Structure

The following diagram illustrates our corporate structure, including our principal subsidiaries and the VIEs, as of the date of this annual report:

img248123453_0.jpg 

 

 

 

Notes:

(1)
Represents (i) 444,989,552 Class A ordinary shares and 4.0% voting rights held by Image Future Investment (HK) Limited, a Hong Kong limited liability company, and (ii) 15,151,714 Class A ordinary shares and 0.1% voting rights held by Tencent Growth Holdings Limited, a Hong Kong limited liability company. Tencent Holdings Limited, a company listed on the Hong Kong Stock Exchange, is the ultimate beneficial owner of both Image Future Investment (HK) Limited and Tencent Growth Holdings Limited. The registered address of each of Image Future Investment (HK) Limited and Tencent Growth Holdings Limited is 29/F, Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong. For more details about the voting rights, see “Item 6. Directors, Senior Management and Employees—E. Share Ownership.”
(2)
Represents (i) 220,151,966 Class B ordinary shares and 58.7% voting rights held by Elevenhalf MG International Limited, a BVI business company, (ii) 83,082,038 Class B ordinary shares and 22.1% voting rights held by Elevenhalf MG Holding Limited, a BVI business company, and (iii) 388,225 ADSs (representing 116,476,500 Class A ordinary shares) and 1.0% voting rights acquired on the open market from September 7, 2022 to December 12, 2022 held by Mr. Qi Chen. Eleven half MG International Limited and Eleven half MG Holding Limited are ultimately owned by SharkBay Captain Trust. Mr. Chen is the settlor of SharkBay Captain Trust, and Mr. Chen and others designated by Mr. Chen are its beneficiaries. Under the terms of the trust, Mr. Chen has the power to direct the retention or disposal of, and the exercise of any voting and other rights attached to the shares held by Eleven half MG International Limited and Eleven half MG Holding Limited in our company. The registered address of Eleven half MG International Limited and Eleven half MG Holding Limited is OMC Chambers, Wickhams Cay 1, Road Town, Tortola, British Virgin Islands. For more details about the voting rights, see “Item 6. Directors, Senior Management and Employees—E. Share Ownership.”

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(3)
Represents (i) 130,587,000 Class A ordinary shares and 1.2% voting rights held by HHLR Advisors, Ltd., an exempted Cayman Islands company (“HHLR”), and (ii) 130,587,005 ordinary shares and 1.2% voting rights held by Hillhouse Investment Management, Ltd, an exempted Cayman Islands company (“HIM”). HHLR acts as the sole investment manager of each of HHLR Fund, L.P. (“HHLR Fund”) and YHG Investment, L.P. (“YHG”). HHLR is hereby deemed to be the beneficial owner of, and to control the voting and investment power of, the Class A Ordinary Shares attributable to the holdings of HHLR Fund and YHG. HIM acts as the sole management company of Hillhouse Fund II, L.P. ("Fund II"). Hillhouse MGJ Holdings Limited ("MGJ") is wholly owned by Fund II. HIM is hereby deemed to be the beneficial owner of, and to control the voting and investment power of, the Class A Ordinary Shares attributable to the holdings of MGJ. HHLR and HIM are under common control and share certain policies, personnel and resources. The registered address of each of HHLR and HIM is Office #122, Windward 3 Building, Regatta Office Park, West Bay Road, Grand Cayman, Cayman Islands, KY1-9006. For more details about the voting rights, see “Item 6. Directors, Senior Management and Employees—E. Share Ownership.”
(4)
Represents 206,730,009 Class A ordinary shares and 1.8% voting rights held by Trustbridge Partners IV, L.P., a Cayman Islands limited partnership. Trustbridge Partners IV, L.P. is managed by an investment committee consisting of Messrs. Shujun Li, Feng Ge, David Ning Lin, Hongyan Guan and Xiaodong Liang, which by majority vote has the power to make investment or divestment decisions for Trustbridge Partners IV, L.P. The registered address of Trustbridge Partners IV, L.P. is c/o Intertrust Corporate Services (Cayman) Limited, 190 Elgin Avenue, George Town, Grand Cayman KY1-9005, Cayman Islands. The business address of each of Messrs. Shujun Li, Feng Ge, David Ning Lin, Hongyan Guan and Xiaodong Liang is 2001, Agricultural Bank of China Tower, 50 Connaught Road Central, Central, Hong Kong. For more details about the voting rights, see “Item 6. Directors, Senior Management and Employees—E. Share Ownership.”
(5)
Represents 200,662,100 Class A ordinary shares and 1.8% voting rights held by Bertelsmann China Holding GmbH, a German company with limited liability, as reported in a as reported in a Schedule 13G amendment jointly filed by Bertelsmann SE & Co. KGaA and Bertelsmann China Holding GmbH on February 8, 2021. Bertelsmann China Holding GmbH is a wholly-owned subsidiary of Bertelsmann SE & Co. KGaA. The business address of Bertelsmann China Holding GmbH is Carl-Bertelsmann-Strasse 270, 33311 Gütersloh, Germany. For more details about the voting rights, see “Item 6. Directors, Senior Management and Employees—E. Share Ownership.”
(6)
Represents (i) 107,643,285 Class A ordinary shares and 1.0% voting rights held by Exceed Intelligence Limited, a BVI business company, (ii) 92,167 ADSs (representing 27,650,100 Class A ordinary shares) and 0.2% voting rights acquired on the open market from December 23, 2022 to February 24 held by Mr. Yibo Wei. Exceed Intelligence Limited, a BVI company. Exceed Intelligence Limited is ultimately held by Exceed Intelligence Trust (the “Trust”). Mr. Wei is the settlor of the Trust, and Mr. Wei and his family members are its beneficiaries. Under the terms of the Trust, Mr. Wei has the power to direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to the shares held by Exceed Intelligence Limited in the Issuer. The registered address of Exceed Intelligence Limited is OMC Chambers, Wickhams Cay 1, Road Town, Tortola, British Virgin Islands. For more details about the voting rights, see “Item 6. Directors, Senior Management and Employees—E. Share Ownership.”
(7)
Represents aggregate 780,837,635 Class A ordinary shares and 6.9% voting rights held by shareholders each of which beneficially own less than 5% of our total outstanding shares.

