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What changed in Bilibili Inc.'s 20-F — 2022 vs 2023

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Paragraph-level year-over-year comparison of Bilibili Inc.'s 2022 and 2023 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 2023 report.

+1043 added−1035 removedSource: 20-F (2024-03-27) vs 20-F (2023-04-27)

Top changes in Bilibili Inc.'s 2023 20-F

1043 paragraphs added · 1035 removed · 821 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

351 edited+97 added−91 removed580 unchanged
Biggest changeOther Subsidiaries Primary Beneficiaries of VIEs VIEs and VIEs’ Subsidiaries Eliminating adjustments Consolidated Totals (RMB, in thousands) Other inter-company costs and expenses (2) — (861,726 ) (3,411,948 ) (418,667 ) 4,692,341 — Total costs and expenses (30,558 ) (8,271,975 ) (7,791,387 ) (19,582,407 ) 5,419,216 (30,257,111 ) Net loss from subsidiaries and net loss of VIEs and VIEs’ subsidiaries (3) (7,685,211 ) (4,520,307 ) (3,856,817 ) — 16,062,335 — Gain/(Loss) from non-operations 218,756 994,357 9,907 (268,584 ) — 954,436 Loss before income tax expenses (7,497,013 ) (7,685,581 ) (4,507,004 ) (3,776,245 ) 16,062,335 (7,403,508 ) Income tax — (1,182 ) (13,303 ) (89,660 ) — (104,145 ) Net loss (7,497,013 ) (7,686,763 ) (4,520,307 ) (3,865,905 ) 16,062,335 (7,507,653 ) Net loss attributable to noncontrolling interests — 1,552 — 9,088 — 10,640 Net loss attributable to Bilibili Inc.’s shareholders (7,497,013 ) (7,685,211 ) (4,520,307 ) (3,856,817 ) 16,062,335 (7,497,013 ) For the Year Ended December 31, 2021 Bilibili Inc.
Biggest changeOther Subsidiaries Primary Beneficiaries of VIEs VIEs and VIEs’ Subsidiaries Eliminating adjustments Consolidated Totals (RMB, in thousands) Third-party revenues — 319,909 6,702,619 14,876,639 — 21,899,167 Inter-company consulting and services revenues (1) — 726,875 — — (726,875 ) — Other inter-company revenues (2) — 3,065,560 428,674 1,198,107 (4,692,341 ) — Total revenues — 4,112,344 7,131,293 16,074,746 (5,419,216 ) 21,899,167 Third-party costs and expenses (30,558 ) (7,410,249 ) (4,379,439 ) (18,436,865 ) — (30,257,111 ) Inter-company consulting and services costs and expenses (1) — — — (726,875 ) 726,875 — Other inter-company costs and expenses (2) — (861,726 ) (3,411,948 ) (418,667 ) 4,692,341 — Total costs and expenses (30,558 ) (8,271,975 ) (7,791,387 ) (19,582,407 ) 5,419,216 (30,257,111 ) Net loss from subsidiaries and net loss of VIEs and VIEs’ subsidiaries (3) (7,685,211 ) (4,520,307 ) (3,856,817 ) — 16,062,335 — Gain/(Loss) from non-operations 218,756 994,357 9,907 (268,584 ) — 954,436 Loss before income tax expenses (7,497,013 ) (7,685,581 ) (4,507,004 ) (3,776,245 ) 16,062,335 (7,403,508 ) Income tax — (1,182 ) (13,303 ) (89,660 ) — (104,145 ) Net loss (7,497,013 ) (7,686,763 ) (4,520,307 ) (3,865,905 ) 16,062,335 (7,507,653 ) Net loss attributable to noncontrolling interests — 1,552 — 9,088 — 10,640 Net loss attributable to Bilibili Inc.’s shareholders (7,497,013 ) (7,685,211 ) (4,520,307 ) (3,856,817 ) 16,062,335 (7,497,013 ) For the Year Ended December 31, 2021 Bilibili Inc.
Risk Factors—Risks Related to Doing Business in China—The approval of, or report and filings with the CSRC or other PRC government authorities may be required in connection with our offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing and report process.” The Holding Foreign Companies Accountable Act Pursuant to the HFCAA, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB, for two consecutive years, the SEC will prohibit our shares or ADSs from being traded on a national securities exchange or in the over-the-counter trading market in the United States.
Risk Factors—Risks Related to Doing Business in China—The approval of, or report and filings with the CSRC or other PRC government authorities may be required in connection with our offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing and report process.” The Holding Foreign Companies Accountable Act Pursuant to the Holding Foreign Companies Accountable Act, or the HFCAA, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for two consecutive years, the SEC will prohibit our shares or ADSs from being traded on a national securities exchange or in the over-the-counter trading market in the United States.
Holders of our Class Z ordinary shares or the ADSs hold equity interest in Bilibili Inc., our Cayman Islands holding company, and do not have direct or indirect equity interests in the VIEs and their subsidiaries.
Holders of our Class Z ordinary shares or the ADSs hold equity interest in Bilibili Inc., our Cayman Islands holding company, and do not have direct or indirect equity interests in the VIEs and their subsidiaries.
Bilibili, its PRC subsidiaries and the 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.
Bilibili, its PRC subsidiaries and the 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.
We currently do not charge users for game playing time. However, if we were to start charging for playing time, we may lose our players, and our financial condition and results of operations may be materially and adversely affected.
We currently do not charge users for game playing time. However, if we were to start charging for playing time, we may lose our game players, and our financial condition and results of operations may be materially and adversely affected.
See “—Risks Related to Doing Business in China—Our ADSs may be prohibited from trading in the United States under the Holding Foreign Companies Accountable Act, or the HFCAA, in the future if the PCAOB is unable to inspect or investigate completely auditors located in China.
See “—Risks Related to Doing Business in China—Our ADSs may be prohibited from trading in the United States under the Holding Foreign Companies Accountable Act, or the HFCAA, in the future if the PCAOB is unable to inspect or investigate completely auditors located in China.
If the PRC government deems that our contractual arrangements with the VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
If the PRC government deems that our contractual arrangements with the VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong, and our auditor was subject to that determination.
On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong, and our auditor was subject to that determination.
In May 2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021.
In May 2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021.
In accordance with the HFCAA, our securities would be prohibited from being traded on a national securities exchange or in the over-the-counter trading market in the United States if we are identified as a Commission-Identified Issuer for two consecutive years in the future.
In accordance with the HFCAA, our securities would be prohibited from being traded on a national securities exchange or in the over-the-counter trading market in the United States if we are identified as a Commission-Identified Issuer for two consecutive years in the future.
Although our Class Z ordinary shares have been listed on the Hong Kong Stock Exchange and the ADSs and the Class Z ordinary shares are fully fungible, we cannot assure you that an active trading market for our Class Z ordinary shares on the Hong Kong Stock Exchange will be sustained or that the ADSs can be converted and traded with sufficient market recognition and liquidity, if our shares and ADSs are prohibited from trading in the United States.
Although our Class Z ordinary shares have been listed on the Hong Kong Stock Exchange and the ADSs and the Class Z ordinary shares are fully fungible, we cannot assure you that an active trading market for our Class Z ordinary shares on the Hong Kong Stock Exchange will be sustained or that the ADSs can be converted and traded with sufficient market recognition and liquidity, if our shares and ADSs are prohibited from trading in the United States.
A prohibition of being able to trade in the United States would substantially impair your ability to sell or purchase our ADSs when you wish to do so, and the risk and uncertainty associated with delisting would have a negative impact on the price of our ADSs.
A prohibition of being able to trade in the United States would substantially impair your ability to sell or purchase our ADSs when you wish to do so, and the risk and uncertainty associated with delisting would have a negative impact on the price of our ADSs.
The Anti-Monopoly Guidelines for the Internet Platform Economy Sector is consistent with the Anti-Monopoly Law of PRC and prohibits monopoly agreements, abuse of dominant position and concentration of undertakings that may have the effect of eliminating or restricting competitions in the field of platform economy.
The Anti-Monopoly Guidelines for the Internet Platform Economy Sector is consistent with the Anti-Monopoly Law of the PRC and prohibits monopoly agreements, abuse of dominant position and concentration of undertakings that may have the effect of eliminating or restricting competitions in the field of platform economy.
Under the Enterprise Income Tax Law and its implementation rules, subject to any applicable tax treaty or similar arrangement between mainland China and the jurisdiction of residence of the holders of our Class Z ordinary shares and/or ADSs that provides for a different income tax arrangement, PRC withholding tax at the rate of 10% is normally applicable to dividends from PRC sources payable to investors that are non-PRC resident enterprises, which do not have an establishment or place of business in mainland China, or which have such establishment or place of business if the relevant income is not effectively connected with the establishment or place of business.
Under the PRC Enterprise Income Tax Law and its implementation rules, subject to any applicable tax treaty or similar arrangement between mainland China and the jurisdiction of residence of the holders of our Class Z ordinary shares and/or ADSs that provides for a different income tax arrangement, PRC withholding tax at the rate of 10% is normally applicable to dividends from PRC sources payable to investors that are non-PRC resident enterprises, which do not have an establishment or place of business in mainland China, or which have such establishment or place of business if the relevant income is not effectively connected with the establishment or place of business.
In the event that a substantial number of Class Z ordinary shares are deposited with the depositary in exchange for ADSs or vice versa, the liquidity and trading price of our Class Z ordinary shares on the Hong Kong Stock Exchange and the ADSs on the Nasdaq may be adversely affected. 75 Table of Contents There is uncertainty as to whether Hong Kong stamp duty will apply to the trading or conversion of the ADSs.
In the event that a substantial number of Class Z ordinary shares are deposited with the depositary in exchange for ADSs or vice versa, the liquidity and trading price of our Class Z ordinary shares on the Hong Kong Stock Exchange and the ADSs on Nasdaq may be adversely affected. 75 Table of Contents There is uncertainty as to whether Hong Kong stamp duty will apply to the trading or conversion of the ADSs.
There is no direct trading or settlement between the Nasdaq and the Hong Kong Stock Exchange on which the ADSs and our Class Z ordinary shares are respectively traded.
There is no direct trading or settlement between Nasdaq and the Hong Kong Stock Exchange on which the ADSs and our Class Z ordinary shares are respectively traded.
Other Subsidiaries Primary Beneficiaries of VIEs VIEs and VIEs’ Subsidiaries Eliminating adjustments Consolidated Totals (RMB, in thousands) Cash and cash equivalents 270,138 6,422,618 1,889,388 1,590,440 — 10,172,584 Time deposits 4,067,326 696,460 — 4,186 — 4,767,972 Restricted cash — 14,803 — — — 14,803 Accounts receivable, net — 114,653 594,004 619,927 — 1,328,584 Amounts due from Group companies (4) 22,313,954 12,925,846 10,386,526 507,849 (46,134,175 ) — Amount due from related parties — 1,466,848 8,215 119,857 — 1,594,920 Prepayments and other current assets 61,631 324,557 680,482 883,903 — 1,950,573 Short-term investments 1,091,044 2,358,697 901,371 272,340 — 4,623,452 Long-term investments, net 1,157,990 2,344,475 295,813 1,852,740 — 5,651,018 Investment in subsidiaries and net assets of VIEs and VIEs’ subsidiaries 226,249 — — — (226,249 ) — Other non-current assets — 4,486,293 1,388,056 5,852,315 — 11,726,664 Total assets 29,188,332 31,155,250 16,143,855 11,703,557 (46,360,424 ) 41,830,570 Accounts payable — 117,183 722,281 3,452,192 — 4,291,656 Salary and welfare payables — 1,003,659 54,081 343,786 — 1,401,526 Taxes payable — 101,278 49,804 165,162 — 316,244 Short-term loan and current portion of long-term debt 5,137,633 883,753 200,000 400,000 — 6,621,386 Deferred revenue 32,513 20,156 628,115 2,138,539 — 2,819,323 Accrued liabilities and other payables 97,208 829,858 76,708 531,188 — 1,534,962 Amounts due to Group companies (4) — 24,157,903 9,560,512 12,415,760 (46,134,175 ) — Amounts due to related parties — 80,378 — 27,929 — 108,307 Other long-term liabilities 8,683,150 534,935 9,871 269,623 — 9,497,579 Deficit in subsidiaries and net loss of VIEs and VIEs’ subsidiaries (3) — 3,199,755 8,042,238 — (11,241,993 ) — Total liabilities 13,950,504 30,928,858 19,343,610 19,744,179 (57,376,168 ) 26,590,983 Total Bilibili Inc’s Shareholders’ equity/(deficit) (3) 15,237,828 226,249 (3,199,755 ) (8,042,238 ) 11,015,744 15,237,828 Noncontrolling interests — 143 — 1,616 — 1,759 Total shareholders’ equity/(deficit) 15,237,828 226,392 (3,199,755 ) (8,040,622 ) 11,015,744 15,239,587 Total liabilities and shareholders’ equity/(deficit) 29,188,332 31,155,250 16,143,855 11,703,557 (46,360,424 ) 41,830,570 12 Table of Contents As of December 31, 2021 Bilibili Inc.
Other Subsidiaries Primary Beneficiaries of VIEs VIEs and VIEs’ Subsidiaries Eliminating adjustments Consolidated Totals (RMB, in thousands) Cash and cash equivalents 270,138 6,422,618 1,889,388 1,590,440 — 10,172,584 Time deposits 4,067,326 696,460 — 4,186 — 4,767,972 Restricted cash — 14,803 — — — 14,803 Accounts receivable, net — 114,653 594,004 619,927 — 1,328,584 Amounts due from Group companies (4) 22,313,954 12,925,846 10,386,526 507,849 (46,134,175 ) — Amount due from related parties — 1,466,848 8,215 119,857 — 1,594,920 Prepayments and other current assets 61,631 324,557 680,482 883,903 — 1,950,573 Short-term investments 1,091,044 2,358,697 901,371 272,340 — 4,623,452 Long-term investments, net 1,157,990 2,344,475 295,813 1,852,740 — 5,651,018 Investment in subsidiaries and net assets of VIEs and VIEs’ subsidiaries 226,249 — — — (226,249 ) — Other non-current assets — 4,486,293 1,388,056 5,852,315 — 11,726,664 Total assets 29,188,332 31,155,250 16,143,855 11,703,557 (46,360,424 ) 41,830,570 Accounts payable — 117,183 722,281 3,452,192 — 4,291,656 Salary and welfare payables — 1,003,659 54,081 343,786 — 1,401,526 Taxes payable — 101,278 49,804 165,162 — 316,244 Short-term loan and current portion of long-term debt 5,137,633 883,753 200,000 400,000 — 6,621,386 Deferred revenue 32,513 20,156 628,115 2,138,539 — 2,819,323 Accrued liabilities and other payables 97,208 829,858 76,708 531,188 — 1,534,962 Amounts due to Group companies (4) — 24,157,903 9,560,512 12,415,760 (46,134,175 ) — Amounts due to related parties — 80,378 — 27,929 — 108,307 Other long-term payable 8,683,150 534,935 9,871 269,623 — 9,497,579 Deficit in subsidiaries and net loss of VIEs and VIEs’ subsidiaries (3) — 3,199,755 8,042,238 — (11,241,993 ) — Total liabilities 13,950,504 30,928,858 19,343,610 19,744,179 (57,376,168 ) 26,590,983 Total Bilibili Inc’s Shareholders’ equity/(deficit) (3) 15,237,828 226,249 (3,199,755 ) (8,042,238 ) 11,015,744 15,237,828 Noncontrolling interests — 143 — 1,616 — 1,759 Total shareholders’ equity/(deficit) 15,237,828 226,392 (3,199,755 ) (8,040,622 ) 11,015,744 15,239,587 Total liabilities and shareholders’ equity/(deficit) 29,188,332 31,155,250 16,143,855 11,703,557 (46,360,424 ) 41,830,570 As of December 31, 2021 Bilibili Inc.
According to Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident enterprise by virtue of having its “de facto management body” in mainland China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) senior management and core management departments in charge of its daily operations function have their presence mainly in the PRC; (ii) decisions relating to the enterprise’s financial matters (such as loan, financing, financial risk management, etc.) and human resource matters (such as appointment, dismissal and remuneration, etc.) are made or are subject to determination or approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior executives habitually reside in the PRC.
According to Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident enterprise by virtue of having its “de facto management body” in mainland China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) senior management and core management departments in charge of its daily operations function have their presence mainly in the PRC; (ii) decisions relating to the enterprise’s financial matters (such as loan, financing, and financial risk management) and human resource matters (such as appointment, dismissal and remuneration) are made or are subject to determination or approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior executives habitually reside in the PRC.
Because we are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of U.S. securities rules and regulations that are applicable to U.S. domestic issuers, including: • the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q; • or current reports on Form 8-K with the SEC; • the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; • the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and • the selective disclosure rules by issuers of material nonpublic information under Regulation FD.
Because we are a foreign private issuer under the Securities Exchange Act of 1934, or the Exchange Act, we are exempt from certain provisions of U.S. securities rules and regulations that are applicable to U.S. domestic issuers, including: • the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q; • or current reports on Form 8-K with the SEC; • the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; • the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and • the selective disclosure rules by issuers of material nonpublic information under Regulation FD.
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 mainland 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.” 7 Table of Contents Furthermore, the PRC government has recently indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers.
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 mainland 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.” 7 Table of Contents Furthermore, the PRC government has indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers.
PRC laws and regulations, including this notice, have provided various restrictions on virtual currency and imposed various requirements and obligations on online game operators with respect to the virtual currency used in their games, including that (i) any entity engaged in the services relating to the issuance or trading of virtual currencies for online games shall comply with the conditions relevant to the establishment of an internet culture entity for business purpose and file an application with the provincial administrative department of culture at its locality for preliminary examination and then with the MOC for approval; (ii) the total amount of virtual currency issued by online game operators and the amount purchased by individual users in mainland China is subject to limits, and online game operators are required to report the total amount of their issued virtual currency on a quarterly basis and are prohibited from issuing disproportionate amounts of virtual currency in order to generate revenues; (iii) virtual currency may only be provided to users in exchange for payment in legal currency and may only be used to pay for virtual goods and services of the issuer of the currency, and online game operators are required to keep transaction data records for no less than 180 days; (iv) online game operators are prohibited from providing lucky draws or lotteries that are conducted on the condition that participants contribute cash or virtual currency in exchange for game props or virtual currencies; (v) online game operators are prohibited from providing virtual currency trading services to minors; and (vi) companies involved with virtual currency in mainland China must be either issuers or trading platforms, and may not operate simultaneously both as issuers and as trading platforms.
PRC laws and regulations, including this notice, have provided various restrictions on virtual currency and imposed various requirements and obligations on online game operators with respect to the virtual currency used in their games, including that (i) any entity engaged in the services relating to the issuance or trading of virtual currencies for online games shall comply with the conditions relevant to the establishment of an internet culture entity for business purpose and file an application with the provincial administrative department of culture at its locality for preliminary examination and then with the Ministry of Culture of the PRC for approval; (ii) the total amount of virtual currency issued by online game operators and the amount purchased by individual users in mainland China is subject to limits, and online game operators are required to report the total amount of their issued virtual currency on a quarterly basis and are prohibited from issuing disproportionate amounts of virtual currency in order to generate revenues; (iii) virtual currency may only be provided to users in exchange for payment in legal currency and may only be used to pay for virtual goods and services of the issuer of the currency, and online game operators are required to keep transaction data records for no less than 180 days; (iv) online game operators are prohibited from providing lucky draws or lotteries that are conducted on the condition that participants contribute cash or virtual currency in exchange for game props or virtual currencies; (v) online game operators are prohibited from providing virtual currency trading services to minors; and (vi) companies involved with virtual currency in mainland China must be either issuers or trading platforms, and may not operate simultaneously both as issuers and as trading platforms.
According to the judicial interpretation, courts in mainland China shall not, among other things, support contracted parties to claim foreign investment contracts in sectors not on the Special Administrative Measures (Negative List) for Foreign Investment Access (2021 Version), most recently jointly promulgated by the Ministry of Commerce of the PRC, or the MOFCOM and the National Development and Reform Commission of the PRC, or the NDRC, on December 27, 2021 and became effective on January 1, 2022, or the Negative List (2021), as void because the contracts have not been approved or registered by administrative authorities.
According to the judicial interpretation, courts in mainland China shall not, among other things, support contracted parties to claim foreign investment contracts in sectors not on the Special Administrative Measures (Negative List) for Foreign Investment Access (2021 Version), most recently jointly promulgated by the Ministry of Commerce of the PRC and the National Development and Reform Commission of the PRC, or the NDRC, on December 27, 2021 and became effective on January 1, 2022, or the Negative List (2021), as void because the contracts have not been approved or registered by administrative authorities.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we continue to use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year.
As of the date of this annual report, our PRC subsidiaries, the VIEs and their subsidiaries have obtained the requisite licenses and permits from the PRC government authorities that are material for the business operations of Bilibili, its PRC subsidiaries, the VIEs and their subsidiaries in mainland China, including, among others, Value-added Telecommunication Business Licenses, License for Online Transmission of Audio-Visual Programs, Online Culture Operating Permits and License for Production and Operation of Radio and Television Program.
As of the date of this annual report, our PRC subsidiaries, the VIEs and their subsidiaries have obtained the requisite licenses and permits from the PRC government authorities that are material for the business operations of Bilibili, its PRC subsidiaries, the VIEs and their subsidiaries in mainland China, including, among others, Value-added Telecommunication Business Licenses, a License for Online Transmission of Audio-Visual Programs, Online Culture Operating Permits and Licenses for Production and Operation of Radio and Television Program.
As a result, a number of mobile apps were condemned publicly for their noncompliance with personal information protection policies, including, among other non-compliance actions, the failure to publish rules on the collection and improper use of users’ personal information, the failure to provide channels for users to access and revise their information, the failure to provide functions for users to cancel accounts, the unauthorized collection of personal information, the unreasonable requests for access, and the unauthorized sharing of information with third parties.
As a result, a number of mobile apps were condemned publicly for their non-compliance with personal information protection policies, including, among other non-compliance actions, the failure to publish rules on the collection and improper use of users’ personal information, the failure to provide channels for users to access and revise their information, the failure to provide functions for users to cancel accounts, the unauthorized collection of personal information, the unreasonable requests for access, and the unauthorized sharing of information with third parties.
We expect each of these trends to continue, and we must continue to adapt our strategy to successfully compete in this market. There are numerous other technologies and business models in varying stages of development, such as portable tablet computers, cloud gaming and VR games involving new mobile technologies, which could render certain current technologies or applications obsolete.
