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What changed in Baidu, Inc.'s 20-F — 2024 vs 2025

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Paragraph-level year-over-year comparison of Baidu, Inc.'s 2024 and 2025 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 2025 report.

+1237 added−1318 removedSource: 20-F (2026-03-17) vs 20-F (2025-03-28)

Top changes in Baidu, Inc.'s 2025 20-F

1237 paragraphs added · 1318 removed · 1054 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

479 edited+69 added−55 removed605 unchanged
Biggest changeYear Ended December 31, 2020 2021 2022 2023 2024 RMB RMB RMB RMB RMB US$ (In millions, except per share and per ADS data) Consolidated Statements of Comprehensive Income Data: Revenues: Online marketing services 72,840 80,695 74,711 81,203 78,563 10,763 Others 34,234 43,798 48,964 53,395 54,562 7,475 Total revenues 107,074 124,493 123,675 134,598 133,125 18,238 Operating costs and expenses: Cost of revenues 55,158 64,314 63,935 65,031 66,102 9,056 Selling, general and administrative 18,063 24,723 20,514 23,519 23,620 3,236 Research and development 19,513 24,938 23,315 24,192 22,133 3,032 Total operating costs and expenses 92,734 113,975 107,764 112,742 111,855 15,324 Operating profit 14,340 10,518 15,911 21,856 21,270 2,914 Total other income (loss), net 8,750 260 (5,799 ) 3,342 7,352 1,007 Income before income taxes 23,090 10,778 10,112 25,198 28,622 3,921 Income taxes 4,064 3,187 2,578 3,649 4,447 609 Net income 19,026 7,591 7,534 21,549 24,175 3,312 Less: Net (loss) income attributable to non-controlling interests (3,446 ) (2,635 ) (25 ) 1,234 415 57 Net income attributable to Baidu, Inc. 22,472 10,226 7,559 20,315 23,760 3,255 9 Table of Contents As of December 31, 2020 2021 2022 2023 2024 RMB RMB RMB RMB RMB US$ (In millions) Consolidated Balance Sheets Data: Cash and cash equivalents 35,782 36,850 53,156 25,231 24,832 3,402 Restricted cash 758 10,821 11,330 11,503 11,697 1,602 Short-term investments, net (1) 126,402 143,243 120,839 168,670 102,608 14,057 Total assets 332,708 380,034 390,973 406,759 427,780 58,606 Short-term loans 3,016 4,168 5,343 10,257 10,669 1,462 Long-term loans, current portion 7,427 2 — 2 168 23 Long-term loans — 12,629 13,722 14,223 15,596 2,137 Notes payable, current portion — 10,505 6,904 6,029 8,026 1,100 Notes payable 48,408 43,120 39,893 34,990 27,996 3,835 Convertible senior notes, current portion (2) 4,752 — 8,305 2,802 242 33 Convertible senior notes (2) 11,927 12,652 9,568 8,144 8,351 1,144 Total liabilities 140,865 156,082 153,168 144,151 144,168 19,751 Total Baidu, Inc. shareholders’ equity 182,696 211,459 223,478 243,626 263,620 36,116 (1) We adopted Accounting Standards Update (ASU) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , or ASU 2016-13, on January 1, 2020, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost.
Biggest changeGAAP. 8 Table of Contents Year Ended December 31, 2021 2022 2023 2024 2025 RMB RMB RMB RMB RMB US$ (In millions, except per share and per ADS data) Consolidated Statements of Comprehensive Income Data: Revenue 124,493 123,675 134,598 133,125 129,079 18,458 Costs and expenses: Cost of revenue 64,314 63,935 65,031 66,102 72,436 10,358 Selling, general and administrative 24,723 20,514 23,519 23,620 25,843 3,696 Research and development 24,938 23,315 24,192 22,133 20,433 2,922 Impairment of long-lived assets — — — — 16,190 2,315 Total costs and expenses 113,975 107,764 112,742 111,855 134,902 19,291 Operating income (loss) 10,518 15,911 21,856 21,270 (5,823 ) (833 ) Total other income (loss), net 260 (5,799 ) 3,342 7,352 12,539 1,793 Income before income taxes 10,778 10,112 25,198 28,622 6,716 960 Income tax expense 3,187 2,578 3,649 4,447 1,259 180 Net income 7,591 7,534 21,549 24,175 5,457 780 Less: Net income (loss) attributable to non-controlling interests (2,635 ) (25 ) 1,234 415 (132 ) (19 ) Net income attributable to Baidu, Inc. 10,226 7,559 20,315 23,760 5,589 799 As of December 31, 2021 2022 2023 2024 2025 RMB RMB RMB RMB RMB US$ (In millions) Consolidated Balance Sheets Data: Cash and cash equivalents 36,850 53,156 25,231 24,832 24,606 3,519 Restricted cash 10,821 11,330 11,503 11,697 225 32 Short-term investments, net 143,243 120,839 168,670 102,608 90,661 12,964 Total assets 380,034 390,973 406,759 427,780 449,157 64,229 Short-term loans 4,168 5,343 10,257 10,669 7,626 1,091 Long-term loans, current portion 2 — 2 168 14,765 2,111 Long-term loans 12,629 13,722 14,223 15,596 3,369 482 Notes payable, current portion 10,505 6,904 6,029 8,026 4,560 652 Notes payable 43,120 39,893 34,990 27,996 51,021 7,296 Convertible senior notes, current portion (1) — 8,305 2,802 242 1,459 209 Convertible senior notes (1) 12,652 9,568 8,144 8,351 6,712 960 Total liabilities 156,082 153,168 144,151 144,168 159,431 22,798 Total Baidu, Inc. shareholders’ equity 211,459 223,478 243,626 263,620 266,330 38,085 (1) We adopted ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , or ASU 2020-06, on January 1, 2022 using a modified retrospective transition method.
Other Subsidiaries VIEs and VIEs’ subsidiaries Eliminations Consolidated Total RMB (In millions) Net cash provided by/(used in) operating activities (1) 13,872 (10 ) 30,096 (7,363 ) (15,361 ) 21,234 Net cash (used in)/provided by investing activities (18,763 ) 3,496 (6,520 ) (7,584 ) 20,816 (8,555 ) Including: Cash contribution to VIEs and VIEs’ subsidiaries (2)(3) — — (434 ) — 434 — Loans provided to VIEs and VIEs’ subsidiaries (4) — (11 ) (9,380 ) — 9,391 — Loans repayments from VIEs and VIEs’ subsidiaries (4) — — 698 — (698 ) — Net cash provided by/(used in) financing activities (1) 1,938 (2,968 ) (19,372 ) 12,098 (5,455 ) (13,759 ) Including: Cash contribution to VIEs and VIEs’ subsidiaries (2)(3) — — — 434 (434 ) — Loans provided to VIEs and VIEs’ subsidiaries (4) — — — 9,391 (9,391 ) — Loans repayments from VIEs and VIEs’ subsidiaries (4) — — — (698 ) 698 — 14 Table of Contents For the Year Ended December 31, 2023 Baidu, Inc.
Other Subsidiaries VIEs and VIEs’ subsidiaries Eliminations Consolidated Total RMB (In millions) Net cash provided by/(used in) operating activities (1) 13,872 (10 ) 30,096 (7,363 ) (15,361 ) 21,234 Net cash provided by/(used in) investing activities (18,763 ) 3,496 (6,520 ) (7,584 ) 20,816 (8,555 ) Including: Cash contribution to VIEs and VIEs’ subsidiaries (2)(3) — — (434 ) — 434 — Loans provided to VIEs and VIEs’ subsidiaries (4) — (11 ) (9,380 ) — 9,391 — Loans repayments from VIEs and VIEs’ subsidiaries (4) — — 698 — (698 ) — Net cash provided by/(used in) financing activities (1) 1,938 (2,968 ) (19,372 ) 12,098 (5,455 ) (13,759 ) Including: Cash contribution to VIEs and VIEs’ subsidiaries (2)(3) — — — 434 (434 ) — Loans provided to VIEs and VIEs’ subsidiaries (4) — — — 9,391 (9,391 ) — Loans repayments from VIEs and VIEs’ subsidiaries (4) — — — (698 ) 698 — 14 Table of Contents For the Year Ended December 31, 2023 Baidu, Inc.
We may have to spend much more personnel cost and time evaluating and managing these risks and challenges in connection with our products and services in the ordinary course of our business operations, and cooperated and will keep cooperating in the future with the competent regulators in these respects.
We may have to spend much more personnel cost and time evaluating and managing these risks and challenges in connection with our products and services in the ordinary course of our business operations, and we have cooperated and will keep cooperating in the future with the competent regulators in these respects.
Some of the stimulus measures designed to boost the Chinese economy may unexpectedly cause higher inflation, which could adversely affect our results of operations and financial condition. For example, certain operating costs and expenses, such as employee compensation and office operating expenses, may increase as a result of higher inflation.
Some of the stimulus measures designed to boost the Chinese economy may unexpectedly cause higher inflation, which could adversely affect our results of operations and financial condition. For example, certain costs and expenses, such as employee compensation and office operating expenses, may increase as a result of higher inflation.
Such actions may have a material and adverse impact on our business, financial condition, result of operations and prospects.
Such actions may have a material and adverse impact on our business, financial condition, result of operations and prospects.
The delisting or prohibition of trading of the ADSs, or the threat of their being delisted or prohibited from trading, may materially and adversely affect the value of your investment.
The delisting or prohibition of trading of the ADSs, or the threat of their being delisted or prohibited from trading, may materially and adversely affect the value of your investment.
In April 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 April 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.
Operating and Financial Review and Prospects.” Potential impacts of health epidemics may include, but are not limited to, the following: • temporary closure of offices, travel restrictions or suspension of services of our customers and suppliers may negatively affect the demand for our services; • our customers in industries that are negatively impacted by epidemics, including the healthcare, travel, offline education, franchising, auto/transportation and real estate/home furnishing sectors, may reduce their budgets on online advertising and marketing, which may materially adversely impact our revenue from online marketing services; • our customers may require additional time to pay us or fail to pay us at all, which could significantly increase the amount of accounts receivable and require us to record additional allowances for doubtful accounts; • the business operations of our third-party agents could be negatively impacted, which may negatively impact our distribution channel, or result in loss of customers or disruption of our services, which may in turn materially adversely affect our financial condition and operating results; • any disruption of our supply chain, logistics providers or customers could adversely impact our business and results of operations, including causing us or our suppliers to cease manufacturing Xiaodu smart devices for a period of time or materially delay delivery to customers, which may also lead to loss of customers, as well as reputational, competitive and business harm to us; 55 Table of Contents • many of our customers, third-party agents, suppliers and other partners are SMEs, which may not have strong cash flows or be well capitalized, and may be vulnerable to a pandemic and slowing macroeconomic conditions; • the global stock markets may experience significant declines and the private and public companies that we have invested in could be materially adversely affected, which may lead to significant impairment in the fair values of our investments and in turn materially adversely affect our financial condition and operating results; and • corporate social responsibility initiatives we put forth in response to epidemics may negatively affect our financial condition and operating results.
Operating and Financial Review and Prospects.” Potential impacts of health epidemics may include, but are not limited to, the following: • temporary closure of offices, travel restrictions or suspension of services of our customers and suppliers may negatively affect the demand for our services; • our customers in industries that are negatively impacted by epidemics, including the healthcare, travel, offline education, franchising, auto/transportation and real estate/home furnishing sectors, may reduce their budgets on online advertising and marketing, which may materially adversely impact our revenue from online marketing services; • our customers may require additional time to pay us or fail to pay us at all, which could significantly increase the amount of accounts receivable and require us to record additional allowances for doubtful accounts; 52 Table of Contents • the business operations of our third-party agents could be negatively impacted, which may negatively impact our distribution channel, or result in loss of customers or disruption of our services, which may in turn materially adversely affect our financial condition and operating results; • any disruption of our supply chain, logistics providers or customers could adversely impact our business and results of operations, including causing us or our suppliers to cease manufacturing Xiaodu smart devices for a period of time or materially delay delivery to customers, which may also lead to loss of customers, as well as reputational, competitive and business harm to us; • many of our customers, third-party agents, suppliers and other partners are SMEs, which may not have strong cash flows or be well capitalized, and may be vulnerable to a pandemic and slowing macroeconomic conditions; • the global stock markets may experience significant declines and the private and public companies that we have invested in could be materially adversely affected, which may lead to significant impairment in the fair values of our investments and in turn materially adversely affect our financial condition and operating results; and • corporate social responsibility initiatives we put forth in response to epidemics may negatively affect our financial condition and operating results.
Specifically, the examination and determination of an indirect offering and listing will be conducted on a substance-over-form basis, and an offering and listing should be considered as an indirect overseas offering and listing by a domestic company if the issuer meets both of the following conditions: (i) any of the revenue, profits, total assets or net assets of such domestic company in the most recent financial year account for more than 50% of the corresponding data in the issuer’s audited consolidated financial statements for the same period; and (ii) the majority of its business operations are conducted in mainland China or its principal place of business is located in the mainland China, or the majority of senior management in charge of business operations are Chinese citizens or have domicile in the mainland China.
Specifically, the examination and determination of an indirect offering and listing will be conducted on a substance-over-form basis, and an offering and listing should be considered as an indirect overseas offering and listing by a domestic company if the issuer meets both of the following conditions: (i) any of the revenue, profits, total assets or net assets of such domestic company in the most recent financial year account for more than 50% of the corresponding data in the issuer’s audited consolidated financial statements for the same period; and (ii) the majority of its business operations are conducted in Chinese mainland or its principal place of business is located in the Chinese mainland, or the majority of senior management in charge of business operations are Chinese citizens or have domicile in the Chinese mainland.
Key Information—Risk Factors—Risks Related to Doing Business in China—If our mainland China subsidiaries declare and distribute dividends to their respective offshore parent companies, we will be required to pay more taxes, which could have a material and adverse effect on our result of operations.” Under the laws of mainland China, Baidu Inc. may provide funding to our mainland China subsidiaries only through capital contributions or loans, and to the variable interest entities only through loans, subject to satisfaction of applicable government registration and approval requirements.
Key Information—Risk Factors—Risks Related to Doing Business in China—If our Chinese mainland subsidiaries declare and distribute dividends to their respective offshore parent companies, we will be required to pay more taxes, which could have a material and adverse effect on our result of operations.” Under the laws of Chinese mainland, Baidu, Inc. may provide funding to our Chinese mainland subsidiaries only through capital contributions or loans, and to the variable interest entities only through loans, subject to satisfaction of applicable government registration and approval requirements.
Key Information—Risk Factors—Risks Related to Doing Business in China—The approval of and/or filing with the CSRC or other PRC government authorities may be required in connection with our offshore offerings under the laws of mainland China, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.” Cash Flows through Our Organization Baidu, Inc. is a holding company with no operations of its own.
Key Information—Risk Factors—Risks Related to Doing Business in China—The approval of and/or filing with the CSRC or other PRC government authorities may be required in connection with our offshore offerings under the laws of Chinese mainland, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.” Cash Flows through Our Organization Baidu, Inc. is a holding company with no operations of its own.
Intellectual property litigation is expensive, time-consuming and could divert resources and management attention from the operations of our business. We are currently named as defendant in certain copyright infringement suits in connection with Baidu Feed, P4P, Baidu Post, Baidu Search, iQIYI, Baidu Wenku, Baidu Drive, Baijiahao, Haokan, Xiaodu and certain other products or services. See “Item 8.A.
Intellectual property litigation is expensive, time-consuming and could divert resources and management attention from the operations of our business. We are currently named as defendant in certain intellectual property infringement suits in connection with Baidu Feed, P4P, Baidu Post, Baidu Search, iQIYI, Baidu Wenku, Baidu Drive, Baijiahao, Haokan, Xiaodu and certain other products or services. See “Item 8.A.
The State Administration of Taxation issued additional rules to provide more guidance on the implementation of SAT Circular 82 in July 2011, and issued an amendment to SAT Circular 82 delegating the authority to its provincial branches to determine whether a Chinese-controlled overseas-incorporated enterprise should be considered a mainland China resident enterprise, in January 2014. See “Item 5.A.
The State Administration of Taxation issued additional rules to provide more guidance on the implementation of SAT Circular 82 in July 2011, and issued an amendment to SAT Circular 82 delegating the authority to its provincial branches to determine whether a Chinese-controlled overseas-incorporated enterprise should be considered a Chinese mainland resident enterprise, in January 2014. See “Item 5.A.
Some of these risks and uncertainties relate to our ability to: • maintain our leading position in the Chinese-language internet search market; • offer attractive, useful and innovative products and services to attract and retain a larger user base; • procure content from studios and other content providers, as well as distribution channels and other licensors of content; • attract users’ continuing use of internet search services; • retain existing customers and attract additional customers and increase spending per customer; • evaluate the credit worthiness and collectability of accounts receivables from an evolving variety of customers, whose failure to pay us in a timely manner may adversely affect our liquidity position; • retain members and attract new members of iQIYI’s membership services; • upgrade our technology to support increased traffic and expanded product-and-service offerings; • further enhance our brand; 42 Table of Contents • respond to competitive market conditions; • respond to evolving user preferences or industry changes; • respond to changes in the regulatory environment and manage legal risks, including those associated with intellectual property rights; • maintain effective control of our costs and expenses; • execute our strategic investments and acquisitions and post-acquisition integrations effectively; • attract, retain and motivate qualified personnel and maintain good relations with a young and growing work force; and • build profitable operations in new markets and other overseas internet markets we have entered into.
Some of these risks and uncertainties relate to our ability to: • maintain our leading position in the Chinese-language internet search market; • offer attractive, useful and innovative products and services to attract and retain a larger user base; • procure content from studios and other content providers, as well as distribution channels and other licensors of content; • attract users’ continuing use of internet search services; • retain existing customers and attract additional customers and increase spending per customer; • evaluate the credit worthiness and collectability of accounts receivables from an evolving variety of customers, whose failure to pay us in a timely manner may adversely affect our liquidity position; • retain members and attract new members of iQIYI’s membership services; • upgrade our technology to support increased traffic and expanded product-and-service offerings; • further enhance our brand; • respond to competitive market conditions; • respond to evolving user preferences or industry changes; • respond to changes in the regulatory environment and manage legal risks, including those associated with intellectual property rights; • maintain effective control of our costs and expenses; • execute our strategic investments and acquisitions and post-acquisition integrations effectively; • attract, retain and motivate qualified personnel and maintain good relations with a young and growing work force; and • build profitable operations in new markets and other overseas internet markets we have entered into.
Du Xiaoman has set up an institutional money laundering risk assessment mechanism to fully understand the key money laundering and terrorist financing risks faced it faces, fully optimize the allocation of anti-money laundering resources, and prevent its financial products and businesses from being exploited by criminals in illegal and criminal fund cleaning activities.
Du Xiaoman has set up an institutional money laundering risk assessment mechanism to fully understand the key money laundering and terrorist financing risks it faces, fully optimize the allocation of anti-money laundering resources, and prevent its financial products and businesses from being exploited by criminals in illegal and criminal fund cleaning activities.
If we are unable to maintain and enhance our brand, or if there is negative publicity related to our products and services, our employees, or our business practices, our business and results of operations may be harmed; • We may not be able to achieve the anticipated benefits of our recent acquisition of YY Live, and face other risks associated with the acquisition and the operation of YY Live; • We face significant competition and may suffer from loss of users and customers as a result; • If our expansions into new businesses are not successful, our results of operation and growth prospects may be materially and adversely affected; • We have made significant investments in foundation models and generative AI and may face uncertainties with respect to their commercialization and the evolving laws and regulations applicable to us; • We have experienced slowdowns and declines in our revenues, and we may sustain net loss from time to time, and we may experience downward pressure on our operating and profit margins in the future; • Potential issues in the adoption and use of artificial intelligence in our product offerings may result in reputational harm or liability; • If we fail to continue to innovate and provide products, services and high-quality internet experience that attract and retain users, we may not be able to remain competitive; we may expend significant resources in order to remain competitive; and • Our business is subject to complex and evolving Chinese and international laws and regulations, including those regarding data privacy and cybersecurity.
If we are unable to maintain and enhance our brand, or if there is negative publicity related to our products and services, our employees, or our business practices, our business and results of operations may be harmed; • We may not be able to achieve the anticipated benefits of our acquisition of YY Live, and face other risks associated with the acquisition and the operation of YY Live; • We face significant competition and may suffer from loss of users and customers as a result; • If our expansions into new businesses are not successful, our results of operation and growth prospects may be materially and adversely affected; • We have made significant investments in foundation models and generative AI and may face uncertainties with respect to their commercialization and the evolving laws and regulations applicable to us; • We have experienced slowdowns and declines in our revenue, and we may sustain net loss from time to time, and we may experience downward pressure on our operating and profit margins in the future; • Potential issues in the adoption and use of artificial intelligence in our product offerings may result in reputational harm or liability; • If we fail to continue to innovate and provide products, services and high-quality internet experience that attract and retain users, we may not be able to remain competitive; we may expend significant resources in order to remain competitive; and • Our business is subject to complex and evolving Chinese and international laws and regulations, including those regarding data privacy and cybersecurity.
On April 2, 2021, we entered into a five-year term and revolving facilities agreement with a group of 22 arrangers, pursuant to which we are entitled to borrow US$3.0 billion with a term of five years and we have drawn down US$2.0 billion (RMB14.6 billion) loan under the facility commitment.
On April 2, 2021, we entered into a five-year term and revolving facilities agreement with a group of 22 arrangers, pursuant to which we are entitled to borrow US$3.0 billion with a term of five years and we have drawn down US$2.0 billion (RMB14.0 billion) loan under the facility commitment.
Various tax jurisdictions have either recently enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024 with the adoption of additional components in later years or announced their plans to enact such legislation in future years. We will continue to evaluate the impact of such legislative initiatives in the tax jurisdictions we operate in.
Various tax jurisdictions have either enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024 with the adoption of additional components in later years or announced their plans to enact such legislation in future years. We will continue to evaluate the impact of such legislative initiatives in the tax jurisdictions we operate in.
If Baidu Union partners decide to use a competitor’s or their own internet search services, or if our competitors offer more attractive prices to bid for union traffic, our user traffic may decline, which may adversely affect our revenues. If we fail to attract additional Baidu Union partners, our revenue growth may be adversely affected.
If Baidu Union partners decide to use a competitor’s or their own internet search services, or if our competitors offer more attractive prices to bid for union traffic, our user traffic may decline, which may adversely affect our revenue. If we fail to attract additional Baidu Union partners, our revenue growth may be adversely affected.
We rely on Baidu Union partners for a significant portion of our revenues. If we fail to retain existing Baidu Union partners or attract additional members, our revenue growth and profitability may be adversely affected. We pay Baidu Union partners a portion of our revenues as we leverage traffic of the Baidu Union partners’ internet properties.
We rely on Baidu Union partners for a significant portion of our revenue. If we fail to retain existing Baidu Union partners or attract additional members, our revenue growth and profitability may be adversely affected. We pay Baidu Union partners a portion of our revenue as we leverage traffic of the Baidu Union partners’ internet properties.
Under these regulations, internet content providers and internet publishers are prohibited from posting or displaying over the internet content that, among other things, violates the laws and regulations of mainland China, impairs the national dignity of China, contains terrorism or extremism content, or is reactionary, obscene, superstitious, fraudulent or defamatory.
Under these regulations, internet content providers and internet publishers are prohibited from posting or displaying over the internet content that, among other things, violates the laws and regulations of Chinese mainland, impairs the national dignity of China, contains terrorism or extremism content, or is reactionary, obscene, superstitious, fraudulent or defamatory.
Key Information—Risk Factors—Risks Related to Doing Business in China—Uncertainties exist with respect to the interpretation and implementation of the PRC Foreign Investment Law and its implementation regulations and how it may impact the viability of our current corporate structure, corporate governance and business operations.” The Holding Foreign Companies Accountable Act Pursuant to the Holding Foreign Companies Accountable Act, which was enacted on December 18, 2020 and further amended by the Consolidated Appropriations Act, 2023 signed into law on December 29, 2022, or the HFCAA, if the Securities and Exchange Commission, or the SEC, determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the Public Company Accounting Oversight Board, or the PCAOB, for two consecutive years, the SEC will prohibit our shares or the ADSs from being traded on a national securities exchange or in the over-the-counter trading market in the United States.
Key Information—Risk Factors—Risks Related to Doing Business in China—Uncertainties exist with respect to the interpretation and implementation of the PRC Foreign Investment Law and its implementation regulations and how it may impact the viability of our current corporate structure, corporate governance and business operations.” 5 Table of Contents The Holding Foreign Companies Accountable Act Pursuant to the Holding Foreign Companies Accountable Act, which was enacted on December 18, 2020 and further amended by the Consolidated Appropriations Act, 2023 signed into law on December 29, 2022, or the HFCAA, if the Securities and Exchange Commission, or the SEC, determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the Public Company Accounting Oversight Board, or the PCAOB, for two consecutive years, the SEC will prohibit our shares or the ADSs from being traded on a national securities exchange or in the over-the-counter trading market in the United States.
These contractual arrangements: • enable us to receive the economic benefits that could potentially be significant to the variable interest entities in consideration for the services provided by our subsidiaries; • effectively assigned all of the voting rights underlying the nominee shareholders’ equity interest in the variable interest entities to us; and • enable us to hold an exclusive option to purchase all or part of the equity interests in the variable interest entities when and to the extent permitted by the laws of mainland China. 3 Table of Contents These contractual arrangements generally include shareholder voting rights trust agreements or proxy agreements, exclusive equity purchase and transfer option agreements or exclusive purchase option agreements, loan agreements, operating agreements or business operation agreements, exclusive technology consulting and services agreements, and equity pledge agreements, as the case may be.
These contractual arrangements: • enable us to receive the economic benefits that could potentially be significant to the variable interest entities in consideration for the services provided by our subsidiaries; • effectively assigned all of the voting rights underlying the nominee shareholders’ equity interest in the variable interest entities to us; and • enable us to hold an exclusive option to purchase all or part of the equity interests in the variable interest entities when and to the extent permitted by the laws of Chinese mainland. 3 Table of Contents These contractual arrangements generally include shareholder voting rights trust agreements or proxy agreements, exclusive equity purchase and transfer option agreements or exclusive purchase option agreements, loan agreements, operating agreements or business operation agreements, exclusive technology consulting and services agreements, and equity pledge agreements, as the case may be.
However, as we expand our operations outside of China, we may be subject to intellectual property infringement claims brought against us in jurisdictions outside of China. We cannot assure you that we will not be subject to intellectual property infringement lawsuits or other proceedings in jurisdictions other than mainland China.
However, as we expand our operations outside of China, we may be subject to intellectual property infringement claims brought against us in jurisdictions outside of China. We cannot assure you that we will not be subject to intellectual property infringement lawsuits or other proceedings in jurisdictions other than Chinese mainland.
