20-F

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

o	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2014.
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
o	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report . . . . . . . . . . . . . . . . . . .

For the transition period from                       to                        

Commission file number: 001-33616

E-HOUSE (CHINA) HOLDINGS LIMITED

(Exact name of Registrant as specified in its charter)

N/A

(Translation of Registrant’s name into English)

Cayman Islands

(Jurisdiction of incorporation or organization)

Qiushi Building, 11/F

383 Guangyan Road, Zhabei District

Shanghai 200072

People’s Republic of China

(Address of principal executive offices)

Bin Laurence, Chief Financial Officer

E-House (China) Holdings Limited

Qiushi Building, 11/F

383 Guangyan Road, Zhabei District

Shanghai 200072

People’s Republic of China

Telephone: +86 21 6133 0808

Facsimile: +86 21 6133 0707

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class	Name of exchange on which registered
American Depositary Shares, each representing one ordinary share, par value $0.001 per share	New York Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

148,243,164 ordinary shares, par value $0.001 per share, as of December 31, 2014.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

o Yes   x No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

o Yes   x No

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes   o No

Indicate by check mark whether the registrant has submitted electronically and posted on its Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files).

x Yes   o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer x Non-accelerated filer o

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

US GAAP x International Financial Reporting Standards as issued
by the International Accounting Standards Board o Other o

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

o Item 17   o Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes   x No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

o Yes   o No

TABLE OF CONTENTS

INTRODUCTION		1
FORWARD-LOOKING STATEMENTS		2
PART I.		2
ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	2
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	2
ITEM 3.	KEY INFORMATION	3
ITEM 4.	INFORMATION ON THE COMPANY	34
ITEM 4A.	UNRESOLVED STAFF COMMENTS	56
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	56
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	83
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	97
ITEM 8.	FINANCIAL INFORMATION	115
ITEM 9.	THE OFFER AND LISTING	116
ITEM 10.	ADDITIONAL INFORMATION	117
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	123
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	124
PART II		125
ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	125
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	125
ITEM 15.	CONTROLS AND PROCEDURES	126
ITEM 16.		126
ITEM 16A.	AUDIT COMMITTEE FINANCIAL EXPERT	126
ITEM 16B.	CODE OF ETHICS	126
ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	127
ITEM 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	127
ITEM 16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	127
ITEM 16F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	127
ITEM 16G.	CORPORATE GOVERNANCE	127
ITEM 16H.	MINE SAFETY DISCLOSURE	127
PART III		127
ITEM 17.	FINANCIAL STATEMENTS	127
ITEM 18.	FINANCIAL STATEMENTS	128
ITEM 19.	EXHIBITS	128

INTRODUCTION

Unless otherwise indicated and except where the context otherwise requires, references in this annual report on Form 20-F to:

·“ADSs” refers to our American depositary shares, each of which represents one ordinary share;

·“Beijing Jiajujiu” refers to Beijing Jiajujiu E-Commerce Co., Ltd., one of our consolidated variable interest entities;

·“Beijing Leju” refers to Beijing Yisheng Leju Information Services Co., Ltd., one of our consolidated variable interest entities;

·“China” or “PRC” refers to the People’s Republic of China, excluding, for the purpose of this annual report only, Taiwan, Hong Kong and Macau;

·“CRIC” refers to China Real Estate Information Corporation, our wholly-owned subsidiary;

·“CRIC system” refers to our proprietary real estate information database and analysis system;

·“GFA” refers to gross floor area;

·“HKD” or “Hong Kong dollars” refers to the legal currency of the Hong Kong Special Administrative Region;

·“Leju” refers to Leju Holdings Limited, our majority-owned subsidiary;

·“liquid assets” refers to the difference between (i) cash and cash equivalents and restricted cash, and (ii) short-term borrowings.

·“primary real estate market” refers to the market for newly constructed residential and commercial real properties, and “primary real estate agency services” refers to agency services provided for the primary real estate market;

·“RMB” or “Renminbi” refers to the legal currency of China;

·“secondary real estate market” refers to the market for existing residential and commercial real properties, and “secondary real estate brokerage services” refers to brokerage services provided for the secondary real estate market;

·“Shanghai E-Cheng” refers to Shanghai E-Cheng Asset Management Co., Ltd., one of our consolidated variable interest entities;

·“Shanghai Fangjia” refers to Shanghai Fangjia Information Technology Co., Ltd., one of our consolidated variable interest entities;

·“Shanghai Kushuo” refers to Shanghai Kushuo Information Technology Co., Ltd., one of our consolidated variable interest entities;

·“Shanghai Weihui” refers to Shanghai Weihui Business Information Consulting Co., Ltd., one of our consolidated variable interest entities;

·“Shanghai Yi Xin” refers to Shanghai Yi Xin E-Commerce Co., Ltd., one of our consolidated variable interest entities;

·“shares” or “ordinary shares” refers to our ordinary shares, par value $0.001 per share;

·“VIEs” refers to any or all of Beijing Leju, Shanghai Yi Xin, Beijing Jiajujiu, Shanghai Kushuo, Shanghai E-Cheng, Shanghai Fangjia and Shanghai Weihui (each a “VIE”), all of which are domestic PRC companies in which we do not have equity interests but whose financial results have been consolidated into our consolidated financial statements in accordance with U.S. GAAP due to our having effective control over, and our being the primary beneficiary of, these companies;

·“we,”“us,”“our company,”“our” or “E-House” refers to E-House (China) Holdings Limited, a Cayman Islands company, its predecessor entities and its subsidiaries and consolidated VIEs; and

·“$,”“dollars,”“US$” or “U.S. dollars” refers to the legal currency of the United States.

1

FORWARD-LOOKING STATEMENTS

This annual report on Form 20-F contains forward-looking statements that involve risks and uncertainties. All statements other than statements of historical facts are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements.

You can identify these forward-looking statements by words or phrases such as “may,”“will,”“expect,”“anticipate,”“aim,”“estimate,”“intend,”“plan,”“believe,”“likely to” or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements include:

·our anticipated growth strategies;

·our future business development, results of operations and financial condition;

·expected changes in our revenues and certain cost or expense items;

·our ability to attract clients and further enhance our brand recognition; and

·trends and competition in the real estate services industry.

You should read thoroughly this annual report and the documents that we refer to in this annual report with the understanding that our actual future results may be materially different from and worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements. Other sections of this annual report include additional factors which could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

PART I.

ITEM 1.IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

2

ITEM 3.KEY INFORMATION

A.Selected Financial Data

Selected Consolidated Financial Data

The following selected consolidated statement of operations data for the three years ended December 31, 2012, 2013 and 2014 and the selected consolidated balance sheet data as of December 31, 2013 and 2014 have been derived from our audited consolidated financial statements included elsewhere in this annual report. The selected consolidated financial data should be read in conjunction with our audited consolidated financial statements and related notes and “Item 5. Operating and Financial Review and Prospects” in this annual report. Our consolidated financial statements are prepared and presented in accordance with U.S. GAAP.

Our selected consolidated statement of operations data for the fiscal years ended December 31, 2010 and 2011 and our consolidated balance sheet data as of December 31, 2010, 2011 and 2012 have been derived from our audited consolidated financial statements not included in this annual report.

Our selected consolidated financial data also includes certain non-GAAP measures, which are not required by, or presented in accordance with U.S. GAAP, but are included because we believe they are indicative of our operating performance and are used by investors and analysts to evaluate companies in our industry.

Our historical results do not necessarily indicate results expected for any future periods.

	As of and for the Years Ended December 31,
	2010			2011			2012			2013			2014
	(in thousands of $, except share, per share and per ADS data)
Consolidated Statement of Operations Data:
Total revenues	356,525			401,625			462,439			731,079			904,499
Cost of revenues	(104,846		)	(163,044		)	(203,171		)	(274,036		)	(306,133		)
Selling, general and administrative expenses	(198,425		)	(286,688		)	(336,873		)	(400,947		)	(545,492		)
Goodwill impairment charge	—			(417,822		)	—			—			—
Other operating income	4,081			6,180			6,475			4,918			8,787
Income (loss) from operations	57,335			(459,749		)	(71,130		)	61,014			61,661
Net income (loss)	48,676			(465,020		)	(71,049		)	51,086			52,338
Less: net income (loss) attributable to non-controlling interest	12,522			(194,663		)	(14,078		)	(871		)	12,336
Net income (loss) attributable to E-House shareholders	36,154			(270,357		)	(56,971		)	51,957			40,002
Earnings (loss) per ordinary share and ADS(1):
Basic	$	0.45		$	(3.39	)	$	(0.54	)	$	0.40		$	0.29
Diluted	$	0.44		$	(3.39	)	$	(0.54	)	$	0.38		$	0.26
Dividends per ordinary share:
Basic	0.25			0.25			0.15			0.15			0.35
Weighted average number of ordinary shares used in per share calculations:
Basic	80,287,171			79,769,823			106,159,388			130,163,165			139,211,442
Diluted	81,302,622			79,769,823			106,159,388			135,779,997			146,687,835
Consolidated Balance Sheet Data:
Cash and cash equivalents	543,818			392,005			210,841			413,319			630,617
Total assets	1,558,267			1,143,698			1,011,962			1,355,520			1,776,924
Total current liabilities	140,099			176,097			222,284			356,624			455,145
Total E-House shareholders’ equity	901,100			633,362			738,925			821,938			1,007,790

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Note: (1) Each ADS represents one ordinary share.

Non-GAAP Financial Measures

The following table sets forth, for the periods specified, our adjusted income (loss) from operations, our adjusted net income (loss) and our adjusted net income (loss) attributable to E-House shareholders. We present these non-GAAP financial measures because they are used by our management to evaluate our operating performance, formulate business plans, and make strategic decisions on capital allocation. These non-GAAP financial measures enable our management to assess our operating results without considering the impact of non-cash charges, including share-based compensation expense, amortization of intangible assets resulting from business combinations, loss from the disposal of subsidiaries and goodwill impairment charge. We also believe they are indicative of our operating performance and are used by investors and analysts to evaluate companies in our industry. These non-GAAP measures of our performance are not required by, or presented in accordance with, U.S. GAAP. Such measures are not a measurement of financial performance or liquidity under U.S. GAAP and should not be considered as an alternative to income from operations, net income or any other performance measures derived in accordance with U.S. GAAP, or an alternative to cash flows from operating activities as a measure of liquidity. Our presentation of such measures may not be comparable to similarly titled measures presented by other companies. You should not compare such measures as presented by us with the presentation of such measures by other companies because not all companies use the same definition.

We define adjusted income (loss) from operations as income (loss) from operations before share-based compensation expense, amortization of intangible assets resulting from business combinations and goodwill impairment charge.

We define adjusted net income (loss) as net income (loss) before share-based compensation expense (net of tax), amortization of intangible assets resulting from business combinations (net of tax), loss from the disposal of subsidiaries and goodwill impairment charge (net of tax).

We define adjusted net income (loss) attributable to E-House shareholders as net income (loss) before share-based compensation expense (net of tax and non-controlling interests), amortization of intangible assets resulting from business combinations (net of tax and non-controlling interests), loss from the disposal of subsidiaries (net of tax and non-controlling interests) and goodwill impairment charge (net of tax and non-controlling interests).

The use of the below non-GAAP financial measures has material limitations as an analytical tool, as they do not include all items that impact our income (loss) from operations, net income (loss), and net income (loss) attributable to E-House shareholders for the period. We compensate for these limitations by providing the relevant disclosure of our share-based compensation expense, amortization of intangible assets results from business acquisitions, loss from the disposal of subsidiaries and goodwill impairment charge both in our reconciliations to the financial measures under U.S. GAAP, and in our consolidated financial statements, all of which should be considered when evaluating our performance.

The following table reconciles our adjusted income (loss) from operations, adjusted net income (loss) and adjusted net income (loss) attributable to E-House shareholders in the periods presented to the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP:

4

	For the Years Ended December 31,
	2010	2011		2012		2013	2014
	(in thousands of $)
Income (loss) from operations	57,335	(459,749	)	(71,130	)	61,014	61,661
Share-based compensation expense	27,006	32,024		35,656		18,903	22,176
Amortization of intangible assets resulting from business acquisitions	20,914	22,228		22,956		22,606	15,269
Goodwill impairment charge	—	417,822		—		—	—
Adjusted income (loss) from operations	105,255	12,325		(12,518	)	102,523	99,106
Net income (loss)	48,676	(465,020	)	(71,049	)	51,086	52,338
Share-based compensation expense (net of tax)	27,006	32,024		35,656		18,903	22,176
Amortization of intangible assets resulting from business acquisitions(net of tax)	18,177	19,220		19,740		14,924	13,482
Loss from the disposal of subsidiaries (net of tax)	—	1,054		—		—	—
Goodwill impairment charge (net of tax)	—	417,822		—		—	—
Adjusted net income (loss)	93,859	5,100		(15,653	)	84,913	87,996
Net income (loss) attributable to E-House shareholders	36,154	(270,357	)	(56,971	)	51,957	40,002
Share-based compensation expense (net of tax and non-controlling interests)	19,987	24,318		32,249		18,903	19,860
Amortization of intangible assets resulting from business acquisitions(net of tax and non-controlling interests)	9,633	10,171		16,360		14,562	11,085
Loss from the disposal of subsidiaries (net of tax and non-controlling interests)	—	565		—		—	—
Goodwill impairment charge (net of tax and non-controlling interests)	—	226,183		—		—	—
Adjusted net income (loss) attributable to E-House shareholders	65,774	(9,120	)	(8,362	)	85,422	70,947

Exchange Rate Information

Our reporting and financial statements are expressed in the U.S. dollar, which is our reporting and functional currency. However, our business is conducted in China and substantially all of our revenues are denominated in Renminbi. This annual report contains translations of RMB amounts into U.S. dollars at specific rates solely for the convenience of the reader. The conversion of RMB into U.S. dollars in this annual report, for the amounts not otherwise recorded in our consolidated financial statements included elsewhere in this annual report, is based on the certified exchange rate published by the Board of Governors of the Federal Reserve Bank. Unless otherwise noted, all translations from RMB to U.S. dollars and from U.S. dollars to RMB in this annual report were made at a rate of RMB6.2046 to US$1.00, the certified exchange rate in effect on December 31, 2014. We make no representation that any RMB or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or RMB, as the case may be, at any particular rate, at the rates stated below, or at all. The PRC government imposes control over its foreign currency reserves in part through direct regulation of the conversion of RMB into foreign currencies and through restrictions on foreign trade. On April 17, 2015, the certified exchange rate was RMB6.1976 to US$1.00.

The following table sets forth information concerning exchange rates between the RMB and the U.S. dollar for the periods indicated. These rates are provided solely for your convenience and are not necessarily the exchange rates that we used in this annual report or will use in the preparation of our periodic reports or any other information to be provided to you. The source of these rates is the Federal Reserve Statistical Release.

5

	Exchange Rate
Period	Period End	Average(1)	Low	High
2010	6.6000	6.7603	6.8330	6.6000
2011	6.2939	6.4475	6.6364	6.2939
2012	6.2301	6.2990	6.3879	6.2221
2013	6.0537	6.1478	6.2438	6.0537
2014	6.2046	6.1704	6.2591	6.0402
October	6.1124	6.1251	6.1385	6.1107
November	6.1429	6.1249	6.1429	6.1117
December	6.2046	6.1886	6.2256	6.1490
2015
January	6.2495	6.2181	6.2535	6.1870
February	6.2695	6.2518	6.2695	6.2399
March	6.1990	6.2386	6.1955	6.2741
April (through April 17, 2015)	6.1976	6.2010	6.2152	6.1930

Source: Federal Reserve Statistical Release

(1)Annual averages are calculated from month-end rates. Monthly averages are calculated using the average of the daily rates during the relevant period.

B.Capitalization and Indebtedness

Not applicable.

C.Reasons for the Offer and Use of Proceeds

Not applicable.

D.Risk Factors

Risks Related to Our Business

Our business is susceptible to fluctuations in the real estate market of China, which may materially and adversely affect our revenues and results of operations.

We conduct our real estate services business primarily in China. Our business depends substantially on the conditions of the PRC real estate market. Demand for private residential real estate in China has grown rapidly in the recent decade but such growth is often coupled with volatility in market conditions and fluctuation in real estate prices. Fluctuations of supply and demand in China’s real estate market are caused by economic, social, political and other factors. For example, the announcement and implementation of restrictive measures in early 2011, combined with further credit tightening, resulted in a severe downturn in the real estate market with a fall of overall transaction volume in many major cities in 2011 and 2012. In its continuing efforts to curb real estate price, the Chinese government released further restrictive policies in 2012 and early 2013. These measures have affected and may continue to affect the growth of the PRC real estate market. See “—Risks Related to Our Business—Our business may be materially and adversely affected by government measures aimed at China’s real estate industry.” To the extent fluctuations in the real estate market adversely affect real estate transaction volumes or prices, our financial condition and results of operations may be materially and adversely affected.

Our business may be materially and adversely affected by government measures aimed at China’s real estate industry.

The real estate industry in China is subject to government regulations, including measures that are intended to control real estate prices. Since January 2011, PRC government agencies have issued a number of restrictive rules on the real estate market, which include:

6

·minimum down payments for the first self-use housing unit purchased by a family must be no less than 20% of the purchase price;

·minimum down payments for the second housing unit purchased by a family must be no less than 40% of the purchase price, and the loan interest rate must be no less than 110% of benchmark lending interest rate;

·all municipalities directly under the central government, all provincial capitals and other cities where the local housing prices are deemed to be too high or to have risen too fast, are required to temporarily suspend the sale of housing units to families with registered local permanent residences that already own two or more housing units, families without registered local permanent residences that already own one or more housing units, and families without registered local permanent residences that cannot provide evidence of their local payment of taxes or social insurance premiums for a required period;

·business tax is imposed and calculated on the full sales revenues for the sale of all housing units held for less than two years, and on the difference between the sales revenue and the amount paid for the housing unit for the sale of non-ordinary housing units which were purchased two or more years ago;

·real estate property tax pilot projects were launched in Shanghai and Chongqing. Local regulations require a real property tax to be imposed on certain local housing units purchased on or after January 28, 2011, at a current tax rate of 0.6% in Shanghai and at a tax rate ranging from 0.5% to 1.2% in Chongqing; and

·governments of most major cities are required to set up and make public their target for controlling the price of local, newly built, residential housing units for the current year within the first season. Accordingly, many cities, including Shanghai, Beijing, Chongqing and Shenzhen, have started such exercise to announce their respective price control targets for each year since 2011.

In late February and March 2013, the PRC government issued the “New Five Policies” for administration of the housing market and detailed implementation rules, which revealed the PRC government’s strong determination to curb the increase of housing prices by requiring more stringent implementation of housing price control measures. For example, in cities where housing unit sales have already been subject to restrictions, if the local housing supply is not sufficient so that the housing prices are rising too fast, local governments are required to take more stringent measures to restrict housing units from being sold to those families who own one or more housing units. Following the request of the central government, Beijing, Shanghai and other major cities in China have announced detailed regulations for the New Five Policies in late March 2013, to further cool down local real estate markets. Such measures and policies by the government have caused a reduction in transactions in the real estate market. While these measures and policies remain in effect, they may continue to depress the real estate market, dissuade would-be purchasers from making purchases, reduce transaction volume, cause a decline in average selling prices, and prevent developers from raising the capital they need and increase developers’ costs to start new projects.

In addition, we cannot assure you that the PRC government will not adopt new measures in the future that may result in lower growth rates in the real estate industry. Frequent changes in government policies may also create uncertainty that could discourage investment in real estate. Our business may be materially and adversely affected as a result of decreased transaction volumes or real estate prices that may result from government policies.

A severe or prolonged downturn in the global or Chinese economy could materially and adversely affect our business and our financial condition.

The global financial markets experienced significant disruptions in 2008 and the United States, Europe and other economies went into recession. The recovery from the lows of 2008 and 2009 was uneven and it is facing new challenges, including the escalation of the European sovereign debt crisis since 2011 and the slowdown of the Chinese economy since 2012. There is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies that have been adopted by the central banks and financial authorities of some of the world’s leading economies. There have also been concerns over unrest in Ukraine, the Middle East and Africa, which have resulted in volatility in oil and other markets. In addition, there have been concerns about the territorial disputes involving China in Asia and the economic effects. Economic conditions in China are sensitive to global economic conditions. Although the Chinese economy has grown significantly in the past decade, that growth may not continue, as evidenced by the slowing of the growth of the Chinese economy since 2012. Any severe or prolonged slowdown in the Chinese economy may materially and adversely affect our business, results of operations and financial condition. In addition, continued turbulence in the international markets may adversely affect our ability to access capital markets to meet liquidity needs.

7

Failure to maintain or enhance our brands or image could have a material and adverse effect on our business and results of operations.

We believe our “E-House” brand is associated with a leading integrated real estate services company with consistent high-quality services among both real estate developers and individual real estate buyers in China. Our “CRIC” brand is associated with a leading real estate information and consulting service provider and the “Leju” brand is associated with a leading real estate online platform in China. Our brands are integral to our sales and marketing efforts. Our continued success in maintaining and enhancing our brands and image depends to a large extent on our ability to satisfy customer needs by further developing and maintaining quality of services across our operations, as well as our ability to respond to competitive pressures. If we are unable to satisfy customer needs or if our public image or reputation were otherwise diminished, our business transactions with our customers may decline, which could in turn adversely affect our results of operations.

We may not be able to successfully execute our strategy of expanding into new geographical markets in China, which could have a material and adverse effect on our business and results of operations.

We plan to continue to expand our business into new geographical areas in China, especially for our mobile community services app called “Shi Hui”. As China is a large and diverse market, consumer trends and demands may vary significantly by region and our experience in the markets in which we currently operate may not be applicable in other parts of China. As a result, we may not be able to leverage our experience to expand into other parts of China. When we enter new markets, we may face intense competition from companies with greater experience or an established presence in the targeted geographical areas or from other companies with similar expansion targets. In addition, our business model may not be successful in new and untested markets and markets with a different legal and business environment, such as Hong Kong and Macau. Therefore, we may not be able to grow our revenues in the new cities we enter into due to the substantial costs involved.

If we fail to successfully execute the business plans for our strategic alliances and other new business initiatives, our results of operations and prospects may be materially and adversely affected.

Since 2008, we have formed strategic alliances with a number of leading real estate developers in China including Evergrande Real Estate Group, or Evergrande. The success of these strategic alliances depends on, among others, our successful sales and marketing of the projects and properties, the developers’ ability to make timely delivery of properties in satisfactory quality and quantity and purchasers’ ability to obtain financing and complete their purchase obligations. If we fail to successfully market and sell these new properties, or if purchasers fail to complete their purchase obligations for any reason, we may not be able to continue the existing strategic alliances or enter into new strategic relationships with leading real estate developers and our results of operations and prospects may be materially and adversely affected.

Through an agreement that we entered into with SINA in 2009, we own SINA’s real estate operations through our majority-owned subsidiary Leju. To a large extent, the operations and revenues of Leju’s business rely on SINA’s cooperation with us. The domain names of some major websites of Leju’s business are owned by SINA and licensed to Leju through agreements which we initially entered into with SINA in 2009 with terms through 2019 and which we recently amended and restated to extend through 2024. A significant number of users of these websites are linked through other SINA websites. Pursuant to an advertising inventory agency agreement with SINA, Leju is also the exclusive agent of SINA for selling advertising to the real estate advertisers through 2024. To a certain extent, we rely on SINA’s continued cooperation on an ongoing basis to enjoy our rights pursuant to our agreements with SINA. SINA could at any time reduce its support for our business. In addition, SINA’s dual role as our substantial shareholder and contractual counterparty could result in conflicts of interest. If for any reason SINA does not fulfill its obligations in accordance with the advertising inventory agency agreement or any of the other agreements or otherwise reduces its support for our online real estate operations, our business may be materially and adversely affected.

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In August 2010, we launched Baidu’s real estate website, house.baidu.com, and home furnishing website, jiaju.baidu.com, to offer search-based advertising for China’s real estate and home furnishing industries pursuant to our strategic cooperation agreement with Baidu, which expires in December 2015. In August 2011, we became Baidu’s premier strategic online real estate partner and obtained the exclusive right, through December 2015, to sell Baidu’s real estate Brand-Link product, a form of keyword advertising. If we are unable to renew our agreements with Baidu when they expire on favorable terms, or at all, or if Baidu reduces or terminates its support for, or cooperation with respect to, our real estate online operations, our business may be materially and adversely affected.

In August 2010, we started a new business initiative to focus on providing data services in the non-residential real estate market, such as office, commercial real estate and real estate construction materials. Our experience and expertise have been concentrated in the residential real estate sector. Failure to establish a meaningful presence and brand in the non-residential sector and generate revenues and profits could adversely affect our results of operations and prospects.

On March 10, 2014, Leju entered into a strategic cooperation agreement with Tencent, a provider of comprehensive internet services serving the largest online community in China. Pursuant to the strategic cooperation agreement, Leju and Tencent have agreed to jointly develop software and tools for use on Tencent’s social communication platform, Weixin, to facilitate Leju’s opening of Weixin public accounts associated with real estate projects. Leju agreed to adopt Weixin payment solutions as the default payment method for real estate O2O e-commerce transactions conducted by its users on Weixin. Leju and Tencent have also agreed to explore and pursue additional opportunities for potential cooperation, including but not limited to cooperation involving Tencent’s social communications platform, including Weixin, “QQ” and “mobile QQ;” the social media service, “Tencent Weibo;” the social networking service “Qzone;” and/or certain other Tencent wholly-owned internet properties in China. Tencent is also a substantial shareholder of Leju. Leju is currently operating numerous Weixin accounts related to various real estate projects throughout China. If Tencent does not fulfill its obligations under the strategic cooperation agreement or otherwise reduces its support for our online real estate operations, our business may be materially and adversely affected.

Leju has also established strategic cooperation relationships with Weibo Corporation, or Weibo, a leading social media platform in China and majority owned subsidiary of SINA, and has opened and operated numerous Weibo accounts related to real estate. In addition, Leju has a strategic venture with CITIC, pursuant to which CITIC introduced “Leju Loan”, an innovative financial product that aims to provide added liquidity and improve the overall purchasing power of home buyers through Leju’s online platform. There can be no assurance that we will be able to maintain our strategic venture with CITIC or maintain our strategic cooperation relationships with Weibo through Leju, or that we will be able to execute on any other new initiatives successfully and achieve the expected results.

We may also explore other business initiatives to expand the scope or our products and services. In July 2014, we launched our community value-added services, our real estate financial services and our home price rating website under our real estate information and consulting services. Failure to execute our business plans for these new business initiatives could have material and adverse effect on the results of our operations.

Our business faces risks associated with the application of the e-commerce business model to the real estate industry.

Our e-commerce business was established in 2011 and became an integral part of our online real estate service operations following its rapid growth from 2012 to 2014. The business of providing these e-commerce services is still relatively new and evolving, and its growth depends on our ability to manage it effectively. Although we generally have been able to maintain contractual arrangements with third-party property developers who allow us to sell discount coupons to prospective real estate purchasers on acceptable terms, there can be no assurance that we will continue to be able to do so in the future. Customer complaints or negative publicity about our services could diminish consumer confidence in and use of our services, and our results of operations or profitability could be adversely affected.

If we cannot manage our growth effectively and efficiently, our results of operations or profitability could be adversely affected.

Our revenues increased 24% to $904.5 million for the year ended December 31, 2014 from $731.1 million for the year ended December 31, 2013. We intend to continue to expand our services and operations. This expansion has placed, and will continue to place, substantial demands on our managerial, operational, technological and other resources. Our planned expansion will also place significant demands on us to maintain the quality of our services to ensure that our brands do not suffer as a result of any deviations, whether actual or perceived, in the quality of our services. In order to manage and support our growth, we must continue to improve our existing operational, administrative and technological systems and our financial and management controls, and recruit, train and retain additional qualified real estate service professionals as well as other administrative and sales and marketing personnel, particularly as we expand into new markets and launch new business initiatives. We may not be able to effectively and efficiently manage the growth of our operations, recruit and retain qualified personnel and integrate new expansion into our operations. As a result, our quality of service may deteriorate and our results of operations or profitability could be adversely affected.

9

We may lose our competitive advantage if we fail to obtain and maintain accurate, comprehensive and reliable data in our CRIC system or prevent disruptions or failure in the performance of our CRIC system.

We have devoted substantial resources to developing, maintaining and updating our proprietary real estate information database and analysis system, which we refer to as the CRIC system. Our ability to provide consistent high-quality services and maintain our competitive advantage relies in large part on the accuracy, comprehensiveness and reliability of the data contained in our CRIC system. The task of establishing and maintaining accurate and reliable data is challenging. We rely on third-party data providers for a significant amount of the information in our CRIC system. While we attempt to ensure the accuracy of our data by using multiple sources and performing quality control checks, some of the data provided to us may be inaccurate. If our data, including the data we obtain from third parties, is not current, accurate, comprehensive or reliable, we could experience reduced demand for our services or be subject to legal claims by our customers, which could adversely affect our business and financial performance. In addition, our staff use integrated standard internal processes to update our CRIC system. Any inefficiencies, errors or technical problems with related applications could reduce the quality of our data, which may result in reduced demand for our services and a decrease in our revenues.

Any frequent or recurring disruption or failure in the performance of our CRIC system could also adversely affect the quality of our services and damage our reputation and our effort to successfully market the CRIC system. Our system is vulnerable to damage or interruption as a result of power loss, telecommunications failures, computer viruses, fires, floods, earthquakes, hacking or other attempts to disrupt our systems, and similar events. Our servers, which are located in Shanghai, may also be vulnerable to break-ins, sabotage and vandalism. Our disaster recovery planning does not account for all possible scenarios. If we experience frequent or persistent system failures, the quality of our services and our reputation could be harmed. The steps we need to take to increase the reliability of our CRIC system and to maintain complete backups may be costly, which could reduce our operating margin, and such steps may not reduce the frequency or duration of system failures and service interruptions.

If we are unable to compete successfully, our financial condition and results of operations may be harmed.

We encounter intense competition in each of our business segments on a national, regional and local level. Competition in the industry is primarily based on quality of services, brand name recognition, geographic coverage, commission rates or service fees, and range of services. Compared to real estate development, providing real estate services does not require significant capital commitments. This low barrier to entry allows new competitors to enter our markets with relative ease. New and existing competitors may offer competitive rates, greater convenience or superior services, which could attract customers away from us, resulting in lower revenues for our operations. Competition among real estate services companies may cause a decrease in commission rates or service fees we receive and higher costs to attract or retain talented employees.

Although we are one of the largest real estate agency companies in China, our relative competitive position varies significantly by service type and geographic area. We may not be able to continue to compete effectively, maintain our current fee arrangements or margin levels or ensure that we will not encounter increased competition. Some of our competitors, such as Hopefluent Group Holdings Limited, SYSWIN Inc and Fangdd, may have smaller aggregate businesses than us, but may be more established and have greater market presence and brand name recognition on a local or regional basis. We are also subject to competition from other large national and international firms such as World Union Real Estate Consultancy (China) Ltd., Jones Lang LaSalle, Centaline Group and SouFun Holdings Limited. These firms may have more financial or other resources than us. If we fail to compete effectively, our business operations and financial condition will suffer.

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In addition, we expect more companies to enter the real estate online service industry in China and a wider range of real estate online services to be introduced. As the real estate online services industry in China is relatively new and constantly evolving, existing or future competitors of our real estate online business may be able to better position themselves to compete as the industry matures. The current competitors of our real estate online business include general internet portals, such as sohu.com, vertically integrated real estate internet portals, such as soufun.com, and anjuke.com which was recently acquired by 58.com, certain specialized or local websites, and traditional advertising media. Some of these websites may have a larger user base, better brand recognition or stronger market influence. It is also possible that websites with large traffic may decide to provide real estate-related listing and other online services. Moreover, regionally and locally focused websites providing regional real estate listings together with localized services have offered and may continue to offer strong competition in the regions that we operate.

Our results of operations and cash flows may fluctuate due to seasonal variations in the real estate market and the non-recurring nature of our services provided to real estate developers.

Our operating income and earnings have historically been substantially lower during the first quarter than other quarters. This results from the relatively low level of real estate activities during the winter and the Chinese New Year holiday period, which falls within the first quarter each year.

We generated a majority of our total revenues from services provided to real estate developers, and expect to continue to rely on real estate developers to generate a significant portion of our revenues for the foreseeable future. Revenues from our services to real estate developers are typically generated on a project-by-project basis. The timing of obtaining sales permits varies from project to project and is subject to uncertain and potentially lengthy delays as developers need to obtain a series of other permits and approvals related to the development before obtaining the sales permit.

It is therefore difficult to predict the interval between the time we sign the agency agreements and the time we launch the sale for the projects. We recognize commission revenue from our primary real estate agency services upon achieving the successful sale of a property unit. “Successful sale,” as defined in individual contracts with our developer clients, depends on, among other things, the delivery of the down payment and some purchasers may not deliver the down payments on time. This makes it difficult for us to forecast revenues and increases period-to-period fluctuations.

For some of our consulting projects in relation to land acquisition and property development, we agree to a fixed fee arrangement conditional upon the delivery of a final product, such as closing a land acquisition transaction or providing a market study report. Because such consulting projects may take anywhere from a month to a year to perform, the timing of recognizing revenues from such projects may cause fluctuations in our quarterly revenues and even our annual revenues. Furthermore, difficulty in predicting when these projects will begin and how long it will take for us to complete them makes it difficult for us to forecast revenues.

Revenues from our online services are closely linked with the timing of various real estate project launches, which could also fluctuate from period to period.

In addition, we have in the past entered into, and expect to continue to enter into, contracts from time to time with developers requiring us to pay deposits, which has from time to time resulted in our operating with negative cash flows or, if we fail to recover such deposits, could have a material and adverse effect on our liquidity, financial condition and results of operations.

Our reliance on a concentrated number of real estate developers may materially and adversely affect us.

Revenues derived from services we rendered to the top ten clients in each of 2012, 2013 and 2014, accounted for approximately 23%, 17% and 15%, respectively, of our total revenues. One real estate developer client accounted for over 10% of our total revenues in 2012, no client accounted for over 10% of our total revenues in 2013 and 2014. In the future, these real estate developers, all of which are independent third parties, may not continue to engage our services at the same level, or at all, or they may experience financial or other difficulties that prevent them from making timely delivery of their properties under development. Should these real estate developers terminate or substantially reduce their business with us and we fail to find alternative real estate developers to provide us with revenue-generating business, or if any of them fail to make timely delivery of their properties under development, our financial condition and results of operations may be materially and adversely affected.

11

We face long cycles to settle our accounts receivable and customer deposits, which could materially and adversely affect our results of operations.

As part of the industry practice, many of our developer clients elect to settle our commission and other service fees only upon the completion of the entire project or a phase of a project. Our working capital levels are therefore affected by the time lag between the time we actually make sales, bill our clients and collect the funds owed to us. This also results in large accounts receivable balances. As of December 31, 2014, our accounts receivable balance, net of allowance for doubtful accounts, totaled approximately $415.2 million. Some of our developer clients require us to pay an upfront and refundable deposit as demonstration of our financial strength and commitment to provide high quality service, and refund our customer deposits subject to certain pre-determined criteria at a date specified in the agency contracts. If any of our clients with significant outstanding accounts receivable balances were to become insolvent or otherwise unable to make payments in a timely manner, or at all, we would have to make further provisions against such accounts receivable and customer deposits, or write off the relevant amounts, either of which could adversely affect our profitability and liquidity position.

To improve the security of our accounts receivable and deposits, we sometimes enter into agreements with our developer clients whereby they agree to use properties or the right to properties with pre-sale permit license as collateral against amounts owed to us. In the event of non-payment, we would then resell the properties or the right to properties under construction for cash. The resale price is subject to market conditions and could fall short of the amounts owed to us against which these properties or rights to properties under construction are used as collateral, in which case we would need to write off a portion of our accounts receivable or deposits, which could materially and adversely affect our results of operations.

We may be subject to liabilities in connection with real estate brokerage activities.

As a licensed real estate broker, we and our licensed employees are subject to statutory obligations not to sell properties that fail to meet the statutory sales conditions or provide false statements on the conditions of any property in any advertisement. We must present clients with relevant title certificates or sales permits of the properties and the related letter of authorization. Failure to fulfill these obligations could subject us or our employees to litigation from parties who purchased, sold or leased properties we brokered. We or our employees may become subject to claims by other participants in real estate transactions claiming that we or our employees did not fulfill our statutory obligations as brokers. See “Item 4. Information on the Company—B. Business Overview—Regulation.”

If we fail to hire, train and retain qualified managerial and other employees, our business and results of operations could be materially and adversely affected.

We place substantial reliance on the real estate industry experience and knowledge of our senior management team as well as their relationships with other industry participants. Mr. Xin Zhou, our co-chairman and chief executive officer, is particularly important to our future success due to his substantial experience and reputation in the real estate industry. We do not carry, and do not intend to procure, key person insurance on any of our senior management team. The loss of the services of one or more members of our senior management team due to their departure, or otherwise, could hinder our ability to effectively manage our business and implement our growth strategies. Finding suitable replacements for our current senior management could be difficult, and competition for such personnel of similar experience is intense. If we fail to retain our senior management, our business and results of operations could be materially and adversely affected.

Our real estate service professionals interact with our customers on a daily basis. They are critical to maintaining the quality and consistency of our services and our brand and reputation. It is important for us to attract qualified managerial and other employees who have experience in real estate related services and are committed to our service approach. There may be a limited supply of qualified individuals in some of the cities in China where we have operations and other cities into which we intend to expand. We must hire and train qualified managerial and other employees on a timely basis to keep pace with our rapid growth while maintaining consistent quality of services across our operations in various geographic locations. We must also provide continuous training to our managerial and other employees so that they are equipped with up-to-date knowledge of various aspects of our operations and can meet our demand for high-quality services. If we fail to do so, the quality of our services may decrease in one or more of the markets where we operate, which in turn, may cause a negative perception of our brand and adversely affect our business.

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Any failure to protect our trademarks and other intellectual property rights could have a negative impact on our business.

We believe our trademarks and other intellectual property rights are critical to our success. Any unauthorized use of our trademarks and other intellectual property rights could harm our competitive advantages and business. Historically, China has not protected intellectual property rights to the same extent as the United States or the Cayman Islands, and infringement of intellectual property rights continues to pose a serious risk of doing business in China. Monitoring and preventing unauthorized use is difficult. The measures we take to protect our intellectual property rights may not be adequate. Furthermore, the application of laws governing intellectual property rights in China and abroad is uncertain and evolving, and could involve substantial risks to us. If we are unable to adequately protect our brand, trademarks and other intellectual property rights, we may lose these rights and our business may suffer materially.

Any competitive advantage that we may derive from our CRIC system depends in large part on our protecting our proprietary rights in it. We have imposed contractual obligations on employees and consultants and have taken other precautionary measures to maintain the confidentiality of our proprietary information and restricted the use of the proprietary information other than for our company’s benefit. If our employees and consultants do not honor their contractual obligations and misappropriate our database and other proprietary information, our business would suffer as a result.

As internet domain name rights are not rigorously regulated or enforced in China, other companies have incorporated in their domain names elements similar in writing or pronunciation to the “E-House” or “Leju” trademarks or their Chinese equivalents. This may result in confusion between those companies and our company and may lead to the dilution of our brand value, which could adversely affect our business.

We may be subject to infringement claims or other claims involving intellectual property, which may be expensive to defend and may disrupt our business and operations.

We cannot be certain that our operations or any aspects of our business do not or will not infringe upon or otherwise violate patents, copyrights, trademark, trade name or other intellectual property rights held by third parties. As a result, we may be subject to claims for breach of contract, defamation, negligence, unfair competition, copyright or trademark infringement, or claims based on other theories. We have been, and from time to time in the future may be, subject to legal proceedings and claims involving the intellectual property. For instance, as part of our business, we collect information and data from various sources and distribute such information and data to others. In particular, we have collected and compiled in our CRIC system real estate-related news, articles, reports, floor plans, architectural drawings, maps and other documents and information prepared by third parties. Although we do not use the information we obtain from clients during the course of providing real estate consulting services, the same information derived from other sources may be found in our database. In such cases, we could be subject to breach of confidentiality or similar claims, whether or not having merit, by those clients. We could also be subject to claims based upon the content that is displayed on our websites or accessible from our websites through links to other websites or information on our websites supplied by third parties. Any lawsuits or threatened lawsuits in which we are involved, either as a plaintiff or as a defendant, could cost us a significant amount of time and money and distract management’s attention from operating our business. Any judgments against us in such suits, or related settlements, could have a material impact on our ability to offer or market our services, harm our reputation and have a material and adverse effect on our results of operations. If a lawsuit against us is successful, we may be required to pay damages or enter into royalty or license agreements that may not be based upon commercially reasonable terms, or we may be unable to enter into such agreements at all. As a result, the scope of information and data we offer to our clients could be reduced, or our methodologies or services could change, which may adversely affect the usefulness of our services and database, and our ability to attract and retain clients.

13

If we fail to obtain or keep licenses, permits or approvals applicable to the various real estate services provided by us, we may incur significant financial penalties and other government sanctions.

Due to the broad geographic scope of our operations and the wide variety of real estate services we provide, we are subject to numerous national, regional and local laws and regulations specific to the services we perform. Pursuant to the previous Foreign Investment Industrial Guidance Catalogue issued in 2011, foreign ownership of the real estate agency and brokerage business in China was subject to government approval. However, the latest Foreign Investment Industrial Guidance Catalogue, which became effective on April 10, 2015, has loosened the restrictions on foreign ownership of the real estate agency and brokerage business in China by removing it from the restricted category for foreign investment. Accordingly, our PRC subsidiaries or their subsidiaries no longer need approval of the Ministry of Commerce or its relevant local counterparts for the establishment of, or investment in, any new PRC subsidiary with a registered business scope of real estate agency and brokerage services. On the other hand, pursuant to the relevant regulations regarding real estate agency and brokerage businesses, a real estate broker is still required conduct a filing with the real estate administrative authority within 30 days after issuance of its business license. Among our PRC operating entities with the registered business scope of real estate brokerage business, we have completed such filings with the relevant local real estate administrative authorities for some entities, and are in the process of filings or preparing the relevant application documents for the filings with respect to the remaining entities which intend to make such filings. The requirements of the local real estate administrative authority for such filing may vary in different cities and we cannot assure you that we will be able to complete such filing in a timely manner or at all.

If we fail to properly file records or to obtain or maintain the licenses and permits for conducting our businesses, the relevant branch office or subsidiary may be ordered to cease conducting the relevant real estate services and be subject to warning, fines and revocation of its licenses. Given the large size and scope of real estate sale transactions, both the difficulty of ensuring compliance with the multiple levels of licensing regimes and the possible loss resulting from non-compliance are significant.

In addition to the licenses for our operations, our secondary real estate brokers are required to have the requisite qualification licenses to engage in secondary real estate brokerage services. These licenses must be renewed every one or two years. We are not certain that our secondary real estate brokers can obtain or renew these licenses in a timely manner, if at all. As the State Administration for Industry and Commerce, or its local counterparts, will only issue a license to us to set up and operate a secondary real estate brokerage storefront in certain cities when the storefront has at least five licensed real estate brokers, our business could suffer if our secondary real estate brokers are unable to obtain or renew these qualification licenses in those cities.

Currently we provide access to our CRIC database on the internet mainly through Shanghai CRIC Information Technology Co., Ltd., or Shanghai CRIC, our wholly-owned subsidiary. If relevant PRC governmental authorities deem this to be provision of internet information services under applicable PRC laws and regulations, they may require Shanghai CRIC to obtain a value-added telecommunications business operating license, or ICP license, to continue to provide access to CRIC database through the internet, and Shanghai CRIC could be subject to fines and penalties for operating this business without the proper license. Moreover, because wholly foreign-owned enterprises like Shanghai CRIC are not permitted to obtain an ICP license or engage in “market survey” activities in China, we would need to restructure our operations to have some of our consolidated VIEs carry out these activities.

Moreover, certain of our consolidated VIEs and their respective subsidiaries, are required to obtain and maintain applicable licenses or approvals from different regulatory authorities in order to provide their current services, including an ICP license. These consolidated VIEs include Beijing Leju, which operates our real estate online business, Shanghai Yi Xin, which operates our real estate e-commerce platform, Beijing Jiajujiu, which operates our online home furnishing websites, Shanghai Kushuo, which operates our real estate offline advertising business, real estate financial services and community value-added services, and Shanghai Fangjia, which operates our real estate home price rating services. We also plan to migrate the operation of community value-added services from Shanghai Kushuo to another VIE, Shanghai Weihui, in the near future. These licenses are essential to the operation of the relevant business segments and are generally subject to annual review by the relevant governmental authorities. Our consolidated VIEs and their respective subsidiaries may also be required to obtain additional licenses. For example, the release, broadcasting and transmission of graphics, video and audio programs or web links to such programs, other websites or data on the websites may be deemed as providing internet publication services as well as transmission of video and audio programs on the internet, which could require internet publication licenses and licenses for internet and network transmission of video and audio programs. During operation of certain of our business segments, we post information, including graphics, web links to videos, other websites or data on websites operated by us. Our consolidated VIEs and their subsidiaries do not have internet publication licenses and licenses for internet and network transmission of video and audio programs. For those video/audio programs and certain other forms of content that we believe are subject to the requirements of these licenses, such programs and content are hosted by SINA and Baidu through our contractual arrangement with them. In the case that they do not possess the necessary licenses and permits, our video/audio programs and other content hosted by them are subject to the risk of being suspended by government authorities. Moreover, we cannot assure you that government would not require us to obtain these licenses separately for operation of our business even if the underlying hosting of the relevant content may be provided by a qualified third party. If we are required to apply for such licenses, we can provide no assurance that we will procure and maintain such additional licenses.

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If we fail to properly obtain or maintain the licenses and permits or complete the filing and registrations required to conduct our business, our affected subsidiaries, consolidated VIEs and branch offices in China may be warned, fined, have their licenses or permits revoked, or ordered to suspend or cease providing certain services, or subjected to other penalties, including confiscation of revenues, sanctions or liabilities, which in turn could materially and adversely affect our business, financial condition and results of operations.

Our business may be adversely affected by changes in the laws and regulations governing the internet finance industry in China.

The laws and regulations governing the internet finance industry in China are still evolving, and the PRC government has not yet adopted a unified regulatory framework governing the P2P industry. There is substantial uncertainty with respect to the implementation and interpretation of any current and future laws and regulations applicable to the P2P industry and to companies operating relevant businesses. Although the China Banking Regulatory Commission and other government authorities have made certain instructions or statements concerning the P2P industry, such instruction or statement has no legal effect and can only be considered as guidelines. Moreover, we cannot assure you that our current internet finance business fully complies with such instructions and statements. New laws and regulations may be adopted to establish detailed requirements and/or to require certain licenses or permits for P2P business. Any enhancement in regulatory scrutiny over the industry may adversely affect our business. In addition, if future PRC regulations require that we obtain certain additional licenses or permits or change current business model in order to continue to conduct our internet finance operations, there can be no assurance that we will be able to obtain such licenses or permits or make certain changes to our business model in a timely fashion, or at all. If any of the above situations occurs, our financial condition and business prospects could be adversely affected.

Failure to maintain effective internal controls over financial reporting could cause us to inaccurately report our financial result or fail to prevent fraud and have a material and adverse effect on our business, results of operations and the trading price of our ADSs.

We are subject to the reporting obligations under U.S. securities laws. Section 404 of the Sarbanes-Oxley Act of 2002 and related rules require public companies to include a report of management on their internal control over financial reporting in their annual reports. This report must contain an assessment by management of the effectiveness of a public company’s internal control over financial reporting. In addition, an independent registered public accounting firm for a public company must attest to and report on management’s assessment of the effectiveness of the company’s internal control over financial reporting. We sometimes hire a professional consultant to assist us in such efforts. Our efforts to implement standardized internal control procedures and develop the internal tests necessary to verify the proper application of the internal control procedures and their effectiveness are a key area of focus for our board of directors, our audit committee and senior management.

Our management has concluded that our internal control over financial reporting was effective as of December 31, 2014. See “Item 15. Controls and Procedures.” Our independent registered public accounting firm has issued an attestation report, which concludes that our internal control over financial reporting was effective in all material aspects as of December 31, 2014. However, if we fail to maintain effective internal control over financial reporting in the future, our management and our independent registered public accounting firm may not be able to conclude that we have effective internal control over financial reporting at a reasonable assurance level. Moreover, effective internal controls over financial reporting are necessary for us to produce reliable financial reports and are important to help prevent fraud. As a result, our failure to achieve and maintain effective internal controls over financial reporting could in turn result in the loss of investor confidence in the reliability of our financial statements and negatively impact the trading price of our ADSs. Furthermore, we have incurred and anticipate that we will continue to incur considerable costs, management time and other resources in an effort to continue to comply with Section 404 and other requirements of the Sarbanes-Oxley Act.

15

Security breaches, computer viruses, “denial of service” and computer hacking attacks could harm our real estate information and online business.

As we further develop our real estate information and online services and further tap into the real estate e-commerce business, we are subject to an increasing risk of security breaches, computer viruses, interruptions of access through the use of “denial of service” attacks, computer hacking or similar attacks. Although we have not experienced a security breach in the past, such attacks may occur to our CRIC system and other aspects of our real estate online operations in the future. Any security breach caused by hacking or other attacks, which involve efforts to gain unauthorized access to information or systems, or to cause intentional malfunctions, loss, corruption or unavailability of data, software, hardware or other computer equipment, and the inadvertent transmission of computer viruses could harm our real estate information and online businesses. Any loss or tampering of our CRIC system or any failure to maintain availability, performance, reliability and security of our network infrastructure or real estate information and online services to the satisfaction of our customers may harm our reputation and our ability to retain existing customers and attract new ones.

Any natural or other disasters, including outbreaks of health epidemics, and other extraordinary events could severely disrupt our business operations.

Our operations are vulnerable to interruption and damage from natural and other types of disasters, including earthquakes, fire, floods, environmental accidents, power loss, communication failures and similar events. If any natural disaster or other extraordinary events were to occur in the area where we operate, our ability to operate our business could be seriously impaired.

Our business could be materially and adversely affected by the outbreak of H7N9 bird flu, H1N1 swine influenza, avian influenza, severe acute respiratory syndrome, or SARS, Ebola or another epidemic. Any such occurrence in China could severely disrupt our business operations and adversely affect our results of operations.

We have in the past, and may in the future, sell or distribute interests in one or more of our subsidiaries.

As part of our funding exercises or attempts to increase the liquidity of shares in our subsidiaries, we may sell all or part of our interests in one or more of our subsidiaries through a listing of the shares of such subsidiaries or the sale to third parties of all or a portion of our equity interests in such subsidiaries. For example, we sold a 15% equity interest in Leju to Tencent in March 2014, and Leju completed its initial public offering of Leju ADSs and a concurrent private placement of Leju ordinary shares to Tencent in April 2014. As a result of these transactions, our equity interest in Leju was reduced to 75.5% as of April 30, 2014. Furthermore, we were authorized by our board of directors in December 2014 and completed on January 15, 2015 a partial spin-off of Leju by distributing Leju shares to our shareholders, after which our equity interest in Leju was reduced to approximately 70%. In addition, in April 2015, we reached an agreement with Jupai Holdings Limited, or Jupai, a leading third-party wealth management service provider in China, to transfer to Jupai all equity interests in Scepter Pacific Limited, or Scepter, our 51% owned subsidiary operating our real estate investment fund management business unit, in exchange for Jupai’s ordinary shares, and the closing of the transaction is conditional upon the closing of the proposed initial public offering of Jupai and certain other customary closing conditions.

Following any such sale or distribution of all or part of our interest in a subsidiary, our equity interest in the assets held by such the subsidiary would be reduced by a corresponding amount. Although we would receive the proceeds of any sale of equity interests in a subsidiary, there can be no assurance that such proceeds will accurately reflect the value of such subsidiary to our business, that the price of our ADSs will not fall as a result of such sale or distribution or that we will not be adversely affected by any potential reduction in our consolidated income or cash flows. Furthermore, there can be no assurance that the proceeds of any sale of equity interests in a subsidiary will be reinvested in our business and that the benefits of such proceeds will accrue to holders of our ordinary shares and our ADSs to the extent of the benefits generated by the sold shares or at all.

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We are exposed to potential liability for information on our websites and for products and services sold over the internet and we may incur significant costs and damage to our reputation as a result of defending against such potential liability and could be subject to penalties or other severe consequences from PRC regulatory authorities as a result of such information.

We provide third-party content on our websites such as real estate listings, links to third-party websites, advertisements and content provided by customers and users of our community-oriented services. In addition, our website, jiaju.com, is a platform for third party home furnishing distributors to offer their products and services to consumers. We could be exposed to liability with respect to such third-party information or the goods and services sold through our website. Among other things, we may face assertions that, by directly or indirectly providing such third-party content or links to other websites, we should be liable for defamation, negligence, copyright or trademark infringement, or other actions by parties providing such content or operating those websites. We may also face assertions that content on our websites, including statistics or other data we compile internally, or information contained in websites linked to our websites contains false information, errors or omissions, and users and our customers could seek damages for losses incurred as a result of their reliance upon or otherwise relating to incorrect information. We may also be subject to fines and other sanctions by the government for such incorrect information. Moreover, our relevant consolidated VIEs, as internet advertising service providers, are obligated under PRC laws and regulations to monitor the advertising content shown on our websites for compliance with applicable law. Violation of applicable law may result in penalties, including fines, confiscation of advertising fees, orders to cease dissemination of the offending advertisements and orders to publish advertisements correcting the misleading information. In case of serious violations, the PRC authorities may revoke the offending entities’ advertising licenses and/or business licenses. In addition, our websites could be used as a platform for fraudulent transactions. The measures we take to guard against liability for third-party content or information may not be adequate to exonerate us from relevant civil and other liabilities. Any such claims, with or without merit, could be time-consuming to defend and result in litigation and significant diversion of management’s attention and resources. Even if these claims do not result in liability to us, we could incur significant costs in investigating and defending against these claims and suffer damage to our reputation. Our general liability insurance may not cover all potential claims to which we are exposed to and may not be adequate to indemnify us for all liability that may be imposed.

China has enacted laws, rules and regulations governing internet access and the distribution of news, information or other content, as well as products and services, through the internet. If any internet content we offer or will offer through our consolidated VIEs were deemed by the PRC government to violate any of such content restrictions, we would not be able to continue such offerings and could be subject to penalties, which could have a material adverse effect on our business, financial condition and results of operations.

Increases in labor costs in the PRC may adversely affect our business and our profitability.

China’s economy has experienced increases in labor costs in recent years. China’s overall economy and the average wage in China are expected to continue to grow. The average wage level for our employees has also increased in recent years. We expect that our labor costs, including wages and employee benefits, will continue to increase. Unless we are able to pass on these increased labor costs to our customers by increasing prices for our products or services, our profitability and results of operations may be materially and adversely affected.

In addition, we have been subject to stricter regulatory requirements in terms of entering into labor contracts with our employees and paying various statutory employee benefits, including pensions, housing fund, medical insurance, work-related injury insurance, unemployment insurance and childbearing insurance to designated government agencies for the benefit of our employees. Pursuant to the PRC Labor Contract Law, or the Labor Contract Law, that became effective in January 2008 and its implementing rules that became effective in September 2008 and its amendments that became effective in July 2013, employers are subject to stricter requirements in terms of signing labor contracts, minimum wages, paying remuneration, determining the term of employees’ probation and unilaterally terminating labor contracts. In the event that we decide to terminate some of our employees or otherwise change our employment or labor practices, the Labor Contract Law and its implementation rules may limit our ability to effect those changes in a desirable or cost-effective manner, which could adversely affect our business and results of operations. Besides, pursuant to the Labor Contract Law and its amendments, dispatched employees are intended to be a supplementary form of employment and the fundamental form should be direct employment by enterprises and organizations that require employees. Further, it is expressly stated in the Interim Provisions on Labor Dispatch that became effective on March 1, 2014 that the number of seconded employees an employer uses may not exceed 10% of its total labor force and the employer has a two-year transition period to comply with such requirement. Some of our PRC subsidiaries, consolidated VIEs and their subsidiaries use seconded employees for their principal business activities. If the relevant PRC companies are deemed to have violated the limitation on the use of seconded employees under the relevant labor laws and regulations, we may be subject to fines and incur other costs to make required changes to our current employment practices.

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As the interpretation and implementation of labor-related laws and regulations are still evolving, we cannot assure you that our employment practice does not and will not violate labor-related laws and regulations in China, which may subject us to labor disputes or government investigations. If we are deemed to have violated relevant labor laws and regulations, we could be required to provide additional compensation to our employees and our business, financial condition and results of operations could be materially and adversely affected.

The successful operation of our business depends upon the performance and reliability of the internet infrastructure and telecommunications networks in China.

Our business depends on the performance and reliability of the internet infrastructure in China. Substantially all access to the internet is maintained through state-controlled telecommunication operators under the administrative control and regulatory supervision of MIIT. In addition, the national networks in China are connected to the internet through international gateways controlled by the PRC government. These international gateways are generally the only websites through which a domestic user can connect to the internet. We cannot assure you that a more sophisticated internet infrastructure will be developed in China. We may not have access to alternative networks in the event of disruptions, failures or other problems with China’s internet infrastructure. In addition, the internet infrastructure in China may not support the demands associated with continued growth in internet usage.

We also rely on China Unicom and China Telecom to provide us with data communications capacity primarily through local telecommunications lines and internet data centers to host our servers. We do not have access to alternative services in the event of disruptions, failures or other problems with the fixed telecommunications networks of China Unicom or China Telecom, or if China Unicom or China Telecom otherwise fails to provide such services. Any unscheduled service interruption could disrupt our operations, damage our reputation and result in a decrease in our revenues. Furthermore, we have no control over the costs of the services provided by China Unicom and China Telecom. If the prices that we pay for telecommunications and internet services rise significantly, our gross margins could be significantly reduced. In addition, if internet access fees or other charges to internet users increase, our user traffic may decrease, which in turn may cause our revenues to decline.

Risks Related to Our Corporate Structure

If the PRC government finds that the agreements that establish the structure for operating our advertising services and internet information services in China do not comply with PRC governmental restrictions on foreign investment in the advertising industry or the internet information service industry, we could be subject to severe penalties.

E-House (China) Holdings Limited is a Cayman Islands company and a foreign person under PRC law. Due to PRC government restrictions on foreign investment in the internet and advertising industries, we conduct part of our business through contractual arrangements with our affiliated PRC entities. We rely on Beijing Leju and its subsidiaries to operate our real estate online business and real estate advertising service business. We use Shanghai Yi Xin to operate our real estate e-commerce platform, Beijing Jiajujiu and its subsidiaries to operate our online home furnishing websites, Shanghai Kushuo and its subsidiaries to operate our real estate offline advertising business, real estate financial services and community value-added services, and Shanghai Fangjia to operate our real estate home price rating services. These VIEs and their relevant subsidiaries hold the licenses and approvals that are essential for our business operations. In addition, we plan to migrate the operation of community value-added services from Shanghai Kushuo to Shanghai Weihui, which will be required to hold the relevant licenses and approvals.

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We have entered into, through our majority-owned subsidiaries, Shanghai SINA Leju Information Technology Co., Ltd., or Shanghai SINA Leju, Shanghai Yi Yue Information Technology Co., Ltd., or Shanghai Yi Yue, Beijing Maiteng Fengshun Science and Technology Co., Ltd., or Beijing Maiteng, Shanghai Yifang Software Co., Ltd., or Shanghai Yifang, Shanghai CRIC, and Shanghai Weidian Information Technology Co., Ltd., or Shanghai Weidian, a series of contractual arrangements with the VIEs operating in the internet and/or advertising industries and their respective shareholders. These contractual arrangements enable us to (1) have power to direct the activities that most significantly affect the economic performance of the VIEs and their subsidiaries; (2) receive substantially all of the economic benefits from the VIEs and their subsidiaries in consideration for the services provided by our PRC subsidiaries; and (3) have an exclusive option to purchase all or part of the equity interests in the VIEs, when and to the extent permitted by PRC law, or request any existing shareholder of the VIEs to transfer all or part of the equity interest in the VIEs to another PRC person or entity designated by us at any time in our discretion. These agreements make us their “primary beneficiary” for accounting purposes under U.S. GAAP. For descriptions of these contractual arrangements, see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Contractual Agreements with Our VIEs.”

If the PRC government finds that these contractual arrangements do not comply with its restrictions on foreign investment in the internet business or advertising industry, or if the PRC government otherwise finds that we, any of the relevant VIEs, or any of their subsidiaries is in violation of PRC laws or regulations or lack the necessary permits or licenses to operate our business, the relevant PRC regulatory authorities, including the State Administration for Industry and Commerce, which regulates advertising companies, and the Ministry of Industry and Information Technology, which regulates internet information service companies, would have broad discretion in dealing with such violations, including:

·revoking the business and operating licenses of our PRC subsidiaries and affiliates;

·discontinuing or restricting our PRC subsidiaries’ and affiliates’ operations;

·imposing fines or confiscating the income of our PRC subsidiaries or affiliates;

·imposing conditions or requirements with which we or our PRC subsidiaries and affiliates may not be able to comply;

·requiring us or our PRC subsidiaries and affiliates to restructure the relevant ownership structure or operations; or

·taking other regulatory or enforcement actions that could be harmful to our business

The imposition of any of these penalties could have a material and adverse effect on our ability to conduct our business and adversely affect our financial condition and results of operations. If any of these penalties results in our inability to direct the activities of any of the relevant VIEs that most significantly impact its economic performance, and/or our failure to receive the economic benefits from any of the VIEs, we may not be able to consolidate the entity in our consolidated financial statements in accordance with U.S. GAAP.

We rely on contractual arrangements with our VIEs and their respective shareholders for a portion of our operations, which may not be as effective as direct ownership in providing operational control.

We rely on contractual arrangements with our VIEs and their respective shareholders for a portion of our business operations. For descriptions of these contractual arrangements, see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Contractual Agreements with Our VIEs.” These contractual arrangements may not be as effective as direct ownership in providing us with control over the VIEs. These contractual arrangements are governed by PRC law and provide for the resolution of disputes through either arbitration or litigation in the PRC. Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. If any of the other parties fail to perform their obligations under these contractual arrangements, we may have to incur substantial costs and resources to enforce such arrangements, and we would have to rely on legal remedies under PRC law, including seeking specific performance or injunctive relief and claiming damages, which we cannot assure you will be effective. Furthermore, the legal environment in the PRC is not as developed as in other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements, which may make it difficult to exert effective control over the VIEs, and our ability to conduct our business may be negatively affected.

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In 2012, 2013 and 2014, our VIEs and their respective subsidiaries contributed in aggregate approximately 37%, 44% and 54% of our total net revenues, respectively. In the event we are unable to enforce the contractual arrangements, we may not be able to have the power to direct the activities that most significantly affect the economic performance of the VIEs and their respective subsidiaries, and our ability to conduct our business may be negatively affected, and we may not be able to consolidate the financial results of our VIEs and their respective subsidiaries into our consolidated financial statements in accordance with U.S. GAAP.

The shareholders of our consolidated VIEs may have potential conflicts of interest with us, and if any such conflicts of interest are not resolved in our favor, our business may be materially and adversely affected.

We have designated individuals who are PRC nationals to be the shareholders of our consolidated VIEs in China, namely Beijing Leju, Shanghai Yi Xin, Beijing Jiajujiu, Shanghai Kushuo, Shanghai E-Cheng, Shanghai Fangjia and Shanghai Weihui. These individuals may have conflicts of interest with us. For example, Beijing Leju is 80% owned by Mr. Xudong Zhu, the head of our offline advertising operations, and 20% owned by Mr. Zuyu Ding, our co-president. Neither Mr. Zhu nor Mr. Ding have a significant equity stake in our company. Conflicts of interests between their dual roles as shareholders of Beijing Leju and as officers of our company may arise. We cannot assure you that when conflicts of interest arise, they will act in the best interests of our company or that conflicts of interests will be resolved in our favor. In addition, they may breach or cause Beijing Leju and its subsidiaries to breach or refuse to renew the existing contractual arrangements that allow us to effectively control Beijing Leju and its subsidiaries and receive economic benefits from them. Currently, we do not have arrangements to address potential conflicts of interest between Mr. Zhu or Mr. Ding and our company. We rely on them to abide by the laws of the Cayman Islands and China, which provide that directors and/or officers owe a fiduciary duty to our company, which requires them to act in good faith and in the best interests of our company and not to use their positions for personal gain. In addition, each of Shanghai Yi Xin and Beijing Jiajujiu is 70% owned by Mr. Zuyu Ding and 30% owned by Mr. Weijie Ma, an employee of our company, each of Shanghai Kushuo and Shanghai E-Cheng is 50% owned Mr. Zuyu Ding and 50% owned by Mr. Weijie Ma, Shanghai Fangjia is 50% owned by Mr. Zuyu Ding and 50% owned by Ms. Yan Zhang, an employee of our company, and Shanghai Weihui is 80% owned by Mr. Xudong Zhu and 20% owned by Mr. Xi Yang, an employee of our company. These individual shareholders do not have a significant equity stake in our company, and they may potentially have similar conflicts of interests as described above. If we cannot resolve any conflicts of interest or disputes between us and the individual shareholders of our consolidated VIEs, we would have to rely on legal proceedings, which could result in disruption of our business and as to the outcome of which there is substantial uncertainty.

Our ability to enforce the equity pledge agreements between us and the shareholders of any of our VIEs may be subject to limitations based on PRC laws and regulations.

Pursuant to the equity pledge agreements relating to our consolidated VIEs, the shareholders of the VIEs pledge their equity interest in the VIEs to our subsidiaries to secure their and the relevant VIEs’ performance of the obligations under the relevant contractual arrangements. The equity pledges under these equity pledge agreements have been registered with the relevant local branch of the State Administration for Industry and Commerce. According to the PRC Property Law and PRC Guarantee Law, the pledgee and the pledgor are prohibited from making an agreement prior to the expiration of the debt performance period to transfer the ownership of the pledged equity to the pledgee when the obligor fails to pay the debt due. However, under the PRC Property Law, when an obligor fails to pay its debt when due, the pledgee may choose to either conclude an agreement with the pledgor to obtain the pledged equity or seek payments from the proceeds of the auction or sell-off of the pledged equity. If any of the consolidated VIEs or its shareholders fails to perform its obligations secured by the pledges under the equity pledge agreements, one remedy in the event of default under the agreements is to require the pledgor to sell the equity interests in the relevant VIE in an auction or private sale and remit the proceeds to our PRC subsidiaries, net of related taxes and expenses. Such an auction or private sale may not result in our receipt of the full value of the equity interests in the relevant VIE. We consider it very unlikely that the public auction process would be undertaken since, in an event of default, our preferred approach is to ask our PRC subsidiary that is a party to the exclusive call option agreement with the VIE’s shareholder, to designate another PRC person or entity to acquire the equity interest in the VIE and replace the existing shareholder pursuant to the exclusive call option agreement.

In addition, in the registration forms of the local branch of State Administration for Industry and Commerce for the pledges over the equity interests under the equity pledge agreements, the amount of registered equity interests pledged to our PRC subsidiaries was stated as the pledgor’s portion of the registered capital of the VIE. The equity pledge agreements with the shareholders of the VIEs provide that the pledged equity interest constitute continuing security for any and all of the indebtedness, obligations and liabilities under the relevant contractual arrangements, and therefore the scope of pledge should not be limited by the amount of the registered capital of the VIEs. However, there is no guarantee that a PRC court will not take the position that the amount listed on the equity pledge registration forms represents the full amount of the collateral that has been registered and perfected. If this is the case, the obligations that are supposed to be secured in the equity pledge agreements in excess of the amount listed on the equity pledge registration forms could be determined by the PRC court as unsecured debt, which takes last priority among creditors and often does not have to be paid back at all. We do not have agreements that pledge the assets of the VIEs and their subsidiaries for the benefit of us or our PRC subsidiaries, although the VIEs grant our PRC subsidiaries options to purchase the assets of the VIEs and their equity interests in their subsidiaries under the exclusive call option agreement.

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Contractual arrangements we have entered into with our VIEs may be subject to scrutiny by the PRC tax authorities and a finding that we or any of our VIEs owe additional taxes could reduce our net income and the value of your investment.

Under PRC laws and regulations, arrangements and transactions among related parties may be audited or challenged by the PRC tax authorities. We could face material and adverse consequences if the PRC tax authorities determine that the contractual arrangements we have entered into with our VIEs do not represent an arm’s-length price and adjust the taxable income of the VIEs or their subsidiaries in the form of a transfer pricing adjustment. A transfer pricing adjustment could, among other things, result in a reduction of expense deductions recorded by the VIEs or their subsidiaries, which could in turn increase their PRC tax liabilities. In addition, the PRC tax authorities may impose late payment fees and other penalties on our VIEs for underpayment of taxes. Our consolidated net income may be materially and adversely affected if our VIEs’ tax liabilities increase or if they are found to be subject to late payment fees or other penalties.

Risks Related to Doing Business in China

Changes in PRC government policies could have a material and adverse effect on overall economic growth in China, which could adversely affect our business.

We conduct substantially all of our business operations in China. As the real estate industry is highly sensitive to business spending, credit conditions and personal discretionary spending levels, it tends to decline during general economic downturns. Accordingly, our results of operations, financial condition and prospects are subject, to a significant degree, to economic developments in China. While China’s economy has experienced significant growth in the past three decades, growth has been uneven across different periods, regions and among various economic sectors of China. The PRC government may implement measures that are intended to benefit the overall economy even if they would be expected to have a negative effect on the real estate industry. The real estate industry is also sensitive to credit policies. In recent years, the PRC government adjusted the People’s Bank of China’s statutory deposit reserve ratio and benchmark interest rates several times in response to various economic situations. Any future monetary tightening may reduce the overall liquidity in the economy and reduce the amount of credit available for real estate purchase. Higher interest rates may increase the borrowing cost for buyers who rely on mortgage loans to finance their real estate purchase. These could negatively affect the total demand for real estate purchase and adversely affect our operating and financial results. We cannot assure you that China will continue to have rapid or stable economic growth in the future or that changes in credit or other government policies that are intended to create stable economic growth will not adversely impact the real estate industry.

Uncertainties with respect to the Chinese legal system could adversely affect us.

We conduct our business primarily through our subsidiaries and VIEs in China. Our operations in China are governed by PRC laws and regulations. Our subsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws applicable to foreign-invested enterprises. The PRC legal system is based on written statutes. Prior court decisions may be cited for reference but have limited precedential value. Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China. However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China. In particular, because these laws and regulations are relatively new, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention.

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Substantial uncertainties exist with respect to the enactment timetable, interpretation and implementation of draft PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.

The Ministry of Commerce published a discussion draft of the proposed Foreign Investment Law in January 2015 aiming to, upon its enactment, replace the trio of existing laws regulating foreign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary regulations. The draft Foreign Investment Law embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic investments. The Ministry of Commerce is currently soliciting comments on this draft and substantial uncertainties exist with respect to its enactment timetable, interpretation and implementation. The draft Foreign Investment Law, if enacted as proposed, may materially impact the viability of our current corporate structure, corporate governance and business operations in many aspects.

Among other things, the draft Foreign Investment Law expands the definition of foreign investment and introduces the principle of “actual control” in determining whether a company is considered a foreign-invested enterprise, or an FIE. The draft Foreign Investment Law specifically provides that entities established in China but “controlled” by foreign investors will be treated as FIEs, whereas an entity set up in a foreign jurisdiction would nonetheless be, upon market entry clearance by the Ministry of Commerce, treated as a PRC domestic investor provided that the entity is “controlled” by PRC entities and/or citizens. In this connection, “control” is broadly defined in the draft law to cover the following summarized categories: (i) holding 50% or more of the voting rights or similar equity interest of the subject entity; (ii) holding less than 50% of the voting rights or similar equity interest of the subject entity but having the power to secure at least 50% of the seats on the board or other equivalent decision making bodies, or having the voting power to exert material influence on the board, the shareholders’ meeting or other equivalent decision making bodies; or (iii) having the power to exert decisive influence, via contractual or trust arrangements, over the subject entity’s operations, financial matters or other key aspects of business operations. Once an entity is determined to be an FIE, and its investment amount exceeds certain thresholds or its business operation falls within a “negative list,” to be separately issued by the State Council in the future, market entry clearance by the MOC or its local counterparts will be required. Otherwise, all foreign investors may make investments on the same terms as domestic investors without being subject to additional approval from the government authorities as mandated by the existing foreign investment legal regime.

The “variable interest entity” structure has been adopted by many PRC-based companies, including us, to obtain necessary licenses and permits in the industries that are currently subject to foreign investment restrictions in China. See “Risks Related to Our Corporate Structure.” Under the draft Foreign Investment Law, variable interest entities that are controlled via contractual arrangement would also be deemed as FIEs, if they are ultimately “controlled” by foreign investors. Therefore, for any companies with a “variable interest entity” structure in an industry category that is on the “negative list,” the “variable interest entity” structure may be deemed legitimate only if the ultimate controlling person(s) is/are of PRC nationality (either PRC state-owned enterprises or agencies or PRC citizens). Conversely, if the actual controlling person(s) is/are of foreign nationalities, then the variable interest entities will be treated as FIEs and any operation in the industry category on the “negative list” without market entry clearance may be considered as illegal.

It is likely that we would not be considered as ultimately controlled by Chinese parties, as our record shareholders in the U.S. hold approximately 54.7% of our total voting power as of March 31, 2015. The draft Foreign Investment Law has not taken a position on what actions will be taken with respect to the existing companies with a “variable interest entity” structure, whether or not these companies are controlled by Chinese parties, while it is soliciting comments from the public on this point. Moreover, it is uncertain whether the real estate service industry, in which our VIEs operate, will be subject to the foreign investment restrictions or prohibitions set forth in the “negative list” to be issued. If the enacted version of the Foreign Investment Law and the final “negative list” mandate further actions, such as a market entry clearance or certain restructuring of our corporate structure and operations, to be completed by companies with existing “variable interest entity” structure like us, we face substantial uncertainties as to whether these actions can be timely completed, or at all, and our business and financial condition may be materially and adversely affected.

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The draft Foreign Investment Law, if enacted as proposed, may also materially impact our corporate governance practice and increase our compliance costs. For instance, the draft Foreign Investment Law imposes stringent ad hoc and periodic information reporting requirements on foreign investors and the applicable FIEs. Aside from investment implementation report and investment amendment report that are required at each investment and alteration of investment specifics, an annual report is mandatory, and large foreign investors meeting certain criteria are required to report on a quarterly basis. Any company found to be non-compliant with these information reporting obligations may potentially be subject to fines and/or administrative or criminal liabilities, and the persons directly responsible may be subject to criminal liabilities.

Governmental control of currency conversion may affect the value of your investment.

The PRC government imposes controls on the convertibility of RMB into foreign currencies and, in certain cases, the remittance of currency out of China. Restrictions on currency exchanges between RMB and other currencies may limit our ability to utilize our revenues and funds, in particular in relation to capital account transactions such as investments and loans. We receive substantially all of our revenues in RMB. Under our current structure, our income will be primarily derived from dividend payments from our PRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries and our VIEs to remit sufficient foreign currency to pay dividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations.

Under current PRC regulations, RMB is convertible for “current account transactions,” which include among other things dividend payments and payments for the import of goods and services, subject to compliance with certain procedural requirements. Although the RMB has been fully convertible for current account transactions since 1996, we cannot assure you that the relevant PRC government authorities will not limit or eliminate our ability to purchase and retain foreign currencies for current account transactions in the future.

Conversion of RMB into foreign currencies and of foreign currencies into RMB, for payments relating to “capital account transactions,” which principally include investments and loans, generally requires the approval of the State Administration of Foreign Exchange, or SAFE, and other relevant PRC governmental authorities. Restrictions on the convertibility of the RMB for capital account transactions could affect the ability of our PRC subsidiaries and affiliated PRC operating companies to make investments overseas or to obtain foreign exchange through debt or equity financing, including by means of loans or capital contributions from us.

Fluctuation in the value of the RMB may have a material and adverse effect on your investment.

The value of the RMB against the U.S. dollar and other currencies is affected by changes in China’s political and economic conditions and by China’s foreign exchange policies, among other things. In July 2005, the PRC government changed its decades-old policy of pegging the value of the RMB to the U.S. dollar, and the RMB appreciated more than 20% against the U.S. dollar over the following three years. Between July 2008 and June 2010, this appreciation halted and the exchange rate between the RMB and the U.S. dollar remained within a narrow band. After June 2010, the RMB began to appreciate against the U.S. dollar again, although there have been some periods when it has lost value against the U.S. dollar, as it did for example during 2014. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future.

As our costs and expenses are mostly denominated in RMB, the appreciation of the RMB against the U.S. dollar would increase our costs in U.S. dollar terms. In addition, as our operating subsidiaries and VIEs in China receive revenues in RMB, any significant depreciation of the RMB against the U.S. dollar may have a material and adverse effect on our revenues in U.S. dollar terms and financial condition, and the value of, and any dividends payable on, our ordinary shares. For example, to the extent that we need to convert U.S. dollars into RMB for our operations, appreciation of the RMB against the U.S. dollar would have an adverse effect on the RMB amount we receive from the conversion. Conversely, if we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes, appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us. These and other effects on our financial data resulting from fluctuations in the value of the RMB against the U.S. dollar could have a material and adverse effect on the market price of our ADSs and your investment. See “Item 11. Quantitative and Qualitative Disclosures about Market Risk—Foreign Exchange Risk.”

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PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us.

The Notice on Issues Relating to the Administration of Foreign Exchange in Fund-Raising and Round-Trip Investment Activities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Circular 75, requires PRC residents to register with the relevant local branch of SAFE before establishing or controlling any company outside of China, referred to as an offshore special purpose company, for the purpose of raising funds from overseas to acquire or exchange the assets of, or acquiring equity interests in, PRC entities held by such PRC residents and to update such registration in the event of any significant changes with respect to that offshore company. SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, on July 4, 2014, which replaced the SAFE Circular 75. SAFE Circular 37 requires PRC residents to register with local branches of SAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents’ legally owned assets or equity interests in domestic enterprises or offshore assets or interests, referred to in SAFE Circular 37 as a “special purpose vehicle”. The term “control” under SAFE Circular 37 is broadly defined as the operation rights, beneficiary rights or decision-making rights acquired by the PRC residents in the offshore special purpose vehicles by such means as acquisition, trust, proxy, voting rights, repurchase, convertible bonds or other arrangements. SAFE Circular 37 further requires amendment to the registration in the event of any changes with respect to the basic information of the special purpose vehicle, such as changes in a PRC resident individual shareholder, name or operation period; or any significant changes with respect to the special purpose vehicle, such as increase or decrease of capital contributed by PRC individuals, share transfer or exchange, merger, division or other material event. If the shareholders of the offshore holding company who are PRC residents do not complete their registration with the local SAFE branches, the PRC subsidiaries may be prohibited from distributing their profits and proceeds from any reduction in capital, share transfer or liquidation to the offshore company, and the offshore company may be restricted in its ability to contribute additional capital to its PRC subsidiaries. Moreover, failure to comply with SAFE registration and amendment requirements described above could result in liability under PRC law for evasion of applicable foreign exchange restrictions.

We have requested our beneficial owners who are PRC residents to make the necessary applications, filings and amendments required by SAFE. However, we cannot provide any assurances that all of our beneficial owners who are PRC residents will continue to make, obtain or amend any applicable registrations or approvals required by these SAFE regulations. The failure or inability of our PRC resident beneficial owners to comply with the registration procedures set forth therein may subject us to fines and legal sanctions, restrict our cross-border investment activities, or limit our ability to contribute additional capital into our PRC subsidiaries, or limit our PRC subsidiaries’ ability to pay dividends or make other distributions to our company or otherwise adversely affect our business. Moreover, failure to comply with the SAFE registration requirements could result in liability under PRC laws for evasion of foreign exchange restrictions.

As it is uncertain how the SAFE regulations will be interpreted or implemented, we cannot predict how these regulations will affect our business operations or future strategy. For example, we may be subject to a more stringent review and approval process with respect to our foreign exchange activities, including the remittance of dividends and foreign currency-denominated borrowings, which may adversely affect our results of operations and financial condition. In addition, if we decide to acquire a PRC domestic company, we cannot assure you that we or the owners of such company, as the case may be, will be able to obtain the necessary approvals or complete the necessary filings and registrations required by the SAFE regulations. This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects.

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Failure to comply with PRC regulations regarding the registration requirements for employee stock ownership plans or share option plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.

Under the applicable regulations and SAFE rules, PRC citizens who participate in an employee stock ownership plan or a stock option plan in an overseas publicly listed company are required to register with SAFE and complete certain other procedures. In February 2012, SAFE promulgated the Notices on Issues concerning the Foreign Exchange Administration for Stock Incentive Plan of Overseas Publicly-Listed Company, or the Stock Option Rules, which terminated the Application Procedures of Foreign Exchange Administration for Domestic Individuals Participating in Employee Stock Ownership Plan or Stock Option Plan of Overseas Publicly-Listed Company issued by SAFE in March 2007. Pursuant to the Stock Option Rules, if a PRC resident participates in any stock incentive plan of an overseas publicly-listed company, a qualified PRC domestic agent must, among other things, file on behalf of such participant an application with SAFE to conduct the SAFE registration with respect to such stock incentive plan and obtain approval for an annual allowance with respect to the purchase of foreign exchange in connection with the exercise or sale of stock options or stock such participant holds. Such participating PRC residents’ foreign exchange income received from the sale of stock and dividends distributed by the overseas publicly-listed company must be fully remitted into a PRC collective foreign currency account opened and managed by the PRC agent before distribution to such participants. We and our PRC employees who have been granted stock options are subject to this rule and we have registered our existing employee stock ownership plan and stock option plan with SAFE Shanghai Branch. However, if there is any change to our existing employee stock ownership plan or stock option plan, we cannot assure you that we and our PRC optionees will be able to amend such registration in a timely manner, or at all. If we or our PRC optionees fail to comply with these regulations, we or our PRC optionees may be subject to fines and legal sanctions. See “Item 4. Information on the Company—B. Business Overview—Regulation—Regulations on Employee Share Options.”

PRC regulations relating to acquisitions in China require us to obtain certain approvals from the Ministry of Commerce and the failure to obtain such approval could have a material and adverse effect on our business, results of operations, reputation and the trading price of our ADSs.

The Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Regulation, jointly issued by six PRC regulatory agencies and amended by the Ministry of Commerce in 2009, include provisions that purport to require the Ministry of Commerce’s approval for acquisitions by offshore entities established or controlled by domestic companies, enterprises or natural persons of onshore entities that are related to such domestic companies, enterprises or natural persons. However, the interpretation and implementation of the M&A Regulation remain unclear with no consensus currently existing regarding the scope and applicability of the Ministry of Commerce approval requirement on foreign acquisitions among related parties.

In 2008, for the purpose of a series of our acquisitions of advertising services and future businesses that may otherwise be restricted for foreign investments, we, through Shanghai CRIC, entered into contractual arrangements with Tian Zhuo, our then variable interest entity, and its shareholder, which provide us with substantial ability to control Tian Zhuo. After the transfer of 10% equity interests in Tian Zhuo from Mr. Xin Zhou to Mr. Xudong Zhu in July 2009, we entered into a series of new or amended contractual arrangements with Tian Zhuo and its shareholders which continue to provide us with substantial ability to control Tian Zhuo. In October 2012, the shareholders of Tian Zhuo transferred all of their equity interests in Tian Zhuo to Shanghai Lerong Information Technology Co., Ltd., a subsidiary of Beijing Leju, so that Tian Zhuo became a wholly owned subsidiary of Beijing Leju, and the contractual arrangement with Tian Zhuo was accordingly terminated. In December 2013, Shanghai Lerong Information Technology Co., Ltd. transferred all of its equity interests in Tian Zhuo to Shanghai Kushuo, so that Tian Zhuo has become a wholly owned subsidiary of Shanghai Kushuo. We have also entered into contractual arrangements with each of Beijing Leju, Shanghai Yi Xin, Beijing Jiajujiu, Shanghai Kushuo, Shanghai E-Cheng, Shanghai Fangjia and Shanghai Weihui and their respective shareholders, which provide us with substantial ability to control each of these VIEs. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions.”

If the Ministry of Commerce subsequently determines that their approval was required for such contractual arrangements, we may need to apply for a remedial approval. There can be no assurance that we will be able to obtain such approval or waiver of such approval from the Ministry of Commerce. Inability to obtain such approval or waiver from the Ministry of Commerce may have a material and adverse effect on our business. Further, we may be subject to certain administrative punishments or other sanctions from the Ministry of Commerce. The Ministry of Commerce or other regulatory agencies may impose fines and penalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of U.S. dollars into the PRC, or take other actions that could have further material and adverse effects on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our ADSs.

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The M&A Rules and certain other PRC regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China.

The M&A Rules and recently adopted regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time consuming and complex. For example, the M&A Rules require that the PRC Ministry of Commerce be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise, if (i) any important industry is concerned, (ii) such transaction involves factors that have or may have impact on the national economic security, or (iii) such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark or PRC time-honored brand. Mergers, acquisitions or contractual arrangements that allow one market player to take control of or to exert decisive impact on another market player must also be notified in advance to the PRC Ministry of Commerce when the threshold under the Provisions on Thresholds for Prior Notification of Concentrations of Undertakings, or the Prior Notification Rules, issued by the State Council in August 2008 is triggered. In addition, the Implementing Rules Concerning Security Review on the Mergers and Acquisitions by Foreign Investors of Domestic Enterprises, issued by the PRC Ministry of Commerce in August 2011, specify that mergers and acquisitions by foreign investors involved in “an industry related to national security” are subject to strict review by the PRC Ministry of Commerce, and prohibit any activities attempting to bypass such security review, including by structuring the transaction through a proxy or contractual control arrangement. In the future, we may grow our business by acquiring complementary businesses. Complying with the requirements of the above-mentioned regulations and other relevant rules to complete such transactions could be time consuming, and any required approval processes, including obtaining approval from the PRC Ministry of Commerce or its local counterparts may delay or inhibit our ability to complete such transactions. We believe that our business is not in an industry related to national security but we cannot preclude the possibility that the PRC Ministry of Commerce or other government agencies may publish explanations contrary to our understanding or broaden the scope of such security reviews in the future, in which case our future acquisitions in the PRC, including those by way of entering into contractual control arrangements with target entities, may be closely scrutinized or prohibited. Our ability to expand our business or maintain or expand our market share through future acquisitions would as such be materially and adversely affected.

Our holding company relies principally on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements it may have, and any limitation on the ability of our PRC subsidiaries to make payments to our holding company could have a material and adverse effect on its ability to fund our operations, make investments or acquisitions, or pay dividends.

E-House is a holding company, and it relies principally on dividends from its PRC subsidiaries to fund any cash and financing requirements it may have, including the funds necessary to pay dividends and other cash distributions to the shareholders and service any debt it may incur. Current PRC regulations permit our PRC subsidiaries to pay dividends only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our PRC subsidiaries is required to set aside a certain amount of its after-tax profits each year, if any, to fund certain statutory reserves. These reserves are not distributable as cash dividends. Furthermore, if our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to E-House. In addition, the PRC tax authorities may require us to adjust our taxable income under the contractual arrangements we currently have in place in a manner that would materially and adversely affect our PRC subsidiaries’ ability to pay dividends and other distributions to E-House. Any limitation on the ability of our PRC subsidiaries to distribute dividends or other payments to E-House could materially and adversely limit its ability to fund our business operations, make investments or acquisitions that could be beneficial to our businesses or pay dividends.

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PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from making loans or additional capital contributions to our PRC operating subsidiaries.

As an offshore holding company of our PRC operating subsidiaries, we may make loans to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to registrations with relevant governmental authorities in China. See “Item 4. Information on the Company—B. Business Overview—Regulation—Regulations on Loans to and Direct Investment in PRC Entities by Offshore Holding Companies.”

We may also decide to finance our subsidiaries by means of capital contributions. According to the relevant PRC regulations on foreign-invested enterprises in China, depending on the amount of total investment, capital contributions to foreign-invested enterprises in China are subject to approval by the PRC Ministry of Commerce or its local branches. We may not obtain these government approvals on a timely basis, if at all, with respect to future capital contributions by us to our subsidiaries. If we fail to receive such approvals, our ability to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expand our business.

The discontinuation of any of the preferential tax treatments currently available to us in the PRC or imposition of any additional PRC taxes on us could adversely affect our financial condition and results of operations.

Pursuant to a Circular on Enterprise Income Tax Preferential Treatments issued by the State Administration of Taxation and the Ministry of Finance effective as of February 22, 2008, a qualified software enterprise is eligible to be exempted from income tax for its first two profitable years, followed by a 50% reduction in income tax, to a rate of 12.5%, for the subsequent three years. Shanghai SINA Leju was recognized as a qualified software enterprise in February 2009 and was further approved by the local tax authority in June 2009, and, thus, became eligible to be exempted from income tax for 2009, followed by a 50% reduction in income tax from 2010 through 2012. Shanghai CRIC was also recognized as a qualified software enterprise in September 2008 and was further approved by the local tax authority in May 2010 and, thus, it is likewise eligible to be exempted from income tax for 2009, followed by a 50% reduction in income tax from 2010 through 2012. Another majority-owned subsidiary Shanghai Fangxin Information Technology Co. Ltd., or Shanghai Fangxin, was recognized as a qualified software enterprise in February 2012 and was further approved by the local tax authority in October 2012 to become eligible for being exempted from income tax for 2012 and 2013, followed by a 50% reduction in income tax from 2014 through 2016. Furthermore, the PRC Enterprise Income Tax Law and its implementation rules permit certain “high and new technology enterprises strongly supported by the State” which hold independent ownership of core intellectual property and simultaneously meet a list of other criteria, financial or nonfinancial, as stipulated in the implementation rules, to enjoy a reduced 15% enterprise income tax rate. The State Administration of Taxation, the Ministry of Science and Technology and the Ministry of Finance jointly issued the Administrative Rules for the Certification of High and New Technology Enterprises delineating the specific criteria and procedures for the “high and new technology enterprises” certification in April 2008. Each of Shanghai CRIC and Shanghai SINA Leju was approved as a high and new technology enterprise and is therefore subject to a 15% preferential income tax rate for the years from 2013 through 2014. In March, 2014, Shanghai CRIC was approved as a key software enterprise and is therefore subject to a 10% preferential income tax rate for the years from 2013 through 2014. In March 2015, Shanghai CRIC was approved as a high and new technology enterprise and is therefore subject to a 15% preferential income tax rate for the years from 2015 through 2016. Shanghai SINA Leju is still in the process of applying to receive a preferential treatment of 15% income tax rate for 2015. However, qualified software enterprise status and high and new technology enterprise status is subject to annual review. Shanghai SINA Leju, Shanghai CRIC and Shanghai Fangxin are in the process of completing the annual review for 2014. If Shanghai SINA Leju, Shanghai CRIC or Shanghai Fangxin fails to maintain software enterprise status in any annual review, or Shanghai CRIC and Shanghai SINA Leju fails to maintain its high and new enterprise status, their applicable enterprise income tax rate may increase to up to 25%, which could have a material and adverse effect on our financial condition and results of operations.

Various local governments in China have also provided discretionary preferential tax treatments to us. However, at any time, these local governments may decide to reduce or eliminate these preferential tax treatments. Furthermore, these local implementations of tax laws may be found in violation of national laws or regulations, and as a consequence, we may be subject to retroactive imposition of higher taxes as a result. We are required under U.S. GAAP to accrue taxes for these contingencies. The change in accounting requirement for reporting tax contingencies, any reduction or elimination of these preferential tax treatments and any retroactive imposition of higher taxes could have an adverse effect on our results of operations.

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Our business benefits from tax-related government incentives and discretionary policies. Expiration of, or changes to, these incentives or policies could have a material and adverse effect on our results of operations.

Since 2009, Shanghai CRIC has been granted certain governmental financial subsidies by the Zhabei District government in Shanghai. Local governments may decide to reduce or eliminate subsidies at any time. In addition, we cannot assure you of the continued availability of the government incentives and subsidies currently enjoyed by some of our PRC subsidiaries and consolidated VIEs. Furthermore, local implementations of tax laws may be found in violation of national laws or regulations, and as a consequence, we may be subject to retroactive imposition of higher taxes. We are required under U.S. GAAP to accrue taxes for these contingencies. Any change in accounting requirements for reporting tax contingencies, any reduction or elimination of subsidies or any retroactive imposition of higher taxes could have an adverse effect on our results of operations.

Dividends payable to us by our PRC subsidiaries may be subject to PRC withholding taxes, or we may be subject to PRC taxation on our worldwide income and dividends and interest distributed to our investors may be subject to PRC withholding taxes under the PRC Enterprise Income Tax Law and our investors may be subject to PRC withholding tax on the transfer of our ordinary shares or ADSs.

Under the PRC Enterprise Income Tax Law and its implementation rules, all domestic and foreign invested companies would be subject to a uniform enterprise income tax at the rate of 25% and dividends from a PRC subsidiary to its foreign parent company will be subject to a withholding tax at the rate of 10%, unless such foreign parent company’s jurisdiction of incorporation has a tax treaty with China that provides for a reduced rate of withholding, or the tax is otherwise exempted or reduced pursuant to PRC tax laws.

Under the Administrative Measures for Non-Residents Enjoying Tax Treaty Benefits (Trial Implementation), effective on October 1, 2009, our Hong Kong subsidiaries need to obtain approval from the relevant local branch of the State Administration of Taxation in order to enjoy the preferential withholding tax rate of 5% in accordance with the Arrangement between Mainland China and Hong Kong for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income. The PRC State Administration of Taxation further clarified in a circular that tax treaty benefits will be denied to “conduit” or shell companies without business substance and that a beneficial ownership analysis will be used based on a “substance-over-form” principle to determine whether or not to grant the tax treaty benefits. It is unclear at this stage whether this circular applies to dividends from our PRC subsidiaries paid to us through our Hong Kong subsidiaries. However, it is possible that our Hong Kong subsidiaries might not be considered as “beneficial owners” of any dividends from their PRC subsidiaries and as a result would be subject to withholding tax at the rate of 10%. As a result, there is no assurance that our Hong Kong subsidiaries will be able to enjoy the preferential withholding tax rate.

In addition, under the PRC Enterprise Income Tax Law, enterprises organized under the laws of jurisdictions outside of China with their “de facto management bodies” located within China may be considered PRC resident enterprises and therefore be subject to PRC enterprise income tax at the rate of 25% on their worldwide income. Under the implementation rules of the PRC Enterprise Income Tax Law, “de facto management bodies” are defined as the bodies that have material and overall management and control over the business, personnel, accounts and properties of the enterprise. A subsequent circular issued by the State Administration of Taxation provides that a foreign enterprise controlled by a PRC company or a PRC company group will be classified as a “resident enterprise” with its “de facto management bodies” located within China if the following requirements are satisfied: (i) the senior management and core management departments in charge of its daily operations function mainly in the PRC; (ii) its financial and human resources decisions are subject to determination or approval by persons or bodies in the PRC; (iii) its major assets, accounting books, company seals, and minutes and files of its board and shareholders’ meetings are located or kept in the PRC; and (iv) more than half of the enterprise’s directors or senior management with voting rights reside in the PRC.

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The PRC Enterprise Income Tax Law and its implementation rules are relatively new and ambiguities exist with respect to the interpretation of the provisions relating to resident enterprise issues. Although our offshore holding companies are not controlled by any PRC company or company group, we cannot assure you that we will not be deemed to be a PRC resident enterprise under the PRC Enterprise Income Tax Law and its implementation rules. If we were considered a PRC resident enterprise, we would be subject to the PRC enterprise income tax at the rate of 25% on our worldwide income; dividend income we receive from the PRC subsidiaries, however, may be exempt from PRC tax since such income is exempted under the PRC Enterprise Income Tax Law to a PRC resident recipient. However, as there is still uncertainty as to how the PRC Enterprise Income Tax Law and its implementation rules will be interpreted and implemented, and the PRC foreign exchange control authorities have not yet issued guidance with respect to the processing of outbound remittances to entities that are treated as PRC resident enterprises, we cannot assure you that we are eligible for such PRC enterprise income tax exemptions or reductions. In addition, ambiguities also exist with respect to the interpretation of the provisions relating to identification of PRC-sourced income. If we were considered a PRC resident enterprise, any interest payable to non-resident enterprise holders of the notes and dividends payable to non-resident holders of our ordinary shares or ADSs, and the gains such investors may realize from the transfer of our ordinary shares or ADSs, may be treated as PRC-sourced income and therefore be subject to a 10% PRC withholding tax (or 20% in the case of non-resident individual holders), unless otherwise exempted or reduced pursuant to treaties or applicable PRC law.

If we became a PRC resident enterprise under the new PRC tax system and received income other than dividends, our profitability and cash flows would be adversely affected due to our worldwide income being taxed in China under the PRC Enterprise Income Tax Law. Additionally, we would incur an incremental PRC dividend withholding tax cost if we distributed our profits to our ultimate shareholders. There is, however, not necessarily an incremental PRC dividend withholding tax on the piece of the profits distributed from our PRC subsidiaries, since they would have been subject to PRC dividend withholding tax even if we were not a PRC tax resident.

Foreign ownership of the real estate agency and brokerage business in China is restricted under PRC regulations. This may limit our ability to establish new PRC operating entities or to increase registered capital of existing entities in the future.

We are a Cayman Islands company and a foreign person under PRC law. We currently mainly use E-House City Rehouse Real Estate Broker (Shanghai) Co., Ltd., or City Rehouse, and its subsidiaries to provide support for our real estate e-commerce business. Certain of the support services provided by City Rehouse and its subsidiaries may be regarded as real estate agency and brokerage services under PRC law.

Pursuant to the previous Foreign Investment Industrial Guidance Catalogue issued in 2011, foreign ownership of the real estate agency and brokerage business in China was subject to government approval. City Rehouse had not obtained approval from the competent local branch of the Ministry of Commerce in connection with the establishment of, or investment in, its subsidiaries with a registered business scope of real estate brokerage business, although each subsidiary of City Rehouse has obtained and maintained a business license with such business scope, and none of such subsidiaries has received any notice of warning or penalties from the competent authorities for lacking such approval.

The latest Foreign Investment Industrial Guidance Catalogue, which became effective on April 10, 2015, has loosened the restrictions on foreign ownership of the real estate agency and brokerage business in China by removing it from the restricted category for foreign investment. Under the new catalogue, City Rehouse no longer needs the approval of the Ministry of Commerce or its relevant local counterparts for the establishment of, or investment in any new PRC subsidiary with a registered business scope of real estate agency and brokerage services. However, we cannot assure you that the historical non-compliance of City Rehouse not obtaining the requisite government approval would not be found as a violation by relevant PRC government authorities, in which case the relevant subsidiaries would be subject to warnings, fines or even revocation of their licenses.

We face uncertainty with respect to indirect transfer of equity interests in PRC resident enterprises or other assets attributed to a PRC establishment of a non-PRC company, or immovable properties located in China owned by their non-PRC holding companies.

We face uncertainties on the reporting and consequences on private equity financing transactions, share exchange or other transactions involving the transfer of shares in our company by investors who are non-PRC resident enterprises.

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On February 3, 2015, the State Administration of Taxation, or the SAT, issued the Notice on Several Issues Concerning Enterprise Income Tax for Indirect Share Transfer by Non-PRC Resident Enterprises, or SAT Bulletin 7, which replaced previous rules under the Notice on Strengthening Administration of Enterprise Income Tax for Share Transfers by Non-PRC Resident Enterprises, or SAT Circular 698, issued by the SAT in 2009. Pursuant to SAT Bulletin 7, an “indirect transfer” of assets of a PRC resident enterprise, including equity interests in a PRC resident enterprise, by non-PRC resident enterprises may be re-characterized and treated as a direct transfer of PRC taxable assets, if such transaction arrangement lacks a reasonable commercial purpose and was established for the purpose of avoiding payment of PRC enterprise income tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax. According to SAT Bulletin 7, “PRC taxable assets” include assets attributed to an establishment in China, immovable properties located in China, and equity interests in PRC resident enterprises, in respect of which gains from their transfer by a direct holder, being a non-PRC resident enterprise, would be subject to PRC enterprise income taxes. In respect of an indirect transfer of assets of a PRC establishment, the resulting gain is to be included with the enterprise income tax filing of the PRC establishment or place of business being transferred, and would consequently be subject to PRC enterprise income tax at a rate of 25%. If the underlying transfer relates to immovable properties located in China or to equity interests in a PRC resident enterprise, which is not related to a PRC establishment or place of business of a non-resident enterprise, a PRC enterprise income tax at 10% would apply, subject to preferential tax treatment under applicable tax treaties or similar arrangements, if any, and the party who is obligated to make payments for the transfer has a withholding obligation. Although SAT Bulletin 7 does not apply to share transfers of publicly traded companies, there is uncertainty as to the application of SAT Bulletin 7 or previous rules under SAT Circular 698. We and our non-PRC resident investors may be at risk of being subject to tax filing or withholding obligations under SAT Bulletin 7 and we may be required to expend valuable resources to comply with SAT Bulletin 7 or to establish that we should not be taxed under SAT Bulletin 7.

We cannot assure you that the PRC tax authorities will not, at their discretion, adjust any capital gains and impose tax return filing and withholding or tax payment obligations on the transferors and transferees, while our PRC subsidiaries may be requested to assist in the filing. Any PRC tax imposed on a transfer of our shares or any adjustment of such gains would cause us to incur additional costs and may have a negative impact on the value of your investment in us.

Our auditor, like other independent registered public accounting firms operating in China, is not permitted to be subject to inspection by the Public Company Accounting Oversight Board, and as such, investors may be deprived of the benefits of such inspection.

Our independent registered public accounting firm that issued the audit reports included in our annual reports filed with the SEC, as an auditor of companies that are traded publicly in the United States and a firm registered with the Public Company Accounting Oversight Board (United States), or the PCAOB, is required by the laws of the United States to undergo regular inspections by the PCAOB to assess its compliance with the laws of the United States and professional standards. Because our auditor is located in China, a jurisdiction where the PCAOB is currently unable to conduct inspections without the approval of the PRC authorities, our auditor, like other independent registered public accounting firms operating in China, is currently not inspected by the PCAOB.

Inspections of other firms that the PCAOB has conducted outside of China have identified deficiencies in those firms’ audit procedures and quality control procedures, which may be addressed as part of the inspection process to improve future audit quality. The inability of the PCAOB to conduct inspections of independent registered public accounting firms operating in China makes it more difficult to evaluate the effectiveness of our auditor’s audit procedures or quality control procedures. As a result, investors may be deprived of the benefits of the PCAOB inspections and lose confidence in our reported financial information and procedures and the quality of our financial statements.

Proceedings instituted by the SEC against certain PRC-based accounting firms, including our independent registered public accounting firm, could result in financial statements being determined to not be in compliance with the requirements of the Exchange Act.

Starting in 2011 the PRC affiliates of the ‘‘big four’’ accounting firms (including our independent registered public accounting firm) were affected by a conflict between U.S. and PRC law.  Specifically, for certain U.S.-listed companies operating and audited in mainland China, the SEC and the PCAOB sought to obtain from the PRC firms access to their audit work papers and related documents.  The firms were, however, advised and directed that under PRC law they could not respond directly to the U.S. regulators on those requests, and that requests by foreign regulators for access to such papers in China had to be channeled through the China Securities Regulatory Commission, or the CSRC.

In late 2012, this impasse led the SEC to commence administrative proceedings under Rule 102(e) of its Rules of Practice and also under the Sarbanes-Oxley Act of 2002 against the PRC-based accounting firms (including our independent registered public accounting firm).  A first instance trial of the proceedings in July 2013 in the SEC’s internal administrative court resulted in an adverse judgment against the firms.  The administrative law judge proposed penalties on the firms including a temporary suspension of their right to practice before the SEC, although that proposed penalty did not take effect pending review by the SEC.  On February 6, 2015, before SEC’s review had taken place, the firms reached a settlement with the SEC.  The settlement requires the firms to follow detailed procedures to seek to provide the SEC with access to PRC-based accounting firms’ audit documents via the CSRC. If they fail to meet specified criteria, the SEC retains the authority to impose a variety of additional remedial measures on the firms depending on the nature of the failure.  Remedies for any future noncompliance could include, as appropriate, an automatic six-month bar on a single firm’s performance of certain audit work, commencement of a new proceeding against a firm, or in extreme cases the resumption of the current proceeding against all four firms.

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In the event that the SEC restarts the administrative proceedings, depending upon the final outcome, listed companies in the United States with major PRC operations may find it difficult or impossible to retain auditors in respect of their operations in the PRC, which could result in financial statements being determined to not be in compliance with the requirements of the Exchange Act, including possible delisting. Moreover, any negative news about any such future proceedings against these audit firms may cause investor uncertainty regarding PRC-based, U.S.-listed companies and the market price of our ADSs may be adversely affected.

If our independent registered public accounting firm were denied, even temporarily, the ability to practice before the SEC and we were unable to timely find another registered public accounting firm to audit and issue an opinion on our financial statements, our financial statements could be determined not to be in compliance with the requirements of the Exchange Act. Such a determination could ultimately lead to the delisting of our ordinary shares from the NYSE or deregistration from the SEC, or both, which would substantially reduce or effectively terminate the trading of our ADSs in the United States.

Risks Related to Our ADSs

The market price for our ADSs has been and may continue to be highly volatile.

In 2014, the closing price of our ADSs on the New York Stock Exchange, or the NYSE, varied from a high of $14.66 to a low of $7.24. The market price for our ADSs has been and may continue to be highly volatile and subject to wide fluctuations in response to factors including the following:

·actual or anticipated fluctuations in our quarterly results of operations;

·changes in financial estimates by securities research analysts;

·changes in government real estate policies or conditions in the real estate industry in China;

·changes in the economic performance or market valuations of other real estate services companies;

·announcements by us or our competitors of new products, acquisitions, strategic investments or partnerships, joint ventures, or capital commitments or capital markets transactions;

·addition or departure of key personnel;

·fluctuations of exchange rates between the RMB and U.S. dollar or other foreign currencies;

·sales or repurchases of our ADSs or ordinary shares; and

·general economic or political conditions in China

The securities markets in the United States, China and elsewhere have experienced significant price and volume fluctuations that are not related to the operating performance of particular companies, particularly in recent years. The securities of some China-based companies that have listed their securities in the United States have experienced significant volatility since their initial public offerings, including, in some cases, substantial price declines in the trading prices of their securities. The trading performances of these Chinese companies’ securities after their offerings may affect the attitudes of investors toward Chinese companies listed in the United States, which consequently may impact the trading performance of our ADSs, regardless of our actual operating performance. Since 2011, some China-based companies became targets of short sellers. Any negative news or perceptions about inadequate corporate governance practices or fraudulent accounting, corporate structure or other matters of other Chinese companies may also negatively affect the attitudes of investors towards Chinese companies in general, including us, regardless of whether we have conducted any inappropriate activities. Although we have confidence in our corporate governance practice and internal control over financial reporting, we cannot assure you that we will not be subject to such attack. Any negative news or perceptions about our corporate governance or accounting practice in the future, regardless of its merits, will negatively affect the trading performance of our ADSs. In addition, the global financial crisis and the ensuing economic recessions in many countries have contributed and may continue to contribute to extreme volatility in the global stock markets. These broad market and industry fluctuations may adversely affect the market price of our ADSs.

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Substantial future sales of our ADSs in the public market, or the perception that these sales could occur, could cause the price of our ADSs to decline.

Additional sales of our ADSs in the public market, or the perception that these sales could occur, could cause the market price of our ADSs to decline. As of March 31, 2015, we had 148,254,830 ordinary shares issued, including the 5,928,517 ordinary shares that had been issued to our depositary and reserved for future grants under our share incentive plan, and 29,333,740 ordinary shares were held by SINA. Pursuant to an Investor Rights Agreement we entered into with SINA in August 2012, we agreed to provide SINA with certain registration rights in respect of our ordinary shares and ADSs owned by SINA, subject to certain limitations.  See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Investor Rights Agreement with SINA.” In addition, a total of 31,500,000 ordinary shares held by certain shareholders affiliated with our management are currently subject to a share charge for the benefit of a third-party lender which has entered into a margin loan facility with one of these shareholders. See “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” We have agreed to register part or all of the shares subject to the share charge on a shelf registration statement under certain conditions and upon occurrence of certain circumstances, if ever. Registration of these shares under the Securities Act would result in these shares becoming freely tradable without restriction under the Securities Act immediately upon the effectiveness of the registration. If part or all of the shares subject to the share charge are sold in the public market or if any existing shareholder or shareholders sell a substantial amount of ADSs, the prevailing market price for our ADSs could be adversely affected. Such sales also might make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem appropriate. In addition, if we pay for our future acquisitions in whole or in part with additionally issued ordinary shares, your ownership interests in our company would be diluted and this, in turn, could have an adverse effect on the price of our ADSs.

You may not have the same voting rights as the holders of our ordinary shares and may not receive voting materials in time to be able to exercise your right to vote.

Except as described in this annual report and in the deposit agreement, holders of our ADSs cannot exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSs have appointed the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receive voting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties, will not have the opportunity to exercise a right to vote.

You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.

We may from time to time distribute rights to our shareholders, including rights to acquire our securities. Under the deposit agreement for the ADSs, the depositary will not offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADS holders are either registered under the Securities Act of 1933, as amended, or the Securities Act, or exempt from registration under the Securities Act with respect to all holders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such a registration statement to be declared effective. In addition, we may not be able to take advantage of any exemptions from registration under the Securities Act. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.

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You may be subject to limitations on transfer of your ADSs.

Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when it deems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason.

You may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited, because our holding company is incorporated under Cayman Islands law, conduct substantially all of our operations in China and all of our officers reside outside the United States.

Our holding company is incorporated in the Cayman Islands. We conduct substantially all of our operations through our PRC subsidiaries. All of our directors and officers reside outside the United States and some or all of the assets of those persons are located outside of the United States. As a result, it may be difficult for you to effect service of process within the United States upon us or these persons. It may also be difficult for you to enforce in U.S. courts judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against us and our officers and directors, most of whom are not residents in the United States and the substantial majority of whose assets are located outside of the United States. In addition, there is uncertainty as to whether the courts of the Cayman Islands or the PRC would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state and it is uncertain whether such Cayman Islands or PRC courts would impose liabilities in original actions brought in the Cayman Islands or the PRC against us or such persons predicated upon the securities laws of the United States or any state.

Our corporate affairs are governed by our memorandum and articles of association, as amended and restated from time to time, and by the Companies Law (2013 Revision) and common law of the Cayman Islands. The rights of shareholders to take legal action against our directors and us, actions by minority shareholders and the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the Cayman Islands. The rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedents in the United States. In particular, the Cayman Islands has a less developed body of securities laws as compared to the United States, and provides significantly less protection to investors. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action before the federal courts of the United States.

As a result of all of the above, our public shareholders may have more difficulty in protecting their interests through actions against our management, directors or controlling shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States.

We may be classified as a passive foreign investment company, or PFIC, which could result in adverse U.S. federal income tax consequences to U.S. Holders.

We will be classified as a “passive foreign investment company,” or “PFIC” for U.S. federal income tax purposes for any taxable year, if either (a) 75% or more of our gross income for such year consists of certain types of “passive” income or (b) 50% or more of the value of our assets (as determined on the basis of a quarterly average) during such year produce or are held for the production of passive income. Although the law in this regard is unclear, we treat our VIEs as being owned by us for U.S. federal income tax purposes, not only because we exercise effective control over the operation of such entities but also because we are entitled to substantially all of their economic benefits, and, as a result, we consolidate their operating results in our consolidated financial statements.

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While we do not expect to be a PFIC for U.S. federal income tax purposes for the current taxable and future taxable years no assurance can be given in this regard because the determination of whether we will be or become a PFIC is a factual determination made annually that will depend, in part, upon the composition of our income and assets. Fluctuations in the market price of our ADSs and ordinary shares may cause us to become a PFIC for the current taxable year or future taxable years because the value of our assets for purposes of the asset test, including the value of our goodwill and other unbooked intangibles, may be determined by reference to the market price of our ADSs and the value of our assets from time to time, including, in particular the value of our goodwill and other unbooked intangibles (which may depend upon the market value of our ADSs or ordinary shares from time-to-time, (which may be volatile). Furthermore, the determination of whether we will be or become a PFIC will also be affected by how, and how quickly, we use our liquid assets. Under circumstances where our revenue from activities that produce passive income significantly increase relative to our revenue from activities that produce non-passive income, or where we determine not to deploy significant amounts of cash for active purposes our risk of being classified as a PFIC may substantially increase. It is also possible that the Internal Revenue Service may challenge our classification or valuation of our goodwill and other unbooked intangibles, which may result in our company being or, becoming classified as, a PFIC for the current or future taxable years. In addition, there can be no assurance our business plans will not change in a manner that will affect our PFIC status.

If we are classified as a PFIC in any taxable year, a U.S. Holder (as defined in “Taxation—U.S. Federal Income Tax Considerations”) may incur significantly increased U.S. federal income tax on gain recognized on the sale or other disposition of the ADSs or ordinary shares and on the receipt of distributions on the ADSs or ordinary shares to the extent such gain or distribution is treated as an “excess distribution” under the U.S. federal income tax rules. Further, if we are classified as a PFIC for any year during which a U.S. Holder holds our ADSs or ordinary shares, we generally will continue to be treated as a PFIC for all succeeding years during which such U.S. Holder holds our ADSs or ordinary shares. Each U.S. Holder is urged to consult its tax advisor concerning the U.S. federal income tax consequences of an investment in our ADSs or ordinary shares if we are treated as a PFIC for our current taxable year or any future taxable year, including the possibility of making a “mark-to-market” election.

See the discussion under “Item 10. Additional Information—E. Taxation—U.S. Federal Income Taxation—Passive Foreign Investment Company Rules” concerning the U.S. federal income tax consequences of an investment in the ADSs or ordinary shares if we are or become classified as a PFIC, including the possibility of making a “mark-to-market” election.

ITEM 4.INFORMATION ON THE COMPANY

A.History and Development of the Company

We are a Cayman Islands incorporated holding company that conducts operations through our subsidiaries and consolidated VIEs. We commenced operations in 2000 through Shanghai Real Estate Sales (Group) Co., Limited, or E-House Shanghai, a limited liability company established in China, and its subsidiaries and affiliates. One of the initial investors of E-House Shanghai was our co-chairman and chief executive officer, Mr. Xin Zhou. In August 2004, we established our holding company, E-House, in the Cayman Islands as an exempted company with limited liability. After a series of transactions, E-House Shanghai became a wholly-owned subsidiary of E-House in April 2005 and E-House Holdings was owned by the same group of investors with the same ownership proportions as E-House Shanghai prior to these transactions.

In April 2006, we issued and sold an aggregate of 22,727,272 Series A preferred shares to a group of private equity investors. Each Series A preferred share was automatically converted to 0.58 ordinary shares upon our initial public offering in August 2007. On August 8, 2007, our ADSs began trading on the NYSE under the ticker symbol “EJ.” Including the exercise of an over-allotment option, we issued and sold a total of 13,167,500 ADSs, representing 13,167,500 ordinary shares, and the selling shareholders sold an additional 3,622,500 ADSs, representing 3,622,500 ordinary shares, in each case at an initial public offering price of $13.80 per ADS. On February 1, 2008, we completed our second public offering, in which we issued and sold a total of 6,000,000 ADSs, representing 6,000,000 ordinary shares, and a selling shareholder sold an additional 900,000 ADSs, representing 900,000 ordinary shares, in each case at a public offering price of $17.00 per ADS.

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On October 16, 2009, our subsidiary CRIC listed its ADSs, each representing one ordinary share of CRIC, on the NASDAQ Global Select Market in connection with an initial public offering. CRIC issued a total of 20,700,000 ADSs at a public offering price of $12.00 per ADS in connection with its initial public offering. Concurrent with completion of the initial public offering, CRIC also acquired SINA’s real estate and home furnishing online business. Following these transactions, we remained the majority shareholder of CRIC, holding 50.04% of CRIC’s total outstanding shares at the time, and SINA became CRIC’s second largest shareholder holding 33.35% of CRIC’s total outstanding shares at the time.

On December 28, 2011, we entered into a merger agreement with CRIC and a wholly-owned subsidiary we established in the Cayman Islands, or the Merger Sub. Merger Sub subsequently merged with and into CRIC, with CRIC continuing as the surviving corporation and a wholly-owned subsidiary of ours, on April 20, 2012, or the Effective Time. As a result, CRIC ADSs are no longer listed on NASDAQ. Pursuant to the Merger Agreement, at the Effective Time, each of CRIC ordinary shares (not including CRIC ordinary shares represented by CRIC ADSs) issued and outstanding immediately prior to the Effective Time was cancelled in exchange for the right to receive 0.6 of our ordinary shares and $1.75 in cash without interest, and each of CRIC ordinary shares represented by CRIC ADSs issued and outstanding immediately prior to the Effective Time was cancelled in exchange for the right to receive 0.6 of our ADSs and $1.75 in cash without interest (less a $0.05 per CRIC ADS cancellation fee payable by the holders of CRIC ADSs pursuant to the depositary agreement in respect of the CRIC ADSs). Immediately following the completion of the merger, SINA became our largest shareholder holding approximately 24.9% of our outstanding shares at the time. We paid approximately $113.1 million in cash and issued 38,785,588 ordinary shares as consideration for the merger.

In December 2013 we issued $135,000,000 principal amount of 2.75% convertible senior notes due 2018. The notes bear interest at a rate of 2.75% per year, payable semiannually in arrears on June 15 and December 15 of each year, beginning on June 15, 2014. The notes will mature on December 15, 2018. The notes are convertible into ADSs, at the option of the holders, in integral multiples of $1,000 principal amount and at any time prior to the close of business on the second business day immediately preceding the maturity date.

In March 2014, we entered into a share purchase and subscription agreement with Leju and Tencent, pursuant to which Tencent acquired from us 19,201,800 of Leju’s ordinary shares, or 15% of its total outstanding shares on a fully diluted basis, including all options and restricted shares and any other rights to acquire Leju’s shares that were granted and outstanding at the time for $180 million in cash. On April 17, 2014, Leju listed its American depositary shares, each representing one ordinary share of Leju (the “Leju ADSs”), on the NYSE in connection with an initial public offering. Leju issued a total of 11,500,000 ordinary shares of Leju, represented by 11,500,000 Leju ADSs, at $10.00 per Leju ADS in connection with its initial public offering, and an additional 2,029,420 Leju ordinary shares to Tencent in a private placement concurrent with Leju’s initial public offering at $10.00 per Leju share. Following these transactions, we remained the majority shareholder of Leju, holding 75.5% of Leju’s total outstanding shares, and Tencent became Leju’s second largest shareholder holding 15.9% of Leju’s total outstanding shares, in each case as of April 30, 2014.

We were approved by our board of directors in December 2014 and completed on January 15, 2015 a partial spin-off of Leju by distributing to E-House shareholders or ADS holders in the form of a dividend of 0.05 ordinary shares, par value $0.001, of Leju, for each of our ordinary shares outstanding as of December 3, 2014, or 0.05 ADSs of Leju, for each of our ADSs outstanding as of December 3, 2014. We distributed a total of 7,103,280 ordinary shares of Leju to holders of our ordinary shares in this manner, which include a total of 3,877,658 ordinary shares of Leju in the form of 3,877,658 ADSs of Leju to our ADS holders through our depositary bank. Following the completion of the partial spin-off, we owned 93,694,920 ordinary shares of Leju, representing approximately 70% of Leju’s total outstanding ordinary shares.

In April 2015, we reached an agreement with Jupai, a leading third-party wealth management service provider in China, regarding the proposed transfer to Jupai of our real estate investment fund management business unit focusing on the design and management of real estate or related investment projects and funds. Our real estate investment fund management business is currently operated by Scepter and its subsidiaries and consolidated entities. We indirectly own 51% of Scepter, while an entity majority owned by Mr. Xin Zhou, our chief executive officer and co-chairman, owns the remaining 49%. Pursuant to the agreement, we and the entity majority-owned by Mr. Zhou will transfer all of the equity interests in Scepter in exchange for Jupai’s issuance of, on a pro rata basis, an aggregate number of Jupai’s ordinary shares equal to 20% of Jupai’s total post-issuance equity interest on a fully diluted basis (without giving effect to shares issued in the proposed initial public offering of Jupai), conditional upon, among other things, the completion of a proposed initial public offering of Jupai. Immediately upon the closing of the transaction and the proposed initial public offering of Jupai, we will become the largest shareholder of Jupai with an approximately 37% equity interest in Jupai (without giving effect to the shares issued in the proposed initial public offering).

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Our principal executive offices are located at Qiushi Building, 11/F, 383 Guangyan Road, Zhabei District, Shanghai 200072, People’s Republic of China. Our telephone number at this address is +86 21 6133-0808. Our registered office in the Cayman Islands is located at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. In addition, we have 60 branch offices in mainland China, and a branch office in each of Hong Kong and Macau. Our agent for service of process in the United States is Law Debenture Corporate Services Inc., located at 400 Madison Avenue 4th Floor, New York, New York 10017.

B.Business Overview

Overview

We are a leading real estate services company in China based on scope of services, brand recognition and geographic presence. We provide real estate online services (including e-commerce, online advertising and listing services), real estate brokerage services (including primary real estate agency services and secondary real estate brokerage services), real estate information and consulting services, community value-added services and other services (including real estate advertising services, real estate promotional event services, real estate investment fund management services and real estate financial services). Our clients mainly include leading domestic and international real estate developers, as well as individual consumers. The geographic network of our services covers 259 cities across China.

Our revenues increased 24% to $904.5 million for the year ended December 31, 2014 from $731.1 million for the year ended December 31, 2013. Starting in 2010, the PRC government adopted a series of restrictive policies for the real estate industry in China, which has had a material and adverse effect on the overall real estate market in China and hence our business operations. We had net income attributable to E-House shareholders of $36.2 million in 2010, and a net loss attributable to E-House shareholders of $270.4 million and $57.0 million in 2011 and 2012, respectively. In 2013 and 2014, we had net income attributable to E-House shareholders of $52.0 million and $40.0 million, respectively. We derive substantially all of our revenues from our operations in China.

Our Services

We provide the following types of services:

·real estate online services (including e-commerce, online advertising and listing services),

·real estate brokerage services (including primary real estate agency services and secondary real estate brokerage services),

·real estate information and consulting services,

·community value-added services, and

·other services, which include real estate advertising services, real estate promotional event services, real estate investment fund management and real estate financial services.

We may continue to offer new complementary real estate services to capture market trends and to serve the evolving needs of our clients.

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Real Estate Online Services

We provide online-to-offline, or “O2O”, real estate services through our majority-owned subsidiary, Leju, in China. We offer real estate e-commerce, online advertising and online listing services through our online platform, which comprises local websites covering over 250 cities and various mobile apps. We integrate our online platform with complementary offline services to facilitate residential property transactions. In addition to our own websites, we also operate various real estate and home furnishing websites of SINA Corporation, or SINA, and Baidu Inc., or Baidu. Real estate online services accounted for 37%, 46% and 55% of our total revenues in 2012, 2013 and 2014, respectively.

E-Commerce. We offer e-commerce services primarily in connection with new residential property sales. Our O2O services for new residential properties include selling discount coupons and facilitating online property viewing, physical property visits and pre-sale customer support. We earn revenue primarily from the sale of discount coupons used for property purchases. The following table sets forth certain operating metrics with respect to our sales of discount coupons for the periods specified.

	Three monthsended March 31, 2014	Three monthsended June 30, 2014	Three monthsended September 30, 2014	Three monthsended December 31, 2014
Number of discount coupons issued to prospective purchasers (number of transactions)	48,440	89,524	85,843	99,688
Number of discount coupons redeemed (number of transactions)(1)	33,872	49,724	59,811	76,150

Note: (1)The number of discount coupons issued to prospective purchasers that were used by the purchaser to obtain a discount in connection with a property purchase during the period. We recognize revenue from the sale of discount coupons when they are redeemed. See ‘‘Item 5. Operating and Financial Review and Prospects—Critical Accounting Policies.’’

Online Advertising. We sell advertising primarily on the SINA and Baidu new residential properties and home furnishing websites, each of which is operated by us. In addition, we are the exclusive advertising agent for the SINA home page and non-real estate websites with respect to advertising sold to real estate and home furnishing advertisers. We also have the exclusive right to sell Baidu’s Brand-Link product for real estate related advertising.

Listing. We offer fee-based online property listing services to real estate agents and free services to individual property sellers. We operate the SINA and Baidu real estate websites for listings of existing residential properties for sale or lease.

In March 2014, we entered into a strategic cooperation agreement with an affiliate of Tencent Holding Limited, or Tencent, a provider of comprehensive internet services serving the largest online community in China. Pursuant to the strategic cooperation agreement, we and Tencent have agreed to jointly develop software and tools for use on Tencent’s social communication platform, Weixin, to facilitate our opening of Weixin public accounts associated with real estate projects, which we believe will provide real estate information to Weixin users, enable us to better connect with our users through such accounts and expand payment solutions provided to users. We have agreed to adopt Weixin payment solutions as the default payment method for real estate O2O e-commerce transactions conducted by our users on Weixin. We and Tencent have also agreed to explore and pursue additional opportunities for potential cooperation, including but not limited to cooperation involving Tencent’s social communications platform, including Weixin, ‘‘QQ’’ and ‘‘mobile QQ;’’ the social media service, ‘‘Tencent Weibo;’’ the social networking service, ‘‘Qzone;’’ and/or certain other Tencent wholly-owned internet properties in China.

Real Estate Brokerage Services

Our real estate brokerage services consist of mostly primary real estate agency services, supplemented by secondary real estate brokerage services in a few cities.

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Primary Real Estate Agency Services. Our principal business has traditionally been providing primary real estate agency services to real estate developers. Primary real estate agency services accounted for 42%, 37% and 30% of our total revenues in 2012, 2013 and 2014, respectively. The following table sets forth the total GFA and value of properties sold for the periods indicated:

	For the Year Ended December 31,
	2012	2013	2014
Total GFA of new properties sold (thousands of square meters)	17,043	21,504	21,752
Total value of new properties sold (millions of RMB)	139,085	196,509	195,410

Once we are engaged by a developer, we formulate a marketing and sales plan for the project. Our contracts typically specify the sales period, the minimum average sales price and the sales commissions. Typically, we receive a fixed or progressive percentage as a commission based on the total sales. Some contracts also provide for bonus commissions for sales achieved above the pre-determined levels.

In 2014, we provided primary real estate agency services for 1,015 projects in 150 cities in China. We have significantly expanded our primary real estate agency services by forming strategic alliances with leading real estate developers such as Evergrande. These strategic alliances provide us with a substantial increase in both GFA immediately available for sale as well as a project pipeline for future sales. They also help us expand into new cities and regions. We plan to continue to form strategic alliances with leading real estate developers. In the fourth quarter of 2014, we incorporated internet tools and mobile apps to our traditional brokerage services to improve our capabilities in customer origination.

Secondary Real Estate Brokerage Services. We provide secondary real estate brokerage services in 4 cities, including brokerage services for both sales and rentals. Secondary real estate brokerage services accounted for 3%, 2% and 1% of our total revenues in 2012, 2013 and 2014, respectively. As of December 31, 2014, we had a total of 41 stores, including 17 in Shanghai, 20 in Hangzhou, 3 in Hong Kong and 1 in Macau. We closed a total of 12 stores in 2014 in order to reduce costs and optimize our store network.

Our secondary real estate brokerage services include offering advisory services on choices of properties, accompanying potential buyers on property viewing trips, drafting purchase contracts, negotiating price and other terms, providing preliminary proof of title, and coordinating with the notary, the bank and the title transfer agency.

In addition to marketing and selling properties in the secondary real estate market, our brokerage storefronts also support our sales effort in the primary real estate agency services market primarily by promoting and selling any remaining unsold units of primary real estate projects. This not only generates additional transactions and revenues for our secondary real estate brokerage business, but also enhances our services to our clients in the primary real estate market.

We provide our secondary real estate brokerage services using a lease-and-operate model. We directly lease properties for our brokerage storefronts, manage and train the sales staff and maintain all the applicable licenses.

Real Estate Information and Consulting Services

Our real estate information and consulting services are tailored to meet the needs of developer clients at various stages of the project development and sales process and other clients with particular requests and needs. Leveraging our strength in real estate data, we also started offering home price index service in 2013 and online home price estimates and rating services in 2014. Real estate information and consulting services accounted for 12%, 11% and 9% of our total revenues in 2012, 2013 and 2014, respectively.

Real Estate Information Services. We provide two levels of real estate information services relying upon our CRIC system: (1) data subscription services, in which we market and sell, on a subscription basis, the use of our CRIC system; and (2) data integration services, which provide periodic research reports and analysis that suit the specific needs and requirements of individual clients in addition to access to the CRIC system. The data subscription services allow clients to subscribe for a single or a combination of our CRIC database products, including information on various real estate markets, residential and/or commercial projects, land transactions, project construction materials, and information on companies within the real estate industry.

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In 2013, we initiated CRIC Home Price series, also referred to as our China Real Estate Price System, or CRPS. The CRIC Home Price series includes a primary home price index for 288 cities in China, a secondary home price index for 60 cities, estimated home prices for existing homes and recommended pricings for newly built homes.

In July 2014, we officially launched the CRIC home price ratings website www.fangjiadp.com and its related mobile app (together, “Fangjiadp”). The website and app covered more than 5,000 new residential developments in 26 cities, as well as more than 30,000 existing residential compounds in 12 cities in China as of March 31, 2015. Fangjiadp provides independent home price estimates, qualitative reviews, and ratings for primary and secondary market residential compounds. By entering an address (down to each individual apartment unit level) or compound name, consumers can instantly obtain the estimated market value of both new and previously-owned properties, as well as CRIC’s expert opinions on other aspects of the properties. Properties are rated as “strongly recommended buy,” “recommended buy,” “buy with caution” or “recommend waiting.” Once a consumer locates a property of interest, Fangjiadp will also list four similar properties in the area that are in the same price range so that consumers can compare estimated values and other aspects of the properties. Fangjiadp’s unique user interface allows consumers to conduct one-on-one conversations with CRIC’s home price analysts.

Real Estate Consulting Services. Our consulting services are tailored to meet the needs of real estate developer clients at various stages of the project development and sales process and include services designed to help real estate developer clients formulate solutions to meet their specific needs and services designed to facilitate large-scale land or development project purchase and sale transactions. Major types of our consulting services include (1) land acquisition consulting, where we are retained by real estate developers as consultant or intermediary to advise on and facilitate the transfer of land development rights; (2) project consulting, where we offer a variety of services to developers who have obtained land development rights, including project feasibility studies, analysis of the real estate transaction history of nearby development projects, marketing and advertising consulting, and development of comprehensive plans for their development projects.

Community Value-added Services

We started our mobile community value-added services, through the launch of “Shi Hui” app, in July 2014. Shi Hui, which translates to “value,” is jointly established by us, SINA, Focus Media Holding Limited, the operator of China’s largest lifestyle targeted interactive digital media network, and Shentong Express Co., Ltd, a logistics company whose network covers major cities and towns in China. As of December 31, 2014, we owned 55% of Shanghai Weidian which owns and operates Shi Hui.

Users download Shi Hui and select their residential compounds, office buildings and/or schools and can win promotional products and free services from a variety of merchants and service providers on a daily basis, find nearby restaurants, stores and other service providers, and participate in chat groups with people in the same communities.

Shi Hui was initially launched in Shanghai and Beijing. In early 2015, Shi Hui was expanded to an additional eight cities in China. As of March 31, 2015, the Shi Hui app had more than 3.8 million registered users, more than 400,000 of which are daily active users. In addition, retailers and service providers provided to Shi Hui users free offers and discounts worth a total value of approximately RMB4.8 billion (US$0.8 billion).

Other Services

Our other services include real estate advertising services, real estate promotional event services, real estate investment fund management and real estate financial services.

Real Estate Advertising Services. We began providing real estate advertising sales services in 2009 by making wholesale purchases of advertising space in print and other media and reselling them to our developer clients.

Real Estate Promotional Event Services. We began offering promotional event services to our various clients in 2010. Our promotional event services include securing venues, hiring caterers and various other service providers, formulating event themes and inviting speakers and guests for real estate promotional events.

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Real Estate Investment Fund Management. We believe our knowledge and expertise in the PRC real estate industry, including our proprietary CRIC database and research capabilities, and our nationwide network, offer us a unique competitive advantage in identifying attractive investment opportunities and executing successful transactions. We have formed a few funds, including E-House China Real Estate Investment Fund I, E-House Shengyuan Equity Investment Center, E-House Shengquan Equity Investment Center, Shanghai Shouxin Equity Investment Center, Shanghai Muxin Equity Investment Center, Suzhou Hehui Xuyuechang Equity Investment Center, Suzhou Hehui Xuyuerong Equity Investment Center and Suzhou Hehui Xuyuezhen Equity Investment Center, which seek to invest in China’s real estate sector, and Shanghai Wuling Investment Center for the purpose of making equity investments in suitable industries. For each of these funds, we, through our 51% owned subsidiary, act as the fund’s general partner. The general partner receives annual management fees and carried interest. The general partner is entitled to carried interest from the fund in the event that the investors in the fund achieve cumulative investment returns in excess of a specified amount at the end of the contract year. See “Item 7.B. Major Shareholders and Related Party Transactions—Related party Transactions—Real Estate Investment Fund Management.”

In April 2015, we reached an agreement with Jupai, a leading third-party wealth management service provider in China, regarding the proposed transfer to Jupai of our real estate investment fund management business unit in exchange for Jupai’s ordinary shares. This transaction is conditional upon, among other things, the completion of a proposed initial public offering of Jupai. Immediately upon the closing of the transaction and the proposed initial public offering, we will become the largest shareholder of Jupai with an approximately 37% equity interest in Jupai (without giving effect to the shares issued in the proposed initial public offering).

Real Estate Financial Services. We launched our real estate financial services P2P platform, “Fang Jin Suo”, and its associated website, www.fangjs.com, in July 2014. Fang Jin Suo, which translates to “Source of Real Estate Funds” and was jointly founded by us, SINA and Sequoia Capital, is a platform that links qualified home buyers with borrowing needs to potential investors. Since its launch, Fang Jin Suo has offered investors a variety of real estate-related investment products with attractive returns while providing qualified home buyers with additional liquidity to facilitate real estate transactions. As of March 31, 2015, a total of RMB 310 million (US$50.0 million) flows through Fang Jin Suo. We held a 56% ownership in Fang Jin Suo as of December 31, 2014.

Marketing and Brand Promotion

We employ a variety of marketing and brand promotion methods to enhance our brand recognition and attract developer clients and real estate buyers, including the following:

Advertisements. We have advertising arrangements with many Chinese national and regional consumer media outlets, including television stations, newspapers, industry publications and internet websites. We also advertise and distribute informational brochures, posters and flyers at various real estate conferences, exhibitions and trade shows. In addition, we conduct advertising activities in cities where we directly operate local websites through promotional events for developers and other industry participants, including industry award ceremonies, panel discussions and similar events.

Social Media. We have official E-House, CRIC and Leju social media accounts through Tencent’s Weixin and Weibo.

E-House and Leju Membership Clubs. We created the E-House Membership Club and Leju Membership Club to attract real estate buyers. As of December 31, 2014, we had approximately 110 million members located in 340 cities from both our online and offline services. We provide value-added services, such as newsletters containing information on the housing market and priority on sought-after properties without charge to our members. We frequently promote new properties to members who have indicated their preferences for new properties. We also conduct activities designed to increase our members’ loyalty, such as birthday greetings and invitations to entertainment events.

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Seasonality

Our operating income and earnings have historically been substantially lower during the first quarter than other quarters. This results from the relatively low level of real estate activities during the winter and the Chinese New Year holiday period, which falls within the first quarter each year.

Competition

The real estate services industry in China is rapidly evolving, highly fragmented and competitive. Compared to real estate development, real estate services require a smaller commitment of capital resources. This relatively lower barrier to entry permits new competitors to enter our markets quickly and compete with us. While we face competition in each geographic market in which we operate, we believe none of our competitors offers as broad a range of services and geographic coverage as we provide in the real estate services market.

·In the real estate online business market, our primary competitor at the national level is SouFun Holdings Limited, or SouFun. Other competitors at the national level include Sohu.com Inc.’s real estate vertical channel, focus.cn. In addition, we have faced and may continue to face competition from regionally focused websites providing regional real estate listings together with localized services. We have various regional competitors, such as house365.com in the Nanjing market, and we compete with various providers in the market for online paid property listings, including 58.com, which recently acquired Anjuke Inc.

·In the primary real estate agency services market, our main competitors include World Union Real Estate Consultancy (China) Ltd., Hopefluent Group Holdings Limited, Centaline Group, SYSWIN Inc., Fangdd and B.A. Consulting Company, all of which operate in multiple cities in China. In addition, we compete with local primary real estate agency services providers in each geographic market where we have a presence.

·In the secondary real estate brokerage services market, we compete with established international and domestic real estate brokerage firms, including IFM Investments Limited (operator of the Century 21 brokerage network), Centaline Group, Coldwell Banker, Shanghai House Exchange Co., Ltd., and 5i5j Real Estate Co. Ltd.

·In the real estate information and consulting service market, we compete with other leading international and domestic real estate services companies which provide real estate consulting services, including DTZ International, Jones Lang LaSalle, CB Richard Ellis, Savills PLC and World Union Real Estate Consultancy (China) Ltd.

Competition in the real estate services industry is primarily based on the ability to attract consumers to our websites and mobile apps, brand recognition, quality and breadth of services and overall client experience. We believe that among both real estate developers and individual real estate buyers in China our well-known “E-House” brand is associated with a leading integrated real estate services company that provides consistent high-quality services and our ‘‘Leju’’ brand is associated with a leading real estate O2O platform in China. In addition, through our strategic partnerships with Tencent and SINA, we are uniquely positioned to reach millions of consumers through our Weixin and Weibo public accounts. While some of our competitors may have more financial and other resources than we do, we believe that the CRIC system, our research capability, our knowledge and experience, our execution capability and our integration of online to offline services distinguish us from our competitors and allow us to respond more promptly to market changes.

Employees and Training

We had 15,088 and 18,927 employees as of December 31, 2012 and 2013 respectively. As of December 31, 2014, we had 23,129 employees, including 3,523 in our corporate offices, 5,246 research staff and 14,360 sales staff. We pay our sales staff a combination of salaries and sales commissions and pay salaries to all other employees. We consider our relations with our employees to be good.

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We have established policies and procedures for the recruitment, training and evaluation of our employees. We place special emphasis on the training of our employees, whom we consider to be our most valuable assets. All newly hired employees must undergo intensive training during their three-month probation period. We also invite outside experts, including experts from the E-House Research and Training Institute, to provide ongoing classroom training to our employees. Each department must prepare detailed annual training plans for its staff based on the particular needs of such department. The human resources department is responsible for implementing the training plans, including engaging trainers, preparing training materials, selecting training venues and collecting feedbacks. We conduct annual performance evaluations for all employees and use both performance-based bonuses and job promotions as incentives to encourage good performance.

Facilities

Our headquarters are located in Shanghai, China, where we lease approximately 26,973 square meters of corporate office space. As of December 31, 2014, our offices in 62 cities occupy an aggregate of 112,995 square meters of leased space. We consider our corporate office space adequate for our current and future operations.

Legal Proceedings

We are subject to legal proceedings, investigations and claims incidental to the conduct of our business from time to time. We are not currently a party to, nor are we aware of, any legal proceeding, investigation or claim which, in the opinion of our management, is likely to have a material and adverse effect on our business, financial condition or results of operations.

Regulation

We are subject to a number of laws and regulations in China relating to real estate service companies. This section summarizes the principal PRC laws and regulations that are currently applicable to our business and operations.

Regulation of Real Estate Services Industry

The principal regulation governing the real estate services industry in China is the Law on Administration of Urban Real Estate issued by the Standing Committee of the National People’s Congress in July 1994, as amended. Under this law, real estate services providers include real estate consulting services providers, real estate appraisal services providers and real estate brokerage services providers.

Regulation on the Establishment and Operation of Real Estate Services Companies

Under PRC law, a company is required to obtain a business license from the State Administration for Industry and Commerce or its delegated local counterpart before it can commence any business. To qualify as a real estate services company, a company must register with the local office of the State Administration for Industry and Commerce in each locality where it does business. Penalties for non-compliance include the imposition of a fine, confiscation of illegal income and injunction against illegal services. To continue its existence as a real estate service company, it must meet certain organizational, financial and operational criteria, such as possessing sufficient funding and employing qualified personnel. It must keep proper records and comply with prescribed procedures in delivering its services. All of our subsidiaries have obtained their respective business licenses before engaging in real estate services.

Furthermore, the Measures for Administration on Real Estate Brokerage requires a real estate brokerage company to file with the real estate regulatory authority at the county level or above within 30 days after its business registration with the relevant local counterpart of State Administration for Industry and Commerce. Among our PRC operating entities with the registered business scope of real estate brokerage business, we have completed such filings with the relevant local real estate administrative authorities for some entities, and are in the process of filings or preparing the relevant application documents for the filings with respect to the remaining entities which intend to make such filings.

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Regulation of Real Estate Agency Companies and Agents

Pursuant to the Regulatory Measures on the Sale of Commercial Houses promulgated by the Ministry of Construction, a real estate developer may entrust a real estate service organization as a broker to pre-sell or sell primary residential housing. The regulatory measures provide that the real estate broker must not make any false statements regarding a property to clients and must present clients with relevant title certificates or sale permits of the properties and the related letter of authorization. Thus, according to these regulatory measures, we are not permitted to (i) act as agents to sell primary residential housing for which requisite certificates, permits or authorization letters have not been obtained, (ii) provide false statements on the conditions of any property in any advertisement, or (iii) violate any PRC advertisement law.

The Circular Concerning Strengthening the Management of Real Estate Services and Regulating the Trade Settlement Capital Account provide a number of specific directives to regulate the real estate services industry. Under this circular, we are not permitted to receive cash purchase payments on behalf of our clients in secondary real estate transactions and we are required to establish separate security deposit accounts for our clients in these transactions.

Pursuant to the Measures on Management of Brokers, “brokers” are defined as include individuals, legal persons and other entities that act as intermediary broker or agent in transactions for the purpose of obtaining commissions. The local offices of the State Administration for Industry and Commerce are the administrative bodies for brokers, responsible for handling registrations of brokers and supervising their activities. Different types of brokerages are required to obtain corresponding qualification licenses applicable to their respective businesses. Within 20 days after a brokerage company employs or dismisses any broker, it must file the broker’s information and the related contracts with the local offices of the State Administration for Industry and Commerce. Thus, according to these measures, before we or our individual brokers are allowed to engage in any brokerage services, we or our individual brokers, respectively, are required to obtain the required qualification licenses from the State Administration for Industry and Commerce. In addition, no brokerage company or broker can engage in any activities beyond the permitted business scope or against clients’ interests. In cases of noncompliance, the local offices of the State Administration for Industry and Commerce can issue warnings or impose fines up to RMB30,000 (US$4,835).

The Measures for Administration on Real Estate Brokerage govern the activities of real estate brokerages and real estate brokerage personnel in providing intermediary, agency and related services and charging commissions thereon. A real estate brokerage company and its branches must have sufficient qualified real estate brokers who have obtained real estate broker licenses.

A real estate brokerage company must enter into written agreements with its clients in respect of its brokerage services whereby the commission fee rate must be expressly specified. If a real estate brokerage company provides other services, such as loan agency and real estate registration agency, to a client, a separate written agreement must be entered into with the client. If a real estate brokerage company is entrusted to receive or pay the transaction price on behalf of any of its clients, the funds received or to be paid must be deposited in a special account established by the real estate brokerage company. If a real estate brokerage company is in violation of the Measures for Administration on Real Estate Brokerage, it may be subject to an order of rectification, an order to cease provision of services, and/or an order confiscating illegal income generated therefrom, and a fine up to RMB30,000 (US$4,835).

Pursuant to the Interim Regulation on Professional Qualification for Real Estate Brokers and the Implementing Measures on the Examinations of Professional Qualification for Real Estate Brokers, to practice as a qualified real estate broker, an individual must first obtain a qualification certificate for real estate brokers, and then the real estate broker license. An individual broker who fails to obtain the required qualification certificate or license will not be permitted to engage in secondary real estate agency services for us.

Pursuant to the Circular Concerning Strengthening the Administration on Real Estate Brokerage and Further Regulating the Order of Real Estate Transaction, a real estate brokerage service contract must be affixed with the seal of the real estate brokerage company and be signed by a qualified real estate broker. For a real estate transaction made through a brokerage company, the real estate brokerage service contract signed by the real estate broker is required to be submitted when applying to transfer the title of the concerned real estate. The real estate developers and real estate brokerage companies, when selling housing units, must strictly comply with the pre-sale plan and the price reported to the government. The real estate brokerage companies are prohibited from making false advertisement, providing fraudulent information on house for lease, inappropriately dividing the house for leasing, concealing the true leasing information and providing real estate brokerage service for premises not meeting the compulsory safety standards or illegally constructed.

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Local governments in different municipalities or cities may have detailed regulations governing the qualification and establishment of real estate brokerage companies and real estate brokerage activities. For example, in Shanghai, a real estate brokerage company must have a registered capital of at least RMB100,000 (US$16,117) and employ at least five licensed real estate brokers. Real estate brokerage companies or their branches must file with the real estate authorities and obtain a certificate of record which is valid for two years. Individual licensed brokers are subject to examination every two years before they can have their licenses renewed. Given the large size and scope of real estate sale transactions, both the difficulty of ensuring compliance with the multiple levels of licensing regimes and the possible loss resulting from non-compliance are significant. If we fail to properly obtain or maintain the licenses and permits or complete the filing and registrations required to conduct our business, our affected subsidiaries and branch offices in China may be warned, fined, have their licenses or permits revoked, or ordered to suspend or cease providing certain services, or subjected to other penalties, sanctions or liabilities. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—If we fail to obtain or keep licenses, permits or approvals applicable to the various real estate services provided by us, we may incur significant financial penalties and other government sanctions.”

Regulation of Real Estate Intermediary Service Charges

Real estate intermediaries must expressly state their service charges in the form of commissions. Commissions for the sale of real estate are required to be within the range of 0.5% to 2.5% of the transaction price, while for exclusive agency services commissions can be raised to a maximum of 3% of the transaction price. Commissions for real estate rental services range between 50% and 100% of the monthly rent, as negotiated between the relevant parties. Rental commissions are one-time payments regardless of the lease duration. We are not allowed to charge our clients commission rates that exceed the maximum rate.

The PRC government issues pricing guidelines for real estate consultation services, but specific charges are decided through negotiations between clients and the consulting service providers.

In addition, local governments in different municipalities or cities may have more specific restrictions within the permitted pricing range on the commissions for sale or rental services of properties located in their jurisdiction. For example, in Shanghai, the maximum commission that a broker may receive from the sale of residential properties is 2% of the transaction price. Commissions for real estate rental services cannot exceed 70% of the monthly rent. Commissions for assignments of State land use rights cannot exceed 3% of the transaction price. Commissions should be born equally between the buyer and the seller, or between the lessor and the lessee, unless stipulated otherwise in a written agreement. With respect to customized service requiring special expertise, a real estate brokerage organization of sufficiently large size (not including franchised stores and stores under contracted management) can apply for approval from the local pricing authorities to charge fees that exceed the fee level set forth in government guidelines.

Foreign Investments in the Real Estate Consulting Business and Real Estate Brokerage Business

The previous Foreign Investment Industrial Guidance Catalogue issued in 2011 classified the real estate agency and brokerage services within the restricted category for foreign investment. Accordingly, a wholly foreign-owned enterprise in China was required to obtain approval from the Ministry of Commerce or its local counterpart in order to establish or invest in any subsidiary to engage real estate agency and brokerage services. The National Development and Reform Commission and the Ministry of Commerce issued a new Foreign Investment Industrial Guidance Catalogue, which became effective on April 10, 2015. The new Foreign Investment Industrial Guidance Catalogue removed the real estate agency and brokerage services from the restricted category. Accordingly, the establishment of or the investment in a subsidiary to engage in real estate agency and brokerage services is no longer subject to the approval of the Ministry of Commerce or its local counterparts.

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We currently mainly use City Rehouse and its subsidiaries to provide support for our real estate e-commerce business. City Rehouse had not obtained approval from the competent local branch of the Ministry of Commerce in connection with the establishment of, or investment in, its subsidiaries with a registered business scope of real estate brokerage business, although each subsidiary of City Rehouse has obtained and maintained a business license with such business scope, and none of such subsidiaries has received any notice of warning or penalties from the competent authorities for lacking such approval. Even though the new catalogue became effective in April 2015, the historical non-compliance of City Rehouse not obtaining the requisite government approval could still be found as a violation by relevant PRC government authorities, and the relevant subsidiaries could be subject to warnings, fines or even revocation of their licenses.

Regulations on Internet Information Services

The provision of content on internet websites is subject to PRC laws and regulations relating to the telecommunications industry and the internet, and regulated by various government authorities, including the Ministry of Industry and Information Technology and the State Administration for Industry and Commerce.

Pursuant to the PRC Regulations on Telecommunication and the Administrative Measures on Operation Licenses for Telecommunication Businesses, telecommunication services are divided into two categories, namely basic telecommunication services and value-added telecommunication services. Internet information services are classified as value-added telecommunication services and a commercial operator of such services must obtain a value-added telecommunication business operating license from the relevant governmental authorities in order to conduct any commercial internet content provision operations in China.

Internet information services are regulated by the Administrative Measures on Internet Information Services, which define “internet information services” as services that provide information to online users through the internet. Internet information services are divided into commercial services and non-commercial services. Internet information service providers that provide commercial services are required to obtain an operating license, or ICP license, from the Ministry of Industry and Information Technology or its relevant provincial counterparts. The Administrative Measures on Internet Information Services also provide that anyone who intends to provide internet information services relating to news, publication, education, medical and health care, pharmaceuticals or medical equipment and certain other matters must first obtain approval from or make a filing with the relevant governmental authorities of the relevant industry as required by relevant laws and regulations.

Pursuant to the Circular on Strengthening the Administration of Foreign Investment in Value-added Telecommunication Services issued by the predecessor of the Ministry of Industry and Information Technology, a PRC entity engaged in internet information services, or its shareholders, must be the owner of the domain names and trademarks it uses for its internet information services.

Most of our consolidated VIEs operating business segments involving internet information services has obtained and maintains an ICP license, and Shanghai Fangjia is in the process of applying for ICP license.

Currently we provide access to our CRIC database through the internet. If the relevant PRC governmental authorities deem this to be a provision of internet information services under applicable PRC laws and regulations, they may require us to obtain an ICP license to continue to providing access to our CRIC database through the internet. We believe, based in part on communications with relevant Shanghai governmental authorities, that our current real estate information services business does not require an ICP license because access to the CRIC database is not offered to the general public. However, if the relevant PRC governmental authorities require us to obtain an ICP license for this business as currently conducted, we could be subject to fines and penalties for operating this business without the proper license. Moreover, because wholly foreign-owned enterprises like Shanghai CRIC are not permitted to hold an ICP license, we would need to restructure our operations to carry out our real estate information services business through the same type of contractual arrangements as we operate our advertising services business. Our real estate information services business would then be subject to the risks associated with this contractual arrangement structure.

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Limitations on Foreign Ownership in Internet Information Services Industry

Pursuant to the Rules for the Administration of Foreign Investment in Telecommunication Enterprises and the Foreign Investment Industrial Guidance Catalogue, foreign investors may not provide more than 50% of the capital of a foreign-invested enterprise that provides value-added telecommunications services. In addition, for a foreign investor to hold any equity interest in a value-added telecommunication business in China, it must satisfy a number of stringent requirements on performance and operational experience, including demonstrating a track record and experience in operating value-added telecommunication business overseas. Foreign investors that meet these requirements must obtain approval to hold any equity interest in a value-added telecommunication company in China from the Ministry of Industry and Information Technology and the Ministry of Commerce or their authorized local counterparts, which have considerable discretion in granting approvals.

Pursuant to a Circular on Strengthening the Administration of Foreign Investment in Value-added Telecommunication Services, if any foreign investor intends to invest in a PRC telecommunications business, a foreign-invested telecommunications enterprise must be established and such enterprise must apply for the relevant telecommunications business licenses. Under the circular, domestic telecommunications enterprises are prohibited from renting, transferring or selling a telecommunications license to foreign investors in any form, and from providing any assistance, including providing resources, sites or facilities, to foreign investors to conduct telecommunications business illegally in China. Our PRC subsidiaries, which are foreign-invested enterprises under PRC law, may not carry out commercial operation of internet information services in China.

We maintain contractual arrangements with our VIEs which operate business segments involving internet information services by themselves or through their subsidiaries. Shanghai SINA Leju, Shanghai Yi Yue, Beijing Maiteng, Shanghai Yifang, Shanghai CRIC and Shanghai Weidian, each a majority-owned subsidiary of us, have entered into a series of contractual arrangements with Beijing Leju and its shareholders, Shanghai Yi Xin and its shareholders, Beijing Jiajujiu and its shareholders, Shanghai Kushuo and its shareholders, Shanghai Fangjia and its shareholders, and Shanghai Weihui and its shareholders, respectively. Under these contractual arrangements:

·we are able to direct the activities that most significantly affect the economic performance of the VIEs and their subsidiaries;

·a substantial portion of the economic benefits of the VIEs and their subsidiaries are transferred to us; and

·we, through our majority-owned subsidiaries, have an exclusive option to purchase all of the equity interests in these VIEs to the extent permitted by PRC law, or request any existing shareholder of them to transfer all or part of its equity interest in the relevant VIE to another PRC person or entity designated by us at any time in our discretion.

See “Item 4. Information on the Company—C. Organizational Structure,”“Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Contractual Agreements with Our VIEs.”

In the opinion of Fangda Partners, our PRC legal counsel, each of the agreements relating to the relevant VIEs that establish the structure for operating our business segments involving internet information services, in each case governed by PRC law, is valid, binding and enforceable in accordance with their respective terms based on currently effective PRC laws and regulations, and do not violate PRC laws or regulations currently in effect.

However, we have been advised by our PRC legal counsel that there are substantial uncertainties regarding the interpretation and application of the current or future PRC laws and regulations. Accordingly, there can be no assurance that the PRC regulatory authorities, in particular the Ministry of Industry and Information Technology, which regulates internet information services companies, will not in the future take a view that is contrary to the opinion of our PRC legal counsel. We have been further advised by our PRC counsel that if the PRC government determines that the agreements establishing the structure for operating our PRC business segments involving internet information services do not comply with PRC government restrictions on foreign investment in the internet information services industry, we could be subject to severe penalties. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating our advertising services and internet information services in China do not comply with PRC governmental restrictions on foreign investment in the advertising industry or the internet information services industry, we could be subject to severe penalties.” and “Item 3. Key Information - D. Risk Factors - Risks Related to Doing Business In China - Substantial uncertainties exist with respect to the enactment timetable, interpretation and implementation of draft PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.”

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Pursuant to applicable PRC laws and regulations, the pledges of the equity interests in the VIEs by their shareholders under their respective equity pledge agreements must be registered with the relevant government authorities before such equity pledges can be enforceable under PRC law. The registration of the pledge of the equity interest in the VIEs has been completed.

Information Security and Confidentiality of User Information

Internet activities in China are also regulated and restricted from a state security standpoint. Pursuant to the Decision Regarding the Protection of Internet Security, activities conducted through the internet are subject to the PRC Criminal Law.

The Ministry of Public Security has promulgated measures that prohibit use of the internet in ways that, among other things, result in leaks of government secrets or the spread of socially destabilizing content. The Ministry of Public Security and its local counterparts have authority to supervise and inspect domestic websites in this regard. If an internet information service provider violates these measures, the PRC government may revoke its license and shut down its website.

The security and confidentiality of internet users’ information are also regulated in China. The Administrative Measures on Internet Information Service require internet information service providers to maintain an adequate system that protects the security of users’ information. The Regulations on Technical Measures of Internet Security Protection require internet information service providers to utilize certain technical measures for internet security protection. Moreover, the Rules for Regulating the Order in the Market for Internet Information Service enhance the protection of internet users’ personal information, by prohibiting internet information service providers from unauthorized collection, disclosure or use of personal information of the their users, and requiring internet information service providers to take measures to safeguard their users’ personal information. In December 2012, the Standing Committee of the National People’s Congress passed the Decision on Strengthening Internet Information Protection, which provides that all internet service providers in China, including internet information service providers, to require their users to provide real identity information when entering into service agreements or providing services to the users. On July 16, 2013, the Ministry of Industry and Information Technology issued the Provisions on Protecting Personal Information of Telecommunication and Internet Users, under which internet information service providers are subject to strict requirements to protect personal information of internet users. Internet information service providers are prohibited from collecting personal information of internet users without obtaining consent from the users. Personal information collected must be used only in connection with the services to be provided by internet information service providers to such users and must be kept in strict confidence.

Certain Licenses and Approvals Required for Internet-Based Businesses

Internet-based businesses in China are highly regulated by the PRC government. Various PRC regulatory authorities, such as the State Council, the Ministry of Industry and Information Technology, the State Administration for Industry and Commerce, the General Administration of Press, Publication, Radio, Film and Television, or GAPPRFT, and the Ministry of Public Security, are empowered to issue and implement regulations governing various aspects of the internet-based businesses.

Internet Publishing

The Provisional Rules for the Administration of Internet Publishing define “internet publications” as works that are either selected or edited to be published on the internet or transmitted to end-users through the internet for the purposes of browsing, reading, using or downloading by the general public. Such works mainly include (i) content or articles formally published by press media such as books, newspapers, periodicals, audio-visual products and electronic publications; and (ii) literature, art and articles on natural science, social science, engineering and other topics that have been edited. Under these rules, web portals operators are required to apply to and register with GAPPRFT before distributing internet publications.

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Online Transmission of Audio-Visual Programs

The Measures for the Administration of Transmission of Audio-Visual Programs through Internet or Other Information Network apply to the opening, broadcasting, integration, transmission or download of audio-visual programs through the internet. An applicant who is engaged in the business of transmitting audio-visual programs through the internet must apply for a license from the State Administration of Radio, Film and Television, the predecessor of GAPPRFT. Foreign-invested enterprises are not allowed to engage in the above business.

Pursuant to the Administrative Provisions on Internet Audio-Visual Program Service, which went effective in January 2008, any entity engaged in internet audio-visual program services must obtain a license from GAPPRFT or register with GAPPRFT. An applicant for engaging in internet audio-visual program services must be a state-owned entity or a state-controlled entity with full corporate capacity, and the business to be carried out by the applicant must satisfy the overall planning and guidance catalogue for internet audio-visual program service determined by GAPPRFT.

The State Administration of Radio, Film and Television and the Ministry of Industry and Information Technology later clarified in a press conference in February 2008 that privately owned website operators are eligible to apply for internet audio-visual program service licenses from GAPPRFT, if they have been engaged in internet audio-visual program services since before December 20, 2007, and they had before that date either obtained an operating license for commercial internet information services or filed for non-commercial internet information services. The Notice on Relevant Issues Concerning Application and Approval of License for Online Transmission of Audio-visual Programs issued in May 2008 further sets forth detailed provisions concerning the application and approval process regarding the internet audio-visual program service licenses.

The relevant VIEs or their relevant subsidiaries do not have internet publication licenses or internet and network transmission video and audio program licenses. For content which we believe is subject to the requirements of these licenses, such content is hosted by SINA and Baidu through our contractual arrangement with them. In the case that they do not possess the necessary licenses and permits, our content hosted by them is subject to the risk of being suspended by government authorities. Moreover, we cannot assure you that the government would not require us to obtain these licenses separately for operation of our business even if the underlying hosting of the relevant content is provided by a qualified third party. “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—If we fail to obtain or keep licenses, permits or approvals applicable to the various real estate services provided by us, we may incur significant financial penalties and other government sanctions.”

Regulations on Advertising Services

Limitations on Foreign Ownership in the Advertising Industry

Under the regulations governing foreign investment in the advertising industry, foreign investors are required to have at least three years prior experience operating an advertising business outside of China as their main business before they may receive approval to directly own a 100% interest in an advertising company in China. Foreign investors with at least two years prior experience operating an advertising business outside China are allowed to establish a joint venture with domestic advertising enterprises to operate an advertising business in China.

Since we have not been involved in an advertising business outside of China for the required number of years, our domestic PRC operating subsidiaries are ineligible to apply for the required advertising services licenses in China. We maintain contractual arrangements with our VIEs which operate our real estate advertising business and real estate online advertising services by themselves or through their wholly owned subsidiaries. Shanghai SINA Leju, our majority-owned subsidiary, has entered into a series of contractual arrangements with Beijing Leju and its shareholders. Shanghai Yifang, our PRC subsidiary, has entered into a series of contractual arrangements with Shanghai Kushuo and its shareholders. Under these contractual arrangements:

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·we are able to direct the activities that most significantly affect the economic performance of the VIEs and their subsidiaries;

·a substantial portion of the economic benefits of the VIEs and their subsidiaries are transferred to us; and

·we, through our PRC subsidiaries, have an exclusive option to purchase all of the equity interests in the VIEs to the extent permitted by PRC law, or request any existing shareholder of them to transfer all or part of its equity interest in the relevant VIE to another PRC person or entity designated by us at any time in our discretion

See “Item 4. Information on the Company—C. Organizational Structure” and “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Contractual Agreements with Our VIEs.”

In the opinion of Fangda Partners, our PRC legal counsel, each of the agreements relating to the relevant VIEs establishing the structure for operating our PRC advertising business, in each case governed by PRC law, is valid, binding and enforceable in accordance with their terms based on currently effective PRC laws and regulations, and will not result in any violation of PRC laws or regulations currently in effect. We have been advised by our PRC legal counsel, however, that there are substantial uncertainties regarding the interpretation and application of the current or future applicable PRC laws and regulations. Accordingly, there can be no assurance that the PRC regulatory authorities, in particular the State Administration for Industry and Commerce (which regulates advertising companies), will not in the future take a view that is contrary to the opinion of our PRC legal counsel. We have been further advised by our PRC counsel that if the PRC government determines that the agreements establishing the structure for operating our PRC advertising business do not comply with PRC government restrictions on foreign investment in the advertising industry, we could be subject to severe penalties. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating our advertising services and internet information services in China do not comply with PRC governmental restrictions on foreign investment in the advertising industry or the internet information services industry, we could be subject to severe penalties.” and “Item 3. Key Information - D. Risk Factors - Risks Related to Doing Business In China - Substantial uncertainties exist with respect to the enactment timetable, interpretation and implementation of draft PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.”

Pursuant to applicable PRC laws and regulations, the pledges of the equity interests in the VIEs by its shareholders under their equity pledge agreement must be registered with the relevant government authorities before such equity pledges can be enforceable under PRC law. The registration of the pledges of the equity interests in the VIEs has been completed.

Advertising Activities

The State Administration for Industry and Commerce is responsible for regulating advertising activities in China. The applicable regulations stipulate that companies that engage in advertising activities must obtain from State Administration for Industry and Commerce or its local branches a business license which specifically includes operating an advertising business within its business scope. As to placing advertisements on the internet, certain local administrations for industry and commerce may require such companies to apply for a license which includes within its business scope placing online advertisements on the internet. Companies conducting advertising activities without such a license may be subject to penalties, including fines, confiscation of illegal revenues and orders to cease advertising operations. The business license of an advertising company is valid for the duration of its existence, unless the license is suspended or revoked due to a violation of any relevant law or regulation. Each of the VIEs and its subsidiaries that operate advertising business has obtained and maintains a business license with advertising business in its business scope to provide its current advertising services.

Advertising Content

PRC advertising laws, rules and regulations set forth certain content requirements for advertisements in China including, among other things, prohibitions on false or misleading content, superlative wording, socially destabilizing content or content involving obscenities, superstition, violence, discrimination or infringement of the public interest. Advertisers, advertising agencies, and advertising distributors are required by PRC advertising laws and regulations to ensure that the content of the advertisements they prepare or distribute is true and in full compliance with applicable law. In providing advertising services, advertising operators and advertising distributors must review the supporting documents provided by advertisers for advertisements and verify that the content of the advertisements complies with applicable PRC laws, rules and regulations. Prior to distributing advertisements that are subject to government censorship and approval, advertising distributors are obligated to verify that such censorship has been performed and approval has been obtained. Violation of these regulations may result in penalties, including fines, confiscation of advertising income, orders to cease dissemination of the advertisements and orders to publish an advertisement correcting the misleading information. In circumstances involving serious violations, the State Administration for Industry and Commerce or its local branches may revoke violators’ licenses or permits for their advertising business operations. Furthermore, advertisers, advertising agencies or advertising distributors may be subject to civil liability if they infringe on the legal rights and interests of third parties in the course of their advertising business.

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Operational Matters of the Advertising Business

Under the PRC Advertising Law, entities engaged in the advertising business must establish and maintain registration, review and filing systems. Advertising fees must be reasonable and rates and fee collection methods must be filed with the PRC Commodity Price Administration and the State Administration for Industry and Commerce for records. Under the Implementation Rules for the Administrative Regulations for Advertising, promulgated by the State Administration for Industry and Commerce, as amended, the advertising agent fee may not be more than 15% of the advertising fees. The advertising customer must provide relevant documents, including certificates rendered by relevant supervisory administrations before an advertising service provider can deliver or place its advertisements. Based on our communications with the relevant local counterpart of the PRC Commodity Price Administration and the State Administration for Industry and Commerce, the relevant local government authorities have not yet established a filing procedure to review the advertising fees. If the relevant local government authorities begin to accept filings by companies engaging in an advertising business in the future, the VIEs and its subsidiaries that operate advertising business will make the necessary filings with the relevant authorities.

Regulations on Private Equity Investment Products

In China, Renminbi-denominated private equity funds are typically formed as limited liability companies or partnerships, the establishment and operation of which is subject to the PRC company laws or partnership laws. The PRC Partnership Enterprise Law was revised in August 2006 to (i) make legal person and other organizations as eligible partners in partnerships, in addition to individuals; and (ii) add limited partnerships as a new form of partnership. CSRC is in charge of the supervision and regulation of private funds, including, but not limited to, private equity funds, private securities investment funds, venture capital funds and other forms of private funds. CSRC has authorized the Asset Management Association of China, or AMAC, to supervise the registration of private fund managers, the filing of private funds, and the self-regulation of private funds. Accordingly, the AMAC formulated the Measures for the Registration of Private Investment Fund Managers and Filling of Private Investment Funds (for Trial Implementation), which became effective in February 2014, setting forth the procedures and requirements for the registration of private fund managers and filing of private funds. In August 2014, CSRC promulgated the Interim Provisions for the Supervision and Management of Private Equity Funds, which further clarified the self-regulatory requirements for private funds. Local governments in certain cities, such as Beijing, Shanghai and Tianjin, have promulgated local administrative rules to encourage and regulate the development of private equity investment. These local rules typically provide preferential treatment to private equity funds registered in the cities or districts upon meeting the specified requirements. Such local administrative rules may be changed or preempted by regulations issued by the CSRC. We have completed the registration of private fund manager and the filing of private funds under our management with the AMAC for our subsidiaries acting as private fund managers, including Shanghai Yidezhen Equity Investment Center, Shanghai Yidezeng Equity Investment Center, Shanghai Yidexin Equity Investment Management Co., Ltd., and Shanghai Yidezhao Equity Investment Center.

Regulations on Intellectual Property Rights

Trademarks

The PRC Trademark Law and its Implementation Regulation give protection to the holders of registered trademarks. The Trademark Office, under the authority of the State Administration for Industry and Commerce, handles trademark registrations and grants rights for a term of ten years for registered trademarks, which may be renewed by the Trademark Office. In addition, trademark license agreements must be filed with the PRC Trademark Office. The PRC Trademark Law has adopted a “first-to-file” principle with respect to trademark registration. Where a trademark for which a registration has been made is identical or similar to another trademark which has already been registered or been subject to a preliminary examination and approval for use on the same kind of or similar commodities or services, the application for registration of such trademark may be rejected. Any person applying for the registration of a trademark may not prejudice the existing right first obtained by others, nor may any person register in advance a trademark that has already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use. Trademark license agreements must be filed with the Trademark Office or its regional offices.

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We have successfully registered certain trademarks, such as ““,”“,”“,”CRIC”, “ “,”Leju”, and ““ in China. We are currently waiting for registration results from the Trademark Office with respect to the rest of the trademarks we have applied to register. There is no assurance that we will be able to register such trademarks, or register them with the scope we seek.

Copyrights

The PRC Copyright Law extends copyright protection to cover internet activities and products disseminated over the internet. Copyrighted software is protected under the Copyright Law and other regulations. In addition, there is a voluntary registration system administered by the China Copyright Protection Center. Pursuant to the Regulations on the Protection of Computer Software, anyone who publishes, revises or translates computer software without the owner’s approval is subject to civil liability. For the software copyrights of legal persons or other organizations, the term of protection for the software copyright is 50 years, ending on December 31 of the fiftieth year after the first publication of the software. The software copyright owner may follow registration procedures with the software registration institution authorized by the State Bureau of Copyright and obtain a Registration Certificate of Software Copyright, which is prima facie proof of registered copyright ownership.

Trade Secrets

Under the PRC Anti-Unfair Competition Law, trade secrets refer to technical and business information which are not known to the public, capable of bringing economic benefits to the information proprietor, of utility to the information proprietor, and under confidentiality measures taken by the information proprietor. It will be an infringement on trade secrets if a person: (i) obtains trade secrets by theft, inducement by benefits, duress or other improper means; (ii) discloses, uses or permits others to use trade secrets obtained by the means listed in (i); (iii) discloses, uses or permits others to use trade secrets in his possession in breach of the agreement with, or the requirements of, the information proprietor for protecting the trade secrets; or (iv) obtains, uses or discloses trade secrets if he knows or ought to know such trade secrets were obtained through the illegal activities described above.

Regulations on Foreign Currency Exchange

The RMB is convertible into other currencies for the purpose of current account items, such as trade-related receipts and payments, interest and dividend. The conversion of RMB into other currencies and remittance of the converted foreign currency outside China for the purpose of capital account items, such as direct equity investments, loans and repatriation of investment, requires the prior approval from SAFE or its local office. Unless otherwise approved, PRC companies must repatriate foreign currency payments received from abroad. Foreign-invested enterprises may retain foreign exchange in accounts with designated foreign exchange banks subