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What changed in Kanzhun Ltd's 20-F — 2022 vs 2023

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Paragraph-level year-over-year comparison of Kanzhun Ltd's 2022 and 2023 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+808 added−857 removedSource: 20-F (2024-04-29) vs 20-F (2023-04-27)

Top changes in Kanzhun Ltd's 2023 20-F

808 paragraphs added · 857 removed · 687 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

290 edited+27 added−39 removed543 unchanged
Biggest changeFinancial Information Related to the VIE The following table presents our condensed consolidating schedule of financial information for our holding company, KANZHUN LIMITED, the WFOE that is the primary beneficiary of the VIE, the VIE and VIE’s subsidiaries, and other subsidiaries as of the dates presented: Selected Condensed Consolidating Statements of Operations Data ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 ​ ​ ​ Primary VIE ​ ​ ​ ​ KANZHUN ​ Other ​ Beneficiary ​ and VIE’s ​ ​ ​ Consolidated ​ ​ LIMITED ​ Subsidiaries ​ of VIE ​ Subsidiaries ​ Eliminations ​ Total ​ ​ (in RMB thousands) Third-party revenues ​ — 12,931 — 4,498,131 — 4,511,062 Inter-company revenues (1) ​ — 33,956 — — (33,956) — Third-party operating cost and expenses ​ (79,956) (188,218) (2,020) (4,387,982) — (4,658,176) Inter-company operating cost and expenses (1) ​ — — — (33,956) 33,956 — Other operating (loss)/income, net ​ — (656) — 18,251 — 17,595 (Loss)/Income from operations ​ (79,956) (141,987) (2,020) 94,444 — (129,519) Other non-operating income, net ​ 188,421 14,683 13,945 32,706 (3,240) 246,515 Share of (loss)/income from subsidiaries and VIE (2) ​ (1,220) 132,486 117,298 — (248,564) — Income before income tax expenses ​ 107,245 5,182 129,223 127,150 (251,804) 116,996 Income tax benefit/(expenses) ​ — 101 — (9,852) — (9,751) Net income ​ 107,245 5,283 129,223 117,298 (251,804) 107,245 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2021 ​ ​ ​ Primary VIE ​ ​ ​ ​ KANZHUN ​ Other ​ Beneficiary ​ and VIE’s ​ ​ ​ Consolidated ​ ​ LIMITED ​ Subsidiaries ​ of VIE ​ Subsidiaries ​ Eliminations ​ Total ​ ​ (in RMB thousands) Third-party revenues ​ — — — 4,259,128 — 4,259,128 Inter-company revenues (1) ​ — 143 — — (143) — Third-party operating cost and expenses ​ (1,537,533) (93,123) (1,289) (3,678,480) — (5,310,425) Inter-company operating cost and expenses (1) ​ — — — (143) 143 — Other operating income, net ​ — 9 29 14,939 — 14,977 (Loss)/Income from operations ​ (1,537,533) (92,971) (1,260) 595,444 — (1,036,320) Other non-operating income/(loss), net ​ 5,011 (829) 5,375 15,216 — 24,773 Share of income from subsidiaries and VIE (2) ​ 461,448 555,248 551,133 — (1,567,829) — (Loss)/Income before income tax expenses ​ (1,071,074) 461,448 555,248 610,660 (1,567,829) (1,011,547) Income tax expenses ​ — — — (59,527) — (59,527) Net (loss)/income ​ (1,071,074) 461,448 555,248 551,133 (1,567,829) (1,071,074) ​ 9 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2020 ​ ​ ​ Primary VIE ​ ​ ​ ​ KANZHUN ​ Other ​ Beneficiary ​ and VIE’s ​ ​ ​ Consolidated ​ ​ LIMITED ​ Subsidiaries ​ of VIE ​ Subsidiaries ​ Eliminations ​ Total ​ ​ (in RMB thousands) Third-party revenues ​ — — — 1,944,359 — 1,944,359 Third-party operating cost and expenses ​ (606,029) (30,933) (3,435) (2,257,716) — (2,898,113) Other operating income, net ​ — — 73 8,776 — 8,849 Loss from operations ​ (606,029) (30,933) (3,362) (304,581) — (944,905) Other non-operating income/(loss), net ​ 6,815 (1,755) (3,570) 1,520 — 3,010 Share of loss from subsidiaries and VIE (2) ​ (342,681) (309,993) (303,061) — 955,735 — Loss before income tax expenses ​ (941,895) (342,681) (309,993) (303,061) 955,735 (941,895) Income tax expenses ​ — — — — — — Net loss ​ (941,895) (342,681) (309,993) (303,061) 955,735 (941,895) ​ Selected Condensed Consolidating Balance Sheets Data ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2022 ​ ​ ​ Primary VIE ​ ​ ​ ​ KANZHUN ​ Other ​ Beneficiary ​ and VIE’s ​ ​ ​ Consolidated ​ ​ LIMITED ​ Subsidiaries ​ of VIE ​ Subsidiaries ​ Eliminations ​ Total ​ ​ (in RMB thousands) Cash and cash equivalents ​ 8,234,173 179,392 318,016 1,020,243 — 9,751,824 Short-term investments ​ 1,410,618 707,912 95,316 1,244,243 — 3,458,089 Accounts receivable, net ​ — 7,609 — 2,253 — 9,862 Amounts due from Group companies (3) ​ 1,851,752 20,949 14,667 136,757 (2,024,125) — Amounts due from related parties ​ — ​ — ​ — ​ 5,714 ​ — ​ 5,714 Prepayments and other current assets ​ 62,256 2,231 7,378 528,908 — 600,773 Investments in subsidiaries and VIE (2) ​ 222,915 1,179,283 781,250 — (2,183,448) — Property, equipment and software, net ​ — 2,358 100 688,578 — 691,036 Intangible assets, net ​ — 9,883 — 368 — 10,251 Goodwill ​ — ​ 5,690 ​ — ​ — ​ — ​ 5,690 Right-of-use assets, net ​ — 7,715 — 281,913 — 289,628 Other non-current assets ​ — — — 4,000 — 4,000 Total assets ​ 11,781,714 2,123,022 1,216,727 3,912,977 (4,207,573) 14,826,867 Accounts payable ​ — 69 17 185,211 — 185,297 Deferred revenue ​ — 2,323 — 2,058,569 — 2,060,892 Other payables and accrued liabilities ​ 40,588 16,116 589 576,189 — 633,482 Amounts due to Group companies (3) ​ 100,363 1,872,048 36,838 14,876 (2,024,125) — Operating lease liabilities, current ​ — 5,079 — 146,359 — 151,438 Operating lease liabilities, non-current ​ — 2,495 — 141,096 — 143,591 Deferred tax liabilities ​ — 1,977 — 9,427 — 11,404 Total liabilities ​ 140,951 1,900,107 37,444 3,131,727 (2,024,125) 3,186,104 Total shareholders’ equity (2) ​ 11,640,763 222,915 1,179,283 781,250 (2,183,448) 11,640,763 Total liabilities and shareholders’ equity ​ 11,781,714 2,123,022 1,216,727 3,912,977 (4,207,573) 14,826,867 ​ 10 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2021 ​ ​ ​ Primary VIE ​ ​ ​ ​ KANZHUN ​ Other ​ Beneficiary ​ and VIE’s ​ ​ ​ Consolidated ​ ​ LIMITED ​ Subsidiaries ​ of VIE ​ Subsidiaries ​ Eliminations ​ Total ​ ​ (in RMB thousands) Cash and cash equivalents ​ 9,875,153 203,523 398,231 864,851 — 11,341,758 Short-term investments ​ — — 20,439 864,557 — 884,996 Accounts receivable ​ — — — 1,002 — 1,002 Amounts due from Group companies (3) ​ 1,072,514 42,327 8,809 86,989 (1,210,639) — Prepayments and other current assets ​ 231,529 1,043 4,413 494,213 — 731,198 Investments in subsidiaries and VIE (2) ​ — 403,391 17,549 — (420,940) — Property, equipment and software, net ​ — 645 100 368,381 — 369,126 Intangible assets, net ​ — — — 458 — 458 Right-of-use assets, net ​ — 7,797 — 301,288 — 309,085 Other non-current assets ​ — — — 4,000 — 4,000 Total assets ​ 11,179,196 658,726 449,541 2,985,739 (1,631,579) 13,641,623 Accounts payable ​ — 8 17 52,938 — 52,963 Deferred revenue ​ — — — 1,958,570 — 1,958,570 Other payables and accrued liabilities ​ 3,897 5,816 9,274 626,151 — 645,138 Amounts due to Group companies (3) ​ 74,043 1,072,514 36,859 27,223 (1,210,639) — Investment deficit in subsidiaries and VIE (2) ​ 427,200 — — — (427,200) — Operating lease liabilities, current ​ — 3,067 — 124,464 — 127,531 Operating lease liabilities, non-current ​ — 4,521 — 178,844 — 183,365 Total liabilities ​ 505,140 1,085,926 46,150 2,968,190 (1,637,839) 2,967,567 Total shareholders’ equity/(deficit) (2) ​ 10,674,056 (427,200) 403,391 17,549 6,260 10,674,056 Total liabilities and shareholders’ equity/(deficit) ​ 11,179,196 658,726 449,541 2,985,739 (1,631,579) 13,641,623 ​ Selected Condensed Consolidating Cash Flows Data ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 ​ ​ ​ Primary VIE and ​ ​ ​ ​ KANZHUN ​ Other ​ Beneficiary ​ VIE’s ​ ​ ​ Consolidated ​ ​ LIMITED ​ Subsidiaries ​ of VIE ​ Subsidiaries ​ Eliminations ​ Total ​ ​ (in RMB thousands) Net cash generated from/(used in) operating activities with third parties ​ 208,862 ​ (113,736) ​ (6,833) ​ 914,749 ​ — ​ 1,003,042 Net cash generated from/(used in) operating activities with Group companies (1) ​ — ​ 21,671 ​ — ​ (21,671) ​ — ​ — Net cash generated from/(used in) operating activities ​ 208,862 (92,065) (6,833) 893,078 — 1,003,042 Investments in subsidiaries (2) ​ (39,392) — — — 39,392 — Loans to Group companies (3) ​ (633,490) — (4,450) — 637,940 — Proceeds from repayments of loans to Group companies (3) ​ — 35,144 — — (35,144) — Other investing activities with third parties ​ (1,365,740) (673,476) (74,823) (702,542) — (2,816,581) Net cash used in investing activities ​ (2,038,622) (638,332) (79,273) (702,542) 642,188 (2,816,581) Capital contribution from Group companies (2) ​ — 39,392 — — (39,392) — Loans from Group companies (3) ​ — 637,940 — — (637,940) — Repayments of loans from Group companies (3) ​ — — — (35,144) 35,144 — Other financing activities with third parties ​ (669,232) — — — — (669,232) Net cash (used in)/generated from financing activities ​ (669,232) 677,332 — (35,144) (642,188) (669,232) ​ 11 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2021 ​ ​ ​ Primary VIE and ​ ​ ​ ​ KANZHUN ​ Other ​ Beneficiary ​ VIE’s ​ ​ ​ Consolidated ​ ​ LIMITED ​ Subsidiaries ​ of VIE ​ Subsidiaries ​ Eliminations ​ Total ​ ​ (in RMB thousands) Net cash generated from/(used in) operating activities with third parties (4) 5,644 (81,135) (232) 1,717,104 — 1,641,381 Investments in subsidiaries (2) (74,131) — (10) — 74,141 — Loans to Group companies (3) (16,486) — — — 16,486 — Proceeds from repayments of loans to Group companies (3) ​ — 96,000 255,000 — (351,000) — Other investing activities with third parties — (649) (10,000) (591,213) — (601,862) Net cash (used in)/generated from investing activities (90,617) 95,351 244,990 (591,213) (260,373) (601,862) Capital contribution from Group companies (2) — 74,131 — 10 (74,141) — Loans from Group companies (3) — 16,486 — — (16,486) — Repayments of loans from Group companies (3) ​ — — (16,000) (335,000) 351,000 — Other financing activities with third parties 6,540,512 — — (109,249) — 6,431,263 Net cash generated from/(used in) financing activities 6,540,512 90,617 (16,000) (444,239) 260,373 6,431,263 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2020 ​ ​ ​ ​ Primary VIE and ​ ​ ​ ​ KANZHUN ​ Other ​ Beneficiary ​ VIE’s ​ ​ ​ Consolidated ​ ​ LIMITED ​ Subsidiaries ​ of VIE ​ Subsidiaries ​ Eliminations ​ Total ​ ​ (in RMB thousands) Net cash (used in)/generated from operating activities with third parties (4) (97,125) (3,566) 2,415 494,187 — 395,911 Investments in subsidiaries (2) (25,487) (416,328) — — 441,815 — Loans to Group companies (3) ​ (410,983) (5) ​ — (260,484) — 671,467 — Other investing activities with third parties 1,161,428 (56,617) (4,938) (632,568) — 467,305 Net cash generated from/(used in) investing activities 724,958 (472,945) (265,422) (632,568) 1,113,282 467,305 Capital contribution from Group companies (2) — 25,487 416,328 — (441,815) — Loans from Group companies (3) — 410,983 — 260,484 (671,467) — Other financing activities with third parties 2,882,112 — — — — 2,882,112 Net cash generated from/(used in) financing activities 2,882,112 436,470 416,328 260,484 (1,113,282) 2,882,112 Notes: (1) It represents the elimination of inter-company service fees charged/received by other subsidiaries to the VIE.
Biggest changeFinancial Information Related to the VIE The following table presents our condensed consolidating schedule of financial information for our holding company, KANZHUN LIMITED, the WFOE that is the primary beneficiary of the VIE, the VIE and VIE’s subsidiaries, and other subsidiaries as of the dates presented: Selected Condensed Consolidating Statements of Operations Data ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2023 ​ ​ ​ Primary VIE ​ ​ ​ ​ KANZHUN ​ Other ​ Beneficiary ​ and VIE’s ​ ​ ​ Consolidated ​ ​ LIMITED ​ Subsidiaries ​ of VIE ​ Subsidiaries ​ Eliminations ​ Total ​ ​ (in RMB thousands) Third-party revenues ​ — 129,127 — 5,822,901 — 5,952,028 Inter-company revenues (1) ​ — 62,780 — 44,982 (107,762) — Third-party operating cost and expenses ​ (62,291) (251,034) (2,241) (5,090,876) — (5,406,442) Inter-company operating cost and expenses (1) ​ — (44,982) — (62,780) 107,762 — Other operating income, net ​ — 812 231 34,342 — 35,385 (Loss)/Income from operations ​ (62,291) (103,297) (2,010) 748,569 — 580,971 Other non-operating income, net ​ 268,481 289,739 13,383 71,007 (1,792) 640,818 Share of income from subsidiaries and VIE (2) ​ 893,037 708,013 697,047 — (2,298,097) — Income before income tax expenses ​ 1,099,227 894,455 708,420 819,576 (2,299,889) 1,221,789 Income tax benefit/(expenses) ​ — ​ 374 ​ (407) ​ (122,538) ​ — ​ (122,571) Net income ​ 1,099,227 ​ 894,829 ​ 708,013 ​ 697,038 ​ (2,299,889) ​ 1,099,218 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 ​ ​ ​ Primary VIE ​ ​ ​ ​ KANZHUN ​ Other ​ Beneficiary ​ and VIE’s ​ ​ ​ Consolidated ​ ​ LIMITED ​ Subsidiaries ​ of VIE ​ Subsidiaries ​ Eliminations ​ Total ​ ​ (in RMB thousands) Third-party revenues ​ — 12,931 — 4,498,131 — 4,511,062 Inter-company revenues (1) ​ — 33,956 — — (33,956) — Third-party operating cost and expenses ​ (79,956) (188,218) (2,020) (4,387,982) — (4,658,176) Inter-company operating cost and expenses (1) ​ — — — (33,956) 33,956 — Other operating (loss)/income, net ​ — (656) — 18,251 — 17,595 (Loss)/Income from operations ​ (79,956) (141,987) (2,020) 94,444 — (129,519) Other non-operating income, net ​ 188,421 14,683 13,945 32,706 (3,240) 246,515 Share of (loss)/income from subsidiaries and VIE (2) ​ (1,220) 132,486 117,298 — (248,564) — Income before income tax expenses ​ 107,245 5,182 129,223 127,150 (251,804) 116,996 Income tax benefit/(expenses) ​ — 101 — (9,852) — (9,751) Net income ​ 107,245 5,283 129,223 117,298 (251,804) 107,245 ​ ​ 9 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2021 ​ ​ ​ Primary VIE ​ ​ ​ ​ KANZHUN ​ Other ​ Beneficiary ​ and VIE’s ​ ​ ​ Consolidated ​ ​ LIMITED ​ Subsidiaries ​ of VIE ​ Subsidiaries ​ Eliminations ​ Total ​ ​ (in RMB thousands) Third-party revenues ​ — — — 4,259,128 — 4,259,128 Inter-company revenues (1) ​ — 143 — — (143) — Third-party operating cost and expenses ​ (1,537,533) (93,123) (1,289) (3,678,480) — (5,310,425) Inter-company operating cost and expenses (1) ​ — — — (143) 143 — Other operating income, net ​ — 9 29 14,939 — 14,977 (Loss)/Income from operations ​ (1,537,533) (92,971) (1,260) 595,444 — (1,036,320) Other non-operating income/(loss), net ​ 5,011 (829) 5,375 15,216 — 24,773 Share of income from subsidiaries and VIE (2) ​ 461,448 555,248 551,133 — (1,567,829) — (Loss)/Income before income tax expenses ​ (1,071,074) 461,448 555,248 610,660 (1,567,829) (1,011,547) Income tax expenses ​ — — — (59,527) — (59,527) Net (loss)/income ​ (1,071,074) 461,448 555,248 551,133 (1,567,829) (1,071,074) ​ Selected Condensed Consolidating Balance Sheets Data ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2023 ​ ​ ​ Primary VIE ​ ​ ​ ​ KANZHUN ​ Other ​ Beneficiary ​ and VIE’s ​ ​ ​ Consolidated ​ ​ LIMITED ​ Subsidiaries ​ of VIE ​ Subsidiaries ​ Eliminations ​ Total ​ ​ (in RMB thousands) Cash and cash equivalents ​ 760,071 219,045 349,875 1,143,968 — 2,472,959 Time deposits ​ 710,330 5,928,093 72,938 211,442 — 6,922,803 Short-term investments ​ 731,805 91,634 10,483 2,679,963 — 3,513,885 Accounts receivable, net ​ — 13,036 — 3,691 — 16,727 Amounts due from Group companies (3) ​ 6,952,437 68,702 11,369 200,970 (7,233,478) — Amounts due from related parties ​ — 29 — 3,937 — 3,966 Prepayments and other current assets ​ 18,528 6,075 2,408 415,686 — 442,697 Investments in subsidiaries and VIE (2) ​ 2,179,517 2,888,791 2,479,473 — (7,547,781) — Property, equipment and software, net ​ — 132,263 93 1,661,132 — 1,793,488 Intangible assets, net ​ — 7,816 — 277 — 8,093 Goodwill ​ — 5,690 — — — 5,690 Right-of-use assets, net ​ — 22,556 — 260,056 — 282,612 Long-term investments ​ 2,323,540 — — 149,588 — 2,473,128 Other non-current assets ​ — — — 4,000 — 4,000 Total assets ​ 13,676,228 9,383,730 2,926,639 6,734,710 (14,781,259) 17,940,048 Accounts payable ​ — 554 17 628,645 — 629,216 Deferred revenue ​ — 144,493 — 2,649,582 — 2,794,075 Other payables and accrued liabilities ​ 115,280 39,798 587 623,381 — 779,046 Amounts due to Group companies (3) ​ 131,746 6,995,928 36,838 68,966 (7,233,478) — Operating lease liabilities, current ​ — 8,912 — 146,102 — 155,014 Operating lease liabilities, non-current ​ — 12,964 — 112,115 — 125,079 Deferred tax liabilities ​ — 1,564 406 26,455 — 28,425 Total liabilities ​ 247,026 ​ 7,204,213 ​ 37,848 ​ 4,255,246 ​ (7,233,478) ​ 4,510,855 Total shareholders’ equity (2) ​ 13,429,202 ​ 2,179,517 ​ 2,888,791 ​ 2,479,464 ​ (7,547,781) ​ 13,429,193 Total liabilities and shareholders’ equity ​ 13,676,228 ​ 9,383,730 ​ 2,926,639 ​ 6,734,710 ​ (14,781,259) ​ 17,940,048 10 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2022 ​ ​ ​ Primary VIE ​ ​ ​ ​ KANZHUN ​ Other ​ Beneficiary ​ and VIE’s ​ ​ ​ Consolidated ​ ​ LIMITED ​ Subsidiaries ​ of VIE ​ Subsidiaries ​ Eliminations ​ Total ​ ​ (in RMB thousands) Cash and cash equivalents ​ 8,234,173 179,392 318,016 1,020,243 — 9,751,824 Time deposits ​ — 707,912 85,130 — — 793,042 Short-term investments ​ 1,410,618 — 10,186 1,244,243 — 2,665,047 Accounts receivable, net ​ — 7,609 — 2,253 — 9,862 Amounts due from Group companies (3) ​ 1,851,752 ​ 20,949 ​ 14,667 ​ 136,757 ​ (2,024,125) ​ — Amounts due from related parties ​ — — — 5,714 — 5,714 Prepayments and other current assets ​ 62,256 2,231 7,378 528,908 — 600,773 Investments in subsidiaries and VIE (2) ​ 222,915 1,179,283 781,250 — (2,183,448) — Property, equipment and software, net ​ — 2,358 100 688,578 — 691,036 Intangible assets, net ​ — ​ 9,883 ​ — ​ 368 ​ — ​ 10,251 Goodwill ​ — 5,690 — — — 5,690 Right-of-use assets, net ​ — 7,715 — 281,913 — 289,628 Other non-current assets ​ — — — 4,000 — 4,000 Total assets ​ 11,781,714 2,123,022 1,216,727 3,912,977 (4,207,573) 14,826,867 Accounts payable ​ — 69 17 185,211 — 185,297 Deferred revenue ​ — 2,323 — 2,058,569 — 2,060,892 Other payables and accrued liabilities ​ 40,588 16,116 589 576,189 — 633,482 Amounts due to Group companies (3) ​ 100,363 1,872,048 36,838 14,876 (2,024,125) — Operating lease liabilities, current ​ — 5,079 — 146,359 — 151,438 Operating lease liabilities, non-current ​ — 2,495 — 141,096 — 143,591 Deferred tax liabilities ​ — 1,977 — 9,427 — 11,404 Total liabilities ​ 140,951 1,900,107 37,444 3,131,727 (2,024,125) 3,186,104 Total shareholders’ equity (2) ​ 11,640,763 222,915 1,179,283 781,250 (2,183,448) 11,640,763 Total liabilities and shareholders’ equity ​ 11,781,714 ​ 2,123,022 ​ 1,216,727 ​ 3,912,977 ​ (4,207,573) ​ 14,826,867 ​ Selected Condensed Consolidating Cash Flows Data ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2023 ​ ​ ​ ​ Primary VIE and ​ ​ ​ ​ KANZHUN ​ Other ​ Beneficiary ​ VIE’s ​ ​ ​ Consolidated ​ ​ LIMITED ​ Subsidiaries ​ of VIE ​ Subsidiaries ​ Eliminations ​ Total ​ ​ (in RMB thousands) Net cash provided by operating activities with third parties 9,873 300,164 13,210 2,723,762 — 3,047,009 Net cash provided by operating activities with Group companies (1) — 5,853 — (5,853) — — Net cash provided by operating activities ​ 9,873 ​ 306,017 13,210 2,717,909 — 3,047,009 Investments in subsidiaries (2) (7,073) — — — 7,073 — Loans to Group companies (3) (9,667,616) — — (6,250) 9,673,866 — Proceeds from repayments of loans to Group companies (3) 4,955,876 — 4,450 — (4,960,326) — Other investing activities with third parties (2,311,881) (5,054,055) 15,225 (2,587,934) — (9,938,645) Net cash (used in)/provided by investing activities (7,030,694) (5,054,055) 19,675 (2,594,184) 4,720,613 (9,938,645) Capital contribution from Group companies (2) — 7,073 — — (7,073) — Loans from Group companies (3) ​ — ​ 9,673,866 ​ — ​ — ​ (9,673,866) ​ — Repayments of loans from Group companies (3) ​ — ​ (4,960,326) ​ — ​ — ​ 4,960,326 ​ — Other financing activities with third parties ​ (417,022) ​ — ​ — ​ — ​ — ​ (417,022) Net cash (used in)/provided by financing activities ​ (417,022) ​ 4,720,613 ​ — ​ — ​ (4,720,613) ​ (417,022) ​ 11 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 ​ ​ ​ Primary VIE and ​ ​ ​ ​ KANZHUN ​ Other ​ Beneficiary ​ VIE’s ​ ​ ​ Consolidated ​ ​ LIMITED ​ Subsidiaries ​ of VIE ​ Subsidiaries ​ Eliminations ​ Total ​ ​ (in RMB thousands) Net cash provided by/(used in) operating activities with third parties ​ 208,862 ​ (113,736) ​ (6,833) ​ 914,749 ​ — ​ 1,003,042 Net cash provided by/(used in) operating activities with Group companies (1) ​ — ​ 21,671 ​ — ​ (21,671) ​ — ​ — Net cash provided by/(used in) operating activities ​ 208,862 (92,065) (6,833) 893,078 — 1,003,042 Investments in subsidiaries (2) ​ (39,392) — — — 39,392 — Loans to Group companies (3) ​ (633,490) — (4,450) — 637,940 — Proceeds from repayments of loans to Group companies (3) ​ — 35,144 — — (35,144) — Other investing activities with third parties ​ (1,365,740) (673,476) (74,823) (702,542) — (2,816,581) Net cash used in investing activities ​ (2,038,622) (638,332) (79,273) (702,542) 642,188 (2,816,581) Capital contribution from Group companies (2) ​ — 39,392 — — (39,392) — Loans from Group companies (3) ​ — 637,940 — — (637,940) — Repayments of loans from Group companies (3) ​ — — — (35,144) 35,144 — Other financing activities with third parties ​ (669,232) — — — — (669,232) Net cash (used in)/provided by financing activities ​ (669,232) 677,332 — (35,144) (642,188) (669,232) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2021 ​ ​ ​ Primary VIE and ​ ​ ​ ​ KANZHUN ​ Other ​ Beneficiary ​ VIE’s ​ ​ ​ Consolidated ​ ​ LIMITED ​ Subsidiaries ​ of VIE ​ Subsidiaries ​ Eliminations ​ Total ​ ​ (in RMB thousands) Net cash provided by/(used in) operating activities with third parties (4) 5,644 (81,135) (232) 1,717,104 — 1,641,381 Investments in subsidiaries (2) (74,131) — (10) — 74,141 — Loans to Group companies (3) (16,486) — — — 16,486 — Proceeds from repayments of loans to Group companies (3) ​ — 96,000 255,000 — (351,000) — Other investing activities with third parties — (649) (10,000) (591,213) — (601,862) Net cash (used in)/provided by investing activities (90,617) 95,351 244,990 (591,213) (260,373) (601,862) Capital contribution from Group companies (2) — 74,131 — 10 (74,141) — Loans from Group companies (3) — 16,486 — — (16,486) — Repayments of loans from Group companies (3) ​ — — (16,000) (335,000) 351,000 — Other financing activities with third parties 6,540,512 — — (109,249) — 6,431,263 Net cash provided by/(used in) financing activities 6,540,512 90,617 (16,000) (444,239) 260,373 6,431,263 Notes: (1) It represents the elimination of inter-company service fees charged/received.