If we fail to generate sufficient usage of our new products and services, we may not grow revenue in line with the significant resources we invest in these new businesses. This may negatively impact gross margins and operating income.
If we fail to generate sufficient usage of our new products and services, we may not grow revenue in line with the significant resources we invest in these new businesses. This may negatively impact gross margins and operating margins.
If we are considered a mainland China resident enterprise under the EIT Law, our shareholders and ADS holders who are deemed non-resident enterprises may be subject to enterprise income tax at the rate of 10% upon the dividends payable by us or upon any gains realized from the transfer of our shares or ADSs, if such income is deemed derived from mainland China; provided that (i) such foreign enterprise investor has no establishment or premises in mainland China, or (ii) it has establishment or premises in mainland China but its income derived from mainland China has no real connection with such establishment or premises.
If we are considered a Chinese mainland resident enterprise under the EIT Law, our shareholders and ADS holders who are deemed non-resident enterprises may be subject to enterprise income tax at the rate of 10% upon the dividends payable by us or upon any gains realized from the transfer of our shares or ADSs, if such income is deemed derived from Chinese mainland; provided that (i) such foreign enterprise investor has no establishment or premises in Chinese mainland, or (ii) it has establishment or premises in Chinese mainland but its income derived from Chinese mainland has no real connection with such establishment or premises.
Particularly, pursuant to the Administrative Measures for Special Tax Adjustment and Investigation and Mutual Consultation Procedures issued by the State Administration of Tax in March 2017, if a mainland China enterprise makes an outbound payment to its overseas related party which undertakes no functions, bears no risks or has no substantial operation or activities and such payment is inconsistent with arm’s-length principles, the tax authorities may carry out a special tax adjustment based on the full amount deducted prior to tax.
Particularly, pursuant to the Administrative Measures for Special Tax Adjustment and Investigation and Mutual Consultation Procedures issued by the State Administration of Tax in March 2017, if a Chinese mainland enterprise makes an outbound payment to its overseas related party which undertakes no functions, bears no risks or has no substantial operation or activities and such payment is inconsistent with arm’s-length principles, the tax authorities may carry out a special tax adjustment based on the full amount deducted prior to tax.
Operating and Financial Review and Prospects—Operating Results—Taxation—Mainland China Enterprise Income Tax.” Although the SAT Circular 82, the additional guidance and amendment apply only to overseas registered enterprises controlled by mainland China enterprises, not to those controlled by mainland China individuals or foreigners, the criteria set forth in SAT Circular 82 may reflect the State Administration of Taxation’s general position on how the “de facto management body” test should be applied in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by enterprises or individuals of mainland China.
Operating and Financial Review and Prospects—Operating Results—Taxation—Chinese Mainland Enterprise Income Tax.” Although the SAT Circular 82, the additional guidance and amendment apply only to overseas registered enterprises controlled by Chinese mainland enterprises, not to those controlled by Chinese mainland individuals or foreigners, the criteria set forth in SAT Circular 82 may reflect the State Administration of Taxation’s general position on how the “de facto management body” test should be applied in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by enterprises or individuals of Chinese mainland.
These risks include, but are not limited to: • the online live streaming business is based on a relatively new business model in a relatively new market in which user demand may change or decrease substantially; • challenges in the integration of operations and systems and in managing the expanded operations of a larger and more complex company; • challenges in achieving anticipated business opportunities and growth prospects from integrating YY Live with the rest of our businesses; • rules and measures governing online live streaming businesses and hosts, both in and outside of mainland China, are complex and evolving, and we may not be able to navigate such complex regulatory environment or to respond to future changes in regulatory environment in an effective and timely manner; • we may face significant risks related to the content and communications on YY Live, as a majority of the communications on YY Live are conducted in real time, and we are unable to verify the sources of all information posted thereon or examine the content generated by users before it is posted; • the revenue model for online live streaming may not remain effective, and we may not be able to retain existing users, attract new users, keep users engaged and attract more paying users; • the live-streaming industry has faced challenges in recent years, which may adversely affect YY Live’s operating and financial performance; • we may be subject to liabilities arising from lawsuits and regulatory actions involving YY Live; • we may not be able to retain or attract popular talents such as performers, channel managers, professional game players, commentators and hosts for our live streaming platform or these talents may fail to draw fans or participants; and • unanticipated additional costs and expenses resulting from integrating into our business additional personnel, operations, products, services, technology, internal controls and financial reporting responsibilities.
These risks include, but are not limited to: • the online live streaming business is based on a relatively new business model in a relatively new market in which user demand may change or decrease substantially; • challenges in the integration of operations and systems and in managing the expanded operations of a larger and more complex company; • challenges in achieving anticipated business opportunities and growth prospects from integrating YY Live with the rest of our businesses; • rules and measures governing online live streaming businesses and hosts, both in and outside of Chinese mainland, are complex and evolving, and we may not be able to navigate such complex regulatory environment or to respond to future changes in regulatory environment in an effective and timely manner; • we may face significant risks related to the content and communications on YY Live, as a majority of the communications on YY Live are conducted in real time, and we are unable to verify the sources of all information posted thereon or examine the content generated by users before it is posted; • the revenue model for online live streaming may not remain effective, and we may not be able to retain existing users, attract new users, keep users engaged and attract more paying users; 20 Table of Contents • the live-streaming industry has faced challenges in recent years, which may adversely affect YY Live’s operating and financial performance; • we may be subject to liabilities arising from lawsuits and regulatory actions involving YY Live; • we may not be able to retain or attract popular talents such as performers, channel managers, professional game players, commentators and hosts for our live streaming platform or these talents may fail to draw fans or participants; and • unanticipated additional costs and expenses resulting from integrating into our business additional personnel, operations, products, services, technology, internal controls and financial reporting responsibilities.
In the event that a substantial number of Class A ordinary shares are deposited with the depositary in exchange for ADSs or vice versa, the liquidity and trading price of our Class A ordinary shares on the Hong Kong Stock Exchange and our ADSs on Nasdaq may be adversely affected. 89 Table of Contents The time required for the exchange between Class A ordinary shares and ADSs might be longer than expected and investors might not be able to settle or effect any sale of their securities during this period, and the exchange of Class A ordinary shares into ADSs involves costs.
In the event that a substantial number of Class A ordinary shares are deposited with the depositary in exchange for ADSs or vice versa, the liquidity and trading price of our Class A ordinary shares on the Hong Kong Stock Exchange and our ADSs on Nasdaq may be adversely affected. 83 Table of Contents The time required for the exchange between Class A ordinary shares and ADSs might be longer than expected and investors might not be able to settle or effect any sale of their securities during this period, and the exchange of Class A ordinary shares into ADSs involves costs.
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 Chinese mainland 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 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 Chinese mainland 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.
Although there is no statutory enforcement in the Cayman Islands of judgments obtained in Hong Kong courts or federal or state courts of the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), the courts of the Cayman Islands will, at common law, recognize and enforce a foreign monetary judgment of a foreign court of competent jurisdiction without any re-examination of the merits of the underlying dispute based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the liquidated sum for which such judgment has been given, provided such judgment (i) is given by a foreign court of competent jurisdiction, (ii) imposes on 85 Table of Contents the judgment debtor a liability to pay a liquidated sum for which the judgment has been given, (iii) is final, (iv) is not in respect of taxes, a fine or a penalty, and (v) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands.
Although there is no statutory enforcement in the Cayman Islands of judgments obtained in Hong Kong courts or federal or state courts of the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), the courts of the Cayman Islands will, at common law, recognize and enforce a foreign monetary judgment of a foreign court of competent jurisdiction without any re-examination of the merits of the underlying dispute based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the liquidated sum for which such judgment has been given, provided such judgment (i) is given by a foreign court of competent jurisdiction, (ii) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given, (iii) is final, (iv) is not in respect of taxes, a fine or a penalty, and (v) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands.
However, the laws and regulations of mainland China are complex and evolving, and uncertainties still exist with respect to the interpretation of the legal standards for determining liabilities of internet search and other internet service providers for (a) providing links to content on third-party websites that infringe upon others’ copyrights or hosting such content, (b) providing information storage space, file sharing technology or other internet services that are used by internet users to disseminate such content, or (c) providing information generated by AI.
However, the laws and regulations of Chinese mainland are complex and evolving, and uncertainties still exist with respect to the interpretation of the legal standards for determining liabilities of internet search and other internet service providers for (a) providing links to content on third-party websites that infringe upon others’ copyrights or hosting such content, (b) providing information storage space, file sharing technology or other internet services that are used by internet users to disseminate such content, or (c) providing information generated by AI.
We believe that our business is not in an industry related to national security, but we cannot preclude the possibility that the competent PRC government authorities may publish explanations contrary to our understanding or broaden the scope of such security reviews in the future, in which case our future acquisitions and investment in mainland China, including those by way of entering into contractual control arrangements with target entities, may be closely scrutinized or prohibited.
We believe that our business is not in an industry related to national security, but we cannot preclude the possibility that the competent PRC government authorities may publish explanations contrary to our understanding or broaden the scope of such security reviews in the future, in which case our future acquisitions and investment in Chinese mainland, including those by way of entering into contractual control arrangements with target entities, may be closely scrutinized or prohibited.
Any failure to obtain or delay in obtaining the CSRC approval for any of our offshore offerings, or a rescission of such approval if obtained by us, would subject us to sanctions imposed by the CSRC or other PRC regulatory authorities, which could include fines and penalties on our operations in mainland China, restrictions or limitations on our ability to pay dividends outside of mainland China, and other forms of sanctions that may materially and adversely affect our business, financial condition, and results of operations.
Any failure to obtain or delay in obtaining the CSRC approval for any of our offshore offerings, or a rescission of such approval if obtained by us, would subject us to sanctions imposed by the CSRC or other PRC regulatory authorities, which could include fines and penalties on our operations in Chinese mainland, restrictions or limitations on our ability to pay dividends outside of Chinese mainland, and other forms of sanctions that may materially and adversely affect our business, financial condition, and results of operations.
Under the EIT Law and related regulations, dividends, interests, rent or royalties payable by a foreign-invested enterprise, such as our mainland China subsidiaries, to any of its foreign non-resident enterprise investors, and proceeds from any such foreign enterprise investor’s disposition of assets (after deducting the net value of such assets) are subject to a 10% withholding tax, unless the foreign enterprise investor’s jurisdiction of incorporation has a tax treaty with mainland China that provides for a reduced rate of withholding tax.
Under the EIT Law and related regulations, dividends, interests, rent or royalties payable by a foreign-invested enterprise, such as our Chinese mainland subsidiaries, to any of its foreign non-resident enterprise investors, and proceeds from any such foreign enterprise investor’s disposition of assets (after deducting the net value of such assets) are subject to a 10% withholding tax, unless the foreign enterprise investor’s jurisdiction of incorporation has a tax treaty with Chinese mainland that provides for a reduced rate of withholding tax.
Although we believe all our related party transactions, including all payments by our mainland China subsidiaries and the variable interest entities to our non-mainland China entities, are made on an arm’s-length basis and our estimates are reasonable, the ultimate decisions by the tax authorities may differ from the amounts recorded in our financial statements and may materially affect our financial results in the period or periods for which such determination is made.
Although we believe all our related party transactions, including all payments by our Chinese mainland subsidiaries and the variable interest entities to our non-Chinese mainland entities, are made on an arm’s-length basis and our estimates are reasonable, the ultimate decisions by the tax authorities may differ from the amounts recorded in our financial statements and may materially affect our financial results in the period or periods for which such determination is made.
However, 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 and investors in our ADSs would be deprived of the benefits of such PCAOB inspections again, which could cause investors and potential investors in the ADSs to lose confidence in our audit procedures and reported financial information and the quality of our financial statements. 77 Table of Contents Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China.
However, if the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in Chinese mainland 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 and investors in our ADSs would be deprived of the benefits of such PCAOB inspections again, which could cause investors and potential investors in the ADSs to lose confidence in our audit procedures and reported financial information and the quality of our financial statements. 72 Table of Contents Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China.
Currently, we do not have any arrangements to address potential conflicts of interest between these individuals and our company, except that we could exercise our transfer option under the exclusive equity purchase and transfer option agreement with the relevant individual nominee shareholder to request him/her to transfer all of his/her equity ownership in the relevant variable interest entity to a mainland China entity or individual designated by us.
Currently, we do not have any arrangements to address potential conflicts of interest between these individuals and our company, except that we could exercise our transfer option under the exclusive equity purchase and transfer option agreement with the relevant individual nominee shareholder to request him/her to transfer all of his/her equity ownership in the relevant variable interest entity to a Chinese mainland entity or individual designated by us.
These regulatory authorities may impose fines and penalties on our operations in mainland China, limit our ability to pay dividends outside of mainland China, limit our operating privileges in mainland China, delay or restrict the repatriation of the proceeds from our offshore offerings into mainland China or take other actions that could materially and adversely affect our business, financial condition, results of operations, and prospects, as well as the trading price of our listed securities.
These regulatory authorities may impose fines and penalties on our operations in Chinese mainland, limit our ability to pay dividends outside of Chinese mainland, limit our operating privileges in Chinese mainland, delay or restrict the repatriation of the proceeds from our offshore offerings into Chinese mainland or take other actions that could materially and adversely affect our business, financial condition, results of operations, and prospects, as well as the trading price of our listed securities.
We could continue to experience a decline in our revenues, as a result of a number of factors, including changes in the mix of products and services, customer demographics, industry and channel, changes in policy or policy implementation, increase in market competition for marketing and/or new AI offerings, and decrease in pricing arising from an oversupply of advertising inventory in the market, which has been witnessed since 2019.
We could continue to experience a decline in our revenue, as a result of a number of factors, including changes in the mix of products and services, customer demographics, industry and channel, changes in policy or policy implementation, increase in market competition for marketing and/or new AI offerings, and decrease in pricing arising from an oversupply of advertising inventory in the market, which has been witnessed since 2019.
Some of our systems are not fully redundant, and our disaster recovery planning does not account for all possible scenarios. We have experienced service disruptions in the past which adversely affected our user experience. 33 Table of Contents Our servers, which are hosted at third-party or our own internet data centers, are vulnerable to break-ins, sabotage and vandalism.
Some of our systems are not fully redundant, and our disaster recovery planning does not account for all possible scenarios. We have experienced service disruptions in the past which adversely affected our user experience. 31 Table of Contents Our servers, which are hosted at third-party or our own internet data centers, are vulnerable to break-ins, sabotage and vandalism.
If we are deemed a mainland China resident enterprise, we may be subject to enterprise income tax at 25% on our global income, except that the dividends we receive from our mainland China subsidiaries may be exempt from enterprise income tax to the extent such dividends are deemed as “dividends among qualified mainland China resident enterprises.” If we are deemed a mainland China resident enterprise and earn income other than dividends from our mainland China subsidiaries, a 25% enterprise income tax on our global income could significantly increase our tax burden and materially and adversely affect our cash flow and profitability.
If we are deemed a Chinese mainland resident enterprise, we may be subject to enterprise income tax at 25% on our global income, except that the dividends we receive from our Chinese mainland subsidiaries may be exempt from enterprise income tax to the extent such dividends are deemed as “dividends among qualified Chinese mainland resident enterprises.” If we are deemed a Chinese mainland resident enterprise and earn income other than dividends from our Chinese mainland subsidiaries, a 25% enterprise income tax on our global income could significantly increase our tax burden and materially and adversely affect our cash flow and profitability.
Furthermore, if we are considered a mainland China resident enterprise and the PRC tax authorities consider dividends we pay with respect to our shares or ADSs and the gains realized from the transfer of our shares or ADSs to be income derived from sources within mainland China, it is possible that such dividends and gains earned by non-resident individuals may be subject to mainland China individual income tax at a rate of 20%.
Furthermore, if we are considered a Chinese mainland resident enterprise and the PRC tax authorities consider dividends we pay with respect to our shares or ADSs and the gains realized from the transfer of our shares or ADSs to be income derived from sources within Chinese mainland, it is possible that such dividends and gains earned by non-resident individuals may be subject to Chinese mainland individual income tax at a rate of 20%.
The Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors adopted by six PRC regulatory agencies in 2006 and amended in 2009, require an overseas special purpose vehicle formed for listing purposes through acquisitions of domestic companies in mainland China and controlled by Domestic persons or entities of mainland China to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange.
The Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors adopted by six PRC regulatory agencies in 2006 and amended in 2009, require an overseas special purpose vehicle formed for listing purposes through acquisitions of domestic companies in Chinese mainland and controlled by Domestic persons or entities of Chinese mainland to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange.
If we or any of the variable interest entities is found to be in violation of any existing or future laws, administrative regulations or provisions of mainland China, or fail to obtain or maintain any of the required permits or approvals, the PRC regulatory authorities would have broad discretion to take corresponding action regarding such violations or failures to such entities, such as: • order to immediately terminate prohibited investment activities and to take certain measures to return to the pre-investment status; • order to rectify within prescribed period and to take necessary measures to comply with such laws, administrative regulations or provisions; • revocation of such entities’ business licenses and/or operating licenses; • shutting down of our website, or discontinuance or restriction on any transactions between certain of our mainland China subsidiaries with them; • fines, confiscation of the income from our mainland China subsidiaries or the variable interest entities, or other requirements with which we or the variable interest entities may not be able to comply; • order to restructure our ownership structure, corporate governance and business operations, including terminating the contractual arrangements with the variable interest entities and deregistering the equity pledges of the variable interest entities, which in turn would affect our ability to consolidate, derive economic interests from, or impose control over the variable interest entities; or 67 Table of Contents • restriction or prohibition on our use of the proceeds of any financing outside mainland China to finance our business operations in mainland China, and other regulatory or enforcement actions that could be harmful to our business.
If we or any of the variable interest entities is found to be in violation of any existing or future laws, administrative regulations or provisions of Chinese mainland, or fail to obtain or maintain any of the required permits or approvals, the PRC regulatory authorities would have broad discretion to take corresponding action regarding such violations or failures to such entities, such as: • order to immediately terminate prohibited investment activities and to take certain measures to return to the pre-investment status; • order to rectify within prescribed period and to take necessary measures to comply with such laws, administrative regulations or provisions; • revocation of such entities’ business licenses and/or operating licenses; • shutting down of our website, or discontinuance or restriction on any transactions between certain of our Chinese mainland subsidiaries with them; • fines, confiscation of the income from our Chinese mainland subsidiaries or the variable interest entities, or other requirements with which we or the variable interest entities may not be able to comply; • order to restructure our ownership structure, corporate governance and business operations, including terminating the contractual arrangements with the variable interest entities and deregistering the equity pledges of the variable interest entities, which in turn would affect our ability to consolidate, derive economic interests from, or impose control over the variable interest entities; or • restriction or prohibition on our use of the proceeds of any financing outside Chinese mainland to finance our business operations in Chinese mainland, and other regulatory or enforcement actions that could be harmful to our business.
We do not have any arrangements in place to address such potential conflicts.” There are also substantial uncertainties regarding the interpretation and application of current and future laws, regulations and rules of mainland China regarding the status of the rights of our Cayman Islands holding company with respect to its contractual arrangements with the variable interest entities and their nominee shareholders.
We do not have any arrangements in place to address such potential conflicts.” There are also substantial uncertainties regarding the interpretation and application of current and future laws, regulations and rules of Chinese mainland regarding the status of the rights of our Cayman Islands holding company with respect to its contractual arrangements with the variable interest entities and their nominee shareholders.
Currently, since the legislation of mainland China on virtual assets are still developing and evolving, uncertainties still exist as to who the legal owner of virtual assets is, whether and how the ownership of virtual assets is protected by law, and whether an operator of a platform would have any liability, whether in contract, tort or otherwise, to users or other interested parties, for loss of such virtual assets.
Currently, since the legislation of Chinese mainland on virtual assets are still developing and evolving, uncertainties still exist as to who the legal owner of virtual assets is, whether and how the ownership of virtual assets is protected by law, and whether an operator of a platform would have any liability, whether in contract, tort or otherwise, to users or other interested parties, for loss of such virtual assets.
Risks Related to Doing Business in China • Changes in China’s economic, political or social conditions or government policies could have a material and adverse effect on our business and operations; • The approval of and/or filing with the CSRC or other PRC government authorities may be required in connection with our offshore offerings under the laws of mainland China, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing; • There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations; • We may be adversely affected by the complexity, uncertainties and changes in the regulations of internet and related business and companies in mainland China; • Any failure to meet the PRC government’s complex regulatory requirements on our business operation could have a material adverse effect on our operations and the value of our securities; • Any failure or perceived failure by us to comply with the enacted Guidelines to Anti-Monopoly in the Field of Internet Platforms and other anti-monopoly laws and regulations may result in governmental investigations or enforcement actions, litigation or claims against us and could have an adverse effect on our business, financial condition and results of operations; • It may be difficult for overseas regulators to conduct investigation or collect evidence within mainland China; • The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such inspections; and 18 Table of Contents • Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China.
Risks Related to Doing Business in China • Changes in China’s economic, political or social conditions or government policies could have a material and adverse effect on our business and operations; • The approval of and/or filing with the CSRC or other PRC government authorities may be required in connection with our offshore offerings under the laws of Chinese mainland, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing; • There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations; • We may be adversely affected by the complexity, uncertainties and changes in the regulations of internet, artificial intelligence and related business and companies in Chinese mainland; • Any failure to meet the PRC government’s complex regulatory requirements on our business operation could have a material adverse effect on our operations and the value of our securities; • Any failure or perceived failure by us to comply with the enacted Guidelines to Anti-Monopoly in the Field of Internet Platforms and other anti-monopoly laws and regulations may result in governmental investigations or enforcement actions, litigation or claims against us and could have an adverse effect on our business, financial condition and results of operations; • It may be difficult for overseas regulators to conduct investigation or collect evidence within Chinese mainland; • The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such inspections; and • Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China.
If the PRC government finds that the agreements that establish the structure for operating our business in mainland China do not comply with the laws and regulations of mainland China, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we and the variable interest entities could be subject to severe penalties or be forced to relinquish our interests in those operations.
If the PRC government finds that the agreements that establish the structure for operating our business in Chinese mainland do not comply with the laws and regulations of Chinese mainland, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we and the variable interest entities could be subject to severe penalties or be forced to relinquish our interests in those operations.
These software apps may be difficult to remove or disable, may reinstall themselves and may circumvent other apps’ efforts to block or remove them. 40 Table of Contents In addition, our business may be adversely affected by the practices of third-party website owners, content providers and developers which interfere with our ability to crawl and index their web pages and contents including apps.
These software apps may be difficult to remove or disable, may reinstall themselves and may circumvent other apps’ efforts to block or remove them. In addition, our business may be adversely affected by the practices of third-party website owners, content providers and developers which interfere with our ability to crawl and index their web pages and contents including apps.
In addition, if the PRC regulatory authorities were to find our legal structure and contractual arrangements to be in violation of any laws, administrative regulations or provisions of mainland China, we are uncertain what impact of above PRC regulatory authorities’ actions would have on us and our ability to consolidate the variable interest entities in the consolidated financial statements.
In addition, if the PRC regulatory authorities were to find our legal structure and contractual arrangements to be in violation of any laws, administrative regulations or provisions of Chinese mainland, we are uncertain what impact of above PRC regulatory authorities’ actions would have on us and our ability to consolidate the variable interest entities in the consolidated financial statements.
Baidu, Inc. may not be able to repay its indebtedness, and the Class A ordinary shares or ADSs of our company may decline in value or become worthless, if we are unable to assert our contractual control rights over the assets of our mainland China subsidiaries and the variable interest entities that conduct all or substantially all of our operations.
Baidu, Inc. may not be able to repay its indebtedness, and the Class A ordinary shares or ADSs of our company may decline in value or become worthless, if we are unable to assert our contractual control rights over the assets of our Chinese mainland subsidiaries and the variable interest entities that conduct all or substantially all of our operations.
Other Subsidiaries VIEs and VIEs’ subsidiaries Eliminations Consolidated Total RMB (In millions) Revenues — 5 91,045 66,755 (24,680 ) 133,125 Share of income of the VIEs and VIEs’ subsidiaries 2,625 453 — — (3,078 ) — Net income 23,760 668 22,839 2,625 (25,717 ) 24,175 For the Year Ended December 31, 2023 Baidu Inc.
Other Subsidiaries VIEs and VIEs’ subsidiaries Eliminations Consolidated Total RMB (In millions) Revenue — 5 91,045 66,755 (24,680 ) 133,125 Share of income of the VIEs and VIEs’ subsidiaries 2,625 453 — — (3,078 ) — Net income 23,760 668 22,839 2,625 (25,717 ) 24,175 For the Year Ended December 31, 2023 Baidu Inc.
Since most of our customers are not bound by long-term contracts, they may amend or terminate their advertising arrangements with us with little advance notice under certain circumstances. Failure to retain our existing customers or attract new customers for our online marketing services could seriously harm our business, results of operations and growth prospects.
Since most of our customers are not bound by long-term contracts, they may amend or terminate their advertising arrangements with us with little advance notice under certain circumstances. Failure to retain our existing customers or attract new customers for our online marketing services could seriously harm our business, results of operations and future prospects.
As a result of our corporate structure and the contractual arrangements between our subsidiaries and each of the variable interest entities in mainland China, we would be subject to adverse tax consequences if the PRC tax authorities were to determine that the contracts between our subsidiaries and these variable interest entities were not on an arm’s-length basis and therefore constituted a favorable transfer pricing.
As a result of our corporate structure and the contractual arrangements between our subsidiaries and each of the variable interest entities in Chinese mainland, we would be subject to adverse tax consequences if the PRC tax authorities were to determine that the contracts between our subsidiaries and these variable interest entities were not on an arm’s-length basis and therefore constituted a favorable transfer pricing.
In addition, if the PRC regulatory authorities were to find our legal structure and contractual arrangements to be in violation of any laws, administrative regulations or provisions of mainland China, we are uncertain what impact of above PRC regulatory authorities’ actions would have on us and our ability to consolidate the variable interest entities in the consolidated financial statement.
In addition, if the PRC regulatory authorities were to find our legal structure and contractual arrangements to be in violation of any laws, administrative regulations or provisions of Chinese mainland, we are uncertain what impact of above PRC regulatory authorities’ actions would have on us and our ability to consolidate the variable interest entities in the consolidated financial statement.
Hong Kong has a tax arrangement with mainland China that provides for a 5% withholding tax on dividends subject to certain conditions and requirements, such as the requirement that the Hong Kong resident enterprise owns at least 25% of the mainland China enterprise distributing the dividend at all times within the 12-month period immediately preceding the distribution of dividends and be a “beneficial owner” of the dividends.
Hong Kong has a tax arrangement with Chinese mainland that provides for a 5% withholding tax on dividends subject to certain conditions and requirements, such as the requirement that the Hong Kong resident enterprise owns at least 25% of the Chinese mainland enterprise distributing the dividend at all times within the 12-month period immediately preceding the distribution of dividends and be a “beneficial owner” of the dividends.
Moreover, failure to comply with SAFE registration and amendment requirements described above could result in liability under the laws of mainland China for evasion of applicable foreign exchange restrictions. On February 28, 2015, SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, which became effective on June 1, 2015.
Moreover, failure to comply with SAFE registration and amendment requirements described above could result in liability under the laws of Chinese mainland for evasion of applicable foreign exchange restrictions. On February 28, 2015, SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, which became effective on June 1, 2015.
Our internet content services, value-added telecommunication-based services, internet map services, online audio and video services and mobile application distribution businesses in mainland China have been conducted through the applicable VIEs in order to comply with the laws and regulations of mainland China, which restrict and impose conditions on foreign direct investment in companies involved in the provision of such businesses.
Our internet content services, value-added telecommunication-based services, internet map services, online audio and video services and mobile application distribution businesses in Chinese mainland have been conducted through the applicable VIEs in order to comply with the laws and regulations of Chinese mainland, which restrict and impose conditions on foreign direct investment in companies involved in the provision of such businesses.
We cannot assure you that we will be able to maintain our current effective tax rate in the future. If our mainland China subsidiaries declare and distribute dividends to their respective offshore parent companies, we will be required to pay more taxes, which could have a material and adverse effect on our result of operations.
We cannot assure you that we will be able to maintain our current effective tax rate in the future. If our Chinese mainland subsidiaries declare and distribute dividends to their respective offshore parent companies, we will be required to pay more taxes, which could have a material and adverse effect on our result of operations.
However, approval from appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of mainland China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions.
However, approval from appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of Chinese mainland to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions.
Key Information—Risk Factors—Risks Related to Our Business and Industry—Any failure or perceived failure by us to comply with the enacted Guidelines to Anti-Monopoly in the Field of Internet Platforms and other anti-monopoly laws and regulations may result in governmental investigations or 21 Table of Contents enforcement actions, litigation or claims against us and could have an adverse effect on our business, financial condition and results of operations.” We would be subject to and may not be able to successfully manage a variety of additional risks associated with integrating YY Live with us.
Key Information—Risk Factors—Risks Related to Our Business and Industry—Any failure or perceived failure by us to comply with the enacted Guidelines to Anti-Monopoly in the Field of Internet Platforms and other anti-monopoly laws and regulations may result in governmental investigations or enforcement actions, litigation or claims against us and could have an adverse effect on our business, financial condition and results of operations.” We would be subject to and may not be able to successfully manage a variety of additional risks associated with integrating YY Live with us.
As a result, although other means are available for us to obtain financing at the holding company level, Baidu, Inc.’s ability to pay dividends to the shareholders and to service any debt it may incur may depend upon dividends paid by our mainland China subsidiaries and license and service fees paid by the variable interest entities.
As a result, although other means are available for us to obtain financing at the holding company level, Baidu, Inc.’s ability to pay dividends to the shareholders and to service any debt it may incur may depend upon dividends paid by our Chinese mainland subsidiaries and license and service fees paid by the variable interest entities.
Our ability to increase revenue and profitability from online marketing may be adversely impacted by a number of factors, many of which are beyond our control, including but not limited to: • difficulties associated with developing and maintaining a larger user base with demographic characteristics attractive to online marketing customers and maintaining and increasing user engagement; • increased competition and potential re-allocation of marketing budgets and downward pressure on online marketing prices, for example, resulting from an oversupply of advertising inventory released into the market; • higher customer acquisition costs due in part to the limited experience of small to medium-sized enterprises, or SMEs, with the internet as a marketing channel or due to competition; • decreased use of our search and paid click because search queries are increasingly being undertaken via voice-activated smart devices, apps, social media or other online platforms; • ineffectiveness of our online marketing delivery, tracking and reporting systems; • decreased use of internet or online marketing in China; and • tightened regulatory environment in mainland China’s internet space.
Our ability to maintain or increase revenue and profitability from online marketing may be adversely impacted by a number of factors, many of which are beyond our control, including but not limited to: • difficulties associated with developing and maintaining a larger user base with demographic characteristics attractive to online marketing customers and maintaining and increasing user engagement; • increased competition and potential re-allocation of marketing budgets and downward pressure on online marketing prices, for example, resulting from an oversupply of advertising inventory released into the market; • higher customer acquisition costs due in part to the limited experience of small to medium-sized enterprises, or SMEs, with the internet as a marketing channel or due to competition; • decreased use of our search and paid click because search queries are increasingly being undertaken via voice-activated smart devices, apps, social media or other online platforms; • ineffectiveness of our online marketing delivery, tracking and reporting systems; • decreased use of internet or online marketing in China; and • tightened regulatory environment in Chinese mainland’s internet space.
Undistributed profits earned by foreign-invested enterprises prior to January 1, 2008 are exempted from any withholding tax. The British Virgin Islands, where Baidu Holdings Limited, the sole shareholder of certain of our mainland China subsidiaries such as Baidu Online, is incorporated, does not have such a tax treaty with mainland China.
Undistributed profits earned by foreign-invested enterprises prior to January 1, 2008 are exempted from any withholding tax. The British Virgin Islands, where Baidu Holdings Limited, the sole shareholder of certain of our Chinese mainland subsidiaries such as Baidu Online, is incorporated, does not have such a tax treaty with Chinese mainland.
If the shareholders of the offshore holding company who are mainland China domestic residents do not complete their registration with the local SAFE branches, the mainland China subsidiaries may be prohibited from distributing their profits and proceeds from any reduction in capital, share transfer or liquidation to the offshore company, and the offshore company may be restricted in its ability to contribute additional capital to its mainland China subsidiaries.
If the shareholders of the offshore holding company who are Chinese mainland domestic residents do not complete their registration with the local SAFE branches, the Chinese mainland subsidiaries may be prohibited from distributing their profits and proceeds from any reduction in capital, share transfer or liquidation to the offshore company, and the offshore company may be restricted in its ability to contribute additional capital to its Chinese mainland subsidiaries.
If we or any of the variable interest entities is found to be in violation of any existing or future laws or regulations of mainland China, or fail to obtain or maintain any of the required permits or approvals, the PRC regulatory authorities would have broad discretion in accordance with the applicable laws and regulations to take action in dealing with such violations or failures.
If we or any of the variable interest entities is found to be in violation of any existing or future laws or regulations of Chinese mainland, or fail to obtain or maintain any of the required permits or approvals, the PRC regulatory authorities would have broad discretion in accordance with the applicable laws and regulations to take action in dealing with such violations or failures.
The laws and regulations in mainland China regarding AI are gradually improving, and they require AI service providers or technology supporters to avoid such deficiencies to the maximum extent possible. Although we believe that we have taken necessary measures according to the applicable laws, we cannot guarantee that we will always meet the regulatory requirements in the future.
The laws and regulations in Chinese mainland regarding AI are gradually improving, and they require AI service providers or technology supporters to avoid such deficiencies to the maximum extent possible. Although we believe that we have taken necessary measures according to the applicable laws, we cannot guarantee that we will always meet the regulatory requirements in the future.
If a company is designated as a critical information infrastructure operator, it must comply with specific obligations mandated by applicable cybersecurity laws and regulations, which include, among others, that any personal information and important data collected and generated in operations within mainland China must be stored within the territory of mainland China.
If a company is designated as a critical information infrastructure operator, it must comply with specific obligations mandated by applicable cybersecurity laws and regulations, which include, among others, that any personal information and important data collected and generated in operations within Chinese mainland must be stored within the territory of Chinese mainland.
The protection of intellectual property rights in mainland China may not be as effective as those in the United States or other jurisdictions. The steps we have taken may be inadequate to prevent the misappropriation of our technology. Reverse engineering, unauthorized copying or other misappropriation of our technologies could enable third parties to benefit from our technologies without paying us.
The protection of intellectual property rights in Chinese mainland may not be as effective as those in the United States or other jurisdictions. The steps we have taken may be inadequate to prevent the misappropriation of our technology. Reverse engineering, unauthorized copying or other misappropriation of our technologies could enable third parties to benefit from our technologies without paying us.
Such fiduciary duty requires directors and/or officers to act in good faith and in the best interests of the company and not to use their positions for personal gains. There are, however, no specific provisions under the Cayman Islands law or the laws of mainland China on how to address potential conflicts of interest.
Such fiduciary duty requires directors and/or officers to act in good faith and in the best interests of the company and not to use their positions for personal gains. There are, however, no specific provisions under the Cayman Islands law or the laws of Chinese mainland on how to address potential conflicts of interest.
As a civil law jurisdiction, the legal system of mainland China is based on written statutes. Prior court decisions may be cited for reference but have limited precedential value. The laws and regulations of mainland China have significantly enhanced the protections afforded to various forms of foreign investments in mainland China for the past decades.
As a civil law jurisdiction, the legal system of Chinese mainland is based on written statutes. Prior court decisions may be cited for reference but have limited precedential value. The laws and regulations of Chinese mainland have significantly enhanced the protections afforded to various forms of foreign investments in Chinese mainland for the past decades.
If we are required under the EIT Law to withhold mainland China income tax on our dividends payable to our non-mainland China resident enterprise shareholders and ADS holders, or if any gains realized from the transfer of our shares or ADSs by our non-mainland China resident enterprise shareholders and ADS holders are subject to enterprise income tax, your investment in our shares or ADSs could be materially and adversely affected.
If we are required under the EIT Law to withhold Chinese mainland income tax on our dividends payable to our non-Chinese mainland resident enterprise shareholders and ADS holders, or if any gains realized from the transfer of our shares or ADSs by our non-Chinese mainland resident enterprise shareholders and ADS holders are subject to enterprise income tax, your investment in our shares or ADSs could be materially and adversely affected.
Further, our mainland China subsidiaries and the variable interest entities are required to make appropriations to certain statutory reserve funds or may make appropriations to certain discretionary funds, which are not distributable as cash dividends except in the event of a solvent liquidation of the companies. For more details, see “Item 5.B.
Further, our Chinese mainland subsidiaries and the variable interest entities are required to make appropriations to certain statutory reserve funds or may make appropriations to certain discretionary funds, which are not distributable as cash dividends except in the event of a solvent liquidation of the companies. For more details, see “Item 5.B.
Besides the evolving regulatory requirements on cybersecurity and data privacy in mainland China, there are also a number of legislative proposals in the European Union, the United States, at both the federal and state level, as well as other jurisdictions that could impose new obligations in areas affecting our business.
Besides the evolving regulatory requirements on cybersecurity and data privacy in Chinese mainland, there are also a number of legislative proposals in the European Union, the United States, at both the federal and state level, as well as other jurisdictions that could impose new obligations in areas affecting our business.
While we believe that we are not subject to U.S. patent laws since we conduct our business operations primarily in mainland China, we cannot assure you that U.S. patent laws would not be applicable to our business operations, or that holders of patents relating to a P4P platform would not seek to enforce such patents against us in the United States or mainland China.
While we believe that we are not subject to U.S. patent laws since we conduct our business operations primarily in Chinese mainland, we cannot assure you that U.S. patent laws would not be applicable to our business operations, or that holders of patents relating to a P4P platform would not seek to enforce such patents against us in the United States or Chinese mainland.
While detailed interpretation of or implementation rules under this Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation or evidence collection activities within mainland China may further increase difficulties faced by you in protecting your interests.
While detailed interpretation of or implementation rules under this Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation or evidence collection activities within Chinese mainland may further increase difficulties faced by you in protecting your interests.
If any or some of these mainland China subsidiaries and variable interest entities fail to maintain the “High and New Technology Enterprise” qualification, their applicable enterprise income tax rate will increase to 25%. Certain of our mainland China subsidiaries and the variable interest entities enjoy a 200% super deduction for eligible research and development expenses.
If any or some of these Chinese mainland subsidiaries and variable interest entities fail to maintain the “High and New Technology Enterprise” qualification, their applicable enterprise income tax rate will increase to 25%. Certain of our Chinese mainland subsidiaries and the variable interest entities enjoy a 200% super deduction for eligible research and development expenses.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeAccording to the Filing Rules, an overseas offering and listing is prohibited under any of the following circumstances: (i) if the intended securities offering and listing is specifically prohibited by the laws, administrative regulations and national provisions; (ii) if the intended securities offering and listing may constitute a threat to or endangers national security as reviewed and determined by competent authorities under the State Council in accordance with law; (iii) the domestic companies or their controlling shareholders or actual controllers have committed corruption, bribery, embezzlement, misappropriation of property, or other criminal offenses disruptive to the order of the socialist market economy in the past three years; (iv) the domestic companies are currently under investigations in connection with suspicion of having committed criminal offenses or material violations of applicable laws and regulations, and there is still no explicit conclusion; (v) there are material ownership disputes over the shareholdings held by the controlling shareholder or the shareholder under the control of the controlling shareholder or the actual controllers.
Biggest changeAccording to the Filing Rules, an overseas offering and listing is prohibited under any of the following circumstances: (i) if the intended securities offering and listing is specifically prohibited by the laws, administrative regulations and national provisions; (ii) if the intended securities offering and listing may constitute a threat to or endangers national security as reviewed and determined by competent authorities under the State Council in accordance with law; (iii) the domestic companies or their controlling shareholders or actual controllers have committed corruption, bribery, embezzlement, misappropriation of property, or other criminal offenses disruptive to the order of the socialist market economy in the past three years; (iv) the domestic companies are currently under investigations in connection with suspicion of having committed criminal offenses or material violations of applicable laws and regulations, and there is still no explicit conclusion; (v) there are material ownership disputes over the shareholdings held by the controlling shareholder or the shareholder under the control of the controlling shareholder or the actual controllers. 132 Table of Contents According to the Filing Rules, the issuer or its affiliated domestic company, as the case may be, is required to file with the CSRC (i) with respect to its initial public offering and listing and its subsequent securities offering in an overseas market different from the market where it has listed, within three business days after its submission of listing application documents to the regulator in the place of intended listing, (ii) with respect to its follow-on offering in the same overseas market where it has listed (including issuance of any corporate convertible bonds, exchangeable bonds and other equity-linked securities, but excluding the offering for employees incentive, dividend distribution by shares and share split), within three business days after completion of such follow-on offering, (iii) with respect to listing by means of single or multiple acquisitions, share swap, transfers of shares and similar transactions, within three business days after its initial filing of the listing application or the first public announcement of the transaction, as case may be.
Licensed content . In addition to original content, iQIYI also provides users with a selection of professionally produced content that is produced by and licensed from third parties.
In addition to original content, iQIYI also provides users with a selection of professionally produced content that is produced by and licensed from third parties.
For Intelligent Driving & Other Growth Initiatives, we sell our products and services to our clients directly and through our third-party agents. iQIYI’s brand advertising is sold through third-party advertising agencies, including members of American Association of Advertising Agencies, or 4As, and leading Chinese advertising agencies, as well as through a direct sales force.
For Intelligent Driving & Other Growth Initiatives, we sell our products and services to our clients directly or through our third-party agents. iQIYI’s brand advertising is sold through third-party advertising agencies, including members of American Association of Advertising Agencies, or 4As, and leading Chinese advertising agencies, as well as through a direct sales force.
The Circular on Tightening the Administration of Internet Live-Streaming Services jointly issued jointly by the MIIT, the CAC and several other government agencies in August 2018 reiterates the license requirements for online-streaming service providers and requires the operator to file with the local public security authority within 30 days after it commences the service online.
The Circular on Tightening the Administration of Internet Live-Streaming Services jointly issued by the MIIT, the CAC and several other government agencies in August 2018 reiterates the license requirements for online-streaming service providers and requires the operator to file with the local public security authority within 30 days after it commences the service online.
When the virtual tipping by a user reaches half of the daily/monthly limit, a consumption notification from the platform and a confirmation from the user by text messages or other means are required before the processing the next transaction.
When the virtual tipping by a user reaches half of the daily/monthly limit, a consumption notification from the platform and a confirmation from the user by text messages or other means are required before processing the next transaction.
Patent . The PRC Patent Law provides for patentable inventions, utility models and designs, which must meet three conditions: novelty, inventiveness and practical applicability. The State Intellectual Property Office under the State Council is responsible for examining and approving patent applications.
The PRC Patent Law provides for patentable inventions, utility models and designs, which must meet three conditions: novelty, inventiveness and practical applicability. The State Intellectual Property Office under the State Council is responsible for examining and approving patent applications.
The MIIT is the major regulatory body responsible for the administration of the internet domain names of mainland China, and under the supervision of the MIIT, the China Internet Network Information Center is responsible for the daily administration of “.cn” domain names and Chinese domain names.
The MIIT is the major regulatory body responsible for the administration of the internet domain names of Chinese mainland, and under the supervision of the MIIT, the China Internet Network Information Center is responsible for the daily administration of “.cn” domain names and Chinese domain names.
In particular, the determination of an indirect offering and listing will be conducted on a “substance over form” basis, and an offering and listing should be considered as an indirect overseas offering and listing by a domestic company if the issuer meets both of the following conditions: (i) any of the revenue, profits, total assets or net assets of such domestic company in the most recent financial year account for more than 50% of the corresponding data in the issuer’s audited consolidated financial statements for the same period; and (ii) the majority of its business operations are conducted in mainland China or its principal place of business is located in mainland China, or the majority of senior management in charge of business operations are Chinese citizens or have domicile in the mainland China.
In particular, the determination of an indirect offering and listing will be conducted on a “substance over form” basis, and an offering and listing should be considered as an indirect overseas offering and listing by a domestic company if the issuer meets both of the following conditions: (i) any of the revenue, profits, total assets or net assets of such domestic company in the most recent financial year account for more than 50% of the corresponding data in the issuer’s audited consolidated financial statements for the same period; and (ii) the majority of its business operations are conducted in Chinese mainland or its principal place of business is located in Chinese mainland, or the majority of senior management in charge of business operations are Chinese citizens or have domicile in the Chinese mainland.
On January 22, 2021, the CAC revised and promulgated the Administrative Provisions on the Information Services Provided through Official Accounts of Internet Users, which requires, among others, that information service platforms for public accounts are required to perform their responsibilities, establish systems such as those for the hierarchical or classified management of public accounts, ecological governance, copyright protection, and credit evaluation, and improve management measures such as public account registration verification, qualification examination, and disclosure of public account registrants.
On January 22, 2021, the CAC promulgated the Administrative Provisions on the Information Services Provided through Official Accounts of Internet Users, which requires, among others, that information service platforms for public accounts are required to perform their responsibilities, establish systems such as those for the hierarchical or classified management of public accounts, ecological governance, copyright protection, and credit evaluation, and improve management measures such as public account registration verification, qualification examination, and disclosure of public account registrants.
Since June 2001, we also have conducted part of our operations in mainland China through Baidu Netcom, a variable interest entity in Beijing, China, which holds the licenses and approvals necessary to operate our platform and provide internet content services, value-added telecommunication-based services, internet map services, online audio and video services and mobile application distribution businesses.
Since June 2001, we also have conducted part of our operations in Chinese mainland through Baidu Netcom, a variable interest entity in Beijing, China, which holds the licenses and approvals necessary to operate our platform and provide internet content services, value-added telecommunication-based services, internet map services, online audio and video services and mobile application distribution businesses.
Pursuant to these rules, a qualified entity to conduct road testing of intelligently connected vehicles must meet the following conditions, including, among others: (i) it must be an independent legal person registered within the territory of mainland China; (ii) it must have the capabilities concerning intelligently connected vehicles, such as the capabilities of manufacturing automobiles and spare parts thereof, the capabilities of research and development of technologies, or the capabilities of experiments and tests; (iii) it must be capable of paying civil compensation for potential damages caused by the road testing of intelligently connected vehicles; (iv) it must have the evaluation rules for the testing of self-driving functions of intelligently connected vehicles; (v) it must have the ability to conduct real-time remote monitoring of the vehicles on road testing; (vi) it must have the ability to record, analyze and reproduce the events related to road test vehicles; (vii) it must have the ability to guarantee the network security for tested vehicles and remote monitoring platforms; and (viii) other conditions specified in applicable laws, administrative regulations and rules.
Pursuant to these rules, a qualified entity to conduct road testing of intelligently connected vehicles must meet the following conditions, including, among others: (i) it must be an independent legal person registered within the territory of Chinese mainland; (ii) it must have the capabilities concerning intelligently connected vehicles, such as the capabilities of manufacturing automobiles and spare parts thereof, the capabilities of research and development of technologies, or the capabilities of experiments and tests; (iii) it must be capable of paying civil compensation for potential damages caused by the road testing of intelligently connected vehicles; (iv) it must have the evaluation rules for the testing of self-driving functions of intelligently connected vehicles; (v) it must have the ability to conduct real-time remote monitoring of the vehicles on road testing; (vi) it must have the ability to record, analyze and reproduce the events related to road test vehicles; (vii) it must have the ability to guarantee the network security for tested vehicles and remote monitoring platforms; and (viii) other conditions specified in applicable laws, administrative regulations and rules.
Key Information—Risk Factors—Risks Related to Our Business and Industry—We may not be able to achieve the anticipated benefits of our recent acquisition of YY Live, and face other risks associated with the acquisition and the operation of YY Live.” On March 1, 2021, our shareholders approved and effected a change to our authorized share capital by a 1-to-80 subdivision of shares.
Key Information—Risk Factors—Risks Related to Our Business and Industry—We may not be able to achieve the anticipated benefits of our acquisition of YY Live, and face other risks associated with the acquisition and the operation of YY Live.” On March 1, 2021, our shareholders approved and effected a change to our authorized share capital by a 1-to-80 subdivision of shares.
We have also entered into contractual arrangements with several other variable interest entities and their respective nominee shareholders, including iQIYI’s other variable interest entities and their respective nominee shareholders, through some of our subsidiaries other than Baidu Online and Beijing QIYI Century, which result in our company/iQIYI or relevant subsidiaries, as the case may be, being the primary beneficiaries of the relevant variable interest entities.
We have also entered into contractual arrangements with several other variable interest entities and their respective nominee shareholders, including iQIYI’s other variable interest entities and their respective nominee shareholders, through some of our subsidiaries other than Baidu Online and Beijing QIYI Century, which result in our company/iQIYI or relevant offshore subsidiaries, as the case may be, being the primary beneficiaries of the relevant variable interest entities.
We also lease offices in Beijing, many other cities in mainland China and places outside of mainland China, including in the United States, Canada, Hong Kong, Malaysia, Japan, Thailand and Singapore. Our servers are hosted at the internet data centers of major telecom operators, including China Telecom, China Unicom and China Mobile, in over ten selected cities across China.
We also lease offices in Beijing, many other cities in Chinese mainland and places outside of Chinese mainland, including in the United States, Canada, Hong Kong, Malaysia, Japan, Thailand and Singapore. Our servers are hosted at the internet data centers of major telecom operators, including China Telecom, China Unicom and China Mobile, in over ten selected cities across China.
This regulation further illustrates certain commonly-seen illegal practices of apps operators in terms of personal information protection, including “failure to publicize rules for collecting and using personal information,” “failure to expressly state the purpose, manner and scope of collecting and using personal information,” “collection and use of personal information without consent of users of such App,” “collecting personal information irrelevant to the services provided by such app in violation of the principle of necessity,” “provision of personal information to others without users’ consent,” “failure to provide the function of deleting or correcting personal information as required by laws” and “failure to publish information such as methods for complaints and reporting.” Among others, any of the following acts of an app operator will constitute “collection and use of personal information without consent of users”: (i) collecting an user’s personal information or activating the permission for collecting any user’s personal information without obtaining such user’s consent; (ii) collecting personal information or activating the permission for collecting the personal information of any user who explicitly refuses such collection, or repeatedly seeking for user’s consent such that the user’s normal use of such app is disturbed; (iii) any user’s personal information which has been actually collected by the app operator or the permission for collecting any user’s personal information activated by the app operator is beyond the scope of personal information which such user authorizes such app operator to collect; (iv) seeking for any user’s consent in a non-explicit manner; (v) modifying any user’s settings for activating the permission for collecting any personal information without such user’s consent; (vi) using users’ personal information and any algorithms to directionally push any information, without providing the option of non-directed pushing such information; 136 Table of Contents (vii) misleading users to permit collecting their personal information or activating the permission for collecting such users’ personal information by improper methods such as fraud and deception; (viii) failing to provide users with the means and methods to withdraw their permission of collecting personal information; and (ix) collecting and using personal information in violation of the rules for collecting and using personal information promulgated by such app operator.
This regulation further illustrates certain commonly-seen illegal practices of apps operators in terms of personal information protection, including “failure to publicize rules for collecting and using personal information,” “failure to expressly state the purpose, manner and scope of collecting and using personal information,” “collection and use of personal information without consent of users of such App,” “collecting personal information irrelevant to the services provided by such app in violation of the principle of necessity,” “provision of personal information to others without users’ consent,” “failure to provide the function of deleting or correcting personal information as required by laws” and “failure to publish information such as methods for complaints and reporting.” Among others, any of the following acts of an app operator will constitute “collection and use of personal information without consent of users”: (i) collecting an user’s personal information or activating the permission for collecting any user’s personal information without obtaining such user’s consent; (ii) collecting personal information or activating the permission for collecting the personal information of any user who explicitly refuses such collection, or repeatedly seeking for user’s consent such that the user’s normal use of such app is disturbed; (iii) any user’s personal information which has been actually collected by the app operator or the permission for collecting any user’s personal information activated by the app operator is beyond the scope of personal information which such user authorizes such app operator to collect; (iv) seeking for any user’s consent in a non-explicit manner; (v) modifying any user’s settings for activating the permission for collecting any personal information without such user’s consent; (vi) using users’ personal information and any algorithms to directionally push any information, without providing the option of non-directed pushing such information; (vii) misleading users to permit collecting their personal information or activating the permission for collecting such users’ personal information by improper methods such as fraud and deception; (viii) failing to provide users with the means and methods to withdraw their permission of collecting personal information; and (ix) collecting and using personal information in violation of the rules for collecting and using personal information promulgated by such app operator.
As a result, PaddlePaddle is well capable to run through the entire AI industry chain, from hardware adaptation to model training, inference deployment and application, consolidating the foundation of industrial intelligence and accelerating the pace of intelligent upgrading. In addition, Baidu has partnered with academics and industry to develop AI talents.
As a result, PaddlePaddle is well capable to run through the entire AI industry chain, from hardware adaptation to model training, inference deployment and application, consolidating the foundation of industrial intelligence and accelerating the pace of intelligent upgrading. In addition, Baidu has partnered with academics and industry to develop AI talents. AI Chips.
