|
SEA LIMITED
|
|
|
|
|
|
By:
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/s/ Forrest Xiaodong Li
|
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Name:
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Forrest Xiaodong Li
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Title:
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Chairman and Group Chief Executive Officer
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For the Six Months Ended June 30,
|
||||||||||||
2020
|
2021
|
|||||||||||
US$
|
Percentage of Total Revenue
|
US$
|
Percentage of Total Revenue
|
|||||||||
(unaudited)
(US$ in thousands, except for percentages)
|
||||||||||||
Selected Consolidated Statements of Operations Data:
|
||||||||||||
Revenue:
|
||||||||||||
Service revenue
|
||||||||||||
Digital entertainment
|
753,629
|
47.2
|
1,805,602
|
44.7
|
||||||||
E-commerce and other services
|
631,264
|
39.5
|
1,772,040
|
43.8
|
||||||||
Sales of goods
|
212,061
|
13.3
|
466,550
|
11.5
|
||||||||
Total revenue
|
1,596,954
|
100.0
|
4,044,192
|
100.0
|
||||||||
Cost of revenue:
|
||||||||||||
Cost of service
|
||||||||||||
Digital entertainment
|
(299,231
|
)
|
(18.7
|
)
|
(540,936
|
)
|
(13.4
|
)
|
||||
E-commerce and other services
|
(673,815
|
)
|
(42.2
|
)
|
(1,491,286
|
)
|
(36.9
|
)
|
||||
Cost of goods sold
|
(216,282
|
)
|
(13.5
|
)
|
(435,667
|
)
|
(10.8
|
)
|
||||
Total cost of revenue
|
(1,189,328
|
)
|
(74.5
|
)
|
(2,467,889
|
)
|
(61.0
|
)
|
||||
Gross profit
|
407,626
|
25.5
|
1,576,303
|
39.0
|
||||||||
Operating income (expenses):
|
||||||||||||
Other operating income
|
57,925
|
3.6
|
147,095
|
3.6
|
||||||||
Sales and marketing expenses
|
(694,665
|
)
|
(43.5
|
)
|
(1,600,284
|
)
|
(39.6
|
)
|
||||
General and administrative expenses
|
(271,480
|
)
|
(17.0
|
)
|
(491,850
|
)
|
(12.2
|
)
|
||||
Research and development expenses
|
(139,933
|
)
|
(8.8
|
)
|
(313,693
|
)
|
(7.8
|
)
|
||||
Total operating expenses
|
(1,048,153
|
)
|
(65.6
|
)
|
(2,258,732
|
)
|
(55.9
|
)
|
||||
Operating loss
|
(640,527
|
)
|
(40.1
|
)
|
(682,429
|
)
|
(16.9
|
)
|
||||
Interest income
|
15,206
|
1.0
|
14,969
|
0.4
|
||||||||
Interest expense
|
(67,927
|
)
|
(4.3
|
)
|
(49,606
|
)
|
(1.2
|
)
|
||||
Investment gain (loss), net
|
58,968
|
3.7
|
(19,770
|
)
|
(0.5
|
)
|
||||||
Changes in fair value of convertible notes
|
(87
|
)
|
(0.0
|
)
|
-
|
-
|
||||||
Foreign exchange gain
|
12,687
|
0.8
|
6,094
|
0.2
|
||||||||
Loss before income tax and share of results of equity investees
|
(621,680
|
)
|
(38.9
|
)
|
(730,742
|
)
|
(18.1
|
)
|
||||
Income tax expense
|
(51,058
|
)
|
(3.2
|
)
|
(126,216
|
)
|
(3.1
|
)
|
||||
Share of results of equity investees
|
(1,588
|
)
|
(0.1
|
)
|
1,198
|
0.0
|
||||||
Net loss
|
(674,326
|
)
|
(42.2
|
)
|
(855,760
|
)
|
(21.2
|
)
|
•
|
Digital Entertainment: Revenue increased by 139.6% from US$753.6 million for the six months ended June 30, 2020 to US$1.8 billion for the six
months ended June 30, 2021. This increase was primarily due to the increase in our active user base as well as the deepened paying user penetration, and in particular, the continued success of our self-developed game Free Fire.
|
•
|
E-commerce and other services: Revenue increased by 180.7% from US$631.3 million for the six months ended June 30, 2020 to US$1.8 billion for
the six months ended June 30, 2021. This increase was primarily driven by the growth in the scale of our e-commerce marketplace, and increase in each of its revenue streams, including transaction-based fees, value-added services, and
advertising, due to our continuous efforts of providing better support to our users with new features and programs.
|
•
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Sales of goods: Revenue increased by 120.0% from US$212.1 million for the six months ended June 30, 2020 to US$466.6 million for the six
months ended June 30, 2021, primarily due to the increase in our product offerings.
|
•
|
E-commerce and other services: Cost of revenue increased by 121.3% from US$673.8 million for the six months ended June 30, 2020 to US$1.5
billion for the six months ended June 30, 2021. The increase was primarily due to higher costs of the logistics and other value-added services that we provide to our users, and other costs incurred, in each case driven by the growth of
our e-commerce marketplace. Improvement in gross profit margins was mainly due to improvement in our marketplace take-rate and our cost efficiency as we continue to enhance our service offerings.
|
•
|
Cost of goods sold: Cost of goods sold increased by 101.4% from US$216.3 million for the six months ended June 30, 2020 to US$435.7 million
for the six months ended June 30, 2021. The increase was largely in line with the increase in our revenue from sales of goods.
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For the Six Months Ended June 30, 2021
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||||||||||||||||||
Digital Entertainment
|
E-commerce
|
Digital Financial Services
|
Other Services(1)
|
Unallocated expenses(2)
|
Consolidated
|
|||||||||||||
(unaudited)
(US$ in thousands) |
||||||||||||||||||
Revenue
|
1,805,602
|
2,077,487
|
140,039
|
21,064
|
-
|
4,044,192
|
||||||||||||
Operating income (loss)
|
1,029,577
|
(1,084,139
|
)
|
(316,648
|
)
|
(84,582
|
)
|
(226,637
|
)
|
(682,429
|
)
|
|||||||
Non-operating loss, net
|
(48,313
|
)
|
||||||||||||||||
Income tax expense
|
(126,216
|
)
|
||||||||||||||||
Share of results of equity investees
|
1,198
|
|||||||||||||||||
Net loss
|
(855,760
|
)
|
For the Six Months Ended June 30, 2020
|
||||||||||||||||||
Digital Entertainment
|
E-commerce
|
Digital Financial Services
|
Other Services(1)
|
Unallocated expenses(2)
|
Consolidated
|
|||||||||||||
(unaudited)
(US$ in thousands) |
||||||||||||||||||
Revenue
|
753,629
|
706,230
|
22,032
|
115,063
|
-
|
1,596,954
|
||||||||||||
Operating income (loss)
|
341,064
|
(636,541
|
)
|
(193,612
|
)
|
(23,632
|
)
|
(127,806
|
)
|
(640,527
|
)
|
|||||||
Non-operating income, net
|
18,847
|
|||||||||||||||||
Income tax expense
|
(51,058
|
)
|
||||||||||||||||
Share of results of equity investees
|
(1,588
|
)
|
||||||||||||||||
Net loss
|
(674,326
|
)
|
(1)
|
A combination of multiple business activities that does not meet the quantitative thresholds to qualify as reportable segments are grouped together as “Other
Services”.
