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What changed in Bilibili Inc.'s 20-F — 2020 vs 2021

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Paragraph-level year-over-year comparison of Bilibili Inc.'s 2020 and 2021 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2021 report.

+1275 added−1030 removedSource: 20-F (2022-04-25) vs 20-F (2021-03-05)

Top changes in Bilibili Inc.'s 2021 20-F

1275 paragraphs added · 1030 removed · 634 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

296 edited+292 added−107 removed378 unchanged
Biggest changeRisks Related to Our Corporate Structure • If the PRC government finds that the agreements that establish the structure for operating our businesses in China do not comply with PRC regulations on foreign investment in internet and other related businesses, or if these regulations or their interpretation change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations. • We rely on contractual arrangements with our VIEs and their shareholders for our operations in China, which may not be as effective in providing operational control as direct ownership. • We may lose the ability to use and enjoy assets held by our VIEs and their subsidiaries that are important to our business if our VIEs and their subsidiaries declare bankruptcy or become subject to a dissolution or liquidation proceeding. 7 Table of Contents • Contractual arrangements we have entered into with our VIEs may be subject to scrutiny by the PRC tax authorities.
Biggest changeBilibili, its PRC subsidiaries and VIEs, and investors of Bilibili face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with the VIEs and, consequently, significantly affect the financial performance of the VIEs and our company as a whole. 14 Table of Contents • If the PRC government finds that the agreements that establish the structure for operating our businesses in China do not comply with PRC regulations on foreign investment in internet and other related businesses, or if these regulations or their interpretation change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
Although we have not been subject to claims or lawsuits outside China, we may become subject to copyright laws in other jurisdictions, such as the United States, by virtue of our listing in the United States, the ability of users to access our videos from the United States and other jurisdictions, the ownership of our ADSs by investors, and the extraterritorial application of foreign law by foreign courts or otherwise.
Although we have not been subject to claims or lawsuits outside China, we may become subject to copyright laws in other jurisdictions, such as the United States, by virtue of our listing in the United States, the ability of users to access our videos from the United States and other jurisdictions, the ownership of the ADSs by investors, and the extraterritorial application of foreign law by foreign courts or otherwise.
If our VIEs or their shareholders fail to perform their respective obligations under the contractual arrangements, we may incur substantial costs and expend substantial resources to enforce our rights. These contractual arrangements are governed by and interpreted in accordance with PRC law, and disputes arising from these contractual arrangements will be resolved through arbitration in China.
If the VIEs or their shareholders fail to perform their respective obligations under the contractual arrangements, we may incur substantial costs and expend substantial resources to enforce our rights. These contractual arrangements are governed by and interpreted in accordance with PRC law, and disputes arising from these contractual arrangements will be resolved through arbitration in China.
Under our contractual arrangements, the shareholders of our VIEs may not voluntarily liquidate our VIEs or approve them to sell, transfer, mortgage or dispose of their assets or legal or beneficial interests exceeding certain threshold in the business in any manner without our prior consent.
Under our contractual arrangements, the shareholders of the VIEs may not voluntarily liquidate the VIEs or approve them to sell, transfer, mortgage or dispose of their assets or legal or beneficial interests exceeding certain threshold in the business in any manner without our prior consent.
However, in the event that the shareholders breach this obligation and voluntarily liquidate our VIEs, or our VIEs declare bankruptcy, or all or part of their assets become subject to liens or rights of third-party creditors, we may be unable to continue some or all of our operations, which could materially and adversely affect our business, financial condition and results of operations.
However, in the event that the shareholders breach this obligation and voluntarily liquidate the VIEs, or the VIEs declare bankruptcy, or all or part of their assets become subject to liens or rights of third-party creditors, we may be unable to continue some or all of our operations, which could materially and adversely affect our business, financial condition and results of operations.
Contractual arrangements we have entered into with our VIEs may be subject to scrutiny by the PRC tax authorities. A finding that we owe additional taxes could negatively affect our financial condition and the value of your investment.
Contractual arrangements we have entered into with the VIEs may be subject to scrutiny by the PRC tax authorities. A finding that we owe additional taxes could negatively affect our financial condition and the value of your investment.
We may be subject to adverse tax consequences if the PRC tax authorities determine that the contractual arrangements among our WFOE, our VIEs and their shareholders are not on an arm’s-length basis and therefore constitute favorable transfer pricing. As a result, the PRC tax authorities could require that our VIEs adjust their taxable income upward for PRC tax purposes.
We may be subject to adverse tax consequences if the PRC tax authorities determine that the contractual arrangements among our WFOE, the VIEs and their shareholders are not on an arm’s-length basis and therefore constitute favorable transfer pricing. As a result, the PRC tax authorities could require that the VIEs adjust their taxable income upward for PRC tax purposes.
Such an adjustment could increase our VIEs’ tax expenses without reducing the tax expenses of our WFOE, subject our VIEs to late payment fees and other penalties for under-payment of taxes, and result in the loss of any preferential tax treatment our WFOE may have. As a result, our consolidated results of operations may be adversely affected.
Such an adjustment could increase the VIEs’ tax expenses without reducing the tax expenses of our WFOE, subject the VIEs to late payment fees and other penalties for under-payment of taxes, and result in the loss of any preferential tax treatment our WFOE may have. As a result, our consolidated results of operations may be adversely affected.
If the chops of our PRC subsidiaries, our VIEs and their subsidiaries, are not kept safely, are stolen or are used by unauthorized persons or for unauthorized purposes, the corporate governance of these entities could be severely and adversely compromised.
If the chops of our PRC subsidiaries, the VIEs and their subsidiaries, are not kept safely, are stolen or are used by unauthorized persons or for unauthorized purposes, the corporate governance of these entities could be severely and adversely compromised.
In addition to this mandatory company chop, companies may have several other chops which can be used for specific purposes. The chops of our PRC subsidiaries, our VIEs and their subsidiaries are generally held securely by personnel designated or approved by us in accordance with our internal control procedures.
In addition to this mandatory company chop, companies may have several other chops which can be used for specific purposes. The chops of our PRC subsidiaries, the VIEs and their subsidiaries are generally held securely by personnel designated or approved by us in accordance with our internal control procedures.
Under the Enterprise Income Tax Law, or the EIT Law, and its implementation rules, an enterprise established outside of the PRC with a “de facto management body” within the PRC is considered a PRC resident enterprise.
Under the PRC Enterprise Income Tax Law, or the EIT Law, and its implementation rules, an enterprise established outside of the PRC with a “de facto management body” within the PRC is considered a PRC resident enterprise.
In addition, we may be required to withhold a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises, including the holders of our ADSs.
In addition, we may be required to withhold a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises, including the holders of the ADSs.
Furthermore, if PRC tax authorities determine that we are a PRC resident enterprise for enterprise income tax purposes, dividends paid to our non-PRC individual shareholders (including our ADS holders) and any gain realized on the transfer of the ADSs or ordinary shares by such holders may be subject to PRC tax at a rate of 20% (which, in the case of dividends, may be withheld at source by us), if such gains are deemed to be from PRC sources.
Furthermore, if PRC tax authorities determine that we are a PRC resident enterprise for enterprise income tax purposes, dividends paid to our non-PRC individual shareholders (including the ADS holders) and any gain realized on the transfer of the ADSs or ordinary shares by such holders may be subject to PRC tax at a rate of 20% (which, in the case of dividends, may be withheld at source by us), if such gains are deemed to be from PRC sources.
PRC regulation of loans to, and direct investment in, PRC entities by offshore holding companies and governmental control of currency conversion may restrict or prevent us from using the proceeds of the offering of equity securities and notes to make loans to our PRC subsidiaries and our VIEs and their subsidiaries, or to make additional capital contributions to our PRC subsidiaries.
PRC regulation of loans to, and direct investment in, PRC entities by offshore holding companies and governmental control of currency conversion may restrict or prevent us from using the proceeds of the offering of equity securities and notes to make loans to our PRC subsidiaries and the VIEs and their subsidiaries, or to make additional capital contributions to our PRC subsidiaries.
The PRC government may at its discretion further restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of our ADSs.
The PRC government may at its discretion further restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of the ADSs.
We may need additional capital, and the sale of additional Class Z ordinary shares and/or ADSs or other equity securities could result in additional dilution to our shareholders, and the incurrence of additional indebtedness could increase our debt obligations. We may require additional cash resources due to changed business conditions, strategic acquisitions or other future developments.
We may need additional capital, and the sale of additional ADSs, Class Z ordinary shares, or other equity securities could result in additional dilution to our shareholders, and the incurrence of additional indebtedness could increase our debt obligations. We may require additional cash resources due to changed business conditions, strategic acquisitions or other future developments.
In respect of matters requiring the votes of shareholders, holders of Class Z ordinary shares will be entitled to one vote per share, while holders of Class Y ordinary shares will be entitled to ten votes per share based on our proposed dual-class share structure. Our ADSs represent Class Z ordinary shares.
In respect of matters requiring the votes of shareholders, holders of Class Z ordinary shares will be entitled to one vote per share, while holders of Class Y ordinary shares will be entitled to ten votes per share based on our proposed dual-class share structure. The ADSs represent Class Z ordinary shares.
As a result, the dual-class structure of our ordinary shares may prevent the inclusion of our ADSs representing Class Z ordinary shares in such indices and may cause shareholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure.
As a result, the dual-class structure of our ordinary shares may prevent the inclusion of the ADSs representing Class Z ordinary shares in such indices and may cause shareholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure.
Although substantially all of our business operations are in China, it is unclear whether dividends we pay with respect to our Class Z ordinary shares or ADSs, or the gain realized from the transfer of our Class Z ordinary shares or ADSs, would be treated as income derived from sources within China and as a result be subject to PRC income tax if we were considered a PRC resident enterprise, as described above.
Although substantially all of our business operations are in China, it is unclear whether dividends we pay with respect to our Class Z ordinary shares and/or the ADSs, or the gain realized from the transfer of our Class Z ordinary shares and/or the ADSs, would be treated as income derived from sources within China and as a result be subject to PRC income tax if we were considered a PRC resident enterprise, as described above.
Furthermore, the holders of our Class Z ordinary shares and/or ADSs whose jurisdictions of residence have tax treaties or similar arrangements with China may not qualify for benefits under such tax treaties or arrangements.
Furthermore, the holders of our Class Z ordinary shares and/or the ADSs whose jurisdictions of residence have tax treaties or similar arrangements with China may not qualify for benefits under such tax treaties or arrangements.
Although the law in this regard is unclear, we intend to treat our VIEs as being owned by us for U.S. federal income tax purposes, not only because we exercise effective control over the operation of these entities but also because we are entitled to substantially all of their economic benefits, and, as a result, we consolidate their results of operations in our consolidated financial statements.
Although the law in this regard is unclear, we intend to treat the VIEs as being owned by us for U.S. federal income tax purposes, not only because we exercise effective control over the operation of these entities but also because we are entitled to substantially all of their economic benefits, and, as a result, we consolidate their results of operations in our consolidated financial statements.
Fluctuations in the market price of our ADSs may cause us to become a PFIC for the current or subsequent taxable years because the value of our assets for the purpose of the asset test may be determined by reference to the market price of our ADSs (which may be volatile).
Fluctuations in the market price of the ADSs may cause us to become a PFIC for the current or subsequent taxable years because the value of our assets for the purpose of the asset test may be determined by reference to the market price of the ADSs (which may be volatile).
The depositary may refuse to deliver, transfer or register transfers of our ADSs generally when our share register or the books of the depositary are closed, or at any time if we or the depositary thinks it is advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the relevant deposit agreement, or for any other reason.
The depositary may refuse to deliver, transfer or register transfers of the ADSs generally when our share register or the books of the depositary are closed, or at any time if we or the depositary thinks it is advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the relevant deposit agreement, or for any other reason.
S&P Dow Jones and FTSE Russell have recently announced changes to their eligibility criteria for inclusion of shares of public companies on certain indices, including the S&P 500, to exclude companies with multiple classes of shares and companies whose public shareholders hold no more than 5% of total voting power from being added to such indices.
S&P Dow Jones and FTSE Russell have announced changes to their eligibility criteria for inclusion of shares of public companies on certain indices, including the S&P 500, to exclude companies with multiple classes of shares and companies whose public shareholders hold no more than 5% of total voting power from being added to such indices.
As a result, our ADS holders may not be afforded the same protections or information, which would be made available to our ADS holders, were they investing in a U.S. domestic issuer. Holders of our ADSs may have fewer rights than holders of our Class Z ordinary shares and must act through the depositary to exercise those rights.
As a result, the ADS holders may not be afforded the same protections or information, which would be made available to the ADS holders, were they investing in a U.S. domestic issuer. ADS Holders may have fewer rights than holders of our Class Z ordinary shares and must act through the depositary to exercise those rights.
Furthermore, if our VIEs or their subsidiaries undergo a voluntary or involuntary liquidation proceeding, their shareholders or unrelated third-party creditors may claim rights to some or all of its assets, hindering our ability to operate our business, which could materially and adversely affect our business, financial condition and results of operations.
Furthermore, if the VIEs or their subsidiaries undergo a voluntary or involuntary liquidation proceeding, their shareholders or unrelated third-party creditors may claim rights to some or all of its assets, hindering our ability to operate our business, which could materially and adversely affect our business, financial condition and results of operations.
In addition, non-resident enterprise shareholders (including our ADS holders) may be subject to PRC tax at a rate of 10% on gains realized on the sale or other disposition of the ADSs or ordinary shares, if such income is treated as sourced from within the PRC.
In addition, non-resident enterprise shareholders (including the ADS holders) may be subject to PRC tax at a rate of 10% on gains realized on the sale or other disposition of the ADSs or ordinary shares, if such income is treated as sourced from within the PRC.
There have also been concerns about the relationship between China and other countries, including the surrounding Asian countries, which may potentially have negative economic effects. In particular, there is significant uncertainty about the future relationship between the United States and China with respect to trade policies, treaties, government regulations and tariffs.
There have also been concerns about the relationship between China and other countries, including the surrounding Asian countries, which may potentially have economic effects. In particular, there is significant uncertainty about the future relationship between the United States and China with respect to trade policies, treaties, government regulations and tariffs.
In the event we are unable to enforce these contractual arrangements or we experience significant delays or other obstacles in the process of enforcing these contractual arrangements, we may not be able to exert effective control over our VIEs and may lose control over the assets owned by our VIEs.
In the event we are unable to enforce these contractual arrangements or we experience significant delays or other obstacles in the process of enforcing these contractual arrangements, we may not be able to exert effective control over the VIEs and may lose control over the assets owned by the VIEs.
Further, we are not likely to finance the activities of our consolidated affiliated entities by means of capital contributions due to regulatory restrictions relating to foreign investment in PRC domestic enterprises engaged in internet information services, online games, online audio-visual program services and related businesses. 45 Table of Contents SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-invested Enterprises, or SAFE Circular 19, effective June 2015, in replacement of the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises.
Further, we are not likely to finance the activities of our consolidated affiliated entities by means of capital contributions due to regulatory restrictions relating to foreign investment in PRC domestic enterprises engaged in internet information services, online games, online audio-visual program services and related businesses. 58 Table of Contents SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-invested Enterprises, or SAFE Circular 19, effective June 2015, in replacement of the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises.
We believe that our ability to compete effectively depends upon many factors, some of which are beyond our control, including: • the popularity, usefulness, ease of use, performance and reliability of our platform, products and services compared to those of our competitors; • the amount, quality and timeliness of content on our platform, especially the amount and quality of the PUGV generated by our content creators; • the environment and culture of our user communities; • our ability, and the ability of our competitors, to develop new products and services and enhancements to existing products and services to keep up with user preferences and demands; • the inventory size, quality and size of player base of the games we operate; • our ability to establish and maintain relationships with content providers and partners; • our ability to commercialize our services; • changes mandated by legislation, regulations or government policies, some of which may have a disproportionate effect on us; 16 Table of Contents • acquisitions or consolidation within our industry, which may result in more formidable competitors; and • our reputation and brand strength relative to our competitors.
We believe that our ability to compete effectively depends upon many factors, some of which are beyond our control, including: • the popularity, usefulness, ease of use, performance and reliability of our platform, products and services compared to those of our competitors; • the amount, quality and timeliness of content on our platform, especially the amount and quality of the PUGV generated by our content creators; • the environment and culture of our user communities; • our ability, and the ability of our competitors, to develop new products and services and enhancements to existing products and services to keep up with user preferences and demands; • the inventory size, quality and size of player base of the games we operate; • our ability to establish and maintain relationships with content providers and partners; • our ability to commercialize our services; • changes mandated by legislation, regulations or government policies, some of which may have a disproportionate effect on us; • acquisitions or consolidation within our industry, which may result in more formidable competitors; and • our reputation and brand strength relative to our competitors.
We must tailor our business model carefully, including designing and operating our databases to maintain user information for the minimum required period, in order to comply with the current PRC laws and regulations, including the foregoing notices, in a manner that in many cases can be expected to result in an adverse impact on our online game revenues. 39 Table of Contents Advertisements shown on our platform may subject us to penalties and other administrative actions.
We must tailor our business model carefully, including designing and operating our databases to maintain user information for the minimum required period, in order to comply with the current PRC laws and regulations, including the foregoing notices, in a manner that in many cases can be expected to result in an adverse impact on our online game revenues. 52 Table of Contents Advertisements shown on our platform may subject us to penalties and other administrative actions.
Due to PRC restrictions or prohibitions on foreign ownership of internet and other related businesses in China, we operate our business in China through our VIEs and their subsidiaries, in which we have no ownership interest.
Due to PRC restrictions or prohibitions on foreign ownership of internet and other related businesses in China, we operate our business in China through the VIEs and their subsidiaries, in which we have no ownership interest.
Our directors have discretion under our memorandum and articles of association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders.
Our directors have discretion under our articles of association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders.
In addition, our board of directors has the authority, without further action by our shareholders, to issue Preferred Shares in one or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our Class Z ordinary shares, in the form of ADS or otherwise.
In addition, our board of directors has the authority, without further action by our shareholders, to issue preferred shares in one or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our ordinary shares, in the form of ADS or otherwise.
Under the PRC Individual Income Tax Law and its implementation rules, dividends from sources within China paid to foreign individual investors who are not PRC residents are generally subject to a PRC withholding tax at a rate of 20% and gains from PRC sources realized by such investors on the transfer of ADSs or ordinary shares are generally subject to 20% PRC income tax, in each case, subject to any reduction or exemption set forth in applicable tax treaties and similar arrangements and PRC laws.
Under the PRC Individual Income Tax Law and its implementation rules, dividends from sources within China paid to foreign individual investors who are not PRC residents are generally subject to a PRC withholding tax at a rate of 20% and gains from PRC sources realized by such investors on the transfer of ADSs and/or Class Z ordinary shares are generally subject to 20% PRC income tax, in each case, subject to any reduction or exemption set forth in applicable tax treaties and similar arrangements and PRC laws.
If our board of directors decides to issue Preferred Shares, the price of our ADSs may fall and the voting and other rights of the holders of our Class Z ordinary shares and ADSs may be materially and adversely affected.
If our board of directors decides to issue preferred shares, the price of our Class Z ordinary shares and/or the ADSs may fall and the voting and other rights of the holders of our Class Z ordinary shares and ADSs may be materially and adversely affected.
We rely on contractual arrangements with our VIEs and their shareholders for our operations in China, which may not be as effective in providing operational control as direct ownership.
We rely on contractual arrangements with the VIEs and their shareholders for our operations in China, which may not be as effective in providing operational control as direct ownership.
As a result, our business could suffer and our user base and results of operations may be materially and adversely affected. 13 Table of Contents If we fail to obtain and maintain the licenses and approvals required within the complex regulatory environment applicable to our businesses in China, or if we are required to take compliance actions that are time-consuming or costly, our business, financial condition and results of operations may be materially and adversely affected.
As a result, our business could suffer and our user base and results of operations may be materially and adversely affected. 23 Table of Contents If we fail to obtain and maintain the licenses and approvals required within the complex regulatory environment applicable to our businesses in China, or if we are required to take compliance actions that are time-consuming or costly, our business, financial condition and results of operations may be materially and adversely affected.
We may experience losses in the future due to our continued investments in technology, talent, content, brand recognition, user base expansion and other initiatives. In addition, our ability to achieve and sustain profitability is affected by various factors, some of which are beyond our control, such as changes in macroeconomic and regulatory environment or competitive dynamics in the industry.