We conduct our value-added telecommunication-based online advertising business through Baidu Netcom, which is one of the variable interest entities in mainland China and holds a business license that covers value-added telecommunication-based online advertising in its business scope. Our subsidiaries Baidu Times and Baidu China have also expanded their respective business license to cover advertising in their respective business scope.
We conduct our value-added telecommunication-based online advertising business through Baidu Netcom, which is one of the variable interest entities in Chinese mainland and holds a business license that covers value-added telecommunication-based online advertising in its business scope. Our subsidiaries Baidu Times and Baidu China have also expanded their respective business license to cover advertising in their respective business scope.
On November 16, 2022, the CAC amended and promulgated the Administrative Provisions on Internet Comment Posting Services, which came into effect on December 15, 2022. According to such provisions, the follow-up comment service providers must conduct standardized management of the follow-up comment service users and the producers and operators of official accounts according to the user service agreement.
On November 16, 2022, the CAC promulgated the Administrative Provisions on Internet Comment Posting Services, which came into effect on December 15, 2022. According to such provisions, the follow-up comment service providers must conduct standardized management of the follow-up comment service users and the producers and operators of official accounts according to the user service agreement.
We have direct sales presence in Beijing, Shanghai, Guangzhou, Shenzhen, and other cities, covering the major regional markets for our online marketing services and other services. We cover our key accounts through direct sales team and enter into agreements with such key accounts directly.
We have direct sales presence in Beijing, Shanghai, Guangzhou, Shenzhen, and other cities, covering the major regional markets for our online marketing services and others. We cover our key accounts through direct sales team and enter into agreements with such key accounts directly.
In September 2009, the General Administration of Press and Publication (currently known as the NPPA) together with several other government agencies issued Notice Regarding the Consistent Implementation of the “Measures on Three Provisions” of the State Council and the Relevant Interpretations of the State Commission Office for Public Sector Reform and the Further Strengthening of the Administration of Examination and Approval of Online Games and the Examination and Approval of Imported Online Games, or the Circular 13, which explicitly prohibits foreign investors from participating in online game operating businesses through wholly-owned enterprises, equity joint ventures or cooperative joint ventures in mainland China.
In September 2009, the General Administration of Press and Publication (currently known as the NPPA) together with several other government agencies issued Notice Regarding the Consistent Implementation of the “Measures on Three Provisions” of the State Council and the Relevant Interpretations of the State Commission Office for Public Sector Reform and the Further Strengthening of the Administration of Examination and Approval of Online Games and the Examination and Approval of Imported Online Games, or the Circular 13, which explicitly prohibits foreign investors from participating in online game operating businesses through wholly-owned enterprises, equity joint ventures or cooperative joint ventures in Chinese mainland.
In December 2021, our shareholders approved a change in the name of our company from Baidu, Inc. to the dual foreign name Baidu, Inc. 百度集 團 股份有限公司 . Since our inception, we have conducted our operations in mainland China principally through Baidu Online, our wholly owned subsidiary in Beijing, China.
In December 2021, our shareholders approved a change in the name of our company from Baidu, Inc. to the dual foreign name Baidu, Inc. 百度集團股份有限公司 . Since our inception, we have conducted our operations in Chinese mainland principally through Baidu Online, our wholly owned subsidiary in Beijing, China.
Furthermore, data processors are required to conduct self-assessment on the risks of cross-border data transfer prior to their applying for the security assessment and focus on assessment of the following significant matters, including, among others: (i) the legality and necessity of the purpose, scope and 133 Table of Contents method of cross-border data transfer; (ii) the scale, scope, type and sensitivity of data transferred overseas, and risks to the national security, public interests or legitimate rights of individuals or organizations caused by such cross-border data transfer; (iii) the responsibilities and obligations that the overseas recipient of such data promises to undertake, and whether such overseas recipient’s management and technical measures and capabilities for performing its responsibilities and obligations can guarantee the security of cross-border data transfer; (iv) the risks that the data transferred overseas may be falsified, destroyed, divulged, lost, transferred, illegally obtained or illegally used during and after the cross-border transfer; (v) whether contracts or other legally binding documents entered into with the overseas recipient have fully stipulated the responsibilities and obligations to protect data security.
Furthermore, data processors are required to conduct self-assessment on the risks of cross-border data transfer prior to their applying for the security assessment and focus on assessment of the following significant matters, including, among others: (i) the legality and necessity of the purpose, scope and method of cross-border data transfer; (ii) the scale, scope, type and sensitivity of data transferred overseas, and risks to the national security, public interests or legitimate rights of individuals or organizations caused by such cross-border data transfer; (iii) the responsibilities and obligations that the overseas recipient of such data promises to undertake, and whether such overseas recipient’s management and technical measures and capabilities for performing its responsibilities and obligations can guarantee the security of cross-border data transfer; (iv) the risks that the data transferred overseas may be falsified, destroyed, divulged, lost, transferred, illegally obtained or illegally used during and after the cross-border transfer; (v) whether contracts or other legally binding documents entered into with the overseas recipient have fully stipulated the responsibilities and obligations to protect data security.
Key Information—Risk Factors—Risks Related to Our Corporate Structure,” “—Risks Related to Doing Business in China” and “—Regulations,” our contractual arrangements with the variable interest entities and the nominee shareholders constituted legal, valid and binding obligation of all parties to these arrangements and the execution, delivery, and performance of the variable interest entities and the nominee shareholders do not violate (x) any provisions of the articles of association and business licenses of such variable interest entity and (y) any current laws or regulations of mainland China; and (iii) subject to the disclosure and risks disclosed under “Item 3.D.
Key Information—Risk Factors—Risks Related to Our Corporate Structure,” “—Risks Related to Doing Business in China” and “—Regulations,” our contractual arrangements with the variable interest entities and the nominee shareholders constituted legal, valid and binding obligation of all parties to these arrangements and the execution, delivery, and performance of the variable interest entities and the nominee shareholders do not violate (x) any provisions of the articles of association and business licenses of such variable interest entity and (y) any current laws or regulations of Chinese mainland; and (iii) subject to the disclosure and risks disclosed under “Item 3.D.
Under these laws and applicable regulations, violators may be subject to penalties, including criminal sanctions, for internet content that: • opposes the fundamental principles stated in the PRC constitution; • compromises national security, divulges state secrets, subverts state power or damages national unity; • harms the dignity or interests of the state; • incites ethnic hatred or racial discrimination or damages inter-ethnic unity; • undermines the PRC’s religious policy or propagates heretical teachings or feudal superstitions; • disseminates rumors, disturbs social order or disrupts social stability; 113 Table of Contents • disseminates obscenity or pornography, encourages gambling, violence, murder or fear or incites the commission of a crime; • insults or slanders a third party or infringes upon the lawful rights and interests of a third party; or • is otherwise prohibited by law or administrative regulations.
Under these laws and applicable regulations, violators may be subject to penalties, including criminal sanctions, for internet content that: • opposes the fundamental principles stated in the PRC constitution; • compromises national security, divulges state secrets, subverts state power or damages national unity; • harms the dignity or interests of the state; • incites ethnic hatred or racial discrimination or damages inter-ethnic unity; • undermines the PRC’s religious policy or propagates heretical teachings or feudal superstitions; • disseminates rumors, disturbs social order or disrupts social stability; • disseminates obscenity or pornography, encourages gambling, violence, murder or fear or incites the commission of a crime; • insults or slanders a third party or infringes upon the lawful rights and interests of a third party; or • is otherwise prohibited by law or administrative regulations.
Pursuant to this circular, the opening of various special purpose foreign exchange accounts, such as pre-establishment expenses accounts, foreign exchange capital accounts and guarantee accounts, the reinvestment of RMB proceeds by foreign investors in mainland China, and remittance of foreign exchange profits and dividends by a foreign-invested enterprise to its foreign shareholders no longer require the approval or verification of SAFE, and multiple capital accounts for the same entity may be opened in different provinces, which was not possible previously.
Pursuant to this circular, the opening of various special purpose foreign exchange accounts, such as pre-establishment expenses accounts, foreign exchange capital accounts and guarantee accounts, the reinvestment of RMB proceeds by foreign investors in Chinese mainland, and remittance of foreign exchange profits and dividends by a foreign-invested enterprise to its foreign shareholders no longer require the approval or verification of SAFE, and multiple capital accounts for the same entity may be opened in different provinces, which was not possible previously.
Internet app distribution platforms refer to mobile internet information services providers which provide distribution services related to releasing, downloading and dynamic loading of internet apps. 116 Table of Contents Pursuant to these provisions, internet app providers must comply with the provisions on the scope of necessary personal information when engaging in personal information processing activities and should not compel users to agree to non-essential personal information collection or ban users from their basic functional services due to their refusal of providing unnecessary personal information.
Internet app distribution platforms refer to mobile internet information services providers which provide distribution services related to releasing, downloading and dynamic loading of internet apps. 107 Table of Contents Pursuant to these provisions, internet app providers must comply with the provisions on the scope of necessary personal information when engaging in personal information processing activities and should not compel users to agree to non-essential personal information collection or ban users from their basic functional services due to their refusal of providing unnecessary personal information.
Circular 13 expressly prohibits foreign investors from gaining control over or participating in mainland China operating companies’ online game operations through indirect means, such as establishing joint venture companies, entering into contractual arrangements with or providing technical support to the operating companies, or through a disguised form, such as incorporating user registration, user account management or payment through game cards into online game platforms that are ultimately controlled or owned by foreign investors.
Circular 13 expressly prohibits foreign investors from gaining control over or participating in Chinese mainland operating companies’ online game operations through indirect means, such as establishing joint venture companies, entering into contractual arrangements with or providing technical support to the operating companies, or through a disguised form, such as incorporating user registration, user account management or payment through game cards into online game platforms that are ultimately controlled or owned by foreign investors.
In the field of robotaxi services, we compete with other autonomous ride-hailing service providers. iQIYI faces competition for content sourcing, user traffic and advertising customers from other providers of online entertainment video services in mainland China, primarily including Tencent Video, Youku, Mango TV and Bilibili. iQIYI also competes with other internet media and entertainment services, such as internet and social platforms and short- or mini-form video platforms, as well as major TV stations.
In the field of robotaxi services, we compete with other autonomous ride-hailing service providers. iQIYI faces competition for content sourcing, user traffic and advertising customers from other providers of online entertainment video services in Chinese mainland, primarily including Tencent Video, Youku, Mango TV and Bilibili. iQIYI also competes with other internet media and entertainment services, such as internet and social platforms and short- or mini-form video platforms, as well as major TV stations.
In addition, through the other exclusive agreements, which consist of exclusive equity purchase and transfer option agreements/exclusive purchase option agreements or commitment letters, operating agreements/business operation agreements, exclusive technology consulting and services agreements and license agreements, the primary beneficiaries, by themselves or by their wholly-owned subsidiaries in mainland China, demonstrate their ability and intention to continue to exercise the ability to absorb losses or receive economic benefits that could potentially be significant to the variable interest entities.
In addition, through the other exclusive agreements, which consist of exclusive equity purchase and transfer option agreements/exclusive purchase option agreements or commitment letters, operating agreements/business operation agreements, exclusive technology consulting and services agreements and license agreements, the primary beneficiaries, by themselves or by their wholly-owned subsidiaries in Chinese mainland, demonstrate their ability and intention to continue to exercise the ability to absorb losses or receive economic benefits that could potentially be significant to the variable interest entities.
These guidelines prohibit certain monopolistic acts of internet platforms so as to protect market competition and safeguard interests of consumers and undertakings participating in internet platform economy, including, without limitation, prohibiting platforms with dominant position from abusing their market dominance (such as discriminating customers in terms of pricing and other 138 Table of Contents transactional conditions using big data and analytics, coercing counterparties into exclusivity arrangements through entering into written or oral agreements or using technology means to block competitors’ interface or reduce positions in search results of goods displays, using bundle services to sell different services or products, compulsory collection of unnecessary user data).
These guidelines prohibit certain monopolistic acts of internet platforms so as to protect market competition and safeguard interests of consumers and undertakings participating in internet platform economy, including, without limitation, prohibiting platforms with dominant position from abusing their market dominance (such as discriminating customers in terms of pricing and other transactional conditions using big data and analytics, coercing counterparties into exclusivity arrangements through entering into written or oral agreements or using technology means to block competitors’ interface or reduce positions in search results of goods displays, using bundle services to sell different services or products, compulsory collection of unnecessary user data).
The Administrative Measures on Internet Information Services, promulgated by the PRC State Council in September 2000 and most recently amended on December 6, 2024, require companies engaged in the provision of commercial internet content services to obtain a Value-added Telecommunication Business Operation Permit for ICP services, or an ICP license from the government authorities before providing any commercial internet content services within mainland China.
The Administrative Measures on Internet Information Services, promulgated by the PRC State Council in September 2000 and most recently amended on December 6, 2024, require companies engaged in the provision of commercial internet content services to obtain a Value-added Telecommunication Business Operation Permit for ICP services, or an ICP license from the government authorities before providing any commercial internet content services within Chinese mainland.
These provisions significantly adjust the revenue threshold of merger control filing to either one of the following two conditions: (i) the worldwide revenue of all business operators involved in the concentration exceeds RMB12 billion (increased from the previous threshold of RMB10 billion) collectively in the last fiscal year, and the revenue in mainland China of at least two business operators among them each exceeds RMB800 million (increased from the previous threshold of RMB400 million) in the last fiscal year; or (ii) the revenue in mainland China of all the business operators involved in the concentration exceeds RMB4 billion (increased from the current threshold of RMB2 billion) collectively in the last fiscal year, and the revenue in mainland China of at least two business operators among them each exceeds RMB800 million (increased from the current threshold of RMB400 million) in the last fiscal year.
These provisions significantly adjust the revenue threshold of merger control filing to either one of the following two conditions: (i) the worldwide revenue of all business operators involved in the concentration exceeds RMB12 billion (increased from the previous threshold of RMB10 billion) collectively in the last fiscal year, and the revenue in Chinese mainland of at least two business operators among them each exceeds RMB800 million (increased from the previous threshold of RMB400 million) in the last fiscal year; or (ii) the revenue in Chinese mainland of all the business operators involved in the concentration exceeds RMB4 billion (increased from the current threshold of RMB2 billion) collectively in the last fiscal year, and the revenue in Chinese mainland of at least two business operators among them each exceeds RMB800 million (increased from the current threshold of RMB400 million) in the last fiscal year.
Exclusive Equity Purchase and Transfer Option Agreement or Exclusive Purchase Option Agreements Pursuant to the exclusive equity purchase and transfer option agreement by and among our company, Baidu Online, Baidu Netcom and the nominee shareholders of Baidu Netcom, the nominee shareholders of Baidu Netcom have irrevocably granted our company or its designated person(s) (including Baidu Online) an exclusive option to purchase, to the extent permitted under the laws of mainland China, all or part of the equity interests in Baidu Netcom for the cost of the initial contributions to the registered capital or the minimum amount of consideration permitted by applicable laws of mainland China.
Exclusive Equity Purchase and Transfer Option Agreement or Exclusive Purchase Option Agreements Pursuant to the exclusive equity purchase and transfer option agreement by and among our company, Baidu Online, Baidu Netcom and the nominee shareholders of Baidu Netcom, the nominee shareholders of Baidu Netcom have irrevocably granted our company or its designated person(s) (including Baidu Online) an exclusive option to purchase, to the extent permitted under the laws of Chinese mainland, all or part of the equity interests in Baidu Netcom for the cost of the initial contributions to the registered capital or the minimum amount of consideration permitted by applicable laws of Chinese mainland.
In addition, SAFE promulgated the Circular on Printing and Distributing the Provisions on Foreign Exchange Administration over Domestic Direct Investment by Foreign Investors and the Supporting Documents in May 2013, as amended, which specifies that the administration by SAFE or its local branches over direct investment by foreign investors in mainland China should be conducted by way of registration and banks should process foreign exchange business relating to the direct investment in mainland China based on the registration information provided by SAFE and its branches.
In addition, SAFE promulgated the Circular on Printing and Distributing the Provisions on Foreign Exchange Administration over Domestic Direct Investment by Foreign Investors and the Supporting Documents in May 2013, as amended, which specifies that the administration by SAFE or its local branches over direct investment by foreign investors in Chinese mainland should be conducted by way of registration and banks should process foreign exchange business relating to the direct investment in Chinese mainland based on the registration information provided by SAFE and its branches.
In addition, this circular stipulates that qualified enterprises in certain pilot areas may use their capital income from registered capital, foreign debt and overseas listing, for the purpose of domestic payments without providing authenticity certifications to the relevant banks in advance for those domestic payments. Payments for transactions that take place within mainland China must be made in RMB.
In addition, this circular stipulates that qualified enterprises in certain pilot areas may use their capital income from registered capital, foreign debt and overseas listing, for the purpose of domestic payments without providing authenticity certifications to the relevant banks in advance for those domestic payments. Payments for transactions that take place within Chinese mainland must be made in RMB.
For example, according to the Provisions on the Management of Network Information Content Ecology issued by the CAC at the end of 2019, a network information content service platform must not, among others, (i) utilize new technologies such as deep- 121 Table of Contents learning and virtual reality to engage in activities prohibited by laws and regulations; (ii) engage in online traffic fraud, malicious traffic rerouting and other activities related to fraudulent account, illegal transaction account or maneuver of users’ account; or (iii) infringe a third party’s legitimate rights or seek illegal interests by way of interfering with information display.
For example, according to the Provisions on the Management of Network Information Content Ecology issued by the CAC at the end of 2019, a network information content service platform must not, among others, (i) utilize new technologies such as deep-learning and virtual reality to engage in activities prohibited by laws and regulations; (ii) engage in online traffic fraud, malicious traffic rerouting and other activities related to fraudulent account, illegal transaction account or maneuver of users’ account; or (iii) infringe a third party’s legitimate rights or seek illegal interests by way of interfering with information display.
According to the PRC Anti-Terrorism Law, telecommunication service operators or internet service providers must (i) carry out pertinent anti-terrorism publicity and education to society; (ii) provide technical interfaces, decryption and other technical support and assistance for the competent departments to prevent and investigate terrorist activities; (iii) implement network security and information monitoring systems as well as safety and technical prevention measures to avoid the dissemination of terrorism information, delete the terrorism information, immediately halt its dissemination, keep relevant records and report to the competent departments once the terrorism information is discovered; and 131 Table of Contents (iv) examine customer identities before providing services.
According to the PRC Anti-Terrorism Law, telecommunication service operators or internet service providers must (i) carry out pertinent anti-terrorism publicity and education to society; (ii) provide technical interfaces, decryption and other technical support and assistance for the competent departments to prevent and investigate terrorist activities; (iii) implement network security and information monitoring systems as well as safety and technical prevention measures to avoid the dissemination of terrorism information, delete the terrorism information, immediately halt its dissemination, keep relevant records and report to the competent departments once the terrorism information is discovered; and (iv) examine customer identities before providing services.
We expense research and development costs as they are incurred, except for capitalized software development costs that fulfill the capitalization criteria. Intellectual Property We rely on a combination of patent, trademark, copyright and trade secret protection laws in mainland China and other jurisdictions, as well as confidentiality procedures and contractual provisions, to protect our intellectual property and our brand.
We expense research and development costs as they are incurred, except for capitalized software development costs that fulfill the capitalization criteria. Intellectual Property We rely on a combination of patent, trademark, copyright and trade secret protection laws in Chinese mainland and other jurisdictions, as well as confidentiality procedures and contractual provisions, to protect our intellectual property and our brand.
Mainland China Wholly owned subsidiary Baidu (China) Co., Ltd. Mainland China Wholly owned subsidiary Baidu.com Times Technology (Beijing) Co., Ltd Mainland China Wholly owned subsidiary Dulian Network Technology (Hainan) Co., Ltd Mainland China Wholly owned subsidiary Beijing Baidu Netcom Science Technology Co., Ltd. Mainland China Variable interest entity Beijing Perusal Technology Co., Ltd Mainland China Variable interest entity iQIYI, Inc.
Chinese Mainland Wholly owned subsidiary Baidu (China) Co., Ltd. Chinese Mainland Wholly owned subsidiary Baidu.com Times Technology (Beijing) Co., Ltd Chinese Mainland Wholly owned subsidiary Dulian Network Technology (Hainan) Co., Ltd Chinese Mainland Wholly owned subsidiary Beijing Baidu Netcom Science Technology Co., Ltd. Chinese Mainland Variable interest entity Beijing Perusal Technology Co., Ltd Chinese Mainland Variable interest entity iQIYI, Inc.
In addition to our brand positioning in the market, we have also initiated a series of marketing activities to promote our products and technologies among existing and potential users and customers, including, but not limited to, Baidu World Conference. Competition For Baidu Core business, our primary competitors are mainly internet companies and online marketing platforms in China.
In addition to our brand positioning in the market, we have also initiated a series of marketing activities to promote our products and technologies among existing and potential users and customers, including, but not limited to, Baidu World Conference. Competition For Baidu General Business, our primary competitors are mainly internet companies and online marketing platforms in China.
In 2019, we began to develop One Shot (satisfying user with the first search result) by significantly enhancing the results of question parsing and analysis, answer matching, extraction, page content understanding and other aspects of our search engine, which has greatly improved user satisfaction with our search products. 104 Table of Contents Multi-modal search .
In 2019, we began to develop One Shot (satisfying user with the first search result) by significantly enhancing the results of question parsing and analysis, answer matching, extraction, page content understanding and other aspects of our search engine, which has greatly improved user satisfaction with our search products. 96 Table of Contents Multi-modal search .
If the shareholders of the offshore holding company who are domestic residents do not complete their registration with the local SAFE branches, the mainland China subsidiaries may be prohibited from distributing their profits and proceeds from any reduction in capital, share transfer or liquidation to the offshore company, and the offshore company may be restricted in its ability to contribute additional capital to its mainland China subsidiaries.
If the shareholders of the offshore holding company who are domestic residents do not complete their registration with the local SAFE branches, the Chinese mainland subsidiaries may be prohibited from distributing their profits and proceeds from any reduction in capital, share transfer or liquidation to the offshore company, and the offshore company may be restricted in its ability to contribute additional capital to its Chinese mainland subsidiaries.
As part of our efforts to create value for our society, we attach great importance to communication and engagement with our users, partners, social organizations and third-party agencies. Regulations We operate our business in an increasingly complex legal and regulatory environment. This section summarizes the principal laws and regulations of mainland China relating to our business.
As part of our efforts to create value for our society, we attach great importance to communication and engagement with our users, partners, social organizations and third-party agencies. Regulations We operate our business in an increasingly complex legal and regulatory environment. This section summarizes the principal laws and regulations of Chinese mainland relating to our business.
Although these provisions deleted the prior requirement that major foreign investors holding equity in enterprises providing value-added telecommunications services in mainland China must have a good track record and operational experience in providing these services, the PRC government authorities have not promulgated any implementation rules in line with these new changes.
Although these provisions deleted the prior requirement that major foreign investors holding equity in enterprises providing value-added telecommunications services in Chinese mainland must have a good track record and operational experience in providing these services, the PRC government authorities have not promulgated any implementation rules in line with these new changes.
Furthermore, in November 2024, Apollo Go was granted permits to conduct autonomous driving testing on public roads in Hong Kong, making Apollo Go the first and only of its kind to receive robotaxi testing authorization in the region. This marks Apollo Go’s first entry into a left-hand traffic market.
Furthermore, in November 2024, Apollo Go was granted permits to conduct autonomous driving testing on public roads in Hong Kong, making Apollo Go the first and only of its kind to receive robotaxi testing authorization in the region at the time. This marks Apollo Go’s first entry into a left-hand traffic market.
These contractual agreements among our company/iQIYI and our subsidiaries, the variable interest entities and their respective shareholders generally include proxy agreements or shareholder voting rights trust agreements, exclusive equity purchase and transfer option agreements or exclusive purchase option agreements, loan agreements, operating agreements or business operation agreements, exclusive technology consulting and services agreements, and equity pledge agreements, as the case may be.
These contractual agreements among our company/iQIYI/our certain offshore subsidiaries, and our subsidiaries, the variable interest entities and their respective shareholders generally include proxy agreements or shareholder voting rights trust agreements, exclusive equity purchase and transfer option agreements or exclusive purchase option agreements, loan agreements, operating agreements or business operation agreements, exclusive technology consulting and services agreements, and equity pledge agreements, as the case may be.
According to the PRC Foreign Investment Law, “foreign investment” refers to the investment activities conducted directly or indirectly in mainland China by foreign individuals, enterprises or other entities, including the following circumstances: (i) the establishment of foreign-invested enterprises in mainland China by foreign investors solely or jointly with other investors, (ii) a foreign investors’ acquisition of shares, equity interests, property portions or other similar rights and interests of enterprises in mainland China, (iii) investment in new projects in mainland China by foreign investors solely or jointly with other investors, and (iv) investments made by foreign investors through means stipulated in laws or administrative regulations or other methods prescribed by the State Council.
According to the PRC Foreign Investment Law, “foreign investment” refers to the investment activities conducted directly or indirectly in Chinese mainland by foreign individuals, enterprises or other entities, including the following circumstances: (i) the establishment of foreign-invested enterprises in Chinese mainland by foreign investors solely or jointly with other investors, (ii) foreign investors’ acquisition of shares, equity interests, property portions or other similar rights and interests of enterprises in Chinese mainland, (iii) investment in new projects in Chinese mainland by foreign investors solely or jointly with other investors, and (iv) investments made by foreign investors through means stipulated in laws or administrative regulations or other methods prescribed by the State Council.
We have also successfully become designated Registry Operator for .baidu top-level domain names by ICANN. 105 Table of Contents Internet, technology and media companies are frequently involved in litigation based on allegations of infringement or other violations of intellectual property rights.
We have also successfully become designated Registry Operator for .baidu top-level domain names by ICANN. 97 Table of Contents Internet, technology and media companies are frequently involved in litigation based on allegations of infringement or other violations of intellectual property rights.
Such measures define foreign investment as direct or indirect investment by foreign investors in mainland China, which includes (i) investment in new onshore projects or establishment of wholly foreign owned onshore companies or joint ventures with foreign investors; (ii) acquiring equity or asset of onshore companies by merger and acquisition; and (iii) onshore investment by and through any other means.
Such measures define foreign investment as direct or indirect investment by foreign investors in Chinese mainland, which includes (i) investment in new onshore projects or establishment of wholly foreign owned onshore companies or joint ventures with foreign investors; (ii) acquiring equity or asset of onshore companies by merger and acquisition; and (iii) onshore investment by and through any other means.
Subscribing members also enjoy earlier access to certain content aired on the iQIYI platform and a bundle of viewing functions and features. iQIYI’s members primarily include subscribing members and, to a lesser extent, users who gain access to our premium content library through paid video-on-demand service. iQIYI reviews and 102 Table of Contents evaluates the scope and the price of its membership services periodically, and may adjust based on evolving market needs from time to time. iQIYI assesses and improves its membership services to better meet the evolving user demand.