We are a company incorporated in the Cayman Islands. We are not a Chinese operating Company but a Cayman Islands holding company with no equity ownership in the VIEs. Our Hong Kong subsidiary is not an operating company but a holding company. We conduct our operations in China through (i) our PRC subsidiaries and (ii) the VIEs with which we have maintained contractual arrangements. Hangzhou Shiqu is our PRC subsidiary and a foreign-invested enterprise under PRC laws. Current PRC laws and regulations impose certain restrictions or prohibitions on foreign ownership of companies that engage in value-added telecommunication services and certain other businesses. To comply with PRC laws and regulations, we conduct certain business in China through Hangzhou Juangua and Beijing Meilishikong, the VIEs in the PRC which we collectively refer to as the VIEs in this annual report, based on a series of contractual arrangements by and among Hangzhou Shiqu and the VIEs. The contractual arrangements including shareholder voting proxy agreements, equity interest pledge agreements and loan agreements that have been entered into by and among our subsidiaries and the VIEs, enable us to have the power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance and realize substantially all of the economic risks and the economic benefits of the business operations of the VIEs, and therefore providing us with a controlling financial interest in each entity and allowing us to consolidate the VIEs under U.S. GAAP (ASC 810) as the primary beneficiary of the VIEs for accounting purposes. The VIEs are used to provide investors with exposure to foreign investments in China-based companies where Chinese law prohibits direct foreign investment in the operating companies. Investors may never hold equity interests in the Chinese operating companies.

As a result of the direct ownership in Hangzhou Shiqu and its contractual arrangements with the VIEs, we are regarded as the primary beneficiary of the VIEs for accounting purposes, and have consolidated the financial results of the VIEs in our consolidated financial statements in accordance with U.S. GAAP. Revenue contributed by the VIEs accounted for 22.9%, 30.1% and 37.8% of our total revenues for the fiscal years of 2021, 2022 and 2023, respectively. However, neither MOGU Inc. nor its investors have an equity ownership in, direct foreign investment in, or control through such ownership or investment of, the VIEs, and the VIEs

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contractual arrangements are not equivalent to an equity ownership in the business of the VIEs. As of the date of this annual report, the contracts with the VIEs have not been tested in a court of law.

However, such contractual arrangements are subject to significant risks. See “Item 4C. Information on the Company – Organizational Structure – Contractual Arrangements with the VIEs and Their Respective Shareholders.” and “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure.” The contractual arrangements may not be as effective as direct ownership of these China-based operating entities, and we may incur substantial costs to enforce the terms of the arrangements. If we had direct ownership of our VIEs in China, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of the VIEs, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational level. However, under the current contractual arrangements, we rely on the performance by the VIEs and their respective shareholders of their obligations under the contracts. In addition, the shareholders of the VIEs may have potential conflicts of interest with us. The shareholders of the VIEs include Mr. Qi Chen, who is the chairman of our board of directors, and Messrs.Yibo Wei and Xuqiang Yue, who are also our shareholders. We cannot assure you that when conflicts arise, these shareholders will act in the best interest of our company. We also cannot assure you that these conflicts will be resolved in our favor and we may need to rely on expensive and time-consuming legal proceedings to resolve the conflicts, which may materially and adversely affect our business and financial performance. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—We rely on contractual arrangements with the VIEs and their respective shareholders for our business operations. These arrangements provide us with a controlling financial interest in these entities, which may not be as effective as direct ownership in providing operational control.” and “— The shareholders of the VIEs may have potential conflicts of interest with us, which may materially and adversely affect our business and financial condition.”

There are also uncertainties under PRC laws and regulations regarding the enforceability of the whole or any part of our contractual arrangements with the VIEs. If the whole or any part of our contractual arrangements with the VIEs is found to be unenforceable, we may not be able to consolidate, derive economic benefits from, or hold a controlling financial interest in the VIEs, which could result in a material adverse change in the financial performance of our company and the value of our ADSs. Also, the Chinese regulatory authorities could disallow this structure, which would likely result in a material change in our operations and materially adversely affect the value of the ADSs we registered for sale, including that it could cause the value of our ADSs to significantly decline or become worthless. If the PRC government deems that our contractual arrangements with the VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if the existing regulations or the interpretation of existing regulations change or are interpreted differently in the future, we could be subject to severe penalties or be forced to relinquish our rights under the contractual agreements in those operations, and the value of our ADSs might significantly decline or become worthless. MOGU, its PRC subsidiaries, the VIEs and the investors of MOGU face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with the VIEs and, consequently, could significantly affect the financial performance of our company and the VIEs as a whole, and the value of our ADSs might significantly decline or become worthless. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—If the PRC government determines that the contractual arrangements constituting part of the VIE structure do not comply with PRC regulations, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our rights under the contractual agreements in those operations, which may cause the value of our ADSs to significantly decline or become worthless.”

In addition, the PRC government’s significant authority in regulating our operations and its broad oversight over overseas offerings by, and foreign investment in, China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors. Implementation of industry-wide regulations, including data security or anti-monopoly related regulations, in this nature may cause the value of such securities to significantly decline or be of little or no value. For more details, see “Item 3. Key Information—Risk Factors—Risks Related to Doing Business in China— The Chinese government has jurisdiction to oversee and may have significant influence on our operations, and provide more stringent regulatory oversight over offerings conducted overseas and foreign investment in China-based issuers, and the PRC government’s authority in regulating our operations, our overseas offerings of securities and foreign investment in us could limit our ability or prevent us from conducting future offerings of securities to investors, which may cause the value of our securities to significantly decline or become worthless.”