We may experience losses in the future due to our continued investments in technology, talent, content, brand recognition, expanding user base and other initiatives. In addition, our ability to achieve and sustain profitability is affected by various factors, some of which are beyond our control, such as changes in macroeconomic and regulatory environment or competitive dynamics in the industry.
This concentrated control will limit your ability to influence corporate matters and could discourage others from pursuing any potential merger, takeover or other change of control transactions that holders of Class Z ordinary shares and ADSs may view as beneficial. The dual-class structure of our ordinary shares may adversely affect the trading market for the ADSs.
This concentrated control will limit your ability to influence corporate matters and could discourage others from pursuing any potential merger, takeover or other change of control transactions that our shareholders may view as beneficial. The dual-class structure of our ordinary shares may adversely affect the trading market for the Class Z ordinary shares and/or ADSs.
If we are found in violation of any PRC laws or regulations or if the contractual arrangements among Hode Shanghai, our VIEs and their shareholders are determined as illegal or invalid by the PRC court, arbitral tribunal or regulatory authorities, the relevant governmental authorities would have broad discretion in dealing with such violation, including, without limitation: • revoking the business licenses and/or operating licenses of such entities; • imposing fines on us; • confiscating any of our income that they deem to be obtained through illegal operations; • discontinuing or placing restrictions or onerous conditions on our operations; • placing restrictions on our right to collect revenues; 32 Table of Contents • shutting down our servers or blocking our app/websites; • requiring us to restructure the operations in such a way as to compel us to establish a new enterprise, re-apply for the necessary licenses or relocate our businesses, staff and assets; • imposing additional conditions or requirements with which we may not be able to comply; or • taking other regulatory or enforcement actions against us that could be harmful to our business.
If we are found in violation of any PRC laws or regulations or if the contractual arrangements among our WFOEs, the VIEs and their shareholders are determined as illegal or invalid by the PRC court, arbitral tribunal or regulatory authorities, the relevant governmental authorities would have broad discretion in dealing with such violation, including, without limitation: • revoking the business licenses and/or operating licenses of such entities; • imposing fines on us; • confiscating any of our income that they deem to be obtained through illegal operations; • discontinuing or placing restrictions or onerous conditions on our operations; 41 Table of Contents • placing restrictions on our right to collect revenues; • shutting down our servers or blocking our app/websites; • requiring us to restructure the operations in such a way as to compel us to establish a new enterprise, re-apply for the necessary licenses or relocate our businesses, staff and assets; • imposing additional conditions or requirements with which we may not be able to comply; or • taking other regulatory or enforcement actions against us that could be harmful to our business.
See also “—Our shareholders may face difficulties in protecting their interests, and the ability to protect their rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law.” for risks associated with investing us as a Cayman Islands exempted company.
See also “—Our shareholders may face difficulties in protecting their interests, and the ability to protect their rights through U.S. and Hong Kong courts may be limited, because we are incorporated under Cayman Islands law.” for risks associated with investing us as a Cayman Islands exempted company.
Any such exclusion from indices could result in a less active trading market for our ADSs. Any actions or publications by shareholder advisory firms critical of our corporate governance practices or capital structure could also adversely affect the value of our ADSs. Techniques employed by short sellers may drive down the market price of our ADSs.
Any such exclusion from indices could result in a less active trading market for the ADSs. Any actions or publications by shareholder advisory firms critical of our corporate governance practices or capital structure could also adversely affect the value of the ADSs. Techniques employed by short sellers may drive down the market prices of the ADSs.
As a result, many of these companies are now conducting internal and external investigations into the allegations and, in the interim, are subject to shareholder lawsuits and/or SEC enforcement actions. 49 Table of Contents It is not clear what effect such negative publicity could have on us.
As a result, many of these companies are now conducting internal and external investigations into the allegations and, in the interim, are subject to shareholder lawsuits and/or SEC enforcement actions. 63 Table of Contents It is not clear what effect such negative publicity could have on us.
We rely on third-party logistics services for our product delivery when performing our e-commerce business, and if such third-party logistics services fail to provide reliable logistics services, our e-commerce business and reputation may be materially and adversely affected. We offer ACG-related merchandise on our platform, and generate revenues from sales of these products.
We rely on third-party logistics services for our product delivery when performing our e-commerce business, and if such third-party logistics services fail to provide reliable logistics services, our e-commerce business and reputation may be materially and adversely affected. We offer ACG-related and other types of merchandise on our platform, and generate revenues from sales of these products.
We rely on a series of contractual arrangements with our VIEs and their shareholders, including the powers of attorney, to control and operate business of our consolidated affiliated entities. These contractual arrangements are intended to provide us with effective control over our consolidated affiliated entities and allow us to obtain economic benefits from them. See “Item 4.
We rely on a series of contractual arrangements with the VIEs and their shareholders, as applicable, including the powers of attorney, to control and operate business of our consolidated affiliated entities. These contractual arrangements are intended to provide us with effective control over our consolidated affiliated entities and allow us to obtain economic benefits from them. See “Item 4.
Any significant depreciation of the RMB may materially adversely affect the value of, and any dividends payable on, our ADSs in U.S. dollars.
Any significant depreciation of the RMB may materially adversely affect the value of, and any dividends payable on, the ADSs in U.S. dollars.
As a result, it may be difficult or impossible for our shareholders to bring an action against us or against these individuals in the United States in the event that such shareholders believe that their rights have been infringed under the U.S. federal securities laws, or otherwise.
As a result, it may be difficult or impossible for our shareholders to bring an action against us or against these individuals in the United States in the event that such shareholders believe that their rights have been infringed under the U.S. federal securities laws, Hong Kong laws, or otherwise.
The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a less developed body of securities laws than the United States.
The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in Hong Kong and some jurisdictions in the United States. In particular, the Cayman Islands has a less developed body of securities laws than Hong Kong and the United States.
If we are unable to generate sufficient revenues that outpace our increased content costs, our business, financial condition and results of operations may be materially and adversely affected. 20 Table of Contents In addition, our live broadcasting services may be abused by hosts and other users.
If we are unable to generate sufficient revenues that outpace our increased content costs, our business, financial condition and results of operations may be materially and adversely affected. 28 Table of Contents In addition, our live broadcasting services may be abused by hosts and other users.
For more information, see “Item 4. Information on the Company—B. Business Overview—Regulation—Regulations Related to Online Transmission of Audio-Visual Programs.” and “Item 4. Information on the Company—B. Business Overview—Regulation—Regulations Related to Internet Information Security and Privacy Protection.” 37 Table of Contents We endeavor to eliminate illicit content from our platform.
For more information, see “Item 4. Information on the Company—B. Business Overview—Regulation—Regulations Related to Online Transmission of Audio-Visual Programs.” and “Item 4. Information on the Company—B. Business Overview—Regulation—Regulations Related to Internet Information Security and Privacy Protection.” 50 Table of Contents We endeavor to eliminate illicit content from our platform.
If government actions or sanctions are brought against us, or if there are widespread rumors that government actions or sanctions have been brought against us, our reputation could be harmed, we may lose users and other customers, our revenues and results of operation may be materially and adversely affected and the value of our ADSs could be dramatically reduced.
If government actions or sanctions are brought against us, or if there are widespread rumors that government actions or sanctions have been brought against us, our reputation could be harmed, we may lose users and other customers, our revenues and results of operation may be materially and adversely affected and the value of our securities could be dramatically reduced.
Our shareholders may face difficulties in protecting their interests, and the ability to protect their rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law. We are an exempted company limited by shares registered under the laws of the Cayman Islands.
Our shareholders may face difficulties in protecting their interests, and the ability to protect their rights through U.S. courts and Hong Kong courts may be limited, because we are incorporated under Cayman Islands law. We are an exempted company limited by shares registered under the laws of the Cayman Islands.
As we are no longer an “emerging growth company,” we expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the other rules and regulations of the SEC.
In particular, as we are no longer an “emerging growth company,” we expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the other rules and regulations of the SEC.
If we fail to comply with these regulations, we may be subject to sanctions including corrective orders, imposition of fines and confiscation of illegal gains. 42 Table of Contents It may be difficult for overseas regulators to conduct investigations or collect evidence within China.
If we fail to comply with these regulations, we may be subject to sanctions including corrective orders, imposition of fines and confiscation of illegal gains. 55 Table of Contents It may be difficult for overseas regulators to conduct investigations or collect evidence within China.
It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between Renminbi and the U.S. dollar in the future. 46 Table of Contents A substantial majority of our revenues and costs is denominated in RMB.
It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between Renminbi and the U.S. dollar in the future. 59 Table of Contents A substantial majority of our revenues and costs is denominated in RMB.
Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions.
Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanction.
In determining whether to enforce a contractual pre-dispute jury trial waiver provision, courts will generally consider whether a party knowingly, intelligently and voluntarily waived the right to a jury trial. We believe that this is the case with respect to the deposit agreement and the ADSs.
In determining whether to enforce a contractual pre-dispute jury trial waiver provision, courts will generally consider whether a party knowingly, intelligently and voluntarily waived the right to a jury trial. We believe that this is the case with respect to the deposit agreements and the ADSs.
In addition to market and industry factors, the price and trading volume for our listed securities may be highly volatile for factors specific to our own operations, including the following: • variations in our revenues, earnings, cash flow and data related to our user base or user engagement; 47 Table of Contents • announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors; • announcements of new product and service offerings, solutions and expansions by us or our competitors; • changes in financial estimates by securities analysts; • detrimental adverse publicity about us, our products and services or our industry; • additions or departures of key personnel; • releases at any time, in some cases without notice, of lock-up or other transfer restrictions on our outstanding ordinary shares, ADSs or other equity related securities; • sales of additional ADSs or other equity-related securities in the public markets, or issuance of ADSs upon conversion of convertible senior notes issued by us, or the perception of these events; and • actual or potential litigation or regulatory investigations.
In addition to market and industry factors, the prices and trading volumes for our listed securities may be highly volatile for factors specific to our own operations, including the following: 60 Table of Contents • variations in our revenues, earnings, cash flow and data related to our user base or user engagement; • announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors; • announcements of new product and service offerings, solutions and expansions by us or our competitors; • changes in financial estimates by securities analysts; • detrimental adverse publicity about us, our products and services or our industry; • additions or departures of key personnel; • releases at any time, in some cases without notice, of lock-up or other transfer restrictions on our outstanding ordinary shares, ADSs or other equity related securities; • sales of additional ADSs or other equity-related securities in the public markets, or issuance of ADSs upon conversion of convertible senior notes issued by us, or the perception of these events; and • actual or potential litigation or regulatory investigations.
Furthermore, in a consultation with the competent government authorities in February 2021, our PRC counsel, Tian Yuan Law Firm, was informed that operation of an online comics business currently does not require the Internet Publishing Service License.
Furthermore, in a consultation with the competent government authorities in February 2022, our PRC counsel, Tian Yuan Law Firm, was informed that operation of an online comics business currently does not require the Internet Publishing Service License.
Provisions of our convertible senior notes could discourage an acquisition of us by a third-party. Certain provisions of the 2026 Notes and the 2027 Notes could make it more difficult or more expensive for a third-party to acquire us, or may even prevent a third-party from acquiring us.
Provisions of our convertible senior notes could discourage an acquisition of us by a third-party. Certain provisions of the April 2026 Notes, the December 2026 Notes and the 2027 Notes could make it more difficult or more expensive for a third-party to acquire us, or may even prevent a third-party from acquiring us.
For example, upon the occurrence of certain transactions constituting a fundamental change, holders of the 2026 Notes and the 2027 Notes will have the right, at their option, to require us to repurchase all of their notes or any portion of the principal amount of such notes.
For example, upon the occurrence of certain transactions constituting a fundamental change, holders of the April 2026 Notes, the December 2026 Notes and the 2027 Notes will have the right, at their option, to require us to repurchase all of their notes or any portion of the principal amount of such notes.
If a lawsuit is brought against us and/or the depositary under the deposit agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have had, including results that could be less favorable to the plaintiff(s) in any such action.
If a lawsuit is brought against us and/or the depositary under the relevant deposit agreements, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have had, including results that could be less favorable to the plaintiff(s) in any such action.
If you or any other holders or beneficial owners of ADSs bring a claim against us or the depositary in connection with matters arising under the deposit agreement or the ADSs, including claims under U.S. federal securities laws, you or such other holder or beneficial owner may not be entitled to a jury trial with respect to such claims, which may have the effect of limiting and discouraging lawsuits against us and/or the depositary.
If any holders or beneficial owners of ADSs bring a claim against us or the depositary in connection with matters arising under the relevant deposit agreements or the ADSs, including claims under U.S. federal securities laws, you or such other holder or beneficial owner may not be entitled to a jury trial with respect to such claims, which may have the effect of limiting and discouraging lawsuits against us and/or the depositary.
If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our consolidated financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information.
If we fail to implement and maintain an effective internal control environment, we could suffer material misstatements in our consolidated financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information.
In 2009, State Taxation Administration of the PRC, or the STA, issued the Circular Regarding the Determination of Chinese-Controlled Offshore Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies which was most recently amended in December 2017, or the Circular 82, which provides certain specific criteria for determining whether the “de facto management body” of a PRC-controlled enterprise that is incorporated offshore is located in China.
In 2009, the STA issued the Circular Regarding the Determination of Chinese-Controlled Offshore Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies which was most recently amended in December 2017, or the Circular 82, which provides certain specific criteria for determining whether the “de facto management body” of a PRC-controlled enterprise that is incorporated offshore is located in China.
We are currently involved in approximately 110 lawsuits based on allegations of infringement of third-party copyright due to the content posted on our platform, which are immaterial to our company on an individual basis or a collective basis.
We are currently involved in approximately 210 lawsuits based on allegations of infringement of third-party copyright due to the content posted on our platform, which are immaterial to our company on an individual basis or a collective basis.
We rely on certain key operating metrics to evaluate the performance of our business, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business. We rely on certain key operating metrics, such as MAU and average monthly paying users, to evaluate the performance of our business.
We rely on certain key operating metrics to evaluate the performance of our business, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business. We rely on certain key operating metrics, such as MAUs and average monthly paying users, to evaluate the performance of our business.
Material impairment of intangible assets could negatively affect our financial condition and results of operations. 23 Table of Contents Any malfunction, capacity constraint or operation interruption for any extended period may have an adverse impact on our business. Our ability to provide superior user experience on our platform depends on the continuous and reliable operation of our IT systems.
Material impairment of intangible assets could negatively affect our financial condition and results of operations. Any malfunction, capacity constraint or operation interruption for any extended period may have an adverse impact on our business. Our ability to provide superior user experience on our platform depends on the continuous and reliable operation of our IT systems.
In addition, we may be subject to administrative actions brought by the National Copyright Administration of China or its local branches or related law enforcement departments for alleged copyright infringement. 18 Table of Contents The validity, enforceability and scope of protection of intellectual property rights in internet-related industries, particularly in China, are uncertain and still evolving.
In addition, we may be subject to administrative actions brought by the National Copyright Administration of China or its local branches or related law enforcement departments for alleged copyright infringement. The validity, enforceability and scope of protection of intellectual property rights in internet-related industries, particularly in China, are uncertain and still evolving.
No condition, stipulation or provision of the deposit agreement or ADSs serves as a waiver by any holder or beneficial owner of ADSs or by us or the depositary of compliance with the U.S. federal securities laws and the rules and regulations promulgated thereunder. Certain judgments obtained against us by our shareholders may not be enforceable.
No condition, stipulation or provision of the relevant deposit agreements or ADSs serves as a waiver by any holder or beneficial owner of ADSs or by us or the depositary of compliance with the U.S. federal securities laws and the rules and regulations promulgated thereunder. Certain judgments obtained against us by our shareholders may not be enforceable.
As a result, our investors may not be provided with the benefits of certain corporate governance requirements of Nasdaq. 53 Table of Contents We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to U.S. domestic public companies.
As a result, our investors may not be provided with the benefits of certain corporate governance requirements of Nasdaq. We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to U.S. domestic public companies.
If our strategic initiatives do not enhance our ability to monetize or enable us to develop new commercialization approaches, we may not be able to maintain or increase our revenues or recover any associated costs.
If our strategic initiatives do not enhance our ability to commercialize or enable us to develop new commercialization approaches, we may not be able to maintain or increase our revenues or recover any associated costs.
Further, if we are a PFIC for any year during which a U.S. Holder holds our ADSs, we will generally continue to be treated as a PFIC for all succeeding years during which such U.S.
Further, if we are a PFIC for any year during which a U.S. Holder holds the ADSs, we will generally continue to be treated as a PFIC for all succeeding years during which such U.S. Holder holds the ADSs.
An unfavorable outcome in any of these matters could exceed the limited coverage provided under our current applicable insurance policies. Our failure to identify unauthorized videos posted on our platform may subject us to claims of infringement of third-party intellectual property rights or other rights.
An unfavorable outcome in any of these matters could exceed the limited coverage provided under our current applicable insurance policies. 26 Table of Contents Our failure to identify unauthorized videos posted on our platform may subject us to claims of infringement of third-party intellectual property rights or other rights.
These rates may be reduced by an applicable tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise, but it is unclear whether our non-PRC shareholders would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise.
These rates may be reduced by applicable tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise, but it is unclear whether our non-PRC shareholders would be able to obtain the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise.
Specifically, under the existing exchange restrictions, without prior approval of SAFE, cash generated from the operations of our PRC subsidiaries in China may be used to pay dividends to our company.
Specifically, under the existing exchange restrictions, without prior approval of SAFE, cash generated from the operations of our PRC subsidiaries in China may be used to pay dividends to Bilibili.
Because we do not expect to pay dividends in the foreseeable future, investors must rely on price appreciation of our ADSs for return on their investments. We currently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our business.
Because we do not expect to pay dividends in the foreseeable future, investors must rely on price appreciation of our listed securities for return on their investments. We currently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our business.
Investors may not realize a return on their investment in our listed securities and may even lose their entire investment. 50 Table of Contents Our shareholders may be subject to PRC income tax on dividends from us or on any gain realized on the transfer of our Class Z ordinary shares and/or ADSs.
Investors may not realize a return on their investment in our listed securities and may even lose their entire investment. Our shareholders may be subject to PRC income tax on dividends from us or on any gain realized on the transfer of our Class Z ordinary shares and/or the ADSs.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeAs advised by our PRC counsel, Tian Yuan Law Firm, if the content of audiovisual programs transmitted by the internet audio-visual program service provider on the internet violate the PRC laws and regulations such as the Administrative Regulations on Internet Audio-Visual Program Service, the internet audio-visual program service provider shall be subject to punishment by the competent authority which may include warning, an order to rectify and a fine up to RMB30,000, if such circumstances are severe judged by the competent authority, it shall be subject to punishment which may include order to cease, a fine of RMB10,000 to RMB50,000 and revocation of license, if such violations constitute crime, criminal investigations or penalties may be imposed; if such content violate the Provisional Measures on Administration of Internet Culture, operating internet culture entities shall subject to punishment which may include an order to rectify, confiscation of illegal proceeds and a fine of RMB10,000 to RMB30,000, if such circumstances are severe judged by the competent authority, it shall be subject to punishment which may include order to cease and revocation of license, if such violations constitute crime, criminal investigations or penalties may be imposed.
Biggest changeIf the content of audio-visual programs transmitted by the internet audio-visual program service provider on the internet violated Internet Culture Provisions, operating internet culture entities shall subject to punishment which may include an order to rectify, confiscation of illegal proceeds and a fine of RMB10,000 to RMB30,000, if such circumstances are severe judged by the competent authority, it shall be subject to punishment which may include order to cease and revocation of license, if such violations constitute crime, criminal investigations or penalties may be imposed.
In addition, pursuant to the exclusive business cooperation agreement, without the prior written approval from Hode Shanghai, Shanghai Kuanyu shall not, and/or shall procure the other consolidated affiliated entities not to, enter into any transactions (save as those transactions entered into in the ordinary course of business) that may materially affect its assets, obligations, rights or operation, including but not limited to: 1. the sale, transfer, mortgage or otherwise dispose of any assets (except for those of value less than RMB 1 million in the ordinary course of business of the consolidated affiliated entities), business, management right or beneficial interest of income or create any security interest on any assets, including but not limited to any mortgage, pledge, share options or other guarantee arrangements; 2. the provision of any guarantee or any fees to third parties or the occurrence of any indebtedness (except for those reasonable costs incurred in the ordinary course of business); 3. the entering into of any material contracts (except for those where contract amount is less than RMB1 million and those which are entered into within the ordinary course of business of the consolidated affiliated entities between Shanghai Kuanyu and Hode Shanghai and its related parties); 4. any merger, acquisition, restructuring or liquidation; and 5. cause any conflict of interest between Shanghai Kuanyu and Hode Shanghai as well as its shareholders.