We expect each of these trends to continue, and we must continue to adapt our strategy to successfully compete in this market. There are numerous other technologies and business models in varying stages of development, such as portable tablet computers, cloud games and VR games involving new mobile technologies, which could render certain current technologies or applications obsolete.
Related Party Transactions—Other Related Party Transactions.” 37 Table of Contents The Construction Project includes risks such as: • the Entity may not be able to obtain construction financing for the development of the Construction Project on reasonable terms in a timely manner, or at all, and we may consider to provide additional financing to the Entity to fund the development or construction of the Construction Project; • construction may not be completed on schedule due to various reasons, such as supply chain issues and increased difficulty for workforce recruitment, which could result in increased expenses and construction costs, and would result in reduced profitability; • construction costs may exceed the Entity’s original estimates due to increases in interest rates and increased material, labor or other costs, possibly making the property less profitable than projected or unprofitable because the Entity may not be able to increase rents to compensate for the increase in construction costs; • occupancy rates and rents at newly completed properties and the time it takes to fully or substantially lease such facilities may not meet the Entity’s expectations, which may result in lower than projected occupancy and rental rates resulting in an investment that is less profitable than projected or unprofitable; • claims for construction defects after a property has been developed; • poor performance or nonperformance by any of our business partners or other third parties on whom we rely; • health and safety incidents and site accidents; and • compliance with building codes and other local regulations.
Related Party Transactions—Other Related Party Transactions.” This construction project includes risks such as: • this entity may not be able to obtain construction financing for the development of the construction project on reasonable terms in a timely manner, or at all, and we may consider to provide additional financing to this entity to fund the development or construction; • construction may not be completed on schedule due to various reasons, such as supply chain issues and increased difficulty for workforce recruitment, which could result in increased expenses and construction costs, and would result in reduced profitability; 38 Table of Contents • construction costs may exceed this entity’s original estimates due to increases in interest rates and increased material, labor or other costs, possibly making the property less profitable than projected or unprofitable because this entity may not be able to increase rents to compensate for the increase in construction costs; • occupancy rates and rents at newly completed properties and the time it takes to lease such facilities fully or substantially may not meet this entity’s expectations, which may result in lower than projected occupancy and rental rates resulting in an investment that is less profitable than projected or unprofitable; • claims for construction defects after a property has been developed; • poor performance or nonperformance by any of our business partners or other third parties on whom we rely; • health and safety incidents and site accidents; and • compliance with building codes and other local regulations.
Fluctuation in exchange rates could have a material and adverse effect on our results of operations and the value of your investment. The conversion of Renminbi into foreign currencies, including U.S. dollars, is based on rates set by the People’s Bank of China. The Renminbi has fluctuated against the U.S. dollar, at times significantly and unpredictably.
Fluctuation in exchange rates could have a material and adverse effect on our results of operations and the value of your investment. The conversion of Renminbi into foreign currencies, including U.S. dollars, is based on rates set by the People’s Bank of China. The Renminbi has fluctuated against the U.S. dollars, at times significantly and unpredictably.
In addition, the Bilibili Convertible Senior Notes each contains similar protections concerning the holders’ right to require us to repurchase their notes upon the occurrence of a fundamental change (as defined in the terms of such notes), as well as similar provisions regarding our ability to redeem the existing notes in case of certain changes in tax law.
In addition, each of the Bilibili Convertible Senior Notes contains similar provisions concerning the holders’ right to require us to repurchase their notes upon the occurrence of a fundamental change (as defined in the terms of such notes), as well as similar provisions regarding our ability to redeem the existing notes in case of certain changes in tax law.
A lower withholding income tax rate of 5% is applied if the FIE’s immediate holding company is registered in Hong Kong or other jurisdictions that have a tax treaty arrangement with mainland China, subject to specific qualification requirements at the time of the distribution.
A lower withholding income tax rate of 5% is applied if the immediate holding company is registered in Hong Kong or other jurisdictions that have a tax treaty arrangement with mainland China, subject to specific qualification requirements at the time of the distribution.
Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or ADSs or for other business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount available to us.
Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or ADSs or for other business purposes, appreciation of the U.S. dollars against the Renminbi would have a negative effect on the U.S. dollars amount available to us.
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. 61 Table of Contents China’s M&A Rules and certain other PRC regulations establish complex procedures for some acquisitions of PRC companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in mainland China.
See also “—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” for risks associated with investing in us as a Cayman Islands exempted company. 61 Table of Contents China’s M&A Rules and certain other PRC regulations establish complex procedures for some acquisitions of PRC companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in mainland China.
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; 46 Table of Contents • discontinuing or placing restrictions or onerous conditions on our operations; • 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.
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; • 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.
Our advertising revenues might be materially and adversely affected by any decision by advertisers to reduce their advertising as a result of adverse media reports, user complaints or other negative publicity involving us or, content on our platform.
Furthermore, our advertising revenues might be materially and adversely affected by any decision by advertisers to reduce their advertising as a result of adverse media reports, user complaints or other negative publicity involving us or, content on our platform.
In addition, PRC laws and regulations are subject to interpretation by the relevant authorities, and it may not be possible to determine in all cases the types of content that could result in our liability as a platform operator.
PRC laws and regulations are subject to interpretation by the relevant authorities, and it may not be possible to determine in all cases the types of content that could result in our liability as a platform operator.
The 2027 Notes bear interest at a rate of 1.25% per year, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2020, and will mature on June 15, 2027 (unless repurchased, redeemed or converted).
The 2027 Notes bear interest at a rate of 1.25% per year, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2020, and will mature on June 15, 2027 (unless earlier repurchased, redeemed or converted).
The Draft Regulations provide that data processors refer to individuals or organizations that, during their data processing activities such as data collection, storage, utilization, processing, transmission, provision, publication and deletion, have autonomy over the purpose and the manner of data processing.
These draft regulations provide that data processors refer to individuals or organizations that, during their data processing activities such as data collection, storage, utilization, processing, transmission, provision, publication and deletion, have autonomy over the purpose and the manner of data processing.
However, past and future acquisitions, partnerships or alliances may expose us to potential risks, including risks associated with: • the integration of new operations and the retention of customers and personnel; 36 Table of Contents • significant volatility in our operating profit (loss) due to changes in the fair value of our contingent purchase consideration payable; • unforeseen or hidden liabilities, including those associated with different business practices; • the diversion of management’s attention and resources from our existing business and technology by acquisition, transition and integration activities; • failure to achieve synergies with our existing business and generate revenues as anticipated; • failure of the newly acquired businesses, technologies, services and products to perform as anticipated; • inability to generate sufficient revenues to offset additional costs and expenses; • breach or termination of key agreements by the counterparties; • the costs of acquisitions; • international operations conducted by some of our subsidiaries; • any different interpretations on contingent purchase consideration; or • the potential loss of, or harm to, relationships with both our employees and customers resulting from our integration of new businesses.
Past and future acquisitions, partnerships or alliances may expose us to potential risks, including risks associated with: • the integration of new operations and the retention of customers and personnel; • significant volatility in our operating profit (loss) due to changes in the fair value of our contingent purchase consideration payable; unforeseen or hidden liabilities, including those associated with different business practices; • the diversion of management’s attention and resources from our existing business and technology by acquisition, transition and integration activities; • failure to achieve synergies with our existing business and generate revenues as anticipated; • failure of the newly acquired businesses, technologies, services and products to perform as anticipated; • inability to generate sufficient revenues to offset additional costs and expenses; 37 Table of Contents • breach or termination of key agreements by the counterparties; • the costs of acquisitions; • international operations conducted by some of our subsidiaries; • any different interpretations on contingent purchase consideration; or • the potential loss of, or harm to, relationships with both our employees and customers resulting from our integration of new businesses.
The VIEs hold certain licenses that are important to our operations, including the Value-added Telecommunication Business Licenses, License for Online Transmission of Audio-Visual Programs, Online Culture Operating Permits and License for Production and Operation of Radio and Television Programs.
The VIEs hold certain licenses that are important to our operations, including the Value-added Telecommunication Business Licenses, a License for Online Transmission of Audio-Visual Programs, Online Culture Operating Permits and License for Production and Operation of Radio and Television Programs.
In addition, upon conversion of the December 2026 Notes, unless we elect to deliver solely ADSs (or Class Z ordinary shares if such holder elects to receive Class Z ordinary shares in lieu of any ADSs deliverable upon conversion) to settle such conversion (other than paying cash in lieu of delivering any fractional ADS), we will be required to make cash payments in respect of the notes being converted. 40 Table of Contents However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of the notes surrendered therefor or redeem the notes or the notes being converted.
In addition, upon conversion of the December 2026 Notes, unless we elect to deliver solely ADSs (or Class Z ordinary shares if such holder elects to receive Class Z ordinary shares in lieu of any ADSs deliverable upon conversion) to settle such conversion (other than paying cash in lieu of delivering any fractional ADS), we will be required to make cash payments in respect of the notes being converted. 41 Table of Contents However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of the notes surrendered therefor or redeem the notes or the notes being converted.
If we fail to file with the CSRC in a timely manner or at all, for any future offering (including, among others, follow-on offerings, issuance of convertible corporate bonds and exchangeable bonds, and other equivalent offering activities) pursuant to the Filing Measures due to our contractual arrangements, our ability to raise or utilize funds could be materially and adversely affected, and we may even need to unwind our contractual arrangements or restructure our business operations to rectify the failure to complete the filings.
If we fail to file with the CSRC in a timely manner or at all, for any future offering (including, among others, follow-on offerings, issuance of convertible corporate bonds and exchangeable bonds, and other equivalent offering activities) pursuant to these measures due to our contractual arrangements, our ability to raise or utilize funds could be materially and adversely affected, and we may even need to unwind our contractual arrangements or restructure our business operations to rectify the failure to complete the filings.
For example, when we convert our U.S. dollars denominated funds into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollar would have an adverse effect on the Renminbi amount we would receive from the conversion.
For example, when we convert our U.S. dollars denominated funds into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollars would have an adverse effect on the Renminbi amount we would receive from the conversion.
In addition, to the extent that the financial institutions with which we hold securities fail or are associated with banks that fail, there may be delays or other access restrictions with respect to such securities, similar to those described above for deposit accounts. 41 Table of Contents We have granted, and may continue to grant, options and other types of awards under our share incentive plan, which may result in increased share-based compensation expenses.
In addition, to the extent that the financial institutions with which we hold securities fail or are associated with banks that fail, there may be delays or other access restrictions with respect to such securities, similar to those described above for deposit accounts. 42 Table of Contents We have granted, and may continue to grant, options and other types of awards under our share incentive plan, which may result in increased share-based compensation expenses.
The PRC anti-monopoly laws may increase our compliance burden, particularly in the context of relevant PRC authorities recently strengthening supervision and enforcement of the Anti-Monopoly Law against internet platforms.
The PRC anti-monopoly laws may increase our compliance burden, particularly in the context of relevant PRC authorities strengthening supervision and enforcement of the Anti-Monopoly Law against internet platforms.
Assuming that we are the owner of the VIEs for U.S. federal income tax purposes, and based upon the composition of our income and assets and projections as to the value of our assets, including goodwill and other unbooked intangibles not reflected on our balance sheet, we do not believe that we were a PFIC for the 2022 taxable year and we do not presently expect to be a PFIC for the current taxable year.
Assuming that we are the owner of the VIEs for U.S. federal income tax purposes, and based upon the composition of our income and assets and projections as to the value of our assets, including goodwill and other unbooked intangibles not reflected on our balance sheet, we do not believe that we were a PFIC for the 2023 taxable year and we do not presently expect to be a PFIC for the current taxable year.
As used in this annual report, “Bilibili” refers to Bilibili Inc., our Cayman Islands holding company; “we,” “us,” “our company” and “our” refers to Bilibili and its subsidiaries, and, in the context of describing our operations and consolidated financial information, the VIEs and their subsidiaries in mainland China (which are collectively referred to as the Consolidated Affiliated Entities), including but not limited to, Hode Information Technology, which was established in May 2013 to expand our operations; Shanghai Kuanyu, whose control was obtained by us in July 2014 to further expand our operations; and Chaodian Culture, whose control was obtained by us in July 2019 to enrich our offerings, and their subsidiaries.
As used in this annual report, “Bilibili” refers to Bilibili Inc., our Cayman Islands holding company; “we,” “us,” “our company” and “our” refers to Bilibili and its subsidiaries, and, in the context of describing our operations and consolidated financial information, the VIEs and their subsidiaries in mainland China (which are collectively referred to as the Consolidated Affiliated Entities), including, but not limited to, Hode Information Technology, which was established in May 2013 to expand our operations; Shanghai Kuanyu, whose control we obtained in July 2014 to further expand our operations; and Chaodian Culture, whose control we obtained in July 2019 to enrich our offerings, and their subsidiaries.
However, there have been no clarifications from the relevant authorities as of the date of this annual report as to the standards for determining whether an activity is one that “affects or may affect national security.” In addition, the Draft Regulations requires that data processors that process “important data” or are listed overseas must conduct an annual data security assessment by itself or commission a data security service provider to do so, and submit the assessment report of the preceding year to the municipal cybersecurity department by the end of January each year.
However, there have been no clarifications from the relevant authorities as of the date of this annual report as to the standards for determining whether an activity is one that “affects or may affect national security.” In addition, these draft regulations require that data processors that process “important data” or are listed overseas must conduct an annual data security assessment by itself or commission a data security service provider to do so, and submit the assessment report of the preceding year to the municipal cybersecurity department by the end of January each year.
In April 2022, the National Radio and Television Administration, or the NRTA, and Publication Bureau of the Central Propaganda Department of the Communist Party of China issued the notice on strengthening the management of live broadcasting of games on network audiovisual program platforms, which stipulates that live broadcasting of games shall be reported to the administrative department of radio and television in accordance with the relevant requirements for live programs.
In April 2022, the National Radio and Television Administration and Publication Bureau of the Central Propaganda Department of the Communist Party of China issued the notice on strengthening the management of live broadcasting of games on network audiovisual program platforms, which stipulates that live broadcasting of games shall be reported to the administrative department of radio and television in accordance with the relevant requirements for live programs.
We face uncertainties regarding the reporting on and consequences of previous private equity financing transactions involving the transfer and exchange of shares in Bilibili by non-resident investors. In February 2015, the STA issued the Bulletin on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-PRC Resident Enterprises, or STA Bulletin 7, as amended in 2017.
We face uncertainties regarding the reporting on and consequences of previous private equity financing transactions involving the transfer and exchange of shares in Bilibili by non-resident investors. In February 2015, the State Tax Administration issued the Bulletin on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-PRC Resident Enterprises, or STA Bulletin 7, as amended in 2017.
(2) Shanghai Kuanyu has four subsidiaries. (3) Mr. Rui Chen, Ms. Ni Li and Mr. Yi Xu hold 52.3%, 3.4% and 44.3% equity interests in Hode Information Technology, respectively, as of the date of this annual report. Mr. Chen is our controlling shareholder, the chairman of our board of directors and our chief executive officer. Ms.
(2) Shanghai Kuanyu has three subsidiaries. (3) Mr. Rui Chen, Ms. Ni Li and Mr. Yi Xu hold 52.3%, 3.4% and 44.3% equity interests in Hode Information Technology, respectively, as of the date of this annual report. Mr. Chen is our controlling shareholder, the chairman of our board of directors and our chief executive officer. Ms.
In addition, reductions of advertising by advertisers due to allegedly objectionable content made available on our platform by content creators, licensors, or other third parties, concerns about our content management practices, concerns about brand reputation or potential liability, or uncertainty regarding their own legal and compliance obligations, may also materially and adversely affect our advertising revenues.
Reductions of advertising by advertisers due to allegedly objectionable content made available on our platform by content creators, licensors, or other third parties, concerns about our content management practices, concerns about brand reputation or potential liability, or uncertainty regarding their own legal and compliance obligations, may also materially and adversely affect our advertising revenues.
Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on, among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors.
Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on, among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, we received from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors.
The PRC government and regulatory authorities strengthen the regulations on internet content from time to time, such as the Opinion on Strictly Regulating Online Game Market Management jointly adopted by a few authorities in December 2017, the Regulations on Administration of Network Short Video Platforms, promulgated in January 2019 by China Netcasting Services Association, or the CNSA, the Censoring Criteria for Network Short Video Content promulgated in January 2019 and last amended in December 2021, the Administrative Provisions on Online Audio-Visual Information Services, effective from January 1, 2020 and the Notice on Strengthening the Administration of Live Broadcasting of Game-Playing on the Online Audio-Visual Program Platform, issued in April 2022 by the Online Audio-Visual Program Administration Division of the National Radio and Television Administration of the PRC, or the NRTA (the successor of the State Administration of Press, Publication, Radio, Film and Television of China, or the SAPPRFT) and the Publishing Bureau of the Propaganda Department of the Central Committee of the Communist Party of China.
The PRC government and regulatory authorities strengthen the regulations on internet content from time to time, such as the Opinion on Strictly Regulating Online Game Market Management jointly adopted by a few authorities in December 2017, the Regulations on Administration of Network Short Video Platforms, promulgated in January 2019 by China Netcasting Services Association, the Censoring Criteria for Network Short Video Content promulgated in January 2019 and last amended in December 2021, the Administrative Provisions on Online Audio-Visual Information Services, effective from January 1, 2020 and the Notice on Strengthening the Administration of Live Broadcasting of Game-Playing on the Online Audio-Visual Program Platform, issued in April 2022 by the Online Audio-Visual Program Administration Division of the National Radio and Television Administration of the PRC (the successor of the State Administration of Press, Publication, Radio, Film and Television) and the Publishing Bureau of the Propaganda Department of the Central Committee of the Communist Party of China.
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.” In the years ended December 31, 2020, 2021 and 2022, no assets other than cash were transferred through our organization.
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.” In the years ended December 31, 2021, 2022 and 2023, no assets other than cash were transferred through our organization.
See “—Risks Related to Doing Business in China—The approval of, or report and filings with the CSRC or other PRC government authorities may be required in connection with our offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing and report process.” • Regulation and censorship of information disseminated over the mobile and internet in mainland China may adversely affect our business and subject us to liability for content posted on our platform.
See “—Risks Related to Doing Business in China—The approval of, or report and filings with the CSRC or other PRC government authorities may be required in connection with our offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing and report process.” 17 Table of Contents • Regulation and censorship of information disseminated over the mobile and internet in mainland China may adversely affect our business and subject us to liability for content posted on our platform.
The notice requires that all online games enterprises including platforms providing online game services may only provide online game services to minors for one hour from 8:00 p.m. to 9:00 p.m. each day on Fridays, Saturdays, Sundays and national holidays, and may not provide online game services to minors in any form at any other time.
This notice requires that all online games enterprises including platforms providing online game services may only provide online game services to minors for one hour from 8:00 p.m. to 9:00 p.m. each day on Fridays, Saturdays, Sundays and national holidays, and may not provide online game services to minors in any form at any other time.
We hold a portion of our cash and cash equivalents that we use to meet our working capital and operating expense needs in deposit accounts at multiple financial institutions. The balance held in the accounts of U.S. financial institutions typically exceeds the Federal Deposit Insurance Corporation, or FDIC, standard deposit insurance limit of $250,000 per depositor and per institution.
We hold a portion of our cash and cash equivalents that we use to meet our working capital and operating expense needs in deposit accounts at multiple financial institutions. The balance held in the accounts of U.S. financial institutions typically exceeds the Federal Deposit Insurance Corporation standard deposit insurance limit of $250,000 per depositor and per institution.
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.
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 we designated or approved in accordance with our internal control procedures.
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. Our failure to identify unauthorized content posted on our platform may subject us to claims of infringement of third-party intellectual property rights or other rights.
Other Subsidiaries Primary Beneficiaries of VIEs VIEs and VIEs’ Subsidiaries Eliminating adjustments Consolidated Totals (RMB, in thousands) Cash and cash equivalents 1,748,896 4,956,403 440,695 377,114 — 7,523,108 Time deposits 7,625,337 — — 6,997 — 7,632,334 Accounts receivable, net — 79,350 778,667 524,311 — 1,382,328 Amounts due from Group companies (4) 23,306,176 9,329,586 8,680,893 391,951 (41,708,606 ) — Amount due from related parties — 1,937,592 1,741 101,983 — 2,041,316 Prepayments and other current assets 11,773 280,689 708,401 1,806,185 — 2,807,048 Short-term investments 13,107,720 767,935 257,943 927,124 — 15,060,722 Long-term investments, net 1,448,100 2,038,157 270,801 1,745,466 — 5,502,524 Other non-current assets — 3,711,745 1,465,037 4,926,989 — 10,103,771 Total assets 47,248,002 23,101,457 12,604,178 10,808,120 (41,708,606 ) 52,053,151 Accounts payable — 244,808 951,797 3,164,301 — 4,360,906 Salary and welfare payables — 641,560 10,883 343,008 — 995,451 Taxes payable — 55,575 19,378 128,817 — 203,770 Short-term loan — 688,448 143,658 400,000 — 1,232,106 Deferred revenue 40,167 962 411,800 2,192,460 — 2,645,389 Accrued liabilities and other payables 126,512 807,547 298,373 1,184,523 — 2,416,955 Amounts due to Group companies (4) — 24,009,991 10,484,469 7,214,146 (41,708,606 ) — Amounts due to related parties — 98,207 326 117,901 — 216,434 Other long-term liabilities 17,784,092 259,161 102 222,719 — 18,266,074 Deficit in subsidiaries and net loss of VIEs and VIEs’ subsidiaries (3) 7,593,564 3,887,067 4,170,459 — (15,651,090 ) — Total liabilities 25,544,335 30,693,326 16,491,245 14,967,875 (57,359,696 ) 30,337,085 Total Bilibili Inc’s Shareholders’ equity/(deficit) (3) 21,703,667 (7,593,564 ) (3,887,067 ) (4,170,459 ) 15,651,090 21,703,667 Noncontrolling interests — 1,695 — 10,704 — 12,399 Total shareholders’ equity/(deficit) 21,703,667 (7,591,869 ) (3,887,067 ) (4,159,755 ) 15,651,090 21,716,066 Total liabilities and shareholders’ equity/(deficit) 47,248,002 23,101,457 12,604,178 10,808,120 (41,708,606 ) 52,053,151 As of December 31, 2020 Bilibili Inc.