Our business operations and financial results are also affected by the risks and uncertainties arising from the legal system in China, including risks and uncertainties regarding the enforcement of laws and quickly evolving rules and regulations in China, could result in a material adverse change in our operations and the value of our ADSs. For more details, see “Risk Factors—Risks Related to Doing Business in China— The Chinese government has jurisdiction to oversee and may have significant influence on our operations, and provide more stringent regulatory oversight over offerings conducted overseas and foreign investment in China-based issuers, and the PRC government’s authority in regulating our operations, our overseas offerings of securities and foreign investment in us could limit our ability or prevent us from conducting future offerings of securities to investors, which may cause the value of our securities to significantly decline or become worthless.”

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Contractual Arrangements with the VIEs and Their Respective Shareholders

The following is a summary of our contractual agreements that are currently in effect, by and among our wholly-owned subsidiary Hangzhou Shiqu, the VIEs and their shareholders. Our contractual arrangements with the VIEs and their respective shareholders allow us to (i) have power to direct activities of the VIEs that most significantly affect the economic performance of the VIEs, (ii) receive the economic benefits of the VIEs that could be significant to the VIEs, and (iii) have an exclusive option to purchase all or part of the equity interests in the VIEs when and to the extent permitted by PRC law. As a result, we are regarded as the primary beneficiary of the VIEs for accounting purposes and have consolidated the financial results of the VIEs in our consolidated financial statements in accordance with U.S. GAAP. However, neither our Cayman Islands holding company nor the investors in the holding company have an equity ownership or direct investment in the VIEs.

Agreements that provide us with a controlling financial interest in the VIEs

Amended and Restated Shareholder Voting Proxy Agreements and Powers of Attorney. Pursuant to the amended and restated shareholder voting proxy agreement, dated July 18, 2018, by and among Hangzhou Shiqu, Hangzhou Juangua and the shareholders of Hangzhou Juangua, each of the shareholders of Hangzhou Juangua has executed a power of attorney to irrevocably authorize Mr. Qi Chen, the chairman of our board of directors, as designated by Hangzhou Shiqu, to act as his attorney-in-fact to exercise all of his rights as a shareholder of Hangzhou Juangua, including, but not limited to, the right to convene and attend shareholders’ meetings, vote on any resolution that requires a shareholder vote, such as the appointment and removal of directors, supervisors and officers, as well as the sale, transfer and disposal of all or part of the equity interests owned by such shareholder. The powers of attorney will remain effective until the amended and restated shareholder voting proxy agreement is terminated in accordance with the provisions of the agreement.

On August 20, 2017, Hangzhou Shiqu, Beijing Meilishikong and each of the shareholders of Beijing Meilishikong entered into an amended and restated shareholder voting proxy agreement, and each of the shareholders of Beijing Meilishikong executed a power of attorney, which contained terms substantially similar to the amended and restated shareholder voting proxy agreement and powers of attorney by and among Hangzhou Shiqu, Hangzhou Juangua and the shareholders of Hangzhou Juangua described above.

Amended and Restated Equity Interest Pledge Agreements. Pursuant to the amended and restated equity interest pledge agreement, dated July 18, 2018, by and among Hangzhou Shiqu, Hangzhou Juangua and the shareholders of Hangzhou Juangua, the shareholders of Hangzhou Juangua have pledged 100% equity interests in Hangzhou Juangua to Hangzhou Shiqu to guarantee performance by the shareholders of their obligations under the amended and restated exclusive option agreement, the amended and restated shareholder voting proxy agreement and the amended and restated loan agreements, as well as the performance by Hangzhou Juangua of its obligations under the amended and restated exclusive option agreement and the amended and restated exclusive consultation and service agreement. In the event of a breach by Hangzhou Juangua or any of its shareholder of contractual obligations under the amended and restated exclusive option agreement, the amended and restated shareholder voting proxy agreement, the amended and restated exclusive consultation and service agreement and the amended and restated equity interest pledge agreement, as the case may be, Hangzhou Shiqu, as pledgee, will have the right to dispose of the pledged equity interests in Hangzhou Juangua and will have priority in receiving the proceeds from such disposal. The shareholders of Hangzhou Juangua also covenant that, without the prior written consent of Hangzhou Shiqu, they will not dispose of, create or allow any encumbrance on the pledged equity interests. Hangzhou Juangua covenants that, without the prior written consent of Hangzhou Shiqu, it will not assist or allow any encumbrance to be created on the pledged equity interests.

On August 20, 2017, Hangzhou Shiqu, Beijing Meilishikong and the shareholders of Beijing Meilishikong entered into an amended and restated equity interest pledge agreement, which contained terms substantially similar to the amended and restated equity interest pledge agreement by and among Hangzhou Shiqu, Hangzhou Juangua and the shareholders of Hangzhou Juangua described above.

We have completed the registration of the equity interest pledge under the amended and restated equity interest pledge agreement in relation to Beijing Meilishikong and Hangzhou Juangua with the relevant office of the State Administration of Market Regulation in accordance with the PRC Property Rights Law.

Amended and Restated Loan Agreements. Pursuant to the amended and restated loan agreement between Hangzhou Shiqu and Mr. Qi Chen, a shareholder of Hangzhou Juangua, dated July 18, 2018, Hangzhou Shiqu made loans in an aggregate amount of RMB5,867,000 to Mr. Chen for the sole purpose of making capital contributions to Hangzhou Juangua. Mr. Chen can only repay the loans by the sale of all his equity interest in Hangzhou Juangua to Hangzhou Shiqu or its designated person pursuant to the amended and restated exclusive option agreement, and, to the extent permitted under PRC law, pay all of the proceeds from sale of such equity interests to Hangzhou Shiqu. In the event that Mr. Chen sells his equity interests in Hangzhou Juangua to Hangzhou Shiqu or its designated person at a price equal to or less than the principal amount of the loans, the loans will be interest free and the loans

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shall be deemed to be duly repaid by Mr. Chen. If the price is higher than the principal amount of the loans, the excess amount will be deemed as interest on the loans paid to Hangzhou Shiqu. The term of the amended and restated loan agreement is 20 years from the date of the loan agreement, which may be extended upon mutual agreement.