In addition, pursuant to the exclusive business cooperation agreement, without the prior written approval from Hode Shanghai, Shanghai Kuanyu shall not, and/or shall procure the other consolidated affiliated entities not to, enter into any transactions (save as those transactions entered into in the ordinary course of business) that may materially affect its assets, obligations, rights or operation, including but not limited to: 1. the sale, transfer, mortgage or otherwise dispose of any assets (except for those of value less than RMB1 million in the ordinary course of business of the consolidated affiliated entities), business, management right or beneficial interest of income or create any security interest on any assets, including but not limited to any mortgage, pledge, share options or other guarantee arrangements; 2. the provision of any guarantee or any fees to third parties or the occurrence of any indebtedness (except for those reasonable costs incurred in the ordinary course of business); 3. the entering into of any material contracts (except for those where contract amount is less than RMB1 million and those which are entered into within the ordinary course of business of the consolidated affiliated entities between Shanghai Kuanyu and Hode Shanghai and its related parties); 4. any merger, acquisition, restructuring or liquidation; and 5. cause any conflict of interest between Shanghai Kuanyu and Hode Shanghai as well as its shareholders.
According to the Notice of the MOF, the STA and the General Administration of Customs on Relevant Policies for Deepening Value Added Tax Reform, issued on March 20, 2019, and became effective on April 1, 2019, the value added tax rate was reduced to 13% and 9%, respectively. 83 Table of Contents Regulations Related to Foreign Exchange Control The principal regulations governing foreign currency exchange in China are the Regulation on the Foreign Exchange Control of PRC, promulgated by the State Council on January 29, 1996, came into effect on April 1, 1996, and last amended on August 5, 2008, and the Regulations on the Administration of Foreign Exchange Settlement, Sale and Payment, promulgated by the People’s Bank of China in June 1996 and came into effect on July 1, 1996, according to which, Renminbi for current account items is freely convertible, including the distribution of dividends, interest payments, trade and service-related foreign exchange transactions, but not for capital account items, such as direct investments, loans and investments in securities outside of the PRC, unless the prior approval or record-filing of the SAFE or its local counterpart is obtained.
According to the Notice of the MOF, the STA and the General Administration of Customs on Relevant Policies for Deepening Value Added Tax Reform, issued on March 20, 2019, and became effective on April 1, 2019, the value added tax rate was reduced to 13% and 9%, respectively. 105 Table of Contents Regulations Related to Foreign Exchange Control The principal regulations governing foreign currency exchange in China are the Regulation on the Foreign Exchange Control of PRC, promulgated by the State Council on January 29, 1996, came into effect on April 1, 1996, and last amended on August 5, 2008, and the Regulations on the Administration of Foreign Exchange Settlement, Sale and Payment, promulgated by the People’s Bank of China in June 1996 and came into effect on July 1, 1996, according to which, Renminbi for current account items is freely convertible, including the distribution of dividends, interest payments, trade and service-related foreign exchange transactions, but not for capital account items, such as direct investments, loans and investments in securities outside of the PRC, unless the prior approval or record-filing of the SAFE or its local counterpart is obtained.
Regulations Related to Anti-Unfair Competition According to the Anti-Unfair Competition Law of the PRC, or the Anti-Unfair Competition Law, which was adopted by the SCNPC on September 2, 1993, became effective as of December 1, 1993, and last amended on April 23, 2019, unfair competition refers to that the operator disrupts the market competition order and damages the legitimate rights and interests of other operators or consumers in violation of the provisions of the Anti-unfair Competition Law in the production and operating activities.
Regulations Related to Anti-Unfair Competition and Anti-Monopoly According to the Anti-Unfair Competition Law of the PRC, or the Anti-Unfair Competition Law, which was adopted by the SCNPC on September 2, 1993, became effective as of December 1, 1993, and last amended on April 23, 2019, unfair competition refers to that the operator disrupts the market competition order and damages the legitimate rights and interests of other operators or consumers in violation of the provisions of the Anti-unfair Competition Law in the production and operating activities.
The Internet Advertisement Measures, which were promulgated by the State Administration for Industry and Commerce of the PRC, or the SAIC, currently known as the SAMR, on July 4, 2016, and became effective on September 1, 2016, regulate any advertisement published on the Internet, including but not limited to, those on websites, webpage and apps, those in the forms of word, picture, audio, video and others.
The Interim Measures for Administration of Internet Advertisement, which were promulgated by the State Administration for Industry and Commerce of the PRC, or the SAIC, currently known as the SAMR, on July 4, 2016, and became effective on September 1, 2016, regulate any advertisement published on the Internet, including but not limited to, those on websites, webpage and apps, those in the forms of word, picture, audio, video and others.
We do identify certain talent and content creators that create popular content and represents our values and beliefs and execute customized contracts with them. We also cooperate with talent agencies which recruit, manage, train, support and promote hosts and content creators. Customized host contracts are negotiated on a case-by-case basis and generally contain revenue sharing arrangements and exclusivity clauses.
We identify certain talent and content creators that create popular content and represents our values and beliefs and execute customized contracts with them. We also cooperate with talent agencies which recruit, manage, train, support and promote hosts and content creators. Customized host contracts are negotiated on a case-by-case basis and generally contain revenue sharing arrangements and exclusivity clauses.
The National Security Law provides that the state shall safeguard the sovereignty, national security and cyber security and development interests of the state, and that the state shall establish a national security review and supervision system to review, among other things, foreign investment, key technologies, internet and information technology products and services and other important activities that are likely to impact the national security of China. 78 Table of Contents On June 28, 2016, the CAC promulgated the Administrative Provisions on Mobile Internet Applications Information Services, which became effective on August 1, 2016, providing that mobile Internet application providers are prohibited from engaging in any activity that may endanger national security, disturb social order or infringe the legal rights of third parties, and may not produce, copy, release or disseminate through mobile Internet applications any content prohibited by laws and regulations.
The National Security Law provides that the state shall safeguard the sovereignty, national security and cyber security and development interests of the state, and that the state shall establish a national security review and supervision system to review, among other things, foreign investment, key technologies, internet and information technology products and services and other important activities that are likely to impact the national security of China. 97 Table of Contents On June 28, 2016, the CAC promulgated the Administrative Provisions on Mobile Internet Applications Information Services, which became effective on August 1, 2016, providing that mobile Internet application providers are prohibited from engaging in any activity that may endanger national security, disturb social order or infringe the legal rights of third parties, and may not produce, copy, release or disseminate through mobile Internet applications any content prohibited by laws and regulations.
Risk Factors—Risks Related to Our Corporate Structure—We rely on contractual arrangements with our VIEs and their shareholders for our operations in China, which may not be as effective in providing operational control as direct ownership.”; “Item 3. Key Information—D.
Risk Factors—Risks Related to Our Corporate Structure—We rely on contractual arrangements with the VIEs and their shareholders for our operations in China, which may not be as effective in providing operational control as direct ownership.”; “Item 3. Key Information—D.
In addition, our sticky user community with strong preference for ACG-related content enables us to obtain exclusive distribution rights of various popular, high-quality mobile games in China from leading global and domestic game developers, particularly with regards to ACG-themed mobile games.
In addition, our sticky user community with strong preference for ACG-related content enables us to obtain exclusive distribution rights of various popular, high-quality mobile games from leading global and domestic game developers, particularly with regards to ACG-themed mobile games.
These two systems include, among others, following measures: (i) the real-name registration system requires users to register with valid identity information and the users without real-name authentication will not be able to log into the game after 1 hour’s trial playing in visitor experience mode for 15 days; (ii) the users are not allowed to top up or purchase game virtual items in visitor experience mode; (iii) the accumulated time of minors playing game each day is monitored, calculated and limited to less than three hours per day on PRC statutory holidays and 1.5 hours per day during other times, and upon exceeding such time limit, a notification will pop up and the player will be forced to log out; (iv) minors are not able to log into the game between 10:00 p.m. and 8:00 a.m.; and (v) consumption limits for minors have been implemented as required by the relevant regulatory guidance.
These two systems include, among others, following measures: (i) the real-name registration system requires users to register with valid identity information and the users without real-name authentication will not be able to log into the game after 1 hour’s trial playing in visitor experience mode for 15 days; 93 Table of Contents (ii) the users are not allowed to top up or purchase game virtual items in visitor experience mode; (iii) the accumulated time of minors playing game each day is monitored, calculated and limited to less than three hours per day on PRC statutory holidays and 1.5 hours per day during other times, and upon exceeding such time limit, a notification will pop up and the player will be forced to log out; (iv) minors are not able to log into the game between 10:00 p.m. and 8:00 a.m.; and (v) consumption limits for minors have been implemented as required by the relevant regulatory guidance.
The Decision Regarding the Safeguarding of Internet Security, enacted by the SCNPC on December 28, 2000, and amended with immediate effect on August 27, 2009, makes it unlawful to, including but not limited to: (i) gain improper entry into a computer information system of national affairs, national defense or cutting-edge science and technology; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information; or (v) infringe intellectual property rights.
The Decision Regarding the Safeguarding of Internet Security, enacted by the SCNPC on December 28, 2000, and amended with immediate effect on August 27, 2009, makes it unlawful to, including but not limited to: (i) gain improper entry into a computer information system of national affairs, national defence or cutting-edge science and technology; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information; or (v) infringe intellectual property rights.
In addition, foreign investments in the internet cultural business (except for music), the internet audio-visual program business, the radio and television program production and operation business, the production of audiovisual products and/or electronic publications and film production and distribution business are prohibited.
In addition, foreign investments in the internet cultural business (except for music), the internet audio-visual program business, the radio and television program production and operation business, the production of audio-visual products and/or electronic publications and film production and distribution business are prohibited.
The SARFT issued the Notice on Further Strengthening the Administration of Online Audio-Visual Content Including Internet Drama and Micro Films on July 6, 2012, pursuant to which, internet audio-visual programs service institutions shall report the information on self-examined and approved internet series, micro films, internet movies, film and television animation, documentaries and other internet audio-visual programs to the provincial authority of film and television administration for record-filing, such information includes but not limited to the program’s title, content summary and the information of the reviewer.
The SARFT and the CAC jointly issued the Notice on Further Strengthening the Administration of Online Audio-Visual Content Including Internet Drama and Micro Films on July 6, 2012, pursuant to which, internet audio-visual programs service institutions shall report the information on self-examined and approved internet series, micro films, internet movies, film and television animation, documentaries and other internet audio-visual programs to the provincial authority of film and television administration for record-filing, such information includes but not limited to the program’s title, content summary and the information of the reviewer.
On October 23, 2019, the SAFE released the Circular on Further Promoting Cross-border Trade and Investment Facilitation, or the Circular 28, according to which besides foreign-invested enterprises engaged in investment business, non-investment foreign-invested enterprises are also permitted to make domestic equity investments with their capital funds in foreign currency provided that such investments do not violate the Negative List (2020) and the target investment projects are genuine and in compliance with laws.
On October 23, 2019, the SAFE released the Circular on Further Promoting Cross-border Trade and Investment Facilitation, or the Circular 28, according to which besides foreign-invested enterprises engaged in investment business, non-investment foreign-invested enterprises are also permitted to make domestic equity investments with their capital funds in foreign currency provided that such investments do not violate the Negative List (2021) and the target investment projects are genuine and in compliance with laws.
In October 2018, Tencent, our principal shareholder, further invested in our company, and we entered into a strategic collaboration agreement with Tencent for sharing and operating existing and additional anime and games on Bilibili’s online platform, pursuant to which we and Tencent will participate in the exchange and purchase of existing anime copyright, and jointly procure, produce and invest in anime projects, as well as seek investment opportunities in the anime and comic industry.
In October 2018, Tencent, our principal shareholder, further invested in our company, and we entered into a strategic collaboration agreement with Tencent for sharing and operating existing and additional anime and games on Bilibili’s online platform, pursuant to which we and Tencent shall participate in the exchange and purchase of existing anime copyright, and jointly procure, produce and invest in anime projects, as well as seek investment opportunities in the anime and comic industry.
Risk Factors—Risks Related to Doing Business in China—If we fail to obtain and maintain the licenses and approvals required within the complex regulatory environment applicable to our businesses in China, or if we are required to take compliance actions that are time-consuming or costly, our business, financial condition and results of operations may be materially and adversely affected.” D.
Risk Factors—Risks Related to Our Business and Industry—If we fail to obtain and maintain the licenses and approvals required within the complex regulatory environment applicable to our businesses in China, or if we are required to take compliance actions that are time-consuming or costly, our business, financial condition and results of operations may be materially and adversely affected.” D.
Organizational Structure The following chart illustrates our company’s organizational structure, including our principal subsidiaries and consolidated affiliated entities as of the date of this annual report: Notes: (1) Mr. Rui Chen holds 100% equity interests in Shanghai Kuanyu. He is also the chairman of our board of directors and our chief executive officer. (2) Shanghai Kuanyu has 4 subsidiaries.
Organizational Structure The following chart illustrates our company’s organizational structure, including our principal subsidiaries and consolidated affiliated entities as of the date of this annual report: Notes: (1) Mr. Rui Chen holds 100% equity interests in Shanghai Kuanyu. He is also the chairman of our board of directors and our chief executive officer. (2) Shanghai Kuanyu has four subsidiaries.
To further explore opportunities in this business sector, we entered into a strategic collaboration agreement with Tencent in October 2018, pursuant to which we would jointly operate more Tencent games on our platform. In 2020, we entered into business collaboration with Sony to bring more high-quality anime content and mobile games to our users.
To further explore opportunities in this business sector, we entered into a strategic collaboration agreement with Tencent in October 2018, pursuant to which we would jointly operate more Tencent games on our platform. We have entered into business collaboration with Sony to bring more high-quality anime content and mobile games to our users.
Advertisers are also seeking out innovative platforms with abundant user traffic to enhance their visibility. We believe our rapidly growing community and increasing brand awareness makes Bilibili a preferred platform for advertisers. We offer various advertising formats including brand advertising, performance-based advertising and native advertising.
Advertisers are also seeking out innovative platforms with high user traffic to enhance their visibility. We believe our rapidly growing community and increasing brand awareness makes Bilibili a preferred platform for advertisers. We offer various advertising formats including brand advertising, performance-based advertising and native advertising.
Users’ interactions on our platform revolve around content, and the social and interactive features of our platform allow users who share similar interests and hobbies to find, engage with and bond with each other to establish a common bond. We provide the following social and interactive features for our users. Bullet chatting.
Users’ interactions on our platform revolve around content, and the social and interactive features of our platform allow users who share similar interests and hobbies to find, engage with and bond with each other to establish a common bond. We provide the following social and interactive features for our users.
This measure also allows users to participate in the management of our communities and helps us educate users and foster a self-regulating environment to protect and strengthen the community values that we hold dear. See “—Content Management and Review.” Community events.
This measure also allows users to participate in the management of our communities and helps us educate users and foster a self-regulating environment to preserve and strengthen the community values that we hold dear. See “—Content Management and Review.” Community events.
The Implementation Rules also set forth that foreign investors that invest in sectors on the Negative List (2020) in which foreign investment is restricted shall comply with special management measures with respect to, among others, shareholding and senior management personnel qualification in the Negative List (2020).
The Implementation Rules also set forth that foreign investors that invest in sectors on the Negative List (2021) in which foreign investment is restricted shall comply with special management measures with respect to, among others, shareholding and senior management personnel qualification in the Negative List (2021).
The Provisions on Technological Measures for Internet Security Protection, promulgated by the Ministry of Public Security on December 13, 2005, and became effective on March 1, 2006, require internet service providers to keep records of certain information about their users (including but not limited to user registration information, log-in and log-out times, IP addresses, content and time of posts by users) for at least 60 days.
The Provisions on Technological Measures for Internet Security Protection, promulgated by the MPS on December 13, 2005, and became effective on March 1, 2006, require internet service providers to keep records of certain information about their users (including but not limited to user registration information, log-in and log-out times, IP addresses, content and time of posts by users) for at least 60 days.
However, this notice has been abolished by the MCT as of August 19, 2019. Anti-addiction System and Protection of Minors In March 2007, the GAPP and several other government agencies issued a circular requiring the implementation of an anti-fatigue system and a real-name registration system by all PRC online game operators to curb addictive online game playing by minors.
However, this notice has been abolished by the MCT as of August 19, 2019. 92 Table of Contents Anti-addiction System and Protection of Minors In March 2007, the GAPP and several other government agencies issued a circular requiring the implementation of an anti-fatigue system and a real-name registration system by all PRC online game operators to curb addictive online game playing by minors.
Game is the second most popular category of our PUGV and the most popular category of our live broadcasting content in 2020. We view mobile games as an adaptive form of video-based content that share many commonalities.
Game is the second most popular category of our PUGV and the most popular category of our live broadcasting content in 2021. We view mobile games as an adaptive form of video-based content that share many commonalities.
The Administrative Measures for the Security Protection of International Connections to Computer Information Network, issued by the Ministry of Public Security on December 30, 1997, and amended on January 8, 2011, prohibits the use of the internet in ways that, among other things, result in a leakage of state secrets or the distribution of socially destabilizing content.
The Administrative Measures for the Security Protection of International Connections to Computer Information Network, issued by the MPS on December 30, 1997, and amended on January 8, 2011, prohibits the use of the internet in ways that, among other things, result in a leakage of state secrets or the distribution of socially destabilizing content.
With a growing number of content creators and the effective incentive mechanisms we provide to the content creators, we receive increasingly diverse and innovative content submissions, which we believe contribute to our mass market appeal. Our most popular PUGV categories were lifestyle, game, entertainment, anime and technology and knowledge in terms of number of video views in 2020.
With a growing number of content creators and the effective incentive mechanisms we provide to the content creators, we receive increasingly diverse and innovative content submissions, which we believe contribute to our mass market appeal. Our most popular PUGV categories were lifestyle, game, entertainment, anime and knowledge in terms of number of video views in 2021.
As the native advertisements are usually cohesive with the content of our platform, assimilated into the design and consistent with the form of content presentation on our platform, our users tend to view them as regular video content. In addition, we offer integrated marketing campaigns to provide a one-stop marketing solution for our advertisers.
As the native advertisements are usually cohesive with the content of our platform, assimilated into the design and consistent with the form of content presentation on our platform, our users tend to view them as regular video content. 80 Table of Contents In addition, we offer integrated marketing campaigns to provide a one-stop marketing solution for our advertisers.
On June 22, 2007, the Administrative Measures for the Graded Protection of Information Security was issued by the Ministry of Public Security and several other governmental agencies, according to which, the State shall, by developing nationally effective good practice and technical standards for the graded protection of information security, and organize citizens, legal persons and other organizations to carry out graded security protection of information system.
On June 22, 2007, the Administrative Measures for the Graded Protection of Information Security was issued by the MPS and several other governmental agencies, according to which, the State shall, by developing nationally effective good practice and technical standards for the graded protection of information security, and organize citizens, legal persons and other organizations to carry out graded security protection of information system.
The SAFE and its branches shall implement indirect supervision over foreign exchange registration of direct investment via the banks. Regulations Related to Dividend Distributions The principal laws and regulations regulating the dividend distribution of dividends by foreign-invested enterprises in China include the PRC Company Law last amended in 2018 and the Foreign Investment Law.
The SAFE and its branches shall implement indirect supervision over foreign exchange registration of direct investment via the banks. 106 Table of Contents Regulations Related to Dividend Distributions The principal laws and regulations regulating the dividend distribution of dividends by foreign-invested enterprises in China include the PRC Company Law last amended in 2018 and the Foreign Investment Law.
Except as disclosed above, we do not have other material transactions, agreements or understanding with our content creators or live broadcasting hosts, other than in their capacity as our content creators or live broadcasting hosts. 60 Table of Contents Our Community The vitality and integrity of our communities are cornerstones of our business and a priority of our business development strategy.
Except as disclosed above, we do not have other material transactions, agreements or understanding with our content creators or live broadcasting hosts, other than in their capacity as our content creators or live broadcasting hosts. Our Community The vitality and integrity of our communities are cornerstones of our business and a priority of our business development strategy.
Under our agreements for exclusively distributed mobile games, we are typically responsible for the launch of the games, hosting and maintenance of game servers, determination of when and how to operate in-game promotions and customer services and the pricing of in-game virtual items and making a localized version for overseas licensed games.
Under our agreements for exclusively distributed mobile games, we are typically responsible for the launch of the games, hosting and maintenance of game servers, determination of when and how to operate in-game promotions and customer services and the pricing of in-game virtual items, and making localized versions for overseas licensed games.
