UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
OR
For the fiscal year ended
OR
OR
Date of event requiring this shell company report.........................
For the transition period from to
Commission file number:
(Exact name of Registrant as specified in its charter)
N/A
(Translation of Registrant’s name into English)
(Jurisdiction of incorporation or organization)
The People’s Republic of
(Address of principal executive offices)
Telephone: +(
Email:
The People’s Republic of
(Name, Telephone, E-mail 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 |
| The | |||
|
|
| ||
|
| The (The Nasdaq Global Market) |
* | Not for trading, but only in connection with the listing on The Nasdaq Global Market of American depositary shares. |
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.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. |
☐ Yes ☒ |
|
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 ☒ |
|
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. |
⌧ |
|
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). |
⌧ |
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 the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large 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.
☒ Yes ☐ No
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
International Financial Reporting Standards as issued by the International Accounting | 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). |
(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
1 | ||
2 | ||
3 | ||
3 | ||
3 | ||
3 | ||
51 | ||
85 | ||
85 | ||
102 | ||
113 | ||
115 | ||
115 | ||
116 | ||
128 | ||
129 | ||
130 | ||
130 | ||
Material Modifications to the Rights of Security Holders and Use of Proceeds | 130 | |
131 | ||
131 | ||
132 | ||
132 | ||
132 | ||
Purchases of Equity Securities by the Issuer and Affiliated Purchasers | 132 | |
132 | ||
133 | ||
133 | ||
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 133 | |
133 | ||
133 | ||
133 | ||
134 | ||
137 | ||
F-1 |
i
INTRODUCTION
In this annual report, except where the context otherwise requires and for purposes of this annual report only:
● | “ADSs” refer to our American depositary shares, each ADS represents three Class A ordinary shares; |
● | “China” or “PRC” refers to the People’s Republic of China, excluding, for the purpose of this annual report only, Taiwan, Hong Kong and Macau; |
● | “consolidated affiliated entities” refers to the VIE and its subsidiaries; |
● | “gross bookings” refer to the total amount paid by our customers for the travel products that we have delivered and the travel services that we have rendered, including the related taxes, fees and other charges borne by our customers; |
● | “shares” or “ordinary shares” refers to our ordinary shares, which include both Class A ordinary shares and Class B ordinary shares; |
● | “U.S. GAAP” refers to generally accepted accounting principles in the United States; |
● | “VIE” refers to variable interest entity, and “the VIE” refers to Nanjing Tuniu Technology Co., Ltd., or Nanjing Tuniu, and its subsidiaries. |
● | “we,” “us,” “our company,” “our,” or “Tuniu” refers to Tuniu Corporation, a Cayman Islands company, its subsidiaries, and, in the context of describing our operations and consolidated financial information, also include the VIE; |
● | “RMB” or “Renminbi” refers to the legal currency of China; |
● | “$,” “dollars,” “US$” or “U.S. dollars” refers to the legal currency of the United States; and |
● | all discrepancies in any table between the amounts identified as total amounts and the sum of the amounts listed therein are due to rounding. |
Our business is primarily conducted in China and almost all of our revenues are denominated in Renminbi. However, periodic reports made to shareholders will include current period amounts translated into U.S. dollars using the then current exchange rates, for the convenience of the readers. 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. The PRC government imposes control over its foreign currency reserves in part through direct regulation of the conversion of Renminbi into foreign exchange and through restrictions on foreign trade. Unless otherwise noted, all translations from Renminbi to U.S. dollars and from U.S. dollars to Renminbi in this annual report were made at a rate of RMB6.3726 to US$1.00, the noon buying rate in effect as of December 30, 2021.
1
FORWARD-LOOKING INFORMATION
This annual report on Form 20-F contains forward-looking statements that reflect our current expectations and views of future events. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as “may,” “will,” “expect,” “anticipate,” “future,” “intend,” “plan,” “believe,” “estimate,” “is/are likely to” or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements include, but are not limited to:
● | our goals and strategies; |
● | the expected growth of the online leisure travel market in China; |
● | our expectations regarding demand for our products and services; |
● | our expectations regarding our relationships with customers and travel suppliers; |
● | our ability to offer competitive travel products and services; |
● | our future business development, results of operations and financial condition; |
● | competition in our industry in China; |
● | relevant government policies and regulations relating to our corporate structure, business and industry; |
● | the impact of the COVID-19 on our business operations, the travel industry and the economy of China and elsewhere generally; |
● | general economic and business condition in China and elsewhere; and |
● | assumptions underlying or related to any of the foregoing. |
We would like to caution you not to place undue reliance on these forward-looking statements and you should read these statements in conjunction with the risk factors disclosed in “Item 3. Key Information—D. Risk Factors.” Those risks are not exhaustive. We operate in a rapidly evolving environment. New risks emerge from time to time and it is impossible 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 from those contained in any forward-looking statement. We do not undertake any obligation to update or revise the forward-looking statements, statements, whether as a result of new information, future events or otherwise, except as required under applicable law.
This annual report also contains statistical data and estimates that we obtained from industry publications and reports generated by government agencies and third-party providers of market intelligence. These industry publications and reports generally indicate that the information contained therein was obtained from sources believed to be reliable, but do not guarantee the accuracy and completeness of such information. Although we believe that the publications and reports are reliable, we have not independently verified the data.
