☐ |
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☒
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Title of each class
|
Trading symbol(s)
|
Name of each exchange on which registered
|
||
American Depositary Shares, each
representing one Class A ordinary share,
par value US$0.0001 per share
|
HUYA
|
New York Stock Exchange
|
||
Class A ordinary shares,
par value US$0.0001 per share*
|
New York Stock Exchange
|
(1) * |
Not for trading, but only in connection with the listing on the New York Stock Exchange of our American depositary shares, each representing one Class A ordinary share.
|
Large accelerated filer
☒
|
Accelerated filer
☐
|
|
Non-accelerated filer
|
|
Emerging growth company
☐
|
U.S. GAAP ☒ | International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ | Other ☐ |
|
|
1
|
|
|||
|
|
2
|
|
|||
|
|
|
3
|
|
||
ITEM 1.
|
|
|
|
3
|
|
|
ITEM 2.
|
|
|
|
3
|
|
|
ITEM 3.
|
|
|
|
4
|
|
|
ITEM 4.
|
|
|
|
54
|
|
|
ITEM 4.A.
|
|
|
|
84
|
|
|
ITEM 5.
|
|
|
|
84
|
|
|
ITEM 6.
|
|
|
|
105
|
|
|
ITEM 7.
|
|
|
|
115
|
|
|
ITEM 8.
|
|
|
|
118
|
|
|
ITEM 9.
|
|
|
|
119
|
|
|
ITEM 10.
|
|
|
|
119
|
|
|
ITEM 11.
|
|
|
|
136
|
|
|
ITEM 12.
|
|
|
|
137
|
|
|
|
|
|
139
|
|
||
ITEM 13.
|
|
|
|
139
|
|
|
ITEM 14.
|
|
|
|
139
|
|
|
ITEM 15.
|
|
|
|
140
|
|
|
ITEM 16.A.
|
|
|
|
141
|
|
|
ITEM 16.B.
|
|
|
|
141
|
|
|
ITEM 16.C.
|
|
|
|
141
|
|
|
ITEM 16.D.
|
|
|
|
141
|
|
|
ITEM 16.E.
|
|
|
|
141
|
|
|
ITEM 16.F.
|
|
|
|
142
|
|
|
ITEM 16.G.
|
|
|
|
142
|
|
|
ITEM 16.H.
|
|
|
|
142
|
|
|
|
|
|
142
|
|
||
ITEM 17.
|
|
|
|
142
|
|
|
ITEM 18.
|
|
|
|
142
|
|
|
ITEM 19.
|
|
|
|
142
|
|
|
|
|
|
146
|
|
• |
“ADSs” refers to our American depositary shares, each of which represents one Class A ordinary share;
|
• |
“China” or “PRC” refers to the People’s Republic of China, excluding, for the purpose of this annual report only, Hong Kong, Macau and Taiwan;
|
• |
“Class A ordinary shares” refers to our Class A ordinary shares of par value US$0.0001 per share;
|
• |
“Class B ordinary shares” refers to our Class B ordinary shares of par value US$0.0001 per share;
|
• |
“DouYu” refers to DouYu International Holdings Limited (Nasdaq: DOYU);
|
• |
“JOYY” refers to JOYY Inc. (Nasdaq: YY), formerly known as YY Inc.;
|
• |
“MAUs”, or “monthly active users” for any period refers to the sum of users who accessed our platform through our mobile apps, our websites, our PC clients, or YY Client, a PC client offered by JOYY (before early January 2021 when we ceased offering content through YY Client), at least once during such relevant period. The calculations of our MAUs may not reflect the actual number of people who accessed our platform, such as it is possible that some people may use more than one device, or some people may share one device, or some people may access our platform through multiple channels. Average MAUs for any period is calculated by dividing (i) the sum of MAUs for each month during such relevant period, by (ii) the number of months during such relevant period;
|
• |
“Merger” refers to the proposed merger with DouYu pursuant to the Merger Agreement;
|
• |
“Merger Agreement” refers to the agreement and plan of merger, dated October 12, 2020, entered into among us, DouYu, Tiger Company Ltd. and, solely for the limited purposes set forth therein, Nectarine Investment Limited;
|
• |
“mobile MAUs” for any period refers to the sum of users who accessed our platform through our mobile apps at least once during such relevant period. The calculations of our mobile MAUs may not reflect the actual number of people who accessed our platform, such as it is possible that some people may use more than one device, or some people may share one device, or some people may access our platform through multiple channels. Average mobile MAUs for any period is calculated by dividing (i) the sum of our mobile MAUs for each month during such relevant period, by (ii) the number of months during such relevant period;
|
• |
“paying users” for any period refers to the sum of user accounts that purchased various products and services on our platform at least once during such relevant period. A paying user is not necessarily a unique user, however, as a unique user may set up multiple paying user accounts on our platform;
|
• |
“RMB” and “Renminbi” refer to the legal currency of China;
|
• |
“shares” or “ordinary shares” refers to our Class A and Class B ordinary shares, par value $0.0001 per share;
|
• |
“Tencent” refers to Tencent Holdings Limited and its subsidiaries;
|
• |
“US$,” “U.S. dollars,” “$,” and “dollars” refer to the legal currency of the United States; and
|
• |
“we,” “us,” “our company,” “our” and “Huya” refer to HUYA Inc., a Cayman Islands company, and its subsidiaries, and, in the context of describing our operations and combined and consolidated financial information, also include its variable interest entity and its subsidiaries in the PRC.
|
• |
our goals and strategies;
|
• |
our future business development, financial conditions and results of operations;
|
• |
the expected growth of the live streaming market in China;
|
• |
our expectations regarding demand for and market acceptance of our products and services;
|
• |
our ability to retain and increase the number of users, broadcasters, talent agencies and advertisers, and expand our product and service offerings;
|
• |
competition in our industry;
|
• |
general economic and business condition in China and elsewhere;
|
• |
our ability to monetize the user base;
|
• |
relevant laws, government policies, regulations, rules and guidelines relating to our industry;
|
• |
the impact of the
COVID-19
pandemic to our business operations and the economy in China and elsewhere generally;
|
• |
the occurrence of any event, change or other circumstances that could give rise to the right of one or both of us and DouYu to terminate the Merger Agreement;
|
• |
the outcome of any legal proceedings that may be instituted against us, DouYu or our respective shareholders or directors in connection with the Merger;
|
• |
the ability to obtain regulatory approvals and meet other closing conditions to the Merger, including the risk that regulatory approvals required for the Merger are not obtained or are obtained subject to conditions that are not anticipated or that are material and adverse to our or DouYu’s business;
|
• |
a delay in closing the Merger;
|
• |
the ability to obtain approval by DouYu’s shareholders on the expected terms and schedule;
|
• |
business disruptions from the Merger that will harm our or DouYu’s business, including current plans and operations;
|
• |
potential adverse reactions or changes to business relationships resulting from the announcement or completion of the Merger;
|
• |
certain restrictions during the pendency of the Merger that may impact our or DouYu’s ability to pursue certain business opportunities or strategic transactions;
|
• |
the ability of DouYu or us to retain and hire key personnel;
|
• |
uncertainty as to the long-term value of our Class A ordinary shares following the Merger;
|
• |
the continued availability of capital and financing following the Merger;
|
• |
our ability to realize the intended synergies from the Merger; and
|
• |
assumptions underlying or related to any of the foregoing.
|
ITEM 1. IDENTITY
|
OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
|
ITEM 2. OFFER
|
STATISTICS AND EXPECTED TIMETABLE
|
ITEM 3.
|
KEY INFORMATION
|
For the year ended December 31,
|
||||||||||||||||||||||||
2016
|
2017
|
2018
|
2019
|
2020
|
||||||||||||||||||||
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
US$
|
|||||||||||||||||||
(in thousands, except for share, ADS, per share and per ADS data)
|
||||||||||||||||||||||||
Selected Consolidated Statements of Comprehensive (Loss) Income:
|
||||||||||||||||||||||||
Net revenues:
|
||||||||||||||||||||||||
Live streaming
|
791,978 | 2,069,536 | 4,442,845 | 7,976,214 | 10,311,624 | 1,580,326 | ||||||||||||||||||
Advertising and others
|
4,926 | 115,280 | 220,595 | 398,287 | 602,750 | 92,375 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total net revenues
|
796,904 | 2,184,816 | 4,663,440 | 8,374,501 | 10,914,374 | 1,672,701 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cost of revenues
(1)
|
(1,094,644 | ) | (1,929,864 | ) | (3,933,647 | ) | (6,892,579 | ) | (8,646,308 | ) | (1,325,105 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Gross (loss) profit
|
(297,740 | ) | 254,952 | 729,793 | 1,481,922 | 2,268,066 | 347,596 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating expenses:
|
||||||||||||||||||||||||
Research and development expenses
(1)
|
(188,334 | ) | (170,160 | ) | (265,152 | ) | (508,714 | ) | (734,261 | ) | (112,530 | ) | ||||||||||||
Sales and marketing expenses
(1)
|
(68,746 | ) | (87,292 | ) | (189,207 | ) | (438,396 | ) | (558,012 | ) | (85,519 | ) | ||||||||||||
General and administrative expenses
(1)
|
(71,325 | ) | (101,995 | ) | (287,710 | ) | (352,824 | ) | (445,006 | ) | (68,200 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total operating expenses
|
(328,405 | ) | (359,447 | ) | (742,069 | ) | (1,299,934 | ) | (1,737,279 | ) | (266,249 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other income
|
— | 9,629 | 38,938 | 79,390 | 194,169 | 29,758 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating (loss) income
|
(626,145 | ) | (94,866 | ) | 26,662 | 261,378 | 724,956 | 111,105 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Interest and short-term investments income
|
518 | 14,049 | 156,549 | 304,491 | 313,366 | 48,025 | ||||||||||||||||||
Fair value loss on derivative liabilities
|
— | — | (2,285,223 | ) | — | — | — | |||||||||||||||||
Gain on fair value change of investment
|
— | — | — | — | 2,160 | 331 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other
non-operating
expenses
|
— | — | — | — | (10,010 | ) | (1,534 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Foreign currency exchange gains, net
|
— | — | 51 | 1,157 | 2,056 | 315 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
(Loss) income before income tax benefits (expenses)
|
(625,627 | ) | (80,817 | ) | (2,101,961 | ) | 567,026 | 1,032,528 | 158,242 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income tax benefits (expenses)
|
— | — | 50,943 | (96,078 | ) | (176,784 | ) | (27,093 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
(Loss) income before share of (loss) income in equity method investments, net of income taxes
|
(625,627 | ) | (80,817 | ) | (2,051,018 | ) | 470,948 | 855,744 | 131,149 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Share of (loss) income in equity method investments, net of income taxes
|
— | (151 | ) | 113,329 | (2,775 | ) | 28,414 | 4,355 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net (loss) income attributable to HUYA Inc.
|
(625,627 | ) | (80,968 | ) | (1,937,689 | ) | 468,173 | 884,158 | 135,504 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Accretion to Series A redeemable convertible preferred shares
|
— | (19,842 | ) | (71,628 | ) | — | — | — | ||||||||||||||||
Deemed dividend to series A preferred shareholders
|
— | — | (496,995 | ) | — | — | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net (loss) income attributable to ordinary shareholders
|
(625,627 | ) | (100,810 | ) | (2,506,312 | ) | 468,173 | 884,158 | 135,504 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net (loss) income
|
(625,627 | ) | (80,968 | ) | (1,937,689 | ) | 468,173 | 884,158 | 135,504 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31,
|
||||||||||||||||||||||||
2016
|
2017
|
2018
|
2019
|
2020
|
||||||||||||||||||||
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
US$
|
|||||||||||||||||||
(in thousands, except for share, ADS, per share and per ADS data)
|
||||||||||||||||||||||||
Foreign currency translation adjustments, net of nil tax
|
— | 308 | 366,259 | 157,568 | (451,873 | ) | (69,253 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total comprehensive (loss) income attributable to HUYA Inc.
|
(625,627 | ) | (80,660 | ) | (1,571,430 | ) | 625,741 | 432,285 | 66,251 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net (loss) income per ADS
(2)
|
||||||||||||||||||||||||
Basic
|
(6.26 | ) | (1.01 | ) | (15.02 | ) | 2.18 | 3.89 | 0.60 | |||||||||||||||
Diluted
|
(6.26 | ) | (1.01 | ) | (15.02 | ) | 2.02 | 3.71 | 0.57 | |||||||||||||||
Weighted average number of ADSs used in calculating net (loss) income per ADS
|
||||||||||||||||||||||||
Basic
|
100,000,000 | 100,000,000 | 166,828,435 | 214,811,862 | 227,081,238 | 227,081,238 | ||||||||||||||||||
Diluted
|
100,000,000 | 100,000,000 | 166,828,435 | 232,024,961 | 238,631,613 | 238,631,613 | ||||||||||||||||||
Net (loss) income per ordinary share
|
||||||||||||||||||||||||
Basic
|
(6.26 | ) | (1.01 | ) | (15.02 | ) | 2.18 | 3.89 | 0.60 | |||||||||||||||
Diluted
|
(6.26 | ) | (1.01 | ) | (15.02 | ) | 2.02 | 3.71 | 0.57 | |||||||||||||||
Weighted average number of ordinary shares used in calculating net (loss) income per ordinary share
|
||||||||||||||||||||||||
Basic
|
100,000,000 | 100,000,000 | 166,828,435 | 214,811,862 | 227,081,238 | 227,081,238 | ||||||||||||||||||
Diluted
|
100,000,000 | 100,000,000 | 166,828,435 | 232,024,961 | 238,631,613 | 238,631,613 |
Notes: |
|
(1) |
Share-based compensation expenses were allocated in cost of revenues and operating expenses as follows:
|
For the year ended December 31,
|
||||||||||||||||||||||||
2016
|
2017
|
2018
|
2019
|
2020
|
||||||||||||||||||||
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
US$
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Cost of revenues
|
5,677 | 2,877 | 10,472 | 31,593 | 64,942 | 9,953 | ||||||||||||||||||
Research and development expenses
|
19,538 | 9,174 | 30,643 | 86,296 | 150,723 | 23,099 | ||||||||||||||||||
Sales and marketing expenses
|
326 | 791 | 1,832 | 5,919 | 9,879 | 1,514 | ||||||||||||||||||
General and administrative expenses
|
26,557 | 27,266 | 183,748 | 157,936 | 182,664 | 27,994 |
(2) |
Each ADS represents one Class A ordinary share
|
As of December 31,
|
||||||||||||||||||||||||
2016
|
2017
|
2018
|
2019
|
2020
|
||||||||||||||||||||
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
US$
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Selected Consolidated Balance Sheet Data:
|
||||||||||||||||||||||||
Cash and cash equivalents
|
6,187 | 442,532 | 709,019 | 1,113,193 | 3,293,573 | 504,762 | ||||||||||||||||||
Short-term deposits
|
95,000 | 593,241 | 4,983,825 | 6,743,445 | 5,974,790 | 915,677 | ||||||||||||||||||
Short-term investments
|
— | — | 300,162 | 2,219,531 | 1,206,539 | 184,910 | ||||||||||||||||||
Total current assets
|
156,101 | 1,250,307 | 6,595,187 | 10,591,820 | 11,270,938 | 1,727,347 | ||||||||||||||||||
Investments
|
— | 10,299 | 219,827 | 379,424 | 467,206 | 71,602 | ||||||||||||||||||
Total assets
|
167,234 | 1,300,541 | 7,106,187 | 11,366,550 | 12,410,687 | 1,902,020 | ||||||||||||||||||
Total current liabilities
|
319,928 | 685,650 | 1,380,446 | 2,446,677 | 2,384,795 | 365,485 | ||||||||||||||||||
Total liabilities
|
331,621 | 730,674 | 1,461,180 | 2,681,700 | 2,633,909 | 403,664 | ||||||||||||||||||
Class A ordinary shares
|
— | 1 | 29 | 44 | 55 | 8 | ||||||||||||||||||
Class B ordinary shares
|
— | 66 | 104 | 100 | 100 | 15 | ||||||||||||||||||
Total shareholders’ (deficit) equity
|
(164,387 | ) | 60,199 | 5,645,007 | 8,684,850 | 9,776,778 | 1,498,356 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31,
|
||||||||||||||||||||||||
2016
|
2017
|
2018
|
2019
|
2020
|
||||||||||||||||||||
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
US$
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Selected Consolidated Cash Flows Data
|
||||||||||||||||||||||||
Net cash (used in)/provided by operating activities
|
(420,451 | ) | 242,444 | 717,461 | 1,945,414 | 1,239,874 | 190,019 | |||||||||||||||||
Net cash (used in)/provided by investing activities
|
(96,135 | ) | (559,561 | ) | (4,567,452 | ) | (3,684,971 | ) | 1,004,780 | 153,990 | ||||||||||||||
Net cash provided by financing activities
|
522,773 | 774,448 | 4,126,861 | 2,133,651 | 265,294 | 40,658 | ||||||||||||||||||
Net increase in cash and cash equivalents and restricted cash
|
6,187 | 457,331 | 276,870 | 394,094 | 2,509,948 | 384,667 | ||||||||||||||||||
Cash and cash equivalents and restricted cash at the beginning of the year
|
— | 6,187 | 442,532 | 709,019 | 1,114,585 | 170,818 | ||||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash
|
— | (20,986 | ) | (10,383 | ) | 11,472 | (166,071 | ) | (25,453 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cash and cash equivalents and restricted cash at the end of the year
|
6,187 | 442,532 | 709,019 | 1,114,585 | 3,458,462 | 530,032 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
B.
|
Capitalization and Indebtedness
|
C.
|
Reasons for the Offer and Use of Proceeds
|
D.
|
Risk Factors
|
• |
challenges in formulating effective local sales and marketing strategies targeting internet and mobile users from various jurisdictions and cultures, who have a diverse range of preferences and demands;
|
• |
challenges in identifying appropriate local third-party business partners such as game developers and publishers,
e-sports
tournament and game event organizers, broadcasters and talent agencies, and establishing and maintaining good working relationships with them;
|
• |
challenges in recruiting quality local broadcasters to attract and engage local users;
|
• |
challenges in effectively managing overseas operations from our headquarters and establishing overseas IT systems and infrastructure;
|
• |
challenges in selecting suitable geographical regions for global expansion and the general economic condition of various regions we operate;
|
• |
challenges in increasing and diversifying revenues, controlling costs and expenses, and making profits;
|
• |
fluctuations in currency exchange rates;
|
• |
compliance with applicable foreign laws and regulations, including but not limited to internet content requirements, foreign exchange controls, cash repatriation restrictions, intellectual property protection rules, data privacy requirements, tax regulations and rules; and
|
• |
competition situations in various regions we operate.
|
• |
our technology, system, networks and our users’ devices have been subject to, and may continue to be the target of, cyber-attacks, computer viruses, malicious code, phishing attacks or information security breaches that could result in an unauthorized release, gathering, monitoring, misuse, loss or destruction of confidential, proprietary and other information of ours, our employees or sensitive information provided by our users, or otherwise disrupt our, our users’ or other third parties’ business operations;
|
• |
we periodically encounter attempts to create false accounts or use our platform to send targeted and untargeted spam messages to our users, or take other actions on our platform for purposes such as spamming or spreading misinformation, and we may not be able to repel spamming attacks;
|
• |
the use of encryption and other security measures intended to protect our systems and confidential data may not provide absolute security, and losses or unauthorized access to or releases of confidential information may still occur;
|
• |
our security measures may be breached due to employee error, malfeasance or unauthorized access to sensitive information by our employees, who may be induced by outside third parties, and we may not be able to anticipate any breach of our security or to implement adequate preventative measures; and
|
• |
we may be subject to information technology system failures or network disruptions caused by natural disasters, accidents, power disruptions, telecommunications failures, acts of terrorism or war, computer viruses, physical or electronic
break-ins,
or other events or disruptions.
|
• |
our market position and competitiveness in the live streaming service, in particular, game live streaming;
|
• |
our future profitability, overall financial condition, results of operations and cash flows;
|
• |
general market conditions for capital raising activities by live streaming and other internet companies in China;
|
• |
foreign currency restrictions; and
|
• |
economic, political and other conditions in China and internationally, including the continuous impact of the
COVID-19
outbreak.
|
• |
Agreements with Tencent
|
• |
Developing business relationships with Tencent’s competitors
|
• |
Employee recruiting and retention
|
• |
Allocation of business opportunities
|
• |
Our directors may have conflicts of interest
|
• |
Sales of shares in our company
|
• |
revoke our business and operating licenses;
|
• |
levy fines on us;
|
• |
confiscate any of our income that they deem to be obtained through illegal operations;
|
• |
require us to discontinue or restrict operations;
|
• |
restrict our right to collect revenues;
|
• |
block our mobile apps, websites, or PC clients;
|
• |
require us to restructure the operations in such a way as to compel us to establish a new enterprise,
re-apply
for the necessary licenses or relocate our businesses, staff and assets;
|
• |
impose additional conditions or requirements with which we may not be able to comply; or
|
• |
take other regulatory or enforcement actions against us that could be harmful to our business.
|
• |
We only have contractual control over our platform. Guangzhou Huya, our PRC variable interest entity, owns our platform due to the restriction of foreign investment in businesses providing value-added telecommunication services in China, including internet content provision services. If Guangzhou Huya breaches its contractual arrangements with us and no longer remains under our control, this may significantly disrupt our business, subject us to sanctions, compromise enforceability of related contractual arrangements, or have other harmful effects on us.
|
• |
There are uncertainties relating to the regulation of the internet business in China, including evolving licensing practices and the requirement for real-name registrations and its implementation in actual practice. Permits, licenses or operations at some of our subsidiaries and PRC variable interest entity levels may be subject to challenge, or we may fail to obtain permits or licenses that may be deemed necessary for our operations or we may not be able to obtain or renew certain permits or licenses. See “Risks Related to Our Business and Our
Industry-If
we fail to obtain and maintain the licenses and approvals required under the complex regulatory environment for internet-based businesses in China, our business, financial condition and results of operations may be materially and adversely affected,” “Item 4. Information on the Company—B. Business Overview—Government Regulations—Internet Information Services,” “Item 4. Information on the Company—B. Business Overview—Government Regulations—Internet Publication and Cultural Products,” “Item 4. Information on the Company—B. Business Overview—Government Regulations—Online Music and Entertainment” and “Item 4. Information on the Company—B. Business Overview—Government Regulations—Online Transmission of Audio-Visual Programs.” In addition, if we were required to implement real-name registration system on our platform with stricter and higher standards, we may lose large numbers of registered user accounts for various reasons, because users may no longer maintain multiple accounts and users who dislike giving out their private information may cease to use our products and services altogether.
|
• |
The evolving PRC regulatory system for the internet industry may lead to the establishment of new regulatory agencies. For example, in May 2011, the State Council announced the establishment of a new department, the State Internet Information Office (now known as the Cyberspace Administration of China or Office of the Central Cyberspace Affairs Commission). The primary role of this new agency is to facilitate the policy-making and legislative development in this field to direct and coordinate with the relevant departments in connection with online content administration and to deal with cross-ministry regulatory matters in relation to the internet industry. We are unable to determine what policies this new agency or any new agencies to be established in the future may have or how they may interpret existing laws, regulations and policies and how they may affect us. Further, new laws, regulations or policies may be promulgated or announced that will regulate internet activities, including online video and online advertising businesses. If these new laws, regulations or policies are promulgated, additional licenses may be required for our operations. If our operations do not comply with these new regulations after they become effective, or if we fail to obtain any licenses required under these new laws and regulations, we could be subject to penalties.