For mobile devices, users typically access our content through our dedicated “Bilibili” mobile apps, or a mobile website that is largely similar in terms of functionality and appearance to our mobile apps. Our mobile apps are available for user download from the Apple and Android app stores.
For mobile devices, users typically access our content through our Bilibili mobile apps, or a mobile website that is largely similar in terms of functionality and appearance to our mobile apps. Our mobile apps are available for user download from the Apple and Android app stores.
As we attract a growing number of hosts and talent agencies to hold live broadcasting on our platform, and encourage more content creators to become hosts, the revenue generated from sales of virtual items increases. 63 Table of Contents We share revenues from the sales of virtual items generated on our live broadcasting with our hosts and talent agencies.
As we attract a growing number of hosts and talent agencies to hold live broadcasting on our platform, and encourage more content creators to become hosts, the revenue generated from sales of virtual items increases. We share revenues from the sales of virtual items generated on our live broadcasting with our hosts and talent agencies.
Copyright The Copyright Law of the PRC, or the Copyright Law, which was promulgated by the SCNPC on September 7, 1990, last amended on February 26, 2010, became effective as of April 1, 2010, further amended on November 11, 2020, and will take effect on June 1, 2021.
Copyright The Copyright Law of the PRC, or the Copyright Law, which was promulgated by the SCNPC on September 7, 1990, last amended on February 26, 2010, became effective as of April 1, 2010, further amended on November 11, 2020, and took effect on June 1, 2021.
The M&A Rules, among other things, further purport to require that an offshore special purpose vehicle, formed for listing purposes and controlled directly or indirectly by PRC companies or individuals, shall obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle acquires shares of or equity interests in the PRC companies in exchange for the shares of offshore companies. 85 Table of Contents C.
The M&A Rules, among other things, further purport to require that an offshore special purpose vehicle, formed for listing purposes and controlled directly or indirectly by PRC companies or individuals, shall obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle acquires shares of or equity interests in the PRC companies in exchange for the shares of offshore companies.
Further, in addition to responding to user complaints, our monitoring team frequently visit different live broadcasting rooms to ensure the appropriateness of the content. 66 Table of Contents We utilize a real-name system to authenticate the identities of our content creators and live broadcasting hosts.
Further, in addition to responding to user complaints, our monitoring team frequently visit different live broadcasting rooms to ensure the appropriateness of the content. We utilize a real-name system to authenticate the identities of our content creators and live broadcasting hosts.
The Online Games Notice further provides that virtual currency must only be used to purchase virtual items and prohibits any resale of virtual currency. 74 Table of Contents On June 4, 2009, the MOC and the MOFCOM jointly issued the Notice on Strengthening Administration of Virtual Currency of Online Games, or the Virtual Currency Notice.
The Online Games Notice further provides that virtual currency must only be used to purchase virtual items and prohibits any resale of virtual currency. On June 4, 2009, the MOC and the MOFCOM jointly issued the Notice on Strengthening Administration of Virtual Currency of Online Games, or the Virtual Currency Notice.
Regulations Related to Foreign Investment in the PRC Foreign Investment Industrial Policy Investments activities in China by foreign investors are principally governed by the Catalogue for the Encouragement of Foreign Investment Industries (2020 Edition), or the Catalogue, and the Negative List (2020), which were both promulgated by the MOFCOM and the NDRC and each became effective on January 27, 2021, and July 23, 2020.
Regulations Related to Foreign Investment in the PRC Foreign Investment Industrial Policy Investments activities in China by foreign investors are principally governed by the Catalogue for the Encouragement of Foreign Investment Industries (2020 Edition), or the Catalogue, and the Negative List (2021), which were both promulgated by the MOFCOM and the NDRC and each became effective on January 27, 2021 and January 1, 2022.
This notice indicates that the National Citizen Identity Information Center of the Ministry of Public Security will verify identity information of game players submitted by online game operators. The Real-name Registration Notice also imposes stringent penalties on online game operators that do not implement the required anti-fatigue and real-name registration systems properly and effectively, including terminating their online game operations.
This notice indicates that the National Citizen Identity Information Center of the MPS will verify identity information of game players submitted by online game operators. The Real-name Registration Notice also imposes stringent penalties on online game operators that do not implement the required anti-fatigue and real-name registration systems properly and effectively, including terminating their online game operations.
These contractual arrangements enable us to (i) exercise effective control over our principal VIEs; (ii) receive substantially all of the economic benefits of our principal VIEs; and (iii) have an exclusive option to purchase all or part of the equity interests in and assets of them when and to the extent permitted by PRC law. 86 Table of Contents Agreements that provide us effective control over our principal VIEs Powers of Attorney Mr.
These contractual arrangements enable us to (i) exercise effective control over the relevant VIEs; (ii) receive substantially all of the economic benefits of the relevant VIEs; and (iii) have an exclusive option to purchase all or part of the equity interests in and assets of them when and to the extent permitted by PRC law. 109 Table of Contents Agreements that provide us effective control over the relevant VIEs Powers of Attorney Mr.
Rui Chen has also undertaken that, subject to the relevant PRC laws and regulations, he will return to Hode Shanghai any consideration he receives in the event that Hode Shanghai exercises the options under the exclusive option agreement to acquire the equity interests and/or assets in Shanghai Kuanyu. 89 Table of Contents Pursuant to the exclusive option agreement, Mr.
Rui Chen has also undertaken that, subject to the relevant PRC laws and regulations, he will return to Hode Shanghai any consideration he receives in the event that Hode Shanghai exercises the options under the exclusive option agreement to acquire the equity interests and/or assets in Shanghai Kuanyu. Pursuant to the exclusive option agreement, Mr.
On January 6, 2017, the SAIC issued the Interim Measures for No Reason Return of Online Purchased Commodities within Seven Days, which came into effect on March 15, 2017, further clarifying the scope of consumers’ rights to make returns without a reason, including exceptions, return procedures and online marketplace platform providers’ responsibility to formulate seven-day no-reason return rules and related consumer protection systems, and supervise the merchants for compliance with these rules.
On January 6, 2017, the SAIC issued the Interim Measures for No Reason Return of Online Purchased Commodities within Seven Days, which came into effect on March 15, 2017 and was last amended on October 23, 2020, further clarifying the scope of consumers’ rights to make returns without a reason, including exceptions, return procedures and online marketplace platform providers’ responsibility to formulate seven-day no-reason return rules and related consumer protection systems, and supervise the merchants for compliance with these rules.
Our commercialization efforts are based on the integrated goals of offering quality content catering to user preference to attract users, building vibrant communities to retain users, and stimulating content consumption to achieve commercialization. We generate revenues primarily from mobile games, VAS, advertising, e-commerce and others.
Our commercialization efforts are based on the integrated goals of offering quality content catering to user preference to attract users, building vibrant communities to retain users, and provide quality content and products to achieve commercialization. We generate revenues primarily from mobile games, VAS, advertising, e-commerce and others.
These notes bear interest at a rate of 1.25% per year, payable semiannually in arrears on June 15 and December 15 of each year, beginning on December 15, 2020, and will mature on June 15, 2027.
In June 2020, we issued the 2027 Notes. These notes bear interest at a rate of 1.25% per year, payable semiannually in arrears on June 15 and December 15 of each year, beginning on December 15, 2020, and will mature on June 15, 2027.
Shanghai Kuanyu shall not enter into any material contracts with an amount more than RMB1 million without Hode Shanghai’s prior written consent, except the contracts executed in the ordinary course of business or contracts entered between Shanghai Kuanyu and our Company (or any of our subsidiaries); 6.
Shanghai Kuanyu shall not enter into any material contracts with an amount more than RMB1 million without Hode Shanghai’s prior written consent, except the contracts executed in the ordinary course of business or contracts entered between Shanghai Kuanyu and Bilibili (or any of its subsidiaries); 6.
We also enable broad video-based content consumption scenarios centered around professional user generated videos, or PUGV, supplemented with live broadcasting, occupationally generated videos, or OGV, and more. We have become the welcoming home of diverse cultures and interests and the destination to discover cultural trends and phenomena of young generations in China. We adopt a user-centric commercialization model.
We also enable broad video-based content consumption scenarios centered around professional user generated videos, or PUGV, supplemented with live broadcasting, occupationally generated videos, or OGV, and more. We have become the welcoming home of diverse cultures and interests and the destination to discover cultural trends and phenomena of young generations in China.
Retaining and expanding our network of content creators who upload and contribute quality content to our platform is essential to us. We have taken a number of initiatives to encourage and facilitate production of creative PUGV by content creators, including various incentive mechanisms to unlock their commercialization potential.
Retaining and expanding our network of content creators who upload and contribute quality content to our platform is essential to us. We have taken a number of initiatives to encourage and facilitate production of creative PUGV by content creators, including various monetization opportunities to unlock their commercialization potential.
We started to publish mobile games on our platform for third-party developers in January 2014, and launched our first self-developed game in August 2017. 62 Table of Contents Our significant growth in net revenues initially around 2016 was primarily attributable to our mobile games operations.
We started to publish mobile games on our platform for third-party developers in January 2014, and launched our first self-developed game in August 2017. Our significant growth in net revenues initially around 2016 was primarily attributable to our mobile games operations.
Brand advertisements primarily appear on the app opening page, the top banner, the website home page banner and the inline video feed alongside organic feeds. Brand advertisements can also be customized according to advertisers’ need and appeared in Bilibili-produced OGV or events. Performance-based advertisements primarily appear as inline video feeds alongside with organic feeds.
Brand advertisements primarily appear on the app opening page, the top banner, the website home page banner and the inline video feed alongside organic feeds. Brand advertisements can also be customized according to advertisers’ need and appeared in Bilibili-produced OGV or events.
In September 2020, we entered into a strategic partnership with Riot Games, the developer of leading MOBA League of Legends, pursuant to which we were granted a three-year exclusive license for live broadcasting the League of Legends E-sports global events in China, including the world-renowned League of Legends World Championship, Mid-Season Invitational, and All-Star Event in China beginning in 2020 through the 2023 Mid-Season Invitational.
For example, in September 2020, we entered into a strategic partnership with Riot Games, the developer of leading MOBA League of Legends, pursuant to which we were granted a three-year exclusive license for live broadcasting the League of Legends E-sports global events in China, including the world-renowned League of Legends World Championship, Mid-Season Invitational, and All-Star Event in China beginning in 2020 through the 2023 Mid-Season Invitational. 2021 League of Legends World Championship S11 enjoyed great popularity.
We offer certain major interactive features on our platform exclusively to official members, as we believe the users who take and pass our membership exam are tuned to our community culture and values, hence contributing to our sticky user community.
We offer certain major interactive features on our platform exclusively to official members, as we believe the users who take and pass our membership exam are tuned to our community culture and values, hence contributing to our sticky user community with high retention rate.
In the fourth quarter of 2020, our average number of monthly paying users was 17.9 million, as compared to 8.8 million in the same period of 2019. Mobile games Games is the second most popular genre category of our PUGV based on video views in 2020. A substantial portion of our users are game lovers.
In the fourth quarter of 2021, our average number of monthly paying users was 24.5 million, as compared to 17.9 million in the same period of 2020. Mobile games Games is the second most popular genre category of our PUGV based on video views in 2021. A substantial portion of our users are game lovers.
On March 28, 2018, our ADSs commenced trading on the Nasdaq Global Select Market under the symbol “BILI.” We raised from our initial public offering approximately $443.3 million in net proceeds after deducting underwriting commissions and the offering expenses payable by us.
On March 28, 2018, the ADSs representing our Class Z ordinary shares commenced trading on the Nasdaq Global Select Market under the symbol “BILI.” We raised from our initial public offering approximately $443.3 million in net proceeds after deducting underwriting commissions and the offering expenses payable by us.
Shanghai Kuanyu shall sign all necessary and appropriate documents, take all necessary and proper acts, bring up all necessary and proper requests, or raise necessary and proper defenses against claims to maintain Shanghai Kuanyu and its affiliates’ ownership for all the assets; 12. if Mr.
Shanghai Kuanyu shall sign all necessary and appropriate documents, take all necessary and proper acts, bring up all necessary and proper requests, or raise necessary and proper defenses against claims to maintain Shanghai Kuanyu and its affiliates’ ownership for all the assets; 113 Table of Contents 12. if Mr.
We are dedicated to providing a wide variety of high-quality content to retain our existing users and attract new users with diverse interests and backgrounds. Our user base is growing rapidly. In the fourth quarter of 2020, we had an average of 202.0 million MAU, as compared to an average of 130.3 million MAU for the same period in 2019.
We are dedicated to providing a wide variety of high-quality content to retain our existing users and attract new users with diverse interests and backgrounds. Our user base is growing rapidly. In the fourth quarter of 2021, we had an average of 271.7 million MAU, as compared to an average of 202.0 million MAU for the same period in 2020.
Our users are attracted to our platform because of our creative content and become attached to our diverse, inclusive and vibrant community. To preserve our culture and community values, we have employed the following features in operating our communities. Membership exam.
Our users are attracted to our platform because of our creative content and retained by our diverse, inclusive and vibrant community. To preserve our culture and community values, we have employed the following features in operating our communities. Membership exam .
Our full-spectrum content ecosystem enables us to become a one-stop platform for users to find a wide variety of content that matches their interests, and for content creators to fully showcase their talent.
Our full-spectrum content ecosystem enables us to become a one-stop platform for users to find a wide variety of content that matches their interests and preferred video consumption scenarios, and for content creators to fully showcase their talent.
These branding and marketing efforts contribute and foster our market leadership as a go-to video community for young generations in China. In addition, our average MAU increased significantly from 87.0 million in 2018, to 117.5 million in 2019 and further to 185.8 million in 2020.
These branding and marketing efforts contribute and foster our market leadership as a go-to video community for young generations in China. In addition, our average MAU increased significantly from 117.5 million in 2019, to 185.8 million in 2020 and further to 249.8 million in 2021.
Regulations Related to The Internet Follow-Up Comment Services According to the Administrative Provisions on Internet Follow-up Comment Services, which was promulgated by the CAC on August 25, 2017, and became effective on October 1, 2017, an internet follow-up comment services provider shall strictly assume the primary responsibilities and the obligations, including but not limited to: (i) verify the real identity information of registered users; (ii) establish and improve a user information protection system; (iii) establish a system of reviewing at first and then publishing comments if they offer internet follow-up comment services to news information; (iv) furnish corresponding static information content on the same platform and page at the same time if they provide internet follow-up comment services by way of bullet chatting; (v) establish and improve an internet follow-up comment review and administration, real-time check, emergency response and other information security administration systems, timely identify and process illicit information and submit a report to the relevant competent authorities; (vi) develop internet follow-up comment information protection and administration technologies, innovate internet follow-up comment administration modes, research, develop and utilize an anti-spam administration system and improve the spam-handling capability; (vii) equip with content examination team corresponding with services; and (viii) coordinate with relevant supervising authorities for examination and provide necessary technology, information and data support.
Other than radio and TV stations, entities shall not produce radio and TV programs about the current political news or similar subjects and columns. 90 Table of Contents Regulations Related to The Internet Follow-Up Comment Services According to the Administrative Provisions on Internet Follow-up Comment Services, which was promulgated by the CAC on August 25, 2017, and became effective on October 1, 2017, an internet follow-up comment services provider shall strictly assume the primary responsibilities and the obligations, including but not limited to: (i) verify the real identity information of registered users; (ii) establish and improve a user information protection system; (iii) establish a system of reviewing at first and then publishing comments if they offer internet follow-up comment services to news information; (iv) furnish corresponding static information content on the same platform and page at the same time if they provide internet follow-up comment services by way of bullet chatting; (v) establish and improve an internet follow-up comment review and administration, real-time check, emergency response and other information security administration systems, timely identify and process illicit information and submit a report to the relevant competent authorities; (vi) develop internet follow-up comment information protection and administration technologies, innovate internet follow-up comment administration modes, research, develop and utilize an anti-spam administration system and improve the spam-handling capability; (vii) equip with content examination team corresponding with services; and (viii) coordinate with relevant supervising authorities for examination and provide necessary technology, information and data support.
As of the date of this annual report, some of our leased properties are subject to mortgage, and we have not registered any of our lease agreements with the relevant government authorities due to the lack of cooperation from our landlords in registering the relevant lease agreements.
Related Party Transactions—Other Related Party Transactions.” As of the date of this annual report, some of our leased properties are subject to mortgage, and we have not registered any of our lease agreements with the relevant government authorities due to the lack of cooperation from our landlords in registering the relevant lease agreements.
In January 2020, we hosted the Bilibili Top 100 Content Creators Award Ceremony to celebrate and award the outstanding achievements of leading content creators in various categories. We marked the end of the year with our second successful New Year’s Eve Gala, The Most Beautiful Night of 2020.
In January 2022, we hosted the Bilibili Top 100 Content Creators Award Ceremony to celebrate and award the outstanding achievements of leading content creators in various categories. We marked the end of the year with our New Year’s Eve Gala, The Most Beautiful Night of 2021.
Online game companies shall analyze the cause of minors’ addiction to games, and alter the content and features of games or game rules resulting in such addiction. 75 Table of Contents On October 17, 2020, the SCNPC revised and promulgated the Law of the PRC on the Protection of Minors (2020 Revision), which will take effect on June 1, 2021.
Online game companies shall analyze the cause of minors’ addiction to games, and alter the content and features of games or game rules resulting in such addiction. On October 17, 2020, the SCNPC revised and promulgated the Law of the PRC on the Protection of Minors (2020 Revision), which took effect on June 1, 2021.
The NAPP at the national level suspended approval of game registration and issuance of publication numbers for online games since March 2018 and resumed to issue game publication numbers by batches periodically since December 2018, according to certain news reports.
The NAPP at the national level suspended approval of game registration and issuance of publication numbers for online games since March 2018 and resumed to issue game publication numbers by batches periodically since December 2018, according to certain news reports. Beginning in December 2018, the NAPP at the national level started to approve new online games.
Since our inception in 2011, our PUGV experienced strong growth in terms of not only the number of active content creators, but also the number and varieties of videos uploaded. In 2020, we received an average of approximately 5.6 million monthly videos submissions, as compared to 2.6 million in 2019.
Since our inception, our PUGV experienced strong growth in terms of not only the number of active content creators, but also the number and varieties of videos uploaded. In 2021, we received an average of approximately 9.3 million monthly videos submissions, as compared to 5.6 million in 2020.
Bilibili moment enables users to express and share their interests and stories in multimedia content such as text, pictures and video. Content creators can utilize this feature to notify their followers when they upload new content on our platform. In addition, users can join fans group to interact with content creators.
Content creators can use moment, fans group, live broadcasting and interactive video to interact with their fans. Bilibili moment enables users to express and share their interests and stories in multimedia content such as text, pictures and video. Content creators can utilize this feature to notify their followers when they upload new content on our platform.
In January 2019, CNSA issued the Censoring Criteria for Network Short Video Content, which sets forth in details of the content prohibited to be broadcasted, such as violence, pornography, gambling, terrorism, superstitious and illegal or immoral content.
The Censoring Criteria for Network Short Video Content issued by CNSA in January 2019 and last amended in December 2021 sets forth in details of the content prohibited to be broadcasted, such as violence, pornography, gambling, terrorism, superstitious and illegal or immoral content.
For a detailed description, please see “Item 5. Operating and Financial Review and Prospects—Key Components of Results of Operations.” Our Users We have a young and culturally aspirational user base who are willing to invest in high-quality content and engaging user experience. Gen Z+ constitutes the core of our user base.
Operating and Financial Review and Prospects—Key Components of Results of Operations.” Our Users We have a young and culturally aspirational user base who are willing to invest in high-quality content and engaging user experience. Gen Z+ constitutes the core of our user base.
Property, Plant and Equipment Our headquarters is located at Wujiaochang commercial district in Shanghai, where we lease and occupy an office building with an aggregate floor area of approximately 94,413 square meters. A substantial majority of our employees are based at our headquarters in Shanghai. Our servers and network facilities for internal administrative functions are located at our headquarters.
Property, Plant and Equipment Our headquarter is located at Wujiaochang commercial district in Shanghai. We lease and occupy office buildings with an aggregate floor area of approximately 113,000 square meters. A substantial majority of our employees are based at our headquarters in Shanghai. Our servers and network facilities for internal administrative functions are located at our headquarters.
The power of attorney has an indefinite term commencing from December 23, 2020 and will be terminated in the event that (i) the power of attorney is unilaterally terminated by Hode Shanghai; or (ii) it is legally permissible for Hode Shanghai, our Company or any of our subsidiaries to hold equity interests directly or indirectly in Shanghai Kuanyu and Hode Shanghai or its designated person is registered to be the sole shareholder of Shanghai Kuanyu.