Subscribing members also enjoy earlier access to certain content aired on the iQIYI platform and a bundle of viewing functions and features. iQIYI’s members primarily include subscribing members and, to a lesser extent, users who gain access to our premium content library through paid video-on-demand service. iQIYI reviews and evaluates the scope and the price of its membership services periodically, and may adjust based on evolving market needs from time to time. iQIYI assesses and improves its membership services to better meet the evolving user demand.
With respect to the internet advertisements which are published by means of algorithmic recommendation or otherwise, the rules on the algorithmic recommendation service and the record of advertisement placement shall be included in the advertisement archives. On August 22, 2024, the SMAR promulgated the Guideline on Regulatory Enforcement concerning the Identifiability of Internet Advertising.
With respect to the internet advertisements which are published by means of algorithmic recommendation or otherwise, the rules on the algorithmic recommendation service and the record of advertisement placement shall be included in the advertisement archives. On August 22, 2024, the SAMR promulgated the Guideline on Regulatory Enforcement concerning the Identifiability of Internet Advertising.
These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by mainland China-based companies and proposed to take effective measures, such as promoting the construction of the regulatory systems to deal with the risks and incidents faced by mainland China-based overseas-listed companies.
These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by Chinese mainland-based companies and proposed to take effective measures, such as promoting the construction of the regulatory systems to deal with the risks and incidents faced by Chinese mainland-based overseas-listed companies.
According to these provisions, domestic companies, whether offering and listing securities overseas directly or indirectly, must strictly abide by the applicable laws and regulations, enhance the sense of confidentiality, improve the archives management system, 143 Table of Contents and take necessary measures to implement the confidentiality and archives management responsibilities when providing or publicly disclosing, either directly or through their overseas listed entities, documents and materials to securities services providers such as securities companies and accounting firms or overseas regulators in the process of their overseas offering and listing.
According to these provisions, domestic companies, whether offering and listing securities overseas directly or indirectly, must strictly abide by the applicable laws and regulations, enhance the sense of confidentiality, improve the archives management system, and take necessary measures to implement the confidentiality and archives management responsibilities when providing or publicly disclosing, either directly or through their overseas listed entities, documents and materials to securities services providers such as securities companies and accounting firms or overseas regulators in the process of their overseas offering and listing.
In the opinion of Han Kun Law Offices, our PRC legal counsel, (i) the ownership structure relating to the variable interest entities complies with current laws and regulations of mainland China; (ii) subject to the disclosure and risks disclosed under “Item 3.D.
In the opinion of Han Kun Law Offices, our PRC legal counsel, (i) the ownership structure relating to the variable interest entities complies with current laws and regulations of Chinese mainland; (ii) subject to the disclosure and risks disclosed under “Item 3.D.
Due to the restrictions under these regulations of mainland China, we operate our websites mainly through the variable interest entities, such as Baidu Netcom. Baidu Netcom is a variable interest entity, and is considered a domestic entity in mainland China under laws of mainland China given that the nominee shareholders are citizens of mainland China.
Due to the restrictions under these regulations of Chinese mainland, we operate our websites mainly through the variable interest entities, such as Baidu Netcom. Baidu Netcom is a variable interest entity, and is considered a domestic entity in Chinese mainland under laws of Chinese mainland given that the nominee shareholders are citizens of Chinese mainland.
The Security Requirements of Vehicle Collected Data (Draft for comments) specifies the security requirements on the transfer, storage, outbound transfer and other dispositions of vehicle collected data. Specifically, certain types of vehicle collected data, such as those collected through sensors within the vehicle cockpit and location and route data, should not be transferred outside mainland China.
The Security Requirements of Vehicle Collected Data (Draft for comments) specifies the security requirements on the transfer, storage, outbound transfer and other dispositions of vehicle collected data. Specifically, certain types of vehicle collected data, such as those collected through sensors within the vehicle cockpit and location and route data, should not be transferred outside Chinese mainland.
The SAMR has promulgated the Guidance regarding Strengthening the Supervision over Marketing Activities by Internet Live-Streaming in November 2020 to further regulated marketing activities by internet live-streaming. The NRTA also issued a circular on the Strengthening Management of Live-Streaming of Internet Shows and Electronic Commerce in November 2020 to provide instruction to online marketing activities through live-streaming.
The SAMR has promulgated the Guidance regarding Strengthening the Supervision over Marketing Activities by Internet Live-Streaming in November 2020 to further regulate marketing activities by internet live-streaming. The NRTA also issued a circular on the Strengthening Management of Live-Streaming of Internet Shows and Electronic Commerce in November 2020 to provide instruction to online marketing activities through live-streaming.
Under SAFE Circular 142 and Circular 45, the RMB capital converted from foreign currency registered capital of a foreign-invested enterprise may only be used for purposes within the business scope approved by the applicable administrative authority and may not be used for equity investments within mainland China.
Under SAFE Circular 142 and Circular 45, the RMB capital converted from foreign currency registered capital of a foreign-invested enterprise may only be used for purposes within the business scope approved by the applicable administrative authority and may not be used for equity investments within Chinese mainland.
This circular suspends the application of SAFE Circular 142 in certain areas and allows a foreign-invested enterprise registered in these areas with a business scope including “investment” to use the RMB capital converted from foreign currency registered capital for equity investments within mainland China.
This circular suspends the application of SAFE Circular 142 in certain areas and allows a foreign-invested enterprise registered in these areas with a business scope including “investment” to use the RMB capital converted from foreign currency registered capital for equity investments within Chinese mainland.
Failure of the option holders to complete their SAFE registrations may subject these domestic employees to fines and legal sanctions and may also limit the ability of the overseas publicly listed company to contribute additional capital into its mainland China subsidiary and limit the mainland China subsidiary’s ability to distribute dividends.
Failure of the option holders to complete their SAFE registrations may subject these domestic employees to fines and legal sanctions and may also limit the ability of the overseas publicly listed company to contribute additional capital into its Chinese mainland subsidiary and limit the Chinese mainland subsidiary’s ability to distribute dividends.
In addition, no entity or individual other than licensed radio stations or television stations are allowed to use “radio station,” “television station,” “broadcasting station,” “TV” or other descriptive terms exclusive to television and radio broadcasting organizations to engage in any business on the internet without approval.
In addition, no entity or individual other than licensed radio stations or television stations is allowed to use “radio station,” “television station,” “broadcasting station,” “TV” or other descriptive terms exclusive to television and radio broadcasting organizations to engage in any business on the internet without approval.
Key Information—Risk Factors—Risks Related to Our Corporate Structure,” “—Risks Related to Doing Business in China” and “—Regulations,” the business operations of the variable interest entities, as described herein, comply with current laws and regulations of mainland China in all material respects.
Key Information—Risk Factors—Risks Related to Our Corporate Structure,” “—Risks Related to Doing Business in China” and “—Regulations,” the business operations of the variable interest entities, as described herein, comply with current laws and regulations of Chinese mainland in all material respects.
We also face competition from U.S.-based internet search providers providing Chinese language services and online marketing platforms, as well as traditional advertising media. 106 Table of Contents Online Marketing Platforms, Internet, Cloud and Smart Device Companies in China.
We also face competition from U.S.-based internet search providers providing Chinese language services and online marketing platforms, as well as traditional advertising media. 98 Table of Contents Online Marketing Platforms, Internet, Cloud and Smart Device Companies in China.
Our business is subject to evolving laws and regulatory requirements of mainland China, including, among others, the laws and regulations governing internet-related industry and AI-related industry. There are substantial uncertainties regarding the interpretation and application of existing or proposed PRC laws and regulations.
Our business is subject to evolving laws and regulatory requirements of Chinese mainland, including, among others, the laws and regulations governing internet-related industry and AI-related industry. There are substantial uncertainties regarding the interpretation and application of existing or proposed PRC laws and regulations.
Foreign Exchange Registration of Offshore Investment by Domestic Residents of Mainland China. On July 4, 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular No. 37.
Foreign Exchange Registration of Offshore Investment by Domestic Residents of Chinese Mainland. On July 4, 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular No. 37.
In addition, according to the PRC Social Insurance Law and the Regulations on the Administration of Housing Provident Funds, employers in mainland China must provide employees with welfare schemes covering pension insurance, unemployment insurance, maternity insurance, work-related injury insurance, medical insurance and housing provident funds.
In addition, according to the PRC Social Insurance Law and the Regulations on the Administration of Housing Provident Funds, employers in Chinese mainland must provide employees with welfare schemes covering pension insurance, unemployment insurance, maternity insurance, work-related injury insurance, medical insurance and housing provident funds.
Regulations on Anti-Monopoly and Unfair Competition Matters related to Internet Platform Companies The PRC Anti-monopoly Law, which was promulgated on August 1, 2008 and most recently amended on June 24, 2022, prohibits monopolistic conduct such as entering into monopoly agreements, abusing market dominance and concentration of undertakings conducted illegally that may have the effect of eliminating or restricting competition.
Regulations on Anti-Monopoly and Unfair Competition Matters related to Internet Platform Companies The PRC Anti-monopoly Law, which took effect on August 1, 2008 and most recently amended on June 24, 2022, prohibits monopolistic conduct such as entering into monopoly agreements, abusing market dominance and concentration of undertakings conducted illegally that may have the effect of eliminating or restricting competition.
According to the Measures for the Administration of Internet Hospitals (for Trial Implementation) issued on July 17, 2018, any entity applying for establishment of an internet hospital is required to submit an application to 139 Table of Contents the competent registration authority of the physical medical institution supporting such internet hospital, and submit the application form, the feasibility research report on establishment of such internet hospital, the address of the physical medical institution supporting such internet hospital, and the agreement jointly signed by the applicant and the physical medical institution in relation to establishment of an internet hospital through cooperation.
According to the Measures for the Administration of Internet Hospitals (for Trial Implementation) issued on July 17, 2018, any entity applying for establishment of an internet hospital is required to submit an application to the competent registration authority of the physical medical institution supporting such internet hospital, and submit the application form, the feasibility research report on establishment of such internet hospital, the address of the physical medical institution supporting such internet hospital, and the agreement jointly signed by the applicant and the physical medical institution in relation to establishment of an internet hospital through cooperation.
By doing so, Baidu Health provides doctors and hospitals more efficient online presence through Baidu Healthcare Wiki short-term videos, live streaming seminars and telemedicine, as well as providing them with hosted management tools to remain in contact with their patients efficiently, such as messaging, appointment, re-scheduling and monitoring of treatment plans. 95 Table of Contents Haokan.
By doing so, Baidu Health provides doctors and hospitals more efficient online presence through Baidu Healthcare Wiki short-term videos, live streaming seminars and telemedicine, as well as providing them with hosted management tools to remain in contact with their patients efficiently, such as messaging, appointment, re-scheduling and monitoring of treatment plans. Haokan.
Our results of operations may fluctuate due to the cyclicality and seasonality in our business. Our Environmental, Social and Governance (ESG) Initiatives We are committed to corporate social responsibility and meeting society’s changing needs despite the challenging economic environment.
Our results of operations may fluctuate due to the cyclicality and seasonality in our business and market competition. Our Environmental, Social and Governance (ESG) Initiatives We are committed to corporate social responsibility and meeting society’s changing needs despite the challenging economic environment.
In addition, the PRC Data Security Law also provides that any organization or individual within the territory of mainland China should not provide any foreign judicial body and law enforcement body with any data without the approval of the competent PRC government authorities.
In addition, the PRC Data Security Law also provides that any organization or individual within the territory of Chinese mainland should not provide any foreign judicial body and law enforcement body with any data without the approval of the competent PRC government authorities.
Our ADSs are currently traded on The Nasdaq Global Select Market. 90 Table of Contents On May 12, 2010, we effected a change of the ADS to Class A ordinary share ratio from 1 ADS representing 1 Class A ordinary share to 10 ADSs representing 1 Class A ordinary share.
Our ADSs are currently traded on The Nasdaq Global Select Market. 84 Table of Contents On May 12, 2010, we effected a change of the ADS to Class A ordinary share ratio from 1 ADS representing 1 Class A ordinary share to 10 ADSs representing 1 Class A ordinary share.
According to these provisions, a foreign investor’s beneficial equity ownership in an entity providing value-added telecommunications services in mainland China is generally not permitted to exceed 50% unless otherwise permitted by laws and regulations.
According to these provisions, a foreign investor’s beneficial equity ownership in an entity providing value-added telecommunications services in Chinese mainland is generally not permitted to exceed 50% unless otherwise permitted by laws and regulations.
Baidu Netcom and some of the other variable interest entities in mainland China hold such Value-Added Telecommunication Business Operating Licenses. Internet content services, or ICP services, are classified as one of the value-added telecommunication businesses.
Baidu Netcom and some of the other variable interest entities in Chinese mainland hold such Value-Added Telecommunication Business Operating Licenses. Internet content services, or ICP services, are classified as one of the value-added telecommunication businesses.
Network services providers who provide services such as online games, online live-streaming, online audio and video, and online 117 Table of Contents social contact shall take measures to reasonably restrict the amount of single consumption and daily cumulative consumption of minors of different ages during the use of such services, and shall not provide minors with paid services which do not match their capacity for civil conduct.
Network services providers who provide services such as online games, online live-streaming, online audio and video, and online social contact shall take measures to reasonably restrict the amount of single consumption and daily cumulative consumption of minors of different ages during the use of such services, and shall not provide minors with paid services which do not match their capacity for civil conduct.
These provisions requires that an internet information search service provider must not publish any information or contents prohibited by law in the form of links, abstracts, snapshots, associative words, related search or recommendations or otherwise.
These provisions require that an internet information search service provider must not publish any information or contents prohibited by law in the form of links, abstracts, snapshots, associative words, related search or recommendations or otherwise.
According to such circular, these requirements are pre-conditions for an operator to publish and operate any online game. On August 30, 2021, the NPPA issued the Circular of the National Press and Publication Administration on Further Strengthening Regulation to Effectively Prevent Online Gaming Additions among Minors, which became into effect on September 1, 2021.
According to such circular, these requirements are pre-conditions for an operator to publish and operate any online game. 130 Table of Contents On August 30, 2021, the NPPA issued the Circular of the National Press and Publication Administration on Further Strengthening Regulation to Effectively Prevent Online Gaming Additions among Minors, which became into effect on September 1, 2021.
Wholly foreign-owned enterprises and Sino-foreign equity joint ventures in mainland China may pay dividends only out of their accumulated profits, if any, as determined in accordance with PRC accounting standards and regulations.
Wholly foreign-owned enterprises and Sino-foreign equity joint ventures in Chinese mainland may pay dividends only out of their accumulated profits, if any, as determined in accordance with PRC accounting standards and regulations.
Entities providing services related to internet audio-video programs should immediately delete the audio-video programs violating laws and regulations, keep relevant records, report to authorities and implement other regulatory requirements. On October 31, 2018, the NRTA issued the Notice on Further Strengthening the Management of Radio and Television and Network Audiovisual Cultural Programs, or Notice 60.
Entities providing services related to internet audio-video programs should immediately delete the audio-video programs violating laws and regulations, keep relevant records, report to authorities and implement other regulatory requirements. 116 Table of Contents On October 31, 2018, the NRTA issued the Notice on Further Strengthening the Management of Radio and Television and Network Audiovisual Cultural Programs, or Notice 60.
We have registered baidu.cn , baidu.com.cn and certain other domain names with registrars accredited by the China Internet Network Information Center. Regulations on Information Security The National People’s Congress has enacted legislation that prohibits use of the internet that breaches the public security, disseminates socially destabilizing content or leaks state secrets.
We have registered baidu.cn , baidu.com.cn and certain other domain names with registrars accredited by the China Internet Network Information Center. 120 Table of Contents Regulations on Information Security The National People’s Congress has enacted legislation that prohibits use of the internet that breaches the public security, disseminates socially destabilizing content or leaks state secrets.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

201 edited+36 added−101 removed97 unchanged
Biggest changeAs of December 31, 2022, 2023 and 2024, iQIYI had nil, RMB100 million and RMB1.2 billion (US$165 million) in long-term loans payables (including current portion of nil, RMB2 million and RMB168 million (US$23 million)), RMB17.9 billion, RMB10.9 billion and RMB8.6 billion (US$1.2 billion) in long-term convertible notes (including current portion of RMB8.3 billion, RMB2.8 billion and RMB242 million (US$33 million)), RMB612 million, RMB625 million and RMB559 million (US$76 million) in lease liabilities (including current portion of RMB104 million, RMB101 million and RMB97 million (US$13 million)) and had RMB3.3 billion, RMB3.6 billion and RMB3.8 billion (US$519 million) in short-term loans, respectively. 184 Table of Contents Accounting for Convertible Senior Notes As the iQIYI 2025 Convertible Notes, the iQIYI 2026 Convertible Notes, the iQIYI 2028 Convertible Notes and the iQIYI PAG Convertible Notes, or collectively, the iQIYI Convertible Notes, were not issued at a substantial premium, all of the proceeds received from the issuance of the iQIYI Convertible Notes are recorded as a liability on the consolidated balance sheet in accordance with ASC 470-20, and no portion of the proceeds from issuing the iQIYI Convertible Notes are attributed to the conversion option at inception.
Biggest changeAccounting for Convertible Senior Notes As the iQIYI 2026 Convertible Notes, the iQIYI 2028 Convertible Notes, the iQIYI 2030 Convertible Notes and the iQIYI PAG Convertible Notes (collectively as the “iQIYI Convertible Notes”) were not issued at a substantial premium, all of the proceeds received from the issuance of the iQIYI Convertible Notes are recorded as a liability on the consolidated balance sheet in accordance with ASC 470-20.
We are not subject to any financial covenants or other significant restrictions under the notes.
We are not subject to any financial covenants or other significant restrictions under the notes.
In addition, following a make-whole fundamental change that occurs prior to the maturity date or following iQIYI’s delivery of a notice of a tax redemption, iQIYI will increase the conversion rate for a holder who elects to convert its notes in connection with such a corporate event or such tax redemption.
In addition, following a make-whole fundamental change that occurs prior to the maturity date or following iQIYI’s delivery of a notice of a tax redemption, iQIYI will increase the conversion rate for a holder who elects to convert its notes in connection with such a corporate event or such tax redemption.
Upon conversion, iQIYI will pay or deliver to such converting holders, as the case may be, cash, ADSs, or a combination of cash and ADSs, at its election.
Upon conversion, iQIYI will pay or deliver to such converting holders, as the case may be, cash, ADSs, or a combination of cash and ADSs, at its election.
In addition, following a make-whole fundamental change that occurs prior to the maturity date or following iQIYI’s delivery of a notice of a tax redemption, iQIYI will increase the conversion rate for a holder who elects to convert its notes in connection with such a corporate event or such tax redemption.
In addition, following a make-whole fundamental change that occurs prior to the maturity date or following iQIYI’s delivery of a notice of a tax redemption, iQIYI will increase the conversion rate for a holder who elects to convert its notes in connection with such a corporate event or such tax redemption.
Following settlement of the repurchase, a difference between the net carrying amount of the repurchased the iQIYI Convertible Notes and the repurchased price was recognized as extinguishment gain and reported in “Others, net” in the consolidated statements of comprehensive income.
Following settlement of the repurchase, a difference between the net carrying amount of the repurchased iQIYI Convertible Notes and the repurchased price was recognized as extinguishment gain and reported in “Others, net” in the consolidated statements of comprehensive income.
Under the terms of the indentures governing the 2025 Ten-year Notes, the 2027 Ten-year Notes and the 2028 March Notes, events of default include, among others, there occurring with respect to any of our indebtedness or indebtedness of our principal controlled entities, an event of default resulting in accelerated maturity or a failure to pay principal, interest or premium when due, and that the outstanding principal amount under payment default or accelerated maturity equals or exceeds the greater of US$100 million and 2.5% of our total equity.
Under the terms of the indentures governing the 2027 Ten-year Notes and the 2028 March Notes, events of default include, among others, there occurring with respect to any of our indebtedness or indebtedness of our principal controlled entities, an event of default resulting in accelerated maturity or a failure to pay principal, interest or premium when due, and that the outstanding principal amount under payment default or accelerated maturity equals or exceeds the greater of US$100 million and 2.5% of our total equity.
In making such determination, these government agencies consider, among other factors, ownership of core technology, whether the key technology supporting the core products or services falls within the scope of high and new technology strongly supported by the state as specified in the administrative measures, the ratios of research and development personnel to total personnel, the ratio of research and development expenditures to annual sales revenues, the ratio of revenues attributed to high and new technology products or services to total revenues, and other measures set forth in the guidance.
In making such determination, these government agencies consider, among other factors, ownership of core technology, whether the key technology supporting the core products or services falls within the scope of high and new technology strongly supported by the state as specified in the administrative measures, the ratios of research and development personnel to total personnel, the ratio of research and development expenditures to annual sales revenues, the ratio of revenues attributed to high and new technology products or services to revenue, and other measures set forth in the guidance.
The term “de facto management body” refers to “the establishment that exercises substantial and overall management and control over the production, business, personnel, accounts and properties of an enterprise.” Pursuant to SAT Circular 82, issued by the State Administration of Taxation in April 2009, an overseas registered enterprise controlled by a mainland China company or a mainland China company group will be classified as a “resident enterprise” with its “de facto management body” located within mainland China if the following requirements are satisfied: (i) the senior management and core management departments in charge of its daily operations are mainly located in mainland China; (ii) its financial and human resources decisions are subject to determination or approval by persons or bodies located in mainland China; (iii) its major assets, accounting books, company seals, and minutes and files of its board and shareholders’ meetings are located or kept in mainland China; and (iv) no less than half of the enterprise’s directors or senior management with voting rights reside in mainland China.
The term “de facto management body” refers to “the establishment that exercises substantial and overall management and control over the production, business, personnel, accounts and properties of an enterprise.” Pursuant to SAT Circular 82, issued by the State Administration of Taxation in April 2009, an overseas registered enterprise controlled by a Chinese mainland company or a Chinese mainland company group will be classified as a “resident enterprise” with its “de facto management body” located within Chinese mainland if the following requirements are satisfied: (i) the senior management and core management departments in charge of its daily operations are mainly located in Chinese mainland; (ii) its financial and human resources decisions are subject to determination or approval by persons or bodies located in Chinese mainland; (iii) its major assets, accounting books, company seals, and minutes and files of its board and shareholders’ meetings are located or kept in Chinese mainland; and (iv) no less than half of the enterprise’s directors or senior management with voting rights reside in Chinese mainland.
The State Administration of Taxation issued additional rules to provide more guidance on the implementation of SAT Circular 82 in July 2011, and issued an amendment to SAT Circular 82 delegating the authority to its provincial branches to determine whether a Chinese-controlled overseas-incorporated enterprise should be considered a mainland China resident enterprise, in January 2014.
The State Administration of Taxation issued additional rules to provide more guidance on the implementation of SAT Circular 82 in July 2011, and issued an amendment to SAT Circular 82 delegating the authority to its provincial branches to determine whether a Chinese-controlled overseas-incorporated enterprise should be considered a Chinese mainland resident enterprise, in January 2014.
In 2024, we paid an aggregate of US$22 million in interest payments related to these notes. • In March 2025, we issued an aggregate of RMB7.5 billion senior unsecured notes due in 2030, or the 2030 Five-year Notes, with stated annual interest rate of 2.70%, and an aggregate of RMB2.5 billion senior unsecured notes due in 2035, or the 2035 Notes, with stated annual interest rate of 3.00%.
In 2025, we paid an aggregate of US$22 million in interest payments related to these notes. • In March 2025, we issued an aggregate of RMB7.5 billion senior unsecured notes due in 2030, or the 2030 Five-year Notes, with stated annual interest rate of 2.70%, and an aggregate of RMB2.5 billion senior unsecured notes due in 2035, or the 2035 Notes, with stated annual interest rate of 3.00%.
It was accounted for as a debt modification pursuant to ASC 470-50, Debt—Modifications and Extinguishment (“ASC 470-50”), resulting the effective interest rates of the iQIYI PAG Convertible Notes held by PAG decreased from 12.05% to 10.20%.
It was accounted for as a debt modification pursuant to ASC 470-50, Debt—Modifications and Extinguishment (“ASC 470-50”), resulting in the effective interest rates of the iQIYI PAG Convertible Notes held by PAG decreased from 12.05% to 10.20%.
In 2024, we paid an aggregate of US$22 million in interest payments related to the 2028 March Notes. • In November 2018, we issued an aggregate of US$600 million senior unsecured notes due in 2024, or the 2024 November Notes, with stated annual interest rate of 4.375%, and an aggregate of US$400 million senior unsecured notes due in 2028, or the 2028 November Notes, with stated annual interest rate of 4.875%.
In 2025, we paid an aggregate of US$22 million in interest payments related to the 2028 March Notes. • In November 2018, we issued an aggregate of US$600 million senior unsecured notes due in 2024, or the 2024 November Notes, with stated annual interest rate of 4.375%, and an aggregate of US$400 million senior unsecured notes due in 2028, or the 2028 November Notes, with stated annual interest rate of 4.875%.
Under the terms of the indentures governing the various notes, a declaration of acceleration of the relevant series of notes will be automatically annulled if such event of default is remedied or cured by our company or any of our company’s principal controlled entities, in the case of the 2025 Ten-year Notes, the 2027 Ten-year Notes and the 2028 March Notes, or our company, in the case of the 2028 November Notes, the 2025 Five-year Notes, the 2030 April Notes, the 2026 Notes, the 2030 October Notes, the 2027 Five-year Notes, the 2031 Notes, the 2030 Five-year Notes and the 2035 Notes, or waived by the holders of the relevant notes within 30 days after the declaration of acceleration with respect thereto and if the annulment of the acceleration of those notes would not conflict with any judgment or decree of a court of competent jurisdiction.
Under the terms of the indentures governing the various notes, a declaration of acceleration of the relevant series of notes will be automatically annulled if such event of default is remedied or cured by our company or any of our company’s principal controlled entities, in the case of the 2027 Ten-year Notes and the 2028 March Notes, or our company, in the case of the 2028 November Notes, the 2030 April Notes, the 2026 Notes, the 2030 October Notes, the 2027 Five-year Notes, the 2031 Notes, the 2030 Five-year Notes, the 2035 Notes and the 2029 Notes, or waived by the holders of the relevant notes within 30 days after the declaration of acceleration with respect thereto and if the annulment of the acceleration of those notes would not conflict with any judgment or decree of a court of competent jurisdiction.
We subsequently adjust the carrying amount of our investment to recognize our proportionate share of each equity investee’s net income or loss into earnings after the date of investment and its share of each equity investee’s movement in accumulated other comprehensive income or loss is recognize in other comprehensive (loss) income.