|
• |
variations in our revenues, earnings, cash flow and data related to our user base or user engagement;
|
• |
announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors;
|
• |
announcements of new product and service offerings, solutions and expansions by us or our competitors;
|
• |
changes in financial estimates by securities analysts;
|
• |
detrimental adverse publicity about us, our services or our industry;
|
• |
additions or departures of key personnel; and
|
• |
potential litigation or regulatory investigations.
|
• |
we have failed to timely provide the depositary with notice of meeting and related voting materials;
|
• |
we have instructed the depositary that we do not wish a discretionary proxy to be given;
|
• |
we have informed the depositary that there is substantial opposition as to a matter to be voted on at the meeting;
|
• |
a matter to be voted on at the meeting would have a material adverse impact on shareholders; or
|
• |
the voting at the meeting is to be made on a show of hands.
|
• |
the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form
10-Q
or current reports on Form
8-K;
|
• |
the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act;
|
• |
the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and
|
• |
the selective disclosure rules by issuers of material nonpublic information under Regulation FD.
|
(1) |
The shareholder of Guangzhou Huya is Linzhi Tencent Technology Co., Ltd., an affiliate of Tencent, holding 100% of Guangzhou Huya’s equity interest.
|
• |
exercise effective control over Guangzhou Huya and its subsidiaries;
|
• |
receive substantially all of the economic benefits of Guangzhou Huya and its subsidiaries; and
|
• |
have an exclusive option to purchase all or part of the equity interests in Guangzhou Huya when and to the extent permitted by PRC law.
|
• |
the ownership structures of Huya Technology and Guangzhou Huya are in compliance with PRC laws or regulations currently in effect; and
|
• |
the contractual arrangements among Huya Technology, Guangzhou Huya and Linzhi Tencent governed by PRC law, are valid, binding and enforceable under PRC law, and do not and will not result in any violation of applicable PRC laws or regulations currently in effect.
|
E.
|
Property, Plants and Equipment
|
ITEM 4.A.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 5.
|
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
|
A.
|
Operating Results
|
For the year ended December 31,
|
||||||||||||||||||||||||||||
2018
|
2019
|
2020
|
||||||||||||||||||||||||||
RMB
|
%
|
RMB
|
%
|
RMB
|
US$
|
%
|
||||||||||||||||||||||
(in thousands, except for percentages)
|
||||||||||||||||||||||||||||
Net revenues
|
||||||||||||||||||||||||||||
Live streaming
|
4,442,845 | 95.3 | 7,976,214 | 95.2 | 10,311,624 | 1,580,326 | 94.5 | |||||||||||||||||||||
Advertising and others
|
220,595 | 4.7 | 398,287 | 4.8 | 602,750 | 92,375 | 5.5 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total net revenues
|
4,663,440 | 100.0 | 8,374,501 | 100.0 | 10,914,374 | 1,672,701 | 100.0 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Cost of revenues
(1)
|
(3,933,647 | ) | (84.4 | ) | (6,892,579 | ) | (82.3 | ) | (8,646,308 | ) | (1,325,105 | ) | (79.2 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Gross profit
|
729,793 | 15.6 | 1,481,922 | 17.7 | 2,268,066 | 347,596 | 20.8 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Operating expenses
|
||||||||||||||||||||||||||||
Research and development expenses
(1)
|
(265,152 | ) | (5.7 | ) | (508,714 | ) | (6.1 | ) | (734,261 | ) | (112,530 | ) | (6.7 | ) | ||||||||||||||
Sales and marketing expenses
(1)
|
(189,207 | ) | (4.1 | ) | (438,396 | ) | (5.2 | ) | (558,012 | ) | (85,519 | ) | (5.1 | ) | ||||||||||||||
General and administrative expenses
(1)
|
(287,710 | ) | (6.1 | ) | (352,824 | ) | (4.2 | ) | (445,006 | ) | (68,200 | ) | (4.1 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total operating expenses
|
(742,069 | ) | (15.9 | ) | (1,299,934 | ) | (15.5 | ) | (1,737,279 | ) | (266,249 | ) | (15.9 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Other income
|
38,938 | 0.8 | 79,390 | 0.9 | 194,169 | 29,758 | 1.8 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Operating income
|
26,662 | 0.5 | 261,378 | 3.1 | 724,956 | 111,105 | 6.7 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31,
|
||||||||||||||||||||||||||||
2018
|
2019
|
2020
|
||||||||||||||||||||||||||
RMB
|
%
|
RMB
|
%
|
RMB
|
US$
|
%
|
||||||||||||||||||||||
(in thousands, except for percentages)
|
||||||||||||||||||||||||||||
Interest and short-term investments income
|
156,549 | 3.4 | 304,491 | 3.6 | 313,366 | 48,025 | 2.9 | |||||||||||||||||||||
Fair value loss on derivative liabilities
|
(2,285,223 | ) | (49.0 | ) | — | — | — | — | — | |||||||||||||||||||
Gain on fair value change of investment
|
— | — | — | — | 2,160 | 331 | 0.0 | |||||||||||||||||||||
Other
non-operating
expenses
|
— | — | — | — | (10,010 | ) | (1,534 | ) | (0.1 | ) | ||||||||||||||||||
Foreign currency exchange gains, net
|
51 | 0.0 | 1,157 | 0.0 | 2,056 | 315 | 0.0 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
(Loss) income before income tax benefits (expenses)
|
(2,101,961 | ) | (45.1 | ) | 567,026 | 6.7 | 1,032,528 | 158,242 | 9.5 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Income tax benefits (expenses)
|
50,943 | 1.1 | (96,078 | ) | (1.1 | ) | (176,784 | ) | (27,093 | ) | (1.6 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
(Loss) income before share of income (loss) in equity method investments, net of income taxes
|
(2,051,018 | ) | (44.0 | ) | 470,948 | 5.6 | 855,744 | 131,149 | 7.9 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Share of income (loss) in equity method investments, net of income taxes
|
113,329 | 2.4 | (2,775 | ) | (0.0 | ) | 28,414 | 4,355 | 0.3 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net (loss) income
|
(1,937,689 | ) | (41.6 | ) | 468,173 | 5.6 | 884,158 | 135,504 | 8.2 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Share-based compensation was allocated in cost of revenues and operating expenses as follows:
|
For the year ended December 31,
|
||||||||||||||||
2018
|
2019
|
2020
|
||||||||||||||
RMB
|
RMB
|
RMB
|
US$
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Cost of revenues
|
10,472 | 31,593 | 64,942 | 9,953 | ||||||||||||
Research and development expenses
|
30,643 | 86,296 | 150,723 | 23,099 | ||||||||||||
Sales and marketing expenses
|
1,832 | 5,919 | 9,879 | 1,514 | ||||||||||||
General and administrative expenses
|
183,748 | 157,936 | 182,664 | 27,994 |
For the year ended December 31,
|
||||||||||||||||||||||||||||
2018
|
2019
|
2020
|
||||||||||||||||||||||||||
RMB
|
%
|
RMB
|
%
|
RMB
|
US$
|
%
|
||||||||||||||||||||||
(in thousands, except for percentages)
|
||||||||||||||||||||||||||||
Cost of revenues:
|
||||||||||||||||||||||||||||
Revenue sharing fees and content costs
|
3,060,836 | 77.8 | 5,552,712 | 80.6 | 7,086,832 | 1,086,105 | 82.0 | |||||||||||||||||||||
Bandwidth costs
|
652,758 | 16.6 | 800,827 | 11.6 | 879,172 | 134,739 | 10.2 | |||||||||||||||||||||
Salaries and welfare
|
101,939 | 2.6 | 255,258 | 3.7 | 306,805 | 47,020 | 3.5 | |||||||||||||||||||||
Payment handling costs
|
22,780 | 0.6 | 120,429 | 1.7 | 154,538 | 23,684 | 1.8 | |||||||||||||||||||||
Share-based compensation
|
10,472 | 0.3 | 31,593 | 0.5 | 64,942 | 9,953 | 0.8 | |||||||||||||||||||||
Others
|
84,862 | 2.1 | 131,760 | 1.9 | 154,019 | 23,604 | 1.7 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total cost of revenues
|
3,933,647 | 100.0 | 6,892,579 | 100.0 | 8,646,308 | 1,325,105 | 100.0 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
• |
Huya Technology was qualified as a Software Enterprise, and enjoyed the zero preferential tax rate starting from 2017 and 12.5% preferential tax rate starting from 2019. In 2020, Huya Technology was qualified as a KNSE and was eligible for the income tax rate of 10% for the year of 2020 pursuant to SAT Public Notice [2018] No.23 (“Circular 23”), subject to review by applicable tax authorities.
|
• |
Guangzhou Huya applied for the HNTE qualification and obtained approval in November 2018. It entitled to enjoy the preferential tax rate of 15% as an HNTE for three years starting from 2018, and should apply for HNTE qualification renewal in 2021.
|
|
• |
Hainan Huya Entertainment Information Technology Co., Ltd., who enterprises in encouraged industries registered in the Hainan Free Trade Port and engaging in substantive operations, entitled to enjoy the preferential tax rate of 15% pursuant to Cai Shui [2020] No. 31.
|
• |
Most of the remaining PRC subsidiaries and VIEs were subject to 25% EIT for the years reported.
|
Date of valuation
|
Fair Value Per
Share (US$)
|
Discount of Lack of
Marketability
(DLOM)
|
Discount
Rate
|
|||||
March 15, 2018
|
7.16 | 10% | 19% | |||||
March 31, 2018
|
7.16 | 10% | 19% |
Valuation Date
|
||||
2018
|
||||
Weighted average fair value per option granted
|
US$ | 5.2130 | ||
Weighted average exercise price
|
US$ | 2.47 | ||
Risk-free interest rate
(1)
|
2.83% | |||
Expected term (in year)
(2)
|
10 | |||
Expected volatility
(3)
|
55% | |||
Dividend yield
(4)
|
— |
(1) |
The risk-free interest rate of periods within the contractual life of the share option is based on the China Government Bond yield as at the valuation dates.
|
(2) |
The expected term is the contract life of the option.
|
(3) |
Expected volatility is estimated based on the average of historical volatilities of the comparable companies in the same industry as at the valuation dates.
|
(4) |
We have no history or expectation of paying dividend on our ordinary shares. The expected dividend yield was estimated based on our expected dividend policy over the expected term of the option.
|
Valuation Date
|
March 8, 2018
|
May 10, 2018
|
||||||
Volatility
|
50% | 50% | ||||||
Risk-free rate (3 months)
|
1.66% | 1.58% | ||||||
Risk-free rate (4 years)
|
2.52% | 2.46% | ||||||
Dividend yield
|
0% | 0% |
B.
|
Liquidity and Capital Resources
|
For the year ended December 31,
|
||||||||||||||||
2018
|
2019
|
2020
|
||||||||||||||
RMB
|
RMB
|
RMB
|
US$
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Summary Consolidated Cash Flows Data
|
||||||||||||||||
Net cash provided by operating activities
|
717,461 | 1,945,414 | 1,239,874 | 190,019 | ||||||||||||
Net cash (used in) /provided by investing activities
|
(4,567,452 | ) | (3,684,971 | ) | 1,004,780 | 153,990 | ||||||||||
Net cash provided by financing activities
|
4,126,861 | 2,133,651 | 265,294 | 40,658 | ||||||||||||
Net increase in cash and cash equivalents and restricted cash
|
276,870 | 394,094 | 2,509,948 | 384,667 | ||||||||||||
Cash and cash equivalents and restricted cash at the beginning of the year
|
442,532 | 709,019 | 1,114,585 | 170,818 | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash
|
(10,383 | ) | 11,472 | (166,071 | ) | (25,453 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents and restricted cash at the end of the year
|
709,019 | 1,114,585 | 3,458,462 | 530,032 | ||||||||||||
|
|
|
|
|
|
|
|
Net revenues
(1)
|
Total assets
(1)
|
|||||||||||||||||||
For the year ended
December 31,
|
As of
December 31,
|
|||||||||||||||||||
2018
|
2019
|
2020
|
2019
|
2020
|
||||||||||||||||
HUYA Inc. and its wholly-owned subsidiaries
|
0.1 | % | 1.0 | % | 1.6 | % | 76.5 | % | 91.1 | % | ||||||||||
Variable interest entity and its subsidiaries
|
99.9 | % | 99.0 | % | 98.4 | % | 23.5 | % | 8.9 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
(1) |
The percentages exclude the inter-company transactions and balances between HUYA Inc. and its wholly-owned subsidiaries and variable interest entity and its subsidiaries.
|
C.
|
Research and Development, Patents and Licenses, etc.
|
• |
AI and big data analytics
|
• |
Live streaming technologies
state-of-the
low-latency
and
low-loss
rates in delivering voice and video data on our platform, even with weak internet connection, which provides our users with superior viewing experience. Audio and video technologies have been our main focus since our inception. For instance, we offer stable
8-12M
pixels
blue-ray
quality live streaming.
|
• |
Servers and other infrastructure
back-end
architecture that enables smooth and expedient upgrades of our platform software infrastructure. Our advanced
peer-to-peer
|
D.
|
Trend Information
|
E.
|
Off-Balance
Sheet Arrangements
|
F.
|
Tabular Disclosure of Contractual Obligations
|
Payment due by period
|
||||||||||||||||||||
Total
|
Less than
1 year
|
1 - 3
years
|
4 - 5
years
|
More than
5 years
|
||||||||||||||||
(in RMB thousands)
|
||||||||||||||||||||
Operating Lease Obligations
(1)
|
133,919 | 42,945 | 76,997 | 13,977 | — | |||||||||||||||
Capital Commitments
|
10,000 | 10,000 | — | — | — |
(1) |
Represents our
non-cancellable
operating leases and property management fees for offices expiring on different dates.
|
G.
|
Safe Harbor
|
ITEM 6.
|
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
|
A.
|
Directors and Executive Officers
|
Directors and Executive Officers
|
Age
|
Position/Title
|
||||
Lingdong Huang
|
44 | Chairman of Board of Directors | ||||
Rongjie Dong
|
44 | Director, Chief Executive Officer | ||||
David Xueling Li
|
46 | Director | ||||
Cheng Yun Ming Matthew
|
51 | Director | ||||
Hai Tao Pu
|
50 | Director | ||||
Guang Xu
|
38 | Director | ||||
Lei Zheng
|
44 | Director | ||||
Hongqiang Zhao
|
44 | Independent Director | ||||
Tsang Wah Kwong
|
68 | Independent Director | ||||
Catherine Xiaozheng Liu
|
44 | Chief Financial Officer | ||||
Ligao Lai
|
42 | Chief Technology Officer |
B.
|
Compensation of Directors and Executive Officers
|
Name
|
Class A
Ordinary Shares
Underlying
Options Awarded
|
Exercise Price
(US$/Share)
|
Date of Grant
|
Date of
Expiration
|
||||||
Rongjie Dong
|
— |
US$2.55
|
August 9, 2017 | August 8, 2027 | ||||||
David Xueling Li
|
— |
US$2.55
|
March 15, 2018 | March 14, 2028 | ||||||
Ligao Lai
|
* |
US$2.55
|
August 9, 2017 | August 8, 2027 | ||||||
Other individuals as a group
|
* |
US$2.55
|
August 9, 2017,
March 15, 2018 and
July 1, 2018
|
August 8, 2027, March 14, 2028 and June 30, 2028 |
* |
Less than 1% of our total outstanding shares.
|
Name
|
Class A Ordinary Shares Underlying
Restricted Share Units Awarded
|
Date of Grant
|
Date of
Expiration
|
|||
Rongjie Dong | * |
March 31, 2018,
and September 13, 2020
|
March 30, 2028,
and September 12, 2030
|
|||
Catherine Xiaozheng Liu | * | December 9, 2019 | December 8, 2029 | |||
Other individuals as a group | 5,938,784 | March 31, 2018 to March 15, 2021 | March 30, 2028 to March 14, 2031 |
* |
Less than 1% of our total outstanding shares
.
|
C.
|
Board Practices
|
• |
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.
|
• |
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.
|
• |
selecting and recommending 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;
|
• |
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.
|
• |
convening shareholders’ annual general meetings and reporting its work to shareholders at such meetings;
|
• |
declaring dividends and distributions;
|
• |
appointing officers and determining the term of office and its responsibilities of the officers;
|
• |
exercising the borrowing powers of our company and mortgaging the property of our company; and
|
• |
approving the transfer of shares in our company, including the registration of such shares in our share register.
|
D.
|
Employees
|
As of December 31, 2020
|
||||||||
Number
|
%
|
|||||||
Customer services and operations
|
669 | 32.2 | ||||||
Research and development
|
1,015 | 48.9 | ||||||
Sales and marketing
|
176 | 8.5 | ||||||
General and administrative
|
215 | 10.4 | ||||||
|
|
|
|
|||||
Total
|
2,075 | 100.0 | ||||||
|
|
|
|
E.
|
Share Ownership
|
• |
each of our directors and executive officers; and
|
• |
each person known to us to own beneficially 5% or more of our total outstanding ordinary shares.
|
Ordinary Shares Beneficially Owned
|
||||||||||||||||||||
Class A
ordinary
Shares(†)
|
Class B
ordinary
Shares(††)
|
Total ordinary
shares on an
as-converted
basis
|
% of total
ordinary shares on
an as converted
basis
|
% of
aggregate
voting power (†††)
|
||||||||||||||||
Directors and Executive Officers:**
|
||||||||||||||||||||
Lingdong Huang
|
— | — | — | — | — | |||||||||||||||
Rongjie Dong
(1)
|
1,392,199 | 1,970,804 | 3,363,003 | 1.4 | 1.3 | |||||||||||||||
David Xueling Li
(2)
|
* | — | * | * | * | |||||||||||||||
Cheng Yun Ming Matthew
(3)
|
— | — | — | — | — | |||||||||||||||
Hai Tao Pu
(4)
|
— | — | — | — | — | |||||||||||||||
Guang Xu
|
— | — | — | — | — | |||||||||||||||
Lei Zheng
|
— | — | — | — | — | |||||||||||||||
Hongqiang Zhao
(5)
|
— | — | — | — | — | |||||||||||||||
Tsang Wah Kwong
(6)
|
— | — | — | — | — | |||||||||||||||
Catherine Xiaozheng Liu
|
* | — | * | * | * | |||||||||||||||
Ligao Lai
|
* | — | * | * | * | |||||||||||||||
All directors and executive officers as a group
|
3,678,525 | 1,970,804 | 5,649,329 | 2.4 | 1.4 | |||||||||||||||
Principal Shareholders:
|
||||||||||||||||||||
Tencent Holdings Limited
(7)
|
— | 112,012,054 | 112,012,054 | 47.4 | 69.7 | |||||||||||||||
JOYY
(8)
|
— | 38,374,463 | 38,374,463 | 16.2 | 23.9 | |||||||||||||||
Morgan Stanley
(9)
|
26,777,866 | — | 26,777,866 | 11.3 | 1.7 |
* |
Less than 1% of total outstanding ordinary shares.
|
** |
Except for Mr. Lingdong Huang, Mr. Guang Xu and Mr. Lei Zheng, and as indicated otherwise below, the business address for our directors and executive officers listed in the table is Building A3,
E-Park,
280 Hanxi Road, Panyu District, Guangzhou 511446, the People’s Republic of China. The business address of Mr. Lingdong Huang, Mr. Guang Xu and Mr. Lei Zheng is Building C, Kexing Science Park, Nanshan District, Shenzhen, the People’s Republic of China.
|
† |
For each person and group included in this column, percentage ownership is calculated by dividing the number of Class A ordinary shares beneficially owned by such person or group, including Class A ordinary shares that such person or group has the right to acquire within 60 days of March 31, 2021, by the sum of the total number of Class A ordinary shares outstanding as of March 31, 2021 and the number of Class A ordinary shares underlying the options held by such person or group that are exercisable within 60 days of March 31, 2021.
|
†† |
For each person and group included in this column, percentage ownership is calculated by dividing the number of Class B ordinary shares beneficially owned by such person or group, including Class B ordinary shares that such person or group has the right to acquire within 60 days of March 31, 2021, by the sum of the total number of Class B ordinary shares outstanding as of March 31, 2021 and the number of Class B ordinary shares underlying the options held by such person or group that are exercisable within 60 days of March 31, 2021.
|
††† |
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, including Class A and Class B ordinary shares that such person or group has the right to acquire within 60 days of March 31, 2021, with respect to all outstanding shares of our Class A and Class B ordinary shares as a single class. Each holder of Class A ordinary shares is entitled to one vote per Class A ordinary share. Each holder of our Class B ordinary shares is entitled to ten votes per Class B ordinary share. Our Class B ordinary shares are convertible at any time by the holder into Class A ordinary shares on a
share-for-share
|
(1) |
Represents (i) 1,220,804 Class B ordinary shares directly held by All Worth Limited, a British Virgin Islands company owned by a family trust controlled by Mr. Rongjie Dong, and (ii) 750,000 Class B ordinary shares directly held by Oriental Luck International Limited, a British Virgin Islands company wholly owned by a family trust controlled by Mr. Rongjie Dong, and (iii) 357,980 Class A ordinary shares issuable upon the vesting of the restricted shares units within 60 days after March 31, 2021 held by Mr. Rongjie Dong, and (iv) 1,034,219 Class A ordinary shares in the form of ADSs held by All Worth Limited. The registered offices of All Worth Limited and Oriental Luck International Limited are both Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands.
|
(2) |
The business address of Mr. David Xueling Li is Building
B-1,
North Block of Wanda Plaza, No. 79 Wanbo 2nd Road, Panyu District, Guangzhou, 511442, the People’s Republic of China.
|
(3) |
The business address of Mr. Cheng Yun Ming Matthew is 29/F, Three Pacific Place, 1 Queen’s Road East, Wanchai, Hong Kong.
|
(4) |
The business address of Mr. Hai Tao Pu is 29/F, Three Pacific Place, 1 Queen’s Road East, Wanchai, Hong Kong.
|
(5) |
The business address of Mr. Hongqiang Zhao is No. 10 Furong Street, Chaoyang District, Beijing, the People’s Republic of China.
|
(6) |
The business address of Mr. Tsang Wah Kwong is Flat B, 11/F., Block 9, Vista Paradiso, 2 Hang Ming Street, Ma On Shan, New Territories, Hong Kong.
|
(7) |
Represents 112,012,054 Class B ordinary shares directly held by Linen Investment Limited, based on our register of members. Tencent Holdings Limited is a Cayman Islands company. Linen Investment Limited is a British Virgin Islands company and a direct wholly owned subsidiary of Tencent Holdings Limited. The principal business address of each of Tencent Holdings Limited and Linen Investment Limited is Level 29, Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong.
|
(8) |
Represents 38,374,463 Class B ordinary shares directly held by JOYY Inc., based on our register of members. JOYY Inc. is a Cayman Islands company. The principal business address of JOYY Inc. is Building
B-1,
North Block of Wanda Plaza, No. 79 Wanbo 2nd Road, Nancun Town, Panyu District, Guangzhou 511442, the People’s Republic of China.
|
(9) |
Represents 26,777,866 Class A ordinary shares in the form of ADSs held by Morgan Stanley and its affiliates as of March 31, 2021, as reported in a Schedule 13G amendment filed by Morgan Stanley and its affiliates on April 12, 2021. The principal business address of Morgan Stanley is 1585 Broadway New York, NY 10036.
|
ITEM 7.
|
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|
A.
|
Major Shareholders
|
B.
|
Related Party Transactions
|
For the year ended December 31,
|
||||||||||||||||
2018
|
2019
|
2020
|
||||||||||||||
RMB
|
RMB
|
RMB
|
US$
|
|||||||||||||
Operation support services provided by Tencent
|
106,547 | 219,403 | 342,487 | 52,488 | ||||||||||||
Content cost charged by Tencent
|
88,075 | 123,204 | 127,224 | 19,498 | ||||||||||||
Payment on behalf of Tencent
|
— | 16,127 | 16,449 | 2,521 | ||||||||||||
Advertising and other revenues from Tencent
|
14,345 | 8,028 | 14,349 | 2,199 | ||||||||||||
Market promotion expenses charged by Tencent
|
2,174 | 12,777 | 11,208 | 1,718 | ||||||||||||
Others
|
— | 2,835 | 2,883 | 442 |
For the year ended December 31,
|
||||||||||||||||
2018
|
2019
|
2020
|
||||||||||||||
RMB
|
RMB
|
RMB
|
US$
|
|||||||||||||
Purchase of services by JOYY on behalf of Huya
|
37,408 | 22,622 | 18,945 | 2,903 | ||||||||||||
Operation support services provided by JOYY
|
44,523 | 17,455 | 4,187 | 642 | ||||||||||||
Deemed distribution to JOYY
|
— | 10,119 | 1,013 | 155 | ||||||||||||
Cash collected by JOYY as a payment platform for Huya
|
4,081,696 | 1,362,489 | — | — | ||||||||||||
Repayment from JOYY in relation to the payment on behalf of Huya’s employees
|
1,229 | 15,306 | — | — | ||||||||||||
Share-based compensation expenses related to JOYY’s Share-based Awards
|
5,833 | 1,996 | — | — | ||||||||||||
Purchase of property and equipment and intangible assets from JOYY
|
6,422 | 294 | — | — | ||||||||||||
Others
|
9,245 | 228 | 41 | 6 |
• |
Demand registration rights.
|
• |
Form
F-3
registration rights.