The power of attorney has an indefinite term commencing from August 24, 2021 and will be terminated in the event that (i) the power of attorney is unilaterally terminated by Hode Shanghai; or (ii) it is legally permissible for Hode Shanghai, Bilibili or any of its subsidiaries to hold equity interests directly or indirectly in Shanghai Kuanyu and Hode Shanghai or its designated person is registered to be the sole shareholder of Shanghai Kuanyu.
In December 2019, Juhuasuan of Alibaba acted as the title sponsor of our New Year’s Eve Gala “The Most Beautiful Night of 2019.” In April 2020, we received a strategic investment from Sony and entered into a business collaboration agreement to pursue collaboration opportunities within the area of entertainment business in the Chinese market, including anime and mobile game.
In December 2019, JuHuaSuan of Alibaba acted as the title sponsor of our New Year’s Eve Gala “The Most Beautiful Night of 2019.” In August 2021, Tmall acted as the principal sponsor of our music-themed variety show “The Next Banger.” In April 2020, we received a strategic investment from Sony and entered into a business collaboration agreement to pursue collaboration opportunities within the area of entertainment business in the Chinese market, including anime and mobile game.
The basic features we offer on our platform include content uploading, viewing and commenting. Our platform also can categorize, rank, search for, curate and recommend content uploaded and viewed to simplify the content discovery process. Our social and interactive features Our communities are built on creative content as well as vibrant interactions among users.
Our platform also can categorize, rank, search for, curate and recommend content uploaded and viewed to simplify the content discovery process. Our social and interactive features Our communities are built on creative content as well as vibrant interactions among users.
We negotiate revenue sharing arrangements or licensing fees with mobile game developers on a case-by-case basis and such arrangements are generally consistent with industry norms. Our exclusively distributed mobile games contributed to 88%, 79% and 75% of our mobile games revenues during 2018, 2019 and 2020, respectively.
We negotiate revenue sharing arrangements or licensing fees with mobile game developers on a case-by-case basis and such arrangements are generally consistent with industry norms. Our exclusively distributed mobile games contributed to 78.7%, 75.3% and 71.3% of our mobile games revenues during 2019, 2020 and 2021, respectively.
As of December 31, 2020, we had approximately 102.6 million official members who had passed our membership exam, representing a 51.1% increase year-over-year. Signature community management. We believe official members who have passed the membership exam tend to develop a strong sense of belonging and ownership to our platform.
As of December 31, 2021, we had approximately 145.3 million official members who had passed our membership exam, representing a 41.6% increase year-over-year. Signature community management. We believe official members who have passed the membership exam tend to develop a strong sense of belonging and ownership to our platform.
Re: Dive April 2020 China ACG-related game Substantially all mobile games on our platform are developed by third-party developers and we select and curate mobile games on our platform based on content, themes, cultural characteristics and features that appeal to our users. Our users access the mobile games on our platform, and log into and play with their Bilibili accounts.
Substantially all mobile games on our platform are developed by third-party developers and we select and curate mobile games on our platform based on content, themes, cultural characteristics and features that appeal to our users. Our users access the mobile games on our platform, and log into and play with their Bilibili accounts.
In addition, the domestic agency is required to amend the SAFE registration with respect to the stock incentive plan if there is any material change to the stock incentive plan. 84 Table of Contents The SAFE Circular 37, promulgated by the SAFE on July 4, 2014, and came into effective on the same date, states that (i) a PRC resident, including a PRC resident natural person or a PRC legal person, shall register with the local branch of the SAFE before it contributes its assets or equity interest in domestic enterprises or offshore assets or interests into a special purpose vehicle for the purpose of investment and financing; and (ii) when the special purpose vehicle undergoes change of basic information, such as change in PRC resident natural person shareholder, name or operating period, or occurrence of a material event, such as change in share capital of a PRC resident natural person, performance of merger or split, the PRC resident shall register such change with the local branch of the SAFE in a timely manner.
The SAFE Circular 37, promulgated by the SAFE on July 4, 2014, and came into effective on the same date, states that (i) a PRC resident, including a PRC resident natural person or a PRC legal person, shall register with the local branch of the SAFE before it contributes its assets or equity interest in domestic enterprises or offshore assets or interests into a special purpose vehicle for the purpose of investment and financing; and (ii) when the special purpose vehicle undergoes change of basic information, such as change in PRC resident natural person shareholder, name or operating period, or occurrence of a material event, such as change in share capital of a PRC resident natural person, performance of merger or split, the PRC resident shall register such change with the local branch of the SAFE in a timely manner.
We offer various virtual items for sale on our live broadcasting. Users can purchase in-app virtual items and send them as virtual gifts to their favorite hosts to show appreciation and provide them with monetary rewards. These virtual items can produce special effects on the screen, such as Bilibili Spaceship and fireworks.
Users can purchase in-app virtual items and send them as virtual gifts to their favorite hosts to show appreciation and provide them with monetary rewards. These virtual items can produce special effects on the screen, such as Bilibili Spaceship and fireworks.
We have built our community around aspiring users, high-quality content, talented content creators and the strong emotional bond among them. In our community, users and content creators discover and interact with diverse content encompassing different interests, from lifestyle, game, entertainment, anime, technology and knowledge to many more.
We provide users with “All the Videos You Like” as our brand proposition. We have built our community around aspiring users, high-quality content, talented content creators and the strong emotional bond among them. In our community, users and content creators discover and interact with diverse content encompassing different interests, from lifestyle, game, entertainment, anime, knowledge to many more.
The Notice on Regulating Copyright Order of Internet Reproduction, issued by the NCA in April 2015, includes the following four major points: (i) clarify certain important issues related to internet copyrights in existing laws and regulations, including the definition of news, clarify statutory licenses that are not applicable to internet copyrights and prohibit the distortion of title and work intent; (ii) guide the press and media to further improve the internal management of copyrights, especially requesting the press to clarify the copyright sources of their content; (iii) encourage the press and internet media to actively carry out copyright cooperation; and (iv) ask the copyright administrations at all levels to strictly implement copyright supervision.
The Notice on Regulating Copyright Order of Internet Reproduction, issued by the NCA in April 2015, includes the following four major points: (i) clarify certain important issues related to internet copyrights in existing laws and regulations, including the definition of news, clarify statutory licenses that are not applicable to internet copyrights and prohibit the distortion of title and work intent; (ii) guide the press and media to further improve the internal management of copyrights, especially requesting the press to clarify the copyright sources of their content; (iii) encourage the press and internet media to actively carry out copyright cooperation; and (iv) ask the copyright administrations at all levels to strictly implement copyright supervision. 102 Table of Contents The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the NCA on February 20, 2002, regulate registrations of software copyright, exclusive licensing contracts for software copyright and transfer contracts.
The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which conform to the provisions of both the Software Copyright Measures and the Computer Software Protection Regulations (Revised in 2013). 81 Table of Contents Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes over Infringement of the Right of Dissemination through Information Networks, promulgated by the Supreme People’s Court in December 2012 and further revised on December 29, 2020 and took effect on January 1, 2021, stipulate that internet users or internet service providers who provide works, performances or audio-video products, for which others have the right of dissemination through information networks or make these available on any information network without authorization shall be deemed to have infringed upon the right of dissemination through information networks.
Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes over Infringement of the Right of Dissemination through Information Networks, promulgated by the Supreme People’s Court in December 2012 and further revised on December 29, 2020 and took effect on January 1, 2021, stipulate that internet users or internet service providers who provide works, performances or audio-video products, for which others have the right of dissemination through information networks or make these available on any information network without authorization shall be deemed to have infringed upon the right of dissemination through information networks.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFor the Year Ended December 31, 2018 2019 2020 RMB % RMB % RMB US$ % (in thousands, except for percentages) Net revenues 4,128,931 100.0 % 6,777,922 100.0 % 11,998,976 1,838,924 100.0 % Cost of revenues (1) (3,273,493 ) (79.3 )% (5,587,673 ) (82.4 )% (9,158,800 ) (1,403,648 ) (76.3 %) Gross profit 855,438 20.7 % 1,190,249 17.6 % 2,840,176 435,276 23.7 % Operating expenses: Sales and marketing expenses (1) (585,758 ) (14.2 )% (1,198,516 ) (17.7 )% (3,492,091 ) (535,186 ) (29.1 )% General and administrative expenses (1) (461,165 ) (11.2 )% (592,497 ) (8.7 )% (976,082 ) (149,592 ) (8.1 )% Research and development expenses (1) (537,488 ) (13.0 )% (894,411 ) (13.2 )% (1,512,966 ) (231,872 ) (12.6 )% Total operating expenses (1,584,411 ) (38.4 )% (2,685,424 ) (39.6 )% (5,981,139 ) (916,650 ) (49.8 )% Loss from operations (728,973 ) (17.7 )% (1,495,175 ) (22.0 )% (3,140,963 ) (481,374 ) (26.1 )% Other income/(expenses): Investment income, net (including impairments) 96,440 2.3 % 96,610 1.4 % 28,203 4,322 0.2 % Interest income 68,706 1.7 % 162,782 2.4 % 83,301 12,766 0.7 % Interest expense — — (46,543 ) (0.7 )% (108,547 ) (16,636 ) (0.9 %) Exchange (losses)/gains (1,661 ) 0.0 % (11,789 ) (0.2 )% 41,717 6,393 0.3 % Others, net 26,455 0.6 % 26,412 0.4 % 95,641 14,660 0.8 % Loss before tax (539,033 ) (13.1 )% (1,267,703 ) (18.7 )% (3,000,648 ) (459,869 ) (25.0 %) Income tax (25,988 ) (0.6 )% (35,867 ) (0.5 )% (53,369 ) (8,180 ) (0.4 %) Net loss (565,021 ) (13.7 )% (1,303,570 ) (19.2 )% (3,054,017 ) (468,049 ) (25.4 %) Note: (1) Share-based compensation expenses were allocated as follows: 97 Table of Contents For the Year Ended December 31, 2018 2019 2020 RMB RMB RMB US$ (in thousands) Cost of revenues 28,173 23,281 37,087 5,684 Sales and marketing expenses 11,499 14,269 40,808 6,254 General and administrative expenses 102,544 68,497 181,753 27,855 Research and development expenses 38,977 66,503 126,250 19,349 Total 181,193 172,550 385,898 59,142 Year ended December 31, 2020 compared to year ended December 31, 2019 Net revenues Our net revenues increased by 77.0% from RMB6,777.9 million in 2019 to RMB11,999.0 million (US$1,838.9 million) in 2020.
Biggest changeFor the Year Ended December 31, 2019 2020 2021 RMB % RMB % RMB US$ % (in thousands, except for percentages) Net revenues 6,777,922 100.0 % 11,998,976 100.0 % 19,383,684 3,041,722 100 % Cost of revenues (1) (5,587,673 ) (82.4 )% (9,158,800 ) (76.3 )% (15,340,537 ) (2,407,265 ) (79.1 )% Gross profit 1,190,249 17.6 % 2,840,176 23.7 % 4,043,147 634,457 20.9 % Operating expenses: Sales and marketing expenses (1) (1,198,516 ) (17.7 )% (3,492,091 ) (29.1 )% (5,794,853 ) (909,339 ) (29.9 )% General and administrative expenses (1) (592,497 ) (8.7 )% (976,082 ) (8.1 )% (1,837,506 ) (288,345 ) (9.5 )% Research and development expenses (1) (894,411 ) (13.2 )% (1,512,966 ) (12.6 )% (2,839,862 ) (445,636 ) (14.7 )% Total operating expenses (2,685,424 ) (39.6 )% (5,981,139 ) (49.8 )% (10,472,221 ) (1,643,320 ) (54.1 )% Loss from operations (1,495,175 ) (22.0 )% (3,140,963 ) (26.1 )% (6,429,074 ) (1,008,863 ) (33.2 )% Other income/(expenses): Investment income/(loss), net (including impairments) 96,610 1.4 % 28,203 0.2 % (194,183 ) (30,472 ) (1.0 )% Interest income 162,782 2.4 % 83,301 0.7 % 70,367 11,042 0.4 % Interest expense (46,543 ) (0.7 )% (108,547 ) (0.9 )% (155,467 ) (24,396 ) (0.8 )% Exchange (losses)/gains (11,789 ) (0.2 )% 41,717 0.3 % (15,504 ) (2,433 ) (0.1 )% Others, net 26,412 0.4 % 95,641 0.8 % 10,411 1,634 0.1 % Loss before tax (1,267,703 ) (18.7 )% (3,000,648 ) (25.0 )% (6,713,450 ) (1,053,488 ) (34.6 )% Income tax (35,867 ) (0.5 )% (53,369 ) (0.4 )% (95,289 ) (14,953 ) (0.5 )% Net loss (1,303,570 ) (19.2 )% (3,054,017 ) (25.4 )% (6,808,739 ) (1,068,441 ) (35.1 )% Note: (1) Share-based compensation expenses were allocated as follows: 120 Table of Contents For the Year Ended December 31, 2019 2020 2021 RMB RMB RMB US$ (In thousands) Cost of revenues 23,281 37,087 76,232 11,962 Sales and marketing expenses 14,269 40,808 53,452 8,388 General and administrative expenses 68,497 181,753 553,526 86,860 Research and development expenses 66,503 126,250 316,607 49,683 Total 172,550 385,898 999,817 156,893 Year ended December 31, 2021 compared to year ended December 31, 2020 Net revenues Our net revenues increased by 61.5% from RMB11,999.0 million in 2020 to RMB19,383.7 million (US$3,041.7 million) in 2021.
Although we consolidate the results of our VIEs and their subsidiaries, we only have access to the assets or earnings of our VIEs and their subsidiaries through our contractual arrangements with our VIEs and their shareholders. See “Item 4. Information on the Company—C.
Although we consolidate the results of the VIEs and their subsidiaries, we only have access to the assets or earnings of the VIEs and their subsidiaries through our contractual arrangements with the VIEs and their shareholders. See “Item 4. Information on the Company—C.
We have a network operation support team responsible for stability and security of our network on a 24-hour, seven-days-a-week basis. The primary responsibilities of the team members consist of monitoring system performance, troubleshooting, detecting system error, random sample testing on servers, maintaining equipment, and testing, evaluating and installing hardware and software.
We have a network operation support team responsible for the stability and security of our network on a 24-hour, seven-days-a-week basis. The primary responsibilities of the team members consist of monitoring system performance, troubleshooting, detecting system error, random sample testing on servers, maintaining equipment, and testing, evaluating and installing hardware and software.
For example, while enjoying an anime in our content library, such paying users are also likely to pay for the games developed based on that anime offered on our platform, the same theme of comic books, audio dramas, and figure toys of the characters in the anime. We see large commercial potentials in the derivative content consumptions.
For example, while enjoying an anime in our content library, such paying users are also likely to pay for the games developed based on that anime offered on our platform, the same theme of comic books, audio dramas, and figure toys of the characters in the anime. We therefore see large commercial potentials in the derivative content consumptions.
Content costs consist of amortized costs of purchased licensed content from copyright owners or content distributors and our production costs. Server and bandwidth costs are the fees we pay to telecommunication carriers and other service providers for telecommunication services, hosting our servers at their internet data centers, and providing content delivery network and application services.
Content costs mainly consist of amortized costs of purchased licensed content from copyright owners or content distributors and our production costs. Server and bandwidth costs are the fees we pay to telecommunication carriers and other service providers for telecommunication services, hosting our servers at their internet data centers, and providing content delivery network and application services.
Under PRC law, each of our subsidiaries and our VIEs in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of their registered capital.
Under PRC law, each of our subsidiaries and the VIEs in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of their registered capital.
The occasional decrease of our average monthly revenue per paying user was mainly due to the substantial increase in the number of paying users attributable to our premium membership program, who on average make lower payments than other paying users such as those for the mobile games.
The occasional decrease of our average monthly revenue per paying user was mainly due to a substantial increase in the number of paying users attributable to our premium membership program, who on average make lower payments than other paying users such as those for the mobile games.
In addition, our wholly foreign-owned subsidiaries in China may allocate a portion of their after-tax profits based on PRC accounting standards to enterprise expansion funds and staff bonus and welfare funds at their discretion, and our VIEs may allocate a portion of its after-tax profits based on PRC accounting standards to a surplus fund at their discretion.
In addition, our wholly foreign-owned subsidiaries in China may allocate a portion of their after-tax profits based on PRC accounting standards to enterprise expansion funds and staff bonus and welfare funds at their discretion, and the VIEs may allocate a portion of its after-tax profits based on PRC accounting standards to a surplus fund at their discretion.
Net cash provided by financing activities in 2019 was RMB5.1 billion, primarily attributable to the proceeds we received from our offerings of 2026 Notes of RMB3.4 billion and the proceeds we received from our public offerings of ordinary shares of RMB1.6 billion.
Net cash provided by financing activities in 2019 was RMB5.1 billion, primarily attributable to the proceeds we received from our offerings of April 2026 Notes of RMB3.4 billion and the proceeds we received from our public offerings of ordinary shares of RMB1.6 billion.
We will also continue the investment in our brand recognition and user base for our long-term success, therefore we expect our sales and marketing expenses to increase in absolute amount as well. Investment in technology and talent Our technology is critical for us to better understand our users, improve user experience maintain a vibrant community, and execute our commercialization strategy.
We will also continue the investment in our brand recognition and user base for our long-term success, therefore we expect our sales and marketing expenses to increase in absolute amount as well. Investment in technology and talents Our technology is critical for us to better understand our users, improve user experience, maintain a vibrant community, and execute our commercialization strategy.
Net loss We incurred net loss of RMB3,054.0 million (US$468.0 million) in 2020, compared to net loss of RMB1,303.6 million in 2019, primarily due to the significant increase in sales and marketing expenses, as well as research and development expenses as a result of our management strategy to invest in the expansion of our user base and the growth of our business.
Net loss We incurred net loss of RMB3,054.0 million in 2020, compared to net loss of RMB1,303.6 million in 2019, primarily due to the significant increase in sales and marketing expenses, as well as research and development expenses as a result of our management strategy to invest in the expansion of our user base and the growth of our business.
The mobile game user base growth and engagement are primarily driven by the launch of new games and the release of updates of our existing games. We witnessed strong growth in the revenues generated from VAS due to the increasing number of subscribers of our premium membership programs and active viewers of our live broadcasting.
The mobile game user base growth and engagement are primarily driven by the launch of new games and the release of updates of our existing games. We witnessed strong growth in the revenues generated from VAS due to the increasing number of subscribers of our premium membership program and active viewers of our live broadcasting.
Commencing from the year of assessment of 2018, the first HK$2 million of profits earned by our subsidiaries incorporated in Hong Kong will be taxed at half the current tax rate (i.e. 8.25%) while the remaining profits will continue to be taxed at the existing 16.5% tax rate.
Commencing from the year of assessment of 2018, the first HK$2 million of profits earned by one of our subsidiaries incorporated in Hong Kong could be taxed at half the current tax rate (i.e. 8.25%) while the remaining profits will continue to be taxed at the existing 16.5% tax rate.
Revenue-sharing costs, increased by 75.1% from RMB2,494.4 million in 2019 to RMB4,366.5 million (US$669.2 million) in 2020, primarily due to an increase in payments made to developers of exclusively distributed games as we rolled out more games, an increase in payments made to distribution channels as we expanded our mobile games and VAS offerings, and an increase in payments made to hosts of live broadcasting and content creators on our platform due to the increase in the numbers of our hosts and content creators.
Revenue-sharing costs, increased by 75.1% from RMB2,494.4 million in 2019 to RMB4,366.5 million in 2020, primarily due to an increase in payments made to developers of exclusively distributed games as we rolled out more games, an increase in payments made to distribution channels as we expanded our mobile games and VAS offerings, and an increase in payments made to hosts of live broadcasting and content creators on our platform due to the increase in the numbers of our hosts and content creators.
Server and bandwidth costs increased by 24.1% from RMB919.8 million in 2019 to RMB1,141.3 million (US$174.9 million) in 2020, primarily due to an increase in server and bandwidth capacity to keep pace with the expansion of our user base and the increase in active users, so as to support a massive and continuously increasing volume of data generated and video views happened on our platform every day.
Server and bandwidth costs increased by 24.1% from RMB919.8 million in 2019 to RMB1,141.3 million in 2020, primarily due to an increase in server and bandwidth capacity to keep pace with the expansion of our user base and the increase in active users, so as to support a massive and continuously increasing volume of data generated and video views happened on our platform every day.