We subsequently adjust the carrying amount of our investment to recognize our proportionate share of each equity investee’s net income or loss into earnings after the date of investment and its share of each equity investee’s movement in accumulated other comprehensive income or loss is recognized in other comprehensive income(loss).
Under the terms of the indentures governing the 2028 November Notes, the 2025 Five-year Notes, the 2030 April Notes, the 2026 Notes, the 2030 October Notes, the 2027 Five-year Notes, the 2031 Notes, the 2030 Five-year Notes and the 2035 Notes, events of default include, among others, there occurring with respect to any of our company’s indebtedness, an event of default resulting in accelerated maturity or a failure to pay principal, interest or premium when due, and that the outstanding principal amount under payment default or accelerated maturity equals or exceeds the greater of US$100 million and 2.5% of our total equity.
Under the terms of the indentures governing the 2028 November Notes, the 2030 April Notes, the 2026 Notes, the 2030 October Notes, the 2027 Five-year Notes, the 2031 Notes, the 2030 Five-year Notes, the 2035 Notes and the 2029 Notes, events of default include, among others, there occurring with respect to any of our company’s indebtedness, an event of default resulting in accelerated maturity or a failure to pay principal, interest or premium when due, and that the outstanding principal amount under payment default or accelerated maturity equals or exceeds the greater of US$100 million and 2.5% of our total equity.
Prior to June 15, 2026, the iQIYI 2026 Convertible Notes will be convertible at the option of the holders only upon the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on March 31, 2021, if the last reported sale price of ADSs for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion 181 Table of Contents price; (2) during the five business day period after any ten consecutive trading day period in which the trading price per US$1,000 principal amount of notes was less than 98% of the product of the last reported sale price of the ADSs and the conversion rate on each such trading day; (3) if iQIYI calls the notes for a tax redemption; or (4) upon the occurrence of specified corporate events.
Prior to June 15, 2026, the iQIYI 2026 Convertible Notes will be convertible at the option of the holders only upon the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on March 31, 2021, if the last reported sale price of ADSs for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price; (2) during the five business day period after any ten consecutive trading day period in which the trading price per US$1,000 principal amount of notes was less than 98% of the product of the last reported sale price of the ADSs and the conversion rate on each such trading day; (3) if iQIYI calls the notes for a tax redemption; or (4) upon the occurrence of specified corporate events.
Such transfer of funds from Baidu, Inc. or any of our offshore subsidiaries to our mainland China subsidiaries is subject to the PRC regulatory restrictions and procedures: (i) capital increase of the existing mainland China subsidiaries and establishment of new mainland China subsidiaries must be registered with the local branch of SAMR and reported to the Ministry of Commerce via the online enterprise registration system, and registered with local banks authorized by SAFE; and (ii) loans to any of our mainland China subsidiaries must not exceed the statutory limit and must be filed with SAFE.
Such transfer of funds from Baidu, Inc. or any of our offshore subsidiaries to our Chinese mainland subsidiaries is subject to the PRC regulatory restrictions and procedures: (i) capital increase of the existing Chinese mainland subsidiaries and establishment of new Chinese mainland subsidiaries must be registered with the local branch of SAMR and reported to the Ministry of Commerce via the online enterprise registration system, and registered with local banks authorized by SAFE; and (ii) loans to any of our Chinese mainland subsidiaries must not exceed the statutory limit and must be filed with SAFE.
As a result, although other means are available for us to obtain financing at the holding company level, Baidu, Inc.’s ability to pay dividends to the shareholders and to service any debt it may incur may depend upon dividends paid by our mainland China subsidiaries and license and service fees paid by the variable interest entities in mainland China.
As a result, although other means are available for us to obtain financing at the holding company level, Baidu, Inc.’s ability to pay dividends to the shareholders and to service any debt it may incur may depend upon dividends paid by our Chinese mainland subsidiaries and license and service fees paid by the variable interest entities in Chinese mainland.
Factors considered by us when determining whether an investment has been other-than-temporarily-impaired, includes, but are not limited to, the length of the time and the extent to which the market value has been less than cost, the financial condition and near-term prospects of the investee, and our intent and ability to retain the investment until the recovery of its cost.
Factors considered by us when determining whether an investment has been other-than-temporarily-impaired, include, but are not limited to, the length of the time and the extent to which the market value has been less than cost, the financial condition and near-term prospects of the investee, and our intent and ability to retain the investment until the recovery of its cost.
In connection with the drawdowns and the modification, we entered into and restructured the two interest rate swap agreements, pursuant to which each of the loans would be settled with a fixed annual interest rate of 1.71% during the respective terms of the loans. In 2024, we canceled US$1.0 billion unused revolving loan lines under the facility commitment.
In connection with the drawdowns and the modification, we entered into and restructured the two interest rate swap agreements, pursuant to which each of the loans would be settled with a fixed annual interest rate of 1.71% during the respective term of the loans. In 2024, we canceled US$1.0 billion unused revolving loan lines under the facility commitment.
Some of our accounting policies require a higher degree of judgment than others in their application. 166 Table of Contents The selection of critical accounting policies, the judgments and other uncertainties affecting application of those policies and the sensitivity of reported results to changes in conditions and assumptions are factors that should be considered when reviewing our financial statements.
Some of our accounting policies require a higher degree of judgment than others in their application. 151 Table of Contents The selection of critical accounting policies, the judgments and other uncertainties affecting application of those policies and the sensitivity of reported results to changes in conditions and assumptions are factors that should be considered when reviewing our financial statements.
Thereafter, the iQIYI 2025 Convertible Notes will be convertible at the option of the holders at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The conversion rate is subject to adjustment in some events but is not adjusted for any accrued and unpaid interest.
Thereafter, the iQIYI 2030 Convertible Notes will be convertible at the option of the holders at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The conversion rate is subject to adjustment in some events but is not adjusted for any accrued and unpaid interest.
In 2024, we paid an aggregate of US$22 million in interest payments related to the 2027 Ten-year Notes. • In March 2018, we issued an aggregate of US$1.0 billion senior unsecured notes due in 2023, or the 2023 Notes, with stated annual interest rate of 3.875%, and an aggregate of US$500 million senior unsecured notes due in 2028, or the 2028 March Notes, with stated annual interest rate of 4.375%.
In 2025, we paid an aggregate of US$22 million in interest payments related to the 2027 Ten-year Notes. • In March 2018, we issued an aggregate of US$1.0 billion senior unsecured notes due in 2023, or the 2023 Notes, with stated annual interest rate of 3.875%, and an aggregate of US$500 million senior unsecured notes due in 2028, or the 2028 March Notes, with stated annual interest rate of 4.375%.
Key Information—Risk Factors—Risks Related to Doing Business in China—We may be deemed a mainland China resident enterprise under the EIT Law, which could subject us to mainland China’s taxation on our global income, and which may have a material and adverse effect on our results of operations.” Should our offshore entities be deemed as mainland China resident enterprises, such changes could significantly increase our tax burden and materially and adversely affect our cash flow and profitability.
Key Information—Risk Factors—Risks Related to Doing Business in China—We may be deemed a Chinese mainland resident enterprise under the EIT Law, which could subject us to Chinese mainland’s taxation on our global income, and which may have a material and adverse effect on our results of operations.” Should our offshore entities be deemed as Chinese mainland resident enterprises, such changes could significantly increase our tax burden and materially and adversely affect our cash flow and profitability.
In 2024, we paid an aggregate of US$18 million in interest payments related to these notes. • In August 2021, we issued an aggregate of US$300 million senior unsecured notes due in 2027, or the 2027 Five-year Notes, with stated annual interest rate of 1.625%, and an aggregate of US$700 million senior unsecured notes due in 2031, or the 2031 Notes, with stated annual interest rate of 2.375%.
In 2025, we paid an aggregate of US$18 million in interest payments related to these notes. • In August 2021, we issued an aggregate of US$300 million senior unsecured notes due in 2027, or the 2027 Five-year Notes, with stated annual interest rate of 1.625%, and an aggregate of US$700 million senior unsecured notes due in 2031, or the 2031 Notes, with stated annual interest rate of 2.375%.
Key Information—Risk Factors—Risks Related to Doing Business in China—If our mainland China subsidiaries declare and distribute dividends to their respective offshore parent companies, we will be required to pay more taxes, which could have a material and adverse effect on our result of operations.” Tax Residence Under the EIT Law and its implementation rules, an enterprise established outside of mainland China with “de facto management body” within mainland China is considered a resident enterprise and will be subject to 158 Table of Contents enterprise income tax at the rate of 25% on its worldwide income.
Key Information—Risk Factors—Risks Related to Doing Business in China—If our Chinese mainland subsidiaries declare and distribute dividends to their respective offshore parent companies, we will be required to pay more taxes, which could have a material and adverse effect on our result of operations.” Tax Residence Under the EIT Law and its implementation rules, an enterprise established outside of Chinese mainland with “de facto management body” within Chinese mainland is considered a resident enterprise and will be subject to enterprise income tax at the rate of 25% on its worldwide income.
We have entered into certain exclusive agreements with the variable interest entities directly or through our subsidiaries, which obligate us to absorb losses of the variable interest entities’ that could potentially be significant to the variable interest entities or entitle the primary beneficiaries to receive economic benefits from the variable interest entities that could potentially be significant to the variable interest entities.
We have entered into certain exclusive agreements with the variable interest entities directly or through our subsidiaries, which obligate us to absorb losses of the variable interest entities’ that could potentially be significant to the variable interest entities or entitle us to receive economic benefits from the variable interest entities that could potentially be significant to the variable interest entities.
The estimated fair values were based on quoted prices for our publicly-traded debt securities as of December 31, 2024. We are not subject to any financial covenants or other significant restrictions under the 2028 March Notes.
The estimated fair values were based on quoted prices for our publicly-traded debt securities as of December 31, 2025. We are not subject to any financial covenants or other significant restrictions under the 2028 March Notes.
For the potential distributable profits to be distributed to our qualified Hong Kong incorporated subsidiary, the deferred tax liabilities are accrued at a 5% withholding tax rate. For more information on related risks, please see “Item 3.D.
For the potential distributable profits to be distributed to our qualified Hong Kong incorporated subsidiary, the deferred tax liabilities are accrued at a 5% withholding tax rate or the statutory withholding tax rate. For more information on related risks, please see “Item 3.D.
We mainly use a discounted cash flow approach to determine the fair value of an individual content or film group, of which the most significant inputs include the forecasted future revenues, costs and operating expenses attributable to an individual content or the film group and the discount rate.
We mainly use a discounted cash flow approach to determine the fair value of an individual content or film group, of which the most significant inputs include the forecasted future revenue, costs and operating expenses attributable to an individual content or the film group and the discount rate.
The amount of income tax payable by our mainland China subsidiaries and the variable interest entities in the future will depend on various factors, including, among other things, the results of operations and taxable income of, and the statutory tax rate applicable to, each of the entities.
The amount of income tax payable by our Chinese mainland subsidiaries and the variable interest entities in the future will depend on various factors, including, among other things, the results of operations and taxable income of, and the statutory tax rate applicable to, each of the entities.
If a qualitative assessment indicates that the investment is impaired, we estimate the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, we recognize an impairment loss in earnings equal to the difference between the carrying value and fair value.
If impairment assessment indicates that the investment is impaired, we estimate the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, we recognize an impairment loss in earnings equal to the difference between the carrying value and fair value.
The estimated fair values were based on quoted prices for our publicly-traded debt securities as of December 31, 2024. We are not subject to any financial covenants or other significant restrictions under the notes.
The estimated fair values were based on quoted prices for our publicly-traded debt securities as of December 31, 2025. We are not subject to any financial covenants or other significant restrictions under the notes.
The estimated fair values were based on quoted prices for our publicly-traded debt securities as of December 31, 2024. We are not subject to any financial covenants or other significant restrictions under the notes.
The estimated fair values were based on quoted prices for our publicly-traded debt securities as of December 31, 2025. We are not subject to any financial covenants or other significant restrictions under the notes.
If our mainland China subsidiaries or the variable interest entities that have enjoyed preferential tax treatment no longer qualify for the preferential treatment, we will consider available options under applicable law that would enable us to qualify for alternative preferential tax treatment.
If our Chinese mainland subsidiaries or the variable interest entities that have enjoyed preferential tax treatment no longer qualify for the preferential treatment, we will consider available options under applicable law that would enable us to qualify for alternative preferential tax treatment.
In addition, our mainland China subsidiaries and the variable interest entities are required to make appropriations to certain statutory reserve funds, which are not distributable as cash dividends except in the event of a solvent liquidation of the companies.
In addition, our Chinese mainland subsidiaries and the variable interest entities are required to make appropriations to certain statutory reserve funds, which are not distributable as cash dividends except in the event of a solvent liquidation of the companies.
Impairment indicators considered include, but are not limited to, a significant deterioration in the earnings performance or business prospects of the investee, including factors that raise significant concerns about the investee’s ability to continue as a going concern, a significant adverse change in the regulatory, economic, or technologic environment of the investee and a significant adverse change in the general market condition of either the geographical area or the industry in which the investee operates.
Impairment indicators considered include, but are not limited to, a significant deterioration in the financial performance or business prospects of the investee, factors that raise significant concerns about the investee’s ability to continue as a going concern, a significant adverse change in the regulatory, economic, or technologic environment of the investee and a significant adverse change in the general market condition of either the geographical area or the industry in which the investee operates.
In the event of a fundamental change, iQIYI may also be required to issue additional ADSs upon conversion of its convertible notes. As of December 31, 2024, there was no such event of default or fundamental change.
In the event of a fundamental change, iQIYI may also be required to issue additional ADSs upon conversion of its convertible notes. As of December 31, 2025, there was no such event of default or fundamental change.
We may use the net proceeds from our issuance and sale of the notes to fund the operations of our mainland China subsidiaries by making additional capital contributions to our existing mainland China subsidiaries, injecting capital to establish new mainland China subsidiaries and/or providing loans to our mainland China subsidiaries.
We may use the net proceeds from our issuance and sale of the notes to fund the operations of our Chinese mainland subsidiaries by making additional capital contributions to our existing Chinese mainland subsidiaries, injecting capital to establish new Chinese mainland subsidiaries and/or providing loans to our Chinese mainland subsidiaries.
Under the equity method, we initially record its investment at cost and the difference between the cost of the equity investee and the amount of the underlying equity in the net assets of the equity investee is accounted for as if the investee were a consolidated subsidiary.
Under the equity method, we initially record its investment at cost and the difference between the cost of the equity investee and the amount of the underlying equity in the net assets of the equity investee is accounted for as if the investee was a consolidated subsidiary.
Our chief executive officer, who has been identified as the chief operating decision maker, reviews the operating results of Baidu Core and iQIYI, to allocate resources and assess our performance. Accordingly, the financial statements include segment information which reflects the current composition of the reportable segments in accordance with ASC Topic 280, Segment Reporting .
Our chief executive officer, who has been identified as the chief operating decision maker, reviews the operating results of Baidu General Business and iQIYI, to allocate resources and assess our performance. Accordingly, the financial statements include segment information which reflects the current composition of the reportable segments in accordance with ASC Topic 280, Segment Reporting .
When we have other investments in the equity-method investee and we are not required to advance additional funds to the investee, 172 Table of Contents we would continue to report its share of equity method losses in our statements of comprehensive income after our equity-method investment in ordinary shares has been reduced to zero, to the extent of and as an adjustment to the adjusted basis of our other investments in the investee.
When we have other investments in the equity-method investee and we are not required to advance additional funds to the investee, we would continue to report its share of equity method losses in our statements of comprehensive income after our equity-method investment in ordinary shares has been reduced to zero, to the extent of and as an adjustment to the adjusted basis of our other investments in the investee.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2024 that are reasonably likely to have a material and adverse effect on our total revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2025 that are reasonably likely to have a material and adverse effect on our total revenue, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions.
GAAP, which requires us to make judgments, estimates and assumptions that affect the reported amounts of our assets and liabilities and the disclosure of our contingent assets and liabilities at the end of each fiscal period and the reported amounts of revenues and expenses during each fiscal period.
GAAP, which requires us to make judgments, estimates and assumptions that affect the reported amounts of our assets and liabilities, and the disclosure of our contingent assets and liabilities at the end of each fiscal period and the reported amounts of revenue and expenses during each fiscal period.
Contract liabilities were mainly related to fees for membership services to be provided over the membership period, which were included in “Customer deposits and deferred revenue” and “Deferred revenue” on the consolidated balance sheets.
Contract liabilities are mainly related to fees for membership services to be provided over the membership period, which are included in “Customer deposits and deferred revenue” and “Deferred revenue” on the consolidated balance sheets.
The allowance for credit losses of the held-to-maturity debt investments reflects the Group’s estimated expected losses over the contractual lives of the held-to-maturity debt investments and is charged to “Others, net” in the consolidated statements of comprehensive income.
The allowance for credit losses of the held-to-maturity debt investments reflects our estimated expected losses over the contractual lives of the held-to-maturity debt investments and is charged to “Others, net” in the consolidated statements of comprehensive income.
We will reconsider the initial determination of whether a 167 Table of Contents legal entity is a variable interest entity upon certain events listed in ASC 810-10-35-4 occurring. We will also continuously reconsider whether we are the primary beneficiaries of the variable interest entities as facts and circumstances change. See “Item 3.D.
We will reconsider the initial determination of whether a legal entity is a variable interest entity upon certain events listed in ASC 810-10-35-4 occurring. We will also continuously reconsider whether we are the primary beneficiaries of the variable interest entities as facts and circumstances change. See “Item 3.D.
Subject to certain 179 Table of Contents conditions, we may elect to deliver Trip.com Shares held by us in lieu of cash or a combination of cash and Trip.com Shares. The net proceeds from the sale of the 2032 Exchangeable Bonds are for repayment of certain existing indebtedness, payment of interest and general corporate purposes.
Subject to certain conditions, we may elect to deliver Trip.com Shares held by us in lieu of cash or a combination of cash and Trip.com Shares. The net proceeds from the sale of the 2032 Exchangeable Bonds are for repayment of certain existing indebtedness, payment of interest and general corporate purposes.
Mainland China Urban Maintenance and Construction Tax and Education Surcharge Any entity, foreign-invested or purely domestic, or individual that is subject to consumption tax and value-added tax is also required to pay mainland China urban maintenance and construction tax.
Chinese Mainland Urban Maintenance and Construction Tax and Education Surcharge Any entity, foreign-invested or purely domestic, or individual that is subject to consumption tax and value-added tax is also required to pay Chinese mainland urban maintenance and construction tax.
Revenue Recognition Our revenues are derived principally from online marketing service and others. Revenue is recognized when control of promised goods or services is transferred to our customers in an amount of consideration to which an entity expects to be entitled to in exchange for those goods or services. Revenue is recorded net of value-added tax.
Revenue Recognition Our revenue is derived principally from online marketing services and others. Revenue is recognized when control of promised goods or services is transferred to our customers in an amount of consideration to which an entity expects to be entitled to in exchange for those goods or services. Revenue is recorded net of value-added tax.
Holding Company Structure Baidu, Inc. is a holding company with no operations of its own. We conduct our operations in mainland China primarily through our subsidiaries and the variable interest entities in mainland China.
Holding Company Structure Baidu, Inc. is a holding company with no operations of its own. We conduct our operations in Chinese mainland primarily through our subsidiaries and the variable interest entities in Chinese mainland.
Withholding Tax Under the EIT Law and its implementation rules, dividends, interests, rent or royalties payable by a foreign-invested enterprise, such as our mainland China subsidiaries, to any of its non-resident enterprise investors, and 157 Table of Contents proceeds from any such non-resident enterprise investor’s disposition of assets (after deducting the net value of such assets) are subject to enterprise income tax at the rate of 10%, namely withholding tax, unless the non-resident enterprise investor’s jurisdiction of incorporation has a tax treaty or arrangement with mainland China that provides for a reduced withholding tax rate or an exemption from withholding tax.
Withholding Tax Under the EIT Law and its implementation rules, dividends, interests, rent or royalties payable by a foreign-invested enterprise, such as our Chinese mainland subsidiaries, to any of its non-resident enterprise investors, and proceeds from any such non-resident enterprise investor’s disposition of assets (after deducting the net value of such assets) are subject to enterprise income tax at the rate of 10%, namely withholding tax, unless the non-resident enterprise investor’s jurisdiction of incorporation has a tax treaty or arrangement with Chinese mainland that provides for a reduced withholding tax rate or an exemption from withholding tax.
Baidu Union online marketing services Baidu Union is a program through which we expand distribution of its customers’ sponsored links or advertisements by leveraging the traffic of Baidu Union partners’ online properties. We acquire traffic from 168 Table of Contents Baidu Union partners and are responsible for service fulfillment and pricing.
Baidu Union online marketing services Baidu Union is a program through which we expand distribution of its customers’ sponsored links or advertisements by leveraging the traffic of Baidu Union partners’ online properties. We acquire traffic from Baidu Union partners and are responsible for service fulfillment and pricing.
For performance obligations satisfied over time, we recognize revenue over time by 170 Table of Contents measuring the progress toward complete satisfaction of a performance obligation. Otherwise, revenue is recognized at a point in time when a customer obtains control of a promised asset or service and we satisfy our performance obligation.
For performance obligations satisfied over time, we recognize revenue over time by measuring the progress toward complete satisfaction of a performance obligation. Otherwise, revenue is recognized at a point in time when a customer obtains control of a promised asset or service and we satisfy our performance obligation.
Material Cash Requirements Our material cash requirements as of December 31, 2024 and any subsequent interim period primarily include payments due for our short-term debt obligations, long-term debt obligations, operating lease obligations, purchase obligations and investment commitment obligations. Our long-term debt obligations primarily consist of long-term loans, notes payable and convertible notes and estimated interest payments.
Material Cash Requirements Our material cash requirements as of December 31, 2025 and any subsequent interim period primarily include payments due for our debt obligations, purchase obligations, lease obligations and investment commitment obligations. Our debt obligations primarily consist of short-term loans, long-term loans, notes payable and convertible notes and estimated interest payments.
These investments are accounted for under the measurement alternative and are measured at cost, less impairment, subject to upward and downward adjustments resulting from observable price changes for identical or similar investments of the same issuer.
These investments are accounted for under the measurement alternative and are measured at cost, less impairment, subject to upward and downward adjustments resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.
Certain PRC subsidiaries and VIEs, including Baidu Online, Baidu China, Baidu International and Baidu Netcom, etc. are qualified HNTEs and enjoy a reduced tax rate of 15% for the years presented, which will expire from 2025 to 2027. An entity could re-apply for the HNTE certificate when the prior certificate expires.
Certain PRC subsidiaries and VIEs, including Baidu Online, Baidu China, Baidu International and Baidu Netcom, etc. are qualified HNTEs and enjoy a reduced tax rate of 15% for the years presented, which will expire from 2026 to 2028. An entity could re-apply for the HNTE certificate when the prior certificate expires.
The net proceeds from the sale of the notes were used to repay existing indebtedness and for general corporate purposes. In September 2023, the 2023 Notes were fully repaid when they became due. As of December 31, 2024, the total carrying value and estimated fair value of the 2028 March Notes were US$500 million and US$491 million, respectively.
The net proceeds from the sale of the notes were used to repay existing indebtedness and for general corporate purposes. In September 2023, the 2023 Notes were fully repaid when they became due. As of December 31, 2025, the total carrying value and estimated fair value of the 2028 March Notes were US$500 million and US$504 million, respectively.
All other changes in the carrying amount of these debt investments are recognized in other comprehensive (loss) income. Long-term time deposits and held-to-maturity investments Long-term time deposits and held-to-maturity investments were mainly deposits in commercial banks and wealth management products issued by commercial banks and other financial institutions with maturities of greater than one year.
All other changes in the carrying amount of these debt investments are recognized in other comprehensive income (loss). 156 Table of Contents Long-term Time Deposits and Held-to-maturity Investments Long-term time deposits and held-to-maturity investments are mainly deposits in commercial banks and wealth management products issued by commercial banks and other financial institutions with maturities of greater than one year.
Furthermore, cash transfers from our mainland China subsidiaries to their parent companies outside of mainland China are subject to PRC government control of currency conversion.
Furthermore, cash transfers from our Chinese mainland subsidiaries to their parent companies outside of Chinese mainland are subject to PRC government control of currency conversion.
For equity investments in private equity funds, over which we do not have the ability to exercise significant influence, are measured using the net asset value per share based on the practical expedient in ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), or NAV practical expedient.
For equity investments in private equity funds, over which we do not have the ability to exercise significant influence, we measure those investments using the net asset value per share based on the practical expedient in ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), or NAV practical expedient.
As of December 31, 2024, we have made long-term loans in an aggregate principal amount of RMB19.6 billion (US$2.7 billion) to the nominee shareholders of the variable interest entities. As of the date of this annual report, we do not have any repayment schedule with respect to such loans to the nominee shareholders of the variable interest entities.
As of December 31, 2025, we have made long-term loans in an aggregate principal amount of RMB19.6 billion (US$2.8 billion) to the nominee shareholders of the variable interest entities. As of the date of this annual report, we do not have any repayment schedule with respect to such loans to the nominee shareholders of the variable interest entities.
Total recognized 171 Table of Contents compensation cost for the awards is at least equal to the fair value of the awards at the grant date unless at the date of the modification the performance or service conditions of the original awards are not expected to be satisfied.
Total recognized compensation cost for the awards is at least equal to the fair value of the awards at the grant date unless at the date of the modification the performance or service conditions of the original awards are not expected to be satisfied.
When such events or changes in circumstances are identified, we assess whether the fair value of an individual content (or film group) is less than its unamortized film costs, determines the fair value of an individual content (or film group) and recognizes an impairment charge for the amount by which the unamortized capitalized costs exceed the individual content’s (or film group’s) fair value.
When such events or changes in circumstances are identified, we assess whether the fair value of an individual content (or film group) is less than its unamortized film costs, determine the fair value of an individual content (or film group) and recognize an impairment charge for the amount by which the unamortized capitalized costs exceed the individual content’s (or film group’s) fair value.
Historically, all of the Company’s subsidiaries and VIEs have successfully renewed their certificates when the prior ones expired. Certain subsidiaries enjoyed a reduced tax rate as qualified Software Enterprise for the years presented, which will expire from 2025 to 2027.
Historically, all of the Company’s subsidiaries and VIEs have successfully renewed their certificates when the prior ones expired. Certain subsidiaries enjoyed a reduced tax rate as qualified Software Enterprise for the years presented, which will expire from 2026 to 2028.
The net proceeds from the sale of the notes were used to repay existing indebtedness and for general corporate purposes. As of December 31, 2024, the total carrying value and estimated fair value were US$600 million and US$584 million, respectively, with respect to the 2027 Ten-year Notes.