F-3,
JOYY may request us to file a registration statement on Form
F-3.
We are not obligated to effect more than six registration statements on Form
F-3
that have been declared and ordered effective.
|
• |
Piggyback registration rights.
|
For the year ended December 31,
|
||||||||
2020
|
||||||||
RMB
|
US$
|
|||||||
Content cost charged by Tencent’s related parties
|
79,784 | 12,227 | ||||||
Operation support services provided by Tencent’s related parties
|
12,326 | 1,889 | ||||||
Market promotion expenses charged by Tencent’s related parties
|
11,417 | 1,750 | ||||||
Advertising and other revenues from Tencent’s related parties
|
8,197 | 1,256 | ||||||
Others
|
10,301 | 1,579 |
C.
|
Interests of Experts and Counsel Not applicable.
|
ITEM 8.
|
FINANCIAL INFORMATION
|
A.
|
Consolidated Statements and Other Financial Information
|
B.
|
Significant Changes
|
ITEM 9.
|
THE OFFER AND LISTING
|
A.
|
Offering and Listing Details.
|
B.
|
Plan of Distribution
|
C.
|
Markets
|
D.
|
Selling Shareholders
|
E.
|
Dilution
|
F.
|
Expenses of the Issue
|
ITEM 10.
|
ADDITIONAL INFORMATION
|
A.
|
Share Capital
|
B.
|
Memorandum and Articles of Association
|
• |
the instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer;
|
• |
the instrument of transfer is in respect of only one class of shares;
|
• |
the instrument of transfer is properly stamped, if required;
|
• |
in the case of a transfer to joint holders, the number of joint holders to whom the ordinary share is to be transferred does not exceed four; and
|
• |
a fee of such maximum sum as the NYSE may determine to be payable or such lesser sum as our directors may from time to time require is paid to us in respect thereof.
|
• |
the designation of the series;
|
• |
the number of shares of the series and the subscription price thereof if different from the par value thereof;
|
• |
the dividend rights, dividend rates, conversion rights, voting rights; and
|
• |
the rights and terms of redemption and liquidation preferences.
|
• |
authorize our board of directors to issue preferred shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preferred shares without any further vote or action by our shareholders; and
|
• |
limit the ability of shareholders to requisition and convene general meetings of shareholders However, under Cayman Islands law, our directors may only exercise the rights and powers granted to them under our fourth amended and restated memorandum and articles of association for a proper purpose and for what they believe in good faith to be in the best interests of our company.
|
• |
increase our share capital by such sum, to be divided into shares of such classes and amount, as the resolution shall prescribe;
|
• |
consolidate and divide all or any of our share capital into shares of a larger amount than our existing shares;
|
• |
sub-divide
our existing shares, or any of them into shares of a smaller amount, provided that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in case of the share from which the reduced share is derived; or
|
• |
cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and diminish the amount of our share capital by the amount of the shares so canceled. Our shareholders may by special resolution, subject to confirmation by the Grand Court of the Cayman Islands on an application by our company for an order confirming such reduction, reduce our share capital or any capital redemption reserve in any manner permitted by law.
|
• |
does not have to file an annual return of its shareholders with the Registrar of Companies;
|
• |
is not required to open its register of members for inspection;
|
• |
does not have to hold an annual general meeting;
|
• |
may issue negotiable or bearer shares or shares with no par value;
|
• |
may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance);
|
• |
may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;
|
• |
may register as a limited duration company; and
|
• |
may register as a segregated portfolio company.
|
• |
the names and addresses of the members, together with a statement of the shares held by each member, and such statement shall confirm (i) the amount paid or agreed to be considered as paid, on the shares of each member, (ii) the number and category of shares held by each member, and (iii) whether each relevant category of shares held by a member carries voting rights under the articles of association of the company, and if so, whether such voting rights are conditional;
|
• |
the date on which the name of any person was entered on the register as a member; and
|
• |
the date on which any person ceased to be a member.
|
• |
the statutory provisions as to the required majority vote have been met;
|
• |
the shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority to promote interests adverse to those of the class;
|
• |
the arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest; and
|
• |
the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act.
|
• |
an act which is ultra vires or illegal and is therefore incapable of ratification by the shareholders,
|
• |
an act which constitutes a fraud against the minority where the wrongdoers are themselves in control of the company, and
|
• |
an act which requires a resolution with a qualified (or special) majority (i.e. more than a simple majority) which has not been obtained.
|
• |
an exempted company does not have to file an annual return of its shareholders with the Registrar of Companies;
|
• |
an exempted company’s register of members is not required to be open to inspection;
|
• |
an exempted company does not have to hold an annual general meeting;
|
• |
an exempted company may issue no par value shares;
|
• |
an exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 30 years in the first instance);
|
• |
an exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;
|
• |
an exempted company may register as a limited duration company; and
|
• |
an exempted company may register as a segregated portfolio company.
|
C.
|
Material Contracts
|
D.
|
Exchange Controls
|
E.
|
Taxation
|
• |
such excess distribution and/or gain will be allocated ratably over the U.S. holder’s holding period for the ADSs or ordinary shares;
|
• |
such amount allocated to the current taxable year and any taxable years in the U.S. holder’s holding period prior to the first taxable year in which we are a PFIC, or
pre-PFIC
year, will be taxable as ordinary income;
|
• |
such amount allocated to each prior taxable year, other than a
pre-PFIC
year, will be subject to tax at the highest tax rate in effect for that year; and
|
• |
an interest charge generally applicable to underpayments of tax will be imposed on the tax attributable to each prior taxable year, other than a
pre-PFIC
year.
|
F.
|
Dividends and Paying Agents
|
G.
|
Statement by Experts
|
H.
|
Documents on Display
|
I.
|
Subsidiary Information
|
ITEM 11.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
A.
|
Debt Securities
|
B.
|
Warrants and Rights
|
C.
|
Other Securities
|
D.
|
American Depositary Shares
|
Service
|
Fees
|
|
• To any person to which ADSs are issued or to any person to which a distribution is made in respect of ADS distributions pursuant to stock dividends or other free distributions of stock, bonus distributions, stock splits or other distributions (except where converted to cash)
|
Up to US$0.05 per ADS issued | |
• Cancelation of ADSs, including the case of termination of the deposit agreement
|
Up to US$0.05 per ADS canceled | |
• Distribution of cash dividends
|
Up to US$0.05 per ADS held | |
• Distribution of cash entitlements (other than cash dividends) and/or cash proceeds from the sale of rights, securities and other entitlements
|
Up to US$0.05 per ADS held | |
• Distribution of ADSs pursuant to exercise of rights
|
Up to US$0.05 per ADS held | |
• Distribution of securities other than ADSs or rights to purchase additional ADSs
|
Up to US$0.05 per ADS held | |
• Depositary services
|
Up to US$0.05 per ADS held on the applicable record date(s) established by the depositary bank |
• |
Fees for the transfer and registration of ordinary shares charged by the registrar and transfer agent for the ordinary shares in the Cayman Islands (i.e., upon deposit and withdrawal of ordinary shares).
|
• |
Expenses incurred for converting foreign currency into U.S. dollars.
|
• |
Expenses for cable, telex and fax transmissions and for delivery of securities.
|
• |
Taxes and duties upon the transfer of securities, including any applicable stamp duties, any stock transfer charges or withholding taxes (i.e., when ordinary shares are deposited or withdrawn from deposit).
|
• |
Fees and expenses incurred in connection with the delivery or servicing of ordinary shares on deposit.
|
• |
Fees and expenses incurred in connection with complying with exchange control regulations and other regulatory requirements applicable to ordinary shares, deposited securities, ADSs and ADRs.
|
• |
Any applicable fees and penalties thereon.
|
ITEM 13.
|
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
|
ITEM 14.
|
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|
ITEM 15.
|
CONTROLS AND PROCEDURES
|
ITEM 16.A.
|
AUDIT COMMITTEE FINANCIAL EXPERT
|
ITEM 16.B.
|
CODE OF ETHICS
|
ITEM 16.C.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
2019
|
2020
|
|||||||
RMB
|
RMB
|
|||||||
(in thousands)
|
||||||||
Audit fees
(1)
|
8,797 | 12,500 | ||||||
Audit-related fees
(2)
|
— | 1,050 | ||||||
Tax fees
(3)
|
— | 987 |
(1) |
“Audit fees” represent the aggregate fees billed for each of the fiscal years listed for professional services rendered by our principal auditor for the audit or review of our annual or quarterly financial statements and other SEC filings.
|
(2) |
“Audit-related fees” mean the aggregate fees billed for professional services rendered by our principal accounting firm for the assurance and related services.
|
(3) |
“Tax fees” mean the aggregate fees billed in each of the fiscal years listed for the professional tax services rendered by our principal auditors.
|
ITEM 16.D.
|
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
|
ITEM 16.E.
|
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
|
ITEM 16.F.
|
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
|
ITEM 16.G.
|
CORPORATE GOVERNANCE
|
• |
an exemption from the rule that a majority of our board of directors must be independent directors;
|
• |
the requirement that the compensation committee be composed entirely of independent directors; and
|
• |
the requirement that the nominating committee be composed entirely of independent directors.
|
ITEM 16.H.
|
MINE SAFETY DISCLOSURE
|
ITEM 17.
|
FINANCIAL STATEMENTS
|
ITEM 18.
|
FINANCIAL STATEMENTS
|
ITEM 19.
|
EXHIBITS
|
Exhibit Number
|
Description of Document
|
|
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104* | Cover Page Interactive Data File — the cover page XBRL tags are embedded within the Exhibit 101 Inline XBRL document set |
* |
Filed herewith.
|
** |
Furnished herewith.
|
† |
Portions of this exhibit have been omitted pursuant to Rule 406 under the Securities Act.
|
HUYA Inc.
|
||
By:
|
/s/ Rongjie Dong
|
|
Name:
|
Rongjie Dong
|
|
Title:
|
Chief Executive Officer
|
Contents
|
Page
|
|||
F-2
|
||||
Consolidated Financial Statements:
|
||||
F-5
|
||||
F-7
|
||||
F-9
|
||||
F-12 | ||||
F-14 |
As of December 31,
|
||||||||||||
2019
|
2020
|
2020
|
||||||||||
RMB | RMB | US$ | ||||||||||
(Note 2(e)) | ||||||||||||
Assets
|
||||||||||||
Current assets
|
||||||||||||
Cash and cash equivalents
|
1,113,193 | 3,293,573 | 504,762 | |||||||||
Restricted cash
|
1,392 | 164,889 | 25,270 | |||||||||
Short-term deposits
|
6,743,445 | 5,974,790 | 915,677 | |||||||||
Short-term investments
|
2,219,531 | 1,206,539 | 184,910 | |||||||||
Accounts receivable, net of allowance of RMB922 and RMB4,449 for 2019 and 2020, respectively
|
61,708 | 71,237 | 10,918 | |||||||||
Amounts due from related parties, net of allowance of nil and RMB299 for 2019 and 2020, respectively
|
51,936 | 64,802 | 9,931 | |||||||||
Prepayments and other current assets, net of allowance of nil and RMB324 for 2019 and 2020, respectively
|
400,615 | 495,108 | 75,879 | |||||||||
|
|
|
|
|
|
|||||||
Total current assets
|
10,591,820 | 11,270,938 | 1,727,347 | |||||||||
|
|
|
|
|
|
|||||||
Non-current
assets
|
||||||||||||
Deferred tax assets
|
45,816 | 48,313 | 7,404 | |||||||||
Investments
|
379,424 | 467,206 | 71,602 | |||||||||
Property and equipment, net
|
96,686 | 94,555 | 14,491 | |||||||||
Intangible assets, net
|
45,085 | 62,796 | 9,624 | |||||||||
Right-of-use
|
102,824 | 87,418 | 13,397 | |||||||||
Prepayments and other
non-current
assets
|
104,895 | 379,461 | 58,155 | |||||||||
|
|
|
|
|
|
|||||||
Total
non-current
assets
|
774,730 | 1,139,749 | 174,673 | |||||||||
|
|
|
|
|
|
|||||||
Total assets
|
11,366,550 | 12,410,687 | 1,902,020 | |||||||||
|
|
|
|
|
|
|||||||
Liabilities and shareholders’ equity
|
||||||||||||
Current liabilities
|
||||||||||||
Accounts payable (including amounts of the consolidated variable interest entity and its subsidiaries (“VIEs”) without recourse to the Company of RMB1,057 and RMB4,706 as of December 31, 2019 and 2020, respectively)
|
3,725 | 10,083 | 1,545 | |||||||||
Advances from customers and deferred revenue (including amounts of the consolidated VIEs without recourse to the Company of RMB842,355 and RMB473,492 as of December 31, 2019 and 2020, respectively)
|
845,966 | 485,878 | 74,464 | |||||||||
Income taxes payable (including amounts of the consolidated VIEs without recourse to the Company of RMB20,397 and RMB53,317 as of December 31, 2019 and 2020, respectively)
|
26,051 | 56,861 | 8,714 | |||||||||
Accrued liabilities and other current liabilities (including amounts of the consolidated VIEs without recourse to the Company of RMB989,274 and RMB492,164 as of December 31, 2019 and 2020, respectively)
|
1,460,025 | 1,707,289 | 261,654 | |||||||||
Amounts due to related parties (including amounts of the consolidated VIEs without recourse to the Company of RMB77,169 and RMB31,791 as of December 31, 2019 and 2020, respectively)
|
79,032 | 95,457 | 14,629 | |||||||||
Lease liabilities due within one year (including amounts of the consolidated VIEs without recourse to the Company of RMB5,418 and RMB757 as of December 31, 2019 and 2020, respectively)
|
31,878 | 29,227 | 4,479 | |||||||||
|
|
|
|
|
|
|||||||
Total current liabilities
|
2,446,677 | 2,384,795 | 365,485 | |||||||||
|
|
|
|
|
|
|||||||
Non-current
liabilities
|
||||||||||||
Lease liabilities (including amounts of the consolidated VIEs without recourse to the Company of RMB4,800 and nil as of December 31, 2019 and 2020, respectively)
|
70,110 | 57,620 | 8,831 | |||||||||
Deferred tax liabilities (including amounts of the consolidated VIEs without recourse to the Company of nil and RMB540 as of December 31, 2019 and 2020, respectively)
|
— | 13,350 | 2,046 | |||||||||
Deferred revenue (including amounts of the consolidated VIEs without recourse to the Company of RMB164,913 and RMB178,144 as of December 31, 2019 and 2020, respectively)
|
164,913 | 178,144 | 27,302 | |||||||||
|
|
|
|
|
|
|||||||
Total
non-current
liabilities
|
235,023 | 249,114 | 38,179 | |||||||||
|
|
|
|
|
|
|||||||
Total liabilities
|
2,681,700 | 2,633,909 | 403,664 | |||||||||
|
|
|
|
|
|
|||||||
Commitments and contingencies
|
As of December 31,
|
||||||||||||
2019
|
2020
|
2020
|
||||||||||
RMB | RMB | US$ | ||||||||||
(Note 2(e)) | ||||||||||||
Shareholders’ equity
|
||||||||||||
Class A ordinary shares (US$0.0001 par value; 750,000,000 and 750,000,000 shares authorized, 67,101,314 and 83,490,841 shares issued and outstanding as of December 31, 2019 and 2020, respectively)
|
44 | 55 | 8 | |||||||||
Class B ordinary shares (US$0.0001 par value; 200,000,000 and 200,000,000 shares authorized, 152,357,321 and 152,357,321 shares issued and outstanding as of December 31, 2019 and 2020, respectively)
|
100 | 100 | 15 | |||||||||
Additional
paid-in
capital
|
10,081,946 | 11,465,575 | 1,757,176 | |||||||||
Statutory reserves
|
64,679 | 122,429 | 18,763 | |||||||||
Accumulated deficit
|
(1,986,054 | ) | (1,883,643 | ) | (288,681 | ) | ||||||
Accumulated other comprehensive income
|
524,135 | 72,262 | 11,075 | |||||||||
|
|
|
|
|
|
|||||||
Total shareholders’ equity
|
8,684,850 | 9,776,778 | 1,498,356 | |||||||||
|
|
|
|
|
|
|||||||
Total liabilities and shareholders’ equity
|
11,366,550 | 12,410,687 | 1,902,020 | |||||||||
|
|
|
|
|
|
For the year ended December 31,
|
||||||||||||||||
2018
|
2019
|
2020
|
2020
|
|||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
(Note 2(e)) | ||||||||||||||||
Net revenues
|
||||||||||||||||
Live streaming
|
4,442,845 | 7,976,214 | 10,311,624 | 1,580,326 | ||||||||||||
Advertising and others (including transactions with related parties of RMB16,300, RMB11,498 and RMB22,546 for the years ended December 31, 2018, 2019 and 2020, respectively)
|
220,595 | 398,287 | 602,750 | 92,375 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total net revenues
|
4,663,440 | 8,374,501 | 10,914,374 | 1,672,701 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cost of revenues
(1)
(including transactions with related parties of RMB266,852, RMB380,219 and RMB593,350
|
(3,933,647 | ) | (6,892,579 | ) | (8,646,308 | ) | (1,325,105 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross Profit
|
729,793 | 1,481,922 | 2,268,066 | 347,596 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating expenses
(1)
|
||||||||||||||||
Research and development expenses (including transactions with related parties of RMB10,042, RMB5,720 and RMB4,023 for the years ended December 31, 2018, 2019 and 2020, respectively)
|
(265,152 | ) | (508,714 | ) | (734,261 | ) | (112,530 | ) | ||||||||
Sales and marketing expenses (including transactions with related parties of RMB4,038, RMB13,350 and RMB24,966 for the years ended December 31, 2018, 2019 and 2020, respectively)
|
(189,207 | ) | (438,396 | ) | (558,012 | ) | (85,519 | ) | ||||||||
General and administrative expenses (including transactions with related parties of RMB3,080, RMB1,058 and RMB2,436 for the years ended December 31, 2018, 2019 and 2020, respectively)
|
(287,710 | ) | (352,824 | ) | (445,006 | ) | (68,200 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses
|
(742,069 | ) | (1,299,934 | ) | (1,737,279 | ) | (266,249 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Other income
|
38,938 | 79,390 | 194,169 | 29,758 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating income
|
26,662 | 261,378 | 724,956 | 111,105 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Interest and short-term investments income
|
156,549 | 304,491 | 313,366 | 48,025 | ||||||||||||
Fair value loss on derivative liabilities
|
(2,285,223 | ) | — | — | — | |||||||||||
Gain on fair value change of investment
|
— | — | 2,160 | 331 | ||||||||||||
Other
non-operating
expense
s
|
— | — | (10,010 | ) | (1,534 | ) | ||||||||||
Foreign currency exchange gains, net
|
51 | 1,157 | 2,056 | 315 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
(Loss) income before income tax benefits (expenses)
|
(2,101,961 | ) | 567,026 | 1,032,528 | 158,242 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income tax benefits (expenses)
|
50,943 | (96,078 | ) | (176,784 | ) | (27,093 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
(Loss) income before share of income (loss) in equity method investments, net of income taxes
|
(2,051,018 | ) | 470,948 | 855,744 | 131,149 | |||||||||||
Share of income (loss) in equity method investments, net of income taxes
|
113,329 | (2,775 | ) | 28,414 | 4,355 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net (loss) income attributable to HUYA Inc.
|
(1,937,689 | ) | 468,173 | 884,158 | 135,504 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Accretion to Series A redeemable convertible preferred shares (“Preferred Shares”)
|
(71,628 | ) | — | — | — | |||||||||||
Deemed dividend to Series A Preferred Shareholders
|
(496,995 | ) | — | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net (loss) income attributable to ordinary shareholders
|
(2,506,312 | ) | 468,173 | 884,158 | 135,504 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net (loss) income
|
(1,937,689 | ) | 468,173 | 884,158 | 135,504 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income
(loss):
|
||||||||||||||||
Foreign currency translation adjustments, net of nil tax
|
366,259 | 157,568 | (451,873 | ) | (69,253 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total comprehensive (loss) income attributable to HUYA Inc.
|
(1,571,430 | ) | 625,741 | 432,285 | 66,251 | |||||||||||
|
|
|
|
|
|
|
|
For the year ended December 31,
|
||||||||||||||||
2018
|
2019
|
2020
|
2020
|
|||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
(Note 2(e)) | ||||||||||||||||
Net (loss) income per ADS*
|
||||||||||||||||
—Basic
|
(15.02 | ) | 2.18 | 3.89 | 0.60 | |||||||||||
—Diluted
|
(15.02 | ) | 2.02 | 3.71 | 0.57 | |||||||||||
Weighted average number of ADSs used in calculating net (loss) income per ADS
|
||||||||||||||||
—Basic
|
166,828,435 | 214,811,862 | 227,081,238 | 227,081,238 | ||||||||||||
—Diluted
|
166,828,435 | 232,024,961 | 238,631,613 | 238,631,613 | ||||||||||||
Net (loss) income per ordinary share*
|
||||||||||||||||
—Basic
|
(15.02 | ) | 2.18 | 3.89 | 0.60 | |||||||||||
—Diluted
|
(15.02 | ) | 2.02 | 3.71 | 0.57 | |||||||||||
Weighted average number of ordinary shares used in calculating net (loss) income per ordinary share
|
||||||||||||||||
—Basic
|
166,828,435 | 214,811,862 | 227,081,238 | 227,081,238 | ||||||||||||
—Diluted
|
166,828,435 | 232,024,961 | 238,631,613 | 238,631,613 |
* |
Each ADS represents one Class A ordinary share.