In addition, we expect to witness increased revenues from advertising, as advertisers across different industries are turning to Bilibili to tap into the coveted Generation Z+ in China. We will also continue to develop our live broadcasting and other VAS.
In addition, we expect to have increased revenues from advertising, as advertisers across different industries are turning to Bilibili to tap into the coveted Generation Z+ in China. We will also continue to develop our live broadcasting and other VAS.
Our net revenues from VAS increased by 134.4% from RMB1,641.0 million in 2019 to RMB3,845.7 million (US$589.4 million) in 2020, mainly attributable to our enhanced commercialization efforts, led by increases in the number of paying users for our premium membership program, live broadcasting services and other value-added services, attracted by the high quality and diversified content on our platform.
Our net revenues from VAS increased by 134.4% from RMB1,641.0 million in 2019 to RMB3,845.7 million in 2020, mainly attributable to our enhanced commercialization efforts, led by increases in the number of paying users for our premium membership program, live broadcasting services and other value-added services, attracted by the high quality and diversified content on our platform. Advertising .
For example, we invented a system and methodology to monitor real-time data stream in multi-link transmission which can accurately analyze big data real-time transmission, spot inconsistency in the system within minutes, and promptly react to and notify such issues.
For example, we invented a system and methodology to monitor real-time data stream in multi-link transmission which can accurately analyze big data real-time transmission, spot inconsistency in the system within minutes, and promptly react to and report such issues.
In addition, there is a strong demand in China’s internet industry for talented and experienced personnel. We must recruit, retain and motivate talented employees while controlling our personnel-related expenses, including share-based compensation expenses. 93 Table of Contents IMPACT OF COVID-19 ON OUR OPERATIONS AND FINANCIAL PERFORMANCE A substantial majority of our revenues and workforce are concentrated in China.
In addition, there is a strong demand in China’s internet industry for talented and experienced personnel. We must recruit, retain and motivate talented employees while controlling our personnel-related expenses, including share-based compensation expenses. Impact of COVID-19 on Our Operations and Financial Performance A substantial majority of our revenues and workforce are concentrated in China.
We expect our general and administrative expenses to increase in absolute amounts in the foreseeable future due to the anticipated growth of our business as well as accounting, insurance, investor relations and other public company costs. Research and development expenses .
We expect our general and administrative expenses to increase in absolute amounts in the foreseeable future due to the anticipated growth of our business as well as accounting, insurance, investor relations and other public company costs.
Loss from operations We incurred loss from operations of RMB3,141.0 million (US$481.4 million) in 2020, compared to loss from operations of RMB1,495.2 million in 2019, primarily due to the significant increase in sales and marketing expenses, as well as research and development expenses as a result of our management strategy to invest in the expansion of our user base and the growth of our business.
Loss from operations We incurred loss from operations of RMB3,141.0 million in 2020, compared to loss from operations of RMB1,495.2 million in 2019, primarily due to the significant increase in sales and marketing expenses, as well as research and development expenses as a result of our management strategy to invest in the expansion of our user base and the growth of our business.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information—D. Risk Factors” or in other parts of this annual report on Form 20-F. 91 Table of Contents A.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information—D. Risk Factors” or in other parts of this annual report on Form 20-F. A.
Any limitation on the ability of our PRC subsidiaries to pay dividends to us could have a material adverse effect on our ability to conduct our business and to pay dividends to our shareholders and ADS holders.” 103 Table of Contents If our holding company in the Cayman Islands or any of our subsidiaries outside of China were deemed to be a “resident enterprise” under the PRC EIT Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%.
Any limitation on the ability of our PRC subsidiaries to pay dividends to us could have a material adverse effect on our ability to conduct our business and to pay dividends to our shareholders and ADS holders.” If Bilibili, a holding company in the Cayman Islands or any of its subsidiaries outside of China were deemed to be a “resident enterprise” under the PRC EIT Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%.
Content costs increased by 87.3% from RMB1,001.6 million in 2019 to RMB1,875.5 million (US$287.4 million) in 2020 as we continued to expand and diversify our content offerings. We procured anime, documentaries, selected TV shows, movies and variety shows to enrich our content library. We have a large anime libraries.
Content costs increased by 87.3% from RMB1,001.6 million in 2019 to RMB1,875.5 million in 2020 as we continued to expand and diversify our content offerings. We procured anime, documentaries, selected TV shows, movies and variety shows to enrich our content library. We have a large anime libraries.
Concurrently with the issuance of 2026 Notes, we completed a registered offering of ADSs, where we offered 14,173,813 ADSs at a price of US$18.00 per ADS. We raised from the 2026 Notes and this concurrent registered offering US$733.9 million in net proceeds after deducting commissions and the offering expenses.
Concurrently with the issuance of April 2026 Notes, we completed a registered offering of ADSs, where we offered 14,173,813 ADSs at a price of US$18.00 per ADS. We raised from the April 2026 Notes and the concurrent registered offering of ADSs a total of US$733.9 million in net proceeds after deducting commissions and offering expenses.
Our sales and marketing expenses increased by 191.4% from RMB1,198.5 million in 2019 to RMB3,492.1 million (US$535.2 million) in 2020, primarily attributable to increased channel and marketing expenses associated with our app and brand, as well as expenses associated with our mobile games’ promotion and an increase in headcount in sales and marketing personnel.
Our sales and marketing expenses increased by 191.4% from RMB1,198.5 million in 2019 to RMB3,492.1 million in 2020, primarily attributable to increased channel and marketing expenses associated with our app and brand, as well as expenses associated with our mobile games’ promotion and an increase in headcount in sales and marketing personnel.
We primarily generate VAS revenues from (i) subscription fees of our premium membership program, which offers paying members benefits including exclusive or advanced access to certain OGV, and (ii) sales of in-channel virtual items for use in our live broadcasting so that users can send them to hosts to show their support, which comprise of either consumable items, such as gifts and items that create special visual effects, or time-based items, such as privileges and titles.
We primarily generate VAS revenues from (i) subscription fees of our premium membership program, which offers paying members benefits including an exclusive or advance access to certain high-quality OGV, and (ii) sales of in-channel virtual items for use in our live broadcasting so that users can send them to hosts to show their support, which comprise of either consumable items, such as gifts and items that create special visual effects, or time-based items, such as privileges and titles.
Our proprietary CDN system enhances network efficiency by managing and optimizing the workload of the servers through real-time optimization and distribution. This technology allows users to upload content without compression and enables viewing of content in higher definition. 113 Table of Contents Real-time monitoring and support.
Our proprietary CDN system enhances network efficiency by managing and optimizing the workload of the servers through real-time optimization and distribution. This technology allows users to upload content without compression and enables viewing of content in higher definition. Real-time monitoring and support.
We also generate advertising revenues from advertisers driven by the size of our user base, the engagement of our users and our brand equity. We will continue to implement our strategy to grow our user base and increase penetration in Generation Z+ and attract users from wider demographics.
We also generate advertising revenues from advertisers driven by the size of our user base, the engagement of our users and our brand equity. 115 Table of Contents We will continue to implement our strategy to grow our user base and increase penetration in Generation Z+ and attract users from wider demographics.
Our net revenues from advertising increased by 125.6% from RMB817.0 million in 2019 to RMB1,842.8 million (US$282.4 million) in 2020. This increase was primarily attributable to further recognition of Bilibili’s brand name in China’s online advertising market.
Our net revenues from advertising increased by 125.6% from RMB817.0 million in 2019 to RMB1,842.8 million in 2020. This increase was primarily attributable to further recognition of Bilibili’s brand name in China’s online advertising market.
E-commerce and other costs increased by 51.5% from RMB1,171.9 million in 2019 to RMB1,775.5 million (US$272.1 million) in 2020, primarily attributable to an increase in cost of goods sold associated with our e-commerce business and an increase in staff cost.
E-commerce and other costs increased by 51.5% from RMB1,171.9 million in 2019 to RMB1,775.5 million in 2020, primarily attributable to an increase in cost of goods sold associated with our e-commerce business and an increase in staff cost.
We had net investment income of RMB28.2 million (US$4.3 million) in 2020, compared to RMB96.6 million in 2019. Interest income . Interest income represents interest earned on cash and cash equivalents and time deposits. We had interest income of RMB162.8 million and RMB83.3 million (US$12.8 million) in 2019 and 2020, respectively. Interest expense.
We had net investment income of RMB28.2 million in 2020, compared to RMB96.6 million in 2019. Interest income . Interest income represents interest earned on cash and cash equivalents and time deposits. We had interest income of RMB162.8 million and RMB83.3 million in 2019 and 2020, respectively. Interest expense.
Interest expense primarily represents interest payment and amortized issuance costs related to long-term debt. We had interest expense of RMB108.5 million (US$16.6 million) in 2020, primarily attributable to interest expense related to our 2027 Notes issued in June 2020 and our 2026 Notes issued in April 2019.
Interest expense primarily represents interest payment and amortized issuance costs related to long-term debt. We had interest expense of RMB108.5 million in 2020, primarily attributable to interest expense related to our 2027 Notes issued in June 2020 and our April 2026 Notes issued in April 2019.
Our research and development expenses increased by 69.2% from RMB894.4 million in 2019 to RMB1,513.0 million (US$231.9 million) in 2020, primarily due to increases in headcount in research and development personnel, share-based compensation expenses and other research and development expenses.
Our research and development expenses increased by 69.2% from RMB894.4 million in 2019 to RMB1,513.0 million in 2020, primarily due to increases in headcount in research and development personnel, share-based compensation expenses and other research and development expenses.
We had interest expense of RMB46.5 million in 2019, primarily attributable to interest expense related to our 2026 Notes issued in April 2019. Income tax We recorded income tax of RMB53.4 million (US$8.2 million) in 2020, compared to RMB35.9 million in 2019.
We had interest expense of RMB46.5 million in 2019, primarily attributable to interest expense related to our 2026 Notes issued in April 2019. Income tax We recorded income tax of RMB53.4 million in 2020, compared to RMB35.9 million in 2019.
Operating expenses Our total operating expenses increased by 122.7% from RMB2,685.4 million in 2019 to RMB5,981.1 million (US$916.7million) in 2020, as we executed our management strategy to invest in the expansion of our user base and the growth of our business, which led to the increases in sales and marketing expenses, general and administrative expenses, as well as research and development expenses. 99 Table of Contents Sales and marketing expenses .
Operating expenses Our total operating expenses increased by 122.7% from RMB2,685.4 million in 2019 to RMB5,981.1 million in 2020, as we executed our management strategy to invest in the expansion of our user base and the growth of our business, which led to the increases in sales and marketing expenses, general and administrative expenses, as well as research and development expenses. 124 Table of Contents Sales and marketing expenses .
The principal non-cash items affecting the difference between our net loss and our net cash provided by operating activities in 2020 were RMB1,721.6 million (US$263.9 million) in depreciation and amortization of property and equipment, and intangible assets, and RMB385.9 million (US$59.1 million) in share-based compensation expenses.
The principal non-cash items affecting the difference between our net loss and our net cash provided by operating activities in 2020 were RMB1,721.6 million in depreciation and amortization of property and equipment, and intangible assets, and RMB385.9 million in share-based compensation expenses.
We will continue to promote our brand name among broader young generations and increase our appeal to mass market. Our ability to manage our costs and expenses Our results of operations depend on our ability to manage our costs and expenses.
We will continue to promote our brand name among broader young generations and increase our appeal to mass market. 116 Table of Contents Our ability to manage our costs and expenses Our results of operations depend on our ability to manage our costs and expenses.
However, most of these uses are subject to PRC regulations. 110 Table of Contents We expect that a substantial majority of our future revenues will be denominated in Renminbi.
However, most of these uses are subject to PRC regulations. We expect that a substantial majority of our future revenues will be denominated in Renminbi.
Cost of revenues Our cost of revenues increased by 63.9% from RMB5,587.7 million in 2019 to RMB9,158.8 million (US$1,403.6 million) in 2020 as all components of cost of revenues increased due to our business growth and the expansion of our user base.
Cost of revenues Our cost of revenues increased by 63.9% from RMB5,587.7 million in 2019 to RMB9,158.8 million in 2020 as all components of cost of revenues increased due to our business growth and the expansion of our user base.
Gross profit As a result of the foregoing, we had gross profit of RMB2,840.2 million (US$435.3 million) in 2020, compared to gross profit of RMB1,190.2 million in 2019.
Gross profit As a result of the foregoing, we had gross profit of RMB2,840.2 million in 2020, compared to gross profit of RMB1,190.2 million in 2019.
According to the National Bureau of Statistics of China, the year-over-year percent changes in the consumer price index for December 2019 and 2020 were increases of 4.5% and 0.2%, respectively.
According to the National Bureau of Statistics of China, the year-over-year percent changes in the consumer price index for December 2020 and 2021 were increases of 0.2% and 1.5%, respectively.
The difference was primarily due to an increase of RMB734.8 million (US$112.6 million) in deferred revenue, an increase of RMB651.7 million (US$99.9 million) in accrued liabilities and other payables and an increase of RMB816.1 million (US$125.1 million) in accounts payable, partially offset by an increase of RMB417.2 million (US$63.9 million) in accounts receivable and an increase of RMB610.6 million (US$93.6 million) in prepayments and other assets.
The difference was primarily due to an increase of RMB734.8 million in deferred revenue, an increase of RMB651.7 million in accrued liabilities and other payables and an increase of RMB816.1 million in accounts payable, partially offset by an increase of RMB417.2 million in accounts receivable and an increase of RMB610.6 million in prepayments and other assets.
Investing activities Net cash used in investing activities in 2020 was RMB8,906.8 million (US$1,365.0 million), primarily due to purchase of short-term investments, primarily including money market funds, financial products with variable interest rates referenced to performance of underlying assets issued by commercial banks or other financial institutions and publicly traded companies of RMB26.7 billion (US$4.1 billion), placements of time deposits of RMB10.9 billion (US$1.7 billion), cash paid for long term investments including loans of RMB1.3 billion (US$193.3 million) and purchase of intangible assets of RMB1.6 billion (US$250.9 million), which primarily consist of licensed copyrights of video content, partially offset by proceeds from maturities of short-term investments of RMB24.9 billion (US$3.8 billion) and maturity of time deposits of RMB7.7 billion (US$1.2 billion). 111 Table of Contents Net cash used in investing activities in 2019 was RMB4.0 billion, primarily due to purchase of short-term investments, including money market funds, financial products with variable interest rates referenced to performance of underlying assets issued by commercial banks or other financial institutions and publicly traded companies of RMB10.0 billion, placement of time deposits of RMB4.9 billion, purchase of intangible assets of RMB1.3 billion, and cash paid for long-term investments including loans of RMB1.2 billion, partially offset by proceeds from maturities of short-term investments of RMB10.0 billion and maturity of time deposits of RMB3.9 billion.
Net cash used in investing activities in 2020 was RMB8,906.8 million, primarily due to purchase of short-term investments, primarily including money market funds, financial products with variable interest rates referenced to performance of underlying assets issued by commercial banks or other financial institutions and publicly traded companies of RMB26.7 billion, placements of time deposits of RMB10.9 billion, cash paid for long term investments including loans of RMB1.3 billion and purchase of intangible assets of RMB1.6 billion, which primarily consist of licensed copyrights of video content, partially offset by proceeds from maturities of short-term investments of RMB24.9 billion and maturity of time deposits of RMB7.7 billion.
Our principal sources of liquidity have been cash generated from operating activities, as well as the proceeds we received from our public offerings of ordinary shares and other financing activities. We believe this level of liquidity is sufficient to successfully navigate at least twelve months of uncertainty.
Our principal sources of liquidity have been cash generated from operating activities, as well as the proceeds we received from our public offerings of ordinary shares and other financing activities. We believe this level of liquidity is sufficient to successfully navigate an extended period of uncertainty.
Our marketing and promotional expenses increased by 221.6% from RMB934.7 million in 2019 to RMB3,006.0 million (US$460.7 million) in 2020, primarily attributable to increased expenses associated with the promotion of our brand and other marketing activities. General and administrative expenses .
Our marketing and promotional expenses increased by 221.6% from RMB934.7 million in 2019 to RMB3,006.0 million in 2020, primarily attributable to increased expenses associated with the promotion of our brand and other marketing activities. General and administrative expenses . Our general and administrative expenses increased by 64.7% from RMB592.5 million in 2019 to RMB976.1 million in 2020.
We expect our advertising revenues to increase in the foreseeable future as we continue to introduce new advertising and marketing solutions and attract more advertisers. E-commerce and others. Our e-commerce and others primarily consist of sales of products on our e-commerce platform and revenues from offline performance activities.
We expect our advertising revenues to increase in the foreseeable future as we continue to introduce new advertising and marketing solutions and attract more advertisers. 118 Table of Contents E-commerce and others. Our e-commerce and others primarily consist of sales of products on our e-commerce platform.
For example, the growth of active users tends to accelerate during school holidays, such as summer and winter breaks, which typically fall in the middle of the third and first quarters of each year, and slow down at the beginning and during certain parts of the school year.
Seasonality Our results of operations are subject to seasonal fluctuations. For example, the growth of active users tends to accelerate during school holidays, such as summer and winter breaks, which typically fall in the middle of the third and first quarters of each year, and slow down at the beginning and during certain parts of the school year.
In addition, we had submitted approximately 808 additional patent applications and 1,833 trademark applications. We intend to protect our technology and proprietary rights vigorously, but there can be no assurance that our efforts will be successful. Even if our efforts are successful, we may incur significant costs in defending our rights.
In addition, we had submitted approximately 1,300 additional patent applications and 2,225 trademark applications. 133 Table of Contents We intend to protect our technology and proprietary rights vigorously, but there can be no assurance that our efforts will be successful. Even if our efforts are successful, we may incur significant costs in defending our rights.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events since January 1, 2020 to December 31, 2020 that are reasonably likely to have a material adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events since January 1, 2021 to December 31, 2021 that are reasonably likely to have a material adverse effect on our net sales or revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.
The increase was primarily attributable to the increase in sales of products on our e-commerce platform and sub-licensing the licensed content related to S10 League of Legends E-sports global events in China, and recorded other net revenues of RMB330.2 million (US$50.6 million) in 2020.
We had RMB722.1 million and RMB1,507.2 million of e-commerce and other net revenues in 2019 and 2020, respectively. The increase was primarily attributable to the increase in sales of products on our e-commerce platform and sub-licensing the licensed content related to S10 League of Legends E-sports global events in China, and recorded other net revenues of RMB330.2 million in 2020.
All information provided in this annual report on Form 20-F and in the exhibits is as of the date of this annual report on Form 20-F, and we do not undertake any obligation to update any such information, except as required under applicable law. 115 Table of Contents ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A.
All information provided in this annual report on Form 20-F and in the exhibits is as of the date of this annual report on Form 20-F, and we do not undertake any obligation to update any such information, except as required under applicable law.
The following table sets forth our average MAU, our average monthly paying users, and average monthly revenue per paying user for each of the quarters indicated: For the Three Months Ended March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020 (In millions) Average MAU 101.3 110.4 127.9 130.3 172.4 171.6 197.2 202.0 Average monthly paying users 5.7 6.3 7.9 8.8 13.4 12.9 15.0 17.9 (In RMB) Average monthly revenue per paying user 67.6 66.4 58.1 54.5 48.3 53.8 50.1 44.2 92 Table of Contents The number of average monthly paying users has generally been increasing primarily attributable to the popularity of our premium membership program driven by the high-quality content that we offered, the expansion of our mobile games operations and diversification of other value-added services offerings.
The following table sets forth our average MAUs, our average monthly paying users, and average monthly revenue per paying user for each of the quarters indicated: For the Three Months Ended March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020 March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 (In millions) Average MAUs 172.4 171.6 197.2 202.0 223.3 237.1 267.2 271.7 Average monthly paying users 13.4 12.9 15.0 17.9 20.5 20.9 23.9 24.5 (In RMB) Average monthly revenue per paying user 48.3 53.8 50.1 44.2 43.4 45.8 46.0 43.4 The number of average monthly paying users has generally been increasing primarily attributable to the popularity of our premium membership program driven by the high-quality content that we offer, the expansion of our mobile games operations and diversification of other value-added services offerings.
Intellectual Property We seek to protect our technology, including our proprietary technology infrastructure and core software system, through a combination of patents, copyrights, trademarks, trade secrets and confidentiality agreements. As of December 31, 2020, we have registered approximately 459 patents, 467 registered copyrights, 270 registered domain names, including www.bilibili.com, and 2,987 registered trademarks, including “ ”.
Intellectual Property We seek to protect our technology, including our proprietary technology infrastructure and core software system, through a combination of patents, copyrights, trademarks, trade secrets and confidentiality agreements. As of December 31, 2021, we have registered approximately 733 patents, 942 registered copyrights, 340 registered domain names, including www.bilibili.com , and 5,428 registered trademarks, including “ ”.
Given the limited space for bullet chats, we employ our proprietary technology to conduct semantic analysis of the favorites, blocks and comments previously made by the users, understand each user’s unique preference and customarily filter the bullet chats, so that each user’s bullet chatting viewing experience is customized.
We employ our proprietary technology to conduct semantic analysis of each user’s favorites, blocks and comments settings, so as to understand each user’s unique preference and customarily filter the bullet chats, so that each user’s bullet chatting viewing experience is customized.
GAAP, which requires us to make judgments, estimates and assumptions. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experiences and various other assumptions that we believe to be reasonable under the circumstances.
E. Critical Accounting Estimates We prepare our financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experiences and various other assumptions that we believe to be reasonable under the circumstances.
If our existing PRC subsidiaries or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us.
As a result, Bilibili Inc.’s ability to pay dividends depends upon dividends paid by our PRC subsidiaries. If our existing PRC subsidiaries or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us.
Across our platform, our average monthly paying users increased from 7.2 million in 2019 to 14.8 million in 2020. In addition, our paying ratio (average monthly paying user / MAU) increased from 6.1% in 2019 to 8.0% in 2020. We set forth below our key operating metrics.
Across our platform, our average monthly paying users increased from 7.2 million in 2019 to 14.8 million in 2020. In addition, our paying ratio (average monthly paying user / MAU) increased from 6.1% in 2019 to 8.0% in 2020. Mobile games .
We expect our research and development expenses to increase as we expand our research and development team, to enhance our artificial intelligence technology, big data analytics capabilities and cloud technology and develop new features and functionalities on our platform.
We expect our research and development expenses to increase as we expand our research and development team, to enhance our artificial intelligence technology, big data analytics capabilities and cloud technology and develop new features and functionalities on our platform. Meanwhile, we will keep implementing our cost control strategy so as to improve our cost efficiency.
Server and bandwidth costs increased by 48.7% from RMB618.7 million in 2018 to RMB919.8 million in 2019, primarily due to an increase in server and bandwidth capacity to keep pace with the expansion of our user base and the increase in active users, so as to support a massive and continuously increasing volume of data generated and video views happened on our platform every day.
Server and bandwidth costs increased by 37.2% from RMB1,141.3 million in 2020 to RMB1,565.9 million (US$245.7 million) in 2021, primarily due to an increase in server and bandwidth capacity to keep pace with the expansion of our user base and the increase in active users, so as to support a massive and continuously increasing volume of data generated and video views happened on our platform every day.
As our user base increased and more users became engaged in interest-based sub-communities such as ACG, the demand for ACG related merchandise also grew which drove the increase in our revenues from e-commerce.
As our user base increased and more users became engaged in interest-based sub-communities such as ACG, the demand for ACG related merchandise also grew, which drove the increase in our revenues from e-commerce. We endeavored to enlarge the types of goods and enrich the content available on our e-commerce platform.
Financing activities Net cash provided by financing activities in 2020 was RMB8,335.4 million (US$1,277.5 million), primarily attributable to the proceeds we received from our offering of 2027 Notes of RMB5.6 billion (US$857.4 million) and the proceeds we received from our issuance of Class Z ordinary shares to Sony Corporation of America of RMB2.8 billion (US$431.8 million).
Financing activities Net cash provided by financing activities in 2021 was RMB30.4 billion (US$4.8 billion), primarily attributable to the proceeds we received from our Global Offering of approximately RMB19.3 billion (US$3.0 billion) and the proceeds we received from our offering of December 2026 Notes of RMB10.1 billion (US$1.6 billion). 130 Table of Contents Net cash provided by financing activities in 2020 was RMB8,335.4 million, primarily attributable to the proceeds we received from our offering of 2027 Notes of RMB5.6 billion and the proceeds we received from our issuance of Class Z ordinary shares to Sony Corporation of America of RMB2.8 billion.
At the same time, we expect greater contribution by revenues from other streams of business as we take initiatives to grow our VAS, advertising and E-commerce businesses. 94 Table of Contents VAS.
We expect revenues from mobile games to fluctuate but remain as an important stream of revenues. At the same time, we expect greater contribution by revenues from other streams of business as we take initiatives to grow our VAS, advertising and e-commerce businesses. VAS.
The following table sets forth our average MAU for each of the quarters indicated: For the Three Months Ended March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020 (In millions) Average MAU (1) 101.3 110.4 127.9 130.3 172.4 171.6 197.2 202.0 Note: (1) Our MAU include mobile apps MAU and PC MAU after eliminating duplicates.
The following table sets forth our average MAU for each of the quarters indicated: For the Three Months Ended March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020 March 31 2021 June 30, 2021 September 30, 2021 December 31, 2021 (In millions) Average MAUs (1) 172.4 171.6 197.2 202.0 223.3 237.1 267.2 271.7 Note: (1) Our MAUs include mobile apps MAUs and PC MAUs after eliminating duplicates of users who utilize both terminals.
See also “Item 3. Key Information — D. Risk Factors—Risks Related to Our Business and Industry—We face risks related to natural disasters, health epidemics and other outbreaks, such as the COVID-19 pandemic, which could significantly disrupt our operations.” As of December 31, 2020, our cash and cash equivalents, time deposits, as well as short-term investments were RMB12.8 billion (US$2.0 billion).
Risk Factors—Risks Related to Our Business and Industry—We face risks related to natural disasters, health epidemics and other outbreaks, such as the COVID-19 pandemic, which could significantly disrupt our operations.” 117 Table of Contents As of December 31, 2021, our cash and cash equivalents, time deposits, as well as short-term investments were RMB30.2 billion (US$4.7 billion).
To determine the ending point of a paying player’s lifespan beyond the date for which observable data are available, we extrapolate the actual observed churn rate to arrive at an estimated weighted average playing lifespan for paying players of the selected games.
We make assumptions about the ending point of a paying player’s lifespan beyond the date for which observable data available and extrapolate the actual observed churn rate to arrive at an estimated weighted average playing lifespan for paying players of the selected games. 134 Table of Contents • Similarities between newly-launched games and existing games.
Operating Results Key Factors Affecting Our Results of Operations User growth and engagement The success of our business depends on our ability to grow our user base, and maintain and increase user engagement. We have experienced rapid user growth and aim to continue to achieve healthy and high-quality user base expansion.
Operating Results Key Factors Affecting Our Results of Operations User growth and engagement Our business depends on our ability to grow our user base, and maintain and increase user engagement. We have experienced rapid user growth since our inception.
See “Item 3. Key Information — D. Risk Factors—Risks Related to Doing Business in China—If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders.” Critical Accounting Policies We prepare our financial statements in conformity with U.S.
See “Item 3. Key Information — D. Risk Factors—Risks Related to Doing Business in China—If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders.” Inflation Inflation in China has not materially impacted our results of operations in recent years.
Cost of revenues The following table sets forth the components of our cost of revenues by amounts and percentages of cost of revenues for the periods presented: For the Year Ended December 31, 2018 2019 2020 RMB % RMB % RMB US$ % (in thousands, except for percentages) Cost of revenues: Revenue-sharing costs 1,630,881 49.8 % 2,494,416 44.6 % 4,366,490 669,194 47.7 % Content costs 543,009 16.6 % 1,001,600 17.9 % 1,875,546 287,440 20.5 % Server and bandwidth costs 618,737 18.9 % 919,753 16.5 % 1,141,257 174,905 12.5 % E-commerce and others 480,866 14.7 % 1,171,904 21.0 % 1,775,507 272,109 19.3 % Total cost of revenues 3,273,493 100 % 5,587,673 100 % 9,158,800 1,403,648 100 % Revenue-sharing costs consist of fees paid to game developers, distribution channels (app stores) and payment channels, and fees we share with hosts of our live broadcasting and content creators in accordance with our revenue-sharing arrangements.
Cost of revenues The following table sets forth the components of our cost of revenues by amounts and percentages of cost of revenues for the periods presented: For the Year Ended December 31, 2019 2020 2021 RMB % RMB % RMB US$ % (in thousands, except for percentages) Cost of revenues: Revenue-sharing costs 2,494,416 44.6 % 4,366,490 47.7 % 7,733,330 1,213,528 50.4 % Content costs 1,001,600 17.9 % 1,875,546 20.5 % 2,694,839 422,879 17.6 % Server and bandwidth costs 919,753 16.5 % 1,141,257 12.5 % 1,565,923 245,727 10.2 % E-commerce and others 1,171,904 21.0 % 1,775,507 19.3 % 3,346,445 525,131 21.8 % Total cost of revenues 5,587,673 100 % 9,158,800 100.0 % 15,340,537 2,407,265 100.0 % Revenue-sharing costs consist of fees paid to game developers, distribution channels (app stores) and payment channels, and fees we share with hosts of our live broadcasting and content creators in accordance with our revenue-sharing arrangements.
Net investment income primarily includes return earned on financial products issued by banks and other financial institutions, return from investments in money market funds, gain from disposal of long-term investments, and the fair value change of investments in publicly traded companies. We had net investment income of RMB96.6 million in 2019, compared to RMB96.4 million in 2018. Interest income .
Net investment income/(loss) primarily includes return earned on financial products issued by banks and other financial institutions, return from investments in money market funds, and the fair value change of investments in publicly traded companies. We had net investment loss of RMB194.2 million (US$30.5 million) in 2021, compared to net investment income of RMB28.2 million in 2020. Interest income .
As the varieties and quantity of content and user interactions continue to increase, AI capabilities are critical for us to control our operating costs and enhance user experience.
Artificial intelligence, or AI, is particularly suitable for reviewing and screening content by recognizing and analyzing patterns and connections. As the varieties and quantity of content and user interactions continue to increase, AI capabilities are critical for us to control our operating costs and enhance user experience.
(2) Numerator includes only revenues from mobile games and VAS. Mobile games . Our net revenues from mobile games increased by 33.5% from RMB3,597.8 million in 2019 to RMB4,803.4 million (US$736.2 million) in 2020. The increase was primarily due to the popularity of our newly launched mobile games.
Our net revenues from mobile games increased by 33.5% from RMB3,597.8 million in 2019 to RMB4,803.4 million in 2020. The increase was primarily due to the popularity of our newly launched mobile games. As of December 31, 2020, we operated 43 exclusively distributed mobile games and hundreds of jointly operated mobile games.
Interest income represents interest earned on cash and cash equivalents and time deposits. We had interest income of RMB68.7 million and RMB162.8 million in 2018 and 2019, respectively. Interest expense. Interest expense primarily represents interest payment and amortized issuance costs related to long-term debt.
Interest income primarily represents interest earned on cash and cash equivalents and time deposits. We had interest income of RMB83.3 million and RMB70.4 million (US$11.0 million) in 2020 and 2021, respectively. Interest expense. Interest expense primarily represents interest payment and amortized issuance costs related to long-term debt.
Our revenues from mobile games depend on the number of paying users, and ultimately are determined by our ability to select, procure and offer engaging games tailored to our platform and our user preferences. We expect revenues from mobile games to continue to grow in absolute amount.
As of December 31, 2021, we operated 59 exclusively distributed mobile games and hundreds of jointly operated mobile games. Our revenues from mobile games depend on the number of paying users, and ultimately are determined by our ability to select, procure and offer engaging games tailored to our platform and our user preferences.
Our PRC subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds. 112 Table of Contents C. Research and Development, Patents and Licenses, Etc.
Our PRC subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds. C. Research and Development, Patents and Licenses, Etc. Technology, Research and Development Our technology platform has been designed for reliability, scalability and flexibility and is administered by our in-house technology department.
Our cash and cash equivalents mainly represent cash on hand, demand deposits placed with large reputable banks in the United States and China, and highly liquid investments that are readily convertible to known amounts of cash and with original terms of three months or less. We entered into a one-year RMB500.0 million revolving loan facility provided by certain financial institution.
Our cash and cash equivalents primarily consist of cash on hand, demand deposits placed with large reputable banks in the United States and China, and highly liquid investments that are readily convertible to known amounts of cash and with original terms of three months or less.
Key Components of Results of Operations Net revenues The following table sets forth the components of our net revenues by amounts and percentages of our total net revenues for the periods presented: For the Year Ended December 31, 2018 2019 2020 RMB % RMB % RMB US$ % (in thousands, except for percentages) Net revenues: Mobile games 2,936,331 71.1 % 3,597,809 53.1 % 4,803,382 736,151 40.0 % Value-added services 585,643 14.2 % 1,641,043 24.2 % 3,845,663 589,374 32.0 % Advertising 463,490 11.2 % 817,016 12.1 % 1,842,772 282,417 15.4 % E-commerce and others 143,467 3.5 % 722,054 10.6 % 1,507,159 230,982 12.6 % Total net revenues 4,128,931 100.0 % 6,777,922 100.0 % 11,998,976 1,838,924 100.0 % Mobile games.
Key Components of Results of Operations Net revenues The following table sets forth the components of our net revenues by amounts and percentages of our total net revenues for the periods presented: For the Year Ended December 31, 2019 2020 2021 RMB % RMB % RMB US$ % (in thousands, except for percentages) Net revenues: Mobile games 3,597,809 53.1 % 4,803,382 40.0 % 5,090,926 798,877 26.3 % Value-added services 1,641,043 24.2 % 3,845,663 32.0 % 6,934,886 1,088,235 35.8 % Advertising 817,016 12.1 % 1,842,772 15.4 % 4,523,421 709,823 23.3 % E-commerce and others 722,054 10.6 % 1,507,159 12.6 % 2,834,451 444,787 14.6 % Total net revenues 6,777,922 100.0 % 11,998,976 100.0 % 19,383,684 3,041,722 100.0 % Mobile games.
Research and development expenses consist primarily of salaries and benefits, including share-based compensation expenses, for research and development personnel dedicated to the development and enhancement of our app/websites and development of online games.
Meanwhile, we will keep implementing our cost control strategy so as to improve our cost efficiency. 119 Table of Contents Research and development expenses . Research and development expenses consist primarily of salaries and benefits, including share-based compensation expenses, for research and development personnel dedicated to the development and enhancement of our app/websites and development of online games.
Our general and administrative expenses increased by 64.7% from RMB592.5 million in 2019 to RMB976.1 million (US$149.6 million) in 2020. The increase was primarily attributable to increases in headcount in general and administrative personnel, share-based compensation expenses, allowance for doubtful accounts, rental expenses and other general and administrative expenses. Research and development expenses .
The increase was primarily attributable to increases in headcount in general and administrative personnel, share-based compensation expenses, allowance for doubtful accounts, rental expenses and other general and administrative expenses. Research and development expenses .
Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates. Some of our accounting policies require a higher degree of judgment than others in their application and require us to make significant accounting estimates.
Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates.

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ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 116 ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 125 ITEM 8. FINANCIAL INFORMATION 127 ITEM 9. THE OFFER AND LISTING 128 ITEM 10. ADDITIONAL INFORMATION 129 ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 139 ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 139 PART II. 141
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ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A. Directors and Senior Management The following table sets forth information regarding our directors and executive officers as of the date of this annual report.
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Directors and Executive Officers Age Position/Title Rui Chen 44 Chairman of the Board of Directors and Chief Executive Officer Yi Xu 32 Founder, Director and President 136 Table of Contents Directors and Executive Officers Age Position/Title Ni Li 36 Vice Chairwoman of the Board of Directors and Chief Operating Officer JP Gan 50 Independent Director Eric He 62 Independent Director Feng Li 48 Independent Director Guoqi Ding 52 Independent Director Xin Fan 43 Chief Financial Officer Rui Chen has served as our chairman of the board of directors and chief executive officer since November 2014.
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He is a serial entrepreneur with more than 15 years of experience in the Internet and technology-related industries in China. Mr. Chen led our strategic development since our founding. With long-term thinking, he spearheaded a series of strategic initiatives which transformed our company to a full-spectrum video community covering a wide array of content categories and diverse video consumption scenarios.
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Mr. Chen formulated the strategy of “community first,” and continuously investing in high-quality content. Under his leadership, Bilibili built a healthy and prosperous content ecosystem, which was crucial for us to stay attractive to young generations. At the same time, Mr. Chen led the construction of our business model, and guided the rapid development in multiple business areas.
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Prior to joining us, Mr. Chen co-founded Cheetah Mobile Inc., a mobile internet company listed on the New York Stock Exchange (NYSE: CMCM). In 2009, Mr. Chen founded Beike Internet Security Co., Ltd. and served as its chief executive officer from 2009 to 2010. Prior to that, Mr.
Added
Chen served as general manager of Internet security research and development at Kingsoft Corporation Limited (SEHK:03888), a leading software and internet service company listed on the Hong Kong Stock Exchange, from 2001 to 2008. Mr.
Added
Chen was named by Fortune Magazine as one of China’s “40 Under 40,” a list of the most influential people in business under the age of 40 in China. Mr. Chen received his bachelor’s degree from Chengdu University of Information Technology in 2001.
Added
Yi Xu founded our website in 2009 (which culminated into the commencement of our commercial operations in 2011 and the founding of our company in 2013) and has served as our director and president since December 2013. Mr.
Added
Xu has guided the technological development of our company and played an instrumental role in developing various ground-breaking interactive features such as bullet chatting. Throughout the years, Mr. Xu has sought innovative ways to refine, and add new functions to, bullet chatting, which remains one of the most significant interactive features on our online platform.
Added
He has also contributed to constant design improvements of the user interface of our online platform. Mr. Xu has also been an opinion leader in our online communities since our inception and led the prosperity of community culture among users, thereby strengthening a strong sense of belonging among users and fostering a vibrant “Bilibili” community. Mr.
Added
Xu received his associate degree from Beijing University of Posts and Telecommunications in 2010. Ni Li has served as our chief operating officer since November 2014 and vice chairwoman of our board of directors since January 2015. Ms. Li oversees our overall operations and leads the strategic functions including content ecosystem development, monetization initiatives, strategic planning, investments and brand marketing.
Added
In the past two years, Ms. Li has built a strong business and operational team. Under her leadership, the team successfully produced blockbusters including New Year’s Eve Gala event and Hou Lang, significantly enhancing Bilibili’s brand awareness and driving the user and revenue growth. Starting from 2021, Ms. Li also chairs our Environmental, Social and Governance Committee. Ms.
Added
Li has served as a non-executive director of Huanxi Media Group Limited (SEHK: 1003) since September 2020. Prior to joining us, Ms. Li was in charge of human resources operations at Cheetah Mobile (NYSE: CMCM) from 2013 to 2014. Previously, Ms.
Added
Li founded Goalcareer, a consulting firm serving Fortune 500 companies and startups with a focus in the semiconductor, telecommunication and internet sectors, and worked as its chief executive officer from 2008 to 2012. Ms. Li received her bachelor’s degree in law from Lingnan Normal University in 2008. JP Gan has served as our director since January 2015. Mr.
Added
Gan has been a founding partner of INCE Capital Limited since 2019. From 2006 to 2019, Mr. Gan was a managing partner of Qiming Venture Partners. From 2005 to 2006, Mr. Gan was the chief financial officer of KongZhong Corporation. Mr. Gan is also an independent director of Trip.com Group Ltd. (Nasdaq: TCOM). Mr.
Added
Gan received his bachelor’s degree in business administration from the University of Iowa in 1994 and his MBA degree from the University of Chicago Booth School of Business in 1999. 137 Table of Contents Eric He has served as our director since March 2018.
Added
He currently also serves as an independent director of 51job (Nasdaq: JOBS) since 2014 and as an independent director of Agora, Inc. (Nasdaq: API) since 2020. Mr. He had served as chief financial officer of JOYY Inc. (previously known as YY Inc.) (Nasdaq: YY) from August 2011 to May 2017. Prior to that, Mr.
Added
He served as chief financial officer of Giant Interactive Group, Inc. from March 2007 to August 2011. He served as chief strategy officer of Ninetowns Internet Technology Group from 2004 to 2007. Mr. He received a bachelor’s degree in accounting from National Taipei University and an MBA degree from the Wharton School of Business at the University of Pennsylvania. Mr.
Added
He is a Chartered Financial Analyst in the United States and was certified as a member of American Institute of Certified Public Accountants in 1991. Feng Li previously served as our director from November 2014 to May 2016, and started to serve as our director again in February 2019. Mr.
Added
Li is the founder and CEO of Shanghai Ziyou Investment Management Limited, also known as FreeS Fund, a venture capital firm that manages funds primarily investing in early and growth stage startups in China and overseas, and focuses on the industries of upgraded consuming, key sensors, A.I. and biotech. Prior to founding FreeS Fund, Mr.