Other Subsidiaries Primary Beneficiaries of VIEs VIEs and VIEs’ Subsidiaries Eliminating adjustments Consolidated Totals (RMB, in thousands) Cash and cash equivalents 1,748,896 4,956,403 440,695 377,114 — 7,523,108 Time deposits 7,625,337 — — 6,997 — 7,632,334 Accounts receivable, net — 79,350 778,667 524,311 — 1,382,328 Amounts due from Group companies (4) 23,306,176 9,329,586 8,680,893 391,951 (41,708,606 ) — Amount due from related parties — 1,937,592 1,741 101,983 — 2,041,316 Prepayments and other current assets 11,773 280,689 708,401 1,806,185 — 2,807,048 Short-term investments 13,107,720 767,935 257,943 927,124 — 15,060,722 Long-term investments, net 1,448,100 2,038,157 270,801 1,745,466 — 5,502,524 Other non-current assets — 3,711,745 1,465,037 4,926,989 — 10,103,771 Total assets 47,248,002 23,101,457 12,604,178 10,808,120 (41,708,606 ) 52,053,151 Accounts payable — 244,808 951,797 3,164,301 — 4,360,906 Salary and welfare payables — 641,560 10,883 343,008 — 995,451 Taxes payable — 55,575 19,378 128,817 — 203,770 Short-term loan — 688,448 143,658 400,000 — 1,232,106 Deferred revenue 40,167 962 411,800 2,192,460 — 2,645,389 Accrued liabilities and other payables 126,512 807,547 298,373 1,184,523 — 2,416,955 Amounts due to Group companies (4) — 24,009,991 10,484,469 7,214,146 (41,708,606 ) — Amounts due to related parties — 98,207 326 117,901 — 216,434 Other long-term payable 17,784,092 259,161 102 222,719 — 18,266,074 Deficit in subsidiaries and net loss of VIEs and VIEs’ subsidiaries (3) 7,593,564 3,887,067 4,170,459 — (15,651,090 ) — Total liabilities 25,544,335 30,693,326 16,491,245 14,967,875 (57,359,696 ) 30,337,085 Total Bilibili Inc’s Shareholders’ equity/(deficit)( 3 ) 21,703,667 (7,593,564 ) (3,887,067 ) (4,170,459 ) 15,651,090 21,703,667 Noncontrolling interests — 1,695 — 10,704 — 12,399 Total shareholders’ equity/(deficit) 21,703,667 (7,591,869 ) (3,887,067 ) (4,159,755 ) 15,651,090 21,716,066 Total liabilities and shareholders’ equity/(deficit) 47,248,002 23,101,457 12,604,178 10,808,120 (41,708,606 ) 52,053,151 13 Table of Contents Selected Condensed Consolidating Cash Flows Data For the Year Ended December 31, 2023 Bilibili Inc.
On October 26, 2021, the Office of the Central Cyberspace Affairs Commission, or the OCCAC, issued the Notice on Further Strengthening the Regulation on Online Information of Entertainment Celebrities. 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.
On October 26, 2021, the Office of the Central Cyberspace Affairs Commission issued the Notice on Further Strengthening the Regulation on Online Information of Entertainment Celebrities. 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.
In 2022, we have shifted our user growth focus from MAU growth to DAU growth, as we believe DAU is not only a better measure of the quality and sustainability of our community, but also better reflects the powerful influence of our platform and is directly linked to our commercial prospects.
Starting from 2022, we have shifted our user growth focus from MAU growth to DAU growth, as we believe DAU is not only a better measure of the quality and sustainability of our community, but also better reflects the powerful influence of our platform and is directly linked to our commercial prospects.
The value of Renminbi against the U.S. dollar and other currencies is affected by changes in China’s political and economic conditions and by China’s foreign exchange policies, among other things. We cannot assure you that Renminbi will not appreciate or depreciate significantly in value against the U.S. dollar in the future.
The value of Renminbi against the U.S. dollars and other currencies is affected by changes in China’s political and economic conditions and by China’s foreign exchange policies, among other things. We cannot assure you that Renminbi will not appreciate or depreciate significantly in value against the U.S. dollars in the future.
The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.” 17 Table of Contents • The approval of, or report and filings with the CSRC or other PRC government authorities may be required in connection with our offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing and report process.
The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.” • The approval of, or report and filings with the CSRC or other PRC government authorities may be required in connection with our offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing and report process.
The National Press and Publication Administration, or the NPPA, at the national level had suspended the approval of game registration and issuance of publication numbers for online games starting from March 2018, and later resumed game registration and issued game publication numbers for the first batch of games with an effective date of December 19, 2018.
The National Press and Publication Administration at the national level had suspended the approval of game registration and issuance of publication numbers for online games starting from March 2018, and later resumed game registration and issued game publication numbers for the first batch of games with an effective date of December 19, 2018.
Our long-term investments primarily consist of investment in companies whose businesses are complementary to ours, including game, anime production and high-technology companies and investments in publicly traded companies with an intention of holding for more than one year.
Our long-term investments primarily consist of (i) investment in companies whose businesses are complementary to ours, including game, anime production and high-technology companies and (ii) investments in publicly traded companies with an intention of holding for more than one year.
For example, the M&A Rules require that MOFCOM be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise, if (i) any important industry is concerned, (ii) such transaction involves factors that impact or may impact national economic security, or (iii) such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark or PRC time-honored brand.
For example, the M&A Rules require that the Ministry of Commerce be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise, if (i) any important industry is concerned, (ii) such transaction involves factors that impact or may impact national economic security, or (iii) such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark or PRC time-honored brand.
Therefore, we will be required to file with the CSRC for our overseas offering of equity and equity linked securities in the future within the applicable scope of the Filing Measures. For more detailed information, see “Item 3. Key Information—D.
Therefore, we will be required to file with the CSRC for our overseas offering of equity and equity linked securities in the future within the applicable scope of these measures. For more detailed information, see “Item 3. Key Information—D.
Under the EIT Law and its implementation rules, the profits of a foreign-invested enterprise generated through operations, which are distributed to its immediate holding company outside mainland China, will be subject to a withholding tax rate of 10%.
Under the Enterprise Income Tax Law and its implementation rules, the profits of a foreign-invested enterprise generated through operations, which are distributed to its immediate holding company outside mainland China, will be subject to a withholding tax rate of 10%.
In light of the flood of capital outflows of mainland China in 2016 due to the weakening RMB, the PRC government has imposed more restrictive foreign exchange policies and stepped up scrutiny of major outbound capital movement including overseas direct investment.
In light of the flood of capital outflows of mainland China in 2016 due to the weakening Renminbi, the PRC government has imposed more restrictive foreign exchange policies and stepped up scrutiny of major outbound capital movement including overseas direct investment.
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 mainland China.
In 2009, the State Tax Administration 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 mainland China.
If investors make investment decisions based on operating metrics we disclose that are inaccurate, we may also face potential lawsuits or disputes. We do not have any business insurance coverage. The insurance industry in mainland China is still in an early stage of development, and insurance companies in mainland China currently offer limited business-related insurance products.
If investors make investment decisions based on operating metrics we disclose that are inaccurate, we may also face potential lawsuits or disputes. 43 Table of Contents We do not have any business insurance coverage. The insurance industry in mainland China is still in an early stage of development, and insurance companies in mainland China currently offer limited business-related insurance products.
We are currently involved in approximately 124 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 200 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.
Although we maintain content management and review procedures to monitor the content uploaded to our platform, due to the large number of videos uploaded, we may not be able to identify all content that may infringe on third-party rights.
Although we maintain content management and review procedures to monitor the content uploaded to our platform, due to the large number of videos, texts, and images uploaded, we may not be able to identify all content that may infringe on third-party rights.
If a well-publicized internet security breach were to occur, users concerned about the security of their online payments may become reluctant to purchase our products through payment service providers even if the publicized breach did not involve payment systems or methods used by us. In addition, billing software errors could damage user confidence in these payment systems.
If a well-publicized internet security breach were to occur, users concerned about the security of their online payments may become reluctant to purchase our products through payment service providers even if the publicized breach did not involve payment systems or methods we used. In addition, billing software errors could damage user confidence in these payment systems.
Further, the STA promulgated the Announcement of the Certain Issues with Respect to the “Beneficial Owner” in Tax Treaties in 2018, which sets forth certain detailed factors in determining “beneficial owner” status, and specifically, if an applicant’s business activities do not constitute substantive business activities, the applicant will not qualify as a “beneficial owner.” 59 Table of Contents Entitlement to a lower tax rate on dividends according to tax treaties or arrangements between the PRC central government and governments of other countries or regions is subject to the Administrative Measures for Non-Resident Taxpayers to Enjoy Treatments under Tax Treaties promulgated by the STA on October 14, 2019 and became effective from January 1, 2020, which provides that non-resident enterprises are not required to obtain pre-approval from the relevant tax authority in order to enjoy the reduced withholding tax.
Further, the State Tax Administration promulgated the Announcement of the Certain Issues with Respect to the “Beneficial Owner” in Tax Treaties in 2018, which sets forth certain detailed factors in determining “beneficial owner” status, and specifically, if an applicant’s business activities do not constitute substantive business activities, the applicant will not qualify as a “beneficial owner.” Entitlement to a lower tax rate on dividends according to tax treaties or arrangements between the PRC central government and governments of other countries or regions is subject to the Administrative Measures for Non-Resident Taxpayers to Enjoy Treatments under Tax Treaties promulgated by the State Tax Administration on October 14, 2019 and became effective from January 1, 2020, which provides that non-resident enterprises are not required to obtain pre-approval from the relevant tax authority in order to enjoy the reduced withholding tax.
Although Circular 82 only applies to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners like us, the criteria set forth in the circular may reflect the STA’s general position on how the “de facto management body” test should be applied in determining the tax resident status of all offshore enterprises.
Although Circular 82 only applies to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners like us, the criteria set forth in the circular may reflect the State Tax Administration’s general position on how the “de facto management body” test should be applied in determining the tax resident status of all offshore enterprises.
Our content screening team screens and monitors the content uploaded on our platform on a 24-hour, 7-day basis. For more details relating to our content monitoring procedures, see “Item 4. Information on the Company—B.
Our content screening team screens and monitors the content uploaded on our platform on a 24-hour, seven-day basis. For more details relating to our content monitoring procedures, see “Item 4. Information on the Company—B.
If any conflicts of interest that may arise between the divesting business and us cannot be resolved in our favor, our business, financial condition, results of operations could be materially and adversely affected. 50 Table of Contents Furthermore, reducing or eliminating our ownership interests in these businesses might negatively affect our operations, prospects, or long-term value.
If any conflicts of interest that may arise between the divesting business and us cannot be resolved in our favor, our business, financial condition, results of operations could be materially and adversely affected. Furthermore, reducing or eliminating our ownership interests in these businesses might negatively affect our operations, prospects, or long-term value.
If we are required to take any rectifying or remedial measures or are subject to any penalties, our reputation and business operations may be materially and adversely affected. 55 Table of Contents Regulation and censorship of information disseminated over the mobile and internet in mainland China may adversely affect our business and subject us to liability for content posted on our platform.
If we are required to take any rectifying or remedial measures or are subject to any penalties, our reputation and business operations may be materially and adversely affected. Regulation and censorship of information disseminated over the mobile and internet in mainland China may adversely affect our business and subject us to liability for content posted on our platform.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeXujun Chai is an employee of our company. 114 Table of Contents Contractual Arrangements with the Relevant VIEs and their Respective Individual Shareholders Reasons for Adopting the Contractual Arrangements Our (i) internet audio-visual program services, (ii) radio and television program production and operation business, and (iii) internet cultural business that are currently conducted by Shanghai Kuanyu and Hode Information Technology (collectively, the “principal VIEs”), Shanghai Hehehe Culture Communication Co., Ltd., or “Shanghai Hehehe”, Sharejoy Network Technology Co., Ltd., or “Sharejoy Network”, and Shanghai Anime Tamashi Cultural Media Co., Ltd., or “Shanghai Anime Tamashi” (collectively with Shanghai Hehehe and Sharejoy Network, the “Major VIE Subsidiaries”), and Chaodian Culture are considered as “prohibited” under the Negative List (2021) where foreign investment is strictly prohibited (collectively, the “Prohibited Business”).
Biggest changeContractual Arrangements with the Relevant VIEs and their Respective Individual Shareholders Reasons for Adopting the Contractual Arrangements PRC laws and regulations restrict and impose conditions on foreign ownership and investment in certain internet-based businesses. 116 Table of Contents Certain consolidated affiliated entities with which we have contractual arrangements and their subsidiaries, namely, Shanghai Kuanyu, Hode Information Technology, Shanghai Hehehe Culture Communication Co., Ltd., Sharejoy Network Technology Co., Ltd. and Shanghai Anime Tamashi Cultural Media Co., Ltd., currently operate the following businesses: (i) internet audio-visual program services, (ii) radio and television program production and operation business, and (iii) internet cultural business.
The total investment for the acquisition of land use rights is approximately RMB9.0 billion. As of the date of this annual report, the Entity has obtained the land use rights and we have paid RMB2.8 billion to fund the acquisition of land use rights, including interest-bearing guaranteed loans of RMB1.3 billion in principal.
The total investment for the acquisition of land use rights is approximately RMB9.0 billion. As of the date of this annual report, this entity has obtained the land use rights and we have paid RMB2.8 billion to fund the acquisition of land use rights, including interest-bearing guaranteed loans of RMB1.3 billion in principal.
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 and most recently amended on December 15, 2022, 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 cyberspace administrators; (vi) develop internet follow-up comment information protection and administration technologies, innovate internet follow-up comment administration modes, enhance the disposition capacity of illegal and harmful information, discover safety defects, loopholes, and other risks existing in the internet follow-up comment services in a timely manner, take remedial measures, and report to the relevant cyberspace administrations; (vii) equip content examination team with corresponding services and strengthen training for examination of posted comments; and (viii) coordinate with relevant supervising authorities for examination and provide necessary technology, data support and assistance.
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 Cyberspace Administration of China on August 25, 2017, and became effective on October 1, 2017 and most recently amended on December 15, 2022, 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 cyberspace administrators; (vi) develop internet follow-up comment information protection and administration technologies, innovate internet follow-up comment administration modes, enhance the disposition capacity of illegal and harmful information, discover safety defects, loopholes, and other risks existing in the internet follow-up comment services in a timely manner, take remedial measures, and report to the relevant cyberspace administrations; (vii) equip content examination team with corresponding services and strengthen training for examination of posted comments; and (viii) coordinate with relevant supervising authorities for examination and provide necessary technology, data support and assistance.
Pursuant to the Provision on Confidentiality of Overseas Securities Issuance and Listing, where a domestic enterprise provides or publicly discloses to the relevant securities companies, securities service institutions, overseas regulatory authorities and other entities and individuals, or provides or publicly discloses through its overseas listing subjects, documents and materials involving state secrets and working secrets of state organs, it shall report the same to the competent department with the examination and approval authority for approval in accordance with the law, afnd submit the same to the secrecy administration department of the same level for filing.
Pursuant to the Provision on Confidentiality of Overseas Securities Issuance and Listing, where a domestic enterprise provides or publicly discloses to the relevant securities companies, securities service institutions, overseas regulatory authorities and other entities and individuals, or provides or publicly discloses through its overseas listing subjects, documents and materials involving state secrets and working secrets of state organs, it shall report the same to the competent department with the examination and approval authority for approval in accordance with the law, and submit the same to the secrecy administration department of the same level for filing.
The draft’s provisions include, but are not limited to, improving the anti-unfair competition rules of the digital economy, regulating and controlling behaviors that disrupt the order of competition in the development of new economies, new formats and new models, improving commercial confusion clauses and false publicity clauses, etc., setting corresponding penalties for new illegal acts such as harming fair trade, carrying out malicious transactions, and new types of online unfair competition, and adjusting the penalty amount for illegal acts.
The draft’s provisions include, but are not limited to, improving the anti-unfair competition rules of the digital economy, regulating and controlling behaviors that disrupt the order of competition in the development of new economies, new formats and new models, improving commercial confusion clauses and false publicity clauses, setting corresponding penalties for new illegal acts such as harming fair trade, carrying out malicious transactions, and new types of online unfair competition, and adjusting the penalty amount for illegal acts.
Pursuant to the Classification Catalogue of Telecommunications Services, an attachment to the Telecommunications Regulations, which was most recently amended on June 6, 2019, information services provided via public telecommunication network or the internet fall within value-added telecommunications services. 91 Table of Contents The Administrative Measures on Internet Information Services, or the Internet Information Services Measures, which was promulgated by the State Council on September 25, 2000, and amended on January 8, 2011, set out guidelines on the provision of internet information services.
Pursuant to the Classification Catalogue of Telecommunications Services, an attachment to the Telecommunications Regulations of the PRC, which was most recently amended on June 6, 2019, information services provided via public telecommunication network or the internet fall within value-added telecommunications services. 91 Table of Contents The Administrative Measures on Internet Information Services, which was promulgated by the State Council on September 25, 2000, and amended on January 8, 2011, set out guidelines on the provision of internet information services.
If any user is found to produce, post or disseminate content prohibited by laws or regulations, the transmission of such information shall be ceased, and disposal measures such as deletion shall be taken to prevent the information from spreading, and such service providers shall retain records, and report to the administrations of cyberspace, culture and tourism, radio and television. 93 Table of Contents On January 16, 2023, the MCT promulgated the Notice on Regulating the Business Activities of Online Shows or Programs to Promote the Healthy and Orderly Development of the Industry, which stipulates that the offering of shows or programs in the form of live or recorded broadcasting via the internet shall be regulated, and the provider of such shows or programs shall establish and continually improve content management systems, staff specific personnel that meet certain requirements to manage online content, and strengthen the real-time monitoring of comments, bullet chats and other user-generated contents.
If any user is found to produce, post or disseminate content prohibited by laws or regulations, the transmission of such information shall be ceased, and disposal measures such as deletion shall be taken to prevent the information from spreading, and such service providers shall retain records, and report to the administrations of cyberspace, culture and tourism, radio and television. 93 Table of Contents On January 16, 2023, the Ministry of Culture and Tourism promulgated the Notice on Regulating the Business Activities of Online Shows or Programs to Promote the Healthy and Orderly Development of the Industry, which stipulates that the offering of shows or programs in the form of live or recorded broadcasting via the internet shall be regulated, and the provider of such shows or programs shall establish and continually improve content management systems, staff specific personnel that meet certain requirements to manage online content, and strengthen the real-time monitoring of comments, bullet chats and other user-generated contents.
The Cybersecurity Law provides that network operators must set up internal security management systems that meet the requirements of a classified protection system for cyber security, including appointing dedicated cyber security personnel, taking technical measures to prevent computer viruses, network attacks and intrusions, taking technical measures to monitor and record network operation status and cyber security incidents, and taking data security measures such as data classification, backups and encryption.
The PRC Cybersecurity Law provides that network operators must set up internal security management systems that meet the requirements of a classified protection system for cyber security, including appointing dedicated cyber security personnel, taking technical measures to prevent computer viruses, network attacks and intrusions, taking technical measures to monitor and record network operation status and cyber security incidents, and taking data security measures such as data classification, backups and encryption.
Our Commercialization Model Capitalizing our engaged user base, expanding content ecosystem, and vibrant community, we are well positioned to capture users’ evolving demand and increase lifetime value of our users by satisfying such demand. As we develop deep insights into user interests and behavior, we curate the right content and service offerings compatible with user demand, achieving efficient user-centric commercialization.
Our Commercialization Model With our engaged user base, expanding content ecosystem, and vibrant community, we are well positioned to capture users’ evolving demand and increase lifetime value of our users by satisfying such demand. As we develop deep insights into user interests and behavior, we curate the right content and service offerings compatible with user demand, achieving efficient user-centric commercialization.
Rui Chen shall pay the taxes or pay the same amount to Hode Shanghai so Hode Shanghai may pay the taxes instead; and (13) Shanghai Kuanyu shall take all necessary and proper acts to ensure that all government permits, licenses, authorizations, and approvals required by Shanghai Kuanyu and its affiliates to conduct their businesses are valid and make all necessary changes as required by the relevant PRC laws and regulations.
Rui Chen shall pay the taxes or pay the same amount to Hode Shanghai so Hode Shanghai may pay the taxes instead; and • Shanghai Kuanyu shall take all necessary and proper acts to ensure that all government permits, licenses, authorizations, and approvals required by Shanghai Kuanyu and its affiliates to conduct their businesses are valid and make all necessary changes as required by the relevant PRC laws and regulations.
Such annual assessment, as required by the draft regulations, would encompass areas including but not limited to the status of important data processing, data security risks identified and the measures adopted, the effectiveness of data protection measures, the implementation of national data security laws and regulations, data security incidents that occurred and their handling, and a security assessment with respect to sharing and provision of important data overseas.
Such annual assessment, as required by these draft regulations, would encompass areas including, but not limited to, the status of important data processing, data security risks identified and the measures adopted, the effectiveness of data protection measures, the implementation of national data security laws and regulations, data security incidents that occurred and their handling, and a security assessment with respect to sharing and provision of important data overseas.
Pursuant to the Foreign Investment Law and the Implementation Rules, the existing foreign-invested enterprises established prior to the effective date of the Foreign Investment Law are allowed to keep their corporate organization forms for five years from the effectiveness of the Foreign Investment Law before such existing foreign-invested enterprises change their organization forms and organization structures in accordance with the PRC Company Law, the Partnership Enterprise Law of the PRC and other applicable laws.
Pursuant to the Foreign Investment Law and its implementation rules, the existing foreign-invested enterprises established prior to the effective date of the Foreign Investment Law are allowed to keep their corporate organization forms for five years from the effectiveness of the Foreign Investment Law before such existing foreign-invested enterprises change their organization forms and organization structures in accordance with the PRC Company Law, the Partnership Enterprise Law of the PRC and other applicable laws.
Regulations Related to Value-Added Telecommunications Services In 2000, the State Council promulgated the Telecommunications Regulations of the PRC, or the Telecommunications Regulations, most recently amended in February 2016, which provide the regulatory framework for telecommunications service providers in mainland China and require a telecommunications service provider to obtain an operating license prior to commencing its operations.
Regulations Related to Value-Added Telecommunications Services In 2000, the State Council promulgated the Telecommunications Regulations of the PRC, most recently amended in February 2016, which provide the regulatory framework for telecommunications service providers in mainland China and require a telecommunications service provider to obtain an operating license prior to commencing its operations.
We also provide a PC website at www.bilibili.com and offer quality content across on smart TV devices. We utilize our big data analytical capabilities in our feed system to categorize and recommend content based on user data captured on our platform and analytics produced by our deep learning algorithms.
We also provide a website at www.bilibili.com and offer quality content across on smart TV devices. We utilize our big data analytical capabilities in our feed system to categorize and recommend content based on user data captured on our platform and analytics produced by our deep learning algorithms.
This notice stresses that any entity producing online audio-visual content, such as internet drama and micro films, must obtain a License for Production and Operation of Radio and Television Programs, and that online audio-visual content service providers shall not release any internet drama or micro films produced by any entity without such license.