|
For the year ended December 31,
|
||||||||||||||||
2018
|
2019
|
2020
|
2020
|
|||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
(Note 2(e)) | ||||||||||||||||
Cost of revenues
|
10,472 | 31,593 | 64,942 | 9,953 | ||||||||||||
Research and development expenses
|
30,643 | 86,296 | 150,723 | 23,099 | ||||||||||||
Sales and marketing expenses
|
1,832 | 5,919 | 9,879 | 1,514 | ||||||||||||
General and administrative expenses
|
183,748 | 157,936 | 182,664 | 27,994 |
Class A ordinary shares
|
Class B ordinary shares
|
Additional
paid-in
|
Statutory
|
Accumulated
|
Accumulated
other
comprehensive |
Total shareholders’
|
||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
capital
|
reserves
|
deficit
|
income
|
equity
|
||||||||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | RMB | RMB | ||||||||||||||||||||||||||||||
Balance at December 31, 2017
|
992,456 | 1 | 99,007,544 | 66 | 140,792 | — | (80,968 | ) | 308 | 60,199 | ||||||||||||||||||||||||||
Share-based compensation related to JOYY’s Share-based Awards
|
— | — | — | — | 5,833 | — | — | — | 5,833 | |||||||||||||||||||||||||||
Share-based compensation related to Huya Share-based Awards
|
— | — | — | — | 220,862 | — | — | — | 220,862 | |||||||||||||||||||||||||||
Class B ordinary shares converted to Class A ordinary shares resulted from the transfer of such shares from JOYY to other investors
|
8,750,223 | 6 | (8,750,223 | ) | (6 | ) | — | — | — | — | — | |||||||||||||||||||||||||
Accretion to Series A Preferred Shares redemption value prior to the extinguishment
|
— | — | — | — | (7,078 | ) | — | — | — | (7,078 | ) | |||||||||||||||||||||||||
Accretion to Series A Preferred Shares redemption value post the extinguishment
|
— | — | — | — | (6,274 | ) | — | (4,165 | ) | — | (10,439 | ) | ||||||||||||||||||||||||
Accretion to Series
B-2
Preferred Shares redemption value
|
— | — | — | — | (32,526 | ) | — | (21,585 | ) | — | (54,111 | ) | ||||||||||||||||||||||||
Deemed dividend to Series A Preferred Shareholders
|
— | — | — | — | (151,854 | ) | — | (345,141 | ) | — | (496,995 | ) | ||||||||||||||||||||||||
Issuance of Class A ordinary shares upon the completion of the initial public offering (“IPO”)
|
17,250,000 | 11 | — | — | 1,207,738 | — | — | — | 1,207,749 | |||||||||||||||||||||||||||
Conversion of Series A Preferred Shares to ordinary shares upon the completion of the IPO
|
17,647,058 | 11 | 4,411,765 | 3 | 436,485 | — | — | — | 436,499 | |||||||||||||||||||||||||||
Conversion of Series
B-2
Preferred Shares to ordinary shares upon the completion of the IPO
|
— | — | 64,488,235 | 41 | 2,665,050 | — | — | — | 2,665,091 | |||||||||||||||||||||||||||
Derecognition of derivative liabilities upon conversion
|
— | — | — | — | 3,188,827 | — | — | — | 3,188,827 | |||||||||||||||||||||||||||
Appropriation to statutory reserves
|
— | — | — | — | — | 34,634 | (34,634 | ) | — | — | ||||||||||||||||||||||||||
Net loss
|
— | — | — | — | — | — | (1,937,689 | ) | — | (1,937,689 | ) | |||||||||||||||||||||||||
Foreign currency translation adjustment, net of nil tax
|
— | — | — | — | — | — | — | 366,259 | 366,259 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance at December 31, 2018
|
44,639,737 | 29 | 159,157,321 | 104 | 7,667,855 | 34,634 | (2,424,182 | ) | 366,567 | 5,645,007 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A ordinary shares
|
Class B ordinary shares
|
Additional
paid-in
|
Statutory
|
Accumulated
|
Accumulated
other
comprehensive |
Total shareholders’
|
||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
capital
|
reserves
|
deficit
|
income
|
equity
|
||||||||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | RMB | RMB | ||||||||||||||||||||||||||||||
Balance at December 31, 2018
|
44,639,737 | 29 | 159,157,321 | 104 | 7,667,855 | 34,634 | (2,424,182 | ) | 366,567 | 5,645,007 | ||||||||||||||||||||||||||
Share-based compensation related to JOYY’s Share-based Awards
|
— | — | — | — | 1,996 | — | — | — | 1,996 | |||||||||||||||||||||||||||
Share-based compensation related to Huya Share-based Awards
|
— | — | — | — | 279,748 | — | — | — | 279,748 | |||||||||||||||||||||||||||
Class B ordinary shares converted to Class A ordinary shares
|
6,800,000 | 4 | (6,800,000 | ) | (4 | ) | — | — | — | — | — | |||||||||||||||||||||||||
Issuance of Class A ordinary shares upon the completion of the
follow-on
public offering
|
13,600,000 | 9 | — | — | 2,110,057 | — | — | — | 2,110,066 | |||||||||||||||||||||||||||
Issuance of ordinary shares for exercised share options
|
2,011,144 | 2 | — | — | 32,409 | — | — | — | 32,411 | |||||||||||||||||||||||||||
Issuance of ordinary shares for restricted share units
|
50,433 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Deemed distribution to JOYY
|
— | — | — | — | (10,119 | ) | — | — | — | (10,119 | ) | |||||||||||||||||||||||||
Appropriation to statutory reserves
|
— | — | — | — | — | 30,045 | (30,045 | ) | — | — | ||||||||||||||||||||||||||
Net income
|
— | — | — | — | — | — | 468,173 | — | 468,173 | |||||||||||||||||||||||||||
Foreign currency translation adjustment, net of nil tax
|
— | — | — | — | — | — | — | 157,568 | 157,568 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance at December 31, 2019
|
67,101,314 | 44 | 152,357,321 | 100 | 10,081,946 | 64,679 | (1,986,054 | ) | 524,135 | 8,684,850 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A ordinary shares
|
Class B ordinary shares
|
Additional
paid-in
|
Statutory
|
Accumulated
|
Accumulated
other
comprehensive |
Total shareholders’
|
||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
capital
|
reserves
|
deficit
|
income
|
equity
|
||||||||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | RMB | RMB | ||||||||||||||||||||||||||||||
Balance at December 31, 2019
|
67,101,314 | 44 | 152,357,321 | 100 | 10,081,946 | 64,679 | (1,986,054 | ) | 524,135 | 8,684,850 | ||||||||||||||||||||||||||
Cumulative effect of initial adoption of ASC 326
|
— | — | — | — | — | — | (3,067 | ) | — | (3,067 | ) | |||||||||||||||||||||||||
Balance at January 1, 2020
|
67,101,314 | 44 | 152,357,321 | 100 | 10,081,946 | 64,679 | (1,989,121 | ) | 524,135 | 8,681,783 | ||||||||||||||||||||||||||
Share-based compensation related to Huya Share-based Awards
|
— | — | — | — | 408,208 | — | — | — | 408,208 | |||||||||||||||||||||||||||
Issuance of ordinary shares for exercised share options
|
14,440,921 | 10 | — | — | 255,505 | — | — | — | 255,515 | |||||||||||||||||||||||||||
Issuance of ordinary shares for restricted share units
|
1,948,606 | 1 | — | — | (1 | ) | — | — | — | — | ||||||||||||||||||||||||||
Deemed distribution to JOYY
|
— | — | — | — | (1,013 | ) | — |
—
|
— | (1,013 | ) | |||||||||||||||||||||||||
Appropriation to statutory reserves
|
— | — | — | — | — | 57,750 | (57,750 | ) | — |
—
|
||||||||||||||||||||||||||
Increase in VIE’s share capital by transferring VIE’s retain earnings
|
— | — | — | — | 720,930 | — | (720,930 | ) | — | — | ||||||||||||||||||||||||||
Net income
|
— | — | — | — | — | — | 884,158 | — | 884,158 | |||||||||||||||||||||||||||
Foreign currency translation adjustment, net of nil tax
|
— | — | — | — | — | — | — | (451,873 | ) | (451,873 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance at December 31, 2020
|
83,490,841 | 55 | 152,357,321 | 100 | 11,465,575 | 122,429 | (1,883,643 | ) | 72,262 | 9,776,778 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31,
|
||||||||||||||||
2018
|
2019
|
2020
|
2020
|
|||||||||||||
RMB | RMB | RMB |
US$
(Note 2(e))
|
|||||||||||||
Cash flows from operating activities
|
||||||||||||||||
Net (loss) income attributable to HUYA Inc.
|
(1,937,689 | ) | 468,173 | 884,158 | 135,504 | |||||||||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities
|
||||||||||||||||
Depreciation of property and equipment
|
26,818 | 45,455 | 58,440 | 8,956 | ||||||||||||
Amortization of acquired intangible assets
|
8,224 | 17,080 | 44,362 | 6,799 | ||||||||||||
Amortization of
right-of-use
|
— | 25,229 | 28,376 | 4,349 | ||||||||||||
Expected credit loss expenses
|
632
|
— | 517 | 79 | ||||||||||||
Loss (gain) on disposal of property and equipment and other long-term assets
|
5 | (1,621 | ) | (648 | ) | (99 | ) | |||||||||
Share-based compensation
|
226,695 | 281,744 | 408,208 | 62,560 | ||||||||||||
Share of(income) loss in equity method investments, net of income
taxes
|
(113,329 | ) | 2,775 | (28,414 | ) | (4,355 | ) | |||||||||
Other
non-cash
income
|
— | (10,119 | ) | (1,013 | ) | (155 | ) | |||||||||
Deferred income tax (benefits)expenses
|
(50,943 | ) | (14,871 | ) | 18,608 | 2,852 | ||||||||||
Fair value loss of derivative liabilities
|
2,285,223 | — | — | — | ||||||||||||
Gain on fair value changes of investments
|
— | — | (2,160 | ) | (331 | ) | ||||||||||
Short-term investments income
|
(2,541 | ) | (21,497 | ) | (6,539 | ) | (1,002 | ) | ||||||||
Foreign currency exchange gains
|
(51 | ) | (1,157 | ) | (2,056 | ) | (315 | ) | ||||||||
Changes in operating assets and liabilities:
|
||||||||||||||||
Accounts receivable
|
(14,634 | ) | (17,909 | ) | (13,058 | ) | (2,001 | ) | ||||||||
Prepayments and other assets
|
(301,697 | ) | (115,353 | ) | (59,336 | ) | (9,094 | ) | ||||||||
Amounts due from related parties
|
(132,624 | ) | 186,903 | (12,121 | ) | (1,858 | ) | |||||||||
Accounts payable
|
(3,709 | ) | 90 | 4,288 | 657 | |||||||||||
Amounts due to related parties
|
26,278 | 44,359 | 16,421 | 2,517 | ||||||||||||
Advances from customers and deferred revenue
|
272,110 | 446,364 | (346,857 | ) | (53,159 | ) | ||||||||||
Lease liabilities
|
— | (23,536 | ) | (28,623 | ) | (4,387 | ) | |||||||||
Accrued liabilities and other current liabilities
|
428,693 | 607,254 | 246,511 | 37,780 | ||||||||||||
Income tax payable
|
— | 26,051 | 30,810 | 4,722 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash provided by operating activitie
s
|
717,461 | 1,945,414 | 1,239,874 | 190,019 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash flows from investing activities
|
||||||||||||||||
Placements of short-term deposits
|
(5,781,911 | ) | (7,166,676 | ) | (7,903,107 | ) | (1,211,204 | ) | ||||||||
Maturities of short-term deposits
|
1,775,811 | 5,553,758 | 8,387,957 | 1,285,511 | ||||||||||||
Cash received in connection with purchasing short-term deposits together with JOYY
|
7,096 | — | — | — | ||||||||||||
Placement of short-term investments
|
(863,753 | ) | (3,706,780 | ) | (2,200,000 | ) | (337,165 | ) | ||||||||
Maturities of short-term investments
|
566,132 | 1,808,908 | 3,208,602 | 491,740 | ||||||||||||
Purchase of property and equipment
|
(74,804 | ) | (61,210 | ) | (54,410 | ) | (8,339 | ) | ||||||||
Purchase of intangible assets
|
(52,583 | ) | (10,186 | ) | (63,581 | ) | (9,744 | ) | ||||||||
Prepayment for purchase of land use right
|
— | — | (310,220 | ) | (47,543 | ) | ||||||||||
Cash paid for long-term investments
|
(86,200 | ) | (92,944 | ) | (101,964 | ) | (15,627 | ) | ||||||||
Cash received from an investee due to withdrawal of investment
|
— | — | 2,000 | 307 | ||||||||||||
Prepayment for long-term investments
|
(67,250 | ) | — | — | — | |||||||||||
Cash received from an
investee for its partial disposal of an investment
|
— | — | 38,532 | 5,905 | ||||||||||||
Cash received from disposal of equity investments
|
10,000 | — | — | — | ||||||||||||
Proceeds from disposal of property and equipment
|
10 | 159 | 971 | 149 | ||||||||||||
Loan to a third party
|
— | (10,000 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash (used in)/provided by investing activities
|
(4,567,452 | ) | (3,684,971 | ) | 1,004,780 | 153,990 | ||||||||||
|
|
|
|
|
|
|
|
For the year ended December 31,
|
||||||||||||||||
2018
|
2019
|
2020
|
2020
|
|||||||||||||
RMB | RMB | RMB |
US$
(Note 2(e)) |
|||||||||||||
Cash flows from financing activities
|
||||||||||||||||
Proceeds from issuance of Series
B-2
Preferred Shares
|
2,919,112 | — | — | — | ||||||||||||
Net proceeds from issuance of ordinary shares upon IPO
|
1,207,749 | — | — | — | ||||||||||||
Net proceeds from issuance of ordinary shares upon
follow-on
public offering
|
— | 2,110,715 | — | — | ||||||||||||
Proceeds from exercise of vested share options
|
— | 22,936 | 265,294 | 40,658 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash provided by financing activities
|
4,126,861 | 2,133,651 | 265,294 | 40,658 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net increase in cash and cash equivalents and restricted cash
|
276,870 | 394,094 | 2,509,948 | 384,667 | ||||||||||||
Cash and cash equivalents and restricted cash at the beginning of the year
|
442,532 | 709,019 | 1,114,585 | 170,818 | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash
|
(10,383 | ) | 11,472 | (166,071 | ) | (25,453 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents and restricted cash at the end of the year
|
709,019 | 1,114,585 | 3,458,462 | 530,032 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
For the year ended December 31,
|
||||||||||||||||
2018
|
2019
|
2020
|
2020
|
|||||||||||||
RMB | RMB | RMB |
US$
(Note 2(e)) |
|||||||||||||
Supplemental disclosure of cash flows information:
|
||||||||||||||||
- Income tax paid
|
— | 84,898 | 185,888 | 28,489 | ||||||||||||
- Acquisition of property and equipment in form of accounts payable and amounts due to a related party
|
9,160 | 3,574 | 5,645 | 865 | ||||||||||||
-
Non-cash
transaction for acquiring an equity investment
|
— | 1,500 | — | — |
1.
|
Organization and principal activities
|
(a)
|
Organization and principal activities
|
(b)
|
Public offering
|
1.
|
Organization and principal activities (continued)
|
(c)
|
Principal subsidiaries and VIEs
|
Name
|
Place of
incorporation |
Date of
incorporation |
% of direct
or indirect economic ownership |
Principal activities
|
||||||||||
Wholly foreign-owned enterprise (“WFOE”)
|
||||||||||||||
Huya Limited
|
Hong Kong | January 4, 2017 | 100 | % |
Investment
holding
|
|||||||||
Guangzhou Huya Technology Co., Ltd. (“Huya Technology”)
|
PRC | June 16, 2017 | 100 | % | Software development | |||||||||
HUYA PTE. LTD.
|
Singapore | July 23, 2018 | 100 | % | Internet value added services | |||||||||
Hainan Huya Entertainment Information Technology Co., Ltd. (“Hain
a
n Huya”)
|
PRC | December 4, 2019 | 100 | % | Cultural and Creative services | |||||||||
VIE
|
||||||||||||||
Guangzhou Huya Information Technology Co., Ltd. (“Guangzhou Huya”)
|
PRC | August 10, 2016 | 100 | % | Internet value added services |
1.
|
Organization and principal activities (continued)
|
(d)
|
Variable interest entities
|
|
•
|
|
exercise effective control over Guangzhou Huya and its subsidiaries;
|
|
•
|
|
receive substantially all of the economic benefits of Guangzhou Huya and its subsidiaries; and
|
|
•
|
|
have an exclusive option to purchase all or part of the equity interests in Guangzhou Huya when and to the extent permitted by PRC law.
|
|
(i)
|
VIE agreements amongst Huya Technology, Guangzhou Huya and Guangzhou Huaduo and Guangzhou Qinlv
|
|
•
|
|
Exclusive Business Cooperation Agreement
|
1.
|
Organization and principal activities (continued)
|
(d)
|
Variable interest entities (continued)
|
|
•
|
|
Exclusive Purchase Option Agreement
|
|
•
|
|
Equity Pledge Agreement
|
|
•
|
|
Power of Attorney
|
|
(ii)
|
VIE agreements amongst Huya Technology, Guangzhou Huya and Linzhi Tencent
|
|
•
|
|
Exclusive Business Cooperation Agreement
|
1.
|
Organization and principal activities (continued)
|
(d)
|
Variable interest entities (continued)
|
• |
Exclusive Option Agreement
|
• |
Equity Interest Pledge Agreement
|
• |
Shareholder Voting Rights Proxy Agreement
|
1.
|
Organization and principal activities (continued)
|
(d)
|
Variable interest entities (continued)
|
• |
revoke or refuse to grant or renew the Group’s business and operating licenses;
|
• |
restrict or prohibit related party transactions between the wholly owned subsidiary of the Group and the VIE;
|
• |
impose fines, confiscate income or other requirements which the Group may find difficult or impossible to comply with;
|
• |
require the Group to alter, discontinue or restrict its operations;
|
• |
restrict or prohibit the Group’s ability to finance its operations, and;
|
• |
take other regulatory or enforcement actions against the Group that could be harmful to the Group’s business.
|
1.
|
Organization and principal activities (continued)
|
(d)
|
Variable interest entities (continued)
|
As of December 31,
|
||||||||
2019
|
2020
|
|||||||
RMB | RMB | |||||||
Total current assets
|
2,033,635 | 738,026 | ||||||
Total
non-current
asset
s
|
634,965 | 372,113 | ||||||
Total assets
|
2,668,600 | 1,110,139 | ||||||
|
|
|
|
|||||
Total current liabilities
|
1,935,670 | 1,056,227 | ||||||
Total
non-current
liabilities
|
169,713 | 178,684 | ||||||
Total liabilities
|
2,105,383 | 1,234,911 | ||||||
|
|
|
|
For the year ended December 31,
|
||||||||||||
2018
|
2019
|
2020
|
||||||||||
RMB | RMB | RMB | ||||||||||
Net revenues
|
4,659,245 | 8,293,317 | 10,738,074 | |||||||||
Net incom
e
|
406,803 | 1,323,915 | 7,808,958 |
For the year ended December 31,
|
||||||||||||
2018
|
2019
|
2020
|
||||||||||
RMB | RMB | RMB | ||||||||||
Net cash provided by operating activities
|
601,022 | 2,597,223 | 7,773,435 | |||||||||
Net cash (used in)/provided by investing activities
|
(516,902 | ) | (1,023,878 | ) | 1,083,634 | |||||||
Net cash used in financing activities
|
(3,647 | ) | (519 | ) | — |
2.
|
Principal accounting policies
|
(a)
|
Basis of presentation
|
(b)
|
Consolidation
|
(c)
|
Use of estimates
|
(d)
|
Foreign currency translation
|
2.
|
Principal accounting policies (continued)
|
(e)
|
Convenience translation
|
(f)
|
Cash and cash equivalents
|
i) |
Readily convertible to known amounts of cash throughout the maturity period;
|
ii) |
So near their maturity that they present insignificant risk of changes in value because of changes in interest rates.
|
(g)
|
Short-term deposits
|
(h)
|
Short-term investments
|
(i)
|
Receivables
|
2.
|
Principal accounting policies (continued)
|
(j)
|
Investments
|
(k)
|
Property and equipment
|
|
|
Estimated useful lives
|
|
|
Residual rate
|
|
||
Servers, computers and equipment
|
3-5 years
|
0%-5
%
|
||||||
Leasehold improvement
s
|
4-
5
|
0
%
|
||||||
Others
|
3-
5
|
0%-5
%
|
2.
|
Principal accounting policies (continued)
|
(l)
|
Intangible assets
|
Estimated useful lives
|
||||
Copyrights of video content
|
1
|
|||
License
|
|
|
15 years
|
|
Softwar
e
|
|
|
1 – 5 years
|
|
Domain names
|
15
|
|||
Trademar
k
|
5
|
(m)
|
Impairment of long-lived assets
|
(n)
|
Mezzanine equity
|
2.
|
Principal accounting policies (continued)
|
(o)
|
Revenue
|
For the year ended December 31,
|
||||||||||||
2018
|
2019
|
2020
|
||||||||||
RMB | RMB | RMB | ||||||||||
Live streaming
|
4,442,845 | 7,976,214 | 10,311,624 | |||||||||
Other revenues (i)
|
220,595 | 398,287 | 602,750 | |||||||||
|
|
|
|
|
|
|||||||
Total
|
4,663,440 | 8,374,501 | 10,914,374 | |||||||||
|
|
|
|
|
|
(i) |
Other revenues mainly include advertising and online games revenues.
|
(i)
|
Live streaming
|
2.
|
Principal accounting policies (continued)
|
(o)
|
Revenue (continued)
|
|
(i)
|
Live streaming (continued)
|
2.
|
Principal accounting policies (continued)
|
(o)
|
Revenue (continued)
|
(ii)
|
Advertising
|
2.
|
Principal accounting policies (continued)
|
(o)
|
Revenue (continued)
|
(iii)
|
Online games revenues
|
2.
|
Principal accounting policies (continued)
|
(o)
|
Revenue (continued)
|
2.
|
Principal accounting policies (continued)
|
(o)
|
Revenue (continued)
|
2021
|
2022 and after
|
Total
|
||||||||||
RMB | RMB | RMB | ||||||||||
Revenue expected to be recognized
|
485,878 | 178,144 | 664,022 |
(p)
|
Cost of revenues
|
(q)
|
Research and development expenses
|
(r)
|
Sales and marketing expenses
|
(s)
|
General and administrative expenses
|
(t)
|
Employee social security and welfare benefits
|
2.
|
Principal accounting policies (continued)
|
(u)
|
Share-based compensation
|
2.
|
Principal accounting policies (continued)
|
(u)
|
Share-based compensation (continued)
|
2.
|
Principal accounting policies (continued)
|
(v)
|
Leases
|
(w)
|
Income taxes
|
2.
|
Principal accounting policies (continued)
|
(x)
|
Statutory reserves
|
(y)
|
Related parties
|
(z)
|
Dividends
|
2.
|
Principal accounting policies (continued)
|
(aa)
|
(Loss) income per share
|
(bb)
|
Segment reporting
|
2.
|
Principal accounting policies (continued)
|
(cc)
|
Recently issued accounting pronouncements
|
3.
|
Certain risks
|
(a)
|
Foreign exchange risk
|
(b)
|
Credit risk
|
4.
|
Cash and cash equivalents
|
December 31, 2019
|
December 31, 2020
|
|||||||||||||||
Amount
|
RMB
equivalent
|
Amount
|
RMB
equivalent
|
|||||||||||||
RMB
|
475,991 | 475,991 | 989,824 | 989,824 | ||||||||||||
US$
|
88,716 | 618,902 | 344,450 | 2,247,500 | ||||||||||||
SGD
|
3,537 | 18,300 | 11,131 | 54,892 | ||||||||||||
Others(i)
|
N/A | — | N/A | 1,357 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
1,113,193 | 3,293,573 | ||||||||||||||
|
|
|
|
|
(i)
|
As of December 31, 2020, the other currencies consist of Hong Kong Dollar, Brazilian Real and Thai Baht.
|
5.
|
Restricted cash
|
6.
|
Short-term deposits
|
December 31, 2019
|
December 31, 2020
|
|||||||||||||||
Amount
|
RMB
equivalent
|
Amount
|
RMB
equivalent
|
|||||||||||||
RMB
|
500,000 | 500,000 | 1,800,000 | 1,800,000 | ||||||||||||
US$
|
894,964 | 6,243,445 | 639,824 | 4,174,790 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
6,743,445 | 5,974,790 | ||||||||||||||
|
|
|
|
7.
|
Short-term investments
|
December 31, 2019
|
December 31, 2020
|
|||||||||||||||
Amount
|
RMB
equivalent
|
Amount
|
RMB
equivalent
|
|||||||||||||
RMB
|
2,211,055 | 2,211,055 | 1,206,539 | 1,206,539 | ||||||||||||
US$
|
1,215 | 8,476 | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
2,219,531 | 1,206,539 | ||||||||||||||
|
|
|
|
8.
|
Accounts receivable, net
|
December 31,
|
||||||||
2019
|
2020
|
|||||||
RMB | RMB | |||||||
Accounts receivable, gross
|
62,630 | 75,686 | ||||||
Less: expected credit loss provision
|
(922 | ) | (4,449 | ) | ||||
|
|
|
|
|||||
Accounts receivable, net
|
61,708 | 71,237 | ||||||
|
|
|
|
8.
|
Accounts receivable, net (continued)
|
For the years ended December 31,
|
||||||||||||
2018
|
2019
|
2020
|
||||||||||
RMB | RMB | RMB | ||||||||||
Beginning balance prior to ASC 32
6
|
|
|
—
|
|
|
|
—
|
|
|
|
(922
|
) |
Impact of adoption to ASC
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,122
|
) |
Balance at beginning of the year
|
(500 | ) | (922 | ) |
|
|
(4,044
|
) | ||||
Current year provision
|
(632 | ) | — |
|
|
(1,907
|
) | |||||
Current year reversa
l
|
210 | — |
|
|
1,502
|
|
||||||
|
|
|
|
|
|
|||||||
Balance at end of the yea
r
|
(922 | ) | (922 | ) |
|
|
(4,449 | ) | ||||
|
|
|
|
|
|
9.
|
Prepayments and other current assets
|
December 31,
|
||||||||
2019
|
2020
|
|||||||
RMB | RMB | |||||||
Prepayments to vendors and content providers
|
184,744 | 203,972 | ||||||
Interests receivable
|
168,739 | 103,531 | ||||||
Input value-added tax to be deducted
|
2,059 | 82,966 | ||||||
Prepayment of income tax
|
— | 58,601 | ||||||
Receivables from exercise of vested share options
|
9,475 | 13,285 | ||||||
Loan to a third party
|
10,000 | 11,350 | ||||||
Prepayments to third-party payment platform
|
7,912 | 6,093 | ||||||
Other
s
|
17,686 | 15,634 | ||||||
Less: expected credit loss provision
|
— | (324 | ) | |||||
|
|
|
|
|||||
Total
|
400,615 | 495,108 | ||||||
|
|
|
|
|
|
For the years ended December 31,
|
|
|||||||||
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|||
|
|
RMB
|
|
|
RMB
|
|
|
RMB
|
|
|||
Beginning balance prior to ASC 326
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Impact of adoption to ASC
|
|
|
—
|
|
|
|
—
|
|
|
|
(308
|
)
|
Balance at beginning of the year
|
|
|
—
|
|
|
|
—
|
|
|
|
(308
|
)
|
Current year provision
|
|
|
—
|
|
|
|
—
|
|
|
|
(155
|
)
|
Current year reversal
|
|
|
—
|
|
|
|
—
|
|
|
|
139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of the year
|
|
|
—
|
|
|
|
—
|
|
|
|
(324
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
10.
|
Investments
|
December 31,
|
||||||||
2019
|
2020
|
|||||||
RMB | RMB | |||||||
Equity method investments (i)
|
203,730 | 187,388 | ||||||
Equity investments without readily determinable fair values (ii)
|
175,694 | 279,818 | ||||||
|
|
|
|
|||||
379,424 | 467,206 | |||||||
|
|
|
|
|
(i) |
In 2019 and 2020, the Company’s equity method investment in an investment fund which owns equity interest of a privately held entity. The privately held entity engages primarily in developing and operating mobile games. For the year ended December 31, 2019 and 2020, the Company recognized the share of cumulative income of this equity method investment with amount of nil and RMB29,231 respectively.
|
(ii) |
In 2019 and 2020, the Company acquired equity interests of five and four privately-held entities with a total consideration of RMB159,494 and RMB101,964, respectively.
|
11.
|
Property and equipment, net
|
December 31,
|
||||||||
2019
|
2020
|
|||||||
RMB | RMB | |||||||
Gross carrying amount
|
||||||||
Servers, computers and equipment
|
142,236 | 186,874 | ||||||
Leasehold improvements
|
32,038 | 34,244 | ||||||
Others
|
10,603 | 11,002 | ||||||
|
|
|
|
|||||
Tota
l
|
184,877 | 232,120 | ||||||
|
|
|
|
|||||
Less: accumulated depreciation
|
(88,191 | ) | (137,565 | ) | ||||
|
|
|
|
|||||
Property and equipment, net
|
96,686 | 94,555 | ||||||
|
|
|
|
12.
|
Intangible assets, net
|
December 31,
|
||||||||
2019
|
2020
|
|||||||
RMB | RMB | |||||||
Gross carrying amount
|
||||||||
Copyrights of video content
|
30,021 | 83,865 | ||||||
License
|
32,000 | 32,000 | ||||||
Software
|
3,125 | 11,142 | ||||||
Domain name
s
|
5,120 | 5,283 | ||||||
Trademark
|
1,132 | 1,132 | ||||||
|
|
|
|
|||||
Total of gross carrying amount
|
71,398 | 133,422 | ||||||
|
|
|
|
|||||
Less: accumulated amortization
|
||||||||
Copyrights of video content
|
(17,689 | ) | (53,262 | ) | ||||
License
|
(3,556 | ) | (5,689 | ) | ||||
Software
|
(2,756 | ) | (8,728 | ) | ||||
Domain names
|
(1,613 | ) | (2,022 | ) | ||||
Trademark
|
(699 | ) | (925 | ) | ||||
|
|
|
|
|||||
Total accumulated amortization
|
(26,313 | ) | (70,626 | ) | ||||
|
|
|
|
|||||
Intangible assets, net
|
45,085 | 62,796 | ||||||
|
|
|
|
Year ended December 31, |
Amortization expense
of intangible assets |
|||
RMB | ||||
2021
|
22,782 | |||
2022
|
11,308 | |||
2023
|
6,453 | |||
2024
|
2,503 | |||
2025
|
2,503 |
December 31,
|
||||||||
2019
|
2020
|
|||||||
Copyrights of video content
|
|
|
2 years
|
|
|
|
2 years
|
|
License
|
|
|
15
|
|
|
|
15
|
|
Software
|
1 year | 2 years | ||||||
Domain names
|
15
|
15
|
||||||
Trademark
|
5 years | 5 years |
13.
|
Prepayments and other non-current assets
|
December 31,
|
||||||||
2019
|
2020
|
|||||||
RMB | RMB | |||||||
Prepayments for purchase of land use right (i)
|
— | 310,220 | ||||||
Prepayments to vendors and content providers
|
93,502 | 58,706 | ||||||
Refundable lease deposits
|
4,826 | 8,173 | ||||||
Prepayments for equity investments
|
2,000 | — | ||||||
Others
|
4,567 | 2,362 | ||||||
|
|
|
|
|||||
Total
|
104,895 | 379,461 | ||||||
|
|
|
|
|
(i)
|
In November 2020, the Company entered into an agreement for acquisition of land use rights for operations. As
of
December 31, 2020, the prepayment
amounted
to RMB310,220.
|
14.
|
Advances from customers and deferred revenue
|
December 31,
|
||||||||
2019
|
2020
|
|||||||
RMB | RMB | |||||||
|
||||||||
Deferred revenue, current
|
795,005 | 399,053 | ||||||
Advances from customers
|
|
|
50,961
|
|
|
|
86,825
|
|
|
|
|
|
|||||
Total current advances from customers and deferred revenue
|
845,966 | 485,878 | ||||||
|
|
|
|
|||||
Deferred revenue,
non-current
|
164,913 | 178,144 | ||||||
|
|
|
|
|||||
Total
non-current
deferred revenue
|
164,913 | 178,144 | ||||||
|
|
|
|
15.
|
Accrued liabilities and other current liabilities
|
December 31,
|
||||||||
2019
|
2020
|
|||||||
RMB | RMB | |||||||
Revenue sharing fees
|
817,792 | 990,867 | ||||||
Salaries and welfare
|
251,914 | 291,466 | ||||||
Marketing and promotion expenses
|
61,210 | 152,010 | ||||||
Bandwidth costs
|
167,793 | 86,967 | ||||||
Deposits from content providers, suppliers and advertising customers
|
47,386 | 50,909 | ||||||
License fees
|
48,138 | 40,749 | ||||||
Other taxes payable
|
40,349 | 15,002 | ||||||
Others
|
25,443 | 79,319 | ||||||
|
|
|
|
|||||
Total
|
1,460,025 | 1,707,289 | ||||||
|
|
|
|
16.
|
Cost of revenues
|
For the year ended December 31,
|
||||||||||||
2018
|
2019
|
2020
|
||||||||||
RMB | RMB | RMB | ||||||||||
Revenue sharing fees and content costs
|
3,060,836 | 5,552,712 | 7,086,832 | |||||||||
Bandwidth costs
|
652,758 | 800,827 | 879,172 | |||||||||
Salaries and welfare
|
101,939 | 255,258 | 306,805 | |||||||||
Payment handling costs
|
22,780 | 120,429 | 154,538 | |||||||||
Share-based compensation
|
10,472 | 31,593 | 64,942 | |||||||||
Others
|
84,862 | 131,760 | 154,019 | |||||||||
|
|
|
|
|
|
|||||||
Total
|
3,933,647 | 6,892,579 | 8,646,308 | |||||||||
|
|
|
|
|
|
17.
|
Other income
|
18.
|
Taxation
|
(a)
|
PRC value-added tax and related surcharges
|
(b)
|
Income taxes
|
18.
|
Taxation (continued)
|
(b)
|
Income taxes (continued)
|
• |
Huya Technology was qualified as a Software Enterprise, and enjoyed the zero preferential tax rate starting from 2017 and 12.5% preferential tax rate starting from 2019. In 2019 and 2020, Huya Technology is qualified as a KNSE and applied the income tax rate of 10% for the years of 2019 and 2020 pursuant to SAT Public Notice [2018] No.23 (“Circular 23”).
|
• |
Guangzhou Huya applied for the HNTE qualification and obtained approval in November 2018. It
is
entitled to enjoy the preferential tax rate of 15% as an HNTE for three years starting from 2018, and should apply for HNTE qualification renewal in 2021.
|
• |
Hainan Huya was qualified as an EIE in Hainan free trade port, and enjoyed the preferential tax rate of 15% for five years starting from 2020.
|
• |
Most of the remaining PRC subsidiaries and VIEs were subject to 25% EIT for the years reported.
|
18.
|
Taxation (continued)
|
(b)
|
Income taxes (continued)
|
18.
|
Taxation (continued)
|
(b)
|
Income taxes (continued)
|
For the year ended December 31,
|
||||||||||||
2018
|
2019
|
2020
|
||||||||||
RMB | RMB | RMB | ||||||||||
PRC entitie
s
|
169,320 | 796,062 | 994,163 | |||||||||
Non-PRC entities (i)
|
(2,271,281 | ) | (229,036 | ) | 38,365 | |||||||
|
|
|
|
|
|
|||||||
Total
|
(2,101,961 | ) | 567,026 | 1,032,528 | ||||||||
|
|
|
|
|
|
(i) |
The loss before tax incurred by
non-PRC
entities for the year ended December 31, 2018 was mainly due to the fair value loss on derivative liabilities amounting to RMB2,285,223.
|
For the year ended December 31,
|
||||||||||||
2018
|
2019
|
2020
|
||||||||||
RMB | RMB | RMB | ||||||||||
Income tax benefits (expenses) applicable to China operations
|
||||||||||||
Current income tax expense
s
|
— | (110,408 | ) | (142,710 | ) | |||||||
Deferred income tax benefits
(expenses)
|
50,943 | 14,871 | (18,818 | ) | ||||||||
|
|
|
|
|
|
|||||||
Subtotal income tax benefits (expenses) applicable to China operations
|
50,943 | (95,537 | ) | (161,528 | ) | |||||||
|
|
|
|
|
|
|||||||
Income tax expenses applicable to
Non-PRC operations
|
||||||||||||
Current income tax expenses
|
— | (541 | ) | (15,466 | ) | |||||||
Deferred income tax benefits
|
— | — | 210 | |||||||||
Subtotal income tax benefits (expenses) applicable to Non-PRC operations
|
|
|
—
|
|
|
|
(541
|
)
|
|
|
(15,256
|
)
|
|
|
|
|
|
|
|||||||
Total income tax benefits (expenses)
|
50,943 | (96,078 | ) | (176,784 | ) | |||||||
|
|
|
|
|
|
18.
|
Taxation (continued)
|
(b)
|
Income taxes (continued)
|
For the year ended December 31,
|
||||||||||||
2018
|
2019
|
2020
|
||||||||||
PRC Statutory income tax rate
|
(25.0 | )% | (25.0 | )% | (25.0 | )% | ||||||
Effect of tax holiday and preferential tax benefit
|
(2.2 | )% | 18.9 | % | 12.3 | % | ||||||
Effect of different tax rates available to different jurisdictions (i)
|
26.0 | % | 3.3 | % | 1.6 | % | ||||||
Permanent differences (ii)
|
1.5 | % | (6.7 | )% | (6.1 | )% | ||||||
Change in valuation allowance
|
(1.7 | )% | (15.8 | )% | (4.8 | )% | ||||||
Effect of Super Deduction available to the Group
|
(1.0 | )% | 8.3 | % | 4.9 | % | ||||||
|
|
|
|
|
|
|||||||
Effective income tax rate
|
(2.4 | )% | (17.0 | )% | (17.1 | )% | ||||||
|
|
|
|
|
|
|||||||
Effect of tax holidays inside the PRC on basic earnings per share/ADS (RMB)
|
0.24 | 0.42 | 0.56 | |||||||||
|
|
|
|
|
|
(i) |
For the year ended December 31, 2018, effect of different tax rates available to different jurisdictions is mainly driven by the fair value loss of derivatives liabilities recognized in relation to the conversion features of the
Pre-IPO
Preferred Shares (Note 20) in HUYA which is subject to an income tax rate of 0% under the tax laws of Cayman Islands.
|
|
(ii)
|
Permanent differences mainly arise from expenses not deductible for tax purposes including primarily share-based compensation costs and expenses incurred by subsidiaries and VIEs.
|
18.
|
Taxation (continued)
|
(b)
|
Income taxes (continued)
|
December 31,
|
||||||||
2019
|
2020
|
|||||||
RMB | RMB | |||||||
Deferred tax assets
|
||||||||
Tax loss carried forward
|
97,795 | 142,408 | ||||||
Deferred revenu
e
|
62,410 | 2,898 | ||||||
Unrealized profit arising from elimination of inter-company transactions
|
|
|
—
|
|
|
|
45,354
|
|
Others
|
246 | 1,084 | ||||||
|
|
|
|
|||||
160,451 | 191,744 | |||||||
|
|
|
|
|||||
Less: Valuation allowance (i)
|
(94,637 | ) | (143,431 | ) | ||||
|
|
|
|
|||||
Total deferred tax assets
|
65,814 | 48,313 | ||||||
|
|
|
|
|||||
Deferred tax liabilities
|
||||||||
Equity investee
|
19,998 | — | ||||||
|
|
|
|
|||||
Total deferred tax liabilities
|
19,998 | — | ||||||
|
|
|
|
|||||
Net deferred tax assets
|
45,816 | 48,313 | ||||||
|
|
|
|
|||||
Deferred tax liabilities
|
|
|
|
|
|
|
|
|
Equity investee
|
|
|
—
|
|
|
|
13,350
|
|
Total deferred tax liabilitie
s
|
|
|
—
|
|
|
|
13,350
|
|
(i) |
Valuation allowance is provided against deferred tax assets when the Group determines that it is more likely than not that the deferred tax assets will not be utilized in the future. In making such determination, the Group considered factors including future taxable income exclusive of reversing temporary differences and tax loss carry forwards. Valuation allowance as of December 31, 2019 and 2020 were provided for net operating loss carry forward, which was mainly incurred by the overseas subsidiaries, because such deferred tax assets are not more likely than not to be realized based on the Group’s estimate of its future taxable income. If events occur in the future that allow the Group to realize more of its deferred income tax than the presently recorded amounts, an adjustment to the valuation allowances will result in a decrease in tax expense when those events occur
.
|
18.
|
Taxation (continued)
|
(b)
|
Income taxes (continued)
|
For the year ended December 31,
|
||||||||||||
2018
|
2019
|
2020
|
||||||||||
RMB | RMB | RMB | ||||||||||
Balance at beginning of the year
|
57,756 | 21,899 | 94,637 | |||||||||
Addition
s
|
21,662 | 89,002 | 61,069 | |||||||||
Reversals/write-off
|
(57,519 | ) | (16,264 | ) | (12,275 | ) | ||||||
|
|
|
|
|
|
|||||||
Balance at end of the year
|
21,899 | 94,637 | 143,431 | |||||||||
|
|
|
|
|
|
19.
|
Ordinary shares
|
20.
|
Redeemable convertible preferred shares
|
20.
|
Redeemable convertible preferred shares (continued)
|
20.
|
Redeemable convertible preferred shares (continued)
|
20.
|
Redeemable convertible preferred shares (continued)
|
20.
|
Redeemable convertible preferred shares (continued)
|
20.
|
Redeemable convertible preferred shares (continued)
|
20.
|
Redeemable convertible preferred shares (continued)
|
20.
|
Redeemable convertible preferred shares (continued)
|
Prior to the extinguishment
|
Number of shares
|
Amount
|
||||||
RMB
|
||||||||
Mezzanine equity balance as of January 1, 2018
|
22,058,823 | 509,668 | ||||||
Accretion to Series A Preferred Shares redemption value prior to the extinguishment
|
— | 7,078 | ||||||
Foreign exchange
|
— | (17,405 | ) | |||||
|
|
|
|
|||||
Mezzanine equity balance as of March 8, 2018
|
22,058,823 | 499,341 | ||||||
|
|
|
|
Post extinguishment
|
Number of shares
|
Amount
|
||||||
RMB
|
||||||||
Mezzanine equity balance as of the extinguishment date
|
22,058,823 | 499,341 | ||||||
Revaluation of fair value of the whole instrument upon the extinguishment as of March 8, 2018, recognized as deemed dividend to Series A Preferred Shareholders
|
— | 496,995 | ||||||
Bifurcation of conversion feature as of March 8, 2018
|
— | (572,237 | ) | |||||
Accretion to Series A Preferred Shares redemption value from March 9, 2018 to May 10, 201
8
|
— | 10,439 | ||||||
Foreign exchange
|
— | 1,961 | ||||||
Conversion of Preferred Shares to ordinary shares upon the completion of the IPO
|
(22,058,823 | ) | (436,499 | ) | ||||
|
|
|
|
|||||
Mezzanine equity balance as of December 31, 2018
|
— | — | ||||||
|
|
|
|
20.
|
Redeemable convertible preferred shares (continued)
|
21.
|
Share-based compensation
|
For the year ended December 31,
|
||||||||||||
2018
|
2019
|
2020
|
||||||||||
RMB | RMB | RMB | ||||||||||
Share-based compensation expenses
|
||||||||||||
- Related to Huya Share-based Awards
|
220,862 | 279,748 | 408,208 | |||||||||
- Related to JOYY’s Share-based Awards
|
5,833 | 1,996 | — | |||||||||
|
|
|
|
|
|
|||||||
Total
|
226,695 | 281,744 | 408,208 | |||||||||
|
|
|
|
|
|
(a)
|
Huya
Share-based Awards
|
21.
|
Share-based compensation (continued)
|
(a)
|
Huya Share-based Awards (continued)
|
Number of
options |
Weighted
average exercise price (US$) |
Weighted
average remaining contractual life (years) |
Aggregate
intrinsic value
(US$)
|
|||||||||||||
As of December 31, 2018
|
17,520,555 | 2.5210 | 8.82 | 227,049 | ||||||||||||
Forfeited
|
(257,750 | ) | 2.5500 | |||||||||||||
Exercised
|
(2,011,144 | ) | 2.3290 | |||||||||||||
|
|
|||||||||||||||
As of December 31, 2019
|
15,251,661 | 2.5458 | 7.84 | 234,939 | ||||||||||||
|
|
|||||||||||||||
Forfeite
d
|
(18,000 | ) | 2.5500 | |||||||||||||
Exercised
|
(14,440,921 | ) | 2.5456 | |||||||||||||
|
|
|||||||||||||||
As of December 31, 2020
|
792,740 | 2.5500 | 6.61 | 13,778 | ||||||||||||
|
|
|||||||||||||||
Expected to vest at December 31, 2020
|
— | — | — | — | ||||||||||||
|
|
|||||||||||||||
Exercisable as of December 31, 2020
|
792,740 | 2.5500 | 6.61 | 13,778 | ||||||||||||
|
|
2018
|
||||
Weighted average fair value per option granted
|
US$ | 5.2130 | ||
Weighted average exercise price
|
US$ | 2.47 | ||
Risk-free interest rate
(1)
|
2.83 | % | ||
Expected term (in year)
(2)
|
10 | |||
Expected volatility
(3)
|
55 | % | ||
Dividend yield
(4)
|
— |
(1) |
The risk-free interest rate of periods within the contractual life of the share option is based on the China Government Bond yield as at the valuation dates.
|
(2) |
The expected term is the contract life of the option.
|
(3) |
Expected volatility is estimated based on the average of historical volatilities of the comparable companies in the same industry as at the valuation dates.
|
(4) |
The Company has no history or expectation of paying dividend on its ordinary shares. The expected dividend yield was estimated based on the Company’s expected dividend policy over the expected term of the option.
|
21.
|
Share-based compensation (continued)
|
(
a
)
|
Huya Share-based Awards (continued)
|
21.
|
Share-based compensation (continued)
|
(
a
)
|
Huya Share-based Awards (continued)
|
Number of
restricted share units |
Weighted
average
grant-date
fair value (US$) |
|||||||
Outstanding, December 31, 2018
|
4,107,185 | 9.0331 | ||||||
Granted
|
2,908,370 | 22.7642 | ||||||
Forfeited
|
(270,707 | ) | 14.8129 | |||||
Vested
|
(465,000 | ) | 7.1600 | |||||
|
|
|||||||
Outstanding, December 31, 2019
|
6,279,848 | 15.4350 | ||||||
|
|
|||||||
Granted
|
3,144,152 | 18.6180 | ||||||
Forfeited
|
(603,929 | ) | 17.9943 | |||||
Veste
d
|
(2,175,765 | ) | 13.6528 | |||||
|
|
|||||||
Outstanding, December 31, 2020
|
6,644,306 | 17.1506 | ||||||
|
|
|||||||
Expected to vest at December 31, 2020
|
6,262,829 | 17.0442 | ||||||
|
|
(b)
|
JOYY’s Share-based Awards
|
22.
|
Net (loss) income per share
|
For the year ended December 31,
|
||||||||||||
2018
|
2019
|
2020
|
||||||||||
RMB | RMB | RMB | ||||||||||
Numerator:
|
||||||||||||
Net (loss) income
|
(1,937,689 | ) | 468,173 | 884,158 | ||||||||
Accretion to Preferred Shares redemption value
|
(71,628 | ) | — | — | ||||||||
Deemed dividend to Series A Preferred Shareholders
|
(496,995 | ) | — | — | ||||||||
|
|
|
|
|
|
|||||||
Numerator for basic and diluted net (loss) income per share
|
(2,506,312 | ) | 468,173 | 884,158 | ||||||||
|
|
|
|
|
|
|||||||
Denominator:
|
||||||||||||
Denominator for basic calculation—weighted average number of Class A and Class B ordinary shares outstanding
|
166,828,435 | 214,811,862 | 227,081,238 | |||||||||
—Diluted effect of share option
|
— | 14,060,031 | 8,076,339 | |||||||||
—Diluted effect of restricted share units
|
— | 3,153,068 | 3,474,036 | |||||||||
Denominator for diluted calculation
|
166,828,435 | 232,024,961 | 238,631,613 | |||||||||
Net (loss) income per ordinary share
|
||||||||||||
—Basic
|
(15.02 | ) | 2.18 | 3.89 | ||||||||
—Diluted
|
(15.02 | ) | 2.02 | 3.71 | ||||||||
Net (loss) income per ADS*
|
||||||||||||
—Basic
|
(15.02 | ) | 2.18 | 3.89 | ||||||||
—Diluted
|
(15.02 | ) | 2.02 | 3.71 |
* |
Each ADS represents one Class A ordinary share.
|
23.
|
Related party transactions
|
For the year ended December 31,
|
||||||||||||
2018
|
2019
|
2020
|
||||||||||
RMB | RMB | RMB | ||||||||||
Operation support services provided by Tencent
|
106,547 | 219,403 | 342,487 | |||||||||
Content cost charged by Tencent
|
88,075 | 123,204 | 127,224 | |||||||||
Payment on behalf of Tencent
|
— | 16,127 | 16,449 | |||||||||
Advertising and other revenues from Tencent
|
14,345 | 8,028 | 14,349 | |||||||||
Market promotion expenses charged by Tencent
|
2,174 | 12,777 | 11,208 | |||||||||
Others
|
— | 2,835 | 2,883 |
|
|
For the year ended December 31,
|
|
|||||||||
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|||
|
|
RMB
|
|
|
RMB
|
|
|
RMB
|
|
|||
Purchase of services by JOYY on behalf of Huya
|
|
|
37,408
|
|
|
|
22,622
|
|
|
|
18,945
|
|
Operation support services provided by JOYY
|
|
|
44,523
|
|
|
|
17,455
|
|
|
|
4,187
|
|
Deemed distribution to JOYY
|
|
|
—
|
|
|
|
10,119
|
|
|
|
1,013
|
|
Cash collected by JOYY as a payment platform for Huya
|
|
|
4,081,696
|
|
|
|
1,362,489
|
|
|
|
—
|
|
Repayment from JOYY in relation to the payment on behalf of Huya’s employees
|
|
|
1,229
|
|
|
|
15,306
|
|
|
|
—
|
|
Share-based compensation expenses related to JOYY’s Share-based Awards (
Note21(b))
|
|
|
5,833
|
|
|
|
1,996
|
|
|
|
—
|
|
Purchase of property and equipment and intangible assets from JOYY
|
|
|
6,422
|
|
|
|
294
|
|
|
|
—
|
|
Others
|
|
|
9,245
|
|
|
|
228
|
|
|
|
41
|
|
23.
|
Related party transactions (continued)
|
For the year ended December 31,
|
||||||||||||
2018
|
2019
|
2020
|
||||||||||
RMB | RMB | RMB | ||||||||||
Content cost charged by Tencent’s related parties
|
— | — | 79,784 | |||||||||
Operation support services provided by Tencent’s related parties
|
— | — | 12,326 | |||||||||
Market promotion expenses charged by Tencent’s related parties
|
— | — | 11,417 | |||||||||
Advertising and other revenues from Tencent’s related parties
|
— | — | 8,197 | |||||||||
Others
|
— | — | 10,301 |
For the year ended December 31,
|
||||||||||||
2018
|
2019
|
2020
|
||||||||||
RMB | RMB | RMB | ||||||||||
Content cost
|
— | — | 5,577 |
23.
|
Related party transactions (continued)
|
December 31,
|
||||||||
2019
|
2020
|
|||||||
RMB | RMB | |||||||
Amounts due from related parties
|
||||||||
Tencent
|
41,129 | 59,832 | ||||||
JOYY
|
10,807 | 4,913 | ||||||
Others
|
— | 356 | ||||||
Less: expected credit loss provision
|
— | (299 | ) | |||||
|
|
|
|
|||||
Total
|
51,936 | 64,802 | ||||||
|
|
|
|
|||||
Amounts due to related parties
|
||||||||
Tencent
|
78,832 | 85,304 | ||||||
Others
|
200 | 10,153 | ||||||
|
|
|
|
|||||
Tota
l
|
79,032 | 95,457 | ||||||
|
|
|
|
|
|
For the years ended
December 31,
|
|
|||||||||
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|||
|
|
RMB
|
|
|
RMB
|
|
|
RMB
|
|
|||
Beginning balance prior to ASC 326
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Impact of adoption to ASC
|
|
|
—
|
|
|
|
—
|
|
|
|
(203
|
)
|
Balance at beginning of the year
|
|
|
—
|
|
|
|
—
|
|
|
|
(203
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current year provision
|
|
|
—
|
|
|
|
—
|
|
|
|
(180
|
)
|
Current year reversal
|
|
|
—
|
|
|
|
—
|
|
|
|
84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of the year
|
|
|
—
|
|
|
|
—
|
|
|
|
(299
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
24.
|
Fair value measurements
|
24.
|
Fair value measurements (continued)
|
As of December 31, 2019
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
RMB | RMB | RMB | RMB | |||||||||||||
Assets
|
||||||||||||||||
Cash equivalents (i)
|
— | — | — | — | ||||||||||||
Short-term investments (ii)
|
108,476 | 2,111,055 | — | 2,219,531 | ||||||||||||
|
|
|
|
|
|
|
|
As of December 31, 2020
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
RMB | RMB | RMB | RMB | |||||||||||||
Assets
|
||||||||||||||||
Cash equivalents (i)
|
401,269 | — | — | 401,269 | ||||||||||||
Short-term investments (ii)
|
— | 1,206,539 | — | 1,206,539 | ||||||||||||
|
|
|
|
|
|
|
|
(i) |
Cash equivalents mainly consist of time deposits with original maturities of three months or less and highly liquid investments that are readily convertible to known amounts of cash. The fair values of cash equivalents are determined based on the pervasive interest rates in the market. The Company classifies the valuation techniques that use the pervasive interest rates input as Level 1 of fair value measurements.
|
(ii) |
Short-term investments represented the investments issued by commercial banks and financial institution with a variable interest rate indexed to the performance of underlying assets within one year. For the instruments whose fair value is provided by banks at the end of each period, the Company classifies the valuation techniques that use these inputs as Level 1 of fair value measurements. For the instruments whose fair values are estimated based on quoted prices of similar products provided by banks at the end of each period, the Company classifies the valuation techniques that use these inputs as Level 2 of fair value measurements.
|
25.
|
Leases
|
For the year ended December 31,
|
Future minimum payments
|
|||
RMB | ||||
2021
|
30,001 | |||
2022
|
30,993 | |||
2023
|
27,330 | |||
2024
|
3,587 | |||
2025 and thereafter
|
1,837 | |||
|
|
|||
Total undiscounted cash flows
|
93,748 | |||
|
|
|||
Less: imputed interest
|
(6,901 | ) | ||
|
|
|||
Total
|
86,847 | |||
|
|
December 31,
|
||||||||
2019
|
2020
|
|||||||
RMB | RMB | |||||||
Cash paid for operating leases
|
28,847 | 33,028 | ||||||
Lease liabilities arising from obtaining
right-of-use
|
33,399 | 21,024 |
26.
|
Commitments and contingencies
|
(a)
|
Operating commitments
|
Operating
commitments |
||||
RMB | ||||
2021
|
12,944 | |||
2022
|
9,742 | |||
2023
|
8,932 | |||
2024 and thereafter
|
8,553 | |||
|
|
|||
40,171 | ||||
|
|
(b)
|
Capital and other commitments
|
(c)
|
Legal proceedings
|
27.
|
Subsequent events
|
28.
|
Restricted net assets
|
Exhibit 4.17
License Agreement for Broadcasting League of Legends Matches*
Between
Tengjing Sports & Culture Development (Shanghai) Co., Ltd.
and
Guangzhou Huya Information Technology Co., Ltd.
*: |
Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed |
Table of Contents
Article 1 Definition and Interpretation |
2 | |||
Article 2 Grant of Rights |
2 | |||
Article 3 Rules and Restrictions on the Exercise of Rights |
8 | |||
Article 4 Publicity and Promotion |
10 | |||
Article 5 Investment Promotion and Advertisement |
11 | |||
Article 6 Supervision and Reporting |
13 | |||
Article 7 Intellectual Property Rights |
14 | |||
Article 8 Consideration for Authorization |
15 | |||
Article 9 Representations and Warranties |
18 | |||
Article 10 Term, Termination and Breach of Contract |
20 | |||
Article 11 Force Majeure |
22 | |||
Article 12 Confidentiality |
23 | |||
Article 13 Notice |
24 | |||
Article 14 Applicable Law and Dispute Resolution |
25 | |||
Article 15 Miscellaneous |
25 | |||
Schedule 1 Definition |
28 | |||
Schedule 2 Technical Quality Standards |
29 | |||
Schedule 3 Blacklist of Advertisers |
30 | |||
Schedule 4 Data Reporting |
31 | |||
Schedule 5 Resource Promotion |
32 | |||
Schedule 6 IP Use Specifications for League of Legends Matches |
33 | |||
Schedule 7 Advertising Standards for Non-official Sponsors in Match Broadcasting |
34 | |||
Schedule 8 [redacted] |
35 |
License Agreement for Broadcasting League of Legends Matches
This License Agreement for Broadcasting League of Legends Matches (the Agreement) is made in Nanshan District, Shenzhen, the Peoples Republic of China (China) on April 27, 2021 by and between:
(1) |
Tengjing Sports & Culture Development (Shanghai) Co., Ltd., a limited liability company legally incorporated and existing under the laws of the Peoples Republic of China, with its legal address at Room 02-04, 45th Floor (actually 39th Floor), No.669 Xinzha Road, Jingan District, Shanghai (hereinafter referred to as Party A); |
(2) |
Guangzhou Huya Information Technology Co., Ltd., a limited liability company legally incorporated and existing under the laws of the Peoples Republic of China, with its legal address at 14/F, Building A3, Shidai E-Park, Zexi Street & Zhongcun Street (Hanxi Commercial Center), Panyu District, Guangzhou (hereinafter referred to as Party B). |
Party A and Party B are hereinafter collectively referred to as the Parties and individually as a Party.
Whereas,
(1) |
Party A or its affiliate is the operating agent of League of Legends in Chinese mainland, and Party A or its affiliate legally owns the right to use resources (Match Resources) based on League of Legends Pro League (LPL), League of Legends Development League (LDL), LPL All-Star Weekend Series (Authorized Matches) and the right to sublicense these rights to third parties. |
(2) |
Party B is a live sharing website, focusing on live games and providing users with high-definition and smooth live video, activities and matches. |
(3) |
Party A is willing to provide Party B with legal Match Resources and grant Party B the right to use the Match Resources for live streaming and provide related services; Party B wishes to obtain the above rights and is willing to abide by the corresponding terms and conditions. |
NOW THEREFORE, in order to further clarify the rights and obligations of the Parties, the Parties enter into the following agreement through friendly consultation in accordance with the principles of equality and mutual benefit:
Article 1 Definition and Interpretation
1.1 |
Definition. |
For the purpose of this Agreement, unless otherwise specified in this Agreement or the context requires otherwise, the relevant words and phrases used in this Agreement shall have the meanings specified in Schedule 1.
1.2 |
Interpretation. |
(1) |
Headings are for reference and convenience only, and do not define, restrict, explain or describe the content of the provisions, nor do they affect the meaning of the provisions. |
(2) |
Any provision, article or schedule mentioned herein refers to the specific provision, Article or Schedule of this Agreement. |
(3) |
Any laws, regulations, rules, notices or statutory provisions referred to in this Agreement shall include any supplement and amendment thereto or re-promulgation thereof made by the legislature. |
(4) |
The Schedules of this Agreement are an integral part of this Agreement and have the same binding force as the text of this Agreement. |
Article 2 Grant of Rights
2.1 |
Authorized rights. Subject to the terms and conditions of this Agreement, Party A agrees to grant to Party B, and Party B is willing to accept a paid license, which is limited in term, exclusive to a certain extent and sublicensable under certain conditions (see below for details), so that Party B can use the authorized content within the authorized use channels, license term, licensed territory and language specified in this Agreement. For the avoidance of any doubt, the specific authorized contents are as follows: |
(1) |
Live broadcasting right: The right to use Party A official Chinese streaming signal for live broadcasting of 2021-2025 (5 years) LPL, 2021-2025 (5 years) LDL and 2021-2025 (5 years) LPL All-Star Weekend and Annual Awards Ceremony. |
(2) |
On-demand broadcasting right: The right to use the official Chinese streaming video of the games provided by Party A for on-demand broadcasting of 2021-2025 (5 years) LPL, 2021-2025 (5 years) LDL and 2021-2025 (5 years) LPL All-Star Weekend and Annual Awards Ceremony. |
The Parties further clarify that the license of live broadcasting right and on-demand broadcasting right granted exclusively by Party A to Party B hereunder refers to [redacted].
2.2 |
Authorized use channels. Party B can only use the authorized content on Party Bs platforms listed in (1), (2), (3) below: |
(1) |
Live sharing website owned or operated by Party B (i.e. the main domain name www.huya.com and sub-domain website under the main domain name) and on-demand website (i.e. the main domain name v.huya.com and sub-domain website under the main domain name); |
(2) |
PC client software owned or operated by Party B running on personal microcomputer with Windows and MacOS as operating systems (i.e. Huya.com). |
(3) |
Smartphone client and tablet client software owned or operated by Party B running on handheld mobile display terminal devices with iOS, Android and Windows Phone as operating systems (i.e. Huya.com). |
(4) |
Software run by the live sharing website listed in (1) (i.e. Huya.com) on Internet TV (including AIOPCTV, OTT TV and box). |
For further clarification, the above platforms do not include: traditional TV; other versions of client software, such as Surface, Surface Pro, Linux, etc.; the case that client software is embedded into terminal devices other than those running the specified operating system; other non-existing and future non-live broadcast tools/platforms that do not mainly transmit and present data in the form of live streaming; game consoles and cloud game platforms, except for the platforms of such types operated by Party B with the written consent of Party A. In addition, Party B shall submit all the specific platforms that meet the requirements to Party A in advance in writing, which shall be reviewed and confirmed by Party A in writing. If Party B intends to use the authorized content on other platforms/tools owned or operated by its affiliate, it shall obtain the written consent of Party A in advance.
2.3 |
License term, territory and language. |
(1) |
License term of live broadcasting: |
a) |
2021-2025 LPL: From the first date of LPL Spring Split of the year to the end of LPL Summer Final of the year (the actual date and time shall be subject to the official announcement); |
b) |
2021-2025 LDL: From the first date of LDL Spring Split of the year to the end of LDL Summer Final of the year (the actual date and time shall be subject to the official announcement); |
c) |
2021-2025 LPL All-Star Weekend and Annual Awards Ceremony: From the date when LPL All-Star Weekend and Annual Awards Ceremony of the year start to the date when LPL All-Star Weekend and Annual Awards Ceremony of the year end (the actual date and time shall be subject to the official announcement). |
(2) |
License term of on-demand broadcasting: |
a) |
2021-2025 LPL: Three (3) years from the end of the live broadcast of the last single match (usually the Summer Final) of LPL of the year; |
b) |
2021-2025 LDL: Three (3) years from the end of the live broadcast of the last single match (usually the Summer Final) of LDL of the year; |
c) |
2021-2025 LPL All-Star Weekend and Annual Awards Ceremony: Three (3) years from the end of the live broadcast of the last single match of LPL All-Star Weekend and Annual Awards Ceremony of the year; |
For further clarification, the license term of each Authorized Match is calculated separately, and the specific time shall be subject to the actual match time Party A officially announces. However, each year there should be a complete set of three Authorized Matches, namely, LPL, LDL and LPL All-Star Weekend Series, that is, a total of 15 Authorized Matches within 5 years. Every year, LPL and LDL consist of the spring and summer splits respectively (the change of season name does not affect the rights and obligations hereunder). However, Party B acknowledges and agrees that Party A may make certain adjustments to the schedule and system of each match in the year according to the actual situation, and the specific match arrangement in each year shall be subject to the actual arrangement of Party A. [redacted]
(3) |
Territory: Chinese mainland only, excluding Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan. |
(4) |
Language: Mandarin Chinese. |
2.4 |
Sublicense. With the written consent of Party A, Party B may sublicense the authorized rights and derivative content production rights hereunder; [redacted]. Party B undertakes that when it makes sublicense to live broadcasting platforms that meet the aforementioned requirements of this Paragraph, it shall sign an agreement with any of the sublicensed platform with restrictions and requirements not conflicting with the authorized content of this Agreement or beyond the authorized scope stipulated in this Agreement, and shall require these sublicensed platforms to bear corresponding responsibilities for their violation of the requirements of this Agreement on the sublicensee. [redacted] |
2.5 |
Exceptions and limitations of exclusive license. Notwithstanding the foregoing, Party A and Party B are aware and agree that [redacted] Party A and Party B shall negotiate on which Party has the right to authorize the live broadcasting right, on-demand broadcasting right and derivative content production right of the Authorized Matches to the New Platform. |
2.6 |
Derivative content production. For the purpose of publicizing and promoting the live/on-demand broadcasting of the Authorized Matches, Party B may carry out secondary processing and arrangement based on the Match Resources, and make highlights and replays of the matches; and make match introductions, news reports, analyses and comments based on the official promotional videos, game videos and other authorized materials separately confirmed by Party A in writing. However, before the aforementioned derivative content is officially produced and broadcast, Party B shall submit the relevant schemes and plans to Party A in writing and obtain Party As written permission. Such derivative content can only be released or broadcast through the authorized use channels stipulated in Article 2.2 hereof or the channels permitted by Party A and approved in writing separately, and shall not breach the relevant stipulation in Article 2.7 hereof. At the same time, Party A reserves the right to require Party B to broadcast the match highlights only after Party As prior written review, which review is aimed at but not limited to the content of production results, release or broadcasting channels, etc. |
2.7 |
Designated official channels (live studios). Unless otherwise agreed by Party A and Party B or in this Agreement, the authorized channels under this Paragraph do not include the non designated official channels such as live studios, personal video or audio channels, etc. (collectively referred to as Live Studios) of anchors not designated by the Parties under Party Bs platforms, that is, the live/on-demand broadcasting of Authorized Matches can only be carried out on the designated official channels, and other non-designated anchors and their Live Rooms inside and outside the platforms cannot use the authorized content without Party As written consent. The specific designated anchors shall be subject to other terms of this Agreement and the written agreement separately negotiated and confirmed by the Parties. In addition, if the anchor designated by Party Bs platform broadcasts the authorized content in its Live Studio with Party As prior written permission, and if the Match Resources or Authorized Matches are involved in political risks and negative public opinion risks due to the content broadcast by the anchor designated by Party Bs platform, Party A shall have the right to immediately stop the above-mentioned related cooperation and the broadcasting of related programs or videos, and ask Party B to immediately make rectification and not continue broadcasting until the rectification is completed and meets Party As requirements. |
2.8 |
Adjustment to Authorized Matches. The Authorized Matches referred to in this Agreement shall be subject to the definition in Article 2 of Schedule 1. If any adjustment to any of the Authorized Matches listed in Article 2 of Schedule 1 due to force majeure or other objective reasons confirmed by the Parties (including but not limited to acute infectious diseases) during the period from January 1, 2021 to December 31, 2025 leads to the failure to hold any Match in the year, the situation shall be handled as follows: |
(1) |
If, during the term of this Agreement, there are similar matches of the same level and value for replacement or compensation, and Party A proposes authorization of the replacement or compensation, Party B shall not refuse without reasonable reasons; for matches of replacement or compensation, priority shall be given to matches of the same year; |
(2) |
If, during the term of this Agreement, Party A is unable to provide authorization of the replacement or compensation, Party B may ask Party A to grant authorization of the corresponding matches to be held after the expiration of this Agreement (for example, [redacted]) as replacement and Party A shall not refuse without reasonable reasons, except that Party A has authorized the relevant matches after the expiration of the term to a third party legally and not in breach of this Agreement, so that the aforementioned replacement authorization cannot be made. In the event that an Authorized Match cannot be held and cannot be replaced or compensated during the term, and Party A has not fulfilled to Party B the replacement obligation of corresponding match authorization after the expiration of the term, Party A shall not, without the written consent of Party B, authorize a third party live broadcasting platform to use the corresponding match after the expiration of the term of this Agreement, as it may hinder the realization of Party Bs replacement right under this Item; |
(3) |
If neither of the above two Items can be realized, the Parties shall only cancel the cooperation on the affected Match of the year, and Party B does not need to pay Party A the corresponding license fee of the year for the affected Match; if the fees paid by Party B include those for the unrealized authorized rights, Party A shall refund them accordingly. For the specific refund ratio, see Article 8 of this Agreement. |
(4) |
For the avoidance of doubt, the Match referred to in this Paragraph means the whole process of an Authorized Match of the year. For example, the 2021 LPL is a Match, and the 2022 LPL All-Star Weekend and Annual Awards Ceremony is a Match. |
(5) |
[redacted] |
2.9 |
Annual up-to-standard requirements. Subject to fulfilling other stipulations in this Agreement, in 2021, Party B must also meet the specific up-to-standard requirements put forward by Party A for the use of authorized rights. [redacted] |
2.10 |
Reservation and limitation of rights. Party A reserves all rights for itself and its affiliates that are not explicitly granted to Party B under this Agreement. In addition to the above authorized rights, without Party As prior written consent, Party B (i) shall not, and/or authorize a third party to, use, broadcast or disseminate the Authorized Matches and Match Resources on any platform other than the authorized channels specified in this Agreement, regardless of whether the platform belongs to Party B or its affiliate, and regardless of whether the platform owner has any business, strategy, or equity relationships with Party B or its affiliate; (ii) shall not use any content other than the Match Resources and other authorized materials provided by Party A, including but not limited to the trademarks, graphics, logo and text of Party A or Party As affiliates, or the trademarks, materials and data of League of Legends, as well as any content or constituent elements related to League of Legends. |
Article 3 Rules and Restrictions on the Exercise of Rights
3.1 |
User restriction and isolation. [redacted] Unless otherwise stipulated in this Agreement, Party B may not restrict and isolate users for any reason, including the use of advertisement screening software and browser selection. Notwithstanding the foregoing provisions, Party B shall adopt digital rights management (DRM) technology, geographical shielding technology and other corresponding technical measures to prevent the Authorized Matches and Match Resources from being received and viewed by any third party (including but not limited to end users) outside the licensed territory and from being modified, grabbed, nested, downloaded, forwarded and distributed by third parties (including but not limited to end users). |
3.2 |
Equipment cost and technical standards. Party B shall prepare equipment for receiving Party As official live signals and match videos at its own cost, and shall be responsible for receiving and subsequent dissemination of the corresponding contents, and bear all related transmission costs, equipment costs and program production costs. Party A has the right to change the way of providing signals and videos at its own discretion, and to upgrade the encryption system of signals and videos according to official rules. Moreover, Party B shall abide by and meet the minimum technical quality standards specified in Schedule 2 when using, broadcasting and disseminating the Authorized Matches and Match Resources. |
3.3 |
No modification. Party B shall use the official live signals and videos of Party A and broadcast them in their entirety; if the official live signals and game videos provided by Party A are not processed, Party B shall use its best efforts to process and produce them within a reasonable range; Party B may mark the watermark logo of Party B on the screen according to industry practice, provided that the main screen of the match is not covered. In any case, if Party B needs to change or process the Match Resources provided by Party A in any form, it must obtain Party As prior written consent and review and confirmation. Without Party As prior written consent, under no circumstances shall Party B interfere with, distort or commit any behavior that impairs or modifies the integrity of the Match Resources provided by Party A, including but not limited to: |
(1) |
Reducing the screen size; |
(2) |
Providing scroll bar information service anywhere on the screen; |
(3) |
Using pop-up ads; |
(4) |
Marking the trademark or logo of its own or a third party on the screen in addition to the above watermark logo; |
(5) |
Covering or obscuring the trademarks or logos of Party A or Party As affiliates or League of Legends and Authorized Matches with trademarks or logos of its own or a third party; |
(6) |
Blocking or obscuring the trademarks or logos of Party A or Party As affiliates or League of Legends and Authorized Matches. |
3.4 |
Limitations on self-made content. Party B shall fully display the whole process of official live stream, and shall not block, cover, edit or actively abandon the broadcast in any form without official permission. Party A shall decide the specific broadcast content of the whole process in the Live Studio of the official live stream. [redacted] Party A reserves the right to require Party B to submit all the self-made content to Party A before using it, and to require Party B to use the content only after obtaining written examination and confirmation from Party A. Such examination is made on, including but not limited to, the specifics, release or broadcasting channels of the content. Party A has the right to propose amendments to or even prohibit the use of Party Bs self-made content, and Party B must strictly follow Party As requirements. Notwithstanding the foregoing provisions, during the period of broadcasting the self-made content (if upon approval by Party A), Party B shall ensure that users are provided with official Match Resources for viewing at the same time, and that Party As official live signals and videos can be broadcast in their entirety. |
3.5 |
Naming and arrangement. When naming and arranging Match Resources, Party B shall observe the follow |
(1) |
Reflecting the following information: league/trophy, year, territory (if allowed to broadcast non-Chinese Match Resources), sessions, weeks and days of spring/summer matches/trophies, and live/on-demand languages (if allowed to broadcast non-Chinese Match Resources). Example: [redacted] |
(2) |
[redacted] The naming of the match videos must reflect the teams of the specific match. Example: [redacted] |
(3) |
Placing links leading to the official website of the Authorized Matches (or other links required by Party A or Party As affiliates) at reasonable positions (such as live broadcasting descriptions). |
3.6 |
Chatting and socializing. Party B shall try its best to ensure that the chatting/socializing content of users during watching the broadcast is legal and compliant, and will not have adverse effects on Party A or its affiliates, League of Legends and Authorized Matches, and shall manage and guide public opinion on the content generated by users, so as to prevent extreme words and deeds during watching games. Otherwise, Party B shall directly prohibit the chatting/socializing function, and Party A has the right to require Party B to immediately process the content generated by related users and optimize or rectify the related chatting/socializing function. |
3.7 |
Observing the broadcasting rules. In order to safeguard the rights and interests of broadcasting the Authorized Matches of Party A on various live broadcasting platforms, ensure that the broadcast contents and resources related to the Authorized Matches meet the official standards of the matches, [redacted]. |
3.8 |
Others. Party B shall try its best to communicate and coordinate with Party A or Party As affiliates or the third party designated by Party A within a reasonable scope, and comply with the provisions of this Agreement and the requirements put forward by Party A or Party As affiliates from time to time to ensure the lawful, compliant and high-quality broadcasting and dissemination of Authorized Matches and Match Resources. Moreover, Party B shall broadcast live every match of the Authorized Matches except that Party B cannot broadcast live for reasons attributable to Party A. |
Article 4 Publicity and Promotion
4.1 |
Publicity and promotion. Party B shall make every effort to promote League of Legends and related matches and activities, so as to maximize the audience number for the live/on-demand broadcasting of Authorized Matches hereunder. For this purpose, Party B agrees to negotiate in good faith with Party A on all marketing and promotional activities and activities related to League of Legends and related match coverage. Subject to other provisions of this Agreement, Party B shall carry out marketing activities around the broadcasting of League of Legends and related matches and activities, and arrange high-quality media resources of Party B and its affiliate for the promotional activities of match broadcasting, including but not limited to the selection of key matches, gold promotion places and We Media. For details, please refer to Schedule 5 Huyas Plan on Resource Promotion. During the cooperation period, Party A has the right to evaluate the Plan every year and request Party B to make reasonable updates. Party B confirms that all plans for the use of Authorized Matches, Match Resources, intellectual property rights of Party A and other related resources shall be notified to Party A in advance in writing, and can be implemented only after obtaining Party As prior written examination and confirmation. |
4.2 |
Party As detailed specification requirements for media resources (including specific form and location, released content and release time) will be communicated to Party B by designated contact person at one time or several times by e-mail or other forms confirmed by the Parties in writing. The released content includes but should not be limited to League of Legends and related matches and activities (including but not limited to Authorized Matches). The final content and requirements shall be subject to consultation and confirmation by the Parties, but Party A has the right for final decision. |
4.3 |
Party B undertakes and warrants that it will complete the release and promotion of all media resources in strict accordance with Schedule 5 of this Agreement and the contents jointly confirmed by the Parties, and provide Party A with the final report within 5 working days after each release. If, during the term of this Agreement, Party A fails to use one or more of the resources due to business arrangement of all parties, market changes, resource scheduling and other factors, Party B agrees to extend the term until all media resources are used up. |
4.4 |
Party A has the right to review and accept Party Bs implementation of media resources. If the media resources provided by Party B do not conform to Schedule 5 of this Agreement and the contents confirmed by the Parties, Party A shall have the right to require Party B to make modification, republication or take remedial measures within a reasonable time limit specified by Party A, and the losses caused to Party A shall be fully borne by Party B. If Party B fails to take effective remedial measures or meet Party As requirements, Party A shall have the right to ask Party B to discount all the fulfilled media resources to cash, that is, to pay the corresponding value directly. |
Article 5 Investment Promotion and Advertisement
5.1 |
Cooperation restrictions. Subject to the terms and conditions of this Agreement, Party B has the right to operate attached investment promotion and advertisement generated from live/on-demand matches, [redacted]. For the avoidance of doubt, the attached advertisements mentioned in this Paragraph, including not only the advertisements and publicity placed by Party B in the live stream of Authorized Matches on Party Bs platform, but also the advertising area around the live broadcasting page of the Authorized Match on Party Bs platform or other advertisement presentation on the live broadcasting page, as well as the advertisement presentation and market promotion using the elements and contents of Authorized Matches in other visual areas and interfaces of Party Bs platform (including but not limited to the screen opening interface), shall be subject to the aforementioned restrictions of this Paragraph. [redacted] In case of any dispute between Party A and Party B over attached advertisement and its investment promotion right, the conditions and requirements finally confirmed by Party A shall prevail. |
5.2 |
Stream time. Party B can only broadcast advertisements in the following time periods: |
(1) |
Party B may broadcast teaser advertisements with a total duration of no more than 45 seconds before the start of the match (that is, before Party A provides official Match Resources). |
(2) |
After the start of the match, the cut-in advertisement can only be broadcast before the end of the match interval in the way of countdown and with the words Be right back, and the stream time shall not exceed 60 seconds. The running of advertisement should be finished before the live broadcast of the match resumes, and if not, should be stopped immediately. |
(3) |
Party B may run advertisements after the end of the match and after the end of the thank-you roll screen, with the total running time not exceeding 45 seconds. The ads shall not block official contents except the countdown of the program and the announcement of tomorrows matches. |
Party B shall not broadcast any form of advertisement, and shall not insert any advertisement content directly or indirectly into the official live signal, the match video or related or adjacent pages without Party As written examination and confirmation, except before the start of the above-mentioned match, during the interval of the major matches and after the end of the match.
5.3 |
No use. Party B shall not invite investment in the name of Party A or Party As affiliates or League of Legends and related matches, nor imply that its investment promotion behavior is related to Party A or Party As affiliates or League of Legends and related matches; Party B shall not authorize any third party to use the trademarks, service marks, copyrights, design patents or industrial designs, domain names, trade names or any other titles, derivatives, adaptations or variants of Party A or Party As affiliates or League of Legends and related matches, or any text, symbols or designs identical or similar to the trademarks, trade names or logos of Party A or Party As affiliates or League of Legends and related matches in the ads. |
5.4 |
Submission and review. Party B shall submit to Party A in writing the list of all merchants and advertisers and the contents of the advertisements. Party A reserves the right to require Party B to cooperate with advertisers or broadcast advertisements only after obtaining the written permission of Party A; Party A has the right to propose reasonable amendments to the advertising content that Party B intends to broadcast, or prohibit the broadcasting of the advertising content if the advertising content does not comply with laws, regulations, relevant policies, public order and good customs, or may have a negative impact on the Authorized Matches, and Party B must strictly comply with Party As requirements. |
5.5 |
Official sponsorship and advertising. Party B shall ensure that the content of the title sponsor or other sponsors of the Authorized Matches is displayed according to the Match Resources provided by Party A and other requirements, and shall not edit, modify, add, delete or change any official sponsorship and advertisement or their components in any form, including but not limited to excluding, restricting, replacing or obscuring the screen covering graphics or billboards around the venue included in the official live signal or video of the match and/or any other graphics, signs, symbols, advertisements or promotional materials displayed at any competition venue. In addition, Party B promises that all advertisements launched in the performance of this Agreement must be in compliance with relevant laws and regulations of the Peoples Republic of China (including but not limited to the current Advertising Law of the Peoples Republic of China), and shall not commit any acts violating laws and policies. |
Article 6 Supervision and Reporting
6.1 |
Supervision power. Party A has the right to know, inquire, review and suggest, regulate and supervise, and finally decide on all the behaviors of Party B under this Agreement and the implementation and completion of matters related to authorized rights. Unless otherwise stipulated in this Agreement, Party A reserves the right to require Party B to submit all the schemes and contents to Party A before implementing all matters, and to require Party B to implement them only after obtaining written examination and confirmation from Party A. If the schemes and contents submitted by Party B are inconsistent, or in the specific implementation process are inconsistent with the schemes confirmed by Party A, Party A shall have the right to require Party B to immediately correct them or prohibit Party Bs implementation, and Party B must strictly follow the requirements of Party A. |
6.2 |
Supervision subject. For the performance of this Agreement, Party A may designate entities or individuals among Party A or its affiliates or other third parties to exercise supervision power. |
6.3 |
Real-time communication. Party B must appoint a representative to discuss with Party A through [redacted] during the live broadcasting of the Authorized Matches, and receive real-time updates and other reasonable requirements raised by Party A from time to time. |
6.4 |
Data reporting. [redacted] |
Article 7 Intellectual Property Rights
7.1 |
Party As intellectual property rights. Authorized Matches, Match Resources, authorized content, and trademarks, service marks, copyrights, design patents or industrial designs, domain names, trade names or any other titles, derivatives, adaptations or variants associated with Party A or its affiliates or any content of League of Legends, and other intellectual property rights, ownership or interests and other rights in any form related to the authorized rights under this Agreement (no matter whether these rights are known at this stage or not, and no matter what medium, form, format or style will be adopted to express them) shall be owned by Party A or its affiliates. Moreover, the intellectual property rights and other rights of the match highlights, match replays produced by Party B or its affiliates according to this Agreement and other self-made contents such as programs, derivative contents and promotional materials produced using Party As intellectual property rights shall also belong to Party A or its affiliates. If there are any intellectual property rights that cannot be vested with Party A or its affiliates from the beginning, Party B promises to transfer the relevant intellectual property rights to Party A or Party As affiliates free of charge. [redacted]. |
7.2 |
Party Bs intellectual property rights. The intellectual property rights and other rights of the self-made content produced and broadcast by Party B according to this Agreement without using the intellectual property rights of Party A shall belong to Party B, but Party B may only use the self-made content when exercising the authorized rights under this Agreement, and shall not transfer or license them to a third party. At the same time, Party B agrees that when Party B uses its own voice, video and picture, it should try its best not to use the data with intellectual property rights enjoyed by Party A, but when it is necessary to use such data, Party B must obtain the prior written consent of Party A, and use the data only within the scope reviewed and confirmed by Party A in writing. |
7.3 |
Free exercise of rights. With respect to the relevant rights (including but not limited to intellectual property rights) and interests enjoyed by Party A in accordance with Article 7.1, Party A has the right to exercise, develop, authorize and license such rights and interests in any form for any purpose at its own discretion, especially that, Party A has the right to transfer or license all or part of the above rights and interests to any third party at its own discretion. The above-mentioned activities can be carried out for any carrier (including future carriers that are unknown at present), and in any form, including but not limited to written form. Party B shall not, by itself or by authorizing a third party, commit any acts that may damage, restrict or hinder any rights and interests obtained by Party A under this Agreement. |
7.4 |
No registration. Party B and any of its affiliates will not, or assist any third party to, register in any country any trademarks, service marks, copyrights, design patents or industrial designs, domain names, trade names or any other titles, derivatives, adaptations or variants implying that Party B is related to Part A or Party As affiliates or League of Legends and any content of the Authorized Matches, or any text, symbols or designs that are identical or similar to those of the trademarks, trade names or logos of Part A or Party As affiliates or League of Legends and the Authorized Matches. If Party B breaches the aforesaid provisions, Party B shall, upon Party As request, immediately terminate the unauthorized registration activities and sign the transfer documents and other documents that Party A may require in time, so as to transfer all rights related to the registration or application of intellectual property rights to Party A. All expenses related to the above rights transfer shall be borne by Party B. |
7.5 |
Right protection. For any illegal misappropriation, publication, reprinting, copying of Authorized Matches, Match Resources, authorized contents, works, or other violations of intellectual property rights or other rights enjoyed by Party A and related rights and interests under this Agreement, Party A may defend its rights in its own name, including but not limited to taking legal actions such as applying for evidence preservation, property preservation, administrative complaints, filing civil lawsuits, appeals, applying for execution, reconciliation, and obtaining compensation. Without Party As prior written consent, Party B shall not take right protection actions without authorization. If Party B finds that there is a third-Party infringement, Party B may inform Party A of the infringement, and Party A shall actively take right protection measures against the infringing subject. |
Article 8 Consideration for Authorization
8.1 |
Fixed license fee. As one of the consideration for obtaining the authorized rights stipulated in this Agreement, Party B shall pay Party A a fixed license fee totaling RMB 2,013 million (SAY RMB 2,013 MILLION ONLY, tax inclusive). The specific payment time, ratio and conditions are as follows: |
1) |
Within fifteen (15) working days after this Agreement comes into effect after being signed and sealed by the Parties and Party B receives the invoice, Party B shall pay Party A the first sum of fixed license fee, i.e., [redacted]; within fifteen (15) working days after receiving the corresponding invoice in [redacted] of 2021, Party B shall pay Party A fixed license fee of [redacted] respectively. The total amount in the year 2021 is [redacted]. |
2) |
Within fifteen (15) working days after receiving the corresponding invoice in [redacted] , 2022, Party B shall pay Party A the first sum of fixed license fee of 2022, i.e., [redacted]; within fifteen (15) working days after receiving the corresponding invoice [redacted], 2022, Party B shall pay Party A fixed license fee of [redacted] respectively. The total amount in the year 2022 is [redacted]. |
3) |
Within fifteen (15) working days after receiving the corresponding invoice in [redacted], 2023, Party B shall pay Party A the first sum of fixed license fee of 2023, i.e.,[redacted]; within fifteen (15) working days after receiving the corresponding invoice in [redacted] , 2023, Party B shall pay Party A fixed license fee of [redacted] respectively. The total amount in the year 2023 is [redacted]. |
4) |
Within fifteen (15) working days after receiving the corresponding invoices in [redacted], 2024, Party B shall pay Party A fixed license fee of [redacted] respectively. The total amount in the year 2024 is [redacted]. |
5) |
Within fifteen (15) working days after receiving the corresponding invoice in [redacted], 2025, Party B shall pay Party A the first sum of fixed license fee of 2025, i.e., [redacted]; within fifteen (15) working days after receiving the corresponding invoice [redacted], 2025, Party B shall pay Party A fixed license fee of [redacted] respectively. The total amount in the year 2025 is [redacted]. |
On the basis of the above agreement, the Parties acknowledge and agree that the ratio of fixed license fees for each Authorized Match in each year is as follows: LPL [redacted] of the total amount of fixed license fee in the year; LDL [redacted] of the total amount of fixed license fee in the year; LPL All-Star Weekend Series [redacted] of the total amount of fixed license fee in the year. The aforementioned agreement on ratio does not affect or change Party Bs obligation to pay corresponding fixed license fees to Party A according to 1) of Article 8.1.
8.2 |
Floating license share. When Party B sublicenses the authorized rights under this Agreement to a third party [redacted] according to Article 2.4 and other relevant provisions hereof, and if, from 2022 to 2025, the total amount of annual sublicensing income exceeds [redacted], Party B shall pay Party A a share of the amount exceeding the base in proportion as another part of the consideration for obtaining the authorized rights stipulated in this Agreement. The specific calculation method is as follows: |
1) |
Base of each year: |
Equivalent to [redacted] of the total fixed license fee in the year
Share ratio:
As for the part of the total annual sublicensing income during the cooperation period that exceeds the base of the year, Party A and Party B shall share it at the ratio of [redacted], that is, Party A shall receive [redacted] and Party B shall retain [redacted] of this part of the amount.
2) |
Payment arrangement: With regard to the floating license share stipulated under this Article 8.2, Party B shall, within twenty (20) working days after the start of each natural year (i.e., January 1), submit to Party A the previous years sublicense settlement report (for example, submit the 2022 settlement report in January 2023), and calculate the floating license share of sublicensing income in the year according to the aforementioned stipulation in this Article. After the settlement report is confirmed by Party A, Party A shall issue to Party B a VAT special invoice corresponding to the floating license share amount, and Party B shall, within fifteen (15) working days after receiving the invoice, pay the floating license share of the year in full to the account designated by Party A. Party A and Party B confirm that the total authorization revenue in the sublicense settlement report shall be based on the contract amount with any existing live broadcasting platform corresponding to the fulfilled sublicense of broadcasting rights in the year, that is, whether or not the existing live broadcasting platform is actually charged, the authorization revenue of the fulfilled part in the year shall be included in the settlement scope. Party B shall provide Party A with relevant attachments (including but not limited to contracts with third parties/existing live broadcasting platforms, statements of accounts, invoices and payment slips) for verification. |
3) |
Party A and Party B shall bear the doubtful debts and bad debts arising from their cooperation. If Party B has not fully recovered the authorization income attributed to the settlement period as of the settlement date of floating license share, Party B shall still pay the corresponding share to Party A according to the amount stipulated in this Agreement, and Party B shall handle the transaction and collection with the sublicensee separately. |
4) |
Special treatment of cashless transactions: [redacted]. |
The sum of fixed license fee in Article 8.1 and floating license share in Article 8.2 is the license fee of this project.
8.3 |
Invoice. Party A shall issue to Party B an effective VAT special invoice with corresponding amount fifteen (15) working days before each payment by Party B. The invoice content includes intangible assets * license fee and the tax rate of 6 %. Otherwise, Party B shall have the right to postpone the payment without assuming corresponding responsibilities. The invoice issued by Party A shall not be used as proof of payment. Party Bs payment to the account designated by Party A shall be deemed as fulfillment of payment. Party B shall be exempted from liability for the corresponding delay in payment caused by Party As invoice problem. |
8.4 |
Taxes. The Parties shall pay relevant taxes in accordance with the laws of the Peoples Republic of China. Party B shall not conduct deduction, withholding, offset or exemption in any form when making payment. |
8.5 |
Deferred payment. If Party B defers in paying to Party A all or part of the payables due, Party B shall pay Party A an overdue fine at a daily rate of one thousandth (1) of the deferred payment for each day of delay. If all or any part of the payment is delayed for more than fifteen (15) working days, Party A shall have the right to rescind this Agreement immediately, and Party B still needs to pay in full the license fee of the used authorized right. |
8.6 |
Collection account. Party A designates the following account as the only valid account to collect the license fee: |
Opening bank: [redacted]
Account name: [redacted]
Account No.: [redacted]
Article 9 Representations and Warranties
9.1 |
The Parties represent and warrant that: |
(1) |
They are legal persons legally incorporated and existing under the laws of the Peoples Republic of China. |
(2) |
They have the authorization, right and approval required for signing this Agreement and fully performing their relevant obligations hereunder. |
9.2 |
Party B represents and warrants that: |
(1) |
It has the right to sign the Agreement and exercise the corresponding authorized rights as stipulated in this Agreement, and has the necessary licenses and qualifications required by the Chinese government and relevant institutions to disseminate the Authorized Matches and Match Resources in the manner stipulated in this Agreement. It will handle the import and broadcast procedures of Match Resources (if necessary) with the relevant Chinese authorities, and provide Party A with authentic and effective information and other documents required by the port. |
(2) |
The performance of this Agreement will not breach any restrictions of applicable laws binding on it, will not infringe upon the legitimate rights and interests of any third party, and shall not contain any illegal or infringing contents in the dissemination of the Authorized Matches and Match Resources of Party A. Party Bs obligations hereunder will not conflict with any other prior agreements to which it is a Party. |
(3) |
It will not do anything that is harmful or likely to be harmful to Party A or its affiliates or League of Legends and Authorized Matches, and will not cause any losses to Party A or its affiliates or League of Legends and Authorized Matches. |
(4) |
It shall not authorize and shall take all possible technical measures to prevent any third-party platform from establishing links to the Match Resources on Party Bs platform or co-constructing a cooperation platform or broadcasting the contents authorized by Party A to Party B under this Agreement through other technical means, including but not limited to deep links, so as to ensure that the end users will not directly watch the Match Resources of Party Bs platform on any third-Party platform by accessing the page with Authorized Matches and Match Resources on Party Bs platform through link technology or other technical means. |
(5) |
Party A is the only owner/agent of authorized rights in the licensed territory. Without Party As written consent, under no circumstances shall Party B broadcast, disseminate and develop any Match Resources other than those authorized by Party A, and shall not receive the contents other than those from the official signal and video sources of Party A without authorization, regardless of whether the content is included in the scope of the authorized rights, and regardless of whether the provider of the signal or video is authorized by Party A. |
(6) |
Party B shall satisfy Party As reasonable requirements related to Authorized Matches and authorized rights from time to time during the performance of this Agreement. |
(7) |
Party B shall be jointly and severally liable for any obligation of its affiliates involving the contents stipulated in this Agreement. |
(8) |
Party As use of Party Bs logo and other materials will not infringe upon the intellectual property rights or other legitimate rights and interests of any third party. |
9.3 |
Party A represents and warrants that: |
(1) |
The performance of this Agreement will not breach any restrictions of applicable laws binding on it, nor infringe upon the legitimate rights and interests of any third party, and the Match Resources provided and authorized by Party A to Party B shall not contain any illegal or infringing contents. |
(2) |
Party Bs use of the logo and other materials provided and authorized by Party A will not infringe on the intellectual property rights or other legitimate rights and interests of any third party. |
(3) |
Notwithstanding the above commitments, Party A does not make the above commitments to Party B regarding the behavior, speech and information of any third-party participants (including but not limited to participating clubs and their players, club staff, audience, and other persons and/or third-party content accidentally appearing in the official live stream), which are irrelevant to Party As warranty under this Article 9.3. However, Party A shall make reasonable efforts to explain the rules and train the participants (including but not limited to participating clubs and their players, club staff, etc.) on the rules before the match, and take reasonable measures to maintain the authenticity and fairness of the Authorized Matches, and crack down on fake competitions or other behaviors that may adversely affect the reputation of the matches. Party A will make reasonable efforts to prevent and remove the illegal or infringing contents of these third-party participants in the official live stream and their adverse effects on the authorized cooperation hereunder. |
9.4 |
Liability limitation and exemption. Except for Article 9.1 and Article 9.3 of this Agreement, to the extent permitted by law, Party A or its affiliates do not make any explicit or implied warranties, including but not limited to any implied warranties of merchantability, applicability for special purposes and non-infringement related to the Authorized Matches and Match Resources. |
Article 10 Term, Termination and Breach of Contract
10.1 |
Term. This Agreement shall come into force from the date when the Parties affix their seals (special seal for contract or official seal), and shall end on the date when the Parties fully perform their obligations hereunder. If the seals are not affixed on the same day, the Agreement will come into force from the date of last seal. If the actual performance of the Agreement occurs first, the validity of the Agreement shall be traced back to the date when the actual performance begins. |
10.2 |
Termination. |
10.2.1 |
If this Agreement is terminated early as stipulated, Party A has the right to request Party B to immediately pay off all the payables due and unpaid by Party B before the effective date of the termination, and the undue amount proportionate to the authorized right that has been used. After receiving the written notice of rescission or termination of the Agreement or any authorized rights under the Agreement, Party B shall immediately stop using all or part of the corresponding Match Resources and authorized contents. |
10.2.2 |
In any of the following circumstances, either Party has the right to terminate this Agreement immediately: |
(1) |
The representations or warranties of the other Party are untrue, inaccurate, incomplete or breach any representations or warranties it makes hereunder; |
(2) |
The other Party substantially breaches any provision of this Agreement, and such breach is irremediable, or if remediable, the other Party fails to remedy such breach within thirty (30) days after a written notice requesting remedy is served; |
(3) |
The other Party and its creditors or any other legal Party apply for liquidation, bankruptcy, reorganization, reconciliation or dissolution of the other Party or the other Partys funds cannot maintain the normal operation of the company; or the other Party is unable to repay any debts due; or the creditor of the other Party takes over the operation of the other Party; |
(4) |
Other circumstances of terminating this Agreement immediately stipulated in this Agreement or the laws of the Peoples Republic of China. |
10.2.3 |
Unless otherwise stipulated in this Agreement, neither Party shall unilaterally terminate this Agreement. If one Party wishes to early terminate this Agreement, it shall negotiate with the other Party and obtain the other Partys consent, and the Parties shall sign a written confirmation document. |
10.3 |
Party Bs liability for breach of contract. If Party A faces any third partys claim, lawsuit or arbitration or suffers losses due to any false representation or warranty of Party B, or Party Bs breach of its obligations hereunder, or Party Bs infringement or breach of contract against a third party, Party B shall take appropriate measures (including but not limited to coordinating with the third party to resolve disputes) to hold Party A harmless from any claim, lawsuit or arbitration and/or losses. Under such circumstances, Party A reserves the right to claim compensation from Party B for the losses it suffers therefrom. Moreover, Party A has the right to take any one or several measures including but not limited to the following according to the severity of Party Bs breach of contract to hold Party B liable: |
(1) |
Temporarily or permanently prohibiting Party B from using the authorized content in some authorized use channels; and/or |
(2) |
Temporarily or permanently revoking part of the authorized rights previously granted to Party B; and/or |
(3) |
Temporarily or permanently shortening license term or reducing the licensed territory; and/or |
(4) |
Requiring Party B to pay [redacted] of the license fee of the year under this Agreement as liquidated damages. If the liquidated damages are insufficient to compensate for Party As losses, Party A shall have the right to require Party B to continue to bear the compensation liability; and/or |
(5) |
Unilaterally rescinding this Agreement and revoking all authorized rights previously granted to Party B as expressly stipulated in this Agreement. |
For further clarification, Party A shall exercise the aforesaid rights within a reasonable and necessary scope, and give a written (including email) notice to Party B. Under such circumstances, no matter what measures Party A takes to hold Party B liable for breach of contract, Party B still needs to pay Party A the license fee proportionate to the actually used authorized rights.
10.4 |
Party As liability for breach of contract. |
10.4.1 |
If Party B faces any third partys claim, lawsuit or arbitration or suffers losses due to Party As breach of the special representation or warranty in Article 9.3 hereof, or Party As infringement or breach of contract against the third party, Party A shall take appropriate measures (including but not limited to coordinating with the third party to resolve disputes) to hold Party B harmless from any claim, lawsuit or arbitration and/or losses. Where Party B suffers actual direct losses due to the aforesaid breach of contract by Party A, Party A shall bear corresponding compensation liabilities. Notwithstanding the foregoing provisions, Party B is aware and agrees that the total liquidated damages and any loss compensation paid by Party A to Party B for breach of contract by Party A shall be limited to [redacted] of the license fee of the year (i.e., the maximum amount for breach of contract shall not exceed [redacted] of the license fee of the year). For the avoidance of doubt, Party Bs holding Party A liable for breach of contract (if any) will not exempt or reduce Party Bs obligation to pay Party A the license fee proportionate to the actually used authorized rights, unless Party B terminates this Agreement as stipulated herein. |
10.4.2 |
[redacted]; in such situation, Party B shall have the right to request Party A to cease the breach immediately, shall have the right to refuse to pay License fee corresponding to the right affected, and shall have the right to seek [redacted] of the total Fixed License Fee in this Agreement as compensation for it losses; in the case the amount of the compensation expressly stipulated aforesaid cannot be enough to recover Party Bs losses, Party B shall have the right to seek further. |
10.5 |
Effect of termination. If this Agreement is terminated, such termination shall not release or affect any obligation or liability of either Party arising prior to the effective date of termination, and this Agreement shall remain in full force and effect with respect to such obligation or liability. |
Article 11 Force Majeure
11.1 |
Force majeure. If one Party fails to fulfill its obligations hereunder due to any natural disaster, terrorist act, fire, hurricane, epidemic, riot, war, hacker attack, government regulation, policy change, network failure or other similar situations that are unforeseeable, insurmountable and unavoidable by adopting reasonable due diligence and reasonable commercial measures (Force Majeure), the Party affected by Force Majeure (the Affected Party) shall not be liable for failing to fulfill its obligations hereunder. |
11.2 |
Consequences of Force Majeure. Unless otherwise stipulated in this Agreement, in case of Force Majeure, the performance of obligations by the Parties shall be temporarily suspended within the scope affected by Force Majeure, until Force Majeure no longer prevents the performance or causes the performance to be impossible (at that time all the performance of obligations shall be resumed and continued). Notwithstanding the foregoing provisions, the payment and compensation obligations of the Parties to each other hereunder before the occurrence of Force Majeure will not be affected. |
11.3 |
Remedy. In case of Force Majeure, the Affected Party shall immediately notify the other Party in writing, and inform the other Party of all the information of Force Majeure, the expected duration, and the remedial methods and measures to be taken. The Affected Party shall try its best to take measures to remove, eliminate or reduce the impact of Force Majeure, and resume the performance of its obligations hereunder as soon as possible. |
11.4 |
Termination of Agreement. In case of Force Majeure, (i) if the situation lasts for more than three (3) months (unless the Parties agree in writing to extend the three (3) month period), either Party has the right to terminate this Agreement after giving written notice to the other Party; or (ii) if the existing objective and uncontroversial evidence shows that the Force Majeure will last for more than three (3) months, and the Parties are unwilling to extend the period mentioned in (i) above, the Parties may agree in writing that this Agreement may be terminated at any time before the expiration of the period mentioned in (i). In case the situation mentioned in (i) occurs, termination of the Agreement shall come into effect when one Party sends a written notice to the other Party. In case of the situation in (ii), termination of the Agreement shall come into effect when the Parties reach a written agreement. |
Article 12 Confidentiality
12.1 |
Confidentiality obligations. Either Party shall (i) keep the confidential information of the other Party strictly confidential; (ii) not disclose any confidential information of the other Party to any third party; (iii) not use the confidential information of the other Party for any purpose other than for the purpose of performing this Agreement. |
12.2 |
Exceptions to confidentiality. Article 12.1 does not apply to: |
(1) |
Disclosure of confidential information of the other Party to its own directors, supervisors, officers and employees who obtain confidential information on the need-to-know basis for the purpose of performing this Agreement; or |
(2) |
Disclosure of confidential information of the other Party required by laws, relevant stock exchanges, regulatory agencies or courts with jurisdiction. |
(3) |
Under the circumstances mentioned in (1) above, either Party shall ensure that its directors, supervisors, officers and employees strictly abide by the obligations under this Article 12. |
12.3 |
Definition of confidential information. For the purposes of Article 12, Confidential Information means (1) information about the existence and content of this Agreement and the transactions contemplated herein; and (2) all proprietary, confidential and non-public technical and/or commercial information disclosed by one Party or its affiliates to the other Party, including but not limited to (i) any R&D design, service or product design concepts/ideas, products and their specifications, data, models, samples, drafts, product test results and other technical information disclosed by the Party or its affiliates to the other Party or the other Partys employees before or after signing this Agreement; (ii) commercial information on marketing requirements and strategies, product plans and prices, customer lists, direction of the companys business development, and systems and processes related to operation and management; and (iii) other information disclosed to the other Party by the Party or its affiliates and subject to confidentiality obligations to a third party (whether the information is disclosed in written, oral, graphic, electromagnetic or any other form). |
12.4 |
Consent to disclosure. If either Party needs to disclose the Confidential Information of the other Party, it shall obtain the written confirmation of the other Party. |
12.5 |
Confidentiality term. The Party receiving Confidential Information of the other Party shall keep it confidential until the Confidential Information is legally disclosed. |
Article 13 Notice
13.1 |
Notice. All notices sent by one Party to the other Party shall be made in Chinese in writing, and shall be sent to the following addresses by email, personal delivery (including courier service) or registered mail: |
If to Tengjing Sports & Culture Development (Shanghai) Co., Ltd.
Contact person: [redacted]
Address: [redacted]
Tel: [redacted]
Email: [redacted]
If to Guangzhou Huya Information Technology Co., Ltd.
Contact person: [redacted]
Address: [redacted]
Tel: [redacted]
Email: [redacted]
13.2 |
Determination of service time. If a notice is sent by e-mail, the notice shall be deemed to have been served at the time of successful transmission recorded in the transmission record, unless the service occurs after 5:00 pm (Beijing time), in which case service shall be deemed to occur on the next working day; or, in the case of personal delivery (including courier service), the notice shall be deemed to be served on the date of signing the delivery receipt; or, if delivered by registered mail, it shall be deemed to be served on the seventh (7th) day after the receipt of the notice is issued by the post office. |
13.3 |
Change of information. If one Party needs to change the above information, it shall notify the other Party in writing within ten (10) days before the change, listing the information after change. Otherwise, after the notice is served at the above address or number confirmed in this Agreement, the obligations related to the sending of such notice shall be deemed to have been fully fulfilled. |
Article 14 Applicable Law and Dispute Resolution
14.1 |
Applicable law. The formation, validity, interpretation, performance and dispute resolution of this Agreement shall be governed by the laws of Chinese mainland. |
14.2 |
Dispute resolution. Any dispute arising from or in connection with this Agreement shall be settled by the Parties in the principle of friendly consultation. If consultation fails, either Party shall bring a lawsuit to the peoples court with jurisdiction in Nanshan District, Shenzhen where this Agreement is executed. |
Article 15 Miscellaneous
15.1 |
Entire agreement. This Agreement constitutes an entire agreement between the Parties on the subject matter of this Agreement and replaces all previous understandings, memos, intentions, agreements, commitments, statements, warranties and arrangements on the same subject matter. |
15.2 |
Assignment. Unless otherwise stipulated in this Agreement, neither Party shall transfer all or part of its rights or obligations hereunder without the prior written consent of the other Party. |
15.3 |
No agency relationship. The Parties acknowledge that they are independent parties to the contract. Nothing in this Agreement shall be interpreted as authorizing one Party to act as the agent or spokesperson of the other Party. Unless otherwise specially stipulated hereunder, neither Party has the right to represent the other Party explicitly or implicitly, or create or assume any obligations in the name of the other Party, and such actions are not binding on the other Party. |
15.4 |
Survival. The relevant Articles in this Agreement (including but not limited to Articles 7, 9, 12, 14) shall survive the termination of this Agreement based on their nature and content. |
15.5 |
Amendment. No supplement, revision or amendment to this Agreement shall be binding upon the Parties unless a written contract is entered into by the Parties. |
15.6 |
No waiver. Failure to exercise or delay in exercising a right or remedy by one Party does not constitute a waiver of that right or remedy or other rights or remedies. The single or partial exercise of a right or remedy by one Party does not hinder the further exercise of that right or remedy or other rights or remedies. |
15.7 |
Accumulation of rights. The rights and remedies stipulated in this Agreement are accumulative and shall not exclude the rights or remedies provided by law. |
15.8 |
Severability. If any provision of this Agreement is held to be invalid or unenforceable, it will not affect the validity or enforceability of the remaining provisions of this Agreement. If any provision of this Agreement is judged to be invalid or unenforceable by any judicial organ or other competent authority, all remaining provisions of this Agreement will remain fully valid and will not be damaged in any way. If any provision of this Agreement is deemed invalid or unenforceable but will be valid or enforceable after some parts of the provision are deleted, the Parties will make the provision valid and enforceable by making the minimum necessary modifications. |
15.9 |
Counterparts. This Agreement is made in quadruplicate, with the Parties holding two copies each, all of which shall have the same legal effect. |
(The remainder of this page is intentionally left blank )
(Signature page)
IN WITNESS WHEREOF, the Parties have signed this Agreement as of the date stated on the first page of this Agreement.
Tengjing Sports & Culture Development (Shanghai) Co., Ltd. | ||
Authorized Signatory: |
/s/ Authorized Signatory |
|
Title: | Match Copyright Owner |
Guangzhou Huya Information Technology Co., Ltd. | ||
Authorized Signatory: |
/s/ Authorized Signatory |
|
Title: | Match Business Owner |
Schedule 1 Definition
[redacted]
Schedule 2 Technical Quality Standards
[redacted]
Schedule 3 Blacklist of Advertisers
[redacted]
Schedule 4 Data Reporting
[redacted]
Schedule 5 Resource Promotion
[redacted]
Schedule 6 IP Use Specifications for League of Legends Matches
[redacted]
Schedule 7 Advertising Standards for Non-official Sponsors in Match Broadcasting
[redacted]
Schedule 8 [redacted]
[redacted]
Exhibit 8.1
Principal Subsidiaries and Variable Interest Entities of HUYA Inc.
Subsidiaries |
Jurisdiction of Incorporation |
|
Tiger Information Technology Inc. |
Cayman Islands | |
Tiger Company Ltd. |
Cayman Islands | |
HUYA PTE. LTD. |
Singapore | |
Huya Limited |
Hong Kong | |
Guangzhou Huya Technology Co., Ltd. |
PRC | |
Hainan Huya Entertainment Information Technology Co., Ltd. |
PRC | |
Variable Interest Entities |
||
Guangzhou Huya Information Technology Co., Ltd. |
PRC | |
Guangzhou Yaoguo Information Technology Co., Ltd. |
PRC | |
Guangzhou Dachafan Entertainment Co., Ltd. |
PRC |
Exhibit 12.1
Certification by the Principal Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Rongjie Dong, certify that:
1. |
I have reviewed this annual report on Form 20-F of HUYA Inc. (the Company); |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
4. |
The Companys other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: |
(a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) |
evaluated the effectiveness of the Companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) |
disclosed in this report any change in the Companys internal control over financial reporting that occurred during the period covered by this annual report that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting; and |
5. |
The Companys other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Companys auditors and the audit committee of the Companys board of directors (or persons performing the equivalent functions): |
(a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Companys ability to record, process, summarize and report financial information; and |
(b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the Companys internal control over financial reporting. |
Date: April 27, 2021
By: |
/s/ Rongjie Dong |
|
Name: | Rongjie Dong | |
Title: | Chief Executive Officer |
Exhibit 12.2
Certification by the Principal Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Catherine Xiaozheng Liu, certify that:
1. |
I have reviewed this annual report on Form 20-F of HUYA Inc. (the Company); |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
4. |
The Companys other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: |
(a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) |
evaluated the effectiveness of the Companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) |
disclosed in this report any change in the Companys internal control over financial reporting that occurred during the period covered by this annual report that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting; and |
5. |
The Companys other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Companys auditors and the audit committee of the Companys board of directors (or persons performing the equivalent functions): |
(a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Companys ability to record, process, summarize and report financial information; and |
(b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the Companys internal control over financial reporting. |
Date: April 27, 2021
By: |
/s/ Catherine Xiaozheng Liu |
|
Name: | Catherine Xiaozheng Liu | |
Title: | Chief Financial Officer |
Exhibit 13.1
Certification by the Principal Executive Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Annual Report of HUYA Inc. (the Company) on Form 20-F for the year ended December 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Rongjie Dong, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: April 27, 2021
By: |
/s/ Rongjie Dong |
|
Name: | Rongjie Dong | |
Title: | Chief Executive Officer |
Exhibit 13.2
Certification by the Principal Financial Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Annual Report of HUYA Inc. (the Company) on Form 20-F for the year ended December 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Catherine Xiaozheng Liu, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: April 27, 2021
By: |
/s/ Catherine Xiaozheng Liu |
|
Name: | Catherine Xiaozheng Liu | |
Title: | Chief Financial Officer |
Exhibit 15.1
Our ref VSL/738622-000001/19424077v2
HUYA Inc.
Building A3, E-Park
280 Hanxi Road
Panyu District, Guangzhou 511446
Peoples Republic of China
April 27, 2021
Dear Sirs
HUYA Inc.
We have acted as legal advisers as to the laws of the Cayman Islands to HUYA Inc., an exempted company incorporated in the Cayman Islands with limited liability (the Company), in connection with the filing by the Company with the United States Securities and Exchange Commission (the SEC) of an annual report on Form 20-F for the year ended 31 December 2020 (the Annual Report).
We hereby consent to the reference to our firm under the headings Item 5.A. Operating and Financial Review and ProspectsOperating Results and Item 10.E. Additional InformationTaxationCayman Islands Taxation in the Annual Report, and we further consent to the incorporation by reference of the summary of our opinions under these headings into the Companys registration statement on Form S-8 (File No. 333-227336) that was filed on 14 September 2018, pertaining to the Companys Amended and Restated 2017 Share Incentive Plan, and the Companys registration statement on Form F-4 (File No. 333-250016) that was filed on 10 November 2020, as amended.
We consent to the filing with the SEC of this consent letter as an exhibit to the Annual Report. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, or under the Securities Exchange Act of 1934, in each case, as amended, or the regulations promulgated thereunder.
Yours faithfully
/s/ Maples and Calder (Hong Kong) LLP
Maples and Calder (Hong Kong) LLP
Exhibit 15.2
April 27, 2021
HUYA Inc.
Building A3, E-Park
280 Hanxi Road
Panyu District, Guangzhou 511446
Peoples Republic of China
Dear Sirs/Madams:
We consent to the reference of our name under the headings Item 3. Key Information D. Risk Factors, Item 4. Information on the Company C. Business Overview PRC Regulations, Item 4. Information on the Company D. Organizational Structure, Item 5. Operating and Financial Review and Prospects C. Operating Results, and Item 10. Additional Information E. Taxation, in HUYA Inc.s Annual Report on Form 20-F for the year ended December 31, 2020 (the Annual Report), which will be filed with the Securities and Exchange Commission (the SEC) in the month of April 2021, and further consent to the incorporation by reference of the summaries of our opinions under these captions into HUYA Inc.s Registration Statement on Form S-8 (No. 333-227336) that was filed on September 14, 2018, and HUYA Inc.s Registration Statement on Form F-4 (No. 333-250016) that was filed on November 10, 2020, as amended. We also consent to the filing of this consent letter with the SEC as an exhibit to the Annual Report.
In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, or under the Securities Exchange Act of 1934, in each case, as amended, or the regulations promulgated thereunder.
Yours faithfully,
/s/ Commerce & Finance Law Offices
Commerce & Finance Law Offices
Exhibit 15.3
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 333-227336) and on Form F-4 (No. 333-250016) of HUYA Inc. of our report dated April 27, 2021 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 20-F.
/s/ PricewaterhouseCoopers Zhong Tian LLP
Guangzhou, the Peoples Republic of China
April 27, 2021