The net proceeds from the sale of the notes were used to repay existing indebtedness and for general corporate purposes. As of December 31, 2025, the total carrying value and estimated fair value were US$600 million and US$597 million, respectively, with respect to the 2027 Ten-year Notes.
In 2024, we paid an aggregate of US$32 million in interest payments related to these notes. • In October 2020, we issued an aggregate of US$650 million senior unsecured notes due in 2026, or the 2026 Notes, with stated annual interest rate of 1.720%, and an aggregate of US$300 million senior unsecured notes due in 2030, or the 2030 October Notes, with stated annual interest rate of 2.375%.
In 2025, we paid an aggregate of US$23 million in interest payments related to these notes. • In October 2020, we issued an aggregate of US$650 million senior unsecured notes due in 2026, or the 2026 Notes, with stated annual interest rate of 1.720%, and an aggregate of US$300 million senior unsecured notes due in 2030, or the 2030 October Notes, with stated annual interest rate of 2.375%.
As of December 31, 2024, the total carrying value and estimated fair value were US$400 million and US$398 million, respectively, with respect to the 2028 November Notes. The estimated fair values were based on quoted prices for our publicly-traded debt securities as of December 31, 2024.
As of December 31, 2025, the total carrying value and estimated fair value were US$400 million and US$409 million, respectively, with respect to the 2028 November Notes. The estimated fair values were based on quoted prices for our publicly-traded debt securities as of December 31, 2025.
The holders may require iQIYI to repurchase all or a portion of the iQIYI 2028 Convertible Notes for cash on March 16, 2026, or upon a fundamental change, at a repurchase price equal to 100% of the principal amount, plus accrued and unpaid interest.
The holders may require iQIYI to repurchase all or a portion of the iQIYI 2030 Convertible Notes for cash on March 15, 2028, or upon a fundamental change, at a repurchase price equal to 100% of the principal amount, plus accrued and unpaid interest.
Revenue related to cloud solutions which mainly include significant integrated hardware, software licensing and installation service, is recognized over time if one of the following criteria is met: (i) the customer simultaneously receives and consumes the benefits as we perform; (ii) our performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or (iii) the asset delivered has no alternative use and we have an enforceable right to payment for performance completed to date.
Revenue related to cloud solutions, which mainly include significant integrated products and services, is recognized over time if one of the following criteria is met: (i) the customer simultaneously receives and consumes the benefits as we perform; (ii) our performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or (iii) the asset delivered has no alternative use and we have an enforceable right to payment for performance completed to date.
Operating costs and expenses of iQIYI mainly consist of content costs, personnel-related costs and expenses, traffic acquisition costs, marketing and promotion spending, payment platform charges, server custody fees and bandwidth costs. Cost of revenues .
Costs and expenses of iQIYI mainly consist of content costs, personnel-related costs and expenses, traffic acquisition costs, marketing and promotion spending, payment platform charges, server custody fees and bandwidth costs. Cost of revenue .
Shortages in the availability of foreign currency may restrict the ability of our mainland China subsidiaries and the variable interest entities to 176 Table of Contents remit sufficient foreign currency to pay dividends or other payments to their parent companies outside of mainland China or our company, or otherwise satisfy their foreign currency denominated obligations. See “Item 3.D.
Shortages in the availability of foreign currency may restrict the ability of our Chinese mainland subsidiaries and the variable interest entities to remit sufficient foreign currency to pay dividends or other payments to their parent companies outside of Chinese mainland or our company, or otherwise satisfy their foreign currency denominated obligations. See “Item 3.D.
The convertible senior notes issued on December 30, 2022 and February 24, 2023, or collectively, the iQIYI PAG Convertible Notes, are senior, secured obligations of iQIYI by certain collateral arrangements, and interest is payable quarterly in cash at a rate of 6.00% per annum on January 1, April 1, July 1 and October 1 of each year, beginning on April 1, 2023.
The convertible senior notes issued on December 30, 2022 and February 24, 2023 (collectively referred to as the “iQIYI PAG Convertible Notes”) are senior, secured obligations of iQIYI by certain collateral arrangements, and interest is payable quarterly in cash at a rate of 6.00% per annum on January 1, April 1, July 1 and October 1 of each year, beginning on April 1, 2023.
Selling, general and administrative expenses . The selling, general and administrative expenses of iQIYI decreased by 8% from RMB4.0 billion in 2023 to RMB3.7 billion (US$504 million) in 2024, primarily due to decreased marketing and promotional expenses, which was due to the less spending on user acquisition channels and content promotions.
The selling, general and administrative expenses of iQIYI decreased by 8% from RMB4.0 billion in 2023 to RMB3.7 billion in 2024, primarily due to decreased marketing and promotional expenses, which was due to the less spending on user acquisition channels and content promotions. Research and development expenses .
Prior to October 1, 2024, the iQIYI 2025 180 Table of Contents Convertible Notes will be convertible at the option of the holders only upon the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2019, if the last reported sale price of ADSs for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price; (2) during the five business day period after any ten consecutive trading day period in which the trading price per US$1,000 principal amount of notes was less than 98% of the product of the last reported sale price of the ADSs and the conversion rate on each such trading day; (3) if iQIYI calls the notes for a tax redemption; or (4) upon the occurrence of specified corporate events.
Prior to September 15, 2029, the iQIYI 2030 Convertible Notes will be convertible at the option of the holders only upon the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2025 (and only during such calendar quarter), if the last reported sale price of ADSs for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price; (2) during the five business day period after any ten consecutive trading day period in which the trading price per US$1,000 principal amount of notes was less than 98% of the product of the last reported sale price of the ADSs and the conversion rate on each such trading day; (3) if iQIYI calls the notes for a tax redemption or an optional redemption; or (4) upon the occurrence of specified corporate events.
On or after March 20, 2026, iQIYI may redeem for cash all or part of the iQIYI 2028 Convertible Notes, at its option, if the last reported sale price of ADSs has been at least 130% of the conversion price then in effect on (i) each of at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the trading day immediately prior to the date iQIYI provides the optional redemption notice and (ii) the trading day immediately preceding the date iQIYI provides the optional redemption notice. iQIYI 2030 Convertible Senior Notes • On February 24, 2025, iQIYI issued US$350 million convertible senior notes, or the iQIYI 2030 Convertible Notes.
On or after March 20, 2026, iQIYI may redeem for cash all or part of the iQIYI 2028 Convertible Notes, at its option, if the last reported sale price of the ADSs has been at least 130% of the conversion price then in effect on (i) each of at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the trading day immediately prior to the date iQIYI provides the optional redemption notice and (ii) the trading day immediately preceding the date iQIYI provides the optional redemption notice.
The convertible senior notes issued on December 21, 2020 and January 8, 2021, or collectively, the iQIYI 2026 Convertible Notes, are senior, unsecured obligations of iQIYI, and interest is payable semi-annually in cash at a rate of 4.00% per annum on June 15 and December 15 of each year, beginning on June 15, 2021.
The convertible senior notes issued on December 21, 2020 and January 8, 2021 (collectively referred to as the “iQIYI 2026 Convertible Notes”) are senior, unsecured obligations of iQIYI, and interest is payable semi-annually in cash at a rate of 4.00% per annum on June 15 and December 15 of each year, beginning on June 15, 2021.
We review our film groups and individual content for impairment when there are events or changes in circumstances that indicate the fair value of a film group or individual content may be less than its unamortized costs.
Impairment of Licensed Copyrights and Produced Content We evaluate our film groups and individual content for impairment when there are events or changes in circumstances that indicate the fair value of a film group or individual content may be less than its unamortized costs.
Production costs for original content that are predominantly monetized in a film group are capitalized. Production costs for original content predominantly monetized on its own are capitalized to the extent that they are recoverable from total revenues that are expected to be earned, or ultimate revenue; otherwise, they are expensed as cost of revenues.
Production costs for original content predominantly monetized on its own are capitalized to the extent that they are recoverable from total revenue that are expected to be earned, or ultimate revenue; otherwise, they are expensed as cost of revenue.

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Item 6. [Reserved]

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

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Biggest changeName Ordinary Shares Underlying Outstanding Options Exercise Price (US$/Share) Grant Date Expiration Date Robin Yanhong Li 958,160 26.834 February 11, 2015 February 11, 2025 3,512,320 25.863 April 16, 2015 April 16, 2025 211,040 19.778 February 25, 2016 February 25, 2026 724,800 21.888 October 27, 2016 October 27, 2026 469,120 23.251 February 22, 2017 February 22, 2027 211,480 (1) — February 8, 2021 N/A 724,024 (1) — February 14, 2022 N/A 1,026,296 (1) — August 9, 2023 N/A 2,043,240 (1) August 8, 2024 N/A James Ding * (1) — February 20, 2024 N/A Yuanqing Yang * (1) — February 20, 2024 N/A Jixun Foo * (1) — February 20, 2024 N/A Sandy Ran Xu * (1) — February 20, 2024 N/A Rong Luo * 20.178 November 8, 2021 November 8, 2031 * (1) — November 8, 2021 N/A * (1) — August 9, 2023 N/A * (1) — August 8, 2024 N/A Haifeng Wang * 23.483 April 27, 2017 April 27, 2027 * 12.486 August 8, 2019 August 8, 2029 * (1) — February 8, 2021 N/A * (1) — February 14, 2022 N/A * (1) — August 9, 2023 N/A * (1) — August 8, 2024 N/A Dou Shen * 12.486 August 8, 2019 August 8, 2029 * (1) — February 8, 2021 N/A * (1) — February 14, 2022 N/A * (1) — August 9, 2023 N/A * (1) — August 8, 2024 N/A Victor Zhixiang Liang * (1) — February 8, 2021 N/A * (1) — February 14, 2022 N/A * (1) — August 9, 2023 N/A * (1) — August 8, 2024 N/A Shanshan Cui * (1) — February 8, 2021 N/A * (1) — February 14, 2022 N/A * (1) — August 9, 2023 N/A * (1) — August 8, 2024 N/A Junjie He * 17.228 August 5, 2022 August 5, 2032 * (1) — February 8, 2021 N/A * (1) — May 6, 2022 N/A * (1) — August 5, 2022 N/A * (1) — August 9, 2023 N/A * (1) — August 8, 2024 N/A Other individuals as a group 81,161,592 — — — * The options and restricted shares in aggregate held by each of these directors and officers represent less than 1% of our total outstanding shares.
Biggest changeName Ordinary Shares Underlying Outstanding Options Exercise Price (US$/Share) Grant Date Expiration Date Robin Yanhong Li 211,040 19.778 (2) February 25, 2016 February 25, 2026 724,800 21.888 (2) October 27, 2016 October 27, 2026 469,120 23.251 (2) February 22, 2017 February 22, 2027 362,008 (1) — February 14, 2022 N/A 684,200 (1) — August 9, 2023 N/A 1,532,432 (1) — August 8, 2024 N/A 2,108,824 (1) — August 7, 2025 N/A Yuanqing Yang * (1) — February 20, 2024 N/A Jixun Foo * (1) — February 20, 2024 N/A Sandy Ran Xu * (1) — February 20, 2024 N/A Xiaodan Liu * (1) — May 20, 2025 N/A Haijian He * 10.934 (2) August 7, 2025 August 7, 2035 * (1) — August 7, 2025 N/A Other individuals as a group 96,859,136 — — — * The options and restricted shares in aggregate held by each of these directors and officers represent less than 1% of our total outstanding shares.
Types of Awards . We may grant the following types of awards under our 2008 share incentive plan: • options (incentive share options, or ISO); • restricted shares; • restricted share units; and • any other form of awards granted to a participant pursuant to the 2008 plan. Plan Administration .
We may grant the following types of awards under our 2008 share incentive plan: • options (incentive share options, or ISO); • restricted shares; • restricted share units; and • any other form of awards granted to a participant pursuant to the 2008 plan. Plan Administration .
The compensation committee will determine the provisions and terms and conditions of each award grant, including, but not limited to, the exercise price, the grant price or purchase price, any restrictions or limitations on the award, any schedule for lapse of forfeiture restrictions or restrictions on the exercisability of an award, and accelerations or waivers thereof, any provisions related to non-competition and recapture of gain on an award, based in each case on such considerations as the committee in its sole discretion determines.
The compensation committee will determine the provisions and terms and conditions of each award grant, including, but not limited to, the exercise price, the grant price or purchase price, any restrictions or limitations on the award, any schedule for lapse of forfeiture restrictions or restrictions on the exercisability of an award, and accelerations or waivers thereof, any provisions related to non-competition and recapture of gain on an award, based in each case on such considerations as the committee in its sole discretion determines.
Eligibility . We may grant awards to employees, directors and consultants of our company or any of our related entities, which include our subsidiaries or any entities in which we hold a substantial ownership interest. However, we may grant ISOs only to our employees and employees of our majority-owned subsidiaries. Acceleration of Awards upon Corporate Transactions .
Eligibility . We may grant awards to employees, directors and consultants of our company or any of our related entities, which include our subsidiaries or any entities in which we hold a substantial ownership interest. However, we may grant ISOs only to our employees and employees of our majority-owned subsidiaries. Acceleration of Awards upon Corporate Transactions .
In such event, each outstanding award will become fully exercisable and all forfeiture restrictions on such award will lapse immediately prior to the specified effective date of the corporate transaction.
In such event, each outstanding award will become fully exercisable and all forfeiture restrictions on such award will lapse immediately prior to the specified effective date of the corporate transaction.
If the successor entity assumes our outstanding awards and later terminates the grantee’s employment or service without cause within 12 months of the corporate transaction, or if the grantee resigns voluntarily with good reason, the outstanding awards automatically will become fully vested and exercisable.
If the successor entity assumes our outstanding awards and later terminates the grantee’s employment or service without cause within 12 months of the corporate transaction, or if the grantee resigns voluntarily with good reason, the outstanding awards automatically will become fully vested and exercisable.
The exercise price per share subject to an option may be amended or adjusted in the absolute discretion of the compensation committee, the determination of which shall be final, binding and conclusive.
The exercise price per share subject to an option may be amended or adjusted in the absolute discretion of the compensation committee, the determination of which shall be final, binding and conclusive.
To the extent not prohibited by applicable laws or exchange rules, a downward adjustment of the exercise prices of options mentioned in the preceding sentence shall be effective without the approval of our shareholders or the approval of the affected grantees.
To the extent not prohibited by applicable laws or exchange rules, a downward adjustment of the exercise prices of options mentioned in the preceding sentence shall be effective without the approval of our shareholders or the approval of the affected grantees.
If we grant an ISO to an employee, who, at the time of that grant, owns shares representing more than 10% of the voting power of all classes of our share capital, the exercise price cannot be less than 110% of the fair market value of our ordinary shares on the date of that grant.
If we grant an ISO to an employee, who, at the time of that grant, owns shares representing more than 10% of the voting power of all classes of our share capital, the exercise price cannot be less than 110% of the fair market value of our ordinary shares on the date of that grant.
The compensation committee will determine the time or times at which an option may be exercised in whole or in part, including exercise prior to vesting.
The compensation committee will determine the time or times at which an option may be exercised in whole or in part, including exercise prior to vesting.
The term may not exceed ten years from the date of the grant, except that five years is the maximum term of an ISO granted to an employee who holds more than 10% of the voting power of our share capital. Restricted Shares and Restricted Share Units .
The term may not exceed ten years from the date of the grant, except that five years is the maximum term of an ISO granted to an employee who holds more than 10% of the voting power of our share capital. Restricted Shares and Restricted Share Units .
The compensation committee is also authorized to make awards of restricted shares and restricted share units.
The compensation committee is also authorized to make awards of restricted shares and restricted share units.
Except as otherwise determined by the compensation committee at the time of the grant of an award or thereafter, upon termination of employment or service during the applicable restriction period, restricted shares that are at the time subject to restrictions shall be forfeited or repurchased in accordance with the respective award agreements. Vesting Schedule .
Except as otherwise determined by the compensation committee at the time of the grant of an award or thereafter, upon termination of employment or service during the applicable restriction period, restricted shares that are at the time subject to restrictions shall be forfeited or repurchased in accordance with the respective award agreements. Vesting Schedule .
The compensation committee determines, and the award agreement specifies, the vesting schedule of options and other awards granted.
The compensation committee determines, and the award agreement specifies, the vesting schedule of options and other awards granted.
The compensation committee determines the time or times at which an option may be exercised in whole or in part, including exercise prior to vesting, and also determines any conditions that must be satisfied before all or part of an option may be exercised.
The compensation committee determines the time or times at which an option may be exercised in whole or in part, including exercise prior to vesting, and also determines any conditions that must be satisfied before all or part of an option may be exercised.
At the time of grant for restricted share units, the compensation committee specifies the date on which the restricted share units become fully vested and non-forfeitable, and may specify such conditions to vesting as it deems appropriate. Amendment and Termination .
At the time of grant for restricted share units, the compensation committee specifies the date on which the restricted share units become fully vested and non-forfeitable, and may specify such conditions to vesting as it deems appropriate. Amendment and Termination .
The compensation committee will determine the provisions and terms and conditions of each award grant, including, but not limited to, the exercise price, the grant price or purchase price, any restrictions or limitations on the award, any schedule for lapse of forfeiture restrictions or restrictions on the exercisability of an award, and accelerations or waivers thereof, any provisions related to non-competition and recapture of gain on an award, based in each case on such considerations as the committee in its sole discretion determines.
The compensation committee will determine the provisions and terms and conditions of each award grant, including, but not limited to, the exercise price, the grant price or purchase price, any restrictions or limitations on the award, any schedule for lapse of forfeiture restrictions or restrictions on the exercisability of an award, and accelerations or waivers thereof, any provisions related to non-competition and recapture of gain on an award, based in each case on such considerations as the committee in its sole discretion determines.
The compensation committee has the sole power and discretion to cancel, forfeit or surrender an outstanding award (whether or not in exchange for another award or combination or awards). Award Agreement .
The compensation committee has the sole power and discretion to cancel, forfeit or surrender an outstanding award (whether or not in exchange for another award or combination or awards). Award Agreement .
In such event, each outstanding award will become fully exercisable and all forfeiture restrictions on such award will lapse immediately prior to the specified effective date of the corporate transaction.
In such event, each outstanding award will become fully exercisable and all forfeiture restrictions on such award will lapse immediately prior to the specified effective date of the corporate transaction.
If the successor entity assumes our outstanding awards and later terminates the grantee’s employment or service without cause within 12 months of the corporate transaction, or if the grantee resigns voluntarily with good reason, the outstanding awards automatically will become fully vested and exercisable.
If the successor entity assumes our outstanding awards and later terminates the grantee’s employment or service without cause within 12 months of the corporate transaction, or if the grantee resigns voluntarily with good reason, the outstanding awards automatically will become fully vested and exercisable.
The exercise price per share subject to an option may be amended or adjusted in the absolute discretion of the compensation committee, the determination of which shall be final, binding and conclusive.
The exercise price per share subject to an option may be amended or adjusted in the absolute discretion of the compensation committee, the determination of which shall be final, binding and conclusive.
To the extent not prohibited by applicable laws or exchange rules, a downward adjustment of the exercise prices of options mentioned in the preceding sentence shall be effective without the approval of our shareholders or the approval of the affected grantees.
To the extent not prohibited by applicable laws or exchange rules, a downward adjustment of the exercise prices of options mentioned in the preceding sentence shall be effective without the approval of our shareholders or the approval of the affected grantees.
If we grant an ISO to an employee, who, at the time of that grant, owns shares representing more than 10% of the voting power of all classes of our share capital, the exercise price cannot be less than 110% of the fair market value of our ordinary shares on the date of that grant.
If we grant an ISO to an employee, who, at the time of that grant, owns shares representing more than 10% of the voting power of all classes of our share capital, the exercise price cannot be less than 110% of the fair market value of our ordinary shares on the date of that grant.
The compensation committee will determine the time or times at which an option may be exercised in whole or in part, including exercise prior to vesting.
The compensation committee will determine the time or times at which an option may be exercised in whole or in part, including exercise prior to vesting.
The compensation committee is also authorized to make awards of restricted shares and restricted share units.
The compensation committee is also authorized to make awards of restricted shares and restricted share units.
Except as otherwise determined by the compensation committee at the time of the grant of an award or thereafter, upon termination of employment or service during the applicable restriction period, restricted shares that are at the time subject to restrictions shall be forfeited or repurchased in accordance with the respective award agreements. Vesting Schedule .
Except as otherwise determined by the compensation committee at the time of the grant of an award or thereafter, upon termination of employment or service during the applicable restriction period, restricted shares that are at the time subject to restrictions shall be forfeited or repurchased in accordance with the respective award agreements. Vesting Schedule .
The compensation committee determines, and the award agreement specifies, the vesting schedule of options and other awards granted.
The compensation committee determines, and the award agreement specifies, the vesting schedule of options and other awards granted.
The compensation committee determines the time or times at which an option may be exercised in whole or in part, including exercise prior to vesting, and also determines any conditions that must be satisfied before all or part of an option may be exercised.
The compensation committee determines the time or times at which an option may be exercised in whole or in part, including exercise prior to vesting, and also determines any conditions that must be satisfied before all or part of an option may be exercised.
At the time of grant for restricted share units, the compensation committee specifies the date on which the restricted share units become fully vested and non-forfeitable, and may specify such conditions to vesting as it deems appropriate. Amendment and Termination .
At the time of grant for restricted share units, the compensation committee specifies the date on which the restricted share units become fully vested and non-forfeitable, and may specify such conditions to vesting as it deems appropriate. Amendment and Termination .
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; • reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; • reviewing periodically any 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.
For instance, BlackRock Inc. is an ADS holder in the United States that beneficially owns 128,640,168 Class A ordinary shares as of December 31, 2023 according to the Schedule 13G/A filed by it, but is 203 Table of Contents not a record holder of our ordinary shares. Please see footnote (4) of the above table for more details.
For instance, BlackRock Inc. is an ADS holder in the United States that beneficially owns 128,640,168 Class A ordinary shares as of December 31, 2023 according to the Schedule 13G/A filed by it, but is not a record holder of our ordinary shares. Please see footnote (4) of the above table for more details.
(2) To our knowledge, Integrity Partners V, LLC holds 100,320 Class B ordinary shares of our company and was not a record shareholder of any Class A ordinary shares as at January 31, 2025. Integrity Partners V, LLC is affiliated with an early stage investor that invested in our company before our U.S. IPO in 2005.
(2) To our knowledge, Integrity Partners V, LLC holds 100,320 Class B ordinary shares of our company and was not a record shareholder of any Class A ordinary shares as at January 31, 2026. Integrity Partners V, LLC is affiliated with an early stage investor that invested in our company before our U.S. IPO in 2005.
The corporate governance and nominating committee is responsible for, among other things: • recommending to the board nominees for election or re-election to the board or for appointments to fill any vacancies; 200 Table of Contents • reviewing annually the performance of each incumbent director in determining whether to recommend such director for an additional term; • overseeing the board in the board’s annual review of its own performance and the performance of the management; and • considering, preparing and recommending to the board such policies and procedures with respect to corporate governance matters as may be required or required to be disclosed under the applicable laws or otherwise considered to be material.
The corporate governance and nominating committee is responsible for, among other things: • recommending to the board nominees for election or re-election to the board or for appointments to fill any vacancies; • reviewing annually the performance of each incumbent director in determining whether to recommend such director for an additional term; • overseeing the board in the board’s annual review of its own performance and the performance of the management; and • considering, preparing and recommending to the board such policies and procedures with respect to corporate governance matters as may be required or required to be disclosed under the applicable laws or otherwise considered to be material.
Share Ownership The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of January 31, 2025 by: • each of our directors and executive officers; and • each person known to us to own beneficially more than 5% of each class of our issued and outstanding shares.
Share Ownership The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of January 31, 2026 by: • each of our directors and executive officers; and • each person known to us to own beneficially more than 5% of each class of our issued and outstanding shares.
Our mainland China subsidiaries and the variable interest entities are required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance, housing fund, unemployment insurance and other statutory benefits.
Our Chinese mainland subsidiaries and the variable interest entities are required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance, housing fund, unemployment insurance and other statutory benefits.
Other than the above-mentioned statutory contributions mandated by applicable laws of mainland China, we have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.
Other than the above-mentioned statutory contributions mandated by applicable laws of Chinese mainland, we have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.
Board Practices Board of Directors Our board of directors has six directors. A director is not required to hold any shares in the company by way of qualification. A director may vote with respect to any contract, proposed contract or arrangement in which he is materially interested.
Board Practices Board of Directors Our board of directors has five directors. A director is not required to hold any shares in the company by way of qualification. A director may vote with respect to any contract, proposed contract or arrangement in which he is materially interested.
The percentage of total ordinary shares and the percentage of aggregate voting power for BlackRock Inc. are calculated based on the number of our company’s total outstanding shares as of January 31, 2025 and assuming BlackRock Inc.’s shareholding has not change since December 31, 2023.
The percentage of total ordinary shares and the percentage of aggregate voting power for BlackRock Inc. are calculated based on the number of our company’s total outstanding shares as of January 31, 2026 and assuming BlackRock Inc.’s shareholding has not change since December 31, 2023.
Li irrevocable voting proxies with respect to these shares on their behalf as of January 31, 2025. As a result, the voting power held by Mr. Robin Yanhong Li represented 59.9% of the total outstanding voting power of our company as of January 31, 2025.
Li irrevocable voting proxies with respect to these shares on their behalf as of January 31, 2026. As a result, the voting power held by Mr. Robin Yanhong Li represented 59.9% of the total outstanding voting power of our company as of January 31, 2026.
Each Class B ordinary share is convertible at any time by the holder thereof into one Class A ordinary share. 202 Table of Contents * Less than 1% of our total outstanding ordinary shares. ** Except for James Ding, Yuanqing Yang, Jixun Foo, Sandy Ran Xu and Xiaodan Liu, the business address of our directors and executive officers is c/o Baidu, Inc., Baidu Campus, Shangdi 10th Street, Haidian District, Beijing 100085, PRC.
Each Class B ordinary share is convertible at any time by the holder thereof into one Class A ordinary share. 180 Table of Contents * Less than 1% of our total outstanding ordinary shares. ** Except for Yuanqing Yang, Jixun Foo, Sandy Ran Xu and Xiaodan Liu, the business address of our directors and executive officers is c/o Baidu, Inc., Baidu Campus, Shangdi 10th Street, Haidian District, Beijing 100085, PRC.
The compensation committee has the sole power and discretion to cancel, forfeit or surrender an outstanding award (whether or not in exchange for another award or combination or awards). 196 Table of Contents Award Agreement .
The compensation committee has the sole power and discretion to cancel, forfeit or surrender an outstanding award (whether or not in exchange for another award or combination or awards). 173 Table of Contents Award Agreement .
Foo graduated from the National University of Singapore with a First-Class Honors degree in Engineering, and received an M.Sc. in Management of Technology from the National University of Singapore’s Graduate School of Business. Sandy Ran Xu has served as our independent director since January 2024. Ms.
Foo graduated from the National University of Singapore with a First-Class Honors degree in Engineering, and received an M.Sc. in Management of Technology from the National University of Singapore’s Graduate School of Business. 171 Table of Contents Sandy Ran Xu has served as our independent director since January 2024. Ms.
Key Information—Risk Factors—Risks Related to Our ADSs and Class A Ordinary shares—Our dual-class ordinary share structure with different voting rights could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial.” Upon the conversion of all the issued and outstanding Class B ordinary shares as at January 31, 2025 into Class A ordinary shares, our company would issue 524,340,320 Class A ordinary shares, representing approximately 19.1% of the total number of issued and outstanding Class A ordinary shares as at January 31, 2025 (without taking into account any allotment and issuance of Shares pursuant to the exercise of options or the vesting of share awards that have been or may be granted from time to time and any issuance or repurchase of Shares and/or ADSs that we may make).
Key Information—Risk Factors—Risks Related to Our ADSs and Class A Ordinary shares—Our dual-class ordinary share structure with different voting rights could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial.” Upon the conversion of all the issued and outstanding Class B ordinary shares as at January 31, 2026 into Class A ordinary shares, our company would issue 524,020,320 Class A ordinary shares, representing approximately 19.3% of the total number of issued and outstanding Class A ordinary shares as at January 31, 2026 (without taking into account any allotment and issuance of Shares pursuant to the exercise of options or the vesting of share awards that have been or may be granted from time to time and any issuance or repurchase of Shares and/or ADSs that we may make).
Key Information—Risk Factors—Risks Related to Our Business and Industry—We may not be able to manage our expanding operations effectively.” 201 Table of Contents E.
Key Information—Risk Factors—Risks Related to Our Business and Industry—We may not be able to manage our expanding operations effectively.” 179 Table of Contents E.
The term may not exceed ten years from the date of the grant, except that five years is the maximum term of an ISO granted to an employee who holds more than 10% of the voting power of our share capital. Restricted Shares and Restricted Share Units .
The term may not exceed ten years from the date of the grant, except that five years is the maximum term of an ISO granted to an employee who holds more than 10% of the voting power of our share capital. 175 Table of Contents Restricted Shares and Restricted Share Units .
Xu was an audit 191 Table of Contents partner and spent nearly 20 years with PricewaterhouseCoopers Zhong Tian LLP, Beijing office and PricewaterhouseCoopers, San Jose office. Ms. Xu was a Certified Public Accountant in both China and the United States. Ms. Xu received her bachelor’s degree with a double major in information science and economics from Peking University.
Xu was an audit partner and spent nearly 20 years with PricewaterhouseCoopers Zhong Tian LLP, Beijing office and PricewaterhouseCoopers, San Jose office. Ms. Xu was a Certified Public Accountant in both China and the United States. Ms. Xu received her bachelor’s degree with a double major in information science and economics from Peking University.
The compensation committee may also, in its sole discretion, upon or in anticipation of a corporate transaction, accelerate awards, purchase the awards from the plan participants, replace the awards, or provide for the payment of the awards in cash. 195 Table of Contents Exercise Price and Term of Awards .
The compensation committee may also, in its sole discretion, upon or in anticipation of a corporate transaction, accelerate awards, purchase the awards from the plan participants, replace the awards, or provide for the payment of the awards in cash. Exercise Price and Term of Awards .
The compensation committee may also, in its sole discretion, upon or in anticipation of a corporate transaction, accelerate awards, purchase the awards from the plan participants, replace the awards, or provide for the payment of the awards in cash. 198 Table of Contents Exercise Price and Term of Awards .
The compensation committee may also, in its sole discretion, upon or in anticipation of a corporate transaction, accelerate awards, purchase the awards from the plan participants, replace the awards, or provide for the payment of the awards in cash. Exercise Price and Term of Awards .
Such rights are subject to the approval and discretion of the board. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof. See “Item 3.D.
Such rights are subject to the approval and discretion of the board. 181 Table of Contents Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof. See “Item 3.D.
There is no age limit requirement for directors. Committees of the Board of Directors We have three committees under the board of directors: an audit committee, a compensation committee and a corporate governance and nominating committee. We have adopted a charter for each of the three committees.
There is no age limit requirement for directors. 177 Table of Contents Committees of the Board of Directors We have three committees under the board of directors: an audit committee, a compensation committee and a corporate governance and nominating committee. We have adopted a charter for each of the three committees.
In 2024, our corporate governance and nominating committee passed resolutions by unanimous written consent one time. Terms of Directors and Executive Officers All directors hold office until their successors have been duly appointed and qualified. None of our directors is subject to a fixed term of office.
In 2025, our corporate governance and nominating committee passed resolutions by unanimous written consent 1 time. Terms of Directors and Executive Officers All directors hold office until their successors have been duly appointed and qualified. None of our directors is subject to a fixed term of office.
Our 2000 option plan terminated in January 2010 upon the expiration of its ten-year term. At the annual general meeting held on December 16, 2008, our shareholders approved a 2008 share incentive plan, which has reserved an additional 274,302,160 Class A ordinary shares for awards to be granted pursuant to its terms.
At the annual general meeting held on December 16, 2008, our shareholders approved a 2008 share incentive plan, which has reserved an additional 274,302,160 Class A ordinary shares for awards to be granted pursuant to its terms. Our 2008 share incentive plan terminated in December 2018 upon the expiration of its ten-year term.
As of January 31, 2025, to our knowledge, approximately 39.7% of our total issued and outstanding ordinary shares were held by two record shareholders in the United States, including approximately 39.7% held by The Bank of New York Mellon, the depositary of our ADS program.
As of January 31, 2026, to our knowledge, approximately 29.7% of our total issued and outstanding ordinary shares were held by two record shareholders in the United States, including approximately 29.7% held by The Bank of New York Mellon, the depositary of our ADS program.
To the extent our company decides to not 197 Table of Contents to follow home country practice, amendments to our 2018 share incentive plan are subject to shareholder approval, to the extent required by law, or by stock exchange rules or regulations.
To the extent our company decides to not to follow home country practice, amendments to our 2018 share incentive plan are subject to shareholder approval, to the extent required by law, or by stock exchange rules or regulations.
Audit Committee Our audit committee consists of Xiaodan Liu, James Ding and Jixun Foo, all of whom satisfy the “independence” requirements of Rule 5605(a)(2) of the Nasdaq Stock Market Rules and Rule 10A-3 under the 199 Table of Contents Exchange Act. Our board of directors has determined that Ms.
Audit Committee Our audit committee consists of Xiaodan Liu and Jixun Foo, all of whom satisfy the “independence” requirements of Rule 5605(a)(2) of the Nasdaq Stock Market Rules and Rule 10A-3 under the Exchange Act. Our board of directors has determined that Ms.
As of December 31, 2024, we had approximately 24,100 employees in Beijing, 11,700 employees outside of Beijing but within China (for the avoidance of doubt, including Hong Kong, Macau and Taiwan), and approximately 100 employees outside of China. We also hire temporary employees and contractors from time to time. Our employees are not covered by any collective bargaining agreement.
As of December 31, 2025, we had approximately 22,100 employees in Beijing, 11,300 employees outside of Beijing but within China (for the avoidance of doubt, including Hong Kong, Macau and Taiwan), and approximately 100 employees outside of China. We also hire temporary employees and contractors from time to time. Our employees are not covered by any collective bargaining agreement.
Class B ordinary shares shall also be automatically and immediately converted into an equal number of Class A ordinary shares: (1) upon any sale, pledge, transfer, assignment or disposition of such Class B ordinary shares by a holder thereto to any person or entity which is not an Affiliate (as defined in our articles of association) of such holder; or (2) where, within 6 months after by a transfer by a holder of Class B ordinary shares to an Affiliate of such holder, there is a change of the beneficial ownership of the Class B ordinary shares held by the Affiliate. 204 Table of Contents Apart from the aforementioned (1) and (2), a change in the beneficial ownership of Class B ordinary shares shall not cause a conversion of Class B ordinary shares to Class A ordinary shares.
Class B ordinary shares shall also be automatically and immediately converted into an equal number of Class A ordinary shares: (1) upon any sale, pledge, transfer, assignment or disposition of such Class B ordinary shares by a holder thereto to any person or entity which is not an Affiliate (as defined in our articles of association) of such holder; or (2) where, within 6 months after by a transfer by a holder of Class B ordinary shares to an Affiliate of such holder, there is a change of the beneficial ownership of the Class B ordinary shares held by the Affiliate.
In 2024, our audit committee held meetings or passed resolutions by unanimous written consent six times. Compensation Committee Our compensation committee consists of James Ding, Yuanqing Yang and Jixun Foo, all of whom satisfy the “independence” requirements of Rule 5605(a)(2) of the Nasdaq Stock Market Rules.
In 2025, our audit committee held meetings or passed resolutions by unanimous written consent 5 times. Compensation Committee Our compensation committee consists of Yuanqing Yang and Jixun Foo, all of whom satisfy the “independence” requirements of Rule 5605(a)(2) of the Nasdaq Stock Market Rules.
Board Diversity Board Diversity Matrix (As of January 31, 2025) 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 6 Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity Directors 2 4 N/A N/A Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 D.
Board Diversity Board Diversity Matrix 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 5 Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity Directors 2 3 N/A N/A Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 D.
(NYSE: AMK) from 2016 to 2020, and has been an independent director of the Board for China Pacific Insurance (Group) Co., Ltd. (SSE: 601601, HKEX: 02601) from January 2021. In addition, Ms.
(NYSE: AMK) from 2016 to 2020, and served as an independent director of the Board for China Pacific Insurance (Group) Co., Ltd. (SSE: 601601, HKEX: 02601) from January 2021 to April 2025. In addition, Ms.
Our 2008 share incentive plan terminated in December 2018 upon the expiration of its ten-year term. On July 20, 2018, our board of directors approved a 2018 share incentive plan, which has reserved an additional 275,516,000 Class A ordinary shares (taking into account the Share Subdivision) for awards to be granted pursuant to its terms.
On July 20, 2018, our board of directors approved a 2018 share incentive plan, which has reserved an additional 275,516,000 Class A ordinary shares (taking into account the Share Subdivision) for awards to be granted pursuant to its terms.
During the same period, we also paid an aggregate of approximately RMB1.4 million (US$194 thousand) in cash compensation and granted 173,072 restricted Class A ordinary shares to our non-executive directors as a group.
During the same period, we also paid an aggregate of approximately RMB1.5 million (US$213 thousand) in cash compensation and granted 27,224 restricted Class A ordinary shares to our non-executive directors as a group.
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable.
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable. 182 Table of Contents
In 2024, our compensation committee held meetings or passed resolutions by unanimous written consent five times. Corporate Governance and Nominating Committee Our corporate governance and nominating committee consists of Yuanqing Yang and James Ding, both of whom satisfy the “independence” requirements of Rule 5605(a) (2) of the Nasdaq Stock Market Rules.
In 2025, our compensation committee held meetings or passed resolutions by unanimous written consent 4 times. 178 Table of Contents Corporate Governance and Nominating Committee Our corporate governance and nominating committee consists of Yuanqing Yang and Jixun Foo, both of whom satisfy the “independence” requirements of Rule 5605(a) (2) of the Nasdaq Stock Market Rules.
Eligibility . We may grant awards to employees, directors and consultants of our company or any of our related entities, which include our subsidiaries or any entities in which we hold a substantial ownership interest. However, we may grant ISOs only to our employees and employees of our majority-owned subsidiaries. Acceleration of Awards upon Corporate Transactions .
Eligibility . We may grant awards to employees, directors and consultants of our company or any of our related entities, which include our subsidiaries or any entities in which we hold a substantial ownership interest.
Jixun Foo has served as our independent director since July 2019. Mr. Foo is also a member of our audit committee and our compensation committee. Mr. Foo currently serves as a Senior Managing Partner at Granite Asia (formerly known as GGV Capital) and leads the firm’s overall investment strategy and portfolio management. Mr.
Foo is also a member of our audit committee and the chairperson of the Corporate Governance and Nominating Committee and the chairperson of the Compensation Committee. Mr. Foo currently serves as a Senior Managing Partner at Granite Asia (formerly known as GGV Capital) and leads the firm’s overall investment strategy and portfolio management. Mr.
Robin Yanhong Li, (ii) 7,037,488 Class A ordinary shares in the form of ADSs held by Handsome Reward Limited in the brokerage account of the administrator of our employee stock option program, (iii) 5,875,440 Class A Ordinary Shares issuable to Handsome Reward Limited upon exercise of options within 60 days after the date of January 31, 2025, and (iv) 362,016 Class A Ordinary Shares issuable to Handsome Reward Limited upon vesting of restricted shares within 60 days after January 31, 2025.
Robin Yanhong Li, (ii) 8,252,408 Class A ordinary shares in the form of ADSs held by Handsome Reward Limited in the brokerage account of the administrator of our employee stock option program, (iii) 1,404,960 Class A Ordinary Shares issuable to Handsome Reward Limited upon exercise of options within 60 days after the date of January 31, 2026, and (iv) 362,008 Class A Ordinary Shares issuable to Handsome Reward Limited upon vesting of restricted shares within 60 days after January 31, 2026.
Compensation In 2024, we paid an aggregate of RMB49 million (US$7 million) in cash compensation and granted 4,095,056 restricted Class A ordinary shares to our executive officers that are in office as of the date of this annual report as a group.
Compensation In 2025, we paid an aggregate of RMB12 million (US$2 million) in cash compensation and granted 3,216,344 restricted Class A ordinary shares to our executive officers that are in office as of the date of this annual report as a group.
As of December 31, 2024, options to purchase an aggregate of 51,365,032 Class A ordinary shares and an aggregate of 374,855,920 restricted Class A ordinary shares had been granted under the 2008, 2018 and 2023 share incentive plans. 193 Table of Contents The following table summarizes, as of December 31, 2024, the outstanding options and restricted Class A ordinary shares that we had granted to our current directors and executive officers and to other individuals as a group.
As of December 31, 2025, options to purchase an aggregate of 52,109,800 Class A ordinary shares and an aggregate of 416,122,616 restricted Class A ordinary shares had been granted under the 2008, 2018 and 2023 share incentive plans. 172 Table of Contents The following table summarizes, as of December 31, 2025, the outstanding options and restricted Class A ordinary shares that we had granted to our current directors and executive officers and to other individuals as a group.
(1) Restricted shares. 194 Table of Contents The following paragraphs summarize the key terms of our 2008 share incentive plan adopted in December 2008, our 2018 share incentive plan adopted in July 2018 and our 2023 share incentive plan adopted in August 2023: 2008 Share Incentive Plan The following paragraphs summarize the key terms of our 2008 share incentive plan.
The following paragraphs summarize the key terms of our 2008 share incentive plan adopted in December 2008, our 2018 share incentive plan adopted in July 2018 and our 2023 share incentive plan adopted in August 2023: 2008 Share Incentive Plan The following paragraphs summarize the key terms of our 2008 share incentive plan. Types of Awards .
Ding received a master’s degree in information science from the University of California, Los Angeles and a bachelor’s degree in chemistry from Peking University in China. Yuanqing Yang has served as our independent director since October 2015. Mr. Yang is also a member of our compensation committee and the chairman of our corporate governance and nominating committee. Mr.
Li received a bachelor’s degree in information science from Peking University and a master’s degree in computer science from the State University of New York at Buffalo. Yuanqing Yang has served as our independent director since October 2015. Mr. Yang is also a member of our compensation committee and corporate governance and nominating committee. Mr.
Yang is currently the chairman and chief executive officer of Lenovo Group Limited (SEHK: 992), a director of Sureinvest Holdings Limited and a director of Taikang Insurance Group. Mr. Yang has more than 30 years of experience in information and communications technology industry. Mr.
Yang is currently the chairman and chief executive officer of Lenovo Group Limited (SEHK: 992), a director of Sureinvest Holdings Limited. Mr. Yang has more than 30 years of experience in information and communications technology industry. Mr. Yang joined Lenovo in 1989 and Lenovo has transformed from a device provider to a solution and service provider under his leadership. Mr.
Robin Yanhong Li, (v) 7,037,488 Class A ordinary shares in the form of ADSs held by Handsome Reward Limited in the brokerage account of the administrator of our employee stock option program, (vi) 5,875,440 Class A ordinary shares issuable to Handsome Reward Limited upon exercise of options within 60 days after the date of January 31, 2025, (vii) 362,016 Class A Ordinary Shares issuable to Handsome Reward Limited upon vesting of restricted shares within 60 days after January 31, 2025, and (viii) 67,019,728 Class A ordinary shares in the form of ADSs held by certain employees who have granted Mr.
Robin Yanhong Li, (iv) 8,252,408 Class A ordinary shares in the form of ADSs held by Handsome Reward Limited in the brokerage account of the administrator of our employee stock option program, (v) 1,404,960 Class A ordinary shares issuable to Handsome Reward Limited upon exercise of options within 60 days after the date of January 31, 2026, (vi) 362,008 Class A Ordinary Shares issuable to Handsome Reward Limited upon vesting of restricted shares within 60 days after January 31, 2026, and (vii) 51,550,880 Class A ordinary shares in the form of ADSs held by certain employees who have granted Mr.
The calculations in the table below are based on 2,750,167,168 ordinary shares, consisting of 2,225,826,848 Class A ordinary shares and 524,340,320 Class B ordinary shares issued and outstanding as of January 31, 2025. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
The calculations in the table below are based on 2,722,021,272 ordinary shares, consisting of 2,198,000,952 Class A ordinary shares and 524,020,320 Class B ordinary shares issued and outstanding as of January 31, 2026. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Number of Class A Ordinary Shares Number of Class B Ordinary Shares Approximate percentage of voting rights (3) As at January 31, 2025, WVR beneficiaries were the following: Robin Yanhong Li (1) 86,940,856 439,200,000 59.9 % Melissa Ma 4,086,336 85,040,000 11.4 % Integrity Partners V, LLC (2) — 100,320 0.0 % Total 91,027,192 524,340,320 71.4 % Notes: (1) Includes 67,019,728 Class A ordinary shares in the form of ADSs held by certain employees who have granted Mr.
Number of Class A Ordinary Shares Number of Class B Ordinary Shares Approximate percentage of voting rights (3) As at January 31, 2026, WVR beneficiaries were the following: Robin Yanhong Li (1) 68,114,224 439,200,000 59.9 % Melissa Ma 3,465,992 84,720,000 11.4 % Integrity Partners V, LLC (2) — 100,320 0.0 % Total 71,580,216 524,020,320 71.4 % Notes: (1) Includes 51,550,880 Class A ordinary shares in the form of ADSs held by certain employees who have granted Mr.
Employees We had approximately 41,300, 39,800 and 35,900 full time employees as of December 31, 2022, 2023 and 2024, respectively. As of December 31, 2024, we had approximately 19,500 employees in research and development, 7,700 employees in sales and marketing, 5,700 employees in operation and service, and 3,000 employees in management and administration.
Employees We had approximately 39,800, 35,900 and 33,500 full time employees as of December 31, 2023, 2024 and 2025, respectively. As of December 31, 2025, we had approximately 18,600 employees in research and development, 6,400 employees in sales and marketing, 5,600 employees in operation and service, and 2,900 employees in management and administration.
The business address of Sandy Ran Xu is 14/F, JD Tower A, 18 Kechuang 11th Street, Beijing, 101111, China. The business address of Xiaodan Liu is STE. 801, KR Center West Tower, Courtyard No. 6, Weigongcun Road, Beijing 100086, China. (1) Includes (i) 3,013,200 Class A Ordinary Shares directly held by Mr.
The business address of Xiaodan Liu is STE. 801, KR Center West Tower, Courtyard No. 6, Weigongcun Road, Beijing 100086, China. (1) Includes (i) 3,013,200 Class A Ordinary Shares directly held by Mr. Robin Yanhong Li on record, (ii) 3,530,768 Class A ordinary shares in the form of ADSs held by Mr.
Robin Yanhong Li’s wife, as of January 31, 2025, and Mr. Robin Yanhong Li disclaims beneficial ownership of all of such shares. (2) Includes 67,019,728 Class A ordinary shares in the form of ADSs held by certain employees who have granted Mr.
Robin Yanhong Li disclaims beneficial ownership of all of such shares. (2) Includes 51,550,880 Class A ordinary shares in the form of ADSs held by certain employees who have granted Mr. Robin Yanhong Li irrevocable voting proxies with respect to these shares on their behalf as of January 31, 2026.
Robin Yanhong Li irrevocable voting proxies with respect to these shares on their behalf as of January 31, 2025. (3) Includes (i) 439,200,000 Class B ordinary shares held by Handsome Reward Limited, a British Virgin Islands company wholly owned and controlled by Mr.
(3) Includes (i) 439,200,000 Class B ordinary shares held by Handsome Reward Limited, a British Virgin Islands company wholly owned and controlled by Mr.
The business address of James Ding is STE. 3818, China World Trade Center Tower III, No.1 Jianguomenwai Street, Chaoyang District, Beijing, 100004, China. The business address of Yuanqing Yang is Building 1, No. 10 Courtyard Xibeiwang East Road, Beijing, China. The business address of Jixun Foo is #21-02 Guoco Midtown, 128 Beach Road, 189773, Singapore.
The business address of Yuanqing Yang is Building 1, No. 10 Courtyard Xibeiwang East Road, Beijing, China. The business address of Jixun Foo is #21-02 Guoco Midtown, 128 Beach Road, 189773, Singapore. The business address of Sandy Ran Xu is 14/F, JD Tower A, 18 Kechuang 11th Street, Beijing, 101111, China.

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Item 7. Management's Discussion & Analysis

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

7 edited+1 added−3 removed6 unchanged
Biggest changeOther related party transactions Related Party A In 2022, 2023 and 2024, related party transactions with Related Party A, which is one of our equity investees, were in the total amount of RMB158 million, RMB540 million and RMB393 million (US$54 million), respectively, and mainly comprised of the online marketing services that we provided to Related Party A.
Biggest changeOther Material Related Party Transactions Related Party A In 2023, 2024 and 2025, related party transactions with Related Party A, which is one of our equity investees, were in the total amount of RMB540 million, RMB393 million and RMB351 million (US$50 million), respectively, and mainly comprised of the online marketing services that we provided to Related Party A. 183 Table of Contents Related Party B In 2023, 2024 and 2025, related party transactions with Related Party B, which is one of our equity investees, were in the total amount of RMB924 million, RMB919 million and RMB979 million (US$140 million), respectively, and comprised of the online marketing services and others that we provided to Related Party B.
The two term loans had been fully repaid to Du Xiaoman in December 2023. As of February 28, 2025, the amount of outstanding loans between us and Du Xiaoman was insignificant. Loan transactions with Jidu Auto Jidu Auto is a joint venture that we established with Zhejiang Geely Holding Group (Geely).
The two term loans had been fully repaid to Du Xiaoman in December 2023. As of February 28, 2026, the amount of outstanding loans between us and Du Xiaoman was insignificant. Loan Transactions with Jidu Auto Jidu Auto is a joint venture that we established with Zhejiang Geely Holding Group (Geely).
In 2024, we provided a term loan to Jidu Auto in a principal amount of RMB38 million (US$5 million), and in February 2025, we provided another term loan in a principal amount of RMB16 million (US$2 million). These loans were provided to Jidu Auto for working capital purposes with an interest rate of 2.79%.
In 2024, we provided a term loan to Jidu Auto in a principal amount of RMB38 million. In 2025, we provided term loans in an aggregate principal amount of RMB100 million (US$14 million) to Jidu Auto. These loans were provided to Jidu Auto for working capital purposes with an interest rate of 2.79%.
Related Party C In 2022 and 2023, related party transactions with Related Party C, over which we could significantly influence its management or operating policies, were in the total amount of RMB2.2 billion and RMB1.8 billion, respectively, and mainly comprised of online marketing services provided to the party.
Related Party C In 2023, related party transactions with Related Party C, over which we could significantly influence its management or operating policies, were in the total amount of RMB1.8 billion, and mainly comprised of online marketing services provided to the party. Since January 2024, Related Party C ceased to be our related party.
The aggregate principal amount outstanding as of February 28, 2025 was RMB54 million (US$7 million).
The aggregate principal amount outstanding as of February 28, 2026 was RMB438 million (US$63 million).
Key Information—Risk Factors—Risks Related to Our Business and Industry—Termination or other changes of related party transactions in the ordinary course of business may have an adverse impact on our results of operations and financial performance” for risks associated with the termination or other changes of related party transactions. 205 Table of Contents Loan transactions with Du Xiaoman In August 2018, we completed the divestiture of Du Xiaoman, following which we recognized our non-controlling equity interest in Du Xiaoman as an equity method investment and Du Xiaoman became a related party.
See “Item 3.D. Key Information—Risk Factors—Risks Related to Our Business and Industry—Termination or other changes of related party transactions in the ordinary course of business may have an adverse impact on our results of operations and financial performance” for risks associated with the termination or other changes of related party transactions.
The hourly rate for use of the aircraft was determined based on an analysis of market rates for the charter of comparable aircrafts. The service charges for the use of the aircraft for 2022, 2023 and 2024 were insignificant. Share Options and Restricted Shares Grants Please refer to “Item 6.B. Directors, Senior Management and Employees—Compensation.” C.
Share Options and Restricted Shares Grants Please refer to “Item 6.B. Directors, Senior Management and Employees—Compensation.” C. Interests of Experts and Counsel Not applicable.
Removed
Related Party B In 2022, 2023 and 2024, related party transactions with Related Party B, which is one of our equity investees, were in the total amount of RMB889 million, RMB924 million and RMB919 million (US$126 million), respectively, and comprised of the online marketing services, cloud services and other services that we provided to Related Party B.
Added
Loan Transactions with Du Xiaoman In August 2018, we completed the divestiture of Du Xiaoman, following which we recognized our non-controlling equity interest in Du Xiaoman as an equity method investment and Du Xiaoman became a related party.
Removed
Related Party C ceased to be a related party from January 2024 as we did not have significant influence over its management or operating policies. 206 Table of Contents Related Party D In 2022, 2023 and 2024, related party transactions with Related Party D, which is one of our equity investees, were in the total amount of RMB257 million, RMB338 million and RMB523 million (US$72 million), respectively, and mainly comprised of sales of hardware, intelligent driving services and other services that we provided to Related Party D.
Removed
Other related parties In 2022, 2023 and 2024, with the approval from our board of directors, we reimbursed Mr. Robin Yanhong Li the fees and expenses incurred in connection with his use of an aircraft beneficially owned by his family member for our business purposes.

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