Added
Li worked as a partner in the venture capital department in IDG Capital, a global network of private equity and venture capital firms. Prior to that, Mr. Li served as deputy vice president of New Oriental School, a leading English teaching and learning school in China. Mr.
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Li currently serves as a board member of several private internet and technology companies based in China, and has served as Chairman of Secretary Committee of Three Squirrels Inc. (Shenzhen Stock Exchange: 300783) since May 2020. Mr.
Added
Li received his bachelor’s degree in Chemistry from Peking University in 1996 and his master’s degree in Chemistry from the University of Rochester in 1998. Guoqi Ding has served as our director since May 2020. Since 2019, Mr.
Added
Guoqi Ding has served as chairman of the board of Zhiqin Management Consulting Ltd., a China-based consulting service provider, and an independent director on the board of Dian Diagnostics Group Co., Ltd., (SHE: 300244) a China-based medical diagnosis outsourcing service provider listed on Shenzhen Stock Exchange since 2017. Between 2004 and 2017, Mr.
Added
Ding held various positions, including chief financial officer, at Fosun International Limited, one of the largest investment groups in China. Between 2012 and 2017, Mr. Ding also served as a board member of several companies based in China, including Shanghai Forte Land Company Limited, one of China’s largest real estate developers. Mr.
Added
Ding received his bachelor’s degree in Finance and Economics from Shanghai University of Finance and Economics, and was recognized as an accountant by Ministry of Finance of the People’s Republic of China in 1997. Xin Fan has served as our chief financial officer since September 2017. Prior to that, Mr.
Added
Fan served as our vice president of finance since April 2016. Before joining our company, Mr. Fan served as a finance director at NetEase (Nasdaq: NTES; HKEX: 9999) from 2011 to 2016. Prior to 2011, Mr. Fan held various positions at KPMG Huazhen for an aggregate of eight years and served as a senior manager there from 2008 to 2011.
Added
Mr. Fan currently also serves as an independent director of UP Fintech Holding Limited (Nasdaq: TIGR). Mr. Fan received his bachelor’s degree in international accounting from Shanghai University of Finance and Economics in 2001. Mr. Fan is a regular member of the American Institute of Certified Public Accountants and a certified public accountant in China.
Added
He also holds licenses as chartered global management accountant and chartered certified accountant in the United Kingdom. B. Compensation For the fiscal year ended December 31, 2021, we paid an aggregate of approximately RMB10.6 million (US$1.7 million) in cash to our executive officers, and approximately RMB1.5 million (US$0.2 million) in cash to our non-executive directors.
Added
We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.
Added
Our PRC subsidiaries and VIEs are required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund. 138 Table of Contents Share Incentive Plans In November 2014, our board of directors approved a global share incentive plan, or the Global Share Plan, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business.
Added
In February 2018, our shareholders and board of directors adopted the 2018 share incentive plan, or the 2018 Plan, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business. We subsequently amended our 2018 Plan in March 2020 by unanimous written approval of our board of directors.
Added
As of February 28, 2022, the maximum aggregate number of ordinary shares which may be issued pursuant to all awards under the Global Share Plan is 19,880,315 ordinary shares, subject to amendment.
Added
The maximum aggregate number of shares which may be issued pursuant to all awards under the 2018 Plan, or the Award Pool, is initially 6,962,069, provided that, in the event that the aggregate number of shares which may be issued pursuant to all granted awards (including incentive share options) reaches 6,962,069, thereafter the Award Pool of the 2018 Plan shall be increased automatically if and whenever the unissued shares reserved accounts for less than 0.5% of the total number of shares of Bilibili issued and outstanding on the last day of the immediately preceding fiscal year (excluding issued shares reserved for future option exercise and restricted share unit vesting), as a result of which increase the shares unissued and reserved in the Award Pool immediately after each such increase shall equal to 2.5% of the total number of shares of Bilibili issued and outstanding on the last day of the immediately preceding fiscal year (excluding issued shares reserved for future option exercise and restricted share unit vesting).
Added
The aggregate number of Class Z Ordinary Shares available for future grant under the Global Share Plan and the 2018 Plan was 2,752,294 as of February 28, 2022. The following paragraphs describe the principal terms of the Global Share Plan and the 2018 Plan. Types of Awards .
Added
The Global Share Plan and the 2018 Plan both permit the awards of options, restricted shares, restricted share units or any other type of awards approved by the plan administrator. Plan Administration. Our chairman of the board of directors or a committee of one or more members of the board of directors will administer the Global Share Plan.
Added
The chairman or the committee, as applicable, will determine the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each award under the Global Share Plan.
Added
The full board of directors will conduct the general administration of the Global Share Plan if required by applicable laws and with respect to awards granted to the chairman of the board of directors, the committee members (if applicable), independent directors and executive officers of Bilibili.
Added
Our board of directors or a committee of one or more members of the board of directors will administer the 2018 Plan.
Added
The committee or the full board of directors, as applicable, will determine the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each award under the 2018 Plan. Award Agreement .
Added
Awards granted under the Global Share Plan and the 2018 Plan are evidenced by an award agreement that sets forth terms, conditions and limitations for each award, which may include the term of the award, the provisions applicable in the event that the grantee’s employment or service terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind the award.
Added
Eligibility . We may grant awards to our employees, directors and consultants of Bilibili under each of the Global Share Plan and the 2018 Plan. In addition, under the 2018 Plan, we may grant options that are intended to qualify as incentive share options only to our employees and employees of our parent companies and subsidiaries. Vesting Schedule .
Added
Under each of the Global Share Plan and the 2018 Plan, in general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement. Exercise of Options . Under each of the Global Share Plan and the 2018 Plan, the plan administrator determines the exercise price for each award, which is stated in the award agreement.
Added
The vested portion of option will expire if not exercised prior to the time as the plan administrator determines at the time of its grant. However, the maximum exercisable term is ten years from the date of a grant. Transfer Restrictions .
Added
Under each of the Global Share Plan and the 2018 Plan, awards may not be transferred in any manner by the participant other than in accordance with the exceptions provided in the Global Share Plan or the relevant award agreement or otherwise determined by the plan administrator, such as transfers by will or the laws of descent and distribution. 139 Table of Contents Termination and Amendment .
Added
Unless terminated earlier, each of the Global Share Plan and the 2018 Plan, has a term of ten years. The plan administrator has the authority to terminate, amend or modify the Global Share Plan. Our board of directors has the authority to amend or terminate the 2018 Plan.
Added
Except with respect to amendments made by the plan administrator, no termination, amendment or modification may adversely affect in any material way any awards previously granted pursuant to each of the Global Share Plan and the 2018 Plan unless agreed by the participant.
Added
The following table summarizes, as of February 28, 2022, the number of ordinary shares underlying outstanding options granted to several of our directors and executive officers and to other individuals as a group under the Global Share Plan and the 2018 Plan, excluding awards that were forfeited or cancelled after the relevant grant dates.
Added
Name Ordinary Shares Underlying Options Awarded Exercise Price (US$/Share) Date of Grant Date of Expiration Rui Chen * From nominal to March 2020 March 2027 * US$20.26 November 2020 November 2027 Yi Xu — Ni Li * Nominal November 2020 November 2027 Xin Fan * From nominal to US$20.26 Various dates from April 2016 to March 2020 Various dates from April 2022 to March 2027 Other grantees 14,583,161 From nominal to US$20.26 Various dates from June 2016 to December 2021 Various dates from June 2022 to December 2028 Total 22,383,161 Note: * Less than 1% of our total outstanding shares.
Added
Equity Incentive Trust s Bilibili Inc. Global Share Incentive Trust and Bilibili Inc. Special Share Incentive Trust, which we collectively refer to as the Equity Incentive Trusts, were established under their respective trust deeds, each dated November 28, 2017, between us and Ark Trust (Hong Kong) Limited, or Ark Trust, as trustee of each of the Equity Incentive Trusts.
Added
Through the Equity Incentive Trusts, our ordinary shares and other rights and interests under awards granted pursuant to our Global Share Plan may be provided to certain of recipients of equity awards. The participants in the Equity Incentive Trusts include our employees and certain of our executive officers.
Added
Participants in the Equity Incentive Trusts transfer their equity awards to Ark Trust to be held for their benefit.
Added
Upon satisfaction of vesting conditions and request by grant recipients, Ark Trust will exercise the equity awards and transfer the relevant ordinary shares and other rights and interest under the equity awards to the relevant grant recipients with the consent of the trust administrator.
Added
Each of the trust deeds provides that Ark Trust shall not exercise the voting rights attached to such ordinary shares unless otherwise directed by the trust administrator, which is an authorized representative of our company. C. Board Practices Board of Directors Our board of directors consists of seven directors.
Added
A director is not required to hold any shares in Bilibili by way of qualification.
Added
Subject to the Nasdaq Stock Market rules, a director may vote with respect to any contract, proposed contract or arrangement in which he is materially interested provided (a) such director, if his interest in such contract or arrangement is material, has declared the nature of his interest at the earliest meeting of the board at which it is practicable for him to do so, either specifically or by way of a general notice and (b) if such contract or arrangement is a transaction with a related party, such transaction has been approved by the audit committee.
Added
The directors may exercise all the powers of the company to borrow money, mortgage its undertaking, property and uncalled capital, and issue debentures or other securities whenever money is borrowed or as security for any obligation of the company or of any third party.
Added
None of our non-executive directors has a service contract with us that provides for benefits upon termination of service. 140 Table of Contents Committees of the Board of Directors We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee.
Added
We have adopted a charter for each of the three committees. Each committee’s members and functions are described below. Audit Committee . Our audit committee consists of Eric He, JP Gan and Feng Li. Eric He is the chairman of our audit committee.
Added
We have determined that Eric He, JP Gan and Feng Li each satisfies the “independence” requirements of Rule 5605(c)(2) of the Nasdaq Stock Market Rules and meet the independence standards under Rule 10A-3 under the Exchange Act, as amended.
Added
We have determined that Eric He qualifies as an “audit committee financial expert.” The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company.
Added
The audit committee is responsible for, among other things: • appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; • reviewing with the independent auditors any audit problems or difficulties and management’s response; • discussing the annual audited financial statements with management and the independent auditors; • reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; • reviewing and approving all proposed related party transactions; • meeting separately and periodically with management and the independent auditors; and • monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.
Added
Compensation Committee . Our compensation committee consists of JP Gan, Eric He and Feng Li. JP Gan is the chairman of our compensation committee. We have determined that JP Gan, Eric He and Feng Li each satisfies the “independence” requirements of Rule 5605(a)(2) of the Nasdaq Stock Market Rules.
Added
The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated.
Added
The compensation committee is responsible for, among other things: • reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; • reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; • reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and • selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management.
Added
Nominating and Corporate Governance Committee . Our nominating and corporate governance committee consists of JP Gan, Eric He and Feng Li. JP Gan is the chairman of our nominating and corporate governance committee. JP Gan, Eric He and Feng Li each satisfies the “independence” requirements of Rule 5605(a)(2) of the Nasdaq Stock Market Rules.
Added
The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees.
Added
The nominating and corporate governance committee is responsible for, among other things: 141 Table of Contents • selecting and recommending to the board nominees for election by the shareholders or appointment by the board; • reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; • making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and • advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.
Added
Duties of Directors Under Cayman Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a duty to exercise the care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances.
Added
In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association and the class rights vested thereunder in the holders of the shares. A shareholder may in certain circumstances have rights to damages if a duty owed by the directors is breached.
Added
Our board of directors has all the powers necessary for managing, and for directing and supervising, our business affairs.
Added
The functions and powers of our board of directors include, among others: • convening shareholders’ annual general meetings and reporting its work to shareholders at such meetings; • declaring dividends and distributions; • appointing officers and determining the term of office of the officers; • exercising the borrowing powers of our company and mortgaging the property of our company; and • approving the transfer of shares in Bilibili, including the registration of such shares in our share register.
Added
Terms of Directors and Officers Our officers are elected by and serve at the discretion of the board of directors.
Added
At each annual general meeting one-third of the directors for the time being, or, if their number is not three or a multiple of three, then the number nearest to but not less than one-third, shall retire from office by rotation provided that every director (including those appointed for a specific term) shall be subject to retirement by rotation at least once every three years.
Added
A retiring director shall be eligible for re-election. The Company, i.e., Bilibili Inc., at the general meeting at which a Director retires may fill the vacated office. The directors to retire by rotation shall include (so far as necessary to obtain the number required) any director who wishes to retire and not to offer himself for re-election.
Added
Any director who has not been subject to retirement by rotation in the three years preceding the annual general meeting shall retire by rotation at such annual general meeting.
Added
Any further directors so to retire shall be those who have been longest in office since their last re-election or appointment and so that as between persons who became or were last re-elected directors on the same day those to retire shall (unless they otherwise agree among themselves) be determined by lot.
Added
A director is not required to retire upon reaching any particular age.
Added
A director will be removed from office automatically if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; or (ii) is found by our company to be or becomes of unsound mind. 142 Table of Contents Board Diversity Board Diversity Matrix (As of February 28, 2022) Country of Principal Executive Offices: People’s Republic of China Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law No Total Number of Directors 7 Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity Directors 1 6 — — Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction — LGBTQ+ — Did Not Disclose Demographic Background 1 D.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

13 edited+2 added−1 removed18 unchanged
Biggest changeAs of December 31, 2018 and 2019, we had a total amount of RMB50.3 million due to Chaodian Inc., which was trade in nature, and RMB195.3 million due from the investment fund and other related parties, respectively, which was non-trade in nature.
Biggest changeFor the years ended December 31, 2019, 2020 and 2021, we purchased goods, promotional and other services amounting to RMB87.6 million, RMB35.1 million and RMB117.1 million (US$18.4 million), respectively. 147 Table of Contents As of December 31, 2019 and 2020, we had RMB195.3 million due from the investment fund and other related parties, and RMB74.2 million due from the investment fund which was non-trade in nature, respectively.
In September 2020, we acquired noncontrolling interest of Chaodian Group from certain related parties on which we have significant influence, with purchase consideration of RMB257.3 million. As of December 31, 2020, we had no unpaid consideration due to certain related parties. Interest bearing loans.
In September 2020, we acquired noncontrolling interest of Chaodian from certain related parties on which we have significant influence, with purchase consideration of RMB257.3 million. As of December 31, 2021, we had no unpaid consideration due to certain related parties. Interest bearing loans.
If we propose to register for a public offering or our securities other than relating to any share incentive plan or a corporate reorganization, we must offer holders of our registrable securities an opportunity to be included in such registration.
Piggyback Registration Rights . If we propose to register for a public offering or our securities other than relating to any share incentive plan or a corporate reorganization, we must offer holders of our registrable securities an opportunity to be included in such registration.
We have the right to defer filing of a registration statement for a period of not more than 90 days if our board of directors determines in good faith that filing of a registration statement in the near future will be materially detrimental to us or our shareholders, but we cannot exercise the deferral right more than once for more than once during any twelve-month period and cannot register any other securities during such period. 125 Table of Contents Piggyback Registration Rights .
We have the right to defer filing of a registration statement for a period of not more than 90 days if our board of directors determines in good faith that filing of a registration statement in the near future will be materially detrimental to us or our shareholders, but we cannot exercise the deferral right more than once for more than once during any twelve-month period and cannot register any other securities during such period.
Specifically, each executive officer has agreed not to (i) approach our suppliers, clients, customers or contacts or other persons or entities introduced to the executive officer in his or her capacity as a representative of us for the purpose of doing business with such persons or entities that will harm our business relationships with these persons or entities; (ii) assume employment with or provide services to any of our competitors, or engage, whether as principal, partner, licensor or otherwise, any of our competitors, without our express consent; or (iii) seek directly or indirectly, to solicit the services of any of our employees who is employed by us on or after the date of the executive officer’s termination, or in the year preceding such termination, without our express consent. 126 Table of Contents We have also entered into indemnification agreements with each of our directors and executive officers.
Specifically, each executive officer has agreed not to (i) approach our suppliers, clients, customers or contacts or other persons or entities introduced to the executive officer in his or her capacity as a representative of us for the purpose of doing business with such persons or entities that will harm our business relationships with these persons or entities; (ii) assume employment with or provide services to any of our competitors, or engage, whether as principal, partner, licensor or otherwise, any of our competitors, without our express consent; or (iii) seek directly or indirectly, to solicit the services of any of our employees who is employed by us on or after the date of the executive officer’s termination, or in the year preceding such termination, without our express consent.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders Please refer to “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” B. Related Party Transactions Contractual Arrangements with Our VIEs and Their Respective Shareholders See “Item 4. Information on the Company—C.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders Please refer to “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” 145 Table of Contents B. Related Party Transactions Contractual Arrangements with the Relevant VIEs and Their Respective Individual Shareholders See “Item 4. Information on the Company—C.
The balances due from the investment fund as of December 31, 2019 and December 31, 2020 were consideration receivables and dividend receivables related to the equity investments transfer in 2019, which was non-trade in nature. Promotional and other services.
The balances due from the investment fund as of December 31, 2019, December 31, 2020, and December 31, 2021 were consideration receivables and dividend receivables, which was non-trade in nature. Promotional and other services.
As of December 31, 2020, we had RMB74.2 million due from the investment fund, which was non-trade in nature. In July 2019, we entered into a series of agreements to acquire a controlling interest in Chaodian Inc.
As of December 31, 2021, we had RMB48.1 million due from the investment fund, which was non-trade in nature. In July 2019, we entered into a series of agreements to acquire a controlling interest in Chaodian.
The balances as of December 31, 2020 mainly represent interest-bearing loans and interest expenses of RMB105.6 million related to an equity investee, which was non-trade in nature, and partially offset by the trade payables to the equity investee. The annual interest rates of the loans were 2.8% and all the loans were within one year. C.
The balances as of December 31, 2020 and 2021 mainly represent interest-bearing loans and interest expenses of RMB105.6 million and RMB279.2 million related to an equity investee, which was non-trade in nature, and partially offset by the trade payables to the equity investee. Interest rates of loans to the investee incurred in 2020 and 2021 were 2.8% and 4.5%, respectively.
Accordingly, Tencent Mobility Limited or its affiliates are entitled one registration on Form F-3, after the expiration of a lock-up period, covering such Class Z ordinary shares issued and sold to Tencent Mobility Limited pursuant to the aforesaid share purchase and investor rights agreement.
Accordingly, Tencent Mobility Limited or its affiliates are entitled one registration on Form F-3, after the expiration of a lock-up period, covering such Class Z ordinary shares issued and sold to Tencent Mobility Limited pursuant to the aforesaid share purchase and investor rights agreement. 146 Table of Contents Employment Agreements and Indemnification Agreements We have entered into employment agreements with each of our executive officers.
Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company. Share Incentive Plan See “Management—Share Incentive Plans.” Other Related Party Transactions Investment transfers.
We have also entered into indemnification agreements with each of our directors and executive officers. Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of Bilibili. Share Incentive Plan See “Item 6.
Employment Agreements and Indemnification Agreements We have entered into employment agreements with each of our executive officers. Under these agreements, each of our executive officers is employed for a specified time period.
Under these agreements, each of our executive officers is employed for a specified time period.
We transferred several long-term investments to an entity controlled by our major shareholders amounting to RMB3.3 million for the year ended December 31, 2018. In June 2019, we transferred several equity investments to an investment fund, and one of our subsidiaries was its limited partner. The cost of the equity investments transfer was RMB465.8 million.
Directors, Senior Management and Employees—B. Compensation—Share Incentive Plans.” Other Related Party Transactions Investment transfers. In June 2019, we transferred several equity investments to an investment fund, and one of our subsidiaries was its limited partner. The cost of the equity investments transfer was RMB465.8 million.
Removed
For the years ended December 31, 2018, 2019 and 2020, we purchased promotional and other services amounting to RMB163.0 million, RMB87.6 million and RMB35.1 million (US$5.4 million), respectively.
Added
Interest bearing guaranteed loans. We established an entity with an independent third party and two entities respectively controlled by Mr. Rui Chen and Ms. Ni Li to acquire the land use rights for a parcel of land in Shanghai for future construction.
Added
We made capital contribution of RMB1,084.3 million and provided interest-bearing guaranteed loans of an aggregate principal amount of RMB1,701.0 million to an entity for its operation. The annual interest rates of the loans were 3.3%. The balance as of December 31, 2021 represents interest-bearing guaranteed loans and interest expenses related to an entity, which are non-trade in nature. C.

Other BILI 10-K year-over-year comparisons