Risk Factors Summary Risk Factors Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows, and prospects.
Risk Factors Summary of Risk Factors Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows, and prospects.
If we cannot properly manage our sales and marketing expenses or if our sales and marketing activities underperform our expectations, our financial condition, results of operations and business prospects will be damaged as a result. 15 Table of Contents Moreover, any negative publicity relating to our company, services or our directors, management, shareholders or business partners, regardless of its veracity, could harm our brands and the perception of our brands in the market.
If we cannot properly manage our sales and marketing expenses or if our sales and marketing activities underperform our expectations, our financial condition, results of operations and business prospects will be damaged as a result. 15 Table of Contents Moreover, any negative publicity relating to our company, our services or our directors, management, shareholders or business partners, regardless of its veracity, could harm our brands and the perception of our brands in the market.
We regularly review operating metrics, such as the number of our paid enterprise customers and MAU, to evaluate growth trends, measure our performance and make strategic decisions. These metrics are calculated using internal company data and have not been validated by an independent third party.
We regularly review operating metrics, such as the number of our paid enterprise customers and our MAU, to evaluate growth trends, measure our performance and make strategic decisions. These metrics are calculated using internal company data and have not been validated by an independent third party.
Risk-monitoring shall be strengthened when carrying out data processing activities, and remedial measures shall be taken immediately upon discovery of any data security defect or bug, disposal measures shall be taken immediately upon occurrence of any data security incident, users shall be timely notified in accordance with the relevant provisions and reports shall be made to relevant competent authorities.
Risk-monitoring shall be strengthened when carrying out data processing activities, and remedial measures shall be taken immediately upon discovery of any data security defect or bug, disposal measures shall be taken immediately upon occurrence of any data security incident, users shall be timely notified in accordance with the relevant provisions and reports shall be made to the competent authorities.
Risks Relating to Our Corporate Structure If the PRC government finds that the agreements that establish the structure for operating some of our operations in China do not comply with laws and regulations of mainland China relating to the relevant industries, or if these laws and regulations or the interpretation of existing laws and regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
Risks Relating to Our Corporate Structure If the PRC government finds that the agreements that establish the structure for operating some of our operations in mainland China do not comply with laws and regulations of mainland China relating to the relevant industries, or if these laws and regulations or the interpretation of existing laws and regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
Should legal actions become necessary, we cannot guarantee that the court will rule in favor of the enforceability of the VIE contractual arrangements.
Should legal actions become necessary, we cannot guarantee that the court will rule in favor of the enforceability of the VIE contractual arrangements.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
In May 2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021.
In May 2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we 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.
Any limitation on the ability of our mainland China subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.
Any limitation on the ability of our mainland China subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.
In addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax at a rate of 10% will be applicable to dividends payable by Chinese companies to non-mainland China-resident enterprises unless reduced under treaties or arrangements between the PRC central government and governments of other countries or regions where the non-mainland China resident enterprises are tax resident.
In addition, the PRC Enterprise Income Tax Law and its implementation rules provide that a withholding tax at a rate of 10% will be applicable to dividends payable by Chinese companies to non-mainland China-resident enterprises unless reduced under treaties or arrangements between the PRC central government and governments of other countries or regions where the non-mainland China resident enterprises are tax resident.
We are required by PRC Labor Law, and relevant regulations to pay various statutory employee benefits, including pensions insurance, medical insurance, work-related injury insurance, unemployment insurance, maternity insurance and housing provident fund, to designated government agencies for the benefit of our employees and associates.
We are required by the PRC Labor Law and the relevant regulations to pay various statutory employee benefits, including pensions insurance, medical insurance, work-related injury insurance, unemployment insurance, maternity insurance and housing provident fund, to designated government agencies for the benefit of our employees and associates.
Companies registered and operating in mainland China are required under the Social Insurance Law of PRC and the Regulations on the Administration of Housing Provident Fund to apply for social insurance registration and housing provident fund deposit registration within 30 days of their establishment and to pay for their employees different social insurance including pension insurance, medical insurance, work-related injury insurance, unemployment insurance and maternity insurance to the extent required by law.
Companies registered and operating in mainland China are required under the Social Insurance Law of the PRC and the Regulations on the Administration of Housing Provident Fund to apply for social insurance registration and housing provident fund deposit registration within 30 days of their establishment and to pay for their employees different social insurance including pension insurance, medical insurance, work-related injury insurance, unemployment insurance and maternity insurance to the extent required by law.
On April 10, 2020, the SAFE promulgated the Circular on Optimizing Administration of Foreign Exchange to Support the Development of Foreign-related Business, or SAFE Circular 8, under which eligible enterprises are allowed to make domestic payments by using their capital funds, foreign loans and the income under capital accounts of overseas listing without providing the evidentiary materials concerning authenticity of each expenditure in advance, provided that their capital use shall be authentic and conforms to the prevailing administrative regulations on the use of income under capital accounts.
On April 10, 2020, SAFE promulgated the Circular on Optimizing Administration of Foreign Exchange to Support the Development of Foreign-related Business, or SAFE Circular 8, under which eligible enterprises are allowed to make domestic payments by using their capital funds, foreign loans and the income under capital accounts of overseas listing without providing the evidentiary materials concerning authenticity of each expenditure in advance, provided that their capital use shall be authentic and conforms to the prevailing administrative regulations on the use of income under capital accounts.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for our Class A ordinary shares and/or ADSs to decline.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for our Class A ordinary shares and ADSs to decline.
Save that any register of members held in Hong Kong shall during normal business hours be open to inspection by a shareholder without charge and any other person on payment of a fee of such amount not exceeding the maximum amount as may from time to time be permitted under the Listing Rules as the Board may determine for each inspection, our directors have discretion under our memorandum and articles of association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders.
Save that any register of members held in Hong Kong shall during normal business hours be open to inspection by a shareholder without charge and any other person on payment of a fee of such amount not exceeding the maximum amount as may from time to time be permitted under the Hong Kong Listing Rules as the Board may determine for each inspection, our directors have discretion under our memorandum and articles of association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders.
If the PRC government otherwise find that we are in violation of any existing or future laws or regulations of mainland China or lack the necessary permits or licenses to operate our business, the relevant governmental authorities would have broad discretion in dealing with such violation, including, without limitation: ● revoking the business licenses and/or operating licenses of our entities in mainland China; ● imposing fines on us; ● confiscating any of our income that they deem to be obtained through illegal operations, or imposing other requirements with which we or the VIE may not be able to comply; ● discontinuing or placing restrictions or onerous conditions on our operations; ● placing restrictions on our right to collect revenues; ● shutting down our servers or blocking our online recruitment platform; ● requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with the VIE and deregistering the equity pledges of the VIE, which in turn would affect our ability to consolidate or derive economic interests from the VIE; ● restricting or prohibiting our use of the proceeds from our offshore offerings or other of our financing activities to finance the business and operations of the VIE; or ● taking other regulatory or enforcement actions that could be harmful to our business. 36 Table of Contents If the PRC government determines that the contractual arrangements constituting part of the VIE structure do not comply with regulations of mainland China, or if these regulations change or are interpreted differently in the future, our Class A ordinary shares or ADSs may decline in value or become worthless if we are unable to direct the activities of the VIE, which conducts substantially all our business operations that generate external revenues.
If the PRC government otherwise find that we are in violation of any existing or future laws or regulations of mainland China or lack the necessary permits or licenses to operate our business, the governmental authorities would have broad discretion in dealing with such violation, including, without limitation: ● revoking the business licenses and/or operating licenses of our entities in mainland China; ● imposing fines on us; ● confiscating any of our income that they deem to be obtained through illegal operations, or imposing other requirements with which we or the VIE may not be able to comply; ● discontinuing or placing restrictions or onerous conditions on our operations; ● placing restrictions on our right to collect revenues; ● shutting down our servers or blocking our online recruitment platform; ● requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with the VIE and deregistering the equity pledges of the VIE, which in turn would affect our ability to consolidate or derive economic interests from the VIE; ● restricting or prohibiting our use of the proceeds from our offshore offerings or other of our financing activities to finance the business and operations of the VIE; or ● taking other regulatory or enforcement actions that could be harmful to our business. 36 Table of Contents If the PRC government determines that the contractual arrangements constituting part of the VIE structure do not comply with regulations of mainland China, or if these regulations change or are interpreted differently in the future, our Class A ordinary shares or ADSs may decline in value or become worthless if we are unable to direct the activities of the VIE, which conducts substantially all our business operations that generate external revenues.
Business Overview—Regulation—Regulations Relating to Information Security and Censorship.” According to the New Regulations, if enacted as currently proposed as applicable to such new or draft laws, regulations, we may be required to fulfill filing, reporting procedures and obtain approval from the China Securities Regulatory Commission, or the CSRC, in connection with follow-on offering and other equivalent overseas offing activities in an overseas market, and may be required to go through cybersecurity review by the Cyberspace Administration of China, or the CAC, in respect of our data processing activities.
Business Overview—Regulation—Regulations Relating to Information Security and Censorship.” According to these laws and regulations, if enacted as currently proposed as applicable to such new or draft laws, regulations, we may be required to fulfill filing, reporting procedures and obtain approval from the China Securities Regulatory Commission, or the CSRC, in connection with follow-on offering and other equivalent overseas offing activities in an overseas market, and may be required to go through cybersecurity review by the Cyberspace Administration of China, or the CAC, in respect of our data processing activities.
On November 10, 2022, the Court granted preliminary approval of the parties’ settlement agreement, pursuant to which, without any admission or finding of any wrongdoing on the part of any of the Defendants, the parties agreed that, in consideration of Kanzhun’s payment of US$2.25 million, all actual and potential claims and causes of action that have been or could have been alleged against Kanzhun and the individual defendant (including the individuals mentioned above) are resolved and discharged and precluded from being raised again in any future action.
On November 10, 2022, the court granted preliminary approval of the parties’ settlement agreement, pursuant to which, without any admission or finding of any wrongdoing on the part of any of the defendants, the parties agreed that, in consideration of Kanzhun’s payment of US$2.25 million, all actual and potential claims and causes of action that have been or could have been alleged against Kanzhun and the individual defendants (including the individuals mentioned above) are resolved and discharged and precluded from being raised again in any future action.
Our market share, financial condition and results of operations may be materially and adversely affected if we are unable to compete effectively. ● If our technology capabilities fail to yield satisfactory results or fail to improve, our online recruitment platform may not be able to effectively match our job seekers with suitable enterprise users or to optimally recommend services for our users, and our user growth, retention, results of operations and business prospects may suffer consequently. ● A slowdown or adverse development in the Chinese or global economy may lower the hiring willingness and budget of our current and potential enterprise users, adversely affecting the demand for our services and our business in general. ● Our users may engage in intentional or negligent misconduct or other improper activities on our online recruitment platform or otherwise misuse our online recruitment platform, which may damage our brand image and reputation, our business and our results of operations. ● Because we store and process data, some of which contains sensitive personal information, we face concerns over the collection, improper use or disclosure of personal information, which could deter current and potential users from using our services, damage our reputation, result in legal liability, bring regulatory scrutiny, and in turn materially and adversely affect our business, financial condition and results of operations. ● Our business is subject to complex and evolving laws and regulations of mainland China.
Our market share, financial condition and results of operations may be materially and adversely affected if we are unable to compete effectively. ● If our technology capabilities fail to yield satisfactory results or fail to improve, our online recruitment platform may not be able to effectively match our job seekers with suitable enterprise users or to optimally recommend services for our users, and our user growth, retention, results of operations and business prospects may suffer consequently. ● A slowdown or adverse development in the Chinese or global economy may lower the hiring willingness and budget of our current and potential enterprise users, adversely affecting the demand for our services and our business in general. ● Our users may engage in intentional or negligent misconduct or other improper activities on our online recruitment platform or otherwise misuse our online recruitment platform, which may damage our brand image and reputation, our business and our results of operations. ● Because we store and process data, some of which contains sensitive personal information, we face concerns over the collection, improper use or disclosure of personal information, which could deter current and potential users from using our services, damage our reputation, result in legal liability, bring regulatory scrutiny, and in turn materially and adversely affect our business, financial condition and results of operations. ● Our business is subject to complex and evolving laws and regulations in mainland China on data protection and cybersecurity.
If a designated legal representative obtains control of the chops in an effort to obtain control over our entities in mainland China, we or our entities in mainland China would need to pass a new shareholder or board resolution to designate a new legal representative and we would need to take legal action to seek the return of the chops, apply for new chops with the relevant authorities, or otherwise seek legal redress for the violation of the representative’s fiduciary duties to us, which could involve significant time and resources and divert management attention away from our regular business.
If a designated legal representative obtains control of the chops in an effort to obtain control over our entities in mainland China, we or our entities in mainland China would need to pass a new shareholder or board resolution to designate a new legal representative and we would need to take legal action to seek the return of the chops, apply for new chops with the authorities, or otherwise seek legal redress for the violation of the representative’s fiduciary duties to us, which could involve significant time and resources and divert management attention away from our regular business.
Under relevant laws and regulations of mainland China, online service providers, which provide storage space for users to upload works or links to other services or content, could be held liable for copyright infringement under various circumstances, including situations where the online service provider knows or should reasonably have known that the relevant content uploaded or linked to on its platform infringes upon the copyright of others and the online service provider failed to take necessary actions to prevent such infringement.
Under the laws and regulations of mainland China, online service providers, which provide storage space for users to upload works or links to other services or content, could be held liable for copyright infringement under various circumstances, including situations where the online service provider knows or should reasonably have known that the content uploaded or linked to on its platform infringes upon the copyright of others and the online service provider failed to take necessary actions to prevent such infringement.
Risks Relating to Our ADSs ● The trading price of the ADSs has been and may be volatile, which could result in substantial losses to investors. ● Our dual-class voting structure will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our ADSs may view as beneficial. ● The dual-class structure of our ordinary shares may adversely affect the trading market for our ADSs. ● If securities or industry analysts do not publish research or publishes inaccurate or unfavorable research about our business, or if they adversely change their recommendations regarding the ADSs, the market price for our ADSs and trading volume could decline. 14 Table of Contents Risks Relating to Our Business and Industry If we fail to implement new technologies, develop and provide innovative features and services, respond to evolving user preferences, enhance user friendliness of our online recruitment platform, or optimize our technology systems, we may not be able to improve user experience, which may have a material and adverse effect on our user growth and retention, business, financial condition and results of operations.
Risks Relating to Our Shares and Our ADSs ● The trading price of the ADSs has been and may be, and the trading price of our Class A ordinary shares can be, volatile, which could result in substantial losses to investors. ● Our dual-class voting structure will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares or ADSs may view as beneficial. ● The dual-class structure of our ordinary shares may adversely affect the trading market for our Class A ordinary shares and/or ADSs. ● If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, or if they adversely change their recommendations regarding the Class A ordinary shares and/or ADSs, the market price for our Class A ordinary shares and ADSs and trading volume could decline. 14 Table of Contents Risks Relating to Our Business and Industry If we fail to implement new technologies, develop and provide innovative features and services, respond to evolving user preferences, enhance user friendliness of our online recruitment platform, or optimize our technology systems, we may not be able to improve user experience, which may have a material and adverse effect on our user growth and retention, business, financial condition and results of operations.
Although we enter into confidentiality and non-disclosure agreements with our employees, and we also have in place various relevant internal rules and polices that require compliance from our employees, these agreements could be breached, the internal rules and policies could be violated, we may be involved in disputes in respect of these agreements and internal rules and policies for which we may not have adequate remedies, and our proprietary technology, know-how or other intellectual property could otherwise become known to third parties.
Although we enter into confidentiality and non-disclosure agreements with our employees, and we also have in place various internal rules and polices that require compliance from our employees, these agreements could be breached, the internal rules and policies could be violated, we may be involved in disputes in respect of these agreements and internal rules and policies for which we may not have adequate remedies, and our proprietary technology, know-how or other intellectual property could otherwise become known to third parties.
As of the date of this annual report, our mainland China subsidiaries, the VIE and its subsidiaries have obtained the requisite licenses and permits from the PRC government authorities that are material for the business operations of our holding company, the VIE in mainland China, including, among others, the Value-added Telecommunications Business Operation License for information services via internet, or ICP License, Human Resource Services License, and other relevant permits required for operating our business.
As of the date of this annual report, our mainland China subsidiaries, the VIE and its subsidiaries have obtained the requisite licenses and permits from the PRC government authorities that are material for the business operations of our holding company, the VIE in mainland China, including, among others, the Value-added Telecommunications Business Operation License for information services via internet, or ICP License, Human Resource Services License, and other permits required for operating our business.
Although the failure to do so does not in itself invalidate the lease agreements, we may be ordered by the PRC government authorities to rectify such noncompliance and, if such noncompliance is not rectified within a given period of time, we may be subject to fines imposed by PRC government authorities ranging from RMB1,000 and RMB10,000 for each lease agreement that has not been registered with the relevant PRC governmental authorities.
Although the failure to do so does not in itself invalidate the lease agreements, we may be ordered by the PRC government authorities to rectify such noncompliance and, if such noncompliance is not rectified within a given period of time, we may be subject to fines imposed by PRC government authorities ranging from RMB1,000 and RMB10,000 for each lease agreement that has not been registered with the PRC governmental authorities.
If we fail to complete the filing with the CSRC in a timely manner, or at all, for our further capital raising activities which are subject to filing requirements under the Overseas Listing Regulations due to the VIE structure, we may be required to unwind the VIE or adjust our business operations to meet relevant requirements and our ability to raise or utilize funds could be materially and adversely affected.
If we fail to complete the filing with the CSRC in a timely manner, or at all, for our further capital raising activities which are subject to filing requirements under the Overseas Listing Regulations due to the VIE structure, we may be required to unwind the VIE or adjust our business operations to meet the requirements and our ability to raise or utilize funds could be materially and adversely affected.
As a result, gains derived from such indirect transfer may be subject to mainland China enterprise income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a mainland China resident enterprise unless otherwise reduced or exempted by relevant tax treaties or similar arrangements.
As a result, gains derived from such indirect transfer may be subject to mainland China enterprise income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a mainland China resident enterprise unless otherwise reduced or exempted by applicable tax treaties or similar arrangements.
In the past, shareholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their securities. A shareholder class action lawsuit has been filed against us and certain of our directors and officers. See “Item 4. Information on the Company—Business Overview—Legal and Administrative Proceedings” for more details.
In the past, shareholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their securities. A shareholder class action lawsuit has been filed against us and certain of our directors and officers. See “Item 4. Information on the Company—B. Business Overview—Legal and Administrative Proceedings” for more details.
For a detailed discussion of applicable PRC regulations governing distribution of dividends, see “Item 4. Information on the Company—Business Overview—Regulations—Regulations Relating to Dividend Distribution.” Additionally, if our mainland China subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends or make other distributions to us.
For a detailed discussion of applicable PRC regulations governing distribution of dividends, see “Item 4. Information on the Company—B. Business Overview—Regulations— Regulations Relating to Dividend Distributions.” Additionally, if our mainland China subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends or make other distributions to us.
It is not clear under the Data Security Law what constitutes “important data” or “state critical data.” If we are deemed to collect “important data” or “state critical data,” we may need to adopt internal reforms in order to comply with the Data Security Law, which may increase the cost of operations, or decline the user growth or engagement, or otherwise harm our business.
It is not clear under the PRC Data Security Law what constitutes “important data” or “state critical data.” If we are deemed to collect “important data” or “state critical data,” we may need to adopt internal reforms in order to comply with the PRC Data Security Law, which may increase the cost of operations, or decline the user growth or engagement, or otherwise harm our business.
While we would strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed against the relevant short seller by principles of freedom of speech, applicable state law or issues of commercial confidentiality. Such a situation could be costly and time-consuming, and could distract our management from growing our business.
While we would strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed against the short seller by principles of freedom of speech, applicable state law or issues of commercial confidentiality. Such a situation could be costly and time-consuming, and could distract our management from growing our business.
In response to allegations of illegal or inappropriate activities conducted through our online recruitment platform, relevant governmental authorities may intervene and hold us liable for non-compliance with applicable laws and regulations and subject us to administrative penalties or other sanctions, such as requiring us to restrict or discontinue some or all of our features and services.
In response to allegations of illegal or inappropriate activities conducted through our online recruitment platform, governmental authorities may intervene and hold us liable for non-compliance with applicable laws and regulations and subject us to administrative penalties or other sanctions, such as requiring us to restrict or discontinue some or all of our features and services.
We are subject to the laws, regulations, guidelines and national standards relating to the protection of personal information in mainland China, which covers areas such as the collection, storage, use, transmission, sharing or other aspects of data processing of such personal information. For example, the PRC Personal Information Protection Law, or the PIPL, took effect on November 1, 2021.
We are subject to the laws, regulations, guidelines and national standards relating to the protection of personal information in mainland China, which covers areas such as the collection, storage, use, transmission, sharing or other aspects of data processing of such personal information. For example, the PRC Personal Information Protection Law took effect on November 1, 2021.
If we face challenges from the legal owners of the leased real properties or other third parties, we could be required to vacate the properties and incur additional costs, in the event of which we could only initiate the claim against the lessors under relevant laws of mainland China and/or lease agreements for indemnities for their breach of the relevant leasing agreements.
If we face challenges from the legal owners of the leased real properties or other third parties, we could be required to vacate the properties and incur additional costs, in the event of which we could only initiate the claim against the lessors under the laws of mainland China and/or lease agreements for indemnities for their breach of the leasing agreements.
At a press conference held for the Overseas Listing Regulations on February 17, 2023, officials from the CSRC clarified that, the CSRC will solicit opinions from relevant PRC regulatory authorities and complete the filing for companies that seek to offer and list their securities overseas with VIE structure if such companies duly meet relevant compliance requirements.
At a press conference held for the Overseas Listing Regulations on February 17, 2023, officials from the CSRC clarified that the CSRC will solicit opinions from the PRC regulatory authorities and complete the filing for companies that seek to offer and list their securities overseas with VIE structure if such companies duly meet the compliance requirements.
Key Information—Risk Factors—Risks Related to Doing Business in 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 “Item 3.
Risk Factors—Risks Related to Doing Business in 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 “Item 3. Key Information—D.
We cannot assure you that our determination regarding our qualification to enjoy the preferential tax treatment will not be challenged by the relevant tax authority or we will be able to complete the necessary filings with the relevant tax authority and enjoy the preferential withholding tax rate of 5% under the arrangement with respect to dividends to be paid by our mainland China subsidiaries to our Hong Kong subsidiary.
We cannot assure you that our determination regarding our qualification to enjoy the preferential tax treatment will not be challenged by the tax authority or we will be able to complete the necessary filings with the tax authority and enjoy the preferential withholding tax rate of 5% under the arrangement with respect to dividends to be paid by our mainland China subsidiaries to our Hong Kong subsidiary.
Although we monitor such authorized personnel, there is no assurance such procedures will prevent all instances of abuse or negligence. Accordingly, if any of our authorized personnel misuse or misappropriate our corporate chops or seals, we could encounter difficulties in maintaining control over the relevant entities and experience significant disruption to our operations.
Although we monitor such authorized personnel, there is no assurance such procedures will prevent all instances of abuse or negligence. Accordingly, if any of our authorized personnel misuse or misappropriate our corporate chops or seals, we could encounter difficulties in maintaining control over the entities and experience significant disruption to our operations.
While we do not expect to be or become a PFIC, no assurance can be given in this regard, however, because the determination of whether we will be or become a PFIC for any taxable year is a fact intensive determination made annually that depends, in part, upon the composition and classification of our income and assets.
While we do not expect to be or become a PFIC, no assurance can be given in this regard because the determination of whether we will be or become a PFIC for any taxable year is a fact intensive determination made annually that depends, in part, upon the composition and classification of our income and assets.
However, since these laws and regulations are relatively new and may be amended from time to time, and because of the limited number of published decisions and the nonbinding nature of such decisions and the significant discretion relevant regulators legally have in enforcing them, the interpretations of many laws, regulations, and rules may not be uniform and their enforcement involves uncertainties.
However, since these laws and regulations are relatively new and may be amended from time to time, and because of the limited number of published decisions and the nonbinding nature of such decisions and the significant discretion the regulators legally have in enforcing them, the interpretations of many laws, regulations, and rules may not be uniform and their enforcement involves uncertainties.
If the relevant PRC authorities determine that we shall make supplemental social insurance and housing provident fund contributions or that we are subject to fines and legal sanctions in relation to our failure to make social insurance and housing provident fund contributions in full for our employees, our business, financial condition and results of operations may be adversely affected.
If the PRC authorities determine that we shall make supplemental social insurance and housing provident fund contributions or that we are subject to fines and legal sanctions in relation to our failure to make social insurance and housing provident fund contributions in full for our employees, our business, financial condition and results of operations may be adversely affected.