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(2)
|
Unallocated expenses are mainly related to share-based compensation and general and corporate administrative costs such as professional fees and other miscellaneous
items that are not allocated to segments. These expenses are excluded from segment results as they are not reviewed by the chief operating decision maker as part of segment performance.
|
SEA LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED
JUNE 30, 2020 AND 2021
|
|
Page
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Unaudited Interim Condensed Consolidated Financial Statements
|
|
Unaudited Interim Condensed Consolidated Balance Sheets as of December 31, 2020 and June
30, 2021
|
1 – 4
|
Unaudited Interim Condensed Consolidated Statements of Operations for the Six Months Ended
June 30, 2020 and 2021
|
5 – 6
|
Unaudited Interim Condensed Consolidated Statements of Comprehensive Loss for the Six Months Ended June 30, 2020
and 2021
|
7
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Unaudited Interim Condensed Consolidated Statements of Cash Flows for the Six Months Ended
June 30, 2020 and 2021
|
8 – 9
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Unaudited Interim Condensed Consolidated Statements of Changes in Shareholders' Equity for
the Six Months Ended June 30, 2020 and 2021
|
10 – 12
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Notes to the Unaudited Interim Condensed Consolidated Financial Statements
|
13 – 41
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SEA LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts expressed in thousands of US dollars (“$”))
|
As of
December 31,
|
As of
June 30,
|
|||||||||||
Note
|
2020
|
2021
|
||||||||||
$_
|
$_
|
|||||||||||
ASSETS
|
||||||||||||
Current assets
|
||||||||||||
Cash and cash equivalents
|
6,166,880
|
4,645,383
|
||||||||||
Restricted cash
|
859,192
|
1,328,060
|
||||||||||
Accounts receivable, net of allowance for credit losses of $7,978
and $4,971, as of December 31, 2020
and June 30, 2021 respectively
|
362,999
|
382,662
|
||||||||||
Prepaid expenses and other assets
|
1,054,229
|
1,202,889
|
||||||||||
Loans receivable, net of allowance for credit losses of $20,872 and $58,832, as of December 31, 2020
and June 30, 2021 respectively
|
4 | 285,937 | 762,485 | |||||||||
Inventories, net
|
64,219
|
99,477
|
||||||||||
Short-term investments
|
5
|
126,099
|
962,141
|
|||||||||
Amounts due from related parties
|
19,449
|
14,001
|
||||||||||
Total current assets
|
8,939,004
|
9,397,098
|
||||||||||
Non-current assets
|
||||||||||||
Property and equipment, net
|
|
386,401
|
442,122
|
|||||||||
Operating lease right-of-use assets, net
|
234,555
|
388,073
|
||||||||||
Intangible assets, net
|
39,773
|
42,137
|
||||||||||
Long-term investments
|
5
|
190,482
|
286,372
|
|||||||||
Prepaid expenses and other assets
|
204,804
|
301,104
|
||||||||||
Loans receivable, net of allowance for credit losses of $19,612 and $15,058, as of December 31, 2020
and June 30, 2021 respectively
|
4
|
117,149 | 45,488 | |||||||||
Restricted cash
|
27,321
|
29,457
|
||||||||||
Deferred tax assets
|
99,904
|
114,862
|
||||||||||
Goodwill
|
3
|
216,278
|
476,334
|
|||||||||
Total non-current assets
|
1,516,667
|
2,125,949
|
||||||||||
Total assets
|
10,455,671
|
11,523,047
|
SEA LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(continued)
(Amounts expressed in thousands of US dollars (“$”))
|
|
As of
December 31,
|
As of
June 30,
|
||||||||||
Note
|
2020
|
2021
|
||||||||||
$_
|
$_
|
|||||||||||
LIABILITIES AND
SHAREHOLDERS’ EQUITY
|
||||||||||||
Current liabilities
|
||||||||||||
Accounts payable
(including accounts payable of the Consolidated VIEs without recourse to the primary beneficiaries of $19,290 and $12,821 as of December 31, 2020
and June 30, 2021, respectively)
|
121,637
|
179,551
|
||||||||||
Accrued expenses
and other payables (including accrued expenses and other payables of the Consolidated VIEs without recourse to the primary beneficiaries of $107,512
and $127,510 as of December 31, 2020
and June 30, 2021, respectively)
|
2,033,461
|
2,670,816
|
||||||||||
Advances from
customers (including advances from customers of the Consolidated VIEs without recourse to the primary beneficiaries of $11,014 and
$16,652 as of December 31, 2020
and June 30, 2021, respectively)
|
161,379
|
206,383
|
||||||||||
Amounts due to
related parties (including amounts due to related parties of the Consolidated VIEs without recourse to the primary beneficiaries of $2,347
and $3,805 as of December 31, 2020
and June 30, 2021, respectively)
|
42,613
|
60,017
|
||||||||||
Operating lease
liabilities (including operating lease liabilities of the Consolidated VIEs without recourse to the primary beneficiaries of $10,122
and $6,543 as of December 31, 2020
and June 30, 2021, respectively)
|
74,506
|
113,544
|
||||||||||
Deferred revenue
(including deferred revenue of the Consolidated VIEs without recourse to the primary beneficiaries of $212,377 and $204,926 as of December 31, 2020
and June 30, 2021, respectively)
|
2,150,165
|
2,538,838
|
||||||||||
Income tax
payable (including income tax payable of the Consolidated VIEs without recourse to the primary beneficiaries of $566 and $1,790 as of December 31, 2020
and June 30, 2021, respectively)
|
52,306
|
114,448
|
||||||||||
Total current
liabilities
|
4,636,067
|
5,883,597
|
SEA LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(continued)
(Amounts expressed in thousands of US dollars (“$”))
|
|
As of
December 31,
|
As of
June 30,
|
||||||||||
Note
|
2020
|
2021
|
||||||||||
$_
|
$_
|
|||||||||||
Non-current liabilities
|
||||||||||||
Accrued expenses and
other payables (including accrued expenses and other payables of the Consolidated VIEs without recourse to the primary beneficiaries of $1,907
and $1,738 as of December 31, 2020
and June 30, 2021, respectively)
|
36,159
|
61,036
|
||||||||||
Operating lease
liabilities (including operating lease liabilities of the Consolidated VIEs without recourse to the primary beneficiaries of $16,916
and $6,642 as of December 31, 2020
and June 30, 2021, respectively)
|
177,870
|
299,476
|
||||||||||
Deferred revenue
(including deferred revenue of the Consolidated VIEs without recourse to the primary beneficiaries of $55,200 and $70,953 as of December 31, 2020
and June 30, 2021, respectively)
|
343,297
|
396,138
|
||||||||||
Convertible notes
(including convertible notes of the Consolidated VIEs without recourse to the primary beneficiaries of nil and nil as of December 31, 2020 and
June 30, 2021, respectively)
|
6
|
1,840,406
|
1,282,496
|
|||||||||
Deferred tax
liabilities (including deferred tax liabilities of the Consolidated VIEs without recourse to the primary beneficiaries of nil and
nil as of December 31, 2020
and June 30, 2021, respectively)
|
1,526
|
1,272
|
||||||||||
Unrecognized tax
benefits (including unrecognized tax benefits of the Consolidated VIEs without recourse to the primary beneficiaries of $107 and $107 as of December 31, 2020 and
June 30, 2021, respectively)
|
107
|
107
|
||||||||||
Total non-current liabilities
|
2,399,365
|
2,040,525
|
||||||||||
Total liabilities
|
7,035,432
|
7,924,122
|
||||||||||
Commitments and contingencies
|
13
|
|
|
SEA LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(continued)
(Amounts expressed in thousands of US dollars (“$”))
|
|
As of
December 31,
|
As of
June 30,
|
||||||||
Note
|
2020
|
2021
|
||||||||
$
|
$ | |||||||||
Shareholders’
equity
|
||||||||||
Class A Ordinary
shares (Par value of US$0.0005 per share; Authorized: 14,800,000,000 and 14,800,000,000 shares as of December
31, 2020 and June 30, 2021
respectively; Issued and outstanding: 359,755,767 and 382,489,822 shares as of December 31, 2020 and June 30, 2021, respectively)
|
|
|
179
|
190
|
||||||
Class B Ordinary
shares (Par value of US$0.0005 per share; Authorized: 200,000,000 and 200,000,000 shares as of December 31, 2020 and June 30, 2021,
respectively; Issued and outstanding: 152,175,703 and 152,175,703 shares as of December 31, 2020 and June 30, 2021, respectively)
|
76
|
76
|
||||||||
Additional
paid-in capital
|
8,526,571
|
9,587,617
|
||||||||
Accumulated other
comprehensive income (loss)
|
4,681
|
(22,989
|
)
|
|||||||
Statutory
reserves
|
2,363
|
1,766
|
||||||||
Accumulated
deficit
|
(5,150,958
|
)
|
(6,006,493
|
)
|
||||||
Total Sea Limited
shareholders’ equity
|
3,382,912 | 3,560,167 | ||||||||
Non-controlling
interests
|
37,327
|
38,758
|
||||||||
Total shareholders’
equity
|
3,420,239
|
3,598,925
|
||||||||
Total liabilities
and shareholders' equity
|
10,455,671
|
11,523,047
|
SEA LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Amounts expressed in thousands of US dollars (“$”))
|
|
For the Six Months ended
June 30,
|
|||||||||
Note
|
2020
|
2021
|
||||||||
$_
|
$_
|
|||||||||
Revenue
|
||||||||||
Service revenue
|
||||||||||
Digital
entertainment
|
753,629
|
1,805,602
|
||||||||
E-commerce and
other services
|
631,264
|
1,772,040
|
||||||||
Sales of goods
|
212,061
|
466,550
|
||||||||
Total revenue
|
1,596,954
|
4,044,192
|
||||||||
Cost of revenue
|
||||||||||
Cost of service
|
||||||||||
Digital
entertainment
|
(299,231
|
)
|
(540,936
|
)
|
||||||
E-commerce and
other services
|
(673,815
|
)
|
(1,491,286
|
)
|
||||||
Cost of goods
sold
|
(216,282
|
)
|
(435,667
|
)
|
||||||
Total cost of
revenue
|
(1,189,328
|
)
|
(2,467,889
|
)
|
||||||
Gross profit
|
407,626
|
1,576,303
|
||||||||
Operating income
(expenses)
|
||||||||||
Other operating
income
|
57,925
|
147,095
|
||||||||
Sales and
marketing expenses
|
(694,665
|
)
|
(1,600,284
|
)
|
||||||
General and
administrative expenses
|
(271,480
|
)
|
(491,850
|
)
|
||||||
Research and
development expenses
|
(139,933
|
)
|
(313,693
|
)
|
||||||
Total operating
expenses
|
(1,048,153
|
)
|
(2,258,732
|
)
|
||||||
Operating loss
|
(640,527
|
)
|
(682,429
|
)
|
||||||
Interest income
|
15,206
|
14,969
|
||||||||
Interest expense
|
(67,927
|
)
|
(49,606
|
)
|
||||||
Investment gain
(loss), net
|
58,968
|
(19,770
|
)
|
|||||||
Changes in fair
value of convertible notes
|
(87
|
)
|
–
|
|||||||
Foreign exchange
gain
|
12,687
|
6,094
|
||||||||
Loss before income
tax and share of results of equity investees
|
(621,680
|
)
|
(730,742
|
)
|
||||||
Income tax
expense
|
8
|
(51,058
|
)
|
(126,216
|
)
|
|||||
Share of results
of equity investees
|
(1,588
|
)
|
1,198
|
|||||||
Net loss
|
(674,326
|
)
|
(855,760
|
)
|
||||||
Net profit
attributable to non-controlling interests
|
(148
|
)
|
(372
|
)
|
||||||
Net loss
attributable to Sea Limited’s ordinary shareholders
|
(674,474
|
)
|
(856,132
|
)
|
SEA LIMITED
UNAUDITED INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (continued)
(Amounts expressed in thousands of US dollars (“$”) except for number of shares and per share data)
|
|
For the Six Months ended
June 30,
|
|||||||||||
Note
|
2020
|
2021
|
||||||||||
$_
|
$_
|
|||||||||||
Loss per share:
|
||||||||||||
Basic and
diluted
|
9
|
(1.45
|
)
|
(1.65
|
)
|
|||||||
Weighted average
shares used in loss per share computation:
|
||||||||||||
Basic and
diluted
|
464,344,956
|
519,037,660
|
SEA LIMITED
UNAUDITED INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Amounts expressed in thousands of US dollars (“$”))
|
|
For the Six Months ended
June 30,
|
|||||||
2020
|
2021
|
|||||||
$_
|
$_
|
|||||||
Net loss
|
(674,326
|
)
|
(855,760
|
)
|
||||
Other
comprehensive loss, net of tax:
|
||||||||
Foreign currency
translation adjustments:
|
||||||||
Translation loss
|
(11,694
|
)
|
(25,758
|
)
|
||||
Net change
|
(11,694
|
)
|
(25,758
|
)
|
||||
Available-for-sale
investments:
|
||||||||
Change in
unrealized loss
|
(5,400
|
)
|
(3,406
|
)
|
||||
Net change
|
(5,400
|
)
|
(3,406
|
)
|
||||
Total other
comprehensive loss, net of tax
|
(17,094
|
)
|
(29,164
|
)
|
||||
Less: total
comprehensive loss attributable to non-controlling interests
|
1,336
|
831
|
||||||
Total comprehensive
loss attributable to Sea Limited’s ordinary shareholders
|
(690,084
|
)
|
(884,093
|
)
|
SEA LIMITED
UNAUDITED INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts expressed in
thousands of US dollars (“$”))
|
|
For the Six Months
ended June 30,
|
|||||||
2020
|
2021
|
|||||||
$_
|
$_
|
|||||||
Cash flows from
operating activities
|
||||||||
Net loss
|
(674,326
|
)
|
(855,760
|
)
|
||||
Adjustments to reconcile net loss to
net cash used in operating activities:
|
||||||||
Allowance for credit losses
|
24,189
|
45,941
|
||||||
Amortization of discount on convertible
notes
|
40,805
|
42,311
|
||||||
Amortization of intangible assets
|
5,695
|
7,811
|
||||||
Deferred income tax
|
(16,515
|
)
|
(17,512
|
)
|
||||
Depreciation of property and equipment
|
74,526
|
111,256
|
||||||
Gain on disposal of subsidiary
|
(75,831
|
)
|
–
|
|||||
Gain on re-measurement of equity
interests
|
(3,003
|
)
|
–
|
|||||
Impairment loss on investments
|
8,856
|
–
|
||||||
Net loss (gain) on debt extinguishment
|
12,158
|
(11,427
|
)
|
|||||
Net foreign exchange differences
|
(19,041
|
)
|
(16,993
|
)
|
||||
Share-based compensation
|
117,186
|
214,560
|
||||||
Share of results of equity investees
|
1,588
|
(1,198
|
)
|
|||||
Unrealised loss on marketable equity
securities
|
– | 21,118 | ||||||
Others
|
2,943
|
2,764
|
||||||
Operating cash
flows before changes in working capital:
|
(500,770
|
)
|
(457,129
|
)
|
||||
Inventories
|
(36,408
|
)
|
(40,037
|
)
|
||||
Accounts receivable
|
(63,383
|
)
|
(21,017
|
)
|
||||
Prepaid expenses and other assets
|
(213,859
|
)
|
(188,670
|
)
|
||||
Amounts due from related parties
|
(12,675
|
)
|
8,346
|
|||||
Operating lease right-of-use assets
|
(16,199
|
)
|
(155,440
|
)
|
||||
Accounts payable
|
29,737
|
56,874
|
||||||
Accrued expenses and other payables
|
324,992
|
493,408
|
||||||
Advances from customers
|
36,269
|
50,179
|
||||||
Operating lease liabilities
|
12,361
|
162,612
|
||||||
Deferred revenue
|
488,206
|
490,938
|
||||||
Income tax payable
|
16,621
|
37,401
|
||||||
Amounts due to related parties
|
9,554
|
13,261
|
||||||
Net cash generated
from operating activities
|
74,446
|
450,726
|
||||||
Cash flows from
investing activities
|
||||||||
Purchase of property and equipment
|
(103,961
|
)
|
(242,866
|
)
|
||||
Purchase of intangible assets and capitalized software costs
|
(8,086
|
)
|
(13,594
|
)
|
||||
Purchase of investments
|
(41,114
|
)
|
(980,296
|
)
|
||||
Proceeds from disposal of property and
equipment
|
980
|
227
|
||||||
Proceeds from sale and maturity of
investments
|
3,644
|
28,047
|
||||||
Distribution from investments
|
386
|
–
|
||||||
Acquisition of businesses, net of cash
acquired
|
(90,994
|
)
|
17,888
|
|||||
Disposal of subsidiary, net of cash
disposed
|
15,380
|
–
|
||||||
Change in loans receivable
|
(87,047
|
)
|
(459,233
|
)
|
||||
Net cash used in
investing activities
|
(310,812
|
)
|
(1,649,827
|
)
|
SEA LIMITED
UNAUDITED INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(Amounts expressed in thousands of US dollars (“$”))
|
|
For the Six Months
ended June 30,
|
|||||||
2020
|
2021
|
|||||||
$_
|
$_
|
|||||||
Cash flows from
financing activities
|
||||||||
Repayment of borrowings and finance lease obligations
|
(31,824
|
)
|
(35
|
)
|
||||
Proceeds from borrowings
|
1,224
|
–
|
||||||
Proceeds from issuance of ordinary
shares, net
|
6,234
|
18,953
|
||||||
Transaction with non-controlling
interests
|
(19,042
|
)
|
–
|
|||||
Payments for exchange and conversion
of convertible notes
|
(50,000
|
)
|
(1,929
|
)
|
||||
Proceeds from issuance of convertible
notes, net
|
1,005,662
|
–
|
||||||
Change in accrued expenses and other
payables
|
(125,417
|
)
|
163,369
|
|||||
Net cash generated
from financing activities
|
786,837
|
180,358
|
||||||
Effect of foreign exchange rate
changes on cash, cash equivalents and restricted cash
|
8,695
|
(31,750
|
)
|
|||||
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
559,166
|
(1,050,493
|
)
|
|||||
Cash, cash equivalents and restricted
cash at beginning of the period
|
3,570,578
|
7,053,393
|
||||||
Cash, cash
equivalents and restricted cash at end of the period
|
4,129,744
|
6,002,900
|
||||||
Supplement
disclosures of cash flow information:
|
||||||||
Income taxes paid
|
(54,545
|
)
|
(81,586
|
)
|
||||
Interest paid
|
(12,422
|
)
|
(22,383
|
)
|
||||
Supplement
disclosures of non-cash activities:
|
||||||||
Purchase of property and equipment
included in accrued expenses and other payables
|
12,495
|
18,717
|
||||||
Purchase of intangible assets included
in accrued expenses and other payables
|
3
|
(334
|
)
|
|||||
Purchase of property and equipment
included in prepayments
|
312
|
(87,387
|
)
|
|||||
Purchase of intangible assets included
in prepayments
|
(6,974
|
)
|
(3,095
|
)
|
||||
Conversion and exchange of convertible
notes into ordinary shares
|
(136,322
|
)
|
(588,007
|
)
|
||||
Acquisition of subsidiaries by
conversion of convertible notes or issuance of shares
|
72,000
|
252,960
|
||||||
Proceeds from disposal of a subsidiary
included in prepaid expenses and other assets
|
38,430
|
–
|
||||||
Transfers of loans receivable to prepaid expenses and other assets | 8,068 | 186 |
SEA LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Amounts expressed in thousands of US dollars (“$”) except for number of shares)
|
|
No of ordinary shares
|
Ordinary shares
|
Additional paid-in capital
|
Accumulated other comprehensive income (loss)
|
Statutory reserves
|
Accumulated deficit
|
Total Sea Limited shareholders’ equity
|
Non-controlling interests
|
Total
shareholders’ equity
|
|||||||||||||||||||||||||||
$_
|
$_
|
$_
|
$_
|
$_
|
$_
|
$_
|
$_
|
|||||||||||||||||||||||||||||
Balance as of January 1, 2020
|
463,244,652
|
230
|
4,687,284
|
5,449
|
46
|
(3,530,585
|
)
|
1,162,424
|
10,228
|
1,172,652
|
||||||||||||||||||||||||||
Comprehensive loss:
|
||||||||||||||||||||||||||||||||||||
Net loss for the period
|
–
|
–
|
–
|
–
|
–
|
(674,474
|
)
|
(674,474
|
)
|
148
|
(674,326
|
)
|
||||||||||||||||||||||||
Foreign currency translation adjustments
|
–
|
–
|
–
|
(10,210
|
)
|
–
|
–
|
(10,210
|
)
|
(1,484
|
)
|
(11,694
|
)
|
|||||||||||||||||||||||
Net change in unrealized loss on available-for-sale investments
|
–
|
–
|
–
|
(5,400
|
)
|
–
|
–
|
(5,400
|
)
|
–
|
(5,400
|
)
|
||||||||||||||||||||||||
Acquisition of subsidiary | – | – | – | – | – | – | – | 37,511 | 37,511 | |||||||||||||||||||||||||||
Appropriation of statutory reserves
|
– | – | – | – | 66 | (66 | ) | – | – | – | ||||||||||||||||||||||||||
Equity component of convertible notes
|
– | – | 284,727 | – | – | – | 284,727 | – | 284,727 | |||||||||||||||||||||||||||
Purchase of capped calls related to issuance of convertible notes
|
– | – | (135,700 | ) | – | – | – | (135,700 | ) | – | (135,700 | ) | ||||||||||||||||||||||||
Conversion and exchange of convertible notes into Class A ordinary shares
|
14,949,659
|
8
|
136,314
|
–
|
–
|
–
|
136,322
|
–
|
136,322
|
|||||||||||||||||||||||||||
Transaction with non-controlling interests
|
–
|
–
|
(20,771
|
)
|
–
|
–
|
–
|
(20,771
|
)
|
1,729
|
(19,042
|
)
|
||||||||||||||||||||||||
Disposal of interest in a subsidiary
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
(11,971
|
)
|
(11,971
|
)
|
|||||||||||||||||||||||||
Shares issued to depositary bank
|
2,000,000
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||||||||||||||
Exercise of share options
|
1,122,088
|
–
|
6,262
|
–
|
–
|
–
|
6,262
|
–
|
6,262
|
|||||||||||||||||||||||||||
Restricted share awards and restricted share units issued
|
1,785,359
|
1
|
(1
|
)
|
–
|
–
|
–
|
–
|
–
|
–
|
||||||||||||||||||||||||||
Share-based compensation
|
–
|
–
|
110,613
|
–
|
–
|
–
|
110,613
|
2,481
|
113,094
|
|||||||||||||||||||||||||||
Settlement of share incentives with shares held by depositary bank
|
(2,807,447
|
)
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
||||||||||||||||||||||||||
Balance as of June 30, 2020
|
480,294,311
|
239
|
5,068,728
|
(10,161
|
)
|
112
|
(4,205,125
|
)
|
853,793
|
38,642
|
892,435
|
SEA LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (continued)
(Amounts expressed in thousands of US dollars (“$”) except for number of shares)
|
|
No of ordinary shares
|
Ordinary shares
|
Additional paid-in capital
|
Accumulated other comprehensive
(loss) income
|
Statutory reserves
|
Accumulated deficit
|
Total Sea Limited shareholders’ equity
|
Non-controlling interests
|
Total
shareholders’ equity
|
|||||||||||||||||||||||||||
$_
|
$_
|
$_
|
$_
|
$_
|
$_
|
$_
|
$_
|
|||||||||||||||||||||||||||||
Balance as of July 1, 2020
|
480,294,311
|
239
|
5,068,728
|
(10,161
|
)
|
112
|
(4,205,125
|
)
|
853,793
|
38,642
|
892,435
|
|||||||||||||||||||||||||
Comprehensive loss:
|
||||||||||||||||||||||||||||||||||||
Net loss for the year
|
–
|
–
|
–
|
–
|
–
|
(943,582
|
)
|
(943,582
|
)
|
(6,249
|
)
|
(949,831
|
)
|
|||||||||||||||||||||||
Foreign currency translation adjustments
|
–
|
–
|
–
|
13,813
|
–
|
–
|
13,813
|
413
|
14,226
|
|||||||||||||||||||||||||||
Net change in unrealized gain on available-for-sale investments
|
–
|
–
|
–
|
981
|
–
|
–
|
981
|
26
|
1,007
|
|||||||||||||||||||||||||||
Acquisition of subsidiaries | – | – | – | – | – | – | – | 2,083 | 2,083 | |||||||||||||||||||||||||||
Appropriation of statutory reserves
|
– | – | – | – | 2,251 | (2,251 | ) | – | – | – | ||||||||||||||||||||||||||
Conversion of convertible notes into Class A ordinary shares
|
12,457,159 | 6 | 328,602 | – | – | – | 328,608 | – | 328,608 | |||||||||||||||||||||||||||
Issuance of Class A ordinary shares, net of issuance costs
|
15,180,000
|
8
|
2,908,291
|
–
|
–
|
–
|
2,908,299
|
–
|
2,908,299
|
|||||||||||||||||||||||||||
Capital contributed by non-controlling interest
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
4,631
|
4,631
|
|||||||||||||||||||||||||||
Transactions with non-controlling interests
|
–
|
–
|
477
|
48
|
–
|
–
|
525
|
(2,219
|
)
|
(1,694
|
)
|
|||||||||||||||||||||||||
Shares issued to depositary bank
|
4,000,000
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||||||||||||||
Exercise of share options
|
1,739,081
|
1
|
55,686
|
–
|
–
|
–
|
55,687
|
–
|
55,687
|
|||||||||||||||||||||||||||
Restricted share awards and restricted share units issued
|
1,462,633
|
1
|
(1
|
)
|
–
|
–
|
–
|
–
|
–
|
–
|
||||||||||||||||||||||||||
Share-based compensation
|
–
|
–
|
164,788
|
–
|
–
|
–
|
164,788
|
–
|
164,788
|
|||||||||||||||||||||||||||
Settlement of share incentives with shares held by depositary bank
|
(3,201,714
|
)
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
||||||||||||||||||||||||||
Balance as of December 31, 2020
|
511,931,470
|
255
|
8,526,571
|
4,681
|
2,363
|
(5,150,958
|
)
|
3,382,912
|
37,327
|
3,420,239
|
SEA LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (continued)
(Amounts expressed in thousands of US dollars (“$”) except for number of shares)
|
|
Note |
No of ordinary shares
|
Ordinary shares
|
Additional paid-in capital
|
Accumulated other comprehensive income (loss)
|
Statutory reserves
|
Accumulated deficit
|
Total
Sea Limited shareholders’ equity
|
Non-controlling interests
|
Total
Shareholders’ equity
|
||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Balance as of January 1, 2021
|
511,931,470
|
255
|
8,526,571
|
4,681
|
2,363
|
(5,150,958
|
)
|
3,382,912
|
37,327
|
3,420,239
|
||||||||||||||||||||||||||||||
Comprehensive loss:
|
||||||||||||||||||||||||||||||||||||||||
Net loss for the year
|
–
|
–
|
–
|
–
|
–
|
(856,132
|
)
|
(856,132
|
)
|
372
|
(855,760
|
)
|
||||||||||||||||||||||||||||
Foreign currency
translation adjustments
|
–
|
–
|
–
|
(24,462
|
)
|
–
|
–
|
(24,462
|
)
|
(1,296
|
)
|
(25,758
|
)
|
|||||||||||||||||||||||||||
Net change in unrealized loss on available-for-sale investments
|
–
|
–
|
–
|
(3,499
|
)
|
–
|
–
|
(3,499
|
)
|
93
|
(3,406
|
)
|
||||||||||||||||||||||||||||
Acquisition of subsidiaries
|
3 |
1,000,000
|
1
|
252,959
|
–
|
–
|
–
|
252,960
|
–
|
252,960
|
||||||||||||||||||||||||||||||
Appropriation of statutory reserves
|
–
|
–
|
–
|
–
|
(597
|
)
|
597
|
–
|
–
|
–
|
||||||||||||||||||||||||||||||
Conversion of convertible notes
into Class A ordinary shares
|
14,734,055
|
7
|
588,000
|
–
|
–
|
–
|
588,007
|
–
|
588,007
|
|||||||||||||||||||||||||||||||
Transaction with non-controlling interests
|
–
|
–
|
(2,553
|
)
|
291
|
–
|
–
|
(2,262
|
)
|
2,262
|
–
|
|||||||||||||||||||||||||||||
Shares issued to depositary
bank
|
7,000,000
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||||||||||||||||||
Exercise of share options
|
4,006,975
|
2
|
18,951
|
–
|
–
|
–
|
18,953
|
–
|
18,953
|
|||||||||||||||||||||||||||||||
Restricted share awards and restricted share units issued
|
2,250,704
|
1
|
(1
|
)
|
–
|
–
|
–
|
–
|
–
|
–
|
||||||||||||||||||||||||||||||
Share-based compensation
|
–
|
–
|
203,690
|
–
|
–
|
–
|
203,690
|
–
|
203,690
|
|||||||||||||||||||||||||||||||
Settlement of share
incentives with shares held by depositary bank
|
(6,257,679
|
)
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
||||||||||||||||||||||||||||||
Balance as of June 30, 2021
|
534,665,525
|
266
|
9,587,617
|
(22,989
|
)
|
1,766
|
(6,006,493
|
)
|
3,560,167
|
38,758
|
3,598,925
|
1. |
BASIS OF PRESENTATION
|
|
As of
December 31,
|
As of
June 30,
|
||||||
2020
|
2021
|
|||||||
$
|
$
|
|||||||
ASSETS:
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
94,502
|
97,396
|
||||||
Amounts due from intercompanies (1)
|
44,928
|
141,878
|
||||||
Others
|
79,484 | 66,892 | ||||||
Total current assets
|
218,914
|
306,166
|
||||||
Non-current assets:
|
||||||||
Property and equipment, net
|
35,453
|
33,988
|
||||||
Long-term investments
|
16,080
|
17,313
|
||||||
Deferred tax assets
|
47,948
|
48,776
|
||||||
Others
|
37,662 | 23,682 | ||||||
Total non-current assets
|
137,143
|
123,759
|
||||||
Total assets
|
356,057
|
429,925
|
|
As of
December 31,
|
As of
June 30,
|
||||||
2020
|
2021
|
|||||||
$
|
$
|
|||||||
LIABILITIES:
|
||||||||
Current liabilities:
|
||||||||
Accrued expenses and other payables
|
91,186
|
112,185
|
||||||
Deferred revenue
|
212,377
|
204,926
|
||||||
Amounts due to intercompanies (1)
|
70,019
|
116,898
|
||||||
Others
|
31,104 | 28,104 | ||||||
Total current liabilities
|
404,686
|
462,113
|
||||||
Non-current liabilities:
|
||||||||
Deferred revenue
|
55,200
|
70,953
|
||||||
Amounts due to intercompanies (1)
|
15,710
|
30,910
|
||||||
Others
|
18,418 | 6,759 | ||||||
Total non-current liabilities
|
89,328
|
108,622
|
||||||
Total liabilities
|
494,014
|
570,735
|
|
For the Six Months ended
June 30,
|
|||||||
2020
|
2021
|
|||||||
$
|
$
|
|||||||
Revenue
|
||||||||
- Third party customers
|
262,801
|
333,847
|
||||||
- Intercompanies
|
70,363
|
84,876
|
||||||
Net loss
|
(28,770
|
)
|
(19,089
|
)
|
For the Six Months ended
June 30,
|
||||||||
2020
|
2021
|
|||||||
$
|
$
|
|||||||
Net cash generated from (used in) operating activities
|
59,030
|
(12,218
|
)
|
|||||
Net cash (used in) generated from investing activities
|
(25,122
|
)
|
500
|
|||||
Net cash generated from financing activities
|
32,220
|
14,025
|
(1) |
Amounts
due from or to intercompanies consist of intercompany receivables or payables to the other companies within the group arising from intercompany transactions and funds advanced for working capital purpose.
|
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
(a) |
Principles of consolidation
|
(b) |
Use of estimates
|
|
(c) |
Fair value of financial instruments
|
(d) |
Revenue recognition
|
(e) |
Goodwill
|
(f) |
Leases
|
3. |
ACQUISITIONS
|
|
$_
|
|||
Cash and cash equivalent
|
42,294 | |||
Others
|
5,219 | |||
Total assets acquired
|
47,513 | |||
Income tax payable
|
(25,682 | ) | ||
Others
|
(1,976 | ) | ||
Total liabilities assumed
|
(27,658 | ) | ||
Net assets acquired
|
19,855 | |||
Fulfilled by:
|
||||
Share consideration(1)
|
252,960 | |||
Cash consideration
|
29,679 | |||
Goodwill
|
262,784 |
(1) |
Measured based
on the fair value of the Company's ordinary shares on the date of acquisition.
|
4.
|
LOANS
RECEIVABLE, NET
|
As of
|
||||||||
December 31,
2020
|
June 30,
2021
|
|||||||
$ | $ | |||||||
Commercial
|
183,710
|
171,619
|
||||||
Consumer
|
259,860
|
710,244
|
||||||
443,570
|
881,863
|
|||||||
Allowance for credit losses
|
(40,484
|
)
|
(73,890
|
)
|
||||
403,086
|
807,973
|
As of June 30, 2021
|
||||||||||||||||||||||||||||
Year of origination
|
||||||||||||||||||||||||||||
2021
|
2020
|
2019
|
2018
|
2017
|
Prior
|
Total
|
||||||||||||||||||||||
Commercial
|
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Delinquency:
|
||||||||||||||||||||||||||||
Current
|
19,522
|
106,345
|
16,132
|
5,217
|
3,812
|
1,607
|
152,635
|
|||||||||||||||||||||
Past due
|
||||||||||||||||||||||||||||
- 1 to 30 days
|
668
|
4,365
|
585
|
2,974
|
100
|
11
|
8,703
|
|||||||||||||||||||||
- 31 to 60 days
|
340
|
3,162
|
276
|
61
|
128
|
2
|
3,969
|
|||||||||||||||||||||
- 61 to 90 days
|
31
|
287
|
348
|
112
|
7
|
70
|
855
|
|||||||||||||||||||||
- More than 90 days
|
–
|
5,017
|
228
|
131
|
34
|
47
|
5,457
|
|||||||||||||||||||||
20,561
|
119,176
|
17,569
|
8,495
|
4,081
|
1,737
|
171,619
|
||||||||||||||||||||||
Consumer
|
||||||||||||||||||||||||||||
Delinquency:
|
||||||||||||||||||||||||||||
Current
|
633,129
|
7,871
|
12,325
|
9,461
|
5,989
|
1,313
|
670,088
|
|||||||||||||||||||||
Past due
|
||||||||||||||||||||||||||||
- 1 to 30 days
|
10,899
|
866
|
585
|
513
|
134
|
37
|
13,034
|
|||||||||||||||||||||
- 31 to 60 days
|
6,483
|
506
|
1,000
|
1,676
|
734
|
119
|
10,518
|
|||||||||||||||||||||
- 61 to 90 days
|
4,260
|
1,286
|
130
|
271
|
64
|
13
|
6,024
|
|||||||||||||||||||||
- More than 90 days
|
7,101
|
2,962
|
246
|
88
|
25
|
158
|
10,580
|
|||||||||||||||||||||
661,872
|
13,491
|
14,286
|
12,009
|
6,946
|
1,640
|
710,244
|
Commercial
|
Consumer
|
Total
|
||||||||||
$ | $ | $ | ||||||||||
Balance at January 1, 2020
|
–
|
–
|
–
|
|||||||||
Acquisition of subsidiaries
|
14,721
|
6,750
|
21,471
|
|||||||||
(Reversal) Charged to expenses
|
(1,687
|
)
|
12,944
|
11,257
|
||||||||
Write-off of loans receivable
|
(3,911
|
)
|
(6,115
|
)
|
(10,026
|
)
|
||||||
Exchange differences
|
(915
|
)
|
(201
|
)
|
(1,116
|
)
|
||||||
Balance at June 30, 2020
|
8,208
|
13,378
|
21,586
|
|||||||||
Acquisition of subsidiaries
|
2,335
|
2,604
|
4,939
|
|||||||||
Charged to expenses
|
27,750
|
12,061
|
39,811
|
|||||||||
Write-off of loans receivable
|
(10,890
|
)
|
(16,460
|
)
|
(27,350
|
)
|
||||||
Exchange differences
|
921
|
577
|
1,498
|
|||||||||
Balance at December 31,2020
|
28,324
|
12,160
|
40,484
|
|||||||||
Charged to expenses
|
11,001
|
36,695
|
47,696
|
|||||||||
Write-off of loans receivable
|
(9,757
|
)
|
(2,544
|
)
|
(12,301
|
)
|
||||||
Exchange differences
|
(951
|
)
|
(1,038
|
)
|
(1,989
|
)
|
||||||
Balance at June 30, 2021
|
28,617
|
45,273
|
73,890
|
5. |
INVESTMENTS
|
As of
|
||||||||
December 31,
2020
|
June 30,
2021
|
|||||||
|
$
|
|
$
|
|||||
Short-term investments
|
||||||||
Debt securities:
|
||||||||
Held to maturity
|
28,330
|
718,517
|
||||||
Available-for-sale
|
21,769
|
168,091
|
||||||
Equity securities
|
76,000
|
75,533
|
||||||
126,099
|
962,141
|
|||||||
Long-term investments
|
||||||||
Debt securities:
|
||||||||
Held to maturity
|
68,854
|
67,463
|
||||||
Available-for-sale
|
5,276
|
45,385
|
||||||
Equity securities
|
21,419
|
42,684
|
||||||
Equity method investments
|
94,933
|
108,848
|
||||||
Investments carried at fair value
|
–
|
21,992
|
||||||
190,482
|
286,372
|
As of December 31, 2020
|
||||||||||||||||||||||||
Cost or Amortized cost
|
Gross unrecognized
gains
|
Gross unrecognized losses
|
Gross unrealized gains
|
Gross unrealized losses
|
Fair value
|
|||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||
Short-term investments
|
||||||||||||||||||||||||
Debt securities:
|
||||||||||||||||||||||||
Held to maturity
|
28,330
|
–
|
(1
|
)
|
–
|
–
|
28,329
|
|||||||||||||||||
Available-for-sale
|
20,859
|
–
|
–
|
910
|
–
|
21,769
|
||||||||||||||||||
Long-term investments
|
||||||||||||||||||||||||
Debt securities:
|
||||||||||||||||||||||||
Held to maturity
|
68,854
|
3,197
|
(23
|
)
|
–
|
–
|
72,028
|
|||||||||||||||||
Available-for-sale
|
5,174
|
–
|
–
|
102
|
–
|
5,276
|
||||||||||||||||||
123,217
|
3,197
|
(24
|
)
|
1,012
|
–
|
127,402
|
As of June 30, 2021
|
||||||||||||||||||||||||
Cost or Amortized cost
|
Gross unrecognized
gains
|
Gross unrecognized losses
|
Gross unrealized gains
|
Gross unrealized losses
|
Fair value
|
|||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||
Short-term investments
|
||||||||||||||||||||||||
Debt securities:
|
||||||||||||||||||||||||
Held to maturity
|
718,517
|
–
|
–
|
–
|
–
|
718,517
|
||||||||||||||||||
Available-for-sale
|
170,872
|
–
|
–
|
77
|
(2,858
|
)
|
168,091
|
|||||||||||||||||
Long-term investments
|
||||||||||||||||||||||||
Debt securities:
|
||||||||||||||||||||||||
Held to maturity
|
67,463
|
2,123
|
(495
|
)
|
–
|
–
|
69,091
|
|||||||||||||||||
Available-for-sale
|
45,003
|
–
|
–
|
426
|
(44
|
)
|
45,385
|
|||||||||||||||||
Investments carried at fair value
|
21,992
|
–
|
–
|
–
|
–
|
21,992
|
||||||||||||||||||
1,023,847
|
2,123
|
(495
|
)
|
503
|
(2,902
|
)
|
1,023,076
|
6. |
CONVERTIBLE NOTES
|
|
As of
|
|||||||
December 31,
|
June 30,
|
|||||||
2020
|
2021
|
|||||||
$_
|
$_
|
|||||||
2023
Convertible Notes
|
41,263
|
29,190
|
||||||
2024
Convertible Notes
|
916,560
|
348,137
|
||||||
2025
Convertible Notes
|
882,583
|
905,169
|
||||||
1,840,406
|
1,282,496
|
|
2023 Convertible Notes
|
2024 Convertible Notes
|
2025 Convertible Notes
|
Issuance date
|
June 18, 2018
|
November 18, 2019
|
May 22, 2020
|
Maturity date
|
July 1, 2023
|
December 1, 2024
|
December 1, 2025
|
Principal amount
|
$575,000
|
$1,150,000
|
$1,150,000
|
Interest rate
|
2.25%
|
1.00%
|
2.375%
|
Initial conversion rate
|
50.5165 American Depositary Shares (“ADSs”) per $1 principal amount, equivalent to $19.80 per ADS
|
19.9475 ADSs per $1 principal
amount, equivalent to $50.13 per ADS
|
11.0549 ADSs per $1 principal
amount, equivalent to $90.46 per ADS
|
Agreed conversion date
|
January 1, 2023
|
June 1, 2024
|
September 1, 2025
|
|
2023 Convertible
Notes
|
2024 Convertible
Notes
|
2025 Convertible
Notes
|
|||||||||
Liability component
|
$
|
410,926
|
$
|
897,918
|
$
|
856,635
|
||||||
Effective interest rate
|
9.38
|
|
6.03
|
|
8.21
|
|
||||||
Equity component
|
$
|
152,714
|
$
|
240,582
|
$
|
284,727
|
||||||
Debt issuance cost, allocated in proportion to the allocation of proceeds
|
$
|
11,360
|
$
|
11,500
|
$
|
8,638
|
|
December 31, 2020
|
June 30, 2021
|
||||||||||||||||||||||||||||||
2023 Convertible Notes
|
2024 Convertible Notes
|
2025 Convertible Notes
|
Total
|
2023 Convertible Notes
|
2024 Convertible Notes
|
2025 Convertible Notes
|
Total
|
|||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
Principal
|
49,000
|
1,112,320
|
1,149,500
|
2,310,820
|
33,530
|
412,402
|
1,149,500
|
1,595,432
|
||||||||||||||||||||||||
Less: unamortized issuance cost and debt discount
|
(7,737
|
)
|
(195,760
|
)
|
(266,917
|
)
|
(470,414
|
)
|
(4,340
|
)
|
(64,265
|
)
|
(244,331
|
)
|
(312,936
|
)
|
||||||||||||||||
Net carrying amount
|
41,263
|
916,560
|
882,583
|
1,840,406
|
29,190
|
348,137
|
905,169
|
1,282,496
|
|
2024 Convertible
Notes
|
2025 Convertible
Notes
|
||||||
Initial strike price per share
|
$
|
50.13
|
$
|
90.46
|
||||
Initial cap price per share
|
$
|
70.36
|
$
|
136.54
|
7. |
SHARE BASED COMPENSATION
|
|
Granted in 2021
|
|||
Risk-free interest rates
|
0.74%~1.07%
|
|
||
Expected term
|
5.6~7.5 years
|
|||
Expected volatility
|
32.1%~33.0%
|
|
||
Expected dividend yield
|
–
|
|||
Fair value of share options
|
|
$71.70~$84.14
|
|
For the Six
Months ended
June 30,
|
|||||||
2020
|
2021
|
|||||||
$_
|
$_
|
|||||||
Share options:
|
||||||||
Cost of revenue
|
65
|
247
|
||||||
Sales and marketing expenses
|
31
|
5
|
||||||
General and administrative expenses
|
74,363
|
109,351
|
||||||
Research and development expenses
|
213
|
33
|
||||||
74,672
|
109,636
|
|||||||
RSAs and RSUs:
|
||||||||
Cost of revenue
|
1,993
|
3,845
|
||||||
Sales and marketing expenses
|
4,306
|
9,562
|
||||||
General and administrative expenses
|
14,299
|
27,697
|
||||||
Research and development expenses
|
17,824
|
52,950
|
||||||
38,422
|
94,054
|
|||||||
SARs:
|
||||||||
Cost of revenue
|
980
|
2,471
|
||||||
Sales and marketing expenses
|
1,898
|
4,707
|
||||||
General and administrative expenses
|
1,078
|
3,029
|
||||||
Research and development expenses
|
136
|
663
|
||||||
4,092
|
10,870
|
|||||||
Total
|
117,186
|
214,560
|
|
8. |
INCOME TAX EXPENSE
|
|
For the Six Months ended
June 30,
|
|||||||
2020
|
2021
|
|||||||
$_
|
$_
|
|||||||
Income tax
|
45,477
|
120,369
|
||||||
Deferred tax
|
(16,515
|
)
|
(17,512
|
)
|
||||
Withholding tax
expense
|
22,096
|
23,359
|
||||||
51,058
|
126,216
|
9. |
LOSS PER SHARE
|
|
For the Six Months ended
June 30,
|
|||||||
2020
|
2021
|
|||||||
$_
|
$_
|
|||||||
Numerator:
|
||||||||
Net loss
attributable to ordinary shareholders
|
(674,474
|
)
|
(856,132
|
)
|
||||
Denominator:
|
||||||||
Weighted-average
number of shares outstanding - basic and diluted
|
464,344,956
|
519,037,660
|
||||||
Basic and
diluted loss per share:
|
(1.45
|
)
|
(1.65
|
)
|
10. |
RELATED PARTY TRANSACTIONS
|
(a)
|
Related parties (1)
|
Name of related parties
|
Relationship with the Company
|
Tencent Limited and its affiliates
(“Tencent”)
|
A shareholder of the Company
|
(1) |
These are the related parties that have engaged in significant transactions with the Company for the six months
ended June 30, 2020 and 2021.
|
(b)
|
The Company had the following significant related
party transactions for the six months ended June 30, 2020 and 2021, respectively:
|
|
Six months ended
June 30,
|
|||||||
2020
|
2021
|
|||||||
$
|
$_
|
|||||||
Royalty fee and
license fee to:
|
||||||||
- Tencent
|
53,931
|
69,128
|
||||||
Services
provided by:
|
||||||||
- Tencent
|
11,369
|
9,935
|
||||||
|
|
|
(c) |
The Company had the following significant related party balances as of
December 31, 2020 and June 30, 2021:
|
11. |
SEGMENT REPORTING
|
|
For the Six Months ended June 30, 2020
|
|||||||||||||||||||||||
Digital
Entertainment
|
E-Commerce
|
Digital Financial
Services
|
Other
Services
|
Unallocated
expenses (1)
|
Consolidated
|
|||||||||||||||||||
$ |
$
|
|
$
|
$
|
$
|
$
|
||||||||||||||||||
Revenue
|
753,629
|
706,230
|
22,032
|
115,063
|
–
|
1,596,954
|
||||||||||||||||||
Operating income (loss)
|
341,064
|
(636,541
|
)
|
(193,612
|
)
|
(23,632
|
)
|
(127,806
|
)
|
(640,527
|
)
|
|||||||||||||
Non-operating income, net
|
18,847
|
|
||||||||||||||||||||||
Income tax expense
|
(51,058
|
)
|
||||||||||||||||||||||
Share of results of equity investees
|
(1,588
|
)
|
||||||||||||||||||||||
Net loss
|
(674,326
|
)
|
|
For the Six Months ended June 30, 2021
|
|||||||||||||||||||||||
Digital
Entertainment
|
E-Commerce
|
Digital Financial
Services
|
Other
Services
|
Unallocated
expenses (1)
|
Consolidated
|
|||||||||||||||||||
$ |
$
|
$
|
$
|
$
|
$
|
|||||||||||||||||||
Revenue
|
1,805,602
|
2,077,487
|
140,039
|
21,064
|
–
|
4,044,192
|
||||||||||||||||||
Operating income (loss)
|
1,029,577
|
(1,084,139
|
)
|
(316,648
|
)
|
(84,582
|
)
|
(226,637
|
)
|
(682,429
|
)
|
|||||||||||||
Non-operating loss, net
|
(48,313
|
)
|
||||||||||||||||||||||
Income tax expense
|
(126,216
|
)
|
||||||||||||||||||||||
Share of results of equity investees
|
1,198
|
|
||||||||||||||||||||||
Net loss
|
(855,760
|
)
|
|
For the Six Months
ended June 30,
|
|||||||
2020
|
2021
|
|||||||
$_
|
$_
|
|||||||
Revenue
|
||||||||
Southeast Asia
|
992,331
|
2,541,824
|
||||||
Latin America
|
300,830
|
776,728
|
||||||
Rest of Asia
|
256,911
|
560,012
|
||||||
Rest of the
world
|
46,882
|
165,628
|
||||||
Consolidated revenue
|
1,596,954
|
4,044,192
|
12. |
FAIR VALUE MEASUREMENTS
|
|
Fair value measurement at December 31, 2020
|
|||||||||||||||
Quoted prices in
active markets for
identical assets
(Level 1)
$
|
Significant other
observable
inputs
(Level 2)
$
|
Unobservable
inputs
(Level 3)
$
|
Total
$
|
|||||||||||||
Cash equivalents
|
74,272
|
–
|
–
|
74,272
|
||||||||||||
Held to maturity investments |
100,071
|
–
|
286
|
100,357
|
||||||||||||
Available-for-sale investments
|
5,688
|
–
|
21,357
|
27,045
|
||||||||||||
Equity securities |
76,000
|
–
|
–
|
76,000
|
||||||||||||
Other assets |
–
|
–
|
19,024
|
19,024
|
||||||||||||
Share appreciation rights
|
(11,640
|
)
|
–
|
–
|
(11,640
|
)
|
||||||||||
244,391
|
–
|
40,667
|
285,058
|
|
Fair value measurement at June 30, 2021
|
|||||||||||||||
Quoted prices in
active markets for
identical assets
(Level 1)
$
|
Significant other
observable
inputs
(Level 2)
$
|
Unobservable
inputs
(Level 3)
$
|
Total
$
|
|||||||||||||
Cash equivalents
|
575,601
|
–
|
–
|
575,601
|
||||||||||||
Held to maturity investments
|
787,122
|
–
|
486
|
787,608
|
||||||||||||
Available-for-sale investments
|
49,017
|
–
|
164,459
|
213,476
|
||||||||||||
Equity securities
|
55,533
|
–
|
–
|
55,533
|
||||||||||||
Investments carried at fair value
|
–
|
–
|
21,992
|
21,992
|
||||||||||||
Other assets
|
– | – | 16,221 | 16,221 | ||||||||||||
Derivative assets(1)
|
–
|
67
|
–
|
67
|
||||||||||||
Derivative liabilities (2)
|
–
|
(1,204 | ) |
–
|
(1,204 | ) | ||||||||||
Share appreciation rights
|
(18,038
|
)
|
–
|
–
|
(18,038
|
)
|
||||||||||
1,449,235
|
(1,137
|
)
|
203,158
|
1,651,256
|
$ | ||||
Assets:
|
||||
Available-for-sale investments
|
||||
Balance at January 1, 2020
|
128,418
|
|||
Impairments
|
(13,429 |
)
|
||
Conversion into ordinary shares of investees
|
(72,000 |
)
|
||
Fair value loss included in other
comprehensive income
|
(5,400 |
)
|
||
Balance at June 30, 2020 |
37,589
|
|||
Addition
|
20,429
|
|||
Impairments | (37,571 |
)
|
||
Fair value loss included in other comprehensive income |
910
|
|||
Balance at December 31, 2020
|
21,357
|
|||
Addition
|
146,871
|
|||
Fair value loss included in other comprehensive income | (3,769 |
)
|
||
Balance as at June 30, 2021
|
164,459
|
Investments carried at fair value
|
|
|||
Balance at January 1, 2020, June 30, 2020 and December 31, 2020 |
–
|
|||
Addition | 21,992 | |||
Balance at June 30, 2021
|
21,992
|
Other assets
|
||||
Balance at January 1, 2020
|
–
|
|||
Acquisition of subsidiary
|
8,718
|
|||
Additions
|
10,928
|
|||
Disposals
|
(45
|
)
|
||
Exchange differences
|
(373
|
)
|
||
Balance at June 30, 2020
|
19,228
|
|||
Acquisition of subsidiary
|
142
|
|||
Additions |
2,412
|
|||
Disposals | (318 | ) | ||
Write-down | (3,713 | ) | ||
Exchange differences |
1,273
|
|||
Balance at December 31, 2020 |
19,024
|
|||
Additions |
186
|
|||
Disposals | (1,989 | ) | ||
Write-down | (441 | ) | ||
Exchange differences | (559 | ) | ||
Balance at June 30, 2021 |
16,221
|
13. |
COMMITMENTS AND CONTINGENCIES
|