This notice stresses that any entity producing online audio-visual content, such as internet drama and microfilms, must obtain a License for Production and Operation of Radio and Television Programs, and that online audio-visual content service providers shall not release any internet drama or micro films produced by any entity without such license.
The Advertisement Law requires that advertisers, advertising operators, and advertisement publishers shall abide by the laws and administrative regulations, and by the principles of fairness and good faith while engaging in advertising activities. Administrative departments for market regulation at and above the county level are in charge of supervision and administration of advertising.
The Advertisement Law of the PRC requires that advertisers, advertising operators, and advertisement publishers shall abide by the laws and administrative regulations, and by the principles of fairness and good faith while engaging in advertising activities. Administrative departments for market regulation at and above the county level are in charge of supervision and administration of advertising.
The Catalogue and the Negative List (2021) set forth the industries in which foreign investments are encouraged, restricted and prohibited. Industries that are not listed in any of these three categories are generally open to foreign investment unless otherwise specifically restricted by other PRC rules and regulations.
The catalogue and the negative list set forth the industries in which foreign investments are encouraged, restricted and prohibited. Industries that are not listed in any of these three categories are generally open to foreign investment unless otherwise specifically restricted by other PRC rules and regulations.
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; 97 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 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).
These 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).
According to the Arrangement for the Avoidance of Double Taxation and Tax Evasion between the mainland of China and Hong Kong entered into between the mainland of China and the HKSAR on August 21, 2006, if the non-PRC parent company of a PRC enterprise is a Hong Kong resident which directly owns 25% or more of the equity interest of the PRC foreign-invested enterprise which pays the dividends and interests, the 10% withholding tax rate applicable under the EIT Law may be lowered to 5% for dividends and 7% for interest payments if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the relevant conditions and requirements under such Double Tax Avoidance Arrangement and other applicable laws.
According to the Arrangement for the Avoidance of Double Taxation and Tax Evasion between the mainland of China and Hong Kong entered into between the mainland of China and the HKSAR on August 21, 2006, if the non-PRC parent company of a PRC enterprise is a Hong Kong resident which directly owns 25% or more of the equity interest of the PRC foreign-invested enterprise which pays the dividends and interests, the 10% withholding tax rate applicable under the Enterprise Income Tax Law may be lowered to 5% for dividends and 7% for interest payments if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the relevant conditions and requirements under such Double Tax Avoidance Arrangement and other applicable laws.
However, according to the Notice on the Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties, which was promulgated by the STA on February 20, 2009, and came into effect on the same date, if the relevant PRC tax authorities determine, in their discretion, that a company benefits unjustifiably from such reduced income tax rate due to a transaction or arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment; and based on the Announcement of the Certain Issues with Respect to the “Beneficial Owner” in Tax Treaties, issued by the STA on February 3, 2018, and effective on April 1, 2018, if an applicant’s business activities do not constitute substantive business activities, it could result in the negative determination of the applicant’s status as a “beneficial owner,” and consequently, the applicant could be precluded from enjoying the above-mentioned reduced income tax rate of 5% under the Double Tax Avoidance Arrangement.
However, according to the Notice on the Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties, which was promulgated by the State Tax Administration on February 20, 2009, and came into effect on the same date, if the relevant PRC tax authorities determine, in their discretion, that a company benefits unjustifiably from such reduced income tax rate due to a transaction or arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment; and based on the Announcement of the Certain Issues with Respect to the “Beneficial Owner” in Tax Treaties, issued by the State Tax Administration on February 3, 2018, and effective on April 1, 2018, if an applicant’s business activities do not constitute substantive business activities, it could result in the negative determination of the applicant’s status as a “beneficial owner,” and consequently, the applicant could be precluded from enjoying the above-mentioned reduced income tax rate of 5% under the Double Tax Avoidance Arrangement.
Our Platform Our platform includes our “Bilibili” mobile apps, PC websites, Smart TV and other smart devices, Bilibili Comic, Maoer and a variety of related features, functionalities, tools and services that we provide to users and content creators.
Our Platform Our platform includes our “Bilibili” mobile apps, websites, Smart TV and other smart devices, Bilibili Comic, Maoer and a variety of related features, functionalities, tools and services that we provide to users and content creators.
The Cybersecurity Law imposes a relatively vague but broad obligation to provide technical support and assistance to the public and state security authorities in connection with criminal investigations or for reasons of national security.
The PRC Cybersecurity Law imposes a relatively vague but broad obligation to provide technical support and assistance to the public and state security authorities in connection with criminal investigations or for reasons of national security.
Xujun Chai, Shanghai Kuanyu and Hode Information Technology hold 31.2%, 6.8%, 9.5%, 5.1%, 44.6% and 2.8% equity interests in Chaodian Culture, respectively, as of the date of this annual report. Mr.
Xujun Chai, Shanghai Kuanyu and Hode Information Technology hold 31.2%, 6.8%, 9.5%, 5.1%, 44.6% and 2.8% equity interests in Chaodian Culture, respectively, as of the date of this annual report.
According to the Internet Information Services Measures, the internet information services is classified into commercial internet information services and noncommercial internet information services; a commercial operator of internet content provision services must obtain an ICP License for the provision of internet information services from the appropriate telecommunications authorities.
According to these measures, the internet information services is classified into commercial internet information services and noncommercial internet information services; a commercial operator of internet content provision services must obtain an ICP License for the provision of internet information services from the appropriate telecommunications authorities.
Pursuant to these regulations, entities are required to obtain the Online Culture Operating Permits from the applicable provincial level counterpart of the MCT if they intend to commercially engage in any of the following types of activities: (i) production, duplication, import, release or broadcasting of online cultural products; (ii) publishing of online cultural products on the internet or transmission over information network, such as internet or mobile telecommunication network, to end user’s devices via computers, fixed-line or mobile phones, radios, television sets or online games consoles and internet cafes for the purpose of browsing, reading, reviewing, using or downloading such products by users; or (iii) exhibitions or contests related to online cultural products.
Pursuant to these regulations, entities are required to obtain the Online Culture Operating Permits from the applicable provincial level counterpart of the Ministry of Culture and Tourism if they intend to commercially engage in any of the following types of activities: (i) production, duplication, import, release or broadcasting of online cultural products; (ii) publishing of online cultural products on the internet or transmission over information network, such as internet or mobile telecommunication network, to end user’s devices via computers, fixed-line or mobile phones, radios, television sets or online games consoles and internet cafes for the purpose of browsing, reading, reviewing, using or downloading such products by users; or (iii) exhibitions or contests related to online cultural products.
Specifically, the draft regulations require data processors to, among others, (i) adopt immediate remediation measures when finding that network products and services they use or provide have security defects and vulnerabilities, or threaten national security or endanger public interest, and (ii) follow a series of detailed requirements with respect to processing of personal information, management of important data and proposed overseas transfer of data.
Specifically, these draft regulations require data processors to, among others, (i) adopt immediate remediation measures when finding that network products and services they use or provide have security defects and vulnerabilities, or threaten national security or endanger public interest, and (ii) follow a series of detailed requirements with respect to processing of personal information, management of important data and proposed overseas transfer of data.
Under the Cybersecurity Law, network operators must also record and report any instances of publication of prohibited information and take measures to prevent such information from dissemination.
Under the PRC Cybersecurity Law, network operators must also record and report any instances of publication of prohibited information and take measures to prevent such information from dissemination.
Measures for the Supervision and Administration of Online Transactions require that, among others, online transaction operators shall not force customers, whether or not in a disguised manner, to consent to the collection and use of information not directly related to their business activities by means of one-off general authorization, default authorization, bundling with other authorizations, or the suspension of installation and use.
Measures for the Supervision and Administration of Online Transactions require that online transaction operators shall not force customers, whether or not in a disguised manner, to consent to the collection and use of information not directly related to their business activities by means of one-off general authorization, default authorization, bundling with other authorizations, or the suspension of installation and use.
The working papers formed within the territory of the PRC by the securities companies and securities service institutions that provide corresponding services for the overseas issuance and listing of domestic enterprises shall be kept within the territory of the PRC, and those that need to leave the PRC shall go through the examination and approval formalities in accordance with the relevant provisions of the State. 113 Table of Contents C.
The working papers formed within the territory of the PRC by the securities companies and securities service institutions that provide corresponding services for the overseas issuance and listing of domestic enterprises shall be kept within the territory of the PRC, and those that need to leave the PRC shall go through the examination and approval formalities in accordance with the relevant provisions of the State. 115 Table of Contents C.
More specifically, these Measures specify that any of the circumstances below will require security assessment before any cross-border data transfer out of mainland China can occur: (i) the data transferred out of mainland China is important data; (ii) the data processor is a critical information infrastructure operator or data processor that processes personal information of more than 1 million individuals; (iii) cross-border data transfer of personal information by a data processor who has made cross-border data transfers of personal information of more than 100,000 individuals, or sensitive personal information of more than 10,000 individuals, in each case as calculated cumulatively, since 1 January of the previous year; or (iv) under other circumstances as stipulated by the CAC.
More specifically, these measures specify that any of the circumstances below will require security assessment before any cross-border data transfer out of mainland China can occur: (i) the data transferred out of mainland China is important data; (ii) the data processor is a critical information infrastructure operator or data processor that processes personal information of more than 1 million individuals; (iii) cross-border data transfer of personal information by a data processor who has made cross-border data transfers of personal information of more than 100,000 individuals, or sensitive personal information of more than 10,000 individuals, in each case as calculated cumulatively, since 1 January of the previous year; or (iv) under other circumstances as stipulated by the Cyberspace Administration of China.
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.
We adopt “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.
Organizational Structure The following chart illustrates our company’s organizational structure, including our principal subsidiaries and the 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.
Organizational Structure The following chart illustrates our company’s organizational structure, including our principal subsidiaries and the 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 three subsidiaries.
Property, Plants 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 139,000 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.
Property, Plants 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 105,000 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 Telecommunications Regulations categorize all telecommunications services as either basic telecommunications services or value-added telecommunications services. Providers of value-added telecommunications services are required to obtain a license for value-added telecommunications services.
The Telecommunications Regulations of the PRC categorize all telecommunications services as either basic telecommunications services or value-added telecommunications services. Providers of value-added telecommunications services are required to obtain a license for value-added telecommunications services.
Rui Chen is contractually entitled to terminate the exclusive option agreement unless otherwise required by PRC laws and regulations. 119 Table of Contents On December 23, 2020, Hode Shanghai, Hode Information Technology and each of the shareholders of Hode Information Technology entered into an exclusive option agreement, which contains terms substantially similar to the exclusive option agreement described above.
Rui Chen is contractually entitled to terminate the exclusive option agreement unless otherwise required by PRC laws and regulations. 121 Table of Contents On December 23, 2020, Hode Shanghai, Hode Information Technology and each of the shareholders of Hode Information Technology entered into an exclusive option agreement, which contains terms substantially similar to the exclusive option agreement described above.
We provide various sales incentives to our advertising customers, including cash incentives in the form of commissions to certain third-party advertising agencies and noncash incentives such as discounts and advertising services provided free of charge in certain bundled arrangements, which are negotiated on a contract-by-contract basis with customers.
We provide various sales incentives to our advertising customers, including cash incentives in the form of commissions to certain third-party advertising agencies and non-cash incentives such as discounts and advertising services provided free of charge in certain bundled arrangements, which are negotiated on a contract-by-contract basis with customers.
Rui Chen shall inform and transfer all distributable receivable by him to Hode Shanghai as soon as possible after receiving such interests; (9) Shanghai Kuanyu and its affiliates shall provide its operation and financial information to Hode Shanghai or its designated person upon Hode Shanghai’s request; (10) Shanghai Kuanyu shall not separate, or merge, or enter into joint operation agreements with other entities, or acquire or be acquired by other entities, or invest in any entities without Hode Shanghai’s written consent; (11) 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.
Rui Chen shall inform and transfer all distributable receivable by him to Hode Shanghai as soon as possible after receiving such interests; • Shanghai Kuanyu and its affiliates shall provide its operation and financial information to Hode Shanghai or its designated person upon Hode Shanghai’s request; • Shanghai Kuanyu shall not separate, or merge, or enter into joint operation agreements with other entities, or acquire or be acquired by other entities, or invest in any entities without Hode Shanghai’s written consent; • 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; • if Mr.
The monitoring team for live broadcasting consisted of about 400 members as of the date of this annual report, and we sometimes assign more team members from our general content screening team as necessary. The live broadcasting reviewing process is similar to the two-level review procedure described above.
The monitoring team for live broadcasting consisted of about 300 members as of the date of this annual report, and we sometimes assign more team members from our general content screening team as necessary. The live broadcasting reviewing process is similar to the two-level review procedure described above.
For example, marketplace platform providers are obligated to examine the legal status of each third-party merchant selling products or services on their platforms and display on a prominent location on a merchant’s web page the information stated in the merchant’s business license or a link to its business license.
Marketplace platform providers are obligated to examine the legal status of each third-party merchant selling products or services on their platforms and display on a prominent location on a merchant’s web page the information stated in the merchant’s business license or a link to its business license.
On September 30, 2020, Chaodian Technology, Chaodian Culture and each of the individual shareholders of Chaodian Culture entered into an equity pledge agreement, which contains terms substantially similar to the equity pledge agreement described above. 116 Table of Contents Letter of Undertakings Pursuant to the letter of undertakings, dated December 23, 2020, the spouse of Mr.
On September 30, 2020, Chaodian Technology, Chaodian Culture and each of the individual shareholders of Chaodian Culture entered into an equity pledge agreement, which contains terms substantially similar to the equity pledge agreement described above. 118 Table of Contents Letter of Undertakings Pursuant to the letter of undertakings, dated December 23, 2020, the spouse of Mr.
Foreign investor or relevant parties in mainland China must declare the security review to the Office of the Working Mechanism prior to (i) the investments in the military industry, military industrial supporting and other fields relating to the security of national defense, and investments in areas surrounding military facilities and military industry facilities; and (ii) investments in important agricultural products, important energy and resources, important equipment manufacturing, important infrastructure, important transport services, important cultural products and services, important information technology and Internet products and services, important financial services, key technologies and other important fields relating to national security, and obtain control in the target enterprise.
Foreign investor or relevant parties in mainland China must declare the security review to this office prior to (i) the investments in the military industry, military industrial supporting and other fields relating to the security of national defense, and investments in areas surrounding military facilities and military industry facilities; and (ii) investments in important agricultural products, important energy and resources, important equipment manufacturing, important infrastructure, important transport services, important cultural products and services, important information technology and internet products and services, important financial services, key technologies and other important fields relating to national security, and obtain control in the target enterprise.
The new measures are applicable to the usage of internet media such as websites, web pages, and internet applications, whether directly or indirectly, to promote commercial advertisement activities for products or services via text, images, videos or other forms, in the territory of PRC.
These measures are applicable to the usage of internet media such as websites, web pages, and internet applications, whether directly or indirectly, to promote commercial advertisement activities for products or services via text, images, videos or other forms, in the territory of PRC.
Under the general mode, from early January 2021, the users who can be identified as minors are not allowed to make virtual gifts and if adult users can prove that the virtual gifts are paid by minors, they can claim for refund; our Youth Mode was established under the direction of the CAC, when an user launches our app for the first time every day, the user can switch to the Youth Mode according to the pop-up prompt, and the browsing content under the Youth Mode is presented in the form of whitelist by our content team, and parents can set up passcodes under the Youth Mode to manage the time spent by minors on our platform and to prevent minors from switching back to general mode.
Under the general mode, from early January 2021, the users who can be identified as minors are not allowed to make virtual gifts and if adult users can prove that the virtual gifts are paid by minors, they can claim for refund; our Youth Mode was established under the direction of the Cyberspace Administration of China, when an user launches our app for the first time every day, the user can switch to the Youth Mode according to the pop-up prompt, and the browsing content under the Youth Mode is presented in the form of whitelist by our content team, and parents can set up passcodes under the Youth Mode to manage the time spent by minors on our platform and to prevent minors from switching back to general mode.
Users’ purchase of in-game virtual items to enhance their game-playing experiences is the primary source of our revenue generated from mobile games. As of December 31, 2022, we operated multiple exclusively distributed mobile games and hundreds of jointly operated mobile games.
Users’ purchase of in-game virtual items to enhance their game-playing experiences is the primary source of our revenue generated from mobile games. As of December 31, 2023, we operated multiple exclusively distributed mobile games and hundreds of jointly operated mobile games.
The first level of review procedure is conducted through our proprietary artificial intelligence-based screening system. This system automatically flags and screens out newly uploaded videos that have piracy issues or contain illegal or inappropriate content by comparing them with copyrighted or objectionable videos stored in our own in-house “black list” databases and identifying those with similar codes.
The first level of review procedure is conducted through our proprietary artificial intelligence-based screening system. This system automatically flags and screens out newly uploaded videos that have piracy issues or contain illegal or inappropriate content by comparing them with copyrighted or objectionable videos stored in our own in-house “blacklist” databases and identifying those with similar codes.
As of the date of this annual report, we have not received any notification from any competent authority in the PRC in relation to the non-registration of lease agreements. 120 Table of Contents ITEM 4A. UNRESOLVED STAFF COMMENTS Not applicable.
As of the date of this annual report, we have not received any notification from any competent authority in the PRC in relation to the non-registration of lease agreements. 122 Table of Contents ITEM 4A. UNRESOLVED STAFF COMMENTS Not applicable.
Business Overview—Regulation—Regulations Related to Internet Cultural Activities.” The CAC conducted a nationwide inspection of major internet platforms providing short-video content, and we were notified by certain smartphone app stores in China that our mobile app had been temporarily removed from July 26, 2018 until August 25, 2018.
Business Overview—Regulation—Regulations Related to Internet Cultural Activities.” The Cyberspace Administration of China conducted a nationwide inspection of major internet platforms providing short-video content, and we were notified by certain smartphone app stores in China that our mobile app had been temporarily removed from July 26, 2018 until August 25, 2018.
On May 14, 2019, the MCT promulgated the Notice on Adjusting the Scope of Examination and Approval regarding the Internet Culture Operation License to Further Regulate the Approval Work, which quotes the Regulations on the Function Configuration, Internal Institutions and Staffing of the MCT, or the Function Configuration Regulations, effective from July 30, 2018, and further specifies that the MCT no longer assumes the responsibility for administering the industry of online games.
On May 14, 2019, the Ministry of Culture and Tourism promulgated the Notice on Adjusting the Scope of Examination and Approval regarding the Internet Culture Operation License to Further Regulate the Approval Work, which quotes the Regulations on the Function Configuration, Internal Institutions and Staffing of the Ministry of Culture and Tourism, or the Function Configuration Regulations, effective from July 30, 2018, and further specifies that the Ministry of Culture and Tourism no longer assumes the responsibility for administering the industry of online games.
The Several Provisions on Regulating the Market Order of Internet Information Services, promulgated by the MIIT on December 29, 2011, and became effective on March 15, 2012, stipulate that internet content provision operators may not, without user’s consent, collect user’s personal information, which is defined as user information that can be used alone or in combination with other information to identify the user, and may not provide any such information to third parties without user’s prior consent, unless when required by laws or regulations.
The Several Provisions on Regulating the Market Order of Internet Information Services, promulgated by the Ministry of Industry and Information Technology on December 29, 2011, and became effective on March 15, 2012, stipulate that internet content provision operators may not, without user’s consent, collect user’s personal information, which is defined as user information that can be used alone or in combination with other information to identify the user, and may not provide any such information to third parties without user’s prior consent, unless when required by laws or regulations.
Regulations Related to Online Transmission of Audio-Visual Programs According to the Administrative Regulations on Internet Audio-Visual Program Service, or the Audio-Visual Regulations, promulgated by State Administration of Radio, Film and Television of the PRC, or the SARFT, and the Ministry of Information Industry of the PRC, or the MII, the predecessor of the MIIT, on December 20, 2007, and became effective on January 31, 2008, as amended on August 28, 2015, and became effective on the same day, internet audio-visual program service refers to the activities of making, editing and integrating audio-visual programs, providing them to the general public via internet, and providing such services to other people by uploading.
Regulations Related to Online Transmission of Audio-Visual Programs According to the Administrative Regulations on Internet Audio-Visual Program Service, or the Audio-Visual Regulations, promulgated by State Administration of Radio, Film and Television of the PRC and the Ministry of Information Industry of the PRC, the predecessor of the Ministry of Industry and Information Technology, on December 20, 2007, and became effective on January 31, 2008, as amended on August 28, 2015, and became effective on the same day, internet audio-visual program service refers to the activities of making, editing and integrating audio-visual programs, providing them to the general public via internet, and providing such services to other people by uploading.
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 its 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: 117 Table of Contents (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.
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 its 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: 119 Table of Contents • 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; • 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); • 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); • any merger, acquisition, restructuring or liquidation; and • cause any conflict of interest between Shanghai Kuanyu and Hode Shanghai as well as its shareholders.
We refer to the trend of video integrating into the scenarios of everyday life as “videolization.” As a go-to video community for young generations in China, we believe we are well positioned to capture the attractive opportunities created by videolization. 77 Table of Contents We are a full-spectrum video community that offers a wide array of content serving young generations’ diverse interests.
We refer to the trend of video integrating into the scenarios of everyday life as “videolization.” As a go-to video community for young generations in China, we believe we are well positioned to capture the attractive opportunities created by videolization. We are a full-spectrum video community that offers a wide array of content serving young generations’ diverse interests.
If 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.
If the content of audio-visual programs transmitted by the internet audio-visual program service provider on the internet violated 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.
Pursuant to the Regulations on Protection of Critical Information Infrastructure, critical information infrastructure refers to any important network facilities and information systems of an important industry and field such as public communication and information service, energy, transport, water conservation, finance, public services, e-government affairs and national defense related science and technology industry, and other industries and fields that may seriously endanger national security, people’s livelihood and public interest in case of damage, function loss or data leakage.
Pursuant to these regulations, critical information infrastructure refers to any important network facilities and information systems of an important industry and field such as public communication and information service, energy, transport, water conservation, finance, public services, e-government affairs and national defense related science and technology industry, and other industries and fields that may seriously endanger national security, people’s livelihood and public interest in case of damage, function loss or data leakage.
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.
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.
According to the Notice on Regulating the Operations of Online Games and Strengthening Interim and Ex Post Regulation promulgated by the MOC on December 1, 2016, and effective as of May 1, 2017, the virtual items, purchased by users directly with legal currency, by using the virtual currencies of online games or by exchanging the virtual currencies of online games according to a certain percentage and enabling users to directly exchange for other virtual items or value-added service functions in online games, shall be regulated pursuant to the provisions on virtual currencies of online games.
According to the Notice on Regulating the Operations of Online Games and Strengthening Interim and Ex Post Regulation promulgated by the Ministry of Culture of the PRC on December 1, 2016, and effective as of May 1, 2017, the virtual items, purchased by users directly with legal currency, by using the virtual currencies of online games or by exchanging the virtual currencies of online games according to a certain percentage and enabling users to directly exchange for other virtual items or value-added service functions in online games, shall be regulated pursuant to the provisions on virtual currencies of online games.
We have employed the following measures to comply with Notice 78 and ensure the appropriateness of live broadcasting content: (i) we have communicated with Shanghai Municipal Administration of Radio and Television, or the SHART and were informed that currently we are not required to register in this system; (ii) we have adopted policies to require real-name registration through identity card for all hosts from 2016, and require real-name registration through mobile number for all virtual gifting users from 2018; (iii) we have set up the youth mode from May 2019, under which users are prohibited from virtual gifting.
We have employed the following measures to comply with Notice 78 and ensure the appropriateness of live broadcasting content: (i) we have communicated with Shanghai Municipal Administration of Radio and Television and were informed that currently we are not required to register in this system; 87 Table of Contents (ii) we have adopted policies to require real-name registration through identity card for all hosts from 2016, and require real-name registration through mobile number for all virtual gifting users from 2018; (iii) we have set up the youth mode from May 2019, under which users are prohibited from virtual gifting.
In March 2021, our Class Z ordinary shares commenced trading on the Main Board of the Hong Kong Stock Exchange under the stock code “9626”. We raised from our global offering approximately HK$22.9 billion (RMB19.3 billion), after deducting underwriting fees and other offering expenses.
In March 2021, our Class Z ordinary shares commenced trading on the Main Board of the Hong Kong Stock Exchange under the stock code “9626.” We raised approximately HK$22.9 billion (RMB19.3 billion) from our global offering, after deducting underwriting fees and other offering expenses.
Bilibili live broadcasting allows content creators to set up channels to interact with fans on a real-time basis and express their appreciation to the talents of live broadcasting host by virtual gifting. Gifting and rewarding . Users can send free or paid virtual items to live broadcasting hosts and content creators to show their support and appreciation.
Bilibili live broadcasting allows content creators to set up channels to interact with fans on a real-time basis and express their appreciation to the talents of live broadcasting host by virtual gifting. 81 Table of Contents Gifting and rewarding. Users can send free or paid virtual items to content creators and live broadcasting hosts to show their support and appreciation.
Rui Chen and Shanghai Kuanyu have undertaken to perform certain acts or refrain from performing certain other acts unless they have obtained prior approval from Hode Shanghai, including but not limited to the following matters: (1) Shanghai Kuanyu shall not in any manner supplement, change or alter its constitutional documents or increase or decrease its registered capital or change the structure of its registered capital in other manner; (2) Shanghai Kuanyu shall prudently and effectively operate its business and transactions in accordance with the good financial and business standards; (3) Shanghai Kuanyu shall not sell, transfer, mortgage or otherwise dispose of any assets, business, legal or beneficial interest of its income or allow any guarantee or security to be created on its assets except for those of value less than RMB 1 million required for normal business operations; (4) Shanghai Kuanyu shall not incur, inherit, guarantee or allow any indebtedness other than those having been disclosed to and consented by Hode Shanghai in writing or those made during the ordinary course of its business; (5) 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) Shanghai Kuanyu shall operate its business in order to maintain its asset value or not allow any acts or omission which adversely affects its business or assets value; (7) Shanghai Kuanyu shall immediately inform Hode Shanghai if its assets or business involved in any disputes, litigations, arbitrations or administrative proceedings; (8) Shanghai Kuanyu shall not distribute any dividend to its shareholder without Hode Shanghai’s written consent.
Rui Chen and Shanghai Kuanyu have undertaken to perform certain acts or refrain from performing certain other acts unless they have obtained prior approval from Hode Shanghai, including, but not limited to, the following matters: • Shanghai Kuanyu shall not in any manner supplement, change or alter its constitutional documents or increase or decrease its registered capital or change the structure of its registered capital in other manner; 120 Table of Contents • Shanghai Kuanyu shall prudently and effectively operate its business and transactions in accordance with the good financial and business standards; • Shanghai Kuanyu shall not sell, transfer, mortgage or otherwise dispose of any assets, business, legal or beneficial interest of its income or allow any guarantee or security to be created on its assets except for those of value less than RMB 1 million required for normal business operations; • Shanghai Kuanyu shall not incur, inherit, guarantee or allow any indebtedness other than those having been disclosed to and consented by Hode Shanghai in writing or those made during the ordinary course of its business; • 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); • Shanghai Kuanyu shall operate its business in order to maintain its asset value or not allow any acts or omission which adversely affects its business or assets value; • Shanghai Kuanyu shall immediately inform Hode Shanghai if its assets or business involved in any disputes, litigations, arbitrations or administrative proceedings; • Shanghai Kuanyu shall not distribute any dividend to its shareholder without Hode Shanghai’s written consent.
In addition, we use a variety of technologies to protect the user personal information with which we are entrusted and have a team of information security professionals dedicated to the ongoing implementation of data security practices.
We use a variety of technologies to protect the user personal information with which we are entrusted and have a team of information security professionals dedicated to the ongoing implementation of data security practices.
Under the Radio and TV Programs Regulations, any entities that engage in the production of radio and television programs are required to apply for a license from the NRTA or its provincial level counterparts. Entities shall conduct their business within the permitted scope as provided in their licenses.
Under the Radio and TV Programs Regulations, any entities that engage in the production of radio and television programs are required to apply for a license from the National Radio and Television Administration or its provincial level counterparts. Entities shall conduct their business within the permitted scope as provided in their licenses.
For the overseas listing of companies with contractual arrangements, the CSRC will solicit opinions from relevant regulatory authorities and complete the filing of the overseas listing of companies with these domestic companies which duly meet their compliance requirements, and support their development and growth by enabling them to utilize both markets and their resources.
Furthermore, for the overseas listing of companies with VIE contractual arrangements, the CSRC will solicit opinions from relevant regulatory authorities and complete the filing of the overseas listing of companies with these domestic companies which meet their compliance requirements and support their development and growth by enabling them to utilize both markets and their resources.
According to the Implementation Rules, in the event of any discrepancy between the Foreign Investment Law, the Implementation Rules and the relevant provisions on foreign investment promulgated prior to January 1, 2020, the Foreign Investment Law and the Implementation Rules shall prevail.
According to these implementation rules, in the event of any discrepancy between the Foreign Investment Law, the implementation rules and the relevant provisions on foreign investment promulgated prior to January 1, 2020, the Foreign Investment Law and its implementation rules shall prevail.
On March 30, 2009, the SARFT promulgated the Notice on Strengthening the Administration of the Content of Internet Audio-Visual Programs, which reiterates the pre-approval from the broadcasting, film and television administrative departments requirements for the domestic and overseas films and television shows disseminating on the internet, including those on mobile networks (if applicable), and prohibits those internet audio-visual programs containing violence, pornography, gambling, terrorism, superstition or other prohibited elements.
On March 30, 2009, the State Administration of Radio, Film and Television of the PRC promulgated the Notice on Strengthening the Administration of the Content of Internet Audio-Visual Programs, which reiterates the pre-approval from the broadcasting, film and television administrative departments requirements for the domestic and overseas films and television shows disseminating on the internet, including those on mobile networks (if applicable), and prohibits those internet audio-visual programs containing violence, pornography, gambling, terrorism, superstition or other prohibited elements.
In addition, such draft regulations require data processors handling important data or the data processors listed overseas to complete an annual data security assessment and file a data security assessment report to applicable regulators.
In addition, these draft regulations require data processors handling important data or the data processors listed overseas to complete an annual data security assessment and file a data security assessment report to applicable regulators.
In November 2022, the CAC issued the Circular on Effectively Strengthening the Governance of Online Violence, requiring that the review of contents of live broadcasting and short video shall be strengthened, live broadcasting rooms with concentrated cyber violence contents shall be shut down in a timely manner, anchors in violation of regulations shall be banned, short videos with cyber violence risk shall be reviewed before publishing, short videos with cyber violence information shall be reviewed, and negative barrages shall be blocked and filtered.
In November 2022, the Cyberspace Administration of China issued the Circular on Effectively Strengthening the Governance of Online Violence, requiring that the review of contents of live broadcasting and short video shall be strengthened, live broadcasting rooms with concentrated cyber violence contents shall be shut down in a timely manner, anchors in violation of regulations shall be banned, short videos with cyber violence risk shall be reviewed before publishing, short videos with cyber violence information shall be reviewed, and negative barrages shall be blocked and filtered.
These policies have later been reflected in the Notice on Relevant Issues Concerning Application and Approval of License for Online Transmission of Audio-visual Programs, issued by SARFT on April 8, 2008, and amended on August 28, 2015. 92 Table of Contents If the content of audio-visual programs transmitted by the internet audio-visual program service provider on the internet violated the Audio-Visual Regulations, 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.
These policies have later been reflected in the Notice on Relevant Issues Concerning Application and Approval of License for Online Transmission of Audio-visual Programs, issued by State Administration of Radio, Film and Television of the PRC on April 8, 2008, and amended on August 28, 2015. 92 Table of Contents If the content of audio-visual programs transmitted by the internet audio-visual program service provider on the internet violated the Audio-Visual Regulations, 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.
The provisions stipulate that mobile internet application providers shall perform their responsibilities as information content administrators, and establish and improve information content security management, information content ecological governance, data security and personal information protection, minors protection and other management systems to ensure cyber security and maintain a good cyber ecology.
These provisions stipulate that mobile internet application providers shall perform their responsibilities as information content administrators, and establish and improve information content security management, information content ecological governance, data security and personal information protection, protection of minors and other management systems to ensure cyber security and maintain a good cyber ecology.
According to the Social Insurance Law of the PRC, which was promulgated by the SCNPC on October 28, 2010, came into effect on July 1, 2011, and was amended on December 29, 2018, the Provisional Regulations on the Collection and Payment of Social Insurance Premium, which was promulgated by the State Council on January 22, 1999, and amended on March 24, 2019, and the Regulations on the Administration of Housing Provident Fund, which was promulgated by the State Council on April 3, 1999, came into effective on the same date and was last amended on March 24, 2019, employers are required to contribute, on behalf of their employees, to a number of social security funds, including funds for basic pension insurance, unemployment insurance, basic medical insurance, occupational injury insurance, maternity insurance and to housing provident funds.
According to the Social Insurance Law of the PRC, which was promulgated by the Standing Committee of the National People’s Congress on October 28, 2010, came into effect on July 1, 2011, and was amended on December 29, 2018, the Provisional Regulations on the Collection and Payment of Social Insurance Premium, which was promulgated by the State Council on January 22, 1999, and amended on March 24, 2019, and the Regulations on the Administration of Housing Provident Fund, which was promulgated by the State Council on April 3, 1999, came into effective on the same date and was last amended on March 24, 2019, employers are required to contribute, on behalf of their employees, to a number of social security funds, including funds for basic pension insurance, unemployment insurance, basic medical insurance, occupational injury insurance, maternity insurance and to housing provident funds.
On November 14, 2021, the CAC published the Regulations of Internet Data Security Management (Draft for Comments), which further regulate the internet data processing activities and emphasize the supervision and management of network data security, and further stipulate the obligations of internet platform operators, such as to establish a system for disclosure of platform rules, privacy policies and algorithmic strategies related to data, and timely disclosure of formulation procedures and adjudication procedures and more.
On November 14, 2021, the Cyberspace Administration of China published the Regulations of Internet Data Security Management (Draft for Comments), which further regulate the internet data processing activities and emphasize the supervision and management of network data security, and further stipulate the obligations of internet platform operators, such as to establish a system for disclosure of platform rules, privacy policies and algorithmic strategies related to data, and timely disclosure of formulation procedures and adjudication procedures and more.
On February 24, 2023, the CSRC and other relevant government authorities promulgated the Provision on Confidentiality of Overseas Securities Issuance and Listing which took effective on March 31, 2023.
On February 24, 2023, the CSRC and other relevant government authorities promulgated the Provision on Confidentiality of Overseas Securities Issuance and Listing which became effective on March 31, 2023.
According to Article 11 of the M&A Rules, where a domestic enterprise, or a domestic natural person, through an overseas company established or controlled by it/him/her, acquires a domestic enterprise which is related to or connected with it/him/her, approval from the MOFCOM is required.
According to Article 11 of the M&A Rules, where a domestic enterprise, or a domestic natural person, through an overseas company established or controlled by it/him/her, acquires a domestic enterprise which is related to or connected with it/him/her, approval from the Ministry of Commerce is required.
As of December 31, 2022, our content screening team consists of over 3,800 employees dedicated to screening and monitoring the content uploaded on our platform to ensure that the flagged content identified by our screening system is reviewed and confirmed before it can be released. We provide initial training during the onboarding process for new hires.
As of December 31, 2023, our content screening team consists of over 2,800 employees dedicated to screening and monitoring the content uploaded on our platform to ensure that the flagged content identified by our screening system is reviewed and confirmed before it can be released. We provide initial training during the onboarding process for new hires.
On December 19, 2020, the NDRC and the MOFCOM jointly promulgated the Measures on the Security Review of Foreign Investment, effective on January 18, 2021, setting forth provisions concerning the security review mechanism on foreign investment, including the types of investments subject to review, review scopes and procedures, among others.
On December 19, 2020, the NDRC and the Ministry of Commerce jointly promulgated the Measures on the Security Review of Foreign Investment, effective on January 18, 2021, setting forth provisions concerning the security review mechanism on foreign investment, including the types of investments subject to review, review scopes and procedures, among others.
On August 12, 2013, the MOC issued the Administrative Measures for Content Self-Review by Internet Culture Business Entities, requiring the entities that engage in the internet cultural business to review the content of products and services to be provided before providing such content and services to the public.
On August 12, 2013, the Ministry of Culture of the PRC issued the Administrative Measures for Content Self-Review by Internet Culture Business Entities, requiring the entities that engage in the internet cultural business to review the content of products and services to be provided before providing such content and services to the public.
Regulations Related to Internet Information Security and Privacy Protection Internet content in mainland China is also regulated and restricted from a state security point of view.
Regulations Related to Internet Information Security and Privacy Protection Internet content in mainland China is highly regulated and restricted from a state security point of view.
According to the Examination Provisions, concentration refers to (i) a merger of undertakings; (ii) acquiring control over other undertakings by virtue of acquiring equities or assets; or (iii) acquisition of control over, or being able to exercise decisive influence on, an undertaking by contract or by any other means.
According to these provisions, concentration refers to (i) a merger of undertakings; (ii) acquiring control over other undertakings by virtue of acquiring equities or assets; or (iii) acquisition of control over, or being able to exercise decisive influence on, an undertaking by contract or by any other means.
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.
Further, in addition to responding to user complaints, our monitoring team frequently visit different live broadcasting rooms to ensure the appropriateness of the content. 86 Table of Contents We utilize a real-name system to authenticate the identities of our content creators and live broadcasting hosts.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

123 edited+29 added−50 removed81 unchanged
Biggest changeFor the Year Ended December 31, 2020 2021 2022 RMB % RMB % RMB US$ % (in thousands, except for percentages) Net revenues 11,998,976 100.0 % 19,383,684 100 % 21,899,167 3,175,081 100 % Cost of revenues (1) (9,158,800 ) (76.3 )% (15,340,537 ) (79.1 )% (18,049,872 ) (2,616,986 ) (82.4 )% Gross profit 2,840,176 23.7 % 4,043,147 20.9 % 3,849,295 558,095 17.6 % Operating expenses: Sales and marketing expenses (1) (3,492,091 ) (29.1 )% (5,794,853 ) (29.9 )% (4,920,745 ) (713,441 ) (22.5 )% General and administrative expenses (1) (976,082 ) (8.1 )% (1,837,506 ) (9.5 )% (2,521,134 ) (365,530 ) (11.5 )% Research and development expenses (1) (1,512,966 ) (12.6 )% (2,839,862 ) (14.7 )% (4,765,360 ) (690,912 ) (21.7 )% Total operating expenses (5,981,139 ) (49.8 )% (10,472,221 ) (54.1 )% (12,207,239 ) (1,769,883 ) (55.7 )% Loss from operations (3,140,963 ) (26.1 )% (6,429,074 ) (33.2 )% (8,357,944 ) (1,211,788 ) (38.1 )% Other income/(expenses): Investment income/(loss), net (including impairments) 28,203 0.2 % (194,183 ) (1.0 )% (532,485 ) (77,203 ) (2.4 )% Interest income 83,301 0.7 % 70,367 0.4 % 281,051 40,749 1.3 % Interest expense (108,547 ) (0.9 )% (155,467 ) (0.8 )% (250,923 ) (36,380 ) (1.1 )% Exchange gains/(losses) 41,717 0.3 % (15,504 ) (0.1 )% (19,745 ) (2,863 ) (0.1 )% Debt distinguish gain — — — — 1,318,594 191,178 6.0 % Others, net 95,641 0.8 % 10,411 0.1 % 157,944 22,900 0.7 % Loss before income tax expenses (3,000,648 ) (25.0 )% (6,713,450 ) (34.6 )% (7,403,508 ) (1,073,407 ) (33.7 )% Income tax (53,369 ) (0.4 )% (95,289 ) (0.5 )% (104,145 ) (15,100 ) (0.5 )% Net loss (3,054,017 ) (25.4 )% (6,808,739 ) (35.1 )% (7,507,653 ) (1,088,507 ) (34.2 )% Note: (1) Share-based compensation expenses were allocated as follows: For the Year Ended December 31, 2020 2021 2022 RMB RMB RMB US$ (In thousands) Cost of revenues 37,087 76,232 69,096 10,018 Sales and marketing expenses 40,808 53,452 59,041 8,560 General and administrative expenses 181,753 553,526 554,976 80,464 Research and development expenses 126,250 316,607 357,570 51,843 Total 385,898 999,817 1,040,683 150,885 126 Table of Contents Year ended December 31, 2022 compared to year ended December 31, 2021 Net revenues Our net revenues increased by 13.0% from RMB19.4 billion in 2021 to RMB21.9 billion (US$3.2 billion) in 2022.
Biggest changeFor the Year Ended December 31, 2021 2022 2023 RMB % RMB % RMB US$ % (in thousands, except for percentages) Net revenues 19,383,684 100 % 21,899,167 100 % 22,527,987 3,173,001 100 % Cost of revenues (1) (15,340,537 ) (79.1 )% (18,049,872 ) (82.4 )% (17,086,122 ) (2,406,530 ) (75.8 )% Gross profit 4,043,147 20.9 % 3,849,295 17.6 % 5,441,865 766,471 24.2 % Operating expenses: Sales and marketing expenses (1) (5,794,853 ) (29.9 )% (4,920,745 ) (22.5 )% (3,916,150 ) (551,578 ) (17.4 )% General and administrative expenses (1) (1,837,506 ) (9.5 )% (2,521,134 ) (11.5 )% (2,122,432 ) (298,938 ) (9.4 )% Research and development expenses (1) (2,839,862 ) (14.7 )% (4,765,360 ) (21.7 )% (4,467,470 ) (629,230 ) (19.9 )% Total operating expenses (10,472,221 ) (54.1 )% (12,207,239 ) (55.7 )% (10,506,052 ) (1,479,746 ) (46.7 )% Loss from operations (6,429,074 ) (33.2 )% (8,357,944 ) (38.1 )% (5,064,187 ) (713,275 ) (22.5 )% Other expenses: Investment loss, net (including impairments) (194,183 ) (1.0 )% (532,485 ) (2.4 )% (435,644 ) (61,359 ) (1.9 )% Interest income 70,367 0.4 % 281,051 1.3 % 542,472 76,406 2.4 % Interest expense (155,467 ) (0.8 )% (250,923 ) (1.1 )% (164,927 ) (23,229 ) (0.7 )% Exchange losses (15,504 ) (0.1 )% (19,745 ) (0.1 )% (35,575 ) (5,011 ) (0.2 )% Debt extinguishment gain — — 1,318,594 6.0 % 292,213 41,157 1.3 % Others, net 10,411 0.1 % 157,944 0.7 % 132,640 18,682 0.6 % Loss before income tax expenses (6,713,450 ) (34.6 )% (7,403,508 ) (33.7 )% (4,733,008 ) (666,629 ) (21.0 )% Income tax (95,289 ) (0.5 )% (104,145 ) (0.5 )% (78,705 ) (11,085 ) (0.4 )% Net loss (6,808,739 ) (35.1 )% (7,507,653 ) (34.2 )% (4,811,713 ) (677,714 ) (21.4 )% Note: (1) Share-based compensation expenses were allocated as follows: For the Year Ended December 31, 2021 2022 2023 RMB RMB RMB US$ (In thousands) Cost of revenues 76,232 69,096 63,724 8,975 Sales and marketing expenses 53,452 59,041 56,649 7,979 General and administrative expenses 553,526 554,976 596,950 84,079 Research and development expenses 316,607 357,570 415,321 58,497 Total 999,817 1,040,683 1,132,644 159,530 127 Table of Contents Year ended December 31, 2023 compared to year ended December 31, 2022 Net revenues Our net revenues increased by 2.9% from RMB21.9 billion in 2022 to RMB22.5 billion (US$3.2 billion) in 2023.
We primarily generate VAS revenues from (i) 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, and (ii) subscription fees of our premium membership program, which offers paying members benefits including exclusive or advance access to certain high-quality OGV content.
We primarily generate VAS revenues from (i) 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 either consumable items, such as gifts and items that create special visual effects, or time-based items, such as privileges and titles, and (ii) subscription fees of our premium membership program, which offers paying members benefits including exclusive or advance access to certain high-quality OGV content.
Updates to these assumptions will impact the estimate average playing period of paying players and the revenue recognized accordingly. If the estimate average playing period of paying players is extended, the revenue will be recognized over a longer period and vice versa. See Note 2-2.
Updates to these assumptions will impact the estimate average playing period of paying players and the revenue recognized accordingly. If the estimate average playing period of paying players is extended, the revenue will be recognized over a longer period and vice versa. See Note 2.
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 mainland 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 mainland China were deemed to be a “resident enterprise” under the PRC Enterprise Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%.
The indentures governing the Bilibili Convertible Senior Notes define a “fundamental change” to include, among others: (i) any person or group gaining control of Bilibili Inc., (ii) any recapitalization, reclassification or change of the ordinary shares or ADSs as a result of which these securities would be converted into, or exchanged for, stock, other securities, other property or assets; (iii) the shareholders of Bilibili Inc. approving any plan or proposal for the liquidation or dissolution of Bilibili Inc.; (iv) the ADSs (or other common equity or ADSs in respect of common equity underlying the convertible senior notes) ceasing to be listed on any of The New York Stock Exchange, The Nasdaq Global Select Market or The Nasdaq Global Market (or any of their respective successors); or (v) any change in or amendment to the laws, regulations and rules of the PRC resulting in our company being legally prohibited from operating substantially all of the business operations conducted by our company unable to continue to derive substantially all of the economic benefits from the business operations conducted by these entities.
The indentures governing the Bilibili Convertible Senior Notes define a “fundamental change” to include, among other things: (i) any person or group gaining control of Bilibili Inc., (ii) any recapitalization, reclassification or change of the ordinary shares or ADSs as a result of which these securities would be converted into, or exchanged for, stock, other securities, other property or assets; (iii) the shareholders of Bilibili Inc. approving any plan or proposal for the liquidation or dissolution of Bilibili Inc.; (iv) the ADSs (or other common equity or ADSs in respect of common equity underlying the convertible senior notes) ceasing to be listed on any of the New York Stock Exchange, the Nasdaq Global Select Market or the Nasdaq Global Market (or any of their respective successors); or (v) any change in or amendment to the laws, regulations and rules of the PRC resulting in our company being legally prohibited from operating substantially all of the business operations conducted by our company unable to continue to derive substantially all of the economic benefits from the business operations conducted by these entities.
Active users on the PC ends refer to the sum of valid logged-in users who visit our PC website at www.bilibili.com and engage in PC application during a given period, after eliminating duplicates. Our active users generally view and consume a multitude of content offered on our platform, including videos, live broadcasting, mobile games and other content.
Active users on PC refer to the sum of valid logged-in users who visit our website at www.bilibili.com on PC and who engage in PC application during a given period, after eliminating duplicates. Our active users generally view and consume a multitude of content offered on our platform, including videos, live broadcasting, mobile games and other content.
In addition, the Bilibili Convertible Senior Notes each contains similar protections concerning the holders’ right to require us to repurchase their notes upon the occurrence of a fundamental change (as defined in the terms of such notes), as well as similar provisions regarding our ability to redeem the existing notes in case of certain changes in tax law.
In addition, each of the Bilibili Convertible Senior Notes contains similar provisions concerning the holders’ right to require us to repurchase their notes upon the occurrence of a fundamental change (as defined in the terms of such notes), as well as similar provisions regarding our ability to redeem the existing notes in case of certain changes in tax law.
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, 2022 to December 31, 2022 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.
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, 2023 to December 31, 2023 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.
Our investment in content costs has contributed to the growth in our user base and the number of average monthly paying user for VAS.
Our investment in content costs has contributed to the growth in our user base and the number of average monthly paying users for VAS.
Net investment income/(loss), net (including impairments) 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. We had net investment loss of RMB194.2 million and RMB532.5 million (US$77.2 million) in 2021 and 2022, respectively.
Net investment income/(loss), net (including impairments) 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. We had net investment loss of RMB194.2 million and RMB532.5 million in 2021 and 2022, respectively.
As of December 31, 2022, we operated multiple 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 develop, select, procure and offer engaging games tailored to our platform and our user preferences.
As of December 31, 2023, we operated multiple 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 develop, select, procure and offer engaging games tailored to our platform and our user preferences.
Our research and development expenses increased by 67.8% from RMB2,839.9 million in 2021 to RMB4,765.4 million (US$690.9 million) in 2022, primarily due to expenses of RMB525.8 million associated with the termination of certain game projects, increases in headcount in research and development personnel and increased depreciation expenses of servers and equipment.
Our research and development expenses increased by 67.8% from RMB2,839.9 million in 2021 to RMB4,765.4 million in 2022, primarily due to expenses of RMB525.8 million associated with the termination of certain game projects, increases in headcount in research and development personnel and increased depreciation expenses of servers and equipment.
The fundamental change repurchase price will be equal to 100% of the principal amount of the notes to be repurchased, plus (except in limited circumstances) accrued and unpaid interest to, but excluding, the fundamental change repurchase date. As of December 31, 2022, there was no such event of default or fundamental change.
The fundamental change repurchase price will be equal to 100% of the principal amount of the notes to be repurchased, plus (except in limited circumstances) accrued and unpaid interest to, but excluding, the fundamental change repurchase date. As of December 31, 2023, there was no such event of default or fundamental change.
All of the other content, primarily consisting of bullet chats posted by users, is also automatically filtered by our screening system, which utilizes an AI-based screening system to conduct semantic analysis on bullet chats to analyse, identify and screen out inappropriate bullet chats.
All of the other content, primarily consisting of bullet chats posted by users, is also automatically filtered by our screening system, which utilizes an AI-based screening system to conduct semantic analysis on bullet chats to analyze, identify and screen out inappropriate bullet chats.
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 appear in Bilibili-produced OGV or events.
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’ needs and appear in Bilibili-produced OGV or events.
Key Information—D. Risk Factors,” “Item 4. Information on the Company,” and “Item 5. Operating and Financial Review and Prospects” in this annual report on Form 20-F, as well as our strategic and operational plans, contain forward-looking statements.
Key Information—D. Risk Factors,” “Item 4. Information on the Company” and “Item 5. Operating and Financial Review and Prospects” in this annual report on Form 20-F, as well as our strategic and operational plans, contain forward-looking statements.
Our proprietary AI-based screening system automatically flags and screens out newly uploaded videos that have privacy issues or contain illegal or inappropriate content by comparing them with copyrighted or objectionable videos stored in our own in-house “black list” databases and identifying those with similar codes, i.e., the key words in the video contents.
Our proprietary AI-based screening system automatically flags and screens out newly uploaded videos that have privacy issues or contain illegal or inappropriate content by comparing them with copyrighted or objectionable videos stored in our own in-house “blacklist” databases and identifying those with similar codes, i.e., the key words in the video contents.
Our net revenues from advertising increased by 12.0% from RMB4,523.4 million in 2021 to RMB5,066.2 million (US$734.5 million) in 2022. This increase was primarily attributable to further recognition of Bilibili’s brand name in China’s online advertising market, as well as our improved advertising efficiency. E-commerce and Others .
Our net revenues from advertising increased by 12.0% from RMB4,523.4 million in 2021 to RMB5,066.2 million in 2022. This increase was primarily attributable to further recognition of Bilibili’s brand name in China’s online advertising market, as well as our improved advertising efficiency. E-commerce and Others .
Content costs increased by 29.8% from RMB2,694.8 million in 2021 to RMB3,496.9 million (US$507.0 million) in 2022, as we continued to expand and diversify our content offerings. We self-produced and procured selected anime, documentaries, TV shows, movies and variety shows to enrich our content library.
Content costs increased by 29.8% from RMB2,694.8 million in 2021 to RMB3,496.9 million in 2022, as we continued to expand and diversify our content offerings. We self-produced and procured selected anime, documentaries, TV shows, movies and variety shows to enrich our content library.
Recent Accounting Pronouncements A list of recently issued accounting pronouncements that are relevant to us is included in “2. (ee)” of our audited consolidated financial statements included elsewhere in this annual report on Form 20-F. Safe Harbor This annual report on Form 20-F contains forward-looking statements.
Recent Accounting Pronouncements A list of recently issued accounting pronouncements that are relevant to us is included in “2. (ee)” of our audited consolidated financial statements included elsewhere in this annual report on Form 20-F. 141 Table of Contents Safe Harbor This annual report on Form 20-F contains forward-looking statements.
Our net revenues from VAS increased by 25.7% from RMB6,934.9 million in 2021 to RMB8,715.2 million (US$1,263.6 million) in 2022, mainly attributable to our enhanced monetization efforts, led by increases in the number of paying users for our value-added services including live broadcasting services, premium membership program and other value-added services. Advertising .
Our net revenues from VAS increased by 25.7% from RMB6,934.9 million in 2021 to RMB8,715.2 million in 2022, mainly attributable to our enhanced monetization efforts, led by increases in the number of paying users for our value-added services including live broadcasting services, premium membership program and other value-added services. Advertising .
Sales and marketing expenses consist primarily of marketing and promotional expenses, salaries and other compensation-related expenses for our sales and marketing personnel. We will keep implementing our cost control strategy to further decrease our sales and marketing expenses, including to rationalize our promotion expense and improve our expense efficiency. General and administrative expenses .
Sales and marketing expenses consist primarily of marketing and promotional expenses, salaries and other compensation-related expenses for our sales and marketing personnel. We will keep implementing our cost control strategy to further decrease our sales and marketing expenses, including to rationalize our promotion expense and improve our expense efficiency. 126 Table of Contents General and administrative expenses .
Server and bandwidth costs increased by 11.9% from RMB1,565.9 million in 2021 to RMB1,752.9 million (US$254.1 million) in 2022, 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 on our platform every day. 127 Table of Contents E-commerce and others increased by 10.1% from RMB3,346.4 million in 2021 to RMB3,684.8 million (US$534.2 million) in 2022, primarily due to an increase in cost of goods sold associated with our e-commerce business.
Server and bandwidth costs increased by 11.9% from RMB1,565.9 million in 2021 to RMB1,752.9 million in 2022, 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 on our platform every day. 130 Table of Contents E-commerce and others increased by 10.1% from RMB3,346.4 million in 2021 to RMB3,684.8 million in 2022, primarily due to an increase in cost of goods sold associated with our e-commerce business.
Gross profit As a result of the foregoing, we had gross profit of RMB3,849.3 million (US$558.1 million) in 2022, compared to gross profit of RMB4,043.1 million in 2021.
Gross profit As a result of the foregoing, we had gross profit of RMB3,849.3 million in 2022, compared to gross profit of RMB4,043.1 million in 2021.
Operating expenses Our total operating expenses increased by 16.6% from RMB10,472.2 million in 2021 to RMB12,207.2 million (US$1,769.9 million) in 2022, as general and administrative expenses and research and development expenses both increased due to severance cost related to organization optimization and termination expenses of certain game projects, partially offset by the decrease in the sales and marketing expenses.
Operating expenses Our total operating expenses increased by 16.6% from RMB10,472.2 million in 2021 to RMB12,207.2 million in 2022, as general and administrative expenses and research and development expenses both increased due to severance cost related to organization optimization and termination expenses of certain game projects, partially offset by the decrease in the sales and marketing expenses.
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. 141 Table of Contents
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 number of our users and the level of their engagement on our platform affect our revenues. We had strong growth in the revenues generated from VAS due to the increasing number of active viewers of our live broadcasting and subscribers of our premium membership program.
The number of our users and the level of their engagement on our platform affect our revenues. We had solid growth in the revenues generated from VAS mainly due to the increasing number of active viewers of our live broadcasting and subscribers of our premium membership program.
Revenue-sharing costs increased by 17.9% from RMB7,733.3 million in 2021 to RMB9,115.3 million (US$1,321.6 million) in 2022, primarily due to an increase in payments made to developers of exclusively distributed games, an increase in payments made to hosts of live broadcasting programs and content creators on our platform, and an increase in payments made to distribution channels.
Revenue-sharing costs increased by 17.9% from RMB7,733.3 million in 2021 to RMB9,115.3 million in 2022, primarily due to an increase in payments made to developers of exclusively distributed games, an increase in payments made to hosts of live broadcasting programs and content creators on our platform, and an increase in payments made to distribution channels.
Loss from operations As a result of the foregoing, we incurred loss from operations of RMB8,357.9 million (US$1,211.8 million) in 2022, compared to loss from operations of RMB6,429.1 million in 2021. Other income/(expenses) Investment income/(loss), net (including impairments) .
Loss from operations As a result of the foregoing, we incurred loss from operations of RMB8,357.9 million in 2022, compared to loss from operations of RMB6,429.1 million in 2021. Other income/(expenses) Investment income/(loss), net (including impairments) .
Sales and marketing expenses. Our sales and marketing expenses decreased by 15.1% from RMB5,794.9 million in 2021 to RMB4,920.7 million (US$713.4 million) in 2022. The decrease was primarily attributable to reduced promotional spending. General and administrative expenses. Our general and administrative expenses increased by 37.2% from RMB1,837.5 million in 2021 to RMB2,521.1 million (US$365.5 million) in 2022.
Sales and marketing expenses. Our sales and marketing expenses decreased by 15.1% from RMB5,794.9 million in 2021 to RMB4,920.7 million in 2022. The decrease was primarily attributable to reduced promotional spending. General and administrative expenses. Our general and administrative expenses increased by 37.2% from RMB1,837.5 million in 2021 to RMB2,521.1 million in 2022.
Our advertising and marketing revenues (valued-added tax included) are subject to culture business construction fee at a rate of 1.5% since July 1, 2019, valid until December 31, 2024, and was exempted in fiscal years of 2020 and 2021 as part of the measures taken by the government to ease the negative impact from COVID-19 pandemic.
Our advertising and marketing revenues (valued-added tax included) are subject to culture business construction fee at a rate of 1.5% since July 1, 2019, valid until December 31, 2024, and were exempted in fiscal year of 2021 as part of the measures taken by the government to ease the negative impact from COVID-19 pandemic.
Our e-commerce and others primarily consist of sales of derivative merchandise of ACG IPs on our e-commerce platform and e-sports copyright sub-licensing. We expect revenues from e-commerce and others to fluctuate in the foreseeable future but remain as a meaningful stream of revenues.
Our IP derivatives and others (formerly known as E-commerce and others) primarily consist of sales of derivative merchandise of ACG IPs on our e-commerce platform and e-sports copyright sub-licensing. We expect revenues from IP derivatives and others to fluctuate in the foreseeable future but remain as a meaningful stream of revenues.
We had RMB2,834.5 million and RMB3,096.5 million (US$448.9 million) of e-commerce and other net revenues in 2021 and 2022, respectively. The increase was mainly attributable to increased revenue from e-sports copyright sub-licensing. Cost of revenues Our cost of revenues increased by 17.7% from RMB15,340.5 million in 2021 to RMB18,049.9 million (US$2,617.0 million) in 2022.
We had RMB2,834.5 million and RMB3,096.5 million of e-commerce and other net revenues in 2021 and 2022, respectively. The increase was mainly attributable to increased revenue from e-sports copyright sub-licensing. Cost of revenues Our cost of revenues increased by 17.7% from RMB15,340.5 million in 2021 to RMB18,049.9 million in 2022.
However, most of these uses are subject to PRC regulations. 134 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.
Operating activities Net cash used in operating activities in 2022 was RMB3,911.4 million (US$567.1 million), as compared to net loss of RMB7,507.7 million in the same period.
Net cash used in operating activities in 2022 was RMB3,911.4 million, as compared to net loss of RMB7,507.7 million in the same period.
The increase in loss was primarily due to the loss of RMB465.6 million (US$67.5 million) related to impairment charges for long-term investments. Interest income . Interest income primarily represents interest earned on cash and cash equivalents and time deposits. We had interest income of RMB70.4 million and RMB281.1 million (US$40.7 million) in 2021 and 2022, respectively.
The increase in loss was primarily due to the loss of RMB465.6 million related to impairment charges for long-term investments. Interest income . Interest income primarily represents interest earned on cash and cash equivalents and time deposits. We had interest income of RMB70.4 million and RMB281.1 million in 2021 and 2022, respectively.
General and administrative expenses consist primarily of salaries and other compensation-related expenses for our general and administrative personnel, professional fees, severance cost, rental expenses and allowance for doubtful accounts. We will keep implementing our cost control strategy, including to optimize our headcount and control our staff costs, to improve our expense efficiency. Research and development expenses .
General and administrative expenses consist primarily of salaries and other compensation-related expenses for our general and administrative personnel, professional fees, severance cost, rental expenses and allowance for expected credit losses. We will keep implementing our cost control strategy, including to optimize our headcount and control our staff costs, to improve our expense efficiency. Research and development expenses .
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.
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.
Purchases of intangible assets, which primarily consist of licensed copyrights of video content, accounted for 73.1%, 73.8% and 72.2% of our total capital expenditures in 2020, 2021 and 2022, respectively. Operating lease commitments Our operating lease commitments consist of the commitments under the lease agreements for our office premises.
Purchases of intangible assets, which primarily consist of licensed copyrights of video content, accounted for 73.8%, 72.2% and 86.3% of our total capital expenditures in 2021, 2022 and 2023, respectively. Operating lease commitments Our operating lease commitments consist of the commitments under the lease agreements for our office premises.
Investing activities Net cash provided by investing activities in 2022 was RMB10,609.2 million (US$1,538.2 million), primarily due to proceeds from maturities of short-term investments of RMB81.7 billion (US$11.8 billion) and maturity of time deposits of RMB13.9 billion (US$2.0 billion), partially offset by purchase of short-term investments of RMB70.6 billion (US$10.2 billion), placements of time deposits of RMB10.2 billion (US$1.5 billion), cash paid for long term investments including loans of RMB1.5 billion (US$212.6 million), cash consideration paid for purchase of subsidies, net of cash acquired of RMB1.2 billion (US$171.1 million) and purchase of intangible assets of RMB2.0 billion (US$286.8 million), which primarily consisted of licensed copyrights of video content.
Net cash provided by investing activities in 2022 was RMB10,609.2 million, primarily due to proceeds from maturities of short-term investments of RMB81.7 billion and maturity of time deposits of RMB13.9 billion, partially offset by purchase of short-term investments of RMB70.6 billion, placements of time deposits of RMB10.2 billion, cash paid for long term investments including loans of RMB1.5 billion, cash consideration paid for purchase of subsidies, net of cash acquired of RMB1.2 billion and purchase of intangible assets of RMB2.0 billion, which primarily consisted of licensed copyrights of video content.
In the year 2022, we assessed the above indicators, then determined that there were impairment indicators and RMB465.6 million investment impairment were charged. See Note 9. Long-term Investment, Net in the accompanying notes to consolidated financial statements included in this annual report on Form 20-F, for additional information regarding the impairment investment accounted for using the measurement alternative.
In the year of 2023, we assessed the above indicators, then determined that there were impairment indicators and RMB278.9 million investment impairment were charged. See Note 9. Long-term Investments, Net in the accompanying notes to consolidated financial statements included in this annual report on Form 20-F for additional information regarding the impairment investment accounted for using the measurement alternative.
In 2022, we have shifted our user growth focus from MAU growth to DAU growth, as we believe DAU is not only a better measure of the quality and sustainability of our community, but also better reflects the powerful influence of our platform and is directly linked to our commercial prospects.
In 2022, we shifted our user growth focus from MAU growth to DAU growth, as we believe DAU is not only a better measure of the quality and sustainability of our community, but also is directly linked to our commercial prospects.
Liquidity and Capital Resources—Holding Company Structure.” In utilizing the proceeds, we received from our initial public offering and other financing activities, we may make additional capital contributions to our PRC subsidiaries, establish new PRC subsidiaries and make capital contributions to these new PRC subsidiaries, make loans to our PRC subsidiaries, or acquire offshore entities with operations in mainland China in offshore transactions.
Liquidity and Capital Resources—Holding Company Structure.” In utilizing the proceeds we receive from our financing activities, we may make additional capital contributions to our PRC subsidiaries, establish new PRC subsidiaries and make capital contributions to these new PRC subsidiaries, make loans to our PRC subsidiaries, or acquire offshore entities with operations in mainland China in offshore transactions.
Financing activities Net cash used in financing activities in 2022 was RMB4,354.9 million (US$631.4 million), primarily attributable to the repurchase of convertible senior notes and shares of RMB4.5 billion (US$659.6 million).
Net cash used in financing activities in 2022 was RMB4,354.9 million, primarily attributable to the repurchase of convertible senior notes and shares of RMB4.5 billion.
We are disciplined about our costs and operating expenses and we will continue to undertake measures to operate more efficiently, including by optimizing our algorithm to save our server and bandwidth cost, controlling our content investment as well as staff cost.
We are disciplined about our costs and operating expenses and we will continue to undertake measures to operate more efficiently, including by optimizing resource utilization efficiency to save our server and bandwidth cost and by controlling our content investment and staff cost.
We will continue to make cash commitments, including capital expenditures, to support the growth of our business. Capital expenditures Our capital expenditures are primarily incurred for purchases of intangible assets and property and equipment. Our capital expenditures were RMB2.2 billion, RMB3.7 billion and RMB2.7 billion (US$397.0 million) in 2020, 2021 and 2022, respectively.
We will continue to make cash commitments, including capital expenditures, to support the growth of our business. Capital expenditures Our capital expenditures are primarily incurred for purchases of intangible assets and property and equipment. Our capital expenditures were RMB3.7 billion, RMB2.7 billion and RMB1.3 billion (US$187.3 million) in 2021, 2022 and 2023, respectively.
The difference was primarily due to a decrease of RMB1,026.3 (US$148.8 million) in accrued liabilities and other payables, an increase of RMB444.3 million (US$64.4 million) in other long-term assets and an increase of RMB556.2 million (US$80.6 million) in prepayments and other current assets, partially offset by an increase of RMB396.1 million (US$57.4 million) million in salary and welfare payable and an increase of RMB173.9 million (US$25.2 million) in deferred revenue.
The difference was primarily due to a decrease of RMB1,026.3 in accrued liabilities and other payables, an increase of RMB444.3 million in other long-term assets and an increase of RMB556.2 million in prepayments and other current assets, partially offset by an increase of RMB396.1 million in salary and welfare payable and an increase of RMB173.9 million in deferred revenue.
Holders of the Bilibili Convertible Senior Notes have the right to require us to repurchase their notes on April 1, 2024, in the case of the April 2026 Notes, June 15, 2023 and June 15, 2025, in the case of the 2027 Notes, and December 1, 2024, in the case of the December 2026 Notes.
As of the date of this annual report, holders of the Bilibili Convertible Senior Notes have the right to require us to repurchase their notes on April 1, 2024, in the case of the April 2026 Notes, June 15, 2025, in the case of the 2027 Notes, and December 1, 2024, in the case of the December 2026 Notes.
(2) Numerator includes only revenues from mobile games and VAS. Mobile games . Our net revenues from mobile games decreased by 1.4% from RMB5,090.9 million in 2021 to RMB5,021.3 million (US$728.0 million) in 2022, primarily due to the lack of popular new exclusively distributed game releases in 2022. VAS .
Mobile games . Our net revenues from mobile games decreased by 1.4% from RMB5,090.9 million in 2021 to RMB5,021.3 million in 2022, primarily due to the lack of popular new exclusively distributed game releases in 2022. VAS .
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.
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.” B.
Material cash requirements Our material cash requirements as of December 31, 2022 primarily include our capital expenditures, operating lease commitments, and convertible senior notes obligations. We intend to fund our existing and future material cash requirements with our existing cash balance and other financing alternatives.
Material cash requirements Our material cash requirements as of December 31, 2023 primarily include our capital expenditures, operating lease commitments, and convertible senior notes obligations. 136 Table of Contents We intend to fund our existing and future material cash requirements with our existing cash balance, cash generated from operating activities, and other financing alternatives.
Net loss As a result of the foregoing, we incurred net loss of RMB6,808.7 million in 2021, compared to net loss of RMB3,054.0 million in 2020. Seasonality Our results of operations are subject to seasonal fluctuations.
Net loss As a result of the foregoing, we incurred net loss of RMB7,507.7 million in 2022, compared to net loss of RMB6,808.7 million in 2021. Seasonality Our results of operations are subject to seasonal fluctuations.
Meanwhile, we also generate revenues from other VAS including sales of paid content and virtual items on our video, audio and comic platforms. We expect revenues from VAS to continue to grow driven by the increasing popularity of our live broadcasting and premium membership programs. Advertising. We generate advertising revenues primarily from brand advertising, performance-based feed advertisements and native advertisements.
Meanwhile, we also generate revenues from other VAS including sales of paid content and virtual items on our video, audio and comic platforms. We expect revenues from VAS to continue to grow in the foreseeable future, driven by the further expansion of our live broadcasting content. Advertising . We generate advertising revenues primarily from brand, performance-based, and native advertisements.
The changes in working capital were attributable to our business expansion, particularly, the expansion of our mobile game operations, diversification of other value-added services offerings and increased advertising revenues, and the increase in sales and marketing expenses.
The changes in working capital were attributable to our business expansion, particularly, diversification of other value-added services offerings and increased advertising revenues.
Despite our cost control measures, our content costs may still increase in absolute amount as we continue to produce and procure high-quality content for our users. 122 Table of Contents 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.
We will adopt a more selective approach to content investment, even though our content costs may still increase in absolute amount as we continue to produce and procure high quality content for our users. 124 Table of Contents 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.
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. • Similarities between newly-launched games and existing games.
To determine the ending point of a paying player’s lifespan beyond the date for which observable data are available, we extrapolate the historical churn rate to arrive at an average playing period for paying players of the selected games. Similarities between newly launched games and existing games.
E-commerce and others consist of cost of goods sold associated with our e-commerce business, staff cost, depreciation and others.
IP derivatives and others (formerly known as E-commerce and others) consist of cost of goods sold associated with our e-commerce business, staff cost, depreciation and others.
Holding Company Structure Bilibili Inc. is a holding company with no material operations of its own. We conduct our operations primarily through our PRC subsidiaries, the VIEs and their subsidiaries in mainland China. As a result, Bilibili Inc.’s ability to pay dividends depends upon dividends paid by our PRC subsidiaries.
We conduct our operations primarily through our PRC subsidiaries, the VIEs and their subsidiaries in mainland China. As a result, Bilibili Inc.’s ability to pay dividends depends upon dividends paid by our PRC subsidiaries.
Hong Kong Majority of our subsidiaries incorporated in Hong Kong, such as Hode HK and Bilibili HK Limited, are subject to 16.5% Hong Kong profit tax on their taxable income generated from operations in Hong Kong.
There are no exchange control regulations or currency restrictions in the Cayman Islands. Hong Kong The majority of our subsidiaries incorporated in Hong Kong, such as Hode HK and Bilibili HK Limited, are subject to 16.5% Hong Kong profit tax on their taxable income generated from operations in Hong Kong.
In addition, we had submitted approximately 1,863 additional patent applications and 1,171 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.
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.
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 other revenue streams. 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 other revenue streams. 125 Table of Contents IP derivatives and others (formerly known as E-commerce and others) .
The average playing period of paying player is subjected to period assessment. Considering the events or circumstances may change that indicate the change of the estimate, we assessed the average playing period of paying player on a quarterly basis. We make a qualitative and quantitative assessment to determine the average playing period of paying players for each game.
Nature of Estimates Required—average playing period of paying players. The average playing period of paying player is subjected to period assessment. Considering the events or circumstances may change that indicate the change of the estimate, we assessed the average playing period of paying player on a quarterly basis.
We had interest expense of RMB155.5 million and RMB250.9 million (US$36.4 million) in 2021 and 2022, respectively, primarily attributable to interest expenses of RMB192.6 million (US$27.9 million) related to our December 2026 Notes, 2027 Notes and April 2026 Notes. 128 Table of Contents Debt distinguish gain .
We had interest expense of RMB155.5 million and RMB250.9 million in 2021 and 2022, respectively, primarily attributable to interest expenses of RMB192.6 million related to our December 2026 Notes, 2027 Notes and April 2026 Notes. Debt extinguishment gain . Debt extinguishment gain was nil and RMB1,318.6 million in 2021 and 2022, respectively.
Net loss As a result of the foregoing, we incurred net loss of RMB7,507.7 million (US$1,088.5 million) in 2022, compared to net loss of RMB6,808.7 million in 2021. Year ended December 31, 2021 compared to year ended December 31, 2020 Net revenues Our net revenues increased by 61.5% from RMB12.0 billion in 2020 to RMB19.4 billion in 2021.
Net loss As a result of the foregoing, we incurred net loss of RMB4,811.7 million (US$677.7 million) in 2023, compared to net loss of RMB7,507.7 million in 2022. Year ended December 31, 2022 compared to year ended December 31, 2021 Net revenues Our net revenues increased by 13.0% from RMB19.4 billion in 2021 to RMB21.9 billion in 2022.
We will continue to invest in our research and development, enhance our artificial intelligence technology, big data analytics capabilities, cloud technology and game development capacity, and develop new features and functionalities on our platform.
We will continue to invest in our research and development, enhance our artificial intelligence technology, big data analytics capabilities, cloud technology and game development capacity, and develop new features and functionalities on our platform. Meanwhile, we will keep implementing our cost control strategy, including to control our research and development expenses more effectively, to improve our expense efficiency.
Holders of the Bilibili Convertible Senior Notes have the right to require us to repurchase their notes on April 1, 2024, in the case of the April 2026 Notes, June 15, 2023 and June 15, 2025, in the case of the 2027 Notes, and December 1, 2024, in the case of the December 2026 Notes. 133 Table of Contents In addition, the Bilibili Convertible Senior Notes each contains similar protections concerning the holders’ right to require us to repurchase their notes upon the occurrence of a fundamental change, as well as similar provisions regarding our ability to redeem the existing notes in case of certain changes in tax law.
In addition, each of the Bilibili Convertible Senior Notes contains similar provisions concerning the holders’ right to require us to repurchase their notes upon the occurrence of a fundamental change, as well as similar provisions regarding our ability to redeem the existing notes in case of certain changes in tax law.
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, 2020 2021 2022 RMB % RMB % RMB US$ % (in thousands, except for percentages) Cost of revenues: Revenue-sharing costs 4,366,490 47.7 % 7,733,330 50.4 % 9,115,351 1,321,601 50.5 % Content costs 1,875,546 20.5 % 2,694,839 17.6 % 3,496,871 506,999 19.4 % Server and bandwidth costs 1,141,257 12.5 % 1,565,923 10.2 % 1,752,878 254,143 9.7 % E-commerce and others 1,775,507 19.3 % 3,346,445 21.8 % 3,684,772 534,243 20.4 % Total cost of revenues 9,158,800 100.0 % 15,340,537 100.0 % 18,049,872 2,616,986 100.0 % 124 Table of Contents 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, 2021 2022 2023 RMB % RMB % RMB US$ % (in thousands, except for percentages) Cost of revenues: Revenue-sharing costs 7,733,330 50.4 % 9,115,351 50.5 % 9,507,483 1,339,101 55.6 % Content costs 2,694,839 17.6 % 3,496,871 19.4 % 3,195,620 450,094 18.7 % Server and bandwidth costs 1,565,923 10.2 % 1,752,878 9.7 % 1,477,116 208,047 8.7 % IP derivatives and others (formerly known as E-commerce and others) 3,346,445 21.8 % 3,684,772 20.4 % 2,905,903 409,288 17.0 % Total cost of revenues 15,340,537 100.0 % 18,049,872 100.0 % 17,086,122 2,406,530 100.0 % 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.
The principal non-cash items affecting the difference between our net loss and our net cash used in operating activities in 2022 were RMB3,336.8 million (US$483.8 million) in depreciation and amortization of property and equipment and intangible assets, RMB1,040.7 million (US$150.9 million) in share-based compensation expenses and RMB525.8 million (US$76.2 million) in termination of certain game projects.
The principal non-cash items affecting the difference between our net loss and our net cash used in operating activities in 2022 were RMB3,336.8 million in depreciation and amortization of property and equipment and intangible assets, RMB1,040.7 million in share-based compensation expenses and RMB525.8 million in termination of certain game projects. 135 Table of Contents Net cash used in operating activities in 2021 was RMB2,647.0 million, as compared to net loss of RMB6,808.7 million in the same period.
We entered into several one-year revolving loan facilities provided by certain financial institutions with an aggregate principal amount of RMB1,200 million (US$174.0 million) as of December 31, 2022. We have utilized RMB892.9 million (US$129.5 million) from such facilities as of December 31, 2022.
We entered into several one-year revolving loan facilities provided by certain financial institutions with an aggregate principal amount of RMB1,200 million (US$169.4 million) as of December 31, 2023.
The following are key assumptions we use in making the average playing period of paying player for each game: • Paying players’ churn rates.
Changes in assumptions or estimates can materially affect average playing period of paying players and, therefore, can affect the test results. The following are key assumptions we use in making the average playing period of paying player for each game: Paying players’ churn rates.
In addition, upon conversion of the December 2026 Notes, unless we elect to deliver solely ADSs (or Class Z ordinary shares if such holder elects to receive Class Z ordinary shares in lieu of any ADSs deliverable upon conversion) to settle such conversion (other than paying cash in lieu of delivering any fractional ADS), we will be required to make cash payments in respect of the notes being converted.
In addition, upon conversion of the December 2026 Notes, unless we elect to deliver solely ADSs (or Class Z ordinary shares if such holder elects to receive Class Z ordinary shares in lieu of any ADSs deliverable upon conversion) to settle such conversion (other than paying cash in lieu of delivering any fractional ADS), we will be required to make cash payments in respect of the notes being converted. 134 Table of Contents We believe that our current cash and cash equivalents and our anticipated cash flows from operations will be sufficient to meet the cash requirements to fund our operations and other commitments for at least the next 12 months.
Due to the nature of the products and services we offer, we have a high demand for storage and computing capacities to enhance the functionalities of our video player, including running algorithms to produce content recommendations. We have developed an advanced cloud system that meets the operational needs of our platform while reducing operating costs. Content distribution network.
Due to the nature of the products and services we offer, we have a high demand for storage and computing capacities to enhance the functionalities of our video player, including running algorithms to produce content recommendations.
We make assumption regarding similarities between newly-launched games and existing games included in and affected our assumptions regarding playing patterns for paying players for other games with similar characteristics with the new games. In connection with our periodic reviews of the estimate, the assumptions are evaluated accordingly considering historical players’ churn rates, playing patterns for paying players and management judgment.
We make assumption regarding similarities between newly launched games and existing games included in and affected our assumptions regarding playing patterns for paying players for other games with similar characteristics with the new games.
Operating expenses The following table sets forth the components of our operating expenses by amounts and percentages of operating expenses for the periods presented: For the Year Ended December 31, 2020 2021 2022 RMB % RMB % RMB US$ % (in thousands, except for percentages) Operating expenses: Sales and marketing expenses 3,492,091 58.4 % 5,794,853 55.3 % 4,920,745 713,441 40.3 % General and administrative expenses 976,082 16.3 % 1,837,506 17.6 % 2,521,134 365,530 20.7 % Research and development expenses 1,512,966 25.3 % 2,839,862 27.1 % 4,765,360 690,912 39.0 % Total operating expenses 5,981,139 100.0 % 10,472,221 100.0 % 12,207,239 1,769,883 100.0 % Sales and marketing expenses .
Operating expenses The following table sets forth the components of our operating expenses by amounts and percentages of operating expenses for the periods presented: For the Year Ended December 31, 2021 2022 2023 RMB % RMB % RMB US$ % (in thousands, except for percentages) Operating expenses: Sales and marketing expenses 5,794,853 55.3 % 4,920,745 40.3 % 3,916,150 551,578 37.3 % General and administrative expenses 1,837,506 17.6 % 2,521,134 20.7 % 2,122,432 298,938 20.2 % Research and development expenses 2,839,862 27.1 % 4,765,360 39.0 % 4,467,470 629,230 42.5 % Total operating expenses 10,472,221 100.0 % 12,207,239 100.0 % 10,506,052 1,479,746 100.0 % Sales and marketing expenses .
Native advertisings are customized according to advertisers’ needs, produced by our content creators and embedded naturally in their video creations. We expect our advertising revenues to increase in the foreseeable future as we continue to introduce new advertising and marketing solutions to various video viewing forms in our ecosystem, improve our advertising efficiency and attract more advertisers. E-commerce and others.
Native advertisings are customized according to advertisers’ needs, produced by our content creators and embedded naturally in their video creations. We expect our advertising revenues to increase in the foreseeable future as we continue to integrate advertising products into our content ecosystem, improve our advertising infrastructure, and attract more advertisers by optimizing advertising procurement processes. Mobile games .
Liquidity and Capital Resources The following table sets forth a summary of our cash flows for the periods presented: For the Year Ended December 31, 2020 2021 2022 RMB RMB RMB US$ (in thousands) Summary Consolidated Statements of Cash Flows Data: Net cash provided by/(used in) operating activities 753,103 (2,647,008 ) (3,911,370 ) (567,097 ) Net cash (used in)/provided by investing activities (8,906,821 ) (24,578,111 ) 10,609,218 1,538,192 Net cash provided by/(used in) financing activities 8,335,419 30,389,152 (4,354,919 ) (631,404 ) Effect of exchange rate changes on cash and cash equivalents held in foreign currencies (466,252 ) (319,034 ) 321,350 46,593 Net increase in cash, cash equivalents and restricted cash (284,551 ) 2,844,999 2,664,279 386,284 Cash, cash equivalents and restricted cash at beginning of the year 4,962,660 4,678,109 7,523,108 1,090,748 Cash, cash equivalents and restricted cash at end of the year 4,678,109 7,523,108 10,187,387 1,477,032 As of December 31, 2020, 2021 and 2022, respectively, our cash, cash equivalents and restricted cash were RMB4,678.1 million, RMB7,523.1 million and RMB10,187.4 (US$1,477.0 million).
Liquidity and Capital Resources The following table sets forth a summary of our cash flows for the periods presented: For the Year Ended December 31, 2021 2022 2023 RMB RMB RMB US$ (in thousands) Summary Consolidated Statements of Cash Flows Data: Net cash (used in)/provided by operating activities (2,647,008 ) (3,911,370 ) 266,622 37,553 Net cash (used in)/provided by investing activities (24,578,111 ) 10,609,218 1,762,148 248,193 Net cash provided by/(used in) financing activities 30,389,152 (4,354,919 ) (5,074,685 ) (714,754 ) Effect of exchange rate changes on cash and cash equivalents held in foreign currencies (319,034 ) 321,350 100,349 14,134 Net increase/(decrease) in cash, cash equivalents and restricted cash 2,844,999 2,664,279 (2,945,566 ) (414,874 ) Cash, cash equivalents and restricted cash at beginning of the year 4,678,109 7,523,108 10,187,387 1,434,863 Cash, cash equivalents and restricted cash at end of the year 7,523,108 10,187,387 7,241,821 1,019,989 As of December 31, 2021, 2022 and 2023, our cash, cash equivalents and restricted cash were RMB7,523.1 million, RMB10,187.4 and RMB7,241.8 million (US$1,020.0 million), respectively.
We are subject to value-added tax mainly at a rate of 6% for services rendered and value-added tax mainly at a rate of 13% for goods sold, although the rate varies depending on their categories in different periods. We are subject to surcharges on value-added tax payments in accordance with PRC law.
The enterprise income tax is calculated based on the entity’s global income as determined under PRC tax laws and accounting standards. We are subject to value-added tax mainly at a rate of 6% for services rendered and value-added tax mainly at a rate of 13% for goods sold, although the rate varies depending on their categories in different periods.
Debt distinguish gain was nil and RMB1,318.6 million (US$191.2 million) in 2021 and 2022, respectively. The increase was primarily attributable to gains resulted from the repurchase of convertible senior notes in 2022. Income tax We recorded income tax of RMB104.1 million (US$15.1 million) in 2022, compared to RMB95.3 million in 2021.
The increase was primarily attributable to gains resulted from the repurchase of convertible senior notes in 2022. 131 Table of Contents Income tax We recorded income tax of RMB104.1 million in 2022, compared to RMB95.3 million in 2021.
As of December 31, 2022, the amount of total future lease payments under operating leases, whose weighted average remaining lease term is 3.3 years, was RMB790.3 million (US$114.6 million), of which RMB245.0 million (US$35.5 million) is short-term.
As of December 31, 2023, the amount of total future lease payments under operating leases, whose weighted average remaining lease term is 2.6 years, was RMB503.5 million (US$70.9 million), of which RMB201.7 million (US$28.4 million) is short term.
We are continuing to diversify our product and service offerings and refine our commercialization avenues without compromising user experience. We will continue our efforts to enrich our content library and product offerings, including PUGV, Story Mode, live broadcasting, OGV and mobile games, to convert more users to paying users.
We are striving to refine our commercialization avenues without compromising user experience. We will continue our efforts to enrich our content library and product offerings, including PUGV, VAS and mobile games, to convert more users to paying users. We plan to launch more high-quality games to satisfy our users’ evolving needs.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

46 edited+4 added−9 removed65 unchanged
Biggest changeAs required under PRC regulations, we participate in housing funds and various employee social security plans that are organized by applicable local municipal and provincial governments, including housing funds, pension, maternity, medical, work-related injury and unemployment benefit plans, under which we make contributions at specified percentages of the salaries of our employees.
Biggest changeThe following table sets forth the numbers of our employees categorized by function as of December 31, 2023: Function: As of December 31, 2023 Products and technology 3,751 Content audit 2,868 Operations 1,653 Management, sales, finance and administration 529 Total 8,801 As of December 31, 2023, we had 5,598 employees in Shanghai, 818 employees in Chengdu, 665 employees in Nanjing, 471 employees in Wuhan and 1,249 employees in other locations. 148 Table of Contents As required under PRC regulations, we participate in housing funds and various employee social security plans that are organized by applicable local municipal and provincial governments, including housing funds, pension, maternity, medical, work-related injury and unemployment benefit plans, under which we make contributions at specified percentages of the salaries of our employees.
There are certain limited circumstances in which the trustee would not be required to comply with such a direction (for example, where a direction may make the trustee subject to criminal sanction or civil liability or where a direction involves a transaction which might have an adverse impact on the reputation of the trustee).
There are certain limited circumstances in which the trustee would not be required to comply with such a direction (for example, where a direction may make the trustee subject to criminal sanction or civil liability or where a direction involves a transaction which might have an adverse impact on the reputation of the trustee).
There are certain limited circumstances in which the trustee would not be required to comply with such a direction (for example, where a direction may make the trustee subject to criminal sanction or civil liability or where a direction involves a transaction which might have an adverse impact on the reputation of the trustee).
There are certain limited circumstances in which the trustee would not be required to comply with such a direction (for example, where a direction may make the trustee subject to criminal sanction or civil liability or where a direction involves a transaction which might have an adverse impact on the reputation of the trustee).
Guoqi Ding is 1500 Changyi Road, Building 1, Room 902, Pudong New Area, Shanghai, People’s Republic of China. (8) Represents 49,299,006 Class Y ordinary shares and 525,525 Class Z ordinary shares in the form of ADSs directly held by Vanship Limited, a business company limited by shares incorporated in British Virgin Islands.
Guoqi Ding is Room 902, Building 1, 1500 Changyi Road, Pudong New Area, Shanghai, People’s Republic of China. (8) Represents 49,299,006 Class Y ordinary shares and 525,525 Class Z ordinary shares in the form of ADSs directly held by Vanship Limited, a business company limited by shares incorporated in British Virgin Islands.
The nominating and corporate governance committee is responsible for, among other things: 146 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.
The nominating and corporate governance committee is responsible for, among other things: • 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.
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.
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; 146 Table of Contents • 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.
Awards granted under 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. Eligibility .
Awards granted under 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. 144 Table of Contents Eligibility.
We enter into standard confidentiality and employment agreements with our key employees. The contracts with our key personnel typically include a standard non-compete agreement that prohibits the employee from competing with us, directly or indirectly, during his or her employment and for at least one year after the termination of his or her employment. 148 Table of Contents E.
We enter into standard confidentiality and employment agreements with our key employees. The contracts with our key personnel typically include a standard non-compete agreement that prohibits the employee from competing with us, directly or indirectly, during his or her employment and for at least one year after the termination of his or her employment. E.
Xu received his associate degree from Beijing University of Posts and Telecommunications in 2010. 142 Table of Contents JP Gan has served as our director since January 2015. Mr. 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.
Xu received his associate degree from Beijing University of Posts and Telecommunications in 2010. JP Gan has served as our director since January 2015. Mr. 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.
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.
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. 143 Table of Contents Xin Fan has served as our chief financial officer since September 2017. Prior to that, Mr.
Li received her bachelor’s degree in law from Lingnan Normal University in 2008. 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.
Li received her bachelor’s degree in law from Lingnan Normal University in 2008. 142 Table of Contents 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.
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., (Shenzhen Stock Exchange: 300244) a China-based medical diagnosis outsourcing service provider listed on Shenzhen Stock Exchange since 2017. Between 2004 and 2017, Mr.
Guoqi Ding has served as chairman of the board of Zhiqin Management Consulting Ltd., a China-based consulting service provider. Between 2017 and 2023, Mr. Ding served as an independent director on the board of Dian Diagnostics Group Co., Ltd., (Shenzhen Stock Exchange: 300244), a China-based medical diagnosis outsourcing service provider. Between 2004 and 2017, Mr.
Under the 2018 Plan, awards may not be transferred in any manner by the participant other than in accordance with the exceptions provided in the relevant award agreement or otherwise determined by the plan administrator, such as transfers by will or the laws of descent and distribution. 144 Table of Contents Termination and Amendment .
Under the 2018 Plan, awards may not be transferred in any manner by the participant other than in accordance with the exceptions provided in the relevant award agreement or otherwise determined by the plan administrator, such as transfers by will or the laws of descent and distribution. Termination and Amendment.
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.
Equity Incentive Trusts 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.
The following table summarizes, as of February 28, 2023, the number of ordinary shares underlying outstanding options and restricted share units granted to several of our directors and executive officers and to other individuals as a group under the Global Share Plan and 2018 Plan, excluding awards that were forfeited or cancelled after the relevant grant dates.
The following table summarizes, as of February 29, 2024, the number of ordinary shares underlying outstanding options and restricted share units granted to several of our directors and executive officers and to other individuals as a group under the Global Share Plan and 2018 Plan, excluding awards that were forfeited or cancelled after the relevant grant dates.
In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days after February 28, 2023, including through the exercise of any option, warrant or other right or the conversion of any other security.
In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days after February 29, 2024, including through the exercise of any option, warrant or other right or the conversion of any other security.
Share Ownership Except as otherwise noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares as of February 28, 2023 by: • each of our directors and executive officers; and • each person known to us to own beneficially more than 5% of our ordinary shares.
Share Ownership Except as otherwise noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares as of February 29, 2024 by: • each of our directors and executive officers; and • each person known to us to own beneficially more than 5% of our ordinary shares.
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.
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. 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.
(1) Represents (i) 49,299,006 Class Y ordinary shares and 525,525 Class Z ordinary shares in the form of ADSs directly held by Vanship Limited, a business company limited by shares incorporated in British Virgin Islands, and (ii) 1,902,000 Class Z ordinary shares issuable to Mr. Rui Chen upon exercise of options within 60 days after February 28, 2023.
(1) Represents (i) 49,299,006 Class Y ordinary shares and 525,525 Class Z ordinary shares in the form of ADSs directly held by Vanship Limited, a business company limited by shares incorporated in British Virgin Islands, and (ii) 2,703,000 Class Z ordinary shares issuable to Mr. Rui Chen upon exercise of options within 60 days after February 29, 2024.
None of our non-executive directors has a service contract with us that provides for benefits upon termination of service. 145 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.
None of our non-executive directors has a service contract with us that provides for benefits upon termination of service. 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. We have adopted a charter for each of the three committees.
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.
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. 147 Table of Contents You should refer to “Item 10.
Our Class Y ordinary shares are convertible at any time by the holder thereof into Class Z ordinary shares on a one-for-one basis. * Less than 1% of our total outstanding shares. * * Except as otherwise indicated below, the business address of our directors and executive officers is c/o Shanghai Hode Information Technology Co., Ltd., Building 3, Guozheng Center, No. 485 Zhengli Road, Yangpu District, Shanghai, People’s Republic of China.
Our Class Y ordinary shares are convertible at any time by the holder thereof into Class Z ordinary shares on a one-for-one basis. * Less than 1% of our total outstanding shares. 149 Table of Contents * Except as otherwise indicated below, the business address of our directors and executive officers is Building 3, Guozheng Center, No. 485 Zhengli Road, Yangpu District, Shanghai, People’s Republic of China.
The registered address of Tencent Mobility Limited is 27/F, Three Pacific Place, No.1 Queen’s Road East, Wanchai, Hong Kong. (10) Represents 27,216,108 Class Y ordinary shares and 151,100 Class Z ordinary shares directly held by Kami Sama Limited, a business company limited by shares incorporated in British Virgin Islands.
The address of principal business office for both Tencent Mobility Limited and Tencent Holdings Limited is Level 29, Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong. (10) Represents 27,216,108 Class Y ordinary shares and 151,100 Class Z ordinary shares directly held by Kami Sama Limited, a business company limited by shares incorporated in British Virgin Islands.
Under the terms of this trust, Ms. Li has the power to direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to, the shares held by Saber Lily Limited in Bilibili, and, except for Ms.
Li has the power to direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to, the shares held by Saber Lily Limited in Bilibili, and, except for Ms. Li, the other beneficiaries of the trust have no voting rights attached to such shares.
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.
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.
Chen served as general manager of Internet security research and development at Kingsoft Corporation Limited (HKEX: 3888), a leading software and internet service company listed on the Hong Kong Stock Exchange, from 2001 to 2008. Mr.
Chen served as general manager of internet security research and development at Kingsoft Corporation Limited (HKEX: 3888), a leading software and internet service company listed on the Hong Kong Stock Exchange, from 2001 to 2008. Mr. Chen received his bachelor’s degree from Chengdu University of Information Technology in 2001.
Employees We had 8,646 employees as of December 31, 2020, 12,281 employees as of December 31, 2021, and 11,092 employees as of December 31, 2022.
Employees We had 12,281 employees as of December 31, 2021, 11,092 employees as of December 31, 2022, and 8,801 employees as of December 31, 2023.
Ordinary Shares Beneficially Owned Class Y Ordinary Shares Class Z Ordinary Shares Total Ordinary Shares % of Beneficial Ownership % of Aggregate Voting Power† Directors and Executive Officers**: Rui Chen (1) 49,299,006 2,427,525 51,726,531 12.6 % 42.4 % Ni Li (2) 7,200,000 1,576,300 8,776,300 2.1 % 6.3 % Yi Xu (3) 27,216,108 196,100 27,412,208 6.7 % 23.4 % JP Gan (4) — * * * * Eric He (5) — * * * * Feng Li (6) — — — — — Guoqi Ding (7) — — — — — Xin Fan — * * * * All Directors and Executive Officers as a Group 83,715,114 5,023,599 88,738,713 21.5 % 72.1 % Principal Shareholders: Entities affiliated with Rui Chen (8) 49,299,006 525,525 49,824,531 12.2 % 42.4 % Tencent entities (9) — 43,749,518 43,749,518 10.7 % 3.8 % Entity affiliated with Yi Xu (10) 27,216,108 151,100 27,367,208 6.7 % 23.4 % Taobao China Holding Limited (11) — 30,845,657 30,845,657 7.5 % 2.7 % Notes: † For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class Y and Class Z ordinary shares as a single class.
Ordinary Shares Beneficially Owned Class Y Ordinary Shares Class Z Ordinary Shares Total Ordinary Shares % of Beneficial Ownership % of Aggregate Voting Power Directors and Executive Officers**; Rui Chen (1) 49,299,006 3,228,525 52,527,531 12.7 % 42.3 % Ni Li (2) 7,200,000 1,910,300 9,110,300 2.2 % 6.3 % Yi Xu (3) 27,216,108 196,100 27,412,208 6.7 % 23.4 % JP Gan (4) — * * * * Eric He (5) — * * * * Feng Li (6) — — — — — Guoqi Ding (7) — — — — — Xin Fan — * * * * All Directors and Executive Officers as a Group 83,715,114 6,307,575 90,022,689 21.6 % 72.0 % Principal Shareholders: Entities affiliated with Rui Chen (8) 49,299,006 525,525 49,824,531 12.1 % 42.3 % Tencent entities (9) — 43,749,518 43,749,518 10.6 % 3.8 % Entity affiliated with Yi Xu (10) 27,216,108 151,100 27,367,208 6.6 % 23.4 % Notes: † For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class Y and Class Z ordinary shares as a single class.
Directors and Executive Officers Age Position/Title Rui Chen 45 Chairman of the Board of Directors and Chief Executive Officer Ni Li 37 Vice Chairwoman of the Board of Directors and Chief Operating Officer Yi Xu 33 Founder, Director and President JP Gan 51 Independent Director Eric He 63 Independent Director Feng Li 49 Independent Director Guoqi Ding 53 Independent Director Xin Fan 44 Chief Financial Officer Rui Chen has served as our chairman of the board of directors and chief executive officer since November 2014.
Directors and Executive Officers Age Position/Title Rui Chen 46 Chairman of the Board of Directors and Chief Executive Officer Ni Li 38 Vice Chairwoman of the Board of Directors and Chief Operating Officer Yi Xu 34 Founder, Director and President JP Gan 52 Independent Director Eric He 64 Independent Director Feng Li 50 Independent Director Guoqi Ding 54 Independent Director Xin Fan 45 Chief Financial Officer Rui Chen has served as our chairman of the board of directors and chief executive officer since November 2014.
One of the holders is Deutsche Bank Trust Company Americas, the depositary of our ADS program, which held 13.6% Class Z ordinary shares on record as of February 28, 2023.
One of the holders is Deutsche Bank Trust Company Americas, the depositary of our ADS program, which held 19.5% Class Z ordinary shares on record as of February 29, 2024.
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.
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.
To our knowledge, as of February 28, 2023, 45,320,928 of our Class Z ordinary shares were held by three record holders in the United States, representing approximately 10.9% of our total outstanding shares on an as converted basis (including the 5,337,832 Class Z ordinary shares issued and reserved for future issuance upon the exercising or vesting of awards granted under our share incentive plan).
To our knowledge, as of February 29, 2024, 66,047,214 of our Class Z ordinary shares were held by three record holders in the United States, representing approximately 15.7% of our total outstanding shares on an as converted basis (including the 9,104,591 Class Z ordinary shares issued and reserved for future issuance upon the exercising or vesting of awards granted under our share incentive plan).
Ni Li upon exercise of options within 60 days after February 28, 2023. Saber Lily Limited is controlled by The Fortuna Trust, a trust established under the laws of Cayman Islands and managed by TMF (Cayman) Ltd. as the trustee. Ms. Li is the settlor of The Fortuna Trust, and Ms. Li and her family members are the trust’s beneficiaries.
Saber Lily Limited is controlled by The Fortuna Trust, a trust established under the laws of Cayman Islands and managed by TMF (Cayman) Ltd. as the trustee. Ms. Li is the settlor of The Fortuna Trust, and Ms. Li and her family members are the trust’s beneficiaries. Under the terms of this trust, Ms.
The calculations in the table below are based on 83,715,114 Class Y ordinary shares and 326,208,471 Class Z ordinary shares outstanding as of February 28, 2023 (excluding 5,337,832 Class Z ordinary shares issued and reserved for future issuance upon the exercising or vesting of awards granted under our share incentive plan).
The calculations in the table below are based on 83,715,114 Class Y ordinary shares and 328,441,712 Class Z ordinary shares outstanding as of February 29, 2024 (excluding 9,104,591 Class Z ordinary shares issued and reserved for future issuance upon the exercising or vesting of awards granted under our share incentive plan).
We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors. 143 Table of Contents Our PRC subsidiaries and the 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.
Our PRC subsidiaries and the 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.
The aggregate number of Class Z ordinary shares available for future grant under the 2018 Plan was 28,706,326 as of February 28, 2023.
The aggregate number of Class Z ordinary shares available for future grant under the 2018 Plan was 19,909,908 as of February 29, 2024.
Name Ordinary Shares Underlying Options and Restricted Share Units 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 Ni Li * Nominal November 2020 November 2027 Xin Fan * From nominal to US$20.26 Various dates from June 2019 to March 2020 Various dates from June 2025 to March 2027 Other grantees 15,799,960 (1) From nominal to US$20.26 Various dates from June 2017 to December 2022 Various dates from June 2023 to December 2028 Total 23,499,960 Notes: * Less than 1% of our total outstanding shares.
Name Ordinary Shares Underlying Options and Restricted Share Units Awarded Exercise Price (US$/Share)** Date of Grant Date of Expiration** Rui Chen * From nominal to March 2020 March 2027 * US$20.26 November 2020 November 2027 Ni Li * Nominal Various dates from November 2020 to March 2023 November 2027 JP Gan * Nominal Various dates from March 2020 to July 2022 Various dates from March 2026 to July 2028 Eric He * Nominal July 2022 July 2028 Xin Fan * From nominal to US$20.26 Various dates from June 2019 to March 2023 Various dates from June 2025 to March 2027 Other grantees 17,931,765 From nominal to US$20.26 Various dates from April 2018 to December 2023 Various dates from March 2024 to December 2028 Total 26,971,191 Notes: * Less than 1% of our total outstanding shares. ** Exercise price and date of expiration are not applicable to the granted restricted share units.
Compensation For the fiscal year ended December 31, 2022, we paid an aggregate of approximately RMB6.9 million (US$1.0 million) in cash to our executive officers, and approximately RMB1.7 million (US$0.2 million) in cash to our non-executive directors.
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, 2023, we paid an aggregate of approximately RMB6.5 million (US$0.9 million) in cash to our executive officers, and approximately RMB1.7 million (US$0.2 million) in cash to our non-executive directors.
The number of beneficial owners of the ADSs in the United States is likely to be much larger than the number of record holders of our ordinary shares in the United States. F. Disclosure of A Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable. 150 Table of Contents
The number of beneficial owners of the ADSs in the United States is likely to be much larger than the number of record holders of our ordinary shares in the United States.
Participants in the Equity Incentive Trusts transfer their equity awards to Ark Trust to be held for their benefit.
The participants in the Equity Incentive Trusts include our employees and certain of our executive officers. 145 Table of Contents Participants in the Equity Incentive Trusts transfer their equity awards to Ark Trust to be held for their benefit.
(9) Represents (i) 10,954,357 Class Z ordinary shares directly held by OPH B Limited, a company limited by shares incorporated in British Virgin Islands, and (ii) 32,795,161 Class Z ordinary shares directly held by Tencent Mobility Limited, a limited company incorporated in Hong Kong, based on the Schedule 13G/A filed on February 10, 2020.
(9) Represents (i) 10,954,357 Class Z ordinary shares directly held by Huang River Investment Limited, a wholly owned subsidiary of Tencent Holdings Limited, and (ii) 32,795,161 Class Z ordinary shares directly held by Tencent Mobility Limited, a wholly owned subsidiary of Tencent Holdings Limited, based on the Schedule 13G/A filed on February 1, 2024.
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. He also holds licenses as chartered global management accountant and chartered certified accountant in the United Kingdom. B.
Mr. Fan has also served as an independent director of Sipai Health Technology Co., Ltd. (HKEX: 0314) since May 2023. 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.
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. 147 Table of Contents Board Diversity Board Diversity Matrix (As of February 28, 2023) 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.
Board Diversity Board Diversity Matrix (As of February 29, 2024) 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 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 1 D.
Chen is incapacitated, has released his authority or nominated another person to have such authority in his place. 149 Table of Contents (2) Represents (i) 7,200,000 Class Y ordinary shares and 908,300 Class Z ordinary shares directly held by Saber Lily Limited, a business company limited by shares incorporated in British Virgin Islands, and (ii) 668,000 Class ordinary shares issuable to Ms.
(2) Represents (i) 7,200,000 Class Y ordinary shares and 908,300 Class Z ordinary shares directly held by Saber Lily Limited, a business company limited by shares incorporated in British Virgin Islands, and (ii) 1,002,000 Class Z ordinary shares issuable to Ms. Ni Li upon exercise of options within 60 days after February 29, 2024.
Terms of Directors and Officers Our officers are elected by and serve at the discretion of the board of directors.
Additional information—B. Memorandum and Articles of Association—Differences in Corporate Law” for additional information on our standard of corporate governance under Cayman Islands law. Terms of Directors and Officers Our officers are elected by and serve at the discretion of the board of directors.
The above position would also not apply if Mr.
The above position would also not apply if Mr. Chen is incapacitated, has released his authority or nominated another person to have such authority in his place.
Removed
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
We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.
Removed
(1) Includes restricted share units Equity Incentive Trust s Bilibili Inc. Global Share Incentive Trust and Bilibili Inc.
Added
A director is not required to retire upon reaching any particular age. 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.
Removed
A director is not required to retire upon reaching any particular age.
Added
There has been no significant change in the percentage ownership held by any major shareholders during the past three years, except that, according to the Schedule 13G/A jointly filed by Alibaba Group Holding Limited, Taobao Holding Limited and Taobao China Holding Limited on March 25, 2024, as of March 21, 2024, Taobao China Holding Limited no longer owns any Class Z ordinary shares or ADSs of our company, and Alibaba Group Holding Limited and Taobao Holding Limited are no longer beneficial owners of Class Z ordinary Shares or ADSs of our company. 150 Table of Contents F.
Removed
The following table sets forth the numbers of our employees categorized by function as of December 31, 2022: As of December 31, 2022 Function: Products and technology 4,614 Content audit 3,874 Operations 2,035 Management, sales, finance and administration 569 Total 11,092 As of December 31, 2022, we had 6,530 employees in Shanghai, 1,005 employees in Chengdu, 982 employees in Nanjing, 603 employees in Wuhan and 1,972 employees in other locations.
Added
Disclosure of A Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable.
Removed
Li, the other beneficiaries of the trust have no voting rights attached to such shares.
Removed
OPH B Limited and Tencent Mobility Limited are investing entities ultimately controlled by Tencent Holdings Limited, and are collectively referred to as Tencent entities. The registered address of OPH B Limited is P.O. Box 957, Offshore Incorporations Center, Road Town, Tortola, British Virgin Islands.
Removed
(11) Represents 20,845,657 Class Z ordinary shares and 10,000,000 Class Z ordinary shares in the form of ADSs directly held by Taobao China Holding Limited, a business company limited by shares incorporated in Hong Kong, based on the Schedule 13G amendment filed on February 10, 2022.
Removed
Taobao China Holding Limited is a wholly owned subsidiary of Taobao Holding Limited, a business company limited by shares incorporated in Cayman Islands, which is a wholly owned subsidiary of Alibaba Group Holding Limited, a business company limited by shares incorporated in Cayman Islands.
Removed
The principal business address of Alibaba Group Holding Limited, Taobao Holding Limited and Taobao China Holding Limited is c/o Alibaba Group Services Limited, 26/F Tower One, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong.

Item 7. Management's Discussion & Analysis

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

6 edited+4 added−3 removed18 unchanged
Biggest changeWe have no obligation to effect any demand, piggyback or Form F-3 or Form S-3 registration upon the later of (i) the fifth anniversary from the date of closing of a QIPO as defined in the shareholders agreement, and (ii) with respect to any holder, the date following a QIPO on which such holder holds less than 1% of the equity securities of our company and all registrable securities may be sold under Rule 144 of the Securities Act in any 90-day period. 151 Table of Contents Pursuant to the share purchase and investor rights agreement by and between us and Tencent Mobility Limited dated October 3, 2018, we have granted certain registration rights to Tencent Mobility Limited or its affiliates.
Biggest changeWe have no obligation to effect any demand, piggyback or Form F-3 or Form S-3 registration upon the later of (i) the fifth anniversary from the date of closing of a QIPO as defined in the shareholders agreement, and (ii) with respect to any holder, the date following a QIPO on which such holder holds less than 1% of the equity securities of our company and all registrable securities may be sold under Rule 144 of the Securities Act in any 90-day period.
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.
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.
Expenses of Registration . We will bear all registration expenses, other than the underwriting discounts and selling commissions applicable to the sale of registrable securities, incurred in connection with registrations, filings or qualification pursuant to the shareholders agreement. Termination of Obligations .
We will bear all registration expenses, other than the underwriting discounts and selling commissions applicable to the sale of registrable securities, incurred in connection with registrations, filings or qualification pursuant to the shareholders agreement. Termination of Obligations.
If the underwriters advise in writing that market factors require a limitation of the number of registrable securities to be underwritten, the underwriters may decide to exclude (i) all of the registrable securities in our initial public offering, or (ii) up to 75% of the registrable securities and the number of the registrable securities will be allocated among the holders on a pro rata basis according to the number of registrable securities then outstanding held by each holder requesting registration, provided that all other equity securities are first excluded (except for securities sold for the account of our company).
If the underwriters advise in writing that market factors require a limitation of the number of registrable securities to be underwritten, the underwriters may decide to exclude (i) all of the registrable securities in our initial public offering, or (ii) up to 75% of the registrable securities and the number of the registrable securities will be allocated among the holders on a pro rata basis according to the number of registrable securities then outstanding held by each holder requesting registration; provided that all other equity securities are first excluded (except for securities sold for the account of our company). 151 Table of Contents Expenses of Registration.
Directors, Senior Management and Employees—B. Compensation—Share Incentive Plan.” Other Related Party Transactions Purchases of goods and services. For the years ended December 31, 2020, 2021 and 2022, we purchased goods and promotional and other services amounting to RMB35.1 million, RMB117.1 million and RMB206.9 million (US$30.0 million), respectively, from certain related parties. 152 Table of Contents Acquisition/transfer of long-term investments.
Directors, Senior Management and Employees—B. Compensation—Share Incentive Plan.” 152 Table of Contents Other Related Party Transactions Purchases of goods and services. For the years ended December 31, 2021, 2022 and 2023, we purchased goods and promotional and other services amounting to RMB117.1 million, RMB206.9 million and RMB172.5 million (US$24.3 million), respectively, from certain related parties. Sale of goods and services.
In July 2020, we acquired certain equity interests in two investments of an investment fund, of which we are a limited partner, with a consideration of RMB110.0 million. In 2022, we transferred some of our equity interests in certain investments to another investment fund, of which we are a limited partner, with a consideration of RMB275.0 million.
In 2022, we transferred some of our equity interests in certain investments to an investment fund, of which we are a limited partner, with a consideration of RMB275.0 million. Loans to the Entity. In 2020, we established an entity with an independent third party and two entities each controlled by Mr. Rui Chen and Ms.
Removed
Purchase of noncontrolling interests of Chaodian Inc. In July 2019, we entered into a series of agreements to acquire a controlling interest in Chaodian Inc. In September 2020, we acquired noncontrolling interest of Chaodian Inc. from certain related parties on which we have significant influence, with purchase consideration of RMB257.3 million.
Added
Pursuant to the share purchase and investor rights agreement by and between us and Tencent Mobility Limited dated October 3, 2018, we have granted certain registration rights to Tencent Mobility Limited or its affiliates.
Removed
As of December 31, 2022, we had no unpaid consideration due to these related parties. Capital contribution/loans to the Entity. In 2020, we established the 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
For the years ended December 31, 2021, 2022 and 2023, we sold goods and live broadcasting and other services amounting to RMB9.1 million, RMB14.0 million and RMB12.7 million (US$1.8 million), respectively, to certain related parties. Acquisition/transfer of long-term investments.
Removed
We made capital contribution of RMB1,530.5 million and provided interest-bearing guaranteed loans of an aggregate principal amount of RMB1,253.7 million to the Entity for its operation. The annual interest rates of the loans were 3.3%. C. Interests of Experts and Counsel Not applicable.
Added
Ni Li to acquire the land use rights for a parcel of land in Shanghai for future construction. We provided interest-bearing guaranteed loans to this entity for its operation. The interest rates of the loans referenced loan prime rate (LPR) and ranged from 3.3% to 4.15% per annum.
Added
For the years ended December 31, 2021, 2022 and 2023, the largest outstanding amount of the loans was RMB1,709.7 million. In 2023, this entity repaid RMB636.4 million in principal and RMB60.2 million in interests on the loans. As of February 29, 2024, the outstanding balance of the loans to this entity was RMB605.5 million. C.

Other BILI 10-K year-over-year comparisons