If we or the VIE 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, approvals, or filings, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures.
If we or the VIE 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, approvals, or filings, the PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures.
Moreover, the costs of identifying and consummating acquisitions may be significant. In addition to possible shareholders’ approval, we may also have to obtain approvals and licenses from relevant governmental authorities for the acquisitions and to comply with any applicable laws and regulations of mainland China, which could result in increased delay and costs.
Moreover, the costs of identifying and consummating acquisitions may be significant. In addition to possible shareholders’ approval, we may also have to obtain approvals and licenses from the governmental authorities for the acquisitions and to comply with any applicable laws and regulations of mainland China, which could result in increased delay and costs.
If such claim is supported by the court, the relevant equity interest may be obtained by the shareholder’s spouse or another third party who is not subject to obligations under our contractual arrangements, which could result in a loss of our status as the primary beneficiary of the VIE.
If such claim is supported by the court, the equity interest may be obtained by the shareholder’s spouse or another third party who is not subject to obligations under our contractual arrangements, which could result in a loss of our status as the primary beneficiary of the VIE.
As a result, we and non-resident enterprises in such transactions may become at risk of being subject to filing obligations or being taxed under SAT Bulletin 7 and SAT Bulletin 37, and may be required to expend valuable resources to comply with them or to establish that we and our non-resident enterprises should not be taxed under these regulations, which may have a material adverse effect on our financial condition and results of operations. 50 Table of Contents If the custodians or authorized users of controlling non-tangible assets of our company, including our corporate chops and seals, fail to fulfill their responsibilities, or misappropriate or misuse these assets, our business and operations could be materially and adversely affected.
As a result, we and non-resident enterprises in such transactions may become at risk of being subject to filing obligations or being taxed under SAT Bulletin 7 and SAT Bulletin 37, and may be required to expend valuable resources to comply with them or to establish that we and our non-resident enterprises should not be taxed under these regulations, which may have a material adverse effect on our financial condition and results of operations. 51 Table of Contents If the custodians or authorized users of controlling non-tangible assets of our company, including our corporate chops and seals, fail to fulfill their responsibilities, or misappropriate or misuse these assets, our business and operations could be materially and adversely affected.
These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies and proposed to take effective measures, such as promoting the construction of relevant regulatory systems to deal with the risks and incidents faced by 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 China-based companies and proposed to take effective measures, such as promoting the construction of regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies.
As it is in the short seller’s interest for the price of the security to decline, many short sellers publish, or arrange for the publication of, negative opinions regarding the relevant issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling a security short.
As it is in the short seller’s interest for the price of the security to decline, many short sellers publish, or arrange for the publication of, negative opinions regarding the issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling a security short.
We may have limited ability to monitor or control the actions of these third parties and, to the extent any of these strategic third parties suffers negative publicity or harm to their reputation from events relating to their business, we may also suffer negative publicity or harm to our reputation by virtue of our association with any such third party.
We may have limited ability to monitor or control the actions of these third parties and, to the extent any of these strategic third parties suffer negative publicity or harm to their reputation from events relating to their business, we may also suffer negative publicity or harm to our reputation by virtue of our association with any such third party.
The PRC Foreign Investment Law provides that (i) foreign-invested entities operating in “restricted” industries are required to obtain market entry clearance and other approvals from relevant PRC government authorities; (ii) foreign investors shall not invest in any industries that are “prohibited” under the Negative List.
The PRC Foreign Investment Law provides that (i) foreign-invested entities operating in “restricted” industries are required to obtain market entry clearance and other approvals from the PRC government authorities; (ii) foreign investors shall not invest in any industries that are “prohibited” under the Negative List.
We may need to invest significant capital, managerial and human resources to comply with legal requirements, enhance information security and address any issues caused by security failures. See also “Item 4. Information on the Company—Business Overview—Regulations—Regulations Relating to Information Security and Censorship” and “Item 4.
We may need to invest significant capital, managerial and human resources to comply with legal requirements, enhance information security and address any issues caused by security failures. See also “Item 4. Information on the Company—B. Business Overview—Regulations—Regulations Relating to Information Security and Censorship” and “Item 4.
Furthermore, internet content providers are also prohibited from displaying content that may be deemed by relevant government authorities as instigating ethnical hatred and harming ethnical unity, harming the national religious policy, “socially destabilizing” or leaking “state secrets” of the PRC.
Furthermore, internet content providers are also prohibited from displaying content that may be deemed by the government authorities as instigating ethnical hatred and harming ethnical unity, harming the national religious policy, “socially destabilizing” or leaking “state secrets” of the PRC.
Meanwhile, there are very few precedents as to whether contractual arrangements would be judged to be effective over the relevant consolidated affiliated entities through the contractual arrangements, or how contractual arrangements in the context of a VIE should be interpreted or enforced by the courts of mainland China.
Meanwhile, there are very few precedents as to whether contractual arrangements would be judged to be effective over the consolidated affiliated entities through the contractual arrangements, or how contractual arrangements in the context of a VIE should be interpreted or enforced by the courts of mainland China.
If we are deemed to have violated relevant labor laws and regulations, we could be required to provide additional compensation to our employees and be subject to orders by competent labor authorities for rectification, and failure to comply with the orders may further subject us to administrative fines.
If we are deemed to have violated labor laws and regulations, we could be required to provide additional compensation to our employees and be subject to orders by competent labor authorities for rectification, and failure to comply with the orders may further subject us to administrative fines.
In addition, if we are subject to listing standards or other rules or regulations of other jurisdictions in the future, those requirements may further change the degree of protection for our shareholders to the extent they differ from the Nasdaq Stock Market’s corporate governance listing standards applicable to U.S. domestic issuers. 59 Table of Contents The voting rights of ADS holders are limited by the terms of the deposit agreement, and you may not be able to exercise your right to direct how the Class A ordinary shares which are represented by your ADSs are voted.
In addition, if we are subject to listing standards or other rules or regulations of other jurisdictions in the future, those requirements may further change the degree of protection for our shareholders to the extent they differ from the Nasdaq Stock Market’s corporate governance listing standards applicable to U.S. domestic issuers. 60 Table of Contents The voting rights of ADS holders are limited by the terms of the deposit agreement, and you may not be able to exercise your right to direct how the Class A ordinary shares which are represented by your ADSs are voted.
Under SAFE Circular 7 and other relevant rules and regulations, mainland China residents who participate in stock incentive plan in an overseas publicly listed company are required to register with SAFE or its local branches and complete certain other procedures.
Under SAFE Circular 7 and other rules and regulations, mainland China residents who participate in stock incentive plan in an overseas publicly listed company are required to register with SAFE or its local branches and complete certain other procedures.
If securities or industry analysts do not publish research or publishes inaccurate or unfavorable research about our business, or if they adversely change their recommendations regarding the Class A ordinary shares and/or ADSs, the market price for our Class A ordinary shares and/or ADSs and trading volume could decline.
If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, or if they adversely change their recommendations regarding the Class A ordinary shares and/or ADSs, the market price for our Class A ordinary shares and ADSs and trading volume could decline.
As advised by our PRC legal counsel, based on a consultation with the Media Integration Development Division of Beijing Municipal Radio and Television Bureau in July 2022, a company that is not eligible for the Audio-Visual License for providing internet audio-visual program services is allowed to apply for the registration and filing with the National Internet Audio-Visual Platforms Information Registration Management System (“Audio-Visual Filing”), when its number of daily active users and program inspectors, personnel within a company that is responsible for reviewing and vetting the content of the internet audio-visual program, reach the respective threshold.
As advised by our PRC legal counsel, based on a consultation with the Media Integration Development Division of Beijing Municipal Radio and Television Bureau in July 2022, a company that is not eligible for the Audio-Visual License for providing internet audio-visual program services is allowed to apply for the registration and filing with the National Internet Audio-Visual Platforms Information Registration Management System, when its number of daily active users and program inspectors, personnel within a company that is responsible for reviewing and vetting the content of the internet audio-visual program, reach the respective threshold.
Meanwhile, there are very few precedents as to whether contractual arrangements would be judged to direct the activities of the relevant VIE through the contractual arrangements, or how contractual arrangements in the context of a VIE should be interpreted or enforced by the courts of mainland China.
Meanwhile, there are very few precedents as to whether contractual arrangements would be judged to direct the activities of the VIE through the contractual arrangements, or how contractual arrangements in the context of a VIE should be interpreted or enforced by the courts of mainland China.
If any of our business partners violate relevant laws and regulations, or fails to fully comply with the service agreements with us, or if any of our employees fails to comply with our internal control measures and misuses the information, we may be subject to legal liabilities.
If any of our business partners violate the laws or regulations, or fails to fully comply with the service agreements with us, or if any of our employees fails to comply with our internal control measures and misuses the information, we may be subject to legal liabilities.
Under the circumstances that we decide to make an amendment to the deposit agreement that is disadvantageous to ADS holders or terminate the deposit agreement, the ADS holders may choose to sell their ADSs or surrender their ADSs and become direct holders of the underlying Class A ordinary shares, but will have no right to any compensation whatsoever. 60 Table of Contents ADS holders may not be entitled to a jury trial with respect to claims arising under the deposit agreement, which could result in less favorable outcomes to the plaintiff(s) in any such action.
Under the circumstances that we decide to make an amendment to the deposit agreement that is disadvantageous to ADS holders or terminate the deposit agreement, the ADS holders may choose to sell their ADSs or surrender their ADSs and become direct holders of the underlying Class A ordinary shares, but will have no right to any compensation whatsoever. 61 Table of Contents ADS holders may not be entitled to a jury trial with respect to claims arising under the deposit agreement, which could result in less favorable outcomes to the plaintiff(s) in any such action.
Under relevant laws and regulations of mainland China, loans to the VIE directly from the Cayman entity shall not exceed 200% of the net assets of the relevant VIE, whereas loans from our mainland China subsidiaries, subject to relevant laws and regulations of mainland China concerning foreign currency, are not subject to amount limitations.
Under the laws and regulations of mainland China, loans to the VIE directly from the Cayman entity shall not exceed 200% of the net assets of the VIE, whereas loans from our mainland China subsidiaries, subject to the laws and regulations of mainland China concerning foreign currency, are not subject to amount limitations.
The revised Cybersecurity Review Measures also provide that the Cybersecurity Review Office of the CAC may initiate cybersecurity review against relevant operators if the authorities believe that the network products, network services or data processing activities of such operators affect or may affect national security.
The revised Cybersecurity Review Measures also provide that the Cybersecurity Review Office of the CAC may initiate cybersecurity review against the operators if the authorities believe that the network products, network services or data processing activities of such operators affect or may affect national security.
As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer. 58 Table of Contents We are a “controlled company” within the meaning of the Nasdaq Stock Market Rules and, as a result, may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.
As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer. 59 Table of Contents We are a “controlled company” within the meaning of the Nasdaq Stock Market Rules and, as a result, may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.
Our board of directors may declare, and our company may pay, dividends after taking into account the results of operations, financial condition, cash flow, operating and capital expenditure requirements, future business development strategies and estimates and other factors as they may deem relevant. 53 Table of Contents Our board of directors has complete discretion as to whether to distribute dividends, subject to certain requirements of Cayman Islands law.
Our board of directors may declare, and our company may pay, dividends after taking into account the results of operations, financial condition, cash flow, operating and capital expenditure requirements, future business development strategies and estimates and other factors as they may deem relevant. 54 Table of Contents Our board of directors has complete discretion as to whether to distribute dividends, subject to certain requirements of Cayman Islands law.
This concentrated control will limit your ability to influence corporate matters and could discourage others from pursuing any potential merger, takeover or other change of control transactions that holders of Class A ordinary shares and ADSs may view as beneficial. 52 Table of Contents The dual-class structure of our ordinary shares may adversely affect the trading market for our Class A ordinary shares and/or ADSs.
This concentrated control will limit your ability to influence corporate matters and could discourage others from pursuing any potential merger, takeover or other change of control transactions that holders of Class A ordinary shares and ADSs may view as beneficial. 53 Table of Contents The dual-class structure of our ordinary shares may adversely affect the trading market for our Class A ordinary shares and/or ADSs.
In addition, gains realized on the sale or other disposition of the Class A ordinary shares and/or ADSs may be subject to PRC tax, at a rate of 10% in the case of non-resident enterprises unless otherwise reduced or exempted by relevant tax treaties or similar arrangements, or 20% in the case of non-resident individuals, if such gains are deemed to be from PRC sources.
In addition, gains realized on the sale or other disposition of the Class A ordinary shares and/or ADSs may be subject to PRC tax, at a rate of 10% in the case of non-resident enterprises unless otherwise reduced or exempted by applicable tax treaties or similar arrangements, or 20% in the case of non-resident individuals, if such gains are deemed to be from PRC sources.
As approved by the Cybersecurity Review Office of the CAC, we have recommenced new user registration on our BOSS Zhipin app, effective from June 29, 2022. On July 30, 2021, the PRC State Council promulgated the Regulations on Security Protection of Critical Information Infrastructure, which became effective on September 1, 2021. See “Item 4.
As approved by the Cybersecurity Review Office of the CAC, we have recommenced new user registration on our BOSS Zhipin app, effective from June 29, 2022. On July 30, 2021, the PRC State Council promulgated the Regulations on Security Protection of Critical Information Infrastructure, which became effective on September 1, 2021. See “Item 4. Information on the Company—B.
We and our PRC employees who have been granted share-based awards are subject to SAFE Circular 7 and other relevant rules and regulations these regulations.
We and our PRC employees who have been granted share-based awards are subject to SAFE Circular 7 and other rules and regulations these regulations.
There is no assurance that we will be able to effectively refute each of the allegations within a reasonable period of time, or at all. Additionally, public allegations, directly or indirectly, against us or our directors, management, shareholders or business partners, may be posted online by anyone on an anonymous basis.
There is no assurance that we will be able to effectively refute allegations within a reasonable period of time, or at all. Additionally, public allegations, directly or indirectly, against us or our directors, management, shareholders or business partners, may be posted online by anyone on an anonymous basis.
Risk Factors—Risks Relating to Our Corporate Structure— If the PRC government finds that the agreements that establish the structure for operating some of our operations in China do not comply with laws and regulations of mainland China relating to the relevant industries, or if these laws and regulations or the interpretation of existing laws and regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations” and “—Our current corporate structure and business operations may be substantially affected by the newly enacted Foreign Investment Law.” We face various risks and uncertainties related to doing business in China.
Risk Factors—Risks Relating to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating some of our operations in mainland China do not comply with laws and regulations of mainland China relating to the relevant industries, or if these laws and regulations or the interpretation of existing laws and regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations,” and “—Our current corporate structure and business operations may be substantially affected by the Foreign Investment Law.” We face various risks and uncertainties related to doing business in China.
Furthermore, the PRC government has promulgated regulations and rules in recent years to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers. Accordingly, there have been certain new or draft laws, regulations in relation to cybersecurity and data privacy, offerings conducted overseas by, and foreign investment in, China-based issuers (the “New Regulations”).
Furthermore, the PRC government has promulgated regulations and rules in recent years to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers. Accordingly, there have been certain new or draft laws, regulations in relation to cybersecurity and data privacy, offerings conducted overseas by, and foreign investment in, China-based issuers.
Specifically, the operation of certain value-added telecommunications services are considered “restricted,” and foreign ownership of an internet information service provider may not exceed 50%. The provision of internet audio-video program services and radio and television program services are considered “prohibited.” We are a Cayman Islands company and our mainland China subsidiaries are considered foreign-invested enterprises.
Specifically, the operation of certain value-added telecommunications services are considered “restricted,” and foreign ownership of an internet information service provider may not exceed 50%. The provision of internet audio-visual program services and radio and television program services are considered “prohibited.” We are a Cayman Islands company and our mainland China subsidiaries are considered foreign-invested enterprises.
Our stock incentive plan has been registered with the Sanya branch of SAFE through Hainan Huapin Borui Network Technology Co., Ltd. as the domestic agent under the SAFE Circular 7. In addition, the State Administration of Taxation, or the SAT has issued certain circulars concerning employee share options and restricted shares.
Our stock incentive plan has been registered with the Sanya branch of SAFE through Hainan Huapin Borui Network Technology Co., Ltd. as the domestic agent under SAFE Circular 7. In addition, the State Administration of Taxation has issued certain circulars concerning employee share options and restricted shares.
Accordingly, holders of ADSs may be unable to participate in our rights offerings and may experience dilution of their holdings as a result. 57 Table of Contents You may not receive the distributions we make on our Class A ordinary shares if the depositary decides it is impractical to make them available to you.
Accordingly, holders of ADSs may be unable to participate in our rights offerings and may experience dilution of their holdings as a result. 58 Table of Contents You may not receive the distributions we make on our Class A ordinary shares if the depositary decides it is impractical to make them available to you.
Foreign ownership in entities that provide internet and other related businesses, including but not limited to, the value-added telecommunication services, internet audio-video program services and radio and television program services, is subject to restrictions under current laws and regulations of mainland China, unless certain exceptions are available.
Foreign ownership in entities that provide internet and other related businesses, including but not limited to, the value-added telecommunication services, internet audio-visual program services and radio and television program services, is subject to restrictions under current laws and regulations of mainland China, unless certain exceptions are available.
On July 6, 2021, the relevant PRC government authorities issued Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with the Law.
On July 6, 2021, the PRC government authorities issued Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with the Law.
Where a non-resident enterprise conducts an “indirect transfer” by transferring the taxable assets indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise being the transferor, or the transferee, or the mainland China entity which directly owned the taxable assets may report to the relevant tax authority such indirect transfer.
Where a nonresident enterprise conducts an “indirect transfer” by transferring the taxable assets indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise being the transferor, or the transferee, or the mainland China entity which directly owned the taxable assets may report to the tax authority such indirect transfer.
Our corporate affairs are governed by our memorandum and articles of association, the Companies Act (As Revised) of the Cayman Islands, or the Companies Act, and the common law of the Cayman Islands.
Our corporate affairs are governed by our memorandum and articles of association, the Companies Act (As Revised) of the Cayman Islands and the common law of the Cayman Islands.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeOn June 22, 2007, the MPS, the National Administration of State Secrets Protection, the State Cipher Code Administration and the Information Office of the State Council (repealed) promulgated the Administrative Measures for the Graded Protection of Information Security, or the Measures for the Graded Protection, effective from June 22, 2007, pursuant to which, graded protection of the state information security shall follow the principle of “independent grading and independent protection”, and the security protection grade of an information system shall be determined according to such factors as its level of importance in national security, economic development and social livelihood as well as its level of damage to national security, social order, public interests and the legitimate rights and interests of citizens, legal persons and other organizations in case it is destroyed, accordingly the security protection grade of an information system may be classified into five grades.
Biggest changeOn September 12, 2022, the CAC released the Notice on Seeking Public Comments on the Decision on Amending the PRC Cyber Security Law (Draft for Public Comments), which imposes more stringent legal liabilities and raises the upper limit of monetary fines for serious violation of the security protection obligations of network operation, network information, critical information infrastructure and personal information under the PRC Cyber Security Law to RMB50 million or 5% of the company’s total sales from the previous year. 85 Table of Contents On June 22, 2007, the Ministry of Public Security, the National Administration of State Secrets Protection, the State Cipher Code Administration and the Information Office of the State Council (absorbed into the MIIT) promulgated the Administrative Measures for the Graded Protection of Information Security, effective from June 22, 2007, pursuant to which, graded protection of the state information security shall follow the principle of “independent grading and independent protection,” and the security protection grade of an information system shall be determined according to such factors as its level of importance in national security, economic development and social livelihood as well as its level of damage to national security, social order, public interests and the legitimate rights and interests of citizens, legal persons and other organizations in case it is destroyed, accordingly the security protection grade of an information system may be classified into five grades.
As a result, we have achieved full user coverage of white and gold-collar users, blue-collar users and college students, and have served a full spectrum of employers, large and small, in numerous industries and from diverse geographical areas, developing a powerful network effect.
As a result, we have achieved full user coverage of white-collar and gold-collar users, blue-collar users and college students, and have served a full spectrum of employers, large and small, in numerous industries and from diverse geographical areas, developing a powerful network effect.
The innovative feature engineering system lays a solid foundation for accurate job and candidate recommendations based on large volume and high velocity of static and behavioral data. In addition, we have built solid data infrastructure of high-availability and high-concurrency.
The innovative feature engineering system lays a solid foundation for accurate job and candidate recommendations based on large volume and high velocity of static and behavioral data. In addition, we have built a solid data infrastructure of high-availability and high-concurrency.
Vigorous User Verification & AI Powered Risk Assessment We have implemented “platform user safety protection” program, which focuses on protecting users’ interests. We emphasize the importance of ensuring the information presented on our platform is verified and authentic.
Vigorous User Verification & AI Powered Risk Assessment We have implemented “platform user safety protection” program, which focuses on protecting our users’ interests. We emphasize the importance of ensuring the information presented on our platform is verified and authentic.
After we discover misconduct of enterprise users, regardless whether it took place on or outside of our platform, or identify false information, we take corresponding actions to address the issues identified, such as banning, blocking user accounts, requiring enterprises to provide additional verification materials, or prohibiting the information of the company and its enterprise users from being accessed by job seekers.
After we discover misconduct of enterprise users, regardless of whether it took place on or outside of our platform, or identify false information, we take corresponding actions to address the issues identified, such as banning, blocking user accounts, requiring enterprises to provide additional verification materials, or prohibiting the information of the company and its enterprise users from being accessed by job seekers.
We have adopted internal policies for our collaboration with and management of our suppliers and partners. We carry out security audits on network products and services suppliers, enter into security agreements with them, and require them to comply with applicable data security obligations.
We have adopted internal policies for our collaboration with and management of our suppliers and partners. We carry out security audits on network security products and services suppliers, enter into security agreements with them, and require them to comply with applicable data security obligations.
For any commercial HR services providers engaging in the services such as collection and release of HR supply and demand information, HR management consulting, HR assessment, or HR training, it shall file with the competent department of MOHRSS within 15 days of the date it starts the operation.
For any commercial HR services providers engaging in the services such as collection and release of HR supply and demand information, HR management consulting, HR assessment, or HR training, it shall file with the competent department of the MOHRSS within 15 days of the date it starts the operation.
According to the Online Live Streaming Services Regulations, where a provider of online live streaming services or an online live-stream releaser provides Internet-based news and information service without or beyond permission, the CAC branches in provinces, autonomous regions and centrally-administered municipalities shall impose punishment on the provider or the releaser in accordance with the Regulations for the Administration of Internet-based News and Information Services.
According to the regulations, where a provider of online live streaming services or an online live-stream releaser provides Internet-based news and information service without or beyond permission, the CAC branches in provinces, autonomous regions and centrally-administered municipalities shall impose punishment on the provider or the releaser in accordance with the Regulations for the Administration of Internet-based News and Information Services.
Failure to comply with such requirements may result in a fine between RMB10,000 and RMB30,000 and an announcement to the public. According to the PRC Cyber Security Law, network operator shall not collect personal information irrelevant to the services it provides or collect or use personal information in violation of the provisions of laws or agreements between both parties.
Failure to comply with such requirements may result in a fine between RMB10,000 and RMB30,000 and an announcement to the public. According to the PRC Cyber Security Law, a network operator shall not collect personal information irrelevant to the services it provides or collect or use personal information in violation of the provisions of laws or agreements between both parties.
Our stock incentive plan has been registered with the Sanya branch of SAFE through Hainan Huapin Borui Network Technology Co., Ltd. as the domestic agent under the Circular 7. In addition, the domestic agents are required to amend the SAFE registration with respect to the stock incentive plan if there is any material change to the stock incentive plan.
Our stock incentive plan has been registered with the Sanya branch of SAFE through Hainan Huapin Borui Network Technology Co., Ltd. as the domestic agent under SAFE Circular 7. In addition, the domestic agents are required to amend the SAFE registration with respect to the stock incentive plan if there is any material change to the stock incentive plan.
As of the date of this annual report, no detailed implementation rules have been issued by the relevant governmental authorities, and we have not been informed by any governmental authority that we are a critical information infrastructure operator. 86 Table of Contents On November 14, 2021, the CAC published draft Regulations on the Administration of Network Data Security (solicitation for comment), or the Draft Regulations on Network Data Security, for public comments, which provides that data processors conducting certain activities shall apply for cybersecurity review, among others, including: (i) merger, reorganization or division of online platform operators that have acquired a large amount of data related to national security, economic development or public interests affects or may affect national security; (ii) listing on a foreign stock exchange of data processors processing over one million individuals’ personal information; (iii) data processors’ listing in Hong Kong which affects or may affect national security; or (iv) other data processing activities that affect or may affect national security.
As of the date of this annual report, no detailed implementation rules have been issued by the governmental authorities, and we have not been informed by any governmental authority that we are a critical information infrastructure operator. 86 Table of Contents On November 14, 2021, the CAC published draft Regulations on the Administration of Network Data Security (solicitation for comment) for public comments, which provides that data processors conducting certain activities shall apply for cybersecurity review, among others, including: (i) merger, reorganization or division of online platform operators that have acquired a large amount of data related to national security, economic development or public interests affects or may affect national security; (ii) listing on a foreign stock exchange of data processors processing over one million individuals’ personal information; (iii) data processors’ listing in Hong Kong which affects or may affect national security; or (iv) other data processing activities that affect or may affect national security.
Regulations Relating to Online Transmission of Audio-Visual Programs According to the Administrative Regulations on Internet Audio-Visual Program Service, or the Internet Audio-Visual Program Regulations, promulgated by the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT and the Ministry of Information Industry (currently known as the MIIT) on December 20, 2007 and were last amended on August 28, 2015, “internet audio-video program services” means producing, editing and integrating of audio-video programs, supplying audio-video programs to the public via the internet, and providing audio-video programs uploading and transmission services to a third party.
Regulations Relating to Online Transmission of Audio-Visual Programs According to the Administrative Regulations on Internet Audio-Visual Program Service, promulgated by the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, and the Ministry of Information Industry (currently known as the MIIT) on December 20, 2007 and were last amended on August 28, 2015, “internet audio-visual program services” means producing, editing and integrating of audio-visual programs, supplying audio-visual programs to the public via the internet, and providing audio-visual programs uploading and transmission services to a third party.