2
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 Holding Company Structure and Contractual Arrangements with the VIE
Tuniu Corporation is not an operating company in China but a Cayman Islands holding company with no equity ownership in the variable interest entity, or VIE. We conduct our business in China through (i) our PRC subsidiaries and (ii) the consolidated affiliated entities with which we have maintained contractual arrangements. PRC laws and regulations restrict and impose conditions on foreign investment in value-added telecommunication services and certain other businesses. Accordingly, we operate these businesses in China through the VIE, and rely on contractual arrangements among our PRC subsidiaries, the VIE and its shareholders to control the business operations of the VIE. Revenues contributed by the VIE accounted for 48.1%, 90.6% and 53.6% of our total revenues for the years of 2019, 2020 and 2021, respectively. Holders of our ADSs hold equity interest in Tuniu Corporation, our Cayman Islands holding company, and do not have direct or indirect equity interest in the VIE.
A series of contractual agreements, including powers of attorney, equity interest pledge agreements, cooperation agreements, purchase option agreements and shareholders’ voting rights agreements, have been entered into by and among our wholly owned PRC subsidiary, Beijing Tuniu Technology Co., Ltd., or Beijing Tuniu, the VIE and its shareholders. As a result of the contractual arrangements, we have effective control over and are considered the primary beneficiary of the VIE, and we have consolidated the financial results of the VIE in our consolidated financial statements. For more details of these contractual arrangements, see “Item 4. Information on the Company—C. Organizational Structure.”
However, the contractual arrangements may not be as effective as direct ownership in providing us with control over the VIE and we may incur substantial costs to enforce the terms of the arrangements. There are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations and rules regarding the status of our rights with respect to our contractual arrangements with the VIE and its shareholders. It is uncertain whether any new PRC laws or regulations relating to VIE structures will be adopted or if adopted, what they would provide. If we or the VIE is 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 authorities would have broad discretion to take action in dealing with such violations or failures. Our holding company, our PRC subsidiaries and 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. In addition, these agreements have not been tested in China courts. For a detailed description of the risks associated with our corporate structure, please refer to risks disclosed under “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure.”
PRC government’s significant authority in regulating our operations and its oversight and control 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. For more details, see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—The PRC government’s significant oversight over our business operation could result in a material adverse change in our operations and the value of our ADSs.”
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 “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China— Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to you and us.”
3
Permissions Required from the PRC Authorities for Our Operations
We conduct our business in China through our subsidiaries and the consolidated affiliated entities in China. Our operations in China are governed by PRC laws and regulations. As of the date of this annual report, our PRC subsidiaries and VIE have obtained the requisite licenses and permits from the PRC government authorities that are material for the business operations of our PRC subsidiaries and the VIE in China, including, among others, a Value-Added Telecommunication Business Operating License issued by the local bureau of the Ministry of Industry and Information Technology of the PRC, or the MIIT, a Short Messaging Service Access Code Certificate issued by the MIIT, a Food Business License issued by Jizhou Branch of Tianjin Administration for Market Regulation, Filing Certificates for Operation of Prepacked Food issued by Xuanwu Branch of Nanjing Administration for Market Regulation, Travel Agency Business Licenses issued by the local bureaus of and/or the then Ministry of Tourism, or the Ministry of Culture and Tourism which has replaced the Ministry of Tourism, Approval Documents for Operation of Small-sum Loan Business issued by the Guangzhou Municipal Bureau of Finance, an Insurance Brokerage Business License is issued by the CBIRC, a Securities and Futures Business Operation License is issued by the CSRC, Insurance Agency Concurrent-business Licenses issued by the CBIRC, and a Hotel Hygiene License, which is issued by the local bureau of the National Health Commission. Given the uncertainties of interpretation and implementation of relevant laws and regulations and the enforcement practice by relevant government authorities, we may be required to obtain additional licenses, permits, filings or approvals for the functions and services of our platform in the future. For more detailed information, see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—We may be adversely affected by the complexity, uncertainties and changes in PRC regulations of internet and related business and companies.”
Furthermore, the PRC government has recently indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers. For more detailed information, see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—The approval of or filing with 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 or complete such filing.”
The Holding Foreign Companies Accountable Act
The Holding Foreign Companies Accountable Act, or the HFCAA, was enacted on December 18, 2020. The HFCAA states 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 Public Company Accounting Oversight Board (United States), or the PCAOB, for three consecutive years beginning in 2021, the SEC shall prohibit our shares or ADSs from being traded on a national securities exchange. Since our auditor is located in China, a jurisdiction where the PCAOB has been unable to conduct inspections without the approval of the Chinese authorities, our auditor is not currently inspected by the PCAOB, which may impact our ability to remain listed on a United States or other foreign exchange. The related risks and uncertainties could cause the value of our ADSs to significantly decline. For more details, see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—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” and “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—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.”
Cash Flows through Our Organization
Tuniu Corporation is a holding company with no operations of its own. We conduct our business in China through our subsidiaries and the consolidated affiliated entities in China. As a result, although other means are available for us to obtain financing at the holding company level, Tuniu Corporation’s ability to pay dividends to the shareholders and to service any debt it may incur may depend upon dividends paid by our PRC subsidiaries and license and service fees paid by the VIE. If any of our subsidiaries incurs debt on its own behalf in the future, the instruments governing such debt may restrict its ability to pay dividends to Tuniu Corporation. In addition, our PRC subsidiaries are permitted to pay dividends to Tuniu Corporation only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Further, our PRC subsidiaries and VIE are required to make appropriations to certain statutory reserve funds or may make appropriations to certain discretionary funds, which are not distributable as cash dividends except in the event of a solvent liquidation of the companies. For more details, see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Holding Company Structure.”
4
Under PRC laws and regulations, our PRC subsidiaries and VIE are subject to certain restrictions with respect to paying dividends or otherwise transferring any of their net assets to us. Remittance of dividends by a wholly foreign-owned enterprise out of China is also subject to examination by the banks designated by State Administration of Foreign Exchange, or the SAFE. Our PRC subsidiaries have not paid dividends and will not be able to pay dividends until they generates accumulated profits and meets the requirements for statutory reserve funds. For risks relating to the fund flows of our operations in China, see “Item 3. Key Information—Risk Factors—Risks Related to Doing Business in China—Our subsidiaries and the consolidated affiliated entities in China are subject to restrictions on paying dividends or making other payments to our holding company, which may restrict our ability to satisfy our liquidity requirements.”
For purposes of illustration, the following discussion reflects the hypothetical taxes that might be required to be paid within China, assuming that: (i) we have taxable earnings, and (ii) we determine to pay dividends in the future.
| Tax calculation (1) |
| |
Hypothetical pre-tax earnings |
| 100 | % |
Tax on earnings at statutory rate of 25% (2) |
| (25) | % |
Net earnings available for distribution |
| 75 | % |
Withholding tax at standard rate of 10% (3) |
| (7.5) | % |
Net distribution to Parent/Shareholders |
| 67.5 | % |
Notes:
(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) | Certain of our subsidiaries qualifies for a 15% preferential income tax rate in China. For purposes of this hypothetical example, the table above reflects a maximum tax scenario under which the full statutory rate would be effective. |
(3) | The PRC Enterprise Income Tax Law imposes a withholding income tax of 10% on dividends distributed by a foreign invested enterprise to its immediate holding company outside of 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 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. |
Under PRC law, Tuniu Corporation may provide funding to our PRC subsidiaries only through capital contributions or loans, and to the VIE only through loans, subject to satisfaction of applicable government registration and approval requirements. For the years ended December 31, 2019, 2020 and 2021, Tuniu Corporation did not make any capital contribution to our intermediate holding companies and subsidiaries. For the years ended December 31, 2019, 2020 and 2021, our intermediate holding companies and subsidiaries and the consolidated affiliated entities received no capital contribution or loan investment from Tuniu Corporation. VIE and its subsidiaries obtained financing from external banks for their operations with the amount of RMB543.5 million for the year ended December 31, 2019, and repaid RMB133.5 million and RMB284.1 million for the years ended December 31, 2020 and 2021, respectively.
Tuniu Corporation has not declared or paid any cash dividends, nor does it has any present plan to pay any cash dividends on our ordinary shares in the foreseeable future. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business. We currently do not have any plan to require our PRC subsidiaries to distribute their retained earnings and intend to retain them to operate and expand our business in the PRC. See “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Dividend Policy.” For PRC and United States federal income tax considerations of an investment in our ADSs, see “Item 10. Additional Information—E. Taxation.”
Financial Information Related to the VIE
The following table presents the condensed consolidating schedule of financial position for the VIE and other entities as of the dates presented.
5
Selected Condensed Consolidated Balance Sheets Information
As of December 31, 2020 | ||||||||||||
Primary | VIE and | |||||||||||
Tuniu | Other | Beneficiary of | its | Eliminating | Consolidated | |||||||
| Corporation |
| Subsidiaries |
| VIE |
| Subsidiaries |
| Adjustments |
| Totals | |
| (in RMB thousands) | |||||||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| 598 |
| 95,805 |
| 1,398 |
| 115,737 |
| — |
| 213,538 |
Restricted cash |
| — |
| 1,498 |
| — |
| 49,068 |
| — |
| 50,566 |
Short-term investments |
| — |
| 564,897 |
| 103,000 |
| 685,773 |
| — |
| 1,353,670 |
Accounts receivable, net |
| — |
| 110,290 |
| — |
| 153,844 |
| — |
| 264,134 |
Intercompany loan receivables (1) | — | 201,685 | — | — | (201,685) | — | ||||||
Amounts due from Group companies (2) |
| 6,909,695 |
| 3,486,097 |
| 20,169 |
| 504,780 |
| (10,920,741) |
| — |
Amounts due from related parties |
| — |
| 57 |
| — |
| 23,856 |
| — |
| 23,913 |
Prepayments and other current assets |
| 228 |
| 162,337 |
| 1,975 |
| 214,164 |
| — |
| 378,704 |
Total current assets |
| 6,910,521 |
| 4,622,666 |
| 126,542 |
| 1,747,222 |
| (11,122,426) |
| 2,284,525 |
Non-current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Long-term investments (3) |
| — |
| 74,798 |
| — |
| 232,068 |
| (40,000) |
| 266,866 |
Property and equipment, net |
| — |
| 64,680 |
| 671 |
| 46,346 |
| — |
| 111,697 |
Intangible assets, net |
| — |
| 4,982 |
| 4,698 |
| 61,682 |
| — |
| 71,362 |
Land use right, net |
| — |
| 96,713 |
| — |
| — |
| — |
| 96,713 |
Operating lease right-of-use assets, net |
| — |
| 5,111 |
| — |
| 37,182 |
| — |
| 42,293 |
Goodwill |
| — |
| 47,003 |
| — |
| 185,004 |
| — |
| 232,007 |
Other non-current assets |
| — |
| 7,850 |
| 2 |
| 83,328 |
| — |
| 91,180 |
Total non-current assets |
| — |
| 301,137 |
| 5,371 |
| 645,610 |
| (40,000) |
| 912,118 |
Total assets |
| 6,910,521 |
| 4,923,803 |
| 131,913 |
| 2,392,832 |
| (11,162,426) |
| 3,196,643 |
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings (1) |
| — |
| 10,679 |
| — |
| 251,685 |
| (201,685) |
| 60,679 |
Accounts and notes payable |
| — |
| 101,072 |
| — |
| 604,766 |
| — |
| 705,838 |
Amounts due to Group companies (2) |
| — |
| 5,613,714 |
| 13,934 |
| 5,293,093 |
| (10,920,741) |
| — |
Amounts due to related parties |
| — |
| 18,836 |
| — |
| 2,198 |
| — |
| 21,034 |
Salary and welfare payable |
| — |
| 6,907 |
| 2,183 |
| 38,397 |
| — |
| 47,487 |
Taxes payable |
| — |
| 84 |
| 2,536 |
| 3,384 |
| — |
| 6,004 |
Advances from customers |
| — |
| 15,797 |
| — |
| 192,965 |
| — |
| 208,762 |
Operating lease liabilities, current |
| — |
| 8,737 |
| — |
| 9,527 |
| — |
| 18,264 |
Accrued expenses and other current liabilities |
| 7,449 |
| 38,356 |
| 366 |
| 630,330 |
| — |
| 676,501 |
Total current liabilities |
| 7,449 |
| 5,814,182 |
| 19,019 |
| 7,026,345 |
| (11,122,426) |
| 1,744,569 |
Non-current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Operating lease liabilities, non-current |
| — |
| 4,259 |
| — |
| 30,108 |
| — |
| 34,367 |
Deferred tax liabilities |
| — |
| 2,842 |
| — |
| 12,019 |
| — |
| 14,861 |
Long-term borrowings |
| — |
| 22,577 |
| — |
| — |
| — |
| 22,577 |
Other non-current liabilities |
| — |
| 3,054 |
| — |
| — |
| — |
| 3,054 |
Investment deficit in subsidiaries and Affiliated Entities (4) |
| 5,518,393 |
| 4,503,579 |
| 4,616,473 |
| — |
| (14,638,445) |
| — |
Total non-current liabilities |
| 5,518,393 |
| 4,536,311 |
| 4,616,473 |
| 42,127 |
| (14,638,445) |
| 74,859 |
Total liabilities |
| 5,525,842 |
| 10,350,493 |
| 4,635,492 |
| 7,068,472 |
| (25,760,871) |
| 1,819,428 |
Redeemable noncontrolling interests |
| — |
| 27,200 |
| — |
| — |
| — |
| 27,200 |
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
Total Tuniu Corporation shareholders’ equity |
| 1,384,679 |
| (5,518,393) |
| (4,503,579) |
| (4,616,473) |
| 14,638,445 |
| 1,384,679 |
Noncontrolling interests (3) |
| — |
| 64,503 |
| — |
| (59,167) |
| (40,000) |
| (34,664) |
Total equity |
| 1,384,679 |
| (5,453,890) |
| (4,503,579) |
| (4,675,640) |
| 14,598,445 |
| 1,350,015 |
Total liabilities, redeemable noncontrolling interests and equity |
| 6,910,521 |
| 4,923,803 |
| 131,913 |
| 2,392,832 |
| (11,162,426) |
| 3,196,643 |
6
As of December 31, 2021 | ||||||||||||
Primary | VIE and | |||||||||||
Tuniu | Other | Beneficiary of | its | Eliminating | Consolidated | |||||||
| Corporation |
| Subsidiaries |
| VIE |
| Subsidiaries |
| Adjustments |
| Totals | |
| (in RMB thousands) | |||||||||||
ASSETS |
|
|
|
|
|
| ||||||
Current assets: |
|
|
|
|
|
| ||||||
Cash and cash equivalents |
| 4,712 |
| 254,173 |
| 761 |
| 89,431 |
| — |
| 349,077 |
Restricted cash |
| — |
| 26,111 |
| — |
| 20,410 |
| — |
| 46,521 |
Short-term investments |
| — |
| 298,201 |
| 11,600 |
| 306,100 |
| — |
| 615,901 |
Accounts receivable, net |
| — |
| — |
| — |
| 111,941 |
| — |
| 111,941 |
Intercompany loan receivables (1) | — | 184,546 | — | — | (184,546) | — | ||||||
Amounts due from Group companies (2) |
| 6,855,545 |
| 3,173,186 |
| 116,142 |
| 424,829 |
| (10,569,702) |
| — |
Amounts due from related parties |
| — |
| 164 |
| — |
| 14,805 |
| — |
| 14,969 |
Prepayments and other current assets |
| 130 |
| 288,526 |
| 1,922 |
| 46,455 |
| — |
| 337,033 |
Total current assets |
| 6,860,387 |
| 4,224,907 |
| 130,425 |
| 1,013,971 |
| (10,754,248) |
| 1,475,442 |
Non-current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Long-term investments (3) |
| — |
| 66,000 |
| — |
| 175,947 |
| (40,000) |
| 201,947 |
Property and equipment, net |
| — |
| 56,421 |
| 676 |
| 41,062 |
| — |
| 98,159 |
Intangible assets, net |
| — |
| 2,186 |
| 1,265 |
| 51,925 |
| — |
| 55,376 |
Land use right, net |
| — |
| 94,652 |
| — |
| — |
| — |
| 94,652 |
Operating lease right-of-use assets, net |
| — |
| 20,274 |
| — |
| 27,841 |
| — |
| 48,115 |
Goodwill |
| — |
| 47,388 |
| — |
| 184,619 |
| — |
| 232,007 |
Other non-current assets |
| — |
| 5,343 |
| 2 |
| 86,766 |
| — |
| 92,111 |
Total non-current assets |
| — |
| 292,264 |
| 1,943 |
| 568,160 |
| (40,000) |
| 822,367 |
Total assets |
| 6,860,387 |
| 4,517,171 |
| 132,368 |
| 1,582,131 |
| (10,794,248) |
| 2,297,809 |
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings (1) |
| — |
| 9,981 |
| — |
| 184,546 |
| (184,546) |
| 9,981 |
Accounts and notes payable |
| — |
| 57,910 |
| — |
| 325,716 |
| — |
| 383,626 |
Amounts due to Group companies (2) |
| — |
| 5,284,262 |
| 13,934 |
| 5,271,506 |
| (10,569,702) |
| — |
Amounts due to related parties |
| — |
| 2,481 |
| — |
| 2,198 |
| — |
| 4,679 |
Salary and welfare payable |
| — |
| 6,603 |
| 2,469 |
| 24,689 |
| — |
| 33,761 |
Taxes payable |
| — |
| 448 |
| 3,443 |
| 4,113 |
| — |
| 8,004 |
Advances from customers |
| — |
| 16,152 |
| — |
| 123,625 |
| — |
| 139,777 |
Operating lease liabilities, current |
| — |
| 12,099 |
| — |
| 4,457 |
| — |
| 16,556 |
Accrued expenses and other current liabilities |
| 8,038 |
| 43,454 |
| 414 |
| 330,723 |
| — |
| 382,629 |
Total current liabilities |
| 8,038 |
| 5,433,390 |
| 20,260 |
| 6,271,573 |
| (10,754,248) |
| 979,013 |
Non-current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Operating lease liabilities, non-current |
| — |
| 14,897 |
| — |
| 23,935 |
| — |
| 38,832 |
Deferred tax liabilities |
| — |
| 2,138 |
| — |
| 10,341 |
| — |
| 12,479 |
Long-term borrowings |
| — |
| 14,344 |
| — |
| — |
| — |
| 14,344 |
Investment deficit in subsidiaries and Affiliated Entities (4) |
| 5,583,205 |
| 4,546,165 |
| 4,658,273 |
| — |
| (14,787,643) |
| — |
Total non-current liabilities |
| 5,583,205 |
| 4,577,544 |
| 4,658,273 |
| 34,276 |
| (14,787,643) |
| 65,655 |
Total liabilities |
| 5,591,243 |
| 10,010,934 |
| 4,678,533 |
| 6,305,849 |
| (25,541,891) |
| 1,044,668 |
Redeemable noncontrolling interests |
| — |
| 27,200 |
| — |
| — |
| — |
| 27,200 |
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
Total Tuniu Corporation shareholders’ equity |
| 1,269,144 |
| (5,583,205) |
| (4,546,165) |
| (4,658,273) |
| 14,787,643 |
| 1,269,144 |
Noncontrolling interests (3) |
| — |
| 62,242 |
| — |
| (65,445) |
| (40,000) |
| (43,203) |
Total equity |
| 1,269,144 |
| (5,520,963) |
| (4,546,165) |
| (4,723,718) |
| 14,747,643 |
| 1,225,941 |
Total liabilities, redeemable noncontrolling interests and equity |
| 6,860,387 |
| 4,517,171 |
| 132,368 |
| 1,582,131 |
| (10,794,248) |
| 2,297,809 |
7
Selected Condensed Consolidated Statements of Comprehensive Loss Information
For the Year Ended December 31, 2019 | ||||||||||||
Primary | VIE and | |||||||||||
Tuniu | Other | Beneficiary of | its | Eliminating | Consolidated | |||||||
| Corporation |
| Subsidiaries |
| VIE |
| Subsidiaries |
| Adjustments |
| Totals | |
| (in RMB thousands) | |||||||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Third-party revenues |
| — |
| 1,183,449 |
| — |
| 1,097,538 |
| — |
| 2,280,987 |
Intra-Group revenues (5) |
| — |
| 25,583 |
| 38,783 |
| 84,209 |
| (148,575) |
| — |
Total revenues |
| — |
| 1,209,032 |
| 38,783 |
| 1,181,747 |
| (148,575) |
| 2,280,987 |
Total costs and expenses (5) |
| (3,903) |
| (1,517,942) |
| (117,315) |
| (1,658,170) |
| 145,499 |
| (3,151,831) |
Loss from operations |
| (3,903) |
| (308,910) |
| (78,532) |
| (476,423) |
| (3,076) |
| (870,844) |
Other income/(expenses) (5) |
| (1,410) |
| 40,004 |
| 416 |
| 98,102 |
| 3,076 |
| 140,188 |
Investment in loss from subsidiaries and Affiliated Entities(4) |
| (689,252) |
| (412,948) |
| (334,832) |
| — |
| 1,437,032 |
| — |
Loss before income tax expense |
| (694,565) |
| (681,854) |
| (412,948) |
| (378,321) |
| 1,437,032 |
| (730,656) |
Income tax (expense)/benefit |
| — |
| (3,210) |
| — |
| 2,261 |
| — |
| (949) |
Equity in income of unrelated affiliates |
| — |
| 2,223 |
| — |
| — |
| — |
| 2,223 |
Net loss |
| (694,565) |
| (682,841) |
| (412,948) |
| (376,060) |
| 1,437,032 |
| (729,382) |
Net loss attributable to noncontrolling interests |
| — |
| 5,431 |
| — |
| (41,228) |
| — |
| (35,797) |
Net income attributable to redeemable noncontrolling interests |
| — |
| 980 |
| — |
| — |
| — |
| 980 |
Net loss attributable to Tuniu Corporation |
| (694,565) |
| (689,252) |
| (412,948) |
| (334,832) |
| 1,437,032 |
| (694,565) |
For the Year Ended December 31, 2020 | ||||||||||||
Primary | VIE and | |||||||||||
Tuniu | Other | Beneficiary of | its | Eliminating | Consolidated | |||||||
| Corporation |
| Subsidiaries |
| VIE |
| Subsidiaries |
| Adjustments |
| Totals | |
| (in RMB thousands) | |||||||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Third-party revenues |
| — |
| 42,122 |
| — |
| 408,137 |
| — |
| 450,259 |
Intra-Group revenues (5) |
| — |
| 22,093 |
| 15,355 |
| 77,565 |
| (115,013) |
| — |
Total revenues |
| — |
| 64,215 |
| 15,355 |
| 485,702 |
| (115,013) |
| 450,259 |
Total costs and expenses (5) |
| (4,293) |
| (862,243) |
| (38,747) |
| (996,345) |
| 110,574 |
| (1,791,054) |
Loss from operations |
| (4,293) |
| (798,028) |
| (23,392) |
| (510,643) |
| (4,439) |
| (1,340,795) |
Other income/(expenses) (5) |
| (1,691) |
| 24,927 |
| 798 |
| (38,746) |
| 4,439 |
| (10,273) |
Investment in loss from subsidiaries and Affiliated Entities (4) |
| (1,301,972) |
| (532,000) |
| (509,406) |
| — |
| 2,343,378 |
| — |
Loss before income tax expense |
| (1,307,956) |
| (1,305,101) |
| (532,000) |
| (549,389) |
| 2,343,378 |
| (1,351,068) |
Income tax (expense)/benefit |
| — |
| (2,151) |
| — |
| 8,792 |
| — |
| 6,641 |
Equity in income of unrelated affiliates |
| — |
| 797 |
| — |
| — |
| — |
| 797 |
Net loss |
| (1,307,956) |
| (1,306,455) |
| (532,000) |
| (540,597) |
| 2,343,378 |
| (1,343,630) |
Net loss attributable to noncontrolling interests |
| — |
| (4,483) |
| — |
| (31,191) |
| — |
| (35,674) |
Net loss attributable to Tuniu Corporation |
| (1,307,956) |
| (1,301,972) |
| (532,000) |
| (509,406) |
| 2,343,378 |
| (1,307,956) |
8
For the Year Ended December 31, 2021 | ||||||||||||
Primary | VIE and | |||||||||||
Tuniu | Other | Beneficiary of | its | Eliminating | Consolidated | |||||||
| Corporation |
| Subsidiaries |
| VIE |
| Subsidiaries |
| Adjustments |
| Totals | |
| (in RMB thousands) | |||||||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Third-party revenues |
| — |
| 197,876 |
| — |
| 228,472 |
| — |
| 426,348 |
Intra-Group revenues (5) |
| — |
| 15,339 |
| 24,134 |
| 21,117 |
| (60,590) |
| — |
Total revenues |
| — |
| 213,215 |
| 24,134 |
| 249,589 |
| (60,590) |
| 426,348 |
Total costs and expenses (5) |
| (3,688) |
| (307,287) |
| (25,841) |
| (325,803) |
| 54,732 |
| (607,887) |
Loss from operations |
| (3,688) |
| (94,072) |
| (1,707) |
| (76,214) |
| (5,858) |
| (181,539) |
Other income (5) |
| 6,996 |
| 12,291 |
| 922 |
| 26,408 |
| 5,858 |
| 52,475 |
Investment in loss from subsidiaries and Affiliated Entities (4) |
| (124,832) |
| (43,643) |
| (42,858) |
| — |
| 211,333 |
| — |
Loss before income tax expense |
| (121,524) |
| (125,424) |
| (43,643) |
| (49,806) |
| 211,333 |
| (129,064) |
Income tax (expense)/benefit |
| — |
| (1,799) |
| — |
| 1,669 |
| — |
| (130) |
Equity in income of unrelated affiliates |
| — |
| 726 |
| — |
| — |
| — |
| 726 |
Net loss |
| (121,524) |
| (126,497) |
| (43,643) |
| (48,137) |
| 211,333 |
| (128,468) |
Net loss attributable to noncontrolling interests |
| — |
| (1,665) |
| — |
| (5,279) |
| — |
| (6,944) |
Net loss attributable to Tuniu Corporation |
| (121,524) |
| (124,832) |
| (43,643) |
| (42,858) |
| 211,333 |
| (121,524) |
Selected Condensed Consolidated Cash Flows Information
| For the Year Ended December 31, 2019 | |||||||||||
Primary | VIE and | |||||||||||
Tuniu | Other | Beneficiary of | its | Eliminating | Consolidated | |||||||
| Corporation |
| Subsidiaries |
| VIE |
| Subsidiaries |
| Adjustments |
| Totals | |
(in RMB thousands) | ||||||||||||
Net cash provided by transactions with intra-Group entities | — | — | — | — | — | — | ||||||
Net cash (used in)/provided by transactions with external parties | (4,739) | 418,435 | (28,665) | (505,492) | — | (120,461) | ||||||
Net cash (used in)/provided by operating activities |
| (4,739) |
| 418,435 |
| (28,665) |
| (505,492) |
| — |
| (120,461) |
(Loans to)/receipts of repayment from Group companies, net |
| — |
| (164,176) |
| 26,851 |
| — |
| 137,325 |
| — |
Other investing activities |
| 18,268 |
| (340,062) |
| (10,000) |
| (246,340) |
| — |
| (578,134) |
Net cash provided by/(used in) investing activities |
| 18,268 |
| (504,238) |
| 16,851 |
| (246,340) |
| 137,325 |
| (578,134) |
Borrowings under loan from Group companies, net |
| — |
| — |
| — |
| 137,325 |
| (137,325) |
| — |
Other financing activities |
| (13,438) |
| (44,949) |
| — |
| 543,497 |
| — |
| 485,110 |
Net cash (used in)/provided by financing activities |
| (13,438) |
| (44,949) |
| — |
| 680,822 |
| (137,325) |
| 485,110 |
For the Year Ended December 31, 2020 | ||||||||||||
Primary | VIE and | |||||||||||
Tuniu | Other | Beneficiary of | its | Eliminating | Consolidated | |||||||
| Corporation |
| Subsidiaries |
| VIE |
| Subsidiaries |
| Adjustments |
| Totals | |
| (in RMB thousands) | |||||||||||
Net cash (used in)/provided by transactions with intra-Group entities | — | (50,124) | 20,656 | 29,468 | — | — | ||||||
Net cash used in transactions with external parties | (4,779) | (399,187) | (30,072) | (879,077) | — | (1,313,115) | ||||||
Net cash (used in)/provided by operating activities |
| (4,779) |
| (449,311) |
| (9,416) |
| (849,609) |
| — |
| (1,313,115) |
Receipts of repayment from to Group companies, net |
| — |
| 30,732 |
| 102,723 |
| — |
| (133,455) |
| — |
Other investing activities |
| 5,292 |
| 344,824 |
| (93,000) |
| 901,947 |
| — |
| 1,159,063 |
Net cash provided by/(used in) investing activities |
| 5,292 |
| 375,556 |
| 9,723 |
| 901,947 |
| (133,455) |
| 1,159,063 |
Repayment of loan from Group companies, net |
| — |
| — |
| — |
| (133,455) |
| 133,455 |
| — |
Other financing activities |
| (250) |
| (10,296) |
| — |
| (199,000) |
| — |
| (209,546) |
Net cash (used in)/provided by financing activities |
| (250) |
| (10,296) |
| — |
| (332,455) |
| 133,455 |
| (209,546) |
9
For the Year Ended December 31, 2021 | ||||||||||||
Primary | VIE and | |||||||||||
Tuniu | Other | Beneficiary of | its | Eliminating | Consolidated | |||||||
| Corporation |
| Subsidiaries |
| VIE |
| Subsidiaries |
| Adjustments |
| Totals | |
| (in RMB thousands) | |||||||||||
Net cash (used in)/provided by transactions with intra-Group entities | — | (20,636) | — | 20,636 | — | — | ||||||
Net cash used in transactions with external parties | (2,341) | (12,906) | (30) | (211,065) | — | (226,342) | ||||||
Net cash used in operating activities |
| (2,341) |
| (33,452) |
| (30) |
| (190,429) |
| — |
| (226,342) |
(Loans to)/receipts of repayment from Group companies, net |
| — |
| 83,908 |
| (92,007) |
| — |
| 8,099 |
| — |
Other investing activities |
| 6,020 |
| 194,939 |
| 91,400 |
| 411,467 |
| — |
| 703,826 |
Net cash provided by/(used in) investing activities |
| 6,020 |
| 278,847 |
| (607) |
| 411,467 |
| 8,099 |
| 703,826 |
Borrowings under loan from Group companies, net |
| — |
| — |
| — |
| 8,099 |
| (8,099) |
| — |
Other financing activities |
| 373 |
| (60,835) |
| — |
| (284,100) |
| — |
| (344,562) |
Net cash provided by/(used in) financing activities |
| 373 |
| (60,835) |
| — |
| (276,001) |
| (8,099) |
| (344,562) |
(1) | It represents the elimination of intercompany loan provided by other subsidiaries to VIE and its subsidiaries. |
(2) | It represents the elimination of the intercompany balances among Tuniu Corporation, other subsidiaries, primary beneficiary of VIE, and VIE and its subsidiaries. |
(3) | The VIE invested in a subsidiary of Other Subsidiaries and measured at cost and such investment is eliminated with noncontrolling interests of Other Subsidiaries. |
(4) | It represents the elimination of the investments among Tuniu Corporation, other subsidiaries, primary beneficiary of VIE, and VIE and its subsidiaries. |
(5) | It represents the elimination of the intercompany transactions at the consolidation level, as follows: |
Charges to the VIE
(i) | Technology consulting service fees and group management fees charged by other subsidiaries and the primary beneficiary of the VIE to the VIE and its subsidiaries, in aggregate amouting to RMB30.4 million, RMB12.8 million and RMB16.3 million for the years ended 2019, 2020 and 2021, respectively. These charges are recognized as operating expenses by the VIE and its subsidiaries. |
(ii) | Revenue was recognized by other subsidiaries for interest on loans to the VIE and its subsidiaries, in the amounts of RMB3.1 million, RMB4.4 million and RMB5.9 million for the years ended 2019, 2020 and 2021, respectively. These charges are recognized as interest expense by the VIE and its subsidiaries. |
Charges by the VIE
(i) | Royalty fees charged by the VIE and its subsidiaries to other subsidiaries and the primary beneficiary of the VIE for the usage of software owned by VIE and its Subsidiaries in the amounts of RMB84.9 million, RMB77.6 million and RMB21.1 million for the years ended 2019, 2020 and 2021, respectively. These charges are recognized as operating expenses by the other subsidiaries and the primary beneficiary of the VIE. |
Charges between other entities
(i) | Group management fees charged by the primary beneficiary of the VIE to other subsidiaries in the Group. |
10
Transfers of Cash Within the Tuniu Group
Transfer of cash do not necessarily equal amounts charged, due to the timing of payments. The following is a summary of cash transfers that have occurred between our subsidiaries and the VIE and its subsidiaries (in thousands):
| As of December 31, | |||||
2019 | 2020 | 2021 | ||||
| RMB |
| RMB |
| RMB | |
Cash paid by our subsidiaries to the VIE and its subsidiaries for royalties |
| — |
| 29,468 |
| 22,000 |
Cash paid by the VIE and its subsidiaries to our subsidiaries under service agreements | — | — | (1,364) | |||
Cash paid by the VIE and its subsidiaries to our subsidiaries for intra-Group financing |
| — |
| (133,455) |
| — |
Cash received by the VIE and its subsidiaries from our subsidiaries for intra-Group financing |
| 137,325 |
| — |
| 8,099 |
A.[Reserved]
B.Capitalization and Indebtedness
Not applicable.
C.Reasons for the Offer and Use of Proceeds
Not applicable.
D.Risk Factors
Summary of Risk Factors
Investing in our ADSs involves significant risks. You should carefully consider all of the information in this annual report before making an investment in our ADSs. Below is a summary of material risks we face, organized under relevant headings. These risks are discussed more fully in Item 3. Key Information—D. Risk Factors.
Risks Related to Our Business and Industry
● | Our business operation, financial condition, results of operations and cash flows have been and are likely to continue to be materially and adversely affected by the COVID-19 outbreak and spread; |
● | Declines or disruptions in the leisure travel industry may materially and adversely affect our business and results of operations; |
● | We face risks related to natural disasters and health epidemics; |
● | If we do not continue to provide competitive travel products and services, we may not be able to attract new customers or retain existing customers, and our business, financial condition and results of operations could suffer; |
● | Failure to maintain the quality of customer services could harm our reputation and our ability to retain existing customers and attract new customers, which may materially and adversely affect our business, financial condition and results of operations; |
● | We have incurred losses in the past and will likely incur losses in the future; |
● | We face intense competition and may not be able to compete successfully against existing and new competitors; |
11
● | Our business generates and processes a large amount of data, and we are required to comply with PRC and other applicable laws relating to privacy and cybersecurity. The improper use or disclosure of data could have a material and adverse effect on our business and prospects; |
● | If we are unable to maintain existing relationships with travel suppliers, or develop relationships with new travel suppliers on favorable terms or terms similar to those we currently have, our business and results of operations may suffer; and |
● | We may be subject to legal or administrative proceedings regarding our travel products and services, information provided on our online platform or other aspects of our business operations, which may be time-consuming to defend and affect our reputation. |
Risks Related to Our Corporate Structure
● | We rely on contractual arrangements with Nanjing Tuniu and its shareholders for the operation of our business, which may not be as effective as direct ownership. If Nanjing Tuniu or its shareholders fail to perform their obligations under these contractual arrangements, we may have to resort to litigation or arbitration to enforce our rights, which may be time-consuming, unpredictable, expensive and damaging to our operations and reputation. If we are unable to maintain effective control we would not be able to continue to consolidate the financial results of the consolidated affiliated entities with our financial results; |
● | Substantial uncertainties and restrictions exist with respect to the interpretation and application of PRC laws and regulations relating to restrictions on foreign investment in value-added telecommunications and travel companies in China. If the PRC government finds that the structure we have adopted for our business operations does not comply with PRC laws and regulations, we could be subject to severe penalties, including shutting down of our online platform; and |
● | Substantial uncertainties exist with respect to the interpretation and implementation of adopted PRC Foreign Investment Law and its implementation rules and how they may impact the viability of our current corporate structure, corporate governance and business operations. |
Risks Related to Doing Business in China
● | The approval of or filing with 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 or complete such filing; |
● | 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; |
● | Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to you and us; |
● | The PRC government’s significant oversi |