On July 18, 2018, Hangzhou Shiqu and each of Mr. Yibo Wei and Mr. Xuqiang Yue, each a shareholder of Hangzhou Juangua entered into an amended and restated loan agreement in the principal amount of RMB2,362,000 and RMB1,771,000, respectively, which contained terms substantially similar to the amended and restated loan agreement by and between Hangzhou Shiqu and Mr. Qi Chen described above.

Agreements that allow us to receive economic benefits from the VIEs

Amended and Restated Exclusive Consultation and Service Agreements. Pursuant to the amended and restated exclusive consultation and service agreement, dated July 18, 2018, by and between Hangzhou Shiqu and Hangzhou Juangua, Hangzhou Shiqu has the exclusive right to provide Hangzhou Juangua with technical and consulting services. Without Hangzhou Shiqu’s prior written consent, Hangzhou Juangua may not accept any services subject to this agreement from any third party. Hangzhou Juangua agrees to pay Hangzhou Shiqu a quarterly service fee at an amount that is equal to Hangzhou Juangua’s revenue for the relevant quarter after deducting any applicable taxes, cost of revenues and retained earnings (which should be zero unless Hangzhou Shiqu otherwise agrees in writing) or an amount adjusted at Hangzhou Shiqu’s sole discretion for the relevant quarter, which should be paid within 10 business days after Hangzhou Juangua confirms in writing the amount and breakdown of the service fee for the relevant quarter. Hangzhou Shiqu has the exclusive ownership of all the intellectual property rights created as a result of the performance of the agreement. To guarantee Hangzhou Juangua’s performance of its obligations under the agreement, the shareholders of Hangzhou Juangua have pledged their entire equity interests in Hangzhou Juangua to Hangzhou Shiqu pursuant to the amended and restated equity interest pledge agreement. The agreement has a term of 10 years, which will be automatically renewed upon expiration, unless it is otherwise terminated in accordance with the provisions of the agreement.

On August 20, 2017, Hangzhou Shiqu and Beijing Meilishikong entered into an amended and restated exclusive consultation and service agreement, which contained terms substantially similar to the amended and restated exclusive consultation and service agreement by and between Hangzhou Shiqu and Hangzhou Juangua described above.

Agreements that provide us with the option to purchase the equity interests in the VIEs

Amended and Restated Exclusive Option Agreements. Pursuant to the amended and restated exclusive option agreement, dated July 18, 2018, by and among Hangzhou Shiqu, Hangzhou Juangua and the shareholders of Hangzhou Juangua, each of the shareholders of Hangzhou Juangua has irrevocably granted Hangzhou Shiqu an exclusive option to purchase all or part of his equity interests in Hangzhou Juangua. Hangzhou Shiqu or its designated person may exercise such option at the lowest price permitted under applicable PRC law. The shareholders of Hangzhou Juangua covenant that, without Hangzhou Shiqu’s prior written consent, they will not, among other things, (i) create any pledge or encumbrance on their equity interests in Hangzhou Juangua; (ii) transfer or otherwise dispose of their equity interests in Hangzhou Juangua; (iii) change Hangzhou Juangua’s registered capital; (iv) amend Hangzhou Juangua’s articles of association in any material respect; (v) dispose of or cause Hangzhou Juangua’s management to dispose of Hangzhou Juangua’s material assets (except in the ordinary course of business); (vi) cause Hangzhou Juangua to enter into transactions that are likely to have a material impact on its assets, liabilities, operations, shareholding structure or equity ownership in other entities; (vii) change Hangzhou Juangua’s directors and supervisors; (viii) declare or distribute dividends; (ix) terminate, liquidate or dissolve Hangzhou Juangua; or (x) allow Hangzhou Juangua to extend or borrow loans, provide any form of guarantee, or assume any material obligations except in the ordinary course of business. In addition, Hangzhou Juangua covenants that, without Hangzhou Shiqu’s prior written consent, it will not, among other things, create or assist or allow its shareholders to create, any pledge or encumbrance on its assets and equity interests, or transfer or otherwise dispose of its assets (except in the ordinary course of business). The amended and restated exclusive option agreement will remain effective until the entire equity interests in Hangzhou Juangua have been transferred to Hangzhou Shiqu or its designated person.

On August 20, 2017, Hangzhou Shiqu, Beijing Meilishikong and the shareholders of Beijing Meilishikong entered into an amended and restated exclusive option agreement, which contained terms substantially similar to the amended and restated exclusive option agreement by and among Hangzhou Shiqu, Hangzhou Juangua and the shareholders of Hangzhou Juangua described above.

Spousal Consent Letters. The spouses of the shareholders of Hangzhou Juangua and Beijing Meilishikong each signed a spousal consent letter. Under each spousal consent letter, the signing spouse unconditionally and irrevocably agreed that the equity interest in Hangzhou Juangua and Beijing Meilishikong held by and registered in the name of her spouse be disposed of in accordance with the above-mentioned amended and restated exclusive option agreement, equity interest pledge agreement, shareholder voting proxy agreement and powers of attorney, as applicable, and that her spouse may perform, amend or terminate such agreements without

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her additional consent. Additionally, the spouse agreed not to assert any rights over the equity interest in Hangzhou Juangua or Beijing Meilishikong held by her spouse. In addition, in the event that the spouse obtains any equity interest in Hangzhou Juangua or Beijing Meilishikong held by her spouse for any reason, she agrees to be bound by and sign any legal documents substantially similar to the contractual arrangements, as may be amended from time to time.

In the opinion of King & Wood Mallesons, our PRC legal counsel:

the ownership structures of the VIEs in China and Hangzhou Shiqu are not in violation of applicable PRC laws and regulations currently in effect; and
the contractual arrangements between Hangzhou Shiqu, the VIEs and their respective shareholders governed by PRC law are valid, binding and enforceable, and will not result in any violation of applicable PRC laws and regulations currently in effect.

However, our PRC legal counsel, has also advised us that there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations and rules. Accordingly, the PRC regulatory authorities may take a view that is contrary to the opinion of our PRC legal counsel. It is uncertain whether any new PRC laws or regulations relating to the VIE structures will be adopted or if adopted, what they would provide. If we or any of the VIEs are found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure— If the PRC government determines that the contractual arrangements constituting part of the VIE structure do not comply with PRC regulations, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our rights under the contractual agreements in those operations, which may cause the value of our ADSs to significantly decline or become worthless.” and “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China— Rules and regulations governing the internet industry in China are relatively new and quickly evolving. The enforcement of rules and regulations in China governing the internet industry could adversely affect our results of business and financial operations and the value of our ADSs.”

Our Operations are subject to PRC Laws and Regulations

We face various risks and uncertainties related to doing business in China. Our business operations are primarily conducted in China, and we are subject to complex and evolving PRC laws and regulations. For example, we face risks associated with regulatory approvals on offshore offerings, anti-monopoly regulatory actions, and oversight on cybersecurity and data privacy, as well as the lack of inspection by the PCAOB, on our auditor, which may impact our ability to conduct certain businesses, accept foreign investments, or list on a United States stock exchange. These risks could result in a material adverse change in our operations and the value of our ADSs, significantly limit or completely hinder our ability to continue to offer securities to investors, or cause the value of such securities to significantly decline. For a detailed description of risks related to doing business in China, please refer to risks disclosed under “Item 3D. Key Information—Risk Factors—Risks Related to Doing Business in China.”

The PRC government’s significant authority in regulating our operations and its oversight and discretion over offerings conducted overseas by, and foreign investment in, China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors. Implementation of industry-wide regulations, including data security or anti-monopoly related regulations, in this nature may cause the value of such securities to significantly decline. See “Item 3D. Key Information—Risk Factors—Risks Related to Doing Business in China— The Chinese government has jurisdiction to oversee and may have significant influence on our operations, and provide more stringent regulatory oversight over offerings conducted overseas and foreign investment in China-based issuers, and the PRC government’s authority in regulating our operations, our overseas offerings of securities and foreign investment in us could limit our ability or prevent us from conducting future offerings of securities to investors, which may cause the value of our securities to significantly decline or become worthless.”

Laws and regulations in China are quickly evolving, which could result in a material adverse change in our operations and the value of our ADSs. See “Item 3D. Key Information—Risk Factors— Risks Related to Doing Business in China — Rules and regulations governing the internet industry in China are relatively new and quickly evolving. The enforcement of rules and regulations in China governing the internet industry could adversely affect our result of business and financial operations and the value of our ADSs.” and “—We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of internet-related businesses and companies, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations.”

In addition, other recent statements and regulatory actions by the PRC government, such as those related to data security or anti-monopoly concerns, may affect our ability to conduct its business, accept foreign investments, or list on a U.S. or other foreign exchange.

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In terms of laws and regulations of anti-monopoly, on February 7, 2021, the Anti-Monopoly Committee of the State Council promulgated the Anti-Monopoly Guidelines for the Internet Platform Economy Sector which stipulates that any concentration of undertakings involving VIEs shall fall within the scope of anti-monopoly review. According to the afore guidelines, business practices such as deploying big data analytics to discriminate customers in terms of pricing and other transactional conditions, coercive exclusivity arrangements with transaction counterparties, blocking of competitor interface through technological means and unlawful collection of user data without consent, are prohibited. In August 2022, the Anti-monopoly Law of the People's Republic of China (2022) came into force with the new regulations prohibiting undertaking from engaging in monopolistic conduct by utilizing data and algorithm, technology, capital advantage, or platform rules, among others. The heightened regulatory scrutiny of business operators under the laws and regulations of anti-monopoly may increase our compliance costs and subject us to heightened risks and challenges.

In terms of data security regulation, a series of laws and regulations have been published by the PRC government in the past year. In June 2021, the SCNPC promulgated the Data Security Law, which took effect on September 1, 2021. In December 2021, the CAC, together with other authorities, jointly promulgated the Measures of Cybersecurity Review, which became effective on February 15, 2022. These laws and regulations impose cybersecurity review obligations on critical information infrastructure operators and network platform operators. According to the Measures of Cybersecurity Review, any network platform operator that holds personal data of more than one million users must apply for a cybersecurity review before it makes any public offering on a foreign stock exchange. As of the date of this annual report, for entities that have been listed overseas before the implementation of the Measures of Cybersecurity Review rather than doing an initial public listing, the Measures of Cybersecurity Review do not clearly stipulate that such entities or their subsidiaries, as network platform operators, shall report to Cybersecurity Review Office for cybersecurity review, and also do not clearly stipulate that such entities or their subsidiaries shall obtain any permissions or approvals by the CAC. Based on the above-mentioned and other effective PRC laws and regulations as of the date of this annual report, as advised by King & Wood Mallesons, our PRC legal counsel, none of us, the VIEs or its subsidiaries is required to conduct a cybersecurity review. However, the laws and regulations in the area of data security are new and quickly evolving and the PRC government may interpret the above laws and regulations differently or issue new regulations in the future. Therefore, it is uncertain whether we would be deemed to be a critical information infrastructure operator or a network platform operator under PRC law and be required to undergo cybersecurity reviews in the future.

The Holding Foreign Companies Accountable Act

The Holding Foreign Companies Accountable Act, or the HFCAA, was enacted on December 18, 2020. Pursuant to the HFCAA, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC may prohibit our shares or ADSs from being traded on a national securities exchange or in the over-the-counter market in the United States. Furthermore, on December 2, 2021, the SEC adopted final amendments implementing the disclosure and submission requirements under the HFCAA, pursuant to which the SEC will identify a “Commission-Identified Issuer” if an issuer has filed an annual report containing an audit report issued by a registered public accounting firm that the PCAOB has determined it is unable to inspect or investigate completely because of a position taken by an authority in the foreign jurisdiction, and will then impose a trading prohibition on an issuer after it is identified as a “Commission-Identified Issuer” for three consecutive years. On December 16, 2021, the PCAOB announced the PCAOB HFCA Act determinations (the “PCAOB determinations”) relating to the PCAOB’s inability to inspect or investigate completely registered public accounting firms headquartered in mainland China or Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in the PRC or Hong Kong. The PCAOB identified our auditor as one of the registered public accounting firms headquartered in mainland China that the PCAOB is unable to inspect and investigate completely. On August 22, 2022, in connection with its implementation of the HFCAA, the SEC conclusively named our company as a “Commission-Identified Issuer” following the filing of our Form 20-F for the fiscal year ended March 31, 2022 with the SEC on July 15, 2022.

In addition, on August 26, 2022, the PCAOB signed a Statement of Protocol with the Chinese authorities governing inspections and investigations of audit firms based in China, which represents the first step toward providing access for the PCAOB to inspect and investigate registered public accounting firms in China without any limitations on scope. However, there remain uncertainties in the enforcement of the Statement of Protocol. On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong completely in 2022. The PCAOB vacated its previous PCAOB determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. As such, we do not expect to be identified as a “Commission-Identified Issuer” under the HFCAA after we file this annual report on Form 20-F for the fiscal year ended March 31, 2023.

However, whether the PCAOB will continue to be able to satisfactorily conduct inspections and investigations of registered public accounting firms headquartered in mainland China is subject to substantial uncertainty and depends on a number of

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factors out of our, and our auditor’s control, including the implementation of the Statement of Protocol signed by the PCAOB and the Chinese authorities and the uncertainties surrounding China-U.S. relations.

On December 23, 2022, the Accelerating Holding Foreign Companies Accountable Act was enacted, which amended the HFCAA, by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three. If the PCAOB determines in the future that it no longer has full access to inspect and investigate accounting firms headquartered in mainland China and Hong Kong and we continue to use such accounting firms to conduct audit work, we would be identified as a “Commission-Identified Issuer” under the HFCAA following the filing of the annual report for the relevant fiscal year, and if we were so identified for two consecutive years, trading in our securities on U.S. markets would be prohibited.

Our auditor is an independent registered public accounting firm that issues the consolidated financial statements incorporated by reference in this annual report, is a firm registered with the PCAOB and is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. However, we cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach, or experience as it relates to the audit of our financial statements. Such uncertainty could cause the market price of our ADSs to be materially and adversely affected, and our ADSs could be delisted or prohibited from being traded “over-the-counter” earlier than would be required by the HFCAA.

The related risks and uncertainties could cause the value of our ADSs to significantly decline. For more details, see “Item 3D. Key Information—Risk Factors—Risks Related to Doing Business in China—If the PCAOB is unable to continue to inspect or investigate completely registered public accounting firms located in mainland China for two consecutive years in the future, our ADSs will be prohibited from trading in the United States under the HFCAA in the future. The delisting of our ADSs, or the threat of them being delisted, may materially and adversely affect the value of your investment.”

Permissions Required from the PRC Authorities for Our Operations

We conduct our business primarily through our subsidiaries and the VIEs in China. Our operations in China are governed by PRC laws and regulations. As of the date of this annual report, nor our company or the VIEs has been involved in any investigations or review initiated by any PRC regulatory authority, or has any of them received any inquiry, notice or sanction for our operations or our issuance of securities to investors. Nevertheless, the Standing Committee of the National People’s Congress (the “SCNPC”) or PRC regulatory authorities may in the future promulgate laws, regulations or implementing rules that require us, our subsidiaries, the VIEs or their subsidiaries to obtain permissions from PRC regulatory authorities to approve the VIEs operations.

On August 8, 2006, six PRC regulatory agencies jointly adopted The Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, which came into effect on September 8, 2006 and were amended on June 22, 2009. Under the regulations, an offshore special purpose vehicle formed for overseas listing purposes and controlled directly or indirectly by the PRC citizens shall obtain the approvals of the CSRC prior to overseas listing and trading of such special purpose vehicle’s securities on an overseas stock exchange. Under the PRC laws and regulations in effect at the time of this annual report, as advised by King & Wood Mallesons, our PRC legal counsel, we will not be required to submit an application to the CSRC for its permissions or approvals of offering and the listing and trading of our securities to foreign investors under the M&A Rules. However, the interpretation and application of the regulations remain unclear, and the above opinions of King & Wood Mallesons, our PRC counsel are subject to any new laws, rules and regulations or detailed implementations and interpretations in any form relating to the M&A Rules. We cannot assure you that relevant Chinese government agencies, including the CSRC, would reach the same conclusion in the future.

On December 28, 2021, the Cyberspace Administration of China, or CAC jointly with the relevant authorities formally published Measures for Cybersecurity Review (2021) which will take effect on February 15, 2022 and replace the former Measures for Cybersecurity Review (2020). Measures for Cybersecurity Review (2021) stipulates that operators of critical information infrastructure purchasing network products and services, and online platform operator (together with the operators of critical information infrastructure, the “Operators”) carrying out data processing activities that affect or may affect national security, shall conduct a cybersecurity review, any online platform operator who controls more than one million users’ personal information must go through a cybersecurity review by the cybersecurity review office if it seeks to be listed in a foreign country. On April 4, 2020, the CAC held a press conference and limited the above Operators to telecommunications, finance, national defense and other industries related to national security, which is not the industry we are engaged in. Moreover, as of the date of this annual report, for entities that have been listed overseas before the implementation of the Measures of Cybersecurity Review rather than doing a public listing, the Measures of Cybersecurity Review do not clearly stipulate that such entities or their subsidiaries, as network platform operators, shall report to Cybersecurity Review Office for cybersecurity review, and also do not clearly stipulate that such entities or their subsidiaries

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shall obtain any permissions of approvals by the CAC. However, it remains uncertain whether any future regulatory changes would impose additional restrictions on companies like us. The aforementioned policies and any related implementation rules to be enacted may subject us to additional compliance requirements in the future. Therefore, we cannot assure you that we will remain fully compliant with all new regulatory requirements of these opinions or any future implementation rules on a timely basis, or at all.

On February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies and five supporting guidelines, or, collectively, the Filing Measures, effective on March 31, 2023. Pursuant to the Filing Measures, PRC domestic companies that directly or indirectly offer or list their securities in an overseas market, which include (i) any PRC company limited by shares, and (ii) any offshore company that conducts its business operations primarily in China and contemplates an offering or listing of its securities in an overseas market based on its onshore equities, assets or similar interests, are required to file with the CSRC within three business days after submitting their listing application documents. Based on the above-mentioned laws and regulations, as of the date of this annual report, as advised by King & Wood Mallesons, our PRC legal counsel, we are an existing enterprise defined by the Filing Measures. An existing enterprise is not required to file with the CSRC immediately, and the filing shall be made as required if we involve refinancing and other filing matters in the future. However, the interpretation and application of the regulations remain unclear and the relevant regulations are quickly evolving. We cannot assure you that CSRC, would reach the same conclusion in the future.

Based on the above-mentioned and other effective PRC laws and regulations as of the date of this annual report, as advised by King &Wood Mallesons, our PRC legal counsel, except for necessary company business license, foreign investment information report to the commerce administrative authority and foreign exchange registration or filing, we and the VIEs do not have to obtain any permissions or approvals from the PRC government authorities for our business operations in China or for securities offerings to foreign investors. Also, as advised by our PRC legal counsel, as an existing enterprise (the domestic companies that have already been listed overseas before the effective date of the Filling Measures) defined under the Filing Measures, none of us or the VIEs is required to file with the CSRC immediately. However, according to the Filling Measures, we will be required to file with the CSRC for our overseas offering of equity and equity linked securities in the future. Furthermore, given the uncertainties of interpretation and implementation of relevant laws and regulations and the enforcement practice by government authorities, we may be required to obtain such permissions or approvals in the future. We cannot predict, if required, whether or for how long we will be able to complete such filings or obtain such approvals. And the failure to complete such filing or the failure to obtain or delay in obtaining such permissions or approvals would subject us to restrictions and penalties imposed by the CSRC, CAC or any other PRC regulatory authorities, and our ability to offer securities to foreign investors could be significantly limited or completely hindered and the ADSs currently being offered may substantially decline in value and be worthless.

Supplemental Financial Information Related to the VIEs

The following tables present supplemental information provided in the form of condensed consolidated statements of operations, condensed consolidated balance sheets and condensed consolidated cash flows for MOGU Inc. (parent company), the primary beneficiaries of the VIEs, the VIEs, and other subsidiaries for the periods as of and for the dates presented.

Condensed Consolidated Statements of Operations

 

 

For the Year Ended March 31, 2023

 

 

MOGU Inc.

 

 

Other
subsidiaries

 

 

Primary
Beneficiaries of
VIEs

 

 

VIEs

 

 

Eliminating
adjustments

 

 

Consolidated
Totals

 

 

(RMB, in thousands)

 

Third-party revenues

 

 

 

 

 

293

 

 

 

170,811

 

 

 

60,972

 

 

 

 

 

 

232,076

 

Inter-company revenues(1)

 

 

 

 

 

 

 

 

13,546

 

 

 

26,785

 

 

 

(40,331

)

 

 

 

Third-party costs and expenses(2)

 

 

(53,206

)

 

 

(8,717

)

 

 

(175,669

)

 

 

(189,199

)

 

 

 

 

 

(426,791

)

Inter-company costs and expenses(1)

 

 

 

 

 

 

 

 

(26,786

)

 

 

(13,545

)

 

 

40,331

 

 

 

 

Third-party other operating income

 

 

8,351

 

 

 

(15,619

)

 

 

9,613

 

 

 

4,922

 

 

 

 

 

 

7,267

 

Inter-company other operating income/(expenses)(3)

 

 

(86,381

)

 

 

89,731

 

 

 

(21,000

)

 

 

17,650

 

 

 

 

 

 

 

Share of loss from subsidiaries and VIEs(4)

 

 

(38,453

)

 

 

(106,161

)

 

 

(73,784

)

 

 

 

 

 

218,398

 

 

 

 

(Expense)/income from non-operations

 

 

(16,717

)

 

 

2,114

 

 

 

3,788

 

 

 

9,874

 

 

 

 

 

 

(941

)

Loss before income tax expense

 

 

(186,406

)

 

 

(38,359

)

 

 

(99,481

)

 

 

(82,541

)

 

 

218,398

 

 

 

(188,389

)

Income tax (expense)/benefit

 

 

 

 

 

(94

)

 

 

(6,680

)

 

 

8,757

 

 

 

 

 

 

1,983

 

Net loss

 

 

(186,406

)

 

 

(38,453

)

 

 

(106,161

)

 

 

(73,784

)

 

 

218,398

 

 

 

(186,406

)

Net loss attributable to non-controlling interests

 

 

 

 

 

 

 

 

 

 

 

(8,422

)

 

 

 

 

 

(8,422

)

Net loss attributable to ordinary shareholders

 

 

(186,406

)

 

 

(38,453

)

 

 

(106,161

)

 

 

(65,362

)

 

 

218,398

 

 

 

(177,984

)

 

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For the Year Ended March 31, 2022

 

 

MOGU Inc.

 

 

Other subsidiaries

 

 

Primary Beneficiaries of VIEs

 

 

VIEs

 

 

Eliminating adjustments

 

 

Consolidated Totals

 

 

(RMB, in thousands)

 

Third-party revenues

 

 

 

 

 

3,006

 

 

 

264,670

 

 

 

69,793

 

 

 

 

 

 

337,469

 

Inter-company revenues(1)

 

 

 

 

 

 

 

 

15,779

 

 

 

31,816

 

 

 

(47,595

)

 

 

 

Third-party costs and expenses(2)

 

 

(307,017

)

 

 

(201,737

)

 

 

(336,666

)

 

 

(187,958

)

 

 

 

 

 

(1,033,378

)

Inter-company costs and expenses(1)

 

 

 

 

 

 

 

 

(31,816

)

 

 

(15,779

)

 

 

47,595

 

 

 

 

Third-party other operating income

 

 

1,008

 

 

 

6,620

 

 

 

15,384

 

 

 

2,415

 

 

 

 

 

 

25,427

 

Inter-company other operating income/(expenses)(3)

 

 

 

 

 

236,825

 

 

 

(39,127

)

 

 

(197,698

)

 

 

 

 

 

 

Share of loss from subsidiaries and VIEs(4)

 

 

(334,730

)

 

 

(376,973

)

 

 

(269,972

)

 

 

 

 

 

981,675

 

 

 

 

(Expense)/income from non-operations

 

 

(1,635

)

 

 

(2,294

)

 

 

4,775

 

 

 

12,750

 

 

 

 

 

 

13,596

 

Loss before income tax expense

 

 

(642,374

)

 

 

(334,553

)

 

 

(376,973

)

 

 

(284,661

)

 

 

981,675

 

 

 

(656,886

)

Income tax (expense)/benefit

 

 

 

 

 

(177

)

 

 

 

 

 

14,689

 

 

 

 

 

 

14,512

 

Net loss

 

 

(642,374

)

 

 

(334,730

)

 

 

(376,973

)

 

 

(269,972

)

 

 

981,675

 

 

 

(642,374

)

Net loss attributable to non-controlling interests

 

 

 

 

 

 

 

 

 

 

 

(2,574

)

 

 

 

 

 

(2,574

)

Net loss attributable to ordinary shareholders

 

 

(642,374

)

 

 

(334,730

)

 

 

(376,973

)

 

 

(267,398

)

 

 

981,675

 

 

 

(639,800

)

 

 

For the Year Ended March 31, 2021

 

 

MOGU Inc.

 

 

Other subsidiaries

 

 

Primary Beneficiaries of VIEs

 

 

VIEs

 

 

Eliminating adjustments

 

 

Consolidated Totals

 

 

(RMB, in thousands)

 

Third-party revenues

 

 

 

 

 

131

 

 

 

397,249

 

 

 

85,012

 

 

 

 

 

 

482,392

 

Inter-company revenues(1)

 

 

 

 

 

 

 

 

32,508

 

 

 

25,679

 

 

 

(58,187

)

 

 

 

Third-party costs and expenses(2)

 

 

(331,385

)

 

 

(9,153

)

 

 

(525,209

)

 

 

(95,454

)

 

 

 

 

 

(961,201

)

Inter-company costs and expenses(1)

 

 

 

 

 

(17

)

 

 

(25,680

)

 

 

(32,490

)

 

 

58,187

 

 

 

 

Third-party other operating income

 

 

6,138

 

 

 

12,451

 

 

 

25,313

 

 

 

5,983

 

 

 

 

 

 

49,885

 

Share of loss from subsidiaries and VIEs(4)

 

 

(82,563

)

 

 

(88,890

)

 

 

1,721

 

 

 

 

 

 

169,732

 

 

 

 

Income from non-operations

 

 

89,596

 

 

 

3,133

 

 

 

5,208

 

 

 

8,197

 

 

 

 

 

 

106,134

 

Loss before income tax expense

 

 

(318,214

)

 

 

(82,345

)

 

 

(88,890

)

 

 

(3,073

)

 

 

169,732

 

 

 

(322,790

)

Income tax (expense)/benefit

 

 

(9,757

)

 

 

(218

)

 

 

 

 

 

4,794

 

 

 

 

 

 

(5,181

)

Net (loss)/income

 

 

(327,971

)

 

 

(82,563

)

 

 

(88,890

)

 

 

1,721

 

 

 

169,732

 

 

 

(327,971

)

Net loss attributable to ordinary shareholders

 

 

(327,971

)

 

 

(82,563

)

 

 

(88,890

)

 

 

1,721

 

 

 

169,732

 

 

 

(327,971

)

 

(1)
It represents the elimination of the intercompany service charge and other operating activities at the consolidation level. For the years ended March 31, 2021, 2022 and 2023, the service fees of variable interest entities charged by the related primary beneficiaries were RMB27.5 million, RMB10.6 million and RMB8.4 million, respectively.
(2)
It includes the amortization of intangible assets and impairment of goodwill and intangible assets of RMB341.8 million, RMB563.5 million and RMB144.7 million for the years ended March 31, 2021, 2022 and 2023.
(3)
It represents the elimination of the write-off certain intercompany balances relating to other subsidiaries, primary beneficiaries of variable interest entities and variable interest entities.
(4)
It represents the elimination of the investment among the Company, other subsidiaries, primary beneficiaries of variable interest entities, and variable interest entities.

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Table of Contents

 

Condensed Consolidated Balance Sheets

 

 

As of March 31, 2023

 

 

MOGU Inc.

 

 

Other subsidiaries

 

 

Primary Beneficiaries of VIEs

 

 

VIEs

 

 

Eliminating adjustments

 

 

Consolidated Totals

 

 

(RMB, in thousands)

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

14,668

 

 

 

121,806

 

 

 

20,694

 

 

 

259,033

 

 

 

 

 

 

416,201

 

Restricted cash

 

 

 

 

 

 

 

 

 

 

 

810

 

 

 

 

 

 

810

 

Short-term investments

 

 

 

 

 

252

 

 

 

120,000

 

 

 

25,584

 

 

 

 

 

 

145,836

 

Inventories, net

 

 

 

 

 

 

 

 

13