“Internet cultural activity” is defined under the Internet Culture Provisions as an act of provision of internet cultural products and related services, which includes (i) the production, duplication, importation, and broadcasting of the internet cultural products; (ii) the online dissemination whereby cultural products are posted on the internet or transmitted via the internet to end-users, such as computers, fixed-line telephones, mobile phones, television sets and games machines, for online users’ browsing, use or downloading; and (iii) the exhibition and competition of the internet cultural products.
“Internet cultural activity” is defined under the provisions as an act of provision of internet cultural products and related services, which includes (i) the production, duplication, importation, and broadcasting of the internet cultural products; (ii) the online dissemination whereby cultural products are posted on the internet or transmitted via the internet to end-users, such as computers, fixed-line telephones, mobile phones, television sets and games machines, for online users’ browsing, use or downloading; and (iii) the exhibition and competition of the internet cultural products.
According to the Contract Law of the PRC, or the Contract Law, promulgated by the National People’s Congress on March 15, 1999 and nullified since January 1, 2021, and the Civil Code of the PRC, or the Civil Code, promulgated by the National People’s Congress on May 28, 2020 and became effective on January 1, 2021, an intermediation contract is defined as a contract whereby an intermediary presents to its client an opportunity for entering into a contract or provides the client with other intermediary services in connection with the conclusion of a contract, and the client pays the intermediary service fees.
According to the Contract Law of the PRC promulgated by the National People’s Congress on March 15, 1999 and nullified since January 1, 2021, and the Civil Code of the PRC promulgated by the National People’s Congress on May 28, 2020 and effective on January 1, 2021, an intermediation contract is defined as a contract whereby an intermediary presents to its client an opportunity for entering into a contract or provides the client with other intermediary services in connection with the conclusion of a contract, and the client pays the intermediary service fees.
According to an Q&A session for reporters’ questions on the Administrative Provisions on Internet-based Audio-visual Program Services issued by the SAPPRFT on its official website on February 3, 2008, units that legally provide Internet audio-visual program services before the issuance of the Administrative Provisions on Internet-based Audio-visual Program Services, as long as the relevant operators do not violate laws and regulations, have the right to re-register their businesses and continue to operate Internet audio-visual program services.
According to an Q&A session for reporters’ questions on the Administrative Provisions on Internet-based Audio-Visual Program Services issued by the SAPPRFT on its official website on February 3, 2008, units that legally provide internet audio-visual program services before the issuance of the Administrative Provisions on Internet-based Audio-Visual Program Services, as long as the operators do not violate laws and regulations, have the right to re-register their businesses and continue to operate internet audio-visual program services.
Under Bulletin 7, an “indirect transfer” of assets, including equity interests in a mainland China resident enterprise, by non-mainland China resident enterprises may be re-characterized and treated as a direct transfer of PRC taxable assets, if such arrangement does not have a reasonable commercial purpose and was established for the purpose of avoiding payment of mainland China enterprise income tax.
Under SAT Bulletin 7, an “indirect transfer” of assets, including equity interests in a mainland China resident enterprise, by non-mainland China resident enterprises may be re-characterized and treated as a direct transfer of PRC taxable assets, if such arrangement does not have a reasonable commercial purpose and was established for the purpose of avoiding payment of mainland China enterprise income tax.
Our information security committee is a cross-disciplinary group comprised of personnel from multiple departments responsible for devising information security strategies and decision making regarding major information security issues. Our information security committee analyses industry trends, designs privacy protection protocols, conducts privacy trainings, assists in the formulation of feasible compliance work assessments and provides relevant risk control suggestions.
Our information security committee is a cross-disciplinary group comprised of personnel from multiple departments responsible for devising information security strategies and decision making regarding major information security issues. Our information security committee analyses industry trends, designs privacy protection protocols, conducts privacy trainings, assists in the formulation of feasible compliance work assessments and provides risk control suggestions.
If we or the VIE are 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, approvals, or filings, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures. See “Item 3. Key Information—D.
If we or the VIE are 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, approvals, or filings, the PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures. See “Item 3. Key Information—D.
The VIE and the its shareholders irrevocably covenanted that they shall procure each of the subsidiaries of the VIE to observe the same covenants as those made by the VIE under the corresponding provisions in the Exclusive Purchase Option Agreement that, among others, (i) unless with prior written consent by our WFOE, the VIE shall not sell, transfer, pledge, or otherwise dispose all or any part of its assets (other than the assets necessary for its ordinary course of business); (ii) without the prior consent by our WFOE, no actions or omissions would be taken that would adversely affect the operation status and asset value of the VIE; and (iii) upon the request of our WFOE, the VIE shareholders and the VIE shall appoint the party designated by our WFOE as the director, supervisor and/or senior officer of the VIE and/or remove the incumbent directors, supervisors and/or senior officers of the VIE and implement all relevant resolutions and filing procedures.
The VIE and the its shareholders irrevocably covenanted that they shall procure each of the subsidiaries of the VIE to observe the same covenants as those made by the VIE under the corresponding provisions in the exclusive purchase option agreement that, among others, (i) unless with prior written consent by our WFOE, the VIE shall not sell, transfer, pledge, or otherwise dispose all or any part of its assets (other than the assets necessary for its ordinary course of business); (ii) without the prior consent by our WFOE, no actions or omissions would be taken that would adversely affect the operation status and asset value of the VIE; and (iii) upon the request of our WFOE, the VIE shareholders and the VIE shall appoint the party designated by our WFOE as the director, supervisor and/or senior officer of the VIE and/or remove the incumbent directors, supervisors and/or senior officers of the VIE and implement all applicable resolutions and filing procedures.
The Trademark Office under the China National Intellectual Property Administration, or the Trademark Office, shall handle trademark registrations and grant a term of ten years to registered trademarks, which may be renewed for additional ten year period upon request from the trademark owner. The Trademark Law of the PRC has adopted a “first-to-file” principle with respect to trademark registration.
The Trademark Office under the China National Intellectual Property Administration shall handle trademark registrations and grant a term of ten years to registered trademarks, which may be renewed for additional ten year period upon request from the trademark owner. The Trademark Law of the PRC has adopted a “first-to-file” principle with respect to trademark registration.
An Internet-based audio-visual program service entity can only forward programs uploaded by individuals who have verified their true identity information, and the programs must comply with relevant content management regulations. Internet audio-visual programs (including online dramas and micro films) shall be filed with the relevant competent authorities before broadcasting.
An internet-based audio-visual program service entity can only forward programs uploaded by individuals who have verified their true identity information, and the programs must comply with the content management regulations. Internet audio-visual programs (including online dramas and micro films) shall be filed with the competent authorities before broadcasting.
Violation of PRC Data Security Law may subject the relevant entities or individuals to warning, fines, and business suspension, revocation of permits or business licenses, or even criminal liabilities. On July 30, 2021, the PRC State Council promulgated the Regulations on Security Protection of Critical Information Infrastructure, which became effective on September 1, 2021.
Violation of the PRC Data Security Law may subject the entities or individuals to warning, fines, and business suspension, revocation of permits or business licenses, or even criminal liabilities. On July 30, 2021, the PRC State Council promulgated the Regulations on Security Protection of Critical Information Infrastructure, which became effective on September 1, 2021.
The Online Live Streaming Services Regulations require providers of online live streaming services taking multiple measures when operating live streaming services, which includes (i) establishing a platform for censoring contents for live streaming, managing such contents based on category and level of user scale thereof, adding or broadcasting identification information of the platform for contents in the form of images/texts, video, and audio, and censoring news and information for live streaming and the interactions thereof prior to releasing them; (ii) authenticating real identity information of each user of online live streaming services based on mobile phone number in the principle of “real name in background, and willingness in foreground”; (iii) verifying real identity information of each online live-stream releaser, filing such information with local CAC branches in provinces, autonomous regions and centrally- administered municipalities on a classification basis, and providing relevant law enforcement authority with such information upon lawful request thereby; (iv) concluding a service agreement with any user of online live streaming services, defining rights and obligations of both sides, and requiring the user to comply with the laws, regulations and the platform convention; and (v) establishing a blacklist management system to prohibit any online live streaming services user included on the blacklist from registering another account, and reporting the blacklist to the CAC branch in the province, autonomous region or centrally- administered municipality where it is located.
The regulations require providers of online live streaming services taking multiple measures when operating live streaming services, which includes (i) establishing a platform for censoring contents for live streaming, managing such contents based on category and level of user scale thereof, adding or broadcasting identification information of the platform for contents in the form of images/texts, video, and audio, and censoring news and information for live streaming and the interactions thereof prior to releasing them; (ii) authenticating real identity information of each user of online live streaming services based on mobile phone number in the principle of “real name in background, and willingness in foreground”; (iii) verifying real identity information of each online live-stream releaser, filing such information with local CAC branches in provinces, autonomous regions and centrally- administered municipalities on a classification basis, and providing law enforcement authorities with such information upon lawful request thereby; (iv) concluding a service agreement with any user of online live streaming services, defining rights and obligations of both sides, and requiring the user to comply with the laws, regulations and the platform convention; and (v) establishing a blacklist management system to prohibit any online live streaming services user included on the blacklist from registering another account, and reporting the blacklist to the CAC branch in the province, autonomous region or centrally- administered municipality where it is located.
Relying on our advanced algorithms, we have built a proprietary suite of models to detect enterprise users’ misconduct and identify and continuously track high-risk job positions and employers. Our proprietary suite of risk identification models factor in multidimensional user information, including static and behavioral data gathered by our risk mining algorithm.
Relying on our advanced algorithms, we have built a proprietary suite of models to detect enterprise users’ misconduct and identify and continuously track high-risk job positions and employers. Our proprietary suite of risk identification models factor in multidimensional user information, including static and behavioral data gathered by our risk mining algorithms.
If the relevant authorities believe that the network products or services or data processing activities of relevant operators affect or may affect national security, they may initiate the cybersecurity review against such operators. Given the Revised Cybersecurity Review Measures were relatively new, there are substantial uncertainties as to the interpretation, application and enforcement of the Revised Cybersecurity Review Measures.
If the authorities believe that the network products or services or the data processing activities of the operators affect or may affect national security, they may initiate the cybersecurity review against such operators. Given the Revised Cybersecurity Review Measures were relatively new, there are substantial uncertainties as to the interpretation, application and enforcement of the Revised Cybersecurity Review Measures.
We exercise great care and prudence in evaluating the purpose and scope of data sharing authorizations, and secure legal undertakings from authorized business partners under relevant confidentiality agreements that require them to comply with the authorized purposes, scopes and security measures in handling our user data.
We exercise great care and prudence in evaluating the purpose and scope of data sharing authorizations, and secure legal undertakings from authorized business partners under confidentiality agreements that require them to comply with the authorized purposes, scopes and security measures in handling our user data.
For cooperation with third parties involving data transfer, we enter into data security agreement to specify the rights and obligations of each party. Data breach and security incident management We have established a comprehensive system to prevent and detect potential data breach risk, cyber threats, and other system vulnerabilities.
For cooperation with third parties involving data transfer, we enter into data processing agreement to specify the rights and obligations of each party. Data breach and security incident management We have established a comprehensive system to prevent and detect potential data breach risk, cyber threats, and other system vulnerabilities.
We apply advanced algorithm to the recommendation system to reflect our key strategies – (i) two-sided matching strategy: our recommendation algorithm considers not only the best recommendation to an individual, but also bilateral compatibilities and the suitability of the match within the user group, which result in a fairer distribution of the platform’s traffic; and (ii) personalized recommendation strategy: we make customized recommendations for users of different user groups, taking into account multiple factors, including the stages of career development, potential suitable positions not thought of by the job seeker but would match his/her skill set and the job seeker’s future career development opportunities.
We apply advanced algorithms to the recommendation system to reflect our key strategies – (i) two-sided matching strategy: our recommendation algorithms considers not only the best recommendation to an individual, but also bilateral compatibilities and the suitability of the match within the user group, which result in a fairer distribution of the platform’s traffic; and (ii) personalized recommendation strategy: we make customized recommendations for users of different user groups, taking into account multiple factors, including the stages of career development, potential suitable positions not thought of by the job seeker but would match his/her skill set and the job seeker’s future career development opportunities.
The scope of usage is consistent with that being disclosed in privacy policies and does not exceed the scope authorized by users. The data is collected and used mainly for the purposes of user registration, identity authentication, online recruitment, online payment, personalized recommendation, content publishing, and user safety.
The scope of usage is consistent with that being disclosed in privacy policies and does not exceed the scope authorized by users. The data is collected and used mainly for the purposes of user registration, identity authentication, online recruitment, personalized recommendation, content publishing, and user safety.
If over 30% of the quantity ( i.e. number of data items or amount of data stored) of important and core data changes or there is any material change to other filing information, data processors must update the filing information with the relevant authorities within three months after such change.
If over 30% of the quantity ( i.e. , number of data items or amount of data stored) of important and core data changes or there is any material change to other filing information, data processors must update the filing information with the authorities within three months after such change.
Any entity that fails to make deposit registration of the housing accumulation fund or fails to open a housing accumulation fund account for its employees shall be ordered to complete the relevant procedures within a prescribed time limit. Any entity failing to complete the relevant procedure within the time limit will be fined RMB10,000 to RMB50,000.
Any entity that fails to make deposit registration of the housing accumulation fund or fails to open a housing accumulation fund account for its employees shall be ordered to complete the procedures within a prescribed time limit. Any entity failing to complete the procedure within the time limit will be fined RMB10,000 to RMB50,000.
In respect of an indirect offshore transfer of assets of a mainland establishment, the relevant gain is to be regarded as effectively connected with the mainland China establishment and therefore included in its enterprise income tax filing, and would consequently be subject to mainland China enterprise income tax at a rate of 25%.
In respect of an indirect offshore transfer of assets of a mainland establishment, the gain is to be regarded as effectively connected with the mainland China establishment and therefore included in its enterprise income tax filing, and would consequently be subject to mainland China enterprise income tax at a rate of 25%.
Risk Factors—Risks Relating to Doing Business in China—PRC regulations relating to offshore investment activities by mainland China residents may limit our mainland China subsidiaries’ ability to increase their registered capital or distribute profits to us or otherwise expose us or our PRC resident beneficial owners to liability and penalties under laws of mainland China.” 93 Table of Contents Regulations on Stock Incentive Plans Pursuant to the Notice on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly Listed Company, issued by SAFE on February 15, 2012, employees, directors, supervisors and other senior management participating in any stock incentive plan of an overseas publicly listed company who are PRC citizens or who are non PRC citizens residing in mainland China for a continuous period of not less than one year, subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could be a subsidiary in mainland China of such overseas listed company, and complete certain other procedures.
Risk Factors—Risks Relating to Doing Business in China—PRC regulations relating to offshore investment activities by mainland China residents may limit our mainland China subsidiaries’ ability to increase their registered capital or distribute profits to us or otherwise expose us or our PRC resident beneficial owners to liability and penalties under laws of mainland China.” Regulations on Stock Incentive Plans Pursuant to the Notice on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly Listed Company, issued by SAFE on February 15, 2012, employees, directors, supervisors and other senior management participating in any stock incentive plan of an overseas publicly listed company who are PRC citizens or who are non PRC citizens residing in mainland China for a continuous period of not less than one year, subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could be a subsidiary in mainland China of such overseas listed company, and complete certain other procedures.
The Circular 16 provides an integrated standard for conversion of foreign exchange under capital account items (including but not limited to foreign currency capital and foreign debts) on self-discretionary basis, which applies to all enterprises registered in mainland China.
Circular 16 provides an integrated standard for conversion of foreign exchange under capital account items (including but not limited to foreign currency capital and foreign debts) on self-discretionary basis, which applies to all enterprises registered in mainland China.
In addition, where a special government review is required for certain categories of advertisements before publishing, the advertisers, advertising operators and advertising distributors are obligated to confirm that such review has been duly performed and that the relevant approval has been obtained.
In addition, where a special government review is required for certain categories of advertisements before publishing, the advertisers, advertising operators and advertising distributors are obligated to confirm that such review has been duly performed and that the approval has been obtained.
Upon the occurrence of an event of default (as defined in the Equity Pledge Agreement), our WFOE may, at any time thereafter, serve a default notice to the VIE shareholders, upon which our WFOE may (1) demand all the outstanding payment due according to the Exclusive Technology and Service Co-operation Agreement, and/or (2) exercise its right of pledge according to the Equity Pledge Agreement, or otherwise dispose of the pledged equity interest in accordance with applicable Laws, unless the event of default has been resolved in the satisfactory of our WFOE within 30 days after the default notice has been served.
Upon the occurrence of an event of default (as defined in the equity pledge agreement), our WFOE may, at any time thereafter, serve a default notice to the VIE shareholders, upon which our WFOE may (1) demand all the outstanding payment due according to the exclusive technology and service co-operation agreement discussed below, and/or (2) exercise its right of pledge according to the equity pledge agreement, or otherwise dispose of the pledged equity interest in accordance with applicable Laws, unless the event of default has been resolved in the satisfactory of our WFOE within 30 days after the default notice has been served.
The APP information service providers shall acquire relevant qualifications required by laws and regulations and implement the information security management responsibilities strictly and fulfill their obligations, including real-name system, protection of users’ information, examination and management of information content, etc.
App information service providers shall acquire the qualifications required by the laws and regulations and implement the information security management responsibilities strictly and fulfill their obligations, including real-name system, protection of users’ information, examination and management of information content, etc.
On May 8, 2017, the Supreme People’s Court and the Supreme People’s Procuratorate released the Interpretations of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues Concerning the Application of Law in the Handling of Criminal Cases Involving Infringement of Citizens’ Personal Information, or the Interpretations, effective from June 1, 2017.
On May 8, 2017, the Supreme People’s Court and the Supreme People’s Procuratorate released the Interpretations of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues Concerning the Application of Law in the Handling of Criminal Cases Involving Infringement of Citizens’ Personal Information, effective from June 1, 2017.
Pursuant to the FEA Regulations, international payments in foreign exchange and the transfer of foreign exchange under the current account items shall not be subject to any state control or restriction when complying with certain procedural requirements.
Pursuant to the regulations, international payments in foreign exchange and the transfer of foreign exchange under the current account items shall not be subject to any state control or restriction when complying with certain procedural requirements.
Our mainland China subsidiaries and VIE have obligations to file documents related to such stock incentive plan with relevant tax authorities and to withhold individual income taxes of those employees for their income derived from the stock incentive plan.
Our mainland China subsidiaries and VIE have obligations to file documents related to such stock incentive plan with the tax authorities and to withhold individual income taxes of those employees for their income derived from the stock incentive plan.
According to the Internet Measures, violators may be subject to penalties, including criminal sanctions, for providing Internet content that: opposes the fundamental principles stated in the PRC Constitution; compromises national security, divulges national secrets, subverts national power or damages national unity; harms national dignity or interest; incites ethnic hatred or racial discrimination or damages inter-ethnic unity; undermines the PRC’s religious policy or propagates superstition; 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.
According to the Administrative Measures on Internet Information Services, violators may be subject to penalties, including criminal sanctions, for providing Internet content that: opposes the fundamental principles stated in the PRC Constitution; compromises national security, divulges national secrets, subverts national power or damages national unity; harms national dignity or interest; incites ethnic hatred or racial discrimination or damages inter-ethnic unity; undermines the PRC’s religious policy or propagates superstition; 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.
If our employees fail to pay or if we fail to withhold their income taxes as required by relevant laws and regulations, we may face sanctions imposed by the PRC tax authorities or other PRC government authorities.
If our employees fail to pay or if we fail to withhold their income taxes as required by the laws and regulations, we may face sanctions imposed by the PRC tax authorities or other PRC government authorities.
Foreign Investment in Value-Added Telecommunications Industry Pursuant to the Negative List and the Administrative Regulations on Foreign-Invested Telecommunications Enterprises (Revised in 2022), which was promulgated by the State Council on December 11, 2001 and last amended on March 29, 2022 by the State Council, the ultimate capital contribution percentage by foreign investor(s) in a foreign-invested value-added telecommunications services (except for e-commerce, domestic multi-party communications, storage-forwarding and call centers) is up to 50%.
Foreign Investment in Value-Added Telecommunications Industry Pursuant to the Negative List and the Administrative Regulations on Foreign-Invested Telecommunications Enterprises (Revised in 2022), which were promulgated by the State Council on December 11, 2001 and last amended on March 29, 2022 by the State Council, the ultimate capital contribution percentage by foreign investor(s) in a foreign-invested value-added telecommunications services (except for e-commerce, domestic multi-party communications, storage-forwarding and call centers) is up to 50%.
The Equity Pledge Agreement shall remain effective until, among others, the VIE and its shareholders have recorded the release of such pledged equity interests in the register of members of the VIE and completed relevant deregistration procedure.
The equity pledge agreement shall remain effective until, among others, the VIE and its shareholders have recorded the release of such pledged equity interests in the register of members of the VIE and completed the deregistration procedure.
Regulations Relating to Value-Added Telecommunication Services Value-added Telecommunications Services An extensive regulatory scheme governing telecommunication services, including value-added telecommunication services and infrastructure telecommunications services, is promulgated by the State Council, MIIT, and other relevant government authorities.
Regulations Relating to Value-Added Telecommunication Services Value-added Telecommunications Services An extensive regulatory scheme governing telecommunication services, including value-added telecommunication services and infrastructure telecommunications services, is promulgated by the State Council, the MIIT, and other government authorities.
Where online live streaming services, which are provided through online performances and online audio-visual programs, violate relevant laws and regulations, the authorities concerned shall impose punishment in accordance with the laws.
Where online live streaming services, which are provided through online performances and online audio-visual programs, violate laws and regulations, the authorities concerned shall impose punishment in accordance with the laws.
Both Bulletin 37 and Bulletin 7 do not apply to transactions of sale of shares by investors through a public stock exchange where such shares were acquired from a transaction through a public stock exchange.
Both SAT Bulletin 37 and SAT Bulletin 7 do not apply to transactions of sale of shares by investors through a public stock exchange where such shares were acquired from a transaction through a public stock exchange.
The Powers of Attorney will be terminated, among other things, under certain conditions when our WFOE or its designee is duly registered as the sole shareholder of the VIE on the premise that PRC laws permits our WFOE, or its offshore parent company or any subsidiary directly or indirectly controlled by it, to directly hold equity interest in and legally engage in the business conducted by the VIE.
The powers of attorney will be terminated, among other things, under certain conditions when our WFOE or its designee is duly registered as the sole shareholder of the VIE on the premise that PRC laws permit our WFOE, or its offshore parent company or any subsidiary directly or indirectly controlled by it, to directly hold equity interest in and legally engage in the business conducted by the VIE.
Enterprise users of our platform include Bosses and recruiting professionals. 63 Table of Contents Bosses: Bosses refer to executives or middle-level managers of large enterprises and SMEs and micro business owners, who are the key decision makers that can better assess candidates’ capabilities, including their soft skills and cultural fit, and more efficiently identify the best people for their businesses.
Enterprise users of our platform include Bosses and recruiting professionals. 64 Table of Contents Bosses: Bosses refer to executives or middle-level managers of large enterprises and SMEs and micro business owners, who are the key decision makers that can better assess candidates’ capabilities, including their soft skills and cultural fit, and more efficiently identify the best people for their businesses.
Among other things, the VIE shareholders have undertaken that without our WFOE’s prior written consent, they shall not directly or indirectly transfer the equity interests in any way, create or permit the existence of any pledge or other form of security which might affect the rights and interests of the our WFOE, other than the transfer of such equity interests to our WFOE or its designee pursuant to the Exclusive Purchase Option Agreement.
Among other things, the VIE shareholders have undertaken that without our WFOE’s prior written consent, they shall not directly or indirectly transfer the equity interests in any way, create or permit the existence of any pledge or other form of security which might affect the rights and interests of our WFOE, other than the transfer of such equity interests to our WFOE or its designee pursuant to the exclusive purchase option agreement discussed below.
As of the date of this annual report, we have not been subject to any administrative penalties imposed by the relevant government authorities in relation to fraudulent recruitment.
As of the date of this annual report, we have not been subject to any administrative penalties imposed by the government authorities in relation to fraudulent recruitment.
On September 15, 2021, the CAC promulgated the Opinions on Further Enforcing Responsibilities on Website Platforms as the Main Responsible Party for Information Content Management, effective on the same date, or the Opinions.
On September 15, 2021, the CAC promulgated the Opinions on Further Enforcing Responsibilities on Website Platforms as the Main Responsible Party for Information Content Management, effective on the same date.
According to the Notice of the SAT on Negotiated Reduction of Dividends and Interest Rates issued on January 29, 2008 and revised on February 29, 2008, and the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on Income, or Double Tax Avoidance Arrangement, which was issued by SAT on August 21, 2006 and were subsequently amended in 2008, 2011, 2016 and 2019, the withholding tax rate in respect of the payment of dividends by a mainland China enterprise to a Hong Kong enterprise may be reduced to 5% from a standard rate of 10% if the Hong Kong enterprise directly holds at least 25% of the mainland China enterprise and certain other conditions are met, including: (i) the Hong Kong enterprise must directly own the required percentage of equity interests and voting rights in the mainland China resident enterprise; and (ii) the Hong Kong enterprise must have directly owned such required percentage in the mainland China resident enterprise throughout the 12 months prior to receiving the dividends.
According to the Notice of the SAT on Negotiated Reduction of Dividends and Interest Rates issued on January 29, 2008 and revised on February 29, 2008, and the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on Income, which was issued by the State Administration of Taxation on August 21, 2006 and was subsequently amended in 2008, 2011, 2016 and 2019, the withholding tax rate in respect of the payment of dividends by a mainland China enterprise to a Hong Kong enterprise may be reduced to 5% from a standard rate of 10% if the Hong Kong enterprise directly holds at least 25% of the mainland China enterprise and certain other conditions are met, including: (i) the Hong Kong enterprise must directly own the required percentage of equity interests and voting rights in the mainland China resident enterprise; and (ii) the Hong Kong enterprise must have directly owned such required percentage in the mainland China resident enterprise throughout the 12 months prior to receiving the dividends.
Our employees are granted access to the minimum extent that is necessary to fulfil their job responsibilities and within strictly defined and layered access authority, and are required to go through strict authorization and authentication procedures and policies before operating. At application level, we use privacy components to set up different approval processes based on data classification.
Our employees are granted access to the minimum extent that is necessary to fulfill their job responsibilities and within strictly defined and layered access authority, and are required to go through strict authorization and authentication procedures and policies before operating. At application level, we use privacy components to set up different approval processes based on data classification.
Technology implementation forms strong technical strengths and competitive barriers Given the difficulties of recruitment recommendation, we have made significant investment to build our core technology capabilities in areas including: Data and data insights: massive, multidimensional data and data insights The capability to gather mass multidimensional data in granular details, which helps capture the unique traits of each job seeker and enterprise user.
Technology implementation forms strong technical strengths and competitive barriers Given the difficulties of recruitment recommendation, we have made significant investments to build our core technology capabilities in areas including: Data and data insights: massive, multidimensional data and data insights We have the capability to gather mass multidimensional data in granular details, which helps capture the unique traits of each job seeker and enterprise user.
If the human resources service agency fails to fulfil the above review obligations, it may be ordered to make rectifications and the failure to do so will subject it to an administrative penalty of (i) less than RMB10,000, if there are no illegal gains, or (ii) a fine of more than RMB10,000 but less than RMB30,000 and the confiscation of any illegal gains.
If the human resources service agency fails to fulfill the above review obligations, it may be ordered to make rectifications and the failure to do so will subject it to an administrative penalty of (i) less than RMB10,000, if there are no illegal gains, or (ii) a fine of more than RMB10,000 but less than RMB30,000 and the confiscation of any illegal gains.
The APP Provisions regulate the APP information service providers and the APP Store service providers and the CAC and local offices of cyberspace administration shall be responsible for the supervision and administration of nationwide or local APP information respectively.
These provisions regulate app information service providers and app store service providers and the CAC and local offices of cyberspace administration shall be responsible for the supervision and administration of nationwide or local APP information respectively.
In addition, Online Recruitment Regulations provide that HR services agencies engaging in online recruitment services shall, in accordance with the requirements under the laws and regulations of mainland China related to national cybersecurity and cybersecurity graded protection systems, strengthen cybersecurity management, perform cybersecurity protection obligations, and adopt technical or other necessary measures to ensure the security of recruitment service network, information system and users’ information.
In addition, the Administrative Regulations on Online Recruitment Services provide that HR services agencies engaging in online recruitment services shall, in accordance with the requirements under the laws and regulations of mainland China related to national cybersecurity and cybersecurity graded protection systems, strengthen cybersecurity management, perform cybersecurity protection obligations, and adopt technical or other necessary measures to ensure the security of recruitment service network, information system and users’ information.
According to the Circular 16, enterprises registered in mainland China may also convert their foreign debts from foreign currency into RMB on self-discretionary basis.
According to Circular 16, enterprises registered in mainland China may also convert their foreign debts from foreign currency into RMB on self-discretionary basis.
Regulations Relating to Online Live Streaming Services On November 4, 2016, the CAC promulgated the Regulations for the Administration of Online Live Streaming Services, or the Online Live Streaming Services Regulations, which became effective on December 1, 2016.
Regulations Relating to Online Live Streaming Services On November 4, 2016, the CAC promulgated the Regulations for the Administration of Online Live Streaming Services, which became effective on December 1, 2016.
On February 7, 2021, the Anti-monopoly Commission of the State Council published the Guidelines on Anti-Monopoly Issues in Platform Economy, or the Platform Economy Anti-Monopoly Guidelines, which took effect on the same date.
On February 7, 2021, the Anti-monopoly Commission of the State Council published the Guidelines on Anti-Monopoly Issues in Platform Economy, which took effect on the same date.
Either job seekers or enterprise users can initiate direct chat with their counterparties on our platform throughout the recruitment process. Direct chatting ensures that our users are active with real demands for job opportunities or candidates, and users can confirm each other’s intentions and their suitability before the interview, which makes their experience highly informative and efficient.
Either job seekers or enterprise users can initiate direct chats with their counterparties on our platform throughout the recruitment process. Direct chatting ensures that our users are active with real demands for job opportunities or candidates, and users can confirm each other’s intentions and their suitability before the interview, which makes their experience highly informative and efficient.
In particular, they verify the consistency of the employers’ business locations and enterprise users’ work locations. Our algorithm powered risk assessment system together with our offline verification efforts are necessary to manage the complexity of analysis at the scale and speed that is needed in light of our massive user base and the changing fraud landscape.
In particular, they verify the consistency of the employers’ business locations and enterprise users’ work locations. Our algorithms powered risk assessment system together with our offline verification efforts are necessary to manage the complexity of analysis at the scale and speed that is needed in light of our massive user base and the changing fraud landscape.
According to the Provisions for the Administration of the Production and Distribution of Radio and Television Programs promulgated by the SAPPRFT on July 19, 2004, which took into effect on August 20, 2004 and was last amended on October 29, 2020, any entity that produces or operates radio or television programs must obtain a Radio and Television Program Production and Operation Permit.
According to the Provisions for the Administration of the Production and Distribution of Radio and Television Programs promulgated by the SAPPRFT on July 19, 2004, which took into effect on August 20, 2004 and were last amended on October 29, 2020, any entity that produces or operates radio or television programs must obtain a Radio and Television Program Production and Operation Permit.
The Platform Economy Anti-Monopoly Guidelines set out detailed standards and rules in respect of definition of relevant markets, typical types of cartel activity and abusive behavior by the operators of Internet platform with market dominance, as well as merger control review procedures, which provide further guidelines for enforcement of Anti-Monopoly laws regarding online platform operators.
These guidelines set out detailed standards and rules in respect of definition of relevant markets, typical types of cartel activity and abusive behavior by the operators of Internet platform with market dominance, as well as merger control review procedures, which provide further guidelines for enforcement of Anti-Monopoly laws regarding online platform operators.
Our Platform We connect job seekers and enterprise users in an efficient and seamless manner mainly through our highly interactive BOSS Zhipin mobile app, a mobile-native online recruitment platform that promotes instant direct chats between enterprise users and job seekers, delivers accurate matching results, and is powered by proprietary algorithms and big data insights.
Our Platform We connect job seekers and enterprise users in an efficient and seamless manner mainly through our BOSS Zhipin mobile app, a mobile-native online recruitment platform that promotes instant direct chats between enterprise users and job seekers, delivers accurate matching results, and is powered by proprietary algorithms and big data insights.
Pursuant to the measures, data in the field of industry and information technology includes industrial data, telecommunication data and radio data generated and collected during the operation of relevant services.
Pursuant to the measures, data in the field of industry and information technology includes industrial data, telecommunication data and radio data generated and collected during the operation of the services.
We get the Bosses involved on our platform since our inception. Our innovative model facilitates direct interaction between job seekers and Bosses, fulfils the undiscovered demands of hiring decision makers to directly participate in the recruiting process at an early stage, and allows us to amass a large number of Bosses.
We get the Bosses involved on our platform since our inception. Our innovative model facilitates direct interaction between job seekers and Bosses, fulfills the undiscovered demands of hiring decision makers to directly participate in the recruiting process at an early stage, and allows us to amass a large number of Bosses.
We also combine the online experience with in-person classes to maximize learning outcomes. We have built an online learning platform in place, which allows our employees to access company-level and department-level courses online. As of December 31, 2022, all of our full-time employees had taken our in-house training courses.
We also combine the online experience with in-person classes to maximize learning outcomes. We have built an online learning platform in place, which allows our employees to access company-level and department-level courses online. As of December 31, 2023, all of our full-time employees had taken our in-house training courses.
According to the Telecommunications Regulations and the Classification Catalogue of Telecommunications Services, there are two categories of telecommunication activities, namely “infrastructure telecommunications services” and “value-added telecommunications services.” Pursuant to the Telecommunications Regulations, operators of value-added telecommunications services, or VATS, shall be approved by MIIT, or its provincial level counterparts, and obtain a license for value-added telecommunications business, or VAT License.
According to the Telecommunications Regulations and the Classification Catalogue of Telecommunications Services, there are two categories of telecommunication activities, namely “infrastructure telecommunications services” and “value-added telecommunications services.” Pursuant to the Telecommunications Regulations, operators of value-added telecommunications services shall be approved by the MIIT, or its provincial level counterparts, and obtain a license for value-added telecommunications business.
The measures are aimed to regulate the processing activities of data in the field of industry and information technology field conducted by relevant data processors in the PRC.
The measures are aimed to regulate the processing activities of data in the field of industry and information technology field conducted by data processors in the PRC.
Regulations Relating to Privacy Protection Pursuant to the Civil Code, the personal information of a natural person shall be protected by the law.
Regulations Relating to Privacy Protection Pursuant to the Civil Code of the PRC, the personal information of a natural person shall be protected by the law.
Violations of the Labor Contract Law and the Labor Law may result in the imposition of fines and other administrative liabilities and/or incur criminal liabilities in the case of serious violations.
Violations of the PRC Labor Contract Law and the PRC Labor Law may result in the imposition of fines and other administrative liabilities and/or incur criminal liabilities in the case of serious violations.
The Algorithm Recommendation Provisions provides the classification and hierarchical management of algorithm recommendation service providers based on various criteria, and stipulates that algorithm recommendation service providers shall clearly inform users of their provision of algorithm recommendation services, and properly disclose the basic principles, intentions, and main operating mechanisms of algorithm recommendation services, and that algorithm recommendation service providers shall perform their responsibilities as subjects for algorithm security, establish and improve the management systems and technical measures for algorithm mechanism and principle review, scientific and technological ethics review, user registration, information release review, data security and personal information protection, anti-telecommunications and Internet fraud, security assessment and monitoring, and security incident emergency response, formulate and publicize the relevant rules for algorithm recommendation services, and be equipped with professional staff and technical support appropriate to the scale of the algorithm recommendation service.
These provisions provide the classification and hierarchical management of algorithm recommendation service providers based on various criteria, and stipulates that algorithm recommendation service providers shall clearly inform users of their provision of algorithm recommendation services, and properly disclose the basic principles, intentions, and main operating mechanisms of algorithm recommendation services, and that algorithm recommendation service providers shall perform their responsibilities as subjects for algorithm security, establish and improve the management systems and technical measures for algorithm mechanism and principle review, scientific and technological ethics review, user registration, information release review, data security and personal information protection, anti-telecommunications and Internet fraud, security assessment and monitoring, and security incident emergency response, formulate and publicize the rules for algorithm recommendation services, and be equipped with professional staff and technical support appropriate to the scale of the algorithm recommendation service.
Entities providing internet audio-video programs services must obtain a license for online transmission of audio-visual programs, or Audio-Visual License or make the audio-visual filing. Entities engaged in Internet audio-visual program services without approval may be subject to warning, order to rectify, and a fine of no more than RMB30,000.
Entities providing internet audio-visual programs services must obtain a License for Online Transmission of Audio-Visual Programs or make the filing for providing internet audio-visual program services and content. Entities engaged in internet audio-visual program services without approval may be subject to warning, order to rectify, and a fine of no more than RMB30,000.
In particular, data processors processing important data and core data are required to complete filings with relevant authorities for the catalogue of important data and core data.
In particular, data processors processing important data and core data are required to complete filings with the authorities for the catalogue of important data and core data.
Our WFOE may exercise such right of pledge based on its own independent judgement. The shareholders of the VIE and the VIE have covenanted to unconditionally collaborate with our WFOE when our WFOE exercises such right of pledge. Our WFOE shall bear no responsibilities for any direct or indirect loss incurred consequent upon its exercise of such right of pledge.
Our WFOE may exercise such right of pledge based on its own independent judgment. The shareholders of the VIE and the VIE have covenanted to unconditionally collaborate with our WFOE when our WFOE exercises such right of pledge. Our WFOE shall bear no responsibilities for any direct or indirect loss incurred consequent upon its exercise of such right of pledge.
Property, Plants and Equipment Our headquarters are based in Beijing and we have offices in 49 cities in mainland China. We leased properties in mainland China with a total gross floor area of approximately 86,000 square meters as of the date of this annual report. Our leased properties are mainly used as offices.
Property, Plants and Equipment Our headquarters are based in Beijing and we have offices in 50 cities in mainland China. We leased properties in mainland China with a total gross floor area of approximately 86,000 square meters as of the date of this annual report. Our leased properties are mainly used as offices.
We also constantly monitor enterprises who have been denied access to our platform to prevent them from potential future misconduct. ​ 70 Table of Contents We leverage our advanced feature engineering, machine learning and decision engine to process user data and respond to threats and frauds constantly.
We also constantly monitor enterprises who have been denied access to our platform to prevent them from potential future misconduct. 69 Table of Contents We leverage our advanced feature engineering, machine learning and decision engine to process user data and respond to threats and frauds.
On September 25, 2000, the State Council promulgated the Telecommunication Regulation of the PRC, or the Telecommunications Regulations, as last amended on February 6, 2016, to regulate telecommunications activities in mainland China. On December 28, 2015, the MIIT promulgated the Classification Catalogue of Telecommunications Services (2015 version) which was amended on June 6, 2019.
On September 25, 2000, the State Council promulgated the Telecommunication Regulations of the PRC, as last amended on February 6, 2016, to regulate telecommunications activities in mainland China. On December 28, 2015, the MIIT promulgated the Classification Catalogue of Telecommunications Services (2015 version), which was amended on June 6, 2019.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeOur general and administrative expenses primarily consist of payroll and other employee-related expenses for our managerial and administrative staff. ​ 106 Table of Contents Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods presented, both in absolute amounts and as percentages of our total revenues. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Online recruitment services to enterprise customers 1,927,178 99.1 4,219,026 99.1 4,461,282 646,825 98.9 Others 17,181 0.9 40,102 0.9 49,780 7,217 1.1 Total revenues 1,944,359 100.0 4,259,128 100.0 4,511,062 654,042 100.0 Operating cost and expenses ​ ​ ​ Cost of revenues (1) (240,211) (12.4) (554,648) (13.0) (754,861) (109,445) (16.7) Sales and marketing expenses (1) (1,347,532) (69.3) (1,942,670) (45.6) (2,000,900) (290,103) (44.4) Research and development expenses (1) (513,362) (26.4) (821,984) (19.3) (1,182,716) (171,478) (26.2) General and administrative expenses (1) (797,008) (41.0) (1,991,123) (46.7) (719,699) (104,347) (16.0) Total operating cost and expenses (2,898,113) (149.1) (5,310,425) (124.6) (4,658,176) (675,373) (103.3) Other operating income, net 8,849 0.5 14,977 0.4 17,595 2,551 0.4 Loss from operations (944,905) (48.6) (1,036,320) (24.2) (129,519) (18,780) (2.9) Investment income 9,095 0.5 24,744 0.6 65,150 9,446 1.4 Financial income, net 3,098 0.2 9,735 0.2 161,332 23,391 3.6 Foreign exchange (loss)/gain (5,074) (0.3) (1,961) (0.0) 8,627 1,251 0.2 Other (expenses)/income, net (4,109) (0.2) (7,745) (0.2) 11,406 1,654 0.3 (Loss)/income before income tax expenses (941,895) (48.4) (1,011,547) (23.6) 116,996 16,962 2.6 Income tax expenses — — (59,527) (1.4) (9,751) (1,414) (0.2) Net (loss)/income (941,895) (48.4) (1,071,074) (25.0) 107,245 15,548 2.4 (1) Share-based compensation expenses were allocated as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ ​ RMB ​ RMB ​ RMB ​ US$ ​ ​ (in thousands) Share-based compensation expenses Cost of revenues 1,920 31,467 39,587 5,740 Sales and marketing expenses 21,473 73,733 170,366 24,701 Research and development expenses 30,883 137,820 284,323 41,223 General and administrative expenses 602,960 1,680,626 197,928 28,697 Total 657,236 1,923,646 692,204 100,361 ​ Year Ended December 31, 2022 compared to Year Ended December 31, 2021 Revenues Our revenues primarily come from online recruitment services provided to paid enterprise customers.
Biggest changeOur general and administrative expenses primarily consist of payroll and other employee-related expenses for our managerial and administrative staff. 106 Table of Contents Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods presented, both in absolute amounts and as percentages of our total revenues. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Online recruitment services to enterprise customers 4,219,026 99.1 4,461,282 98.9 5,889,101 829,463 98.9 Others 40,102 0.9 49,780 1.1 62,927 8,863 1.1 Total revenues 4,259,128 100.0 4,511,062 100.0 5,952,028 838,326 100.0 Operating cost and expenses ​ ​ ​ ​ ​ ​ ​ Cost of revenues (1) (554,648) (13.0) (754,861) (16.7) (1,059,861) (149,278) (17.8) Sales and marketing expenses (1) (1,942,670) (45.6) (2,000,900) (44.4) (1,991,226) (280,458) (33.5) Research and development expenses (1) (821,984) (19.3) (1,182,716) (26.2) (1,543,568) (217,407) (25.9) General and administrative expenses (1) (1,991,123) (46.7) (719,699) (16.0) (811,787) (114,338) (13.6) Total operating cost and expenses (5,310,425) (124.6) (4,658,176) (103.3) (5,406,442) (761,481) (90.8) Other operating income, net 14,977 0.4 17,595 0.4 35,385 4,984 0.6 (Loss)/Income from operations (1,036,320) (24.2) (129,519) (2.9) 580,971 81,829 9.8 Interest and investment income, net 34,479 0.8 226,482 5.0 606,757 85,460 10.2 Foreign exchange (loss)/gain (1,961) (0.0) 8,627 0.2 1,088 153 0.0 Other (expenses)/income, net (7,745) (0.2) 11,406 0.3 32,973 4,644 0.6 (Loss)/Income before income tax expenses (1,011,547) (23.6) 116,996 2.6 1,221,789 172,086 20.6 Income tax expenses (59,527) (1.4) (9,751) (0.2) (122,571) (17,264) (2.1) Net (loss)/income (1,071,074) (25.0) 107,245 2.4 1,099,218 154,822 18.5 (1) Share-based compensation expenses were allocated as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ ​ RMB ​ RMB ​ RMB ​ US$ ​ ​ (in thousands) Share-based compensation expenses Cost of revenues 31,467 39,587 46,395 6,535 Sales and marketing expenses 73,733 170,366 262,431 36,963 Research and development expenses 137,820 284,323 418,769 58,982 General and administrative expenses 1,680,626 197,928 329,372 46,391 Total 1,923,646 692,204 1,056,967 148,871 ​ Year Ended December 31, 2023 compared to Year Ended December 31, 2022 Revenues Our revenues primarily come from online recruitment services provided to paid enterprise customers.
Our sales and marketing expenses primarily consist of (i) advertising expenses, including expenses relating to branding activities and online traffic acquisition, (ii) payroll and other employee-related expenses for our sales and marketing staff, and (iii) other miscellaneous expenses for our sales functions.
Our sales and marketing expenses primarily consist of (i) payroll and other employee-related expenses for our sales and marketing staff, (ii) advertising expenses, including expenses relating to branding activities and online traffic acquisition, and (iii) other miscellaneous expenses for our sales functions.
The difference between this net cash generated from operating activities and the net loss of RMB1.1 billion in the same period was due to adjustments for non-cash items that primarily include share-based compensation expenses of RMB1.9 billion, amortization of right-of-use assets of RMB109.3 million and depreciation and amortization expenses of RMB80.1 million, as well as cash released from a decrease in working capital mainly resulting from an increase of RMB758.2 million in deferred revenue, reflecting the increasing scale of our business and our growing user base, and an increase of RMB329.8 million in other payables and accrued liabilities, partially offset by a RMB403.7 million increase in prepayments and other current assets and a RMB99.4 million decrease in operating lease liabilities.
The difference between this net cash provided by operating activities and net loss of RMB1.1 billion in the same period was due to adjustments for non-cash items that primarily include share-based compensation expenses of RMB1.9 billion, amortization of right-of-use assets of RMB109.3 million and depreciation and amortization expenses of RMB80.1 million, as well as cash released from a decrease in working capital mainly resulting from an increase of RMB758.2 million in deferred revenue, reflecting the increasing scale of our business and our growing user base, and an increase of RMB329.8 million in other payables and accrued liabilities, partially offset by an increase of RMB403.7 million in prepayments and other current assets and a decrease of RMB99.4 million in operating lease liabilities.
Risk Factors—Risks Relating to Doing Business in China—If we are classified as a mainland China resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-mainland China shareholders or ADS holders.” We are subject to VAT at a rate of approximately 3% for small-scale-VAT-payer entities or 6% for general-VAT-payer entities on the services and solutions we provide to our customers, less any deductible VAT we have already paid or borne in accordance with laws of mainland China.
Risk Factors—Risks Relating to Doing Business in China—If we are classified as a mainland China resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-mainland China shareholders or ADS holders.” We are subject to value-added tax at a rate of approximately 3% for small-scale-value-added-tax-payer entities or 6% for general-value-added-tax-payer entities on the services and solutions we provide to our customers, less any deductible value-added tax we have already paid or borne in accordance with laws of mainland China.
Paid enterprise customers who contributed RMB5,000 or more, but less than RMB50,000 of revenues to us in a twelve-month period ended on the end of a given period, or mid-sized accounts, contributed 35.8%, 35.5% and 39.3% of our total revenues in 2020, 2021 and 2022, respectively.
Paid enterprise customers who contributed RMB5,000 or more, but less than RMB50,000 of revenues to us in a twelve-month period ended on the end of a given period, or mid-sized accounts, contributed 35.5%, 39.3% and 35.8% of our total revenues in 2021, 2022 and 2023, respectively.
Among our paid enterprise customers, those who contributed revenues of RMB5,000 or more to us in a twelve-month period ended on the end of a given period accounted for the majority of our revenue source in 2020, 2021 and 2022.
Among our paid enterprise customers, those who contributed revenues of RMB5,000 or more to us in a twelve-month period ended on the end of a given period accounted for the majority of our revenue source in 2021, 2022 and 2023.
We are also subject to surcharges on VAT payments in accordance with laws of mainland China. Pursuant to the PRC Enterprise Income Tax Law, a 5% or 10% withholding tax is levied on dividends declared to our intermediary holding company in Hong Kong from mainland China effective from January 1, 2008. See “Item 3. Key Information—D.
We are also subject to surcharges on value-added tax payments in accordance with laws of mainland China. Pursuant to the PRC Enterprise Income Tax Law, a 5% or 10% withholding tax is levied on dividends declared to our intermediary holding company in Hong Kong from mainland China effective from January 1, 2008. See “Item 3. Key Information— D.
The preferential tax treatment continues as long as an enterprise can retain its “high and new technology enterprise” status. Our WFOE was subject to an enterprise income tax rate of 25% in each of 2020, 2021 and 2022.
The preferential tax treatment continues as long as an enterprise can retain its “high and new technology enterprise” status. Our WFOE was subject to an enterprise income tax rate of 25% in each of 2021, 2022 and 2023.
Treasury with a maturity life that corresponds with the expected term. ● Expected term: Expected term is the contractual life of the options. ● Expected dividend yield: We have no history of paying cash dividends on our ordinary shares and do not expect to pay dividends in the foreseeable future. 113 Table of Contents ● Expected volatility: Expected volatility was estimated based on the average volatility of comparable companies in the same industry.
Treasury with a maturity life that corresponds with the expected term. ● Expected term: Expected term is the contractual life of the options. ● Expected dividend yield: We have no history of paying cash dividends on our ordinary shares and do not expect to pay dividends in the foreseeable future. ● Expected volatility: Expected volatility was estimated based on the average volatility of comparable companies in the same industry.
General and administrative expenses Our general and administrative expenses decreased by 63.9% from RMB2.0 billion in 2021 to RMB719.7 million (US$104.3 million) in 2022, which was mainly due to one-off share-based compensation expenses of RMB1,506.4 million recognized in 2021, partially offset by increased employee-related expenses.
General and administrative expenses Our general and administrative expenses decreased by 63.9% from RMB2.0 billion in 2021 to RMB719.7 million in 2022, which was mainly due to one-off share-based compensation expenses of RMB1,506.4 million recognized in 2021, partially offset by increased employee-related expenses.
Risk Factors—Risks Relating to Doing Business in China—We may not be able to obtain certain benefits under relevant tax treaty on dividends paid by our mainland China subsidiaries to us through our Hong Kong subsidiary.” B. Liquidity and Capital Resources Our principal sources of liquidity are cash flows from operations and cash generated by historical equity financing activities.
Risk Factors—Risks Relating to Doing Business in China—We may not be able to obtain certain benefits on dividends paid by our mainland China subsidiaries to us through our Hong Kong subsidiary.” B. Liquidity and Capital Resources Our principal sources of liquidity are cash flows from operations and cash generated from historical equity financing activities.
Cost of revenues. Our cost of revenues primarily consists of third-party payment processing cost, payroll and other employee-related expenses, server and bandwidth service cost and server depreciation. Sales and marketing expenses.
Cost of revenues. Our cost of revenues primarily consists of payment processing cost, payroll and other employee-related expenses, server and bandwidth service cost and server depreciation. Sales and marketing expenses.
Except for those disclosed above, we did not have any significant capital or other commitments, long-term obligations, or guarantees as of December 31, 2022. Holding Company Structure KANZHUN LIMITED is a holding company with no material operations of its own. We conduct our operations primarily through our mainland China subsidiaries and the VIE in mainland China.
Except for those disclosed above, we did not have any significant capital or other commitments, long-term obligations, or guarantees as of December 31, 2023. 112 Table of Contents Holding Company Structure KANZHUN LIMITED is a holding company with no material operations of its own. We conduct our operations primarily through our mainland China subsidiaries and the VIE in mainland China.
Research and development expenses Our research and development expenses increased by 43.9% from RMB822.0 million in 2021 to RMB1.2 billion (US$171.5 million) in 2022, which was primarily due to increased employee-related expenses.
Research and development expenses Our research and development expenses increased by 43.9% from RMB822.0 million in 2021 to RMB1.2 billion in 2022, which was primarily due to increased employee-related expenses.
Loss from operations As a result of the foregoing, we incurred RMB129.5 million (US$18.8 million) of loss from operations in 2022, as compared to RMB1.0 billion in 2021. Income tax expenses We accrued income tax expenses of RMB9.8 million (US$1.4 million) in 2022, as compared to that of RMB59.5 million in 2021.
Loss from operations As a result of the foregoing, we incurred RMB129.5 million of loss from operations in 2022, as compared to RMB1.0 billion in 2021. Income tax expenses We accrued income tax expenses of RMB9.8 million in 2022, as compared to that of RMB59.5 million in 2021.
We believe that our current cash and cash equivalents will be sufficient to meet our current and anticipated working capital requirements and capital expenditures for at least the next twelve months upon the issuance of the financial statements. We may, however, need additional cash resources in the future if we experience changes in business conditions or other developments.
We believe that our current cash balance will be sufficient to meet our current and anticipated working capital requirements and capital expenditures for at least the next twelve months. We may, however, need additional cash resources in the future if we experience changes in business conditions or other developments.
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, 2022 that are reasonably likely to have a material and adverse effect on our net 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 period since January 1, 2024 that are reasonably likely to have a material and adverse effect on our net 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.
Remittance of dividends by a wholly foreign-owned company out of mainland China is subject to examination by the banks designated by SAFE. Our mainland China subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds. 112 Table of Contents C.
Remittance of dividends by a wholly foreign-owned company out of mainland China is subject to examination by the banks designated by the SAFE. Our mainland China subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds. C. Research and Development, Patents and Licenses, etc.
The difference between this net cash generated from operating activities and net loss of RMB107.2 million (US$15.5 million) in the same period was due to adjustments for non-cash items that primarily include share-based compensation expenses of RMB692.2 million (US$100.4 million), amortization of right-of-use assets of RMB147.3 million (US$21.4 million) and depreciation and amortization expenses of RMB140.1 million (US$20.3 million), as well as cash used for an increase in working capital mainly resulting from a decrease of RMB143.7 million (US$20.8 million) in operating lease liabilities, partially offset by an increase of RMB102.3 million (US$14.8 million) in deferred revenue, reflecting the increasing scale of our business.
The difference between this net cash provided by operating activities and net income of RMB107.2 million in the same period was due to adjustments for non-cash items that primarily include share-based compensation expenses of RMB692.2 million, amortization of right-of-use assets of RMB147.3 million and depreciation and amortization expenses of RMB140.1 million, as well as cash used for an increase in working capital mainly resulting from a decrease of RMB143.7 million in operating lease liabilities, partially offset by an increase of RMB102.3 million in deferred revenue, reflecting the increasing scale of our business.
The consistent increase of revenue contribution of mid-sized accounts and key accounts speaks to the importance of expanding our services to existing paid enterprise customers, which will increase their spending and move more of our paid enterprise customers into the mid-sized and key account groups.
The consistent increase of revenue contribution of mid-sized accounts and key accounts speaks to the importance of expanding our services to existing paid enterprise customers, which will increase their spending.
Enterprises that qualify as “high and new technology enterprises” are entitled to a preferential rate of 15% for three years. Enterprises that qualify as “small low-profit enterprises” are entitled to a preferential rate of 20%.
Enterprises that qualify as “high and new technology enterprises” are entitled to a preferential rate of 15% for three years.
We value key accounts because they typically are large enterprises with steady demand for our online recruitment services and a stable recruiting budget. The number of key accounts increased by 155.4% from 1,871 in 2020 to 4,778 in 2021 and further increased by 25.2% to 5,984 in 2022.
We value key accounts because they typically are large enterprises with steady demand for our online recruitment services and a stable recruiting budget. The number of key accounts increased by 25.2% from 4,778 in 2021 to 5,984 in 2022 and further increased by 24.3% to 7,440 in 2023.
Key assumptions are set forth as follows: ● Fair value of ordinary shares on the grant date—The fair value of the ordinary share prior to our initial public offering in the United States of America was estimated based on the following assumptions: ● Weighted average cost of capital, or WACC: The WACC was determined in consideration of factors including risk-free rate, comparative industry risk, equity risk premium, company size and non-systematic risk factors. ● Discount for lack of marketability, or DLOM: The DLOM was quantified by the protective put options mode.
Significant estimates and assumptions, including fair value of ordinary shares on the grant date, risk-free interest rate, expected term, expected dividend yield, expected volatility and expected early exercise multiple are made. 113 Table of Contents Key assumptions are set forth as follows: ● Fair value of ordinary shares on the grant date—The fair value of the ordinary share prior to our initial public offering in the United States of America was estimated based on the following assumptions: ● Weighted average cost of capital, or WACC: The WACC was determined in consideration of factors including risk-free rate, comparative industry risk, equity risk premium, company size and non-systematic risk factors. ● Discount for lack of marketability, or DLOM: The DLOM was quantified by the protective put options mode.
In addition, paid enterprise customers who contributed RMB50,000 or more of revenues to us in a twelve-month period ended on the end of a given period, or key accounts, contributed 17.0%, 21.8% and 22.9% of our total revenues in 2020, 2021 and 2022, respectively.
In addition, paid enterprise customers who contributed RMB50,000 or more of revenues to us in a twelvemonth period ended on the end of a given period, or key accounts, contributed 21.8%, 22.9% and 21.2% of our total revenues in 2021, 2022 and 2023, respectively.
Certain items of our operating cost and expenses trended downwards as a percentage of our revenues from 2020 to 2022, especially after excluding share-based compensation expenses. As our business grows further, we expect to improve the efficiency and utilization of our personnel, and leverage our scale to achieve greater operating leverage.
Our total operating cost and expenses trended downwards as a percentage of our revenues in 2023, especially after excluding share-based compensation expenses. As our business grows further, we expect to improve the efficiency and utilization of our personnel, and leverage our scale to achieve greater operating leverage.
Investing activities Net cash used in investing activities in 2022 was RMB2.8 billion (US$408.4 million), primarily due to purchase of short-term investments of RMB5.2 billion (US$755.8 million) and purchase for property, equipment and software of RMB340.1 million (US$49.3 million), partially offset by proceeds from maturity of short-term investments of RMB2.7 billion (US$398.2 million).
Net cash used in investing activities in 2022 was RMB2.8 billion, primarily due to purchase of time deposits and short-term investments of RMB5.2 billion and purchase of property, equipment and software of RMB340.1 million, partially offset by proceeds from maturity of time deposits and short-term investments of RMB2.7 billion.
Research and Development, Patents and Licenses, etc. See “Item 4. Information on the Company—B. Business Overview—Technology and Infrastructure,” and “Item 4. Information on the Company—B. Business Overview—Intellectual Properties.” D.
See “Item 4. Information on the Company—B. Business Overview—Research and Technology,” and “Item 4. Information on the Company—B. Business Overview—Intellectual Properties.” D.
Operating Results Key Factors Affecting Our Results of Operations Our business and results of operations are affected by a number of general factors that impact China’s online recruitment service market, including, among others: ● China’s overall economic growth and development, along with its structural transformation into a service-based and technology-driven economy; ● greater challenges in hiring leading to the increasing adoption of recruitment services; ● digitalization of the recruitment industry; ● the emergence of the direct recruitment model; ● growth of the blue-collar sector; ● the high growth potential in online penetration among employers, in particular Bosses; ● competitive landscape of China’s online recruitment service industry and our market position therein; and 103 Table of Contents ● government policies and regulations affecting China’s internet industry as well as online recruitment service industry.
Operating Results Key Factors Affecting Our Results of Operations Our business and results of operations are affected by a number of general factors that impact China’s online recruitment service market, including, among others: ● China’s overall economic condition and its influence on job market and recruitment industry; ● greater challenges in hiring leading to the increasing adoption of recruitment services; ● digitalization of the recruitment industry; ● growth of the blue-collar sector; ● the high growth potential in online penetration among employers, in particular Bosses; ● the competitive landscape of China’s online recruitment service industry and our market position therein; and 104 Table of Contents ● government policies and regulations affecting China’s internet industry as well as online recruitment service industry.
We believe it’s important to grow our MAU, which we view as a key indicator of the size of our active user base, in order to support our business development. Our average MAU grew by 36.9% from 19.8 million in 2020 to 27.1 million in 2021 and grew by 5.9% to 28.7 million in 2022.
We believe it is important to grow our MAU, which we view as a key indicator of the size of our active user base, in order to support our business development. Our average MAU grew by 5.9% from 27.1 million in 2021 to 28.7 million in 2022 and grew by 47.4% to 42.3 million in 2023.
Sales and marketing expenses Our sales and marketing expenses increased by 3.0% from RMB1.9 billion in 2021 to RMB2.0 billion (US$290.1 million) in 2022, primarily due to increased employee-related expenses and increased brand advertising expenses mainly resulting from the marketing campaigns during the 2022 FIFA World Cup, partially offset by decreased customer acquisition cost.
Cost of revenues Our cost of revenues increased by 36.1% from RMB554.6 million in 2021 to RMB754.9 million in 2022, primarily driven by increased employee-related expenses and increased server and bandwidth cost. 108 Table of Contents Sales and marketing expenses Our sales and marketing expenses increased by 3.0% from RMB1.9 billion in 2021 to RMB2.0 billion in 2022, primarily due to increased employee-related expenses and increased brand advertising expenses mainly resulting from the marketing campaigns during the 2022 FIFA World Cup, partially offset by decreased customer acquisition cost.
The following table sets forth the components of our revenues by amounts and percentages of our revenues for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Revenues Online recruitment services to enterprise customers 1,927,178 99.1 4,219,026 99.1 4,461,282 646,825 98.9 Others 17,181 0.9 40,102 0.9 49,780 7,217 1.1 Total revenues 1,944,359 100.0 4,259,128 100.0 4,511,062 654,042 100.0 ​ Operating cost and expenses Our operating costs and expenses consist of cost of revenues, sales and marketing expenses, research and development expenses, and general and administrative expenses.
The following table sets forth the components of our revenues by amounts and percentages of our revenues for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Revenues Online recruitment services to enterprise customers 4,219,026 99.1 4,461,282 98.9 5,889,101 829,463 98.9 Others 40,102 0.9 49,780 1.1 62,927 8,863 1.1 Total revenues 4,259,128 100.0 4,511,062 100.0 5,952,028 838,326 100.0 ​ Operating cost and expenses Our operating costs and expenses consist of cost of revenues, sales and marketing expenses, research and development expenses, and general and administrative expenses.
Net cash generated from operating activities in 2021 was RMB1.6 billion.
Net cash provided by operating activities in 2021 was RMB1.6 billion.
Risk Factors—Risks Relating to Doing Business in China—PRC regulation of loans to and direct investment in entities in mainland China by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans or additional capital contributions to our mainland China subsidiaries and the VIE, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” 110 Table of Contents The following table sets forth a summary of our cash flows for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB RMB RMB US$ ​ ​ (in thousands) Net cash generated from operating activities 395,911 1,641,381 1,003,042 145,427 Net cash generated from/(used in) investing activities 467,305 (601,862) (2,816,581) (408,365) Net cash generated from/(used in) financing activities 2,882,112 6,431,263 (669,232) (97,029) Effect of exchange rate changes on cash and cash equivalents (154,480) (127,227) 892,837 129,449 Net increase/(decrease) in cash and cash equivalents 3,590,848 7,343,555 (1,589,934) (230,518) Cash and cash equivalents at beginning of the year 407,355 3,998,203 11,341,758 1,644,400 Cash and cash equivalents at end of the year 3,998,203 11,341,758 9,751,824 1,413,882 ​ Operating activities Net cash generated from operating activities in 2022 was RMB1.0 billion (US$145.4 million).
Risk Factors—Risks Relating to Doing Business in China—PRC regulation of loans to and direct investment in entities in mainland China by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans or additional capital contributions to our mainland China subsidiaries and the VIE, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” 110 Table of Contents The following table sets forth a summary of our cash flows for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB RMB RMB US$ ​ ​ (in thousands) Net cash provided by operating activities 1,641,381 1,003,042 3,047,009 429,162 Net cash used in investing activities (601,862) (2,816,581) (9,938,645) (1,399,829) Net cash provided by/(used in) financing activities 6,431,263 (669,232) (417,022) (58,736) Effect of exchange rate changes on cash and cash equivalents (127,227) 892,837 29,793 4,196 Net increase/(decrease) in cash and cash equivalents 7,343,555 (1,589,934) (7,278,865) (1,025,207) Cash and cash equivalents at beginning of the year 3,998,203 11,341,758 9,751,824 1,373,516 Cash and cash equivalents at end of the year 11,341,758 9,751,824 2,472,959 348,309 ​ Operating activities Net cash provided by operating activities in 2023 was RMB3.0 billion (US$429.2 million).
To achieve maximum return for our branding and marketing investments, we set and adjust our branding and marketing strategies based on data analytics of factors such as occupational structure, average income of target demographics, and characteristics of different marketing channels. Our advertising expenses represented 41.8%, 23.4% and 17.6% of our revenues in 2020, 2021 and 2022, respectively.
To achieve maximum return for our branding and marketing investments, we set and adjust our branding and marketing strategies based on data analytics of factors such as occupational structure, average income of target demographics, and characteristics of different marketing channels.
No provision for Hong Kong profits tax was made as we had no estimated assessable profit that was subject to Hong Kong profits tax during 2020, 2021 and 2022. 109 Table of Contents PRC Under the PRC Enterprise Income Tax Law effective from January 1, 2008, and amended on February 24, 2017 and December 29, 2018, our mainland China subsidiaries and the VIE are subject to the statutory rate of 25%, subject to preferential tax treatments available to qualified enterprises as stipulated under PRC tax laws and regulations.
PRC Under the PRC Enterprise Income Tax Law effective from January 1, 2008, and amended on February 24, 2017 and December 29, 2018, our mainland China subsidiaries and the VIE are subject to the statutory rate of 25%, subject to preferential tax treatments available to qualified enterprises as stipulated under PRC tax laws and regulations.
Our ability to enhance our operating efficiency Our results of operations are further affected by our operating efficiency in aspects other than sales and marketing, as measured by our total operating cost and expenses excluding sales and marketing expenses as a percentage of our revenues.
We will need to continue to monitor and manage our advertising expenses if we are to improve profitability in the future. 105 Table of Contents Our ability to enhance our operating efficiency Our results of operations are further affected by our operating efficiency in aspects other than sales and marketing, as measured by our total operating cost and expenses excluding sales and marketing expenses as a percentage of our revenues.
The following table sets forth the components of our sales and marketing expenses by amounts and percentages of our revenues for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Sales and marketing expenses Payroll and other employee-related expenses 470,644 24.2 823,399 19.3 1,065,184 154,437 23.6 Advertising expenses 812,415 41.8 997,650 23.4 793,211 115,005 17.6 Others 64,473 3.3 121,621 2.9 142,505 20,661 3.2 Total 1,347,532 69.3 1,942,670 45.6 2,000,900 290,103 44.4 ​ Research and development expenses .
The following table sets forth the components of our sales and marketing expenses by amounts and percentages of our revenues for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Sales and marketing expenses Payroll and other employee-related expenses 823,399 19.3 1,065,184 23.6 1,221,732 172,077 20.5 Advertising expenses 997,650 23.4 793,211 17.6 582,075 81,984 9.8 Others 121,621 2.9 142,505 3.2 187,419 26,397 3.2 Total 1,942,670 45.6 2,000,900 44.4 1,991,226 280,458 33.5 ​ Research and development expenses .
Our revenues increased by 5.9% from RMB4.3 billion in 2021 to RMB4.5 billion (US$654.0 million) in 2022. This increase was primarily resulted from our continued investment in enhancing our service capabilities.
Our revenues increased by 5.9% from RMB4.3 billion in 2021 to RMB4.5 billion in 2022. This increase was primarily resulted from our continued investment in enhancing our service capabilities. In particular, revenues from online recruitment services to enterprise customers were RMB4,461.3 million in 2022, representing an increase of 5.7% from RMB4,219.0 million in 2021.
Revenues from other services, which mainly comprise paid value-added services offered to job seekers, were RMB49.8 million (US$7.2 million) for the full year of 2022, representing an increase of 24.2% from RMB40.1 million for the full year of 2021, mainly benefiting from expanded user base. 107 Table of Contents Cost of revenues Our cost of revenues increased by 36.1% from RMB554.6 million in 2021 to RMB754.9 million (US$109.4 million) in 2022, primarily driven by increased employee-related expenses and increased server and bandwidth cost.
Revenues from other services, which mainly comprise paid value-added services offered to job seekers, were RMB62.9 million (US$8.9 million) in 2023, representing an increase of 26.3% from RMB49.8 million for the full year of 2022. 107 Table of Contents Cost of revenues Our cost of revenues increased by 40.4% from RMB754.9 million in 2022 to RMB1.1 billion (US$149.3 million) in 2023, primarily driven by increases in server and bandwidth cost and payment processing cost.
We provide online recruitment services to enterprise customers that allow them to access and interact with job seekers and better manage their recruitment process.
Key Components of Results of Operations Revenues We derive most of our revenues from paid enterprise customers on our online recruitment platform. We provide online recruitment services to enterprise customers that allow them to access and interact with job seekers and better manage their recruitment process.
As of December 31, 2022, our cash and cash equivalents and short-term investments increased by 8.0% from RMB12.2 billion as of December 31, 2021 to RMB13.2 billion (US$1.9 billion) as of December 31, 2022, with RMB1.0 billion (US$145.4 million) net cash generated from operating activities for 2022.
As of December 31, 2023, our cash and cash equivalents, time deposits and short-term investments totaled RMB12.9 billion (US$1.8 billion), with RMB3.0 billion (US$429.2 million) net cash provided by operating activities for 2023.
The following table sets forth our contractual obligations as of December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment Due by Period ​ ​ ​ ​ Less than ​ ​ ​ ​ ​ More than ​ ​ Total ​ 1 year ​ 1–3 years ​ 3–5 years ​ 5 years ​ ​ (in RMB thousands) Operating lease obligations ​ 314,394 ​ 154,865 ​ 132,245 ​ 27,284 ​ — Advertising commitments 28,004 25,583 2,421 — — ​ We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties.
The following table sets forth our contractual obligations as of December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment Due by Period ​ ​ ​ ​ Less than ​ ​ ​ ​ ​ More than ​ ​ Total ​ 1 year 1–3 years 3–5 years 5 years ​ ​ (in RMB thousands) Operating lease obligations ​ 293,967 ​ 158,723 ​ 134,789 ​ 455 ​ — Capital commitments ​ 225,644 ​ 225,644 ​ — ​ — ​ — Advertising commitments 55,564 34,808 20,756 — — ​ We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties.
Net cash used in investing activities in 2021 was RMB601.9 million, primarily due to purchase of short-term investments of RMB3.9 billion and purchase for property, equipment and software of RMB259.9 million, partially offset by proceeds from maturity of short-term investments of RMB3.6 billion.
Investing activities Net cash used in investing activities in 2023 was RMB9.9 billion (US$1.4 billion), primarily due to purchase of time deposits and short-term investments of RMB16.9 billion (US$2.4 billion), purchase of long-term investments of RMB2.4 billion (US$337.3 million) and purchase of property, equipment and software of RMB955.5 million (US$134.6 million), partially offset by proceeds from maturity of time deposits and short-term investments of RMB10.3 billion (US$1.4 billion).
To expand our services to existing paid enterprise customers, we plan to introduce new service offerings, better educate existing paid enterprise customers about the value of additional services, and recommend more customized services to each paid enterprise customer based on analysis of its historical hiring behaviors. 104 Table of Contents Our ability to promote our brands and market our services more effectively Our investment in branding, marketing and promotional activities contributes to our user acquisition, and whether such investment is cost-effective has a significant impact on our results of operations.
To expand our services to existing paid enterprise customers, we plan to introduce new service offerings, better educate existing paid enterprise customers about the value of additional services, and recommend more customized services to each paid enterprise customer based on analysis of its historical hiring behaviors.
The difference between this net cash generated from operating activities and the net loss of RMB941.9 million in the same period was due to adjustments for non-cash items that primarily include share-based compensation expenses of RMB657.2 million, amortization of right-of-use assets of RMB66.9 million and depreciation and amortization expense of RMB41.1 million, as well as cash released from a decrease in working capital mainly resulting from an increase of RMB585.5 million in deferred revenue and an increase of RMB130.5 million in other payables and accrued liabilities, both of which reflected the increasing scale of our business and our growing user base, partially offset by a RMB71.8 million decrease in operating lease liabilities, a RMB46.1 million increase in prepayments and other current assets, and a RMB22.7 million decrease in accounts payable.
The difference between this net cash provided by operating activities and net income of RMB1.1 billion (US$154.8 million) in the same period was due to adjustments for non-cash items that primarily include share-based compensation expenses of RMB1.1 billion (US$148.9 million), unrealized interest and investment income of RMB288.0 million (US$40.6 million), depreciation and amortization expenses of RMB258.8 million (US$36.4 million) and amortization of right-of-use assets of RMB169.1 million (US$23.8 million), as well as cash released from a decrease in working capital mainly resulting from an increase of RMB733.2 million (US$103.3 million) in deferred revenue, a decrease of RMB123.9 million (US$17.5 million) in prepayments and other current assets, partially offset by a decrease of RMB170.8 million (US$24.1 million) in operating lease liabilities.
Beijing Huapin Borui Network Technology Co., Ltd., or the VIE, was certified as a “high and new technology enterprise” under the relevant laws and regulations of mainland China, and accordingly was eligible for a preferential tax rate of 15% in each of 2020, 2021 and 2022.
Enterprises that qualify as “small low-profit enterprises” are entitled to a preferential rate of 20%. 109 Table of Contents Beijing Huapin Borui Network Technology Co., Ltd., which we refer to as the VIE, was certified as a “high and new technology enterprise” and accordingly was eligible for a preferential tax rate of 15% in each of 2021, 2022 and 2023.
Net cash generated from investing activities in 2020 was RMB467.3 million, primarily due to proceeds from maturity of short-term investments of RMB2.4 billion, partially offset by cash purchase payments for short-term investments of RMB1.8 billion and cash purchase payments for property, equipment and software of RMB138.2 million. 111 Table of Contents Financing activities Net cash used in financing activities in 2022 was RMB669.2 million (US$97.0 million), primarily attributable to the repurchase of Class A ordinary shares of RMB918.9 million (US$133.2 million), partially offset by proceeds of RMB249.7 million (US$36.2 million) from the exercise of share options.
Net cash used in investing activities in 2021 was RMB601.9 million, primarily due to purchase of time deposits and short-term investments of RMB3.9 billion and purchase of property, equipment and software of RMB259.9 million, partially offset by proceeds from maturity of time deposits and short-term investments of RMB3.6 billion. 111 Table of Contents Financing activities Net cash used in financing activities in 2023 was RMB417.0 million (US$58.7 million), primarily attributable to the payment of dividends of RMB562.9 million (US$79.3 million) and the repurchase of ordinary shares of RMB71.8 million (US$10.1 million), partially offset by proceeds from the exercise of share-based awards of RMB217.7 million (US$30.7 million).
Our operating lease obligations primarily represent our obligations under the lease agreements for our office premises. Purchase obligations primarily consist of minimum commitments for advertising activities. We intend to fund our existing and future material cash requirements primarily with our existing cash balance and anticipated cash flows from operations.
We intend to fund our existing and future material cash requirements primarily with our existing cash balance and anticipated cash flows from operations.
Our paid enterprise customers reached 3.6 million in 2022.
Our paid enterprise customers are 4.0 million in 2021, 3.6 million in 2022 and 5.2 million in 2023.
Net income We recorded net income of RMB107.2 million (US$15.5 million) in 2022, as compared to a net loss of RMB1.1 billion in 2021.
Net income We recorded net income of RMB107.2 million in 2022, as compared to a net loss of RMB1.1 billion in 2021. Taxation Cayman Islands The Cayman Islands currently levies no taxes on corporations based upon profits, income, gains, or appreciation.
Net cash generated from financing activities in 2021 was RMB6.4 billion, primarily attributable to net proceeds from our initial public offering in the United States.
Net cash used in financing activities in 2022 was RMB669.2 million, primarily attributable to the repurchase of ordinary shares of RMB918.9 million, partially offset by proceeds from the exercise of share-based awards of RMB249.7 million. Net cash provided by financing activities in 2021 was RMB6.4 billion, primarily attributable to net proceeds from our initial public offering in the United States.
We used a binomial option pricing model to determine the fair value of the awarded share options, which is to be expensed over the vesting period. Significant estimates and assumptions, including fair value of ordinary shares on the grant date, risk-free interest rate, expected term, expected dividend yield, expected volatility and expected early exercise multiple are made.
We used a binomial option pricing model to determine the fair value of the awarded share options, which is to be expensed over the vesting period.
Year Ended December 31, 2021 compared to Year Ended December 31, 2020 Revenues Our revenues primarily come from online recruitment services provided to paid enterprise customers, and they increased by 119.0% from RMB1.9 billion in 2020 to RMB4.3 billion in 2021.
Net income We recorded net income of RMB1.1 billion (US$154.8 million) in 2023, as compared to RMB107.2 million in 2022. Year Ended December 31, 2022 compared to Year Ended December 31, 2021 Revenues Our revenues primarily come from online recruitment services provided to paid enterprise customers.
In particular, revenues from online recruitment services to enterprise customers were RMB4,461.3 million (US$646.8 million) for the full year of 2022, representing an increase of 5.7% from RMB4,219.0 million for the full year of 2021.
Our revenues increased by 31.9% from RMB4.5 billion in 2022 to RMB6.0 billion (US$838.3 million) in 2023. This increase was primarily resulted from the user growth and increased user engagement. In particular, revenues from online recruitment services to enterprise customers were RMB5.9 billion (US$829.5 million) in 2023, representing an increase of 32.0% from RMB4.5 billion in 2022.
Material cash requirements Our material cash requirements as of December 31, 2022 and any subsequent interim period primarily include capital expenditures, operating lease obligations and purchase obligations. Our capital expenditures primarily consist of purchases of servers and other electronic equipment. We incurred capital expenditures of RMB138.2 million, RMB259.9 million and RMB340.1 million (US$49.3 million) in 2020, 2021 and 2022, respectively.
Capital expenditures Our capital expenditures primarily consist of purchases of servers and other electronic equipment. We incurred capital expenditures of RMB259.9 million, RMB340.1 million and RMB955.5 million (US$134.6 million) in 2021, 2022 and 2023, respectively. We plan to continue to incur capital expenditures in the future to meet our business growth.
Peng Zhao, and increased headcount in general and administrative personnel. Loss from operations As a result of the foregoing, we incurred RMB1.0 billion of loss from operations in 2021, as compared to a loss from operations of RMB944.9 million in 2020. Income tax expenses We accrued income tax expenses of RMB59.5 million in 2021.
Income/(Loss) from operations As a result of the foregoing, we recorded an income from operations of RMB581.0 million (US$81.8 million) in 2023, as compared to loss from operations of RMB129.5 million in 2022.
Removed
Pursuant to an announcement posted by the CAC on July 5, 2021 relating to the cybersecurity review, our BOSS Zhipin app was required to suspend new user registration to cooperate with the cybersecurity review and prevent the expansion of risks.
Added
Our ability to promote our brands and market our services more effectively Our investment in branding, marketing and promotional activities contributes to our user acquisition, and whether such investment is cost-effective has a significant impact on our results of operations.
Removed
As approved by the Cybersecurity Review Office of the CAC, we have recommenced new user registration on our BOSS Zhipin app, effective from June 29, 2022.
Added
Our advertising expenses decreased in 2023 as a result of not having similar marketing campaigns like the FIFA World Cup sponsorship in 2022. Our advertising expenses represented 23.4%, 17.6% and 9.8% of our revenues in 2021, 2022 and 2023, respectively. The declining proportion of our advertising expenses to revenues signifies higher efficiency of our marketing activities.
Removed
The declining proportion of our advertising expenses to revenues signifies higher efficiency of our marketing activities. We will need to continue to monitor and manage our advertising expenses if we are to improve profitability in the future.
Added
Sales and marketing expenses Our sales and marketing expenses were RMB2.0 billion (US$280.5 million) in 2023, relatively stable with that in 2022. The decrease in advertising expenses in 2023, as a result of not having similar marketing campaigns like the FIFA World Cup sponsorship in 2022, was largely offset by an increase in employee-related expenses.
Removed
Impact of COVID-19 on Our Operations The COVID-19 pandemic had severely impacted China and the rest of the world, and resulted in quarantines, travel restrictions, the temporary closure of offices and facilities and cancelation of public activities, among others.
Added
Research and development expenses Our research and development expenses increased by 30.5% from RMB1.2 billion in 2022 to RMB1.5 billion (US$217.4 million) in 2023, which was primarily due to increased employee-related expenses as well as increased investments in technology.
Removed
In 2022, there was a recurrence of COVID-19 outbreaks in certain cities and provinces of mainland China, including, among others, Shanghai, Beijing, Shenzhen, Chengdu and Zhengzhou due to the COVID-19 variants, which delayed the recovery of consumption and services.
Added
General and administrative expenses Our general and administrative expenses increased by 12.8% from RMB719.7 million in 2022 to RMB811.8 million (US$114.3 million) in 2023, which was mainly due to increased share-based compensation expenses, partially offset by decreased professional service fees.
Removed
Although the COVID-19 pandemic accelerated the existing trend of bringing the recruitment process online and increased the market penetration of online recruitment platforms, the impact from the COVID-19 has reduced the employers’ willingness to recruit and their recruitment related budgets, and the combined effect had a negative impact on our business, especially in cities most impacted by the COVID-19 pandemic.
Added
Interest and investment income Our interest and investment income increased by 167.9% from RMB226.5 million in 2022 to RMB606.8 million (US$85.5 million) in 2023, primarily attributable to increases in time deposits and investments in financial products in 2023. Income tax expenses We accrued income tax expenses of RMB122.6 million (US$17.3 million) in 2023, as compared to RMB9.8 million in 2022.
Removed
In addition, we made adjustments to operation hours and instituted work-from-home arrangements.
Added
Revenues from other services, which mainly comprise paid value-added services offered to job seekers, were RMB49.8 million in 2022, representing an increase of 24.2% from RMB40.1 million in 2021, mainly benefiting from expanded user base.
Removed
We believe the resurgence of the COVID-19 had an adverse impact on our business and results of operations in 2022 while such adverse impact, as a whole, had been temporary in nature and will not have a material impact on us in the long run, on the basis that (i) despite some sporadic resurgence in certain areas from time to time, the recruitment demand adversely affected by the COVID-19 recovered in a speedy manner soon after the outbreak to a pre-COVID level (ii) our business is mainly operated online, which had been less directly impacted by the restrictive measures; and (iii) we have also adopted enhanced hygiene and precautionary measures to prevent infection and transmission of the COVID-19 within our premises and among our staff.
Added
No provision for Hong Kong profits tax was made as we had no estimated assessable profit that was subject to Hong Kong profits tax during 2021, 2022 and 2023.
Removed
Most of the restrictions and requirements imposed in mainland China in response to the COVID-19 pandemic were lifted in December 2022. However, the potential future impact of the virus and related policies remains uncertain.
Added
Net cash provided by operating activities in 2022 was RMB1.0 billion.
Removed
The extent to which the COVID-19 may continue to affect our customers’ ability to pay, customer demand for our services remain uncertain, and we are closely monitoring its impact on us. See “Item 3. Key Information—D.
Added
Material cash requirements Our material cash requirements as of December 31, 2023 primarily include operating lease obligations, capital commitments and advertising commitments. Our operating lease obligations primarily represent our obligations under the lease agreements for our office premises. Our capital commitments primarily relate to purchase obligations for servers. Advertising commitments relate to purchase obligations for advertising services.
Removed
Risk Factors—Risks Relating to Our Business and Industry—The ongoing COVID-19 pandemic could adversely affect our business, results of operations and financial condition.” 105 Table of Contents Key Components of Results of Operations Revenues We derive most of our revenues from paid enterprise customers on our online recruitment platform.
Removed
This increase primarily resulted from the rapid growth in our paid enterprise customers’ numbers following the expansion of our user base and continued investment in enhancing our service capabilities. Our paid enterprise customers increased by 81.8% from 2.2 million in 2020 to 4.0 million in 2021.
Removed
In particular, revenues from key accounts increased by 180.6% from RMB330.8 million in 2020 to RMB928.4 million in 2021, and revenues from mid-sized accounts increased by 117.4% from RMB696.3 million in 2020 to RMB1.5 billion in 2021. The number of our key accounts increased by 155.4% from 1,871 in 2020 to 4,778 in 2021.
Removed
Cost of revenues Our cost of revenues increased by 130.9% from RMB240.2 million in 2020 to RMB554.6 million in 2021, primarily driven by (i) an increase in third-party payment processing cost, (ii) an increase in employee-related expenses associated with the increased headcount, especially in security and operation personnel, and (iii) an increase in server and bandwidth cost, resulting from expanded user base and increased transaction volume. 108 Table of Contents Sales and marketing expenses Our sales and marketing expenses increased by 44.2% from RMB1.3 billion in 2020 to RMB1.9 billion in 2021, primarily due to increased payroll and other employee-related expenses for our sales and marketing staff and enhanced brand advertising activities.

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Item 6. [Reserved]

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

58 edited+10 added−11 removed43 unchanged
Biggest change(3) 47,286,435 — 47,286,435 5.5 2.2 Notes: * Less than 1% of our total ordinary shares on an as-converted basis outstanding as of February 28, 2023. ** Except as indicated otherwise below, the business address of our directors and executive officers is 18/F, GrandyVic Building, Taiyanggong Middle Road, Chaoyang District, Beijing 100020, People’s Republic of China. † For each person or group included in this column, percentage of total voting power represents voting power based on both Class A and Class B ordinary shares held by such person or group with respect to all outstanding shares of our Class A and Class B ordinary shares as a single class.
Biggest changeThese shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Beneficially Owned ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ordinary ​ ​ ​ % of ​ ​ Class A ​ Class B ​ shares on an ​ ​ ​ aggregate ​ ​ ordinary ​ ordinary ​ as converted ​ ​ ​ voting ​ ​ Shares Shares basis % power Directors and Officers**: ​ ​ ​ ​ ​ Peng Zhao (1) ​ — ​ 139,630,401 ​ 139,630,401 ​ 15.9 ​ 65.4 Yu Zhang ​ * ​ — ​ * ​ * ​ * Xu Chen ​ * ​ — ​ * ​ * ​ * Tao Zhang * — * * * Xiehua Wang * — * ​ * ​ * Haiyang Yu ​ — ​ — ​ — ​ — ​ — Yonggang Sun * — * * * Yan Li * — * * * Shangyu Gao * — * * * All directors and officers as a group 12,642,746 139,630,401 152,273,147 17.3 66.8 Principal Shareholders: ​ ​ ​ ​ ​ TECHWOLF LIMITED (1) — 139,630,401 139,630,401 15.9 65.4 Image Frame Investment (HK) Limited (2) 72,996,393 — 72,996,393 8.3 3.4 Notes: * Less than 1% of our total ordinary shares on an as-converted basis outstanding as of February 29, 2024. ** Except as indicated otherwise below, the business address of our directors and executive officers is 18/F, GrandyVic Building, Taiyanggong Middle Road, Chaoyang District, Beijing 100020, People’s Republic of China. † For each person or group included in this column, percentage of total voting power represents voting power based on both Class A and Class B ordinary shares held by such person or group with respect to all outstanding shares of our Class A and Class B ordinary shares as a single class.
The corporate governance committee ensures that we are operated and managed for the benefit of all shareholders and to ensure the Company’s compliance with the Nasdaq Stock Market Rules and Hong Kong Listing Rules and safeguards relating to our weighted voting rights structures, and develop and recommend to the board a set of corporate governance guideline.
The corporate governance committee ensures that we are operated and managed for the benefit of all shareholders and to ensure our company’s compliance with the Nasdaq Stock Market Rules and Hong Kong Listing Rules and safeguards relating to our weighted voting rights structures, and develop and recommend to the board a set of corporate governance guideline.
Awards may not be transferred in any manner by the participant other than in accordance with the exceptions provided in the 2020 Share Incentive Plan or the relevant award agreement or otherwise determined by the plan administrator, such as transfers by will or the laws of descent and distribution. Termination and Amendment.
Awards may not be transferred in any manner by the participant other than in accordance with the exceptions provided in the 2020 Share Incentive Plan or the award agreement or otherwise determined by the plan administrator, such as transfers by will or the laws of descent and distribution. Termination and Amendment.
The plan administrator determines the exercise or purchase price, as applicable, and the time or times of exercise, for each award, which are stated in the relevant award agreement. However, the maximum exercisable term is ten years from the date of grant. Transfer Restrictions.
The plan administrator determines the exercise or purchase price, as applicable, and the time or times of exercise, for each award, which are stated in the award agreement. However, the maximum exercisable term is ten years from the date of grant. Transfer Restrictions.
We typically enter into standard contracts and agreements regarding confidentiality, intellectual property, employment, commercial ethics and non-competition with our senior management and core personnel. These contracts typically include a non-competition provision and a confidentiality provisions effective during and after their employment.
We typically enter into standard contracts and agreements regarding confidentiality, intellectual property, employment, commercial ethics and non-competition with our senior management and core personnel. These contracts typically include a non-competition provision and a confidentiality provision effective during and after their employment.
The corporate governance committee is responsible for, among other things: ● developing and reviewing periodically, the corporate governance principles adopted by the board to assure that they are appropriate for our company and comply with the requirements of Nasdaq and the Hong Kong Stock Exchange, and recommend any desirable changes to the board; ● reviewing and monitoring the training and continuous professional development of directors and senior management; and ● reviewing and monitoring our policies and practices on compliance with legal and regulatory requirements.
The corporate governance committee is responsible for, among other things: ● developing and reviewing periodically the corporate governance principles adopted by the board to assure that they are appropriate for our company and comply with the requirements of Nasdaq and the Hong Kong Stock Exchange, and recommend any desirable changes to the board; ● reviewing and monitoring the training and continual professional development of directors and senior management; and ● reviewing and monitoring our policies and practices on compliance with legal and regulatory requirements.
However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands.
However, English courts have moved towards an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands.
Limits on Grant of Awards Unless approved by the shareholders, the total number of Class A Shares issued and to be issued upon exercise of awards granted and to be granted under the Post-IPO Share Scheme and any other share schemes of the Company to each eligible participant (including both exercised and outstanding Options) in any 12 month period shall not exceed 1% of the total number of shares in issue.
Limits on Grant of Awards Unless approved by the shareholders, the total number of Class A ordinary shares issued and to be issued upon exercise of awards granted and to be granted under the Post-IPO Share Scheme and any other share schemes of our company to each eligible participant (including both exercised and outstanding Options) in any 12-month period shall not exceed 1% of the total number of shares in issue.
The nomination committee is responsible for, among other things: ● selecting and recommending to the board nominees for election by the shareholders or appointment by the board; ● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; ● making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and ● advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken. 120 Table of Contents Corporate governance committee.
The nomination committee is responsible for, among other things: ● selecting and recommending to the board nominees for election by the shareholders or appointment by the board; ● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; ● making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and ● advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.
The audit committee is responsible for, among other things: ● appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; ● reviewing with the independent auditors any audit problems or difficulties and management’s response; ● discussing the annual audited financial statements with management and the independent auditors; ● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; ● reviewing and approving all proposed related party transactions; ● meeting separately and periodically with management and the independent auditors; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance; ● assuming other duties and responsibilities as required under the Nasdaq Stock Market Rules and the Hong Kong Listing Rules. 119 Table of Contents Compensation committee.
The audit committee is responsible for, among other things: ● appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; ● reviewing with the independent auditors any audit problems or difficulties and management’s response; ● discussing the annual audited financial statements with management and the independent auditors; ● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; ● reviewing and approving all proposed related party transactions; ● meeting separately and periodically with management and the independent auditors; and monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance; ● assuming other duties and responsibilities as required under the Nasdaq Stock Market Rules and the Hong Kong Listing Rules.
Yu Zhang has served as our Chief Financial Officer since September 2019 and as our director since May 2021. Mr. Zhang is in charge of the accounting, legal and internal control functions and the capital markets activities of our Group. Mr. Zhang has over 17 years of research and investment experience in the technology, media and telecom industry.
Yu Zhang has served as our Chief Financial Officer since September 2019 and as our director since May 2021. Mr. Zhang is in charge of the accounting, legal and internal control functions and the capital markets activities of our Group. Mr. Zhang has over 18 years of research and investment experience in the technology, media and telecom industry.
Zhang has over 16 years of experience in the software engineering and internet industry. Prior to joining us, Mr. Zhang served in various companies, including group companies of IBM, Renren Inc., a China-based social media platform, and Baidu Inc., one of the leading Chinese language Internet search service providers. Mr.
Zhang has over 17 years of experience in the software engineering and internet industry. Prior to joining us, Mr. Zhang served in various companies, including group companies of IBM, Renren Inc., a China-based social media platform, and Baidu Inc., one of the leading Chinese language Internet search service providers. Mr.
Our compensation committee is also in compliance with Rule 3.25 of the Hong Kong Listing Rules and the Corporate Governance Code set out in Appendix 14 to the Hong Kong Listing Rules. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers.
Our compensation committee is also in compliance with Rule 3.25 of the Hong Kong Listing Rules and the Corporate Governance Code set out in Appendix C1 to the Hong Kong Listing Rules. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers.
Wang has over 10 years of experience in product management in internet companies. Prior to joining us, Ms. Wang was a senior product manager of Lianjia (currently known as KE Holdings Inc.), a leading housing transactions and services platform in China. Ms.
Wang has over 11 years of experience in product management in internet companies. Prior to joining us, Ms. Wang was a senior product manager of Lianjia (currently known as KE Holdings Inc.), a leading housing transactions and services platform in China. Ms.
We may grant awards to our employees, directors and consultants. However, incentive share options may be granted to our employees and employees of any of our subsidiaries only. Vesting Schedule. In general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement. Exercise of Awards.
Eligibility. We may grant awards to our employees, directors and consultants. However, incentive share options may be granted to our employees and employees of any of our subsidiaries only. Vesting Schedule. In general, the plan administrator determines the vesting schedule, which is specified in the award agreement. Exercise of Awards.
Awards granted under the 2020 Share Incentive Plan are evidenced by a stock option agreement, restricted share purchase agreement or share award agreement, as applicable, that sets forth the terms, conditions and limitations for each award, which may include the term of the award, the provisions applicable in the event that the awardee’s employment or service terminates, and our authority to unilaterally or bilaterally modify or amend the award. 116 Table of Contents Eligibility.
Awards granted under the 2020 Share Incentive Plan are evidenced by a stock option agreement, restricted share purchase agreement or share award agreement, as applicable, that sets forth the terms, conditions and limitations for each award, which may include the term of the award, the provisions applicable in the event that the awardee’s employment or service terminates, and our authority to unilaterally or bilaterally modify or amend the award.
Our corporate governance committee is also in compliance with the requirements in the Corporate Governance Code set out in Appendix 14 to the Hong Kong Listing Rules and Chapter 8A of the Hong Kong Listing Rules.
Our corporate governance committee is also in compliance with the requirements in the Corporate Governance Code set out in Appendix C1 to the Hong Kong Listing Rules and Chapter 8A of the Hong Kong Listing Rules.
In certain limited exceptional circumstances, a shareholder may have the right to seek damages in our name if a duty owed by our directors is breached. Our board of directors has all the powers necessary for managing, and for directing and supervising, our business affairs.
In certain limited exceptional circumstances, a shareholder may have the right to seek damages in our name if a duty owed by our directors is breached. 121 Table of Contents Our board of directors has all the powers necessary for managing, and for directing and supervising, our business affairs.
Share Ownership Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares on an as-converted basis as of February 28, 2023 by: ● each of our directors and executive officers; and ● each of our principal shareholders who beneficially own 5% or more of our total issued and outstanding shares.
Share Ownership Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares on an as-converted basis as of February 29, 2024 by: ● each of our directors and executive officers; and ● each of our principal shareholders who beneficially own 5% or more of our total issued and outstanding shares.
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. F. Disclosure of a registrant’s action to recover erroneously awarded compensation. Not applicable.
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. F. Disclosure of a registrant’s action to recover erroneously awarded compensation. Not applicable. 124 Table of Contents
Peng Zhao is the Founder of our company and has been our Chairman of the board and Chief Executive Officer since our inception. He founded our company and has guided our development and growth since then. Mr. Zhao has more than 18 years of experience in the internet industry and more than 24 years of experience in human resources services.
Peng Zhao is the Founder of our company and has been our Chairman of the board and Chief Executive Officer since our inception. He founded our company and has guided our development and growth since then. Mr. Zhao has more than 19 years of experience in the internet industry and more than 25 years of experience in human resources services.
Our Class B ordinary shares are convertible at any time by the holder into Class A ordinary shares on a one-for-one basis, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. (1) Represents 140,830,401 Class B ordinary shares held by TECHWOLF LIMITED, a British Virgin Islands company.
Our Class B ordinary shares are convertible at any time by the holder into Class A ordinary shares on a one-for-one basis, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. (1) Represents 139,630,401 Class B ordinary shares held by TECHWOLF LIMITED, a British Virgin Islands company.
We believe that we maintain a good working relationship with our employees, and we did not experience any material labor disputes or work stoppages or any difficulty in recruiting staff for our operations in the past. 122 Table of Contents E.
We believe that we maintain a good working relationship with our employees, and we did not experience any material labor disputes or work stoppages or any difficulty in recruiting staff for our operations in the past. E.
Chen has over 22 years of experience in marketing in the Greater China region. Prior to joining us, Mr. Chen was the vice president at Jiuxianwang, a China-based e-commerce company, from November 2015 to November 2016. Mr. Chen received his bachelor’s degree from Beijing Wuzi University. 114 Table of Contents Mr.
Chen has over 23 years of experience in marketing in the Greater China region. Prior to joining us, Mr. Chen was the vice president at Jiuxianwang, a China-based e-commerce company, from November 2015 to November 2016. Mr. Chen received his bachelor’s degree from Beijing Wuzi University. Mr.
A director is not required to hold any shares in our company by way of qualification. A director who is in any way, whether directly or indirectly, interested in a contract or transaction or proposed contract or transaction with our company is required to declare the nature of his or her interest at a meeting of our directors.
A director who is in any way, whether directly or indirectly, interested in a contract or transaction or proposed contract or transaction with our company is required to declare the nature of his or her interest at a meeting of our directors.
We may also terminate an executive officer’s employment without cause upon 60-day advance written notice. In such case of termination by us, we will provide severance payments to the executive officer as may be agreed between the executive officer and us.
We may also terminate an executive officer’s employment without cause upon 60-day advance written notice. In such case of termination by us, we will provide severance payments to the executive officer as may be agreed between the executive officer and us. The executive officer may resign at any time with a 60-day advance written notice.
Our compensation committee consists of Yonggang Sun, Charles Zhaoxuan Yang and Peng Zhao. Yonggang Sun is the chairperson of our compensation committee. We have determined that Yonggang Sun and Charles Zhaoxuan Yang satisfy the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market.
Compensation committee Our compensation committee consists of Yonggang Sun, Shangyu Gao and Peng Zhao. Yonggang Sun is the chairperson of our compensation committee. We have determined that Yonggang Sun and Shangyu Gao satisfy the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market.
Our nomination committee is also in compliance with the requirements in respect of nomination committees in the Corporate Governance Code set out in Appendix 14 to the Hong Kong Listing Rules and Chapter 8A of the Hong Kong Listing Rules.
Our nomination committee is also in compliance with Rule 3.27A of the Hong Kong Listing Rules, the requirements in respect of nomination committees in the Corporate Governance Code set out in Appendix C1 to the Hong Kong Listing Rules and Chapter 8A of the Hong Kong Listing Rules.
We have determined that Charles Zhaoxuan Yang qualifies as an “audit committee financial expert.” Our audit committee is also in compliance with Rule 3.21 of the Hong Kong Listing Rules and the Corporate Governance Code set out in Appendix 14 to the Hong Kong Listing Rules.
We have determined that Shangyu Gao qualifies as an “audit committee financial expert.” Our audit committee is also in compliance with Rule 3.21 of the Hong Kong Listing Rules and the Corporate Governance Code set out in Appendix C1 to the Hong Kong Listing Rules.
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 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. 120 Table of Contents Nomination committee Our nomination committee consists of Yan Li, Yonggang Sun and Peng Zhao.
The executive officer may resign at any time with a 60-day advance written notice. 115 Table of Contents Each executive officer has agreed to hold, both during and after the termination or expiry of his or her employment agreement, in strict confidence and not to use, except as required in the performance of his or her duties in connection with the employment or pursuant to applicable law, any of our confidential information or trade secrets, any confidential information or trade secrets of our users or prospective users, or the confidential or proprietary information of any third-party received by us and for which we have confidential obligations.
Each executive officer has agreed to hold, both during and after the termination or expiry of his or her employment agreement, in strict confidence and not to use, except as required in the performance of his or her duties in connection with the employment or pursuant to applicable law, any of our confidential information or trade secrets, any confidential information or trade secrets of our users or prospective users, or the confidential or proprietary information of any third-party received by us and for which we have confidential obligations.
The entire interest in TECHWOLF LIMITED is held by a trust established by Mr. Peng Zhao as the settlor for the benefit of Mr. Zhao and his family. The registered office address of TECHWOLF LIMITED is Start Chambers, Wickham’s Cay II, P.O.
The entire interest in TECHWOLF LIMITED is held by a trust established by Mr. Peng Zhao (as the settlor) for the benefit of Mr. Zhao and his family. The registered office address of TECHWOLF LIMITED is Start Chambers, Wickham’s Cay II, P.O. Box 2221, Road Town, Tortola, British Virgin Islands.
Yu was a non-executive director of Tongcheng Travel Holdings Limited (formerly known as Tongcheng-Elong Holdings Limited) (SEHK: 780) from November 2019 to April 2020. Mr. Yu received his bachelor of engineering degree majoring in civil engineering from Tsinghua University in 2005. Mr.
Yu was a non-executive director of Tongcheng Travel Holdings Limited (formerly known as Tongcheng-Elong Holdings Limited) (SEHK: 780) from November 2019 to April 2020. Mr. Yu received his bachelor of engineering degree majoring in civil engineering from Tsinghua University in 2005. Mr. Yonggang Sun has served as our independent director since June 2021. Mr.
Committees of the Board of Directors We have established four committees under the board of directors: an audit committee, a compensation committee, a nomination committee and a corporate governance committee. We have adopted a charter for each of the four committees. Each committee’s members and functions are described below. Audit committee.
Committees of the Board of Directors We have established four committees under the board of directors: an audit committee, a compensation committee, a nomination committee and a corporate governance committee. We have adopted a charter for each of the four committees.
Board Diversity Matrix ​ Board Diversity Matrix (As of February 28, 2023) Country of Principal Executive Offices PRC Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law No Total Number of Directors 9 ​ ​ ​ ​ Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity ​ ​ ​ ​ ​ ​ ​ ​ Directors ​ 1 ​ 8 ​ 0 ​ 0 Part II: Demographic Background ​ ​ ​ ​ ​ ​ ​ ​ Underrepresented Individual in Home Country Jurisdiction ​ ​ ​ ​ ​ 0 ​ ​ LGBTQ+ ​ ​ ​ ​ ​ 0 ​ ​ Did Not Disclose Demographic Background ​ ​ ​ ​ ​ 0 ​ ​ ​ D.
Board Diversity Matrix ​ Board Diversity Matrix (As of February 29, 2024) Country of Principal Executive Offices PRC Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law No Total Number of Directors 9 ​ ​ ​ ​ Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity ​ ​ ​ ​ ​ ​ ​ ​ Directors ​ 2 ​ 7 ​ — ​ — Part II: Demographic Background ​ ​ ​ ​ ​ ​ ​ ​ Underrepresented Individual in Home Country Jurisdiction ​ ​ ​ ​ ​ — ​ ​ LGBTQ+ ​ ​ ​ ​ ​ — ​ ​ Did Not Disclose Demographic Background ​ ​ ​ ​ ​ — ​ ​ ​ 122 Table of Contents D.
In addition, a director will cease to be a director if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his or her creditors; (ii) dies or is found to be or becomes of unsound mind; (iii) resigns his or her office by notice in writing to our company, or (iv) is removed from office pursuant to any other provision of our articles of association. 121 Table of Contents Our officers are appointed by and serve at the discretion of the board of directors, and may be removed by our board of directors.
In addition, a director will cease to be a director if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his or her creditors; (ii) dies or is found to be or becomes of unsound mind; (iii) resigns his or her office by notice in writing to our company, or (iv) is removed from office pursuant to any other provision of our articles of association.
Nomination committee. Our nomination committee consists of Charles Zhaoxuan Yang, Yonggang Sun and Peng Zhao. Charles Zhaoxuan Yang is the chairperson of our nomination committee. We have determined that Charles Zhaoxuan Yang and Yonggang Sun satisfy the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market.
Yan Li is the chairperson of our nomination committee. We have determined that Yan Li and Yonggang Sun satisfy the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market.
Our corporate governance committee consists of Yusheng Wang, Charles Zhaoxuan Yang and Yonggang Sun. Yusheng Wang is the chairperson of our corporate governance committee. We have determined that Yusheng Wang, Charles Zhaoxuan Yang and Yonggang Sun satisfy the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market.
Corporate governance committee Our corporate governance committee consists of Yan Li, Yonggang Sun and Shangyu Gao. Yan Li is the chairperson of our corporate governance committee. We have determined that Yan Li, Yonggang Sun and Shangyu Gao satisfy the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market.
The following table sets forth the number of our employees as of December 31, 2022, by function: ​ ​ ​ ​ Function Number Sales and marketing 2,622 Research and development 1,444 Operations 1,255 General administration 281 Total 5,602 ​ Our success depends on our ability to attract, motivate, train and retain qualified employees.
The following table sets forth the number of our full-time employees as of December 31, 2023, by function: ​ ​ ​ ​ Function Number Sales and marketing 2,635 Research and development 1,395 Operations 1,029 General administration 287 Total 5,346 ​ Our success depends on our ability to attract, motivate, train and retain qualified employees.
Zhao devoted his time to youth development research and volunteer projects in social organizations and took on various roles in those organizations including the China Youth Volunteers Association. Mr. Zhao received his bachelor’s degree in law from Peking University in 1994. Mr. Haiyang Yu has served as our director since July 2019. Mr.
Zhao devoted his time to youth development research and volunteer projects in social organizations and took on various roles in those organizations including the China Youth Volunteers Association. Mr. Zhao received his bachelor’s degree in law from Peking University in 1994. 114 Table of Contents Mr.
Employees We had a total of 5,602 employees as of December 31, 2022, and most of which are located in mainland China.
Employees We had a total of 5,346 full-time employees as of December 31, 2023, 5,602 full-time employees as of December 31, 2022 and 4,840 full-time employees as of December 31, 2021. Most of the employees are located in mainland China.
Directors and Senior Management The following table sets forth information regarding our executive officers and directors. ​ Directors and Executive Officers Age Position/Title Peng Zhao ​ 52 ​ Chairman of the Board of Directors and Chief Executive Officer Haiyang Yu ​ 40 ​ Director Yu Zhang ​ 46 ​ Director and Chief Financial Officer Xu Chen ​ 47 ​ Director and Chief Marketing Officer Tao Zhang ​ 41 ​ Director and Chief Technology Officer Xiehua Wang ​ 35 ​ Director Charles Zhaoxuan Yang ​ 39 ​ Independent Director Yonggang Sun ​ 52 ​ Independent Director Yusheng Wang ​ 79 ​ Independent Director ​ Mr.
Directors and Senior Management The following table sets forth information regarding our executive officers and directors. ​ Directors and Executive Officers Age Position/Title Peng Zhao ​ 53 ​ Chairman of the Board of Directors and Chief Executive Officer Yu Zhang ​ 46 ​ Director and Chief Financial Officer Xu Chen ​ 48 ​ Director and Chief Marketing Officer Tao Zhang ​ 42 ​ Director and Chief Technology Officer Xiehua Wang ​ 36 ​ Director and Vice President of Product Haiyang Yu ​ 41 ​ Director Yonggang Sun ​ 53 ​ Independent Director Yan Li ​ 53 ​ Independent Director Shangyu Gao ​ 33 ​ Independent Director ​ Mr.
We may grant awards to employees (whether full-time or-part time), directors and officers of any member of our Group or any company which is an associate of our Company. 117 Table of Contents Award Letter We shall, in respect of each award, on the grant date issue a letter to each grantee in such form as the Scheme Administrator may from time to time determine setting out the terms and conditions of the award, which may include the number of Class A Shares in respect of which the award relates, the issue price or exercise price (as applicable), the vesting criteria and conditions, the vesting date, any minimum performance targets that must be achieved and any such other details as the Scheme Administrator may consider necessary, and requiring the grantee to undertake to hold the award on the terms of the award letter and be bound by the provisions of the Post-IPO Share Scheme.
The letter will set out the terms and conditions of the award, which may include the number of Class A ordinary shares in respect of which the award relates, the issue price or exercise price (as applicable), the vesting criteria and conditions, the vesting date, any minimum performance targets that must be achieved and any such other details as the scheme administrator may consider necessary, and requiring the grantee to undertake to hold the award on the terms of the award letter and be bound by the provisions of the Post-IPO Share Scheme.
The calculations in the table below are based on 724,847,189 Class A ordinary shares and 140,830,401 Class B ordinary shares issued and outstanding as of February 28, 2023. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
The calculations in the table below are based on 740,222,111 Class A ordinary shares and 139,630,401 Class B ordinary shares issued and outstanding as of February 29, 2024. 123 Table of Contents Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Our audit committee consists of Charles Zhaoxuan Yang, Yonggang Sun and Yusheng Wang. Charles Zhaoxuan Yang is the chairperson of our audit committee. We have determined that Charles Zhaoxuan Yang, Yonggang Sun and Yusheng Wang satisfy the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market and Rule 10A-3 under the Exchange Act.
We have determined that Shangyu Gao, Yonggang Sun and Yan Li satisfy the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market and Rule 10A-3 under the Exchange Act.
Image Frame Investment (HK) Limited is a subsidiary of Tencent Holdings Limited, a public company listed on the Hong Kong Stock Exchange (SEHK: 0700). The registered address of Image Frame Investment (HK) Limited is 29/F., Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong.
Image Frame Investment (HK) Limited is a subsidiary of Tencent Holdings Limited, a public company listed on the Hong Kong Stock Exchange (SEHK: 0700).
Compensation Compensation of Directors and Executive Officers In 2022, we paid an aggregate of RMB32.2 million (US$4.7 million) in cash compensation to our executive officers, and an aggregate of RMB1.1 million (US$0.2 million) in cash compensation to our non-executive directors.
Compensation Compensation of Directors and Executive Officers In 2023, we paid or accrued an aggregate of approximately RMB26.2 million (US$3.7 million) in cash to our directors and executive officers as a group, and an aggregate of RMB1.2 million (US$0.2 million) in cash compensation to our non-executive directors.
Sun served as the vice president of Capital Steel Group Co., Ltd. and the general counsel of China Tietong Group Co., Ltd. Mr. Sun received his bachelor’s degree in law from Renmin University in 1993 and his LL.M. degree from Temple University in 2003. Mr. Yusheng Wang has served as our independent director since October 2022. Mr.
Sun received his bachelor’s degree in law from Renmin University of China in 1993 and his LL.M. degree from Temple University in 2003. Mr. Yan Li has served as our independent director since October 2023. Mr.
Box 2221, Road Town, Tortola, British Virgin Islands. 123 Table of Contents (2) Represents 72,309,691 Class A ordinary shares held by Image Frame Investment (HK) Limited, a company incorporated in Hong Kong, as reported in a Schedule 13G amendment jointly filed Image Frame Investment (HK) Limited and Tencent Holdings Limited on February 10, 2023.
(2) Represents 72,996,393 Class A ordinary shares held by Image Frame Investment (HK) Limited, a company incorporated in Hong Kong, as reported in a Schedule 13G amendment jointly filed Image Frame Investment (HK) Limited and Tencent Holdings Limited on February 1, 2024.
One-third of the directors for the time being shall retire from office by rotation provided that every director shall be subject to retirement by rotation at least once every three years. A director may be removed from office by an ordinary resolution of our shareholders.
One-third of the directors for the time being (or, if their number is not three or a multiple of three, then the number nearest to, but not less than, one-third) shall retire from office by rotation provided that every director shall be subject to retirement by rotation at least once every three years.
The following table summarizes, as of February 28, 2023, the number of ordinary shares underlying outstanding options and restricted share units we granted to our directors and executive officers. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares ​ ​ ​ ​ ​ ​ ​ ​ Underlying Options and ​ Exercise Price ​ ​ ​ ​ Name Restricted Share Units (US$/Share) Date of Grant Date of Expiration Yu Zhang ​ 9,432,750 ​ -~5.33 ​ May 18, 2019 to December 3, 2022 ​ May 18, 2029 to December 3, 2032 Xu Chen ​ * ​ -~3.0807 ​ August 1, 2018 to December 3, 2022 ​ August 1, 2028 to December 3, 2032 Tao Zhang * -~3.0807 December 20, 2018 to December 3, 2022 December 20, 2028 to December 3, 2032 Xiehua Wang * -~3.0807 May 2, 2018 to June 15, 2022 May 2, 2028 to June 15, 2032 Yonggang Sun * 0.0001 July 10, 2021 to June 15, 2022 July 10, 2031 to June 15, 2032 All directors and executive officers as a group 14,543,768 Note: * Less than 1% of our total ordinary shares issued and outstanding as of February 28, 2023. ​ As of February 28, 2023, our consultants and employees other than directors and executive officers hold options and restricted share units to purchase 73,583,734 Class A ordinary shares.
The board may subject to the rules of the Post-IPO Share Scheme amend any of the provisions of the Post-IPO Share Scheme or any awards granted under the Post-IPO Share Scheme at any time and in any respect, provided that the terms of this Scheme or the awards so altered must comply with the requirements of the Hong Kong Listing Rules. 118 Table of Contents The following table summarizes, as of February 29, 2024, the number of ordinary shares underlying outstanding options and restricted share units we granted to our directors and executive officers. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares ​ ​ ​ ​ ​ ​ ​ ​ Underlying Options and ​ Exercise Price ​ ​ ​ ​ Name Restricted Share Units (US$/Share) Date of Grant Date of Expiration Yu Zhang ​ 9,324,564 ​ -~5.33 ​ May 18, 2019 to December 3, 2022 ​ May 18, 2029 to December 3, 2032 Xu Chen ​ * ​ -~3.0807 ​ August 1, 2018 to December 3, 2022 ​ August 1, 2028 to December 3, 2032 Tao Zhang * -~3.0807 December 20, 2018 to March 27, 2023 December 20, 2028 to March 27, 2033 Xiehua Wang * -~3.0807 May 2, 2018 to June 15, 2022 May 2, 2028 to June 15, 2032 Yonggang Sun * 0.0001 July 10, 2021 to June 15, 2023 July 10, 2031 to June 15, 2033 Yan Li * — December 15, 2023 December 15, 2033 Shangyu Gao ​ * ​ — ​ December 15, 2023 ​ December 15, 2033 All directors and executive officers as a group ​ 12,731,862 ​ — ​ ​ ​ ​ Note: * Less than 1% of our total ordinary shares issued and outstanding as of February 29, 2024. ​ As of February 29, 2024, our consultants and employees other than directors and executive officers hold options and restricted share units to purchase 81,776,822 Class A ordinary shares.
The weighted average exercise price for the options granted to our consultants and employees other than directors and executive officers as of February 28, 2023 was US$3.13 per share. 118 Table of Contents C. Board Practices ​ Board of Directors Our board of directors consists of nine directors.
The weighted average exercise price for the options granted to our consultants and employees other than directors and executive officers as of February 29, 2024 was US$3.026 per share. C. Board Practices ​ Board of Directors Our board of directors consists of nine directors. A director is not required to hold any shares in our company by way of qualification.
Yu is currently a deputy general manager of the investment and acquisition department at a group company of Tencent, a director of DouYu International Holdings Ltd (Nasdaq: DOYU) and a director of Waterdrop Inc. (NYSE: WDH). Mr.
Haiyang Yu has served as our director since July 2019. Mr. Yu is currently a vice general manager of Tencent Investment, a director of DouYu International Holdings Ltd (Nasdaq: DOYU) and a director of Waterdrop Inc. (NYSE: WDH). Mr.
As of February 28, 2023, options to purchase a total of 68,037,820 of our Class A ordinary shares and restricted share units to purchase a total of 20,089,682 of our Class A ordinary shares were outstanding under the 2020 Share Incentive Plan. The following paragraphs summarize the principal terms of the 2020 Share Incentive Plan. Type of Awards.
As of February 29, 2024, options to purchase a total of 55,471,746 of our Class A ordinary shares and restricted share units to purchase a total of 13,935,034 of our Class A ordinary shares were outstanding under the 2020 Share Incentive Plan.
The 2020 Share Incentive Plan permits the awards of options, restricted share purchase rights, share appreciation rights and restricted shares. Plan Administration. Our chairman of the board of directors or a committee authorized by our board of directors will administer the 2020 Share Incentive Plan.
The following paragraphs summarize the principal terms of the 2020 Share Incentive Plan. 116 Table of Contents Type of Awards. The 2020 Share Incentive Plan permits the awards of options, restricted share purchase rights, share appreciation rights and restricted shares. Plan Administration. Our compensation committee administers the 2020 Share Incentive Plan. Award Agreement.
The registered address of Banyan Partners Fund II, L.P. is Walkers Corporate Limited, 190 Elgin Avenue, George Town, Grand Cayman, KY1-9008, Cayman Islands. ​ To our knowledge, as of February 28, 2023, an aggregate of 563,535,251 of our ordinary shares are held by record holders in the United States (including an aggregate of 563,535,250 ordinary shares held by Citibank, N.A., the depositary of our ADS program).
The registered address of Image Frame Investment (HK) Limited and Tencent Holding Limited is Level 29, Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong. ​ To our knowledge, as of February 29, 2024, an aggregate of 624,947,333 of our ordinary shares are held by record holders in the United States (including an aggregate of 624,947,332 ordinary shares held by Citibank, N.A., the depositary of our ADS program).
Yang is a Certified Public Accountant licensed in the State of Michigan and Hong Kong. Mr. Yonggang Sun has served as our independent director since June 2021. Mr. Sun currently serves as a partner of Z-Park Fund. Prior to joining Z-Park Fund, Mr.
Sun currently serves as a partner of Z-Park Fund. Prior to joining Z-Park Fund, Mr. Sun served as the vice president of Capital Steel Group Co., Ltd. and the general counsel of China Tietong Group Co., Ltd. Mr.
As of February 28, 2023, the maximum aggregate number of ordinary shares that may be issued under the Post-IPO Share Scheme is 86,380,904. We had not granted any award under the Post-IPO Share Scheme as of February 28, 2023. The following paragraphs summarize the principal terms of the Post-IPO Share Scheme. Plan Administration.
As of February 29, 2024, the maximum aggregate number of ordinary shares that may be granted under the Post-IPO Share Scheme is 60,701,196. As of February 29, 2024, share awards in the form of restricted share units to purchase a total of 25,101,904 of our Class A ordinary shares were outstanding under the Post-IPO Share Scheme.
Removed
Charles Zhaoxuan Yang has served as our independent director since June 2021. Mr. Yang is the chief financial officer of NetEase, Inc. (Nasdaq: NTES) and an independent director of So-Young International Inc., a company listed on the Nasdaq Global Market (Nasdaq: SY). Prior to joining NetEase, Inc. in 2017, Mr.
Added
Li is a seasoned strategic expert with over 20 years of experience in management services, which span across various business sectors, including intellectual property rights protection and technology development. Mr. Li currently serves as the general manager of Metis IP, a company which provides intellectual property rights related services. Prior to joining us, Mr.
Removed
Yang was an executive director at global investment banking department of J.P. Morgan Securities (Asia Pacific) Limited based in Hong Kong and worked there for almost a decade. Mr. Yang holds a master’s degree in business administration from the University of Hong Kong and a bachelor’s degree of arts from Wesleyan University. Mr.
Added
Li was formerly the director and general manager of Beijing Runqian Information System Technology Co., Ltd., a PRC-based technology and software development company, from January 2006 to January 2016. Prior to that, Mr. Li was the division general manager of China International Electronic Commerce Center, a China-based nationwide provider of e-commerce services and infrastructure, from November 2000 to June 2002.
Removed
Wang is currently a member of China National Education Advisory Committee and the deputy director of Chinese Alliance of Science Popularization. Mr.
Added
Mr. Li received his bachelor’s degree in science from Peking University in June 1994. Ms. Shangyu Gao has served as our independent director since October 2023. Ms. Gao is the founder and currently the general manager of Hainan Gaoshang Investment Group Co., Ltd., an investment management company. Prior to joining us, Ms.
Removed
Wang served as the director of China Science and Technology Museum from 2000 to 2006, and a deputy director, researcher (professor) and doctoral supervisor of the Institute for the History of Natural Science, Chinese Academy of Sciences from 1993 to 2000. Mr.
Added
Gao held various positions at the investment and acquisition department at a group company of Tencent Holdings Limited from August 2015 to August 2023, with her last position being an investment director which she was responsible for business, financial and legal assessment, post-investment services and capital operation of investment projects in primary and secondary markets. Ms.
Removed
Wang received a bachelor’s degree in mathematics from Sichuan Normal University in 1966, a master’s degree from the Graduate School of Chinese Academy of Sciences in 1981, and a PhD degree from Chinese Academy of Sciences in 1987. B.
Added
Gao received her bachelor’s degree in economics from Tsinghua University in July 2013 and her master’s degrees in management from HEC Paris in October 2015 and from Tsinghua University in January 2016. 115 Table of Contents B.
Removed
The committee or the full board of directors, as applicable, will determine, among others, the participants to receive awards, the number of shares to be covered by each award, the form of award agreements, and the terms and conditions of each award. Award Agreement.
Added
The following paragraphs summarize the principal terms of the Post-IPO Share Scheme. 117 Table of Contents Plan Administration. The chairperson of the board acts as the scheme administrator. The scheme administrator has the power to offer or grant awards and to determine the terms and conditions of such awards.
Removed
The chairperson of the board or an award management committee as authorized by the Board, provided that such committee is established (“the Scheme Administrator”), shall have the powers to offer or grant awards and to determine the terms and conditions of such awards.
Added
Eligibility. We may grant awards to employees (whether full-time or-part time), directors and officers of any member of our Group or any company which is an associate of our company. Award Letter For each award, we will issue a letter to each grantee on the grant date in such form as the scheme administrator may determine.
Removed
The board may subject to the rules of the Post-IPO Share Scheme amend any of the provisions of the Post-IPO Share Scheme or any awards granted under the Post-IPO Share Scheme at any time and in any respect, provided that the terms of this Scheme or the awards so altered must comply with the relevant requirements of the Hong Kong Listing Rules.
Added
Each committee’s members and functions are described below. 119 Table of Contents Audit committee Our audit committee consists of Shangyu Gao, Yonggang Sun and Yan Li. Shangyu Gao is the chairperson of our audit committee.
Removed
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Beneficially Owned ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ordinary ​ ​ ​ % of ​ ​ Class A ​ Class B ​ shares on an ​ ​ ​ aggregate ​ ​ ordinary ​ ordinary ​ as converted ​ ​ ​ voting ​ ​ Shares Shares basis % power Directors and Officers**: ​ ​ ​ ​ ​ Peng Zhao (1) ​ — ​ 140,830,401 ​ 140,830,401 ​ 16.3 ​ 66.0 Haiyang Yu ​ — ​ — ​ — ​ — ​ — Yu Zhang ​ * ​ — ​ * ​ * ​ * Xu Chen ​ * ​ — ​ * ​ * ​ * Tao Zhang * — * * * Xiehua Wang * — ​ ​ ​ ​ ​ Charles Zhaoxuan Yang * — * * * Yonggang Sun * — * * * Yusheng Wang — — — — — All directors and officers as a group 13,157,528 140,830,401 153,987,929 17.8 66.6 Principal Shareholders: TECHWOLF LIMITED (1) — 140,830,401 140,830,401 16.3 66.0 Image Frame Investment (HK) Limited (2) 72,309,691 — 72,309,691 8.4 3.4 Banyan Partners Fund II, L.P.
Added
A director may be removed from office by an ordinary resolution of our shareholders.
Removed
(3) Represents 47,286,435 Class A ordinary shares held by Banyan Partners Fund II, L.P., an exempted limited partnership formed under the law of the Cayman Islands, as reported in a Schedule 13G amendment jointly filed Banyan Partners Fund II, L.P. and Banyan Partners II Ltd. on February 13, 2023.
Added
Our officers are appointed by and serve at the discretion of the board of directors, and may be removed by our board of directors.
Removed
The general partner of Banyan Partners Fund II, L.P. is Banyan Partners II Ltd., a Cayman Islands company.

Item 7. Management's Discussion & Analysis

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

4 edited+3 added−9 removed3 unchanged
Biggest changeFor the years ended December 31, 2020, 2021 and 2022, the expenses we incurred for such services amount to RMB8.0 million, RMB23.6 million and RMB30.8 million (US$4.5 million), respectively. Shareholders Agreement We entered into our eleventh amended and restated shareholders agreement with our shareholders in November 2020.
Biggest changeWe purchase cloud services and online payment platform clearing service from companies under the control of Tencent Holdings Limited. For the years ended December 31, 2021, 2022 and 2023, the expenses we incurred for such services amount to RMB23.6 million, RMB30.8 million and RMB28.6 million (US$4.0 million), respectively.
Item 7. Major Shareholders and Related Party Transactions A. Major Shareholders Please refer to “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” B. Related Party Transactions Contractual Arrangements with the VIE and Its Shareholders See “Item 4. Information on the Company—C. Organizational Structure.” Employment Agreements and Indemnification Agreements See “Item 6. Directors, Senior Management and Employees—B.
Item 7. Major Shareholders and Related Party Transactions A. Major Shareholders See “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” B. Related Party Transactions Contractual Arrangements with the VIE and Its Shareholders See “Item 4. Information on the Company—C. Organizational Structure.” Employment Agreements and Indemnification Agreements See “Item 6. Directors, Senior Management and Employees—B.
Zhang with a term of one year, which was extended for another year in 2020 upon its original maturity date. In March 2021, the loan was fully settled in cash. 124 Table of Contents Transactions with Image Frame Investment (HK) Limited and companies under the control of Tencent Holdings Limited (the “Tencent Group”).
Zhang with a term of one year, which was extended for another year in 2020 upon its original maturity date. In March 2021, the loan was fully settled in cash. Transactions with Tencent Holdings Limited and its affiliates. Tencent Holdings Limited is one of our major shareholders.
The special rights other than certain registration rights, as well as the corporate governance provisions, automatically terminated upon the completion of our initial public offering. Registration Rights We have granted certain registration rights to our shareholders. Set forth below is a description of the registration rights granted under the shareholders agreement. Demand Registration Rights.
The special rights other than certain registration rights, as well as the corporate governance provisions, automatically terminated upon the completion of our initial public offering. The registration rights will expire on June 15, 2024.
Removed
Image Frame Investment (HK) Limited is one of our major shareholders. We purchase cloud services and online payment platform clearing service from Tencent Group, and incur prepaid service fees in connection with such services.
Added
Shareholders Agreement We entered into our eleventh amended and restated shareholders agreement with our shareholders in November 2020.
Removed
(i) Holders of registrable securities holding 50% or more of the then outstanding registrable securities after the fifth anniversary of the closing date of the sale and issuance of our Series F+ preferred shares or (ii) holders of registrable securities holding at least 30% of the then outstanding registrable securities after six months following the effective date of the registration statement for our initial public offering may request in writing for us to effect a registration of the registrable securities under the Securities Act of such requesting shareholder’s registrable securities on a form other than F-3, if such registrable securities represent at least 20% of the total registrable securities (or any lesser percentage if the anticipated gross proceeds from the offering are at least US$20 million).
Added
We filed a shelf registration statement on Form F-3 with the SEC on December 16, 2022, in connection with our public offering of Class A ordinary shares in Hong Kong.
Removed
Upon receipt of such a request, we shall give notice of such requested registration to all other shareholders within 10 business days and shall use our commercially reasonable efforts to effect, as soon as practicable, the registration under the Securities Act of all registrable securities for which the requesting shareholder has requested registration and all other registrable securities that other shareholders request us to register within 20 days after receipt of the notice.
Added
Any shareholder named as a selling shareholder in a prospectus supplement to this registration statement may utilize this registration statement to sell Class A ordinary shares or ADSs in a public offering. 125 Table of Contents C. Interests of Experts and Counsel Not applicable.
Removed
We are not obligated to effect more than a total of two demand registrations and in no event shall we be required to effect more than one demand registration within any six-month period. We shall pay all registration expenses in connection with each demand registration.
Removed
Registration on Form F-3 Holders of a majority of our outstanding registrable securities may request us in writing to file a registration statement on Form F-3. We shall effect the registration of the securities on Form F-3 as soon as practicable using our reasonable best efforts.
Removed
We are not obligated to effect more than one registration on Form F-3 during any 12-month period. Piggyback Registration Rights. If we propose to file a registration statement for a public offering of our securities, we must offer shareholders an opportunity to include in the registration all or any part of the registrable securities held by such holders.
Removed
If the managing underwriters of any underwritten offering determine in good faith that marketing factors require a limitation of the number of shares to be underwritten, and the number of shares that may be included in the registration and the underwriting shall be allocated to each holder requesting inclusion of its registrable securities in such registration statement on a pro rata basis based on the total number of registrable securities then held by each such holder; provided that at least 25% of the registrable securities requested by the holders to be included in the underwriting and registration shall be so included, and all shares that are not registrable securities shall first be excluded from such registration and underwriting before any registrable securities are so excluded. 125 Table of Contents Expenses of Registration.
Removed
We will bear all registration expenses in connection with any demand, piggyback or Form F-3 registration, other than the selling expenses or other amounts payable to underwriters, brokers or the depositary bank in connection with such offering by the holders. Termination of Registration Rights.
Removed
The registration rights will terminate with respect to any holder of registrable securities upon the earlier of: (i) the date that is that is the third anniversary following the completion of our initial public offering, and (ii) when all registrable securities held by that shareholder may be sold without restriction under Rule 144 within any 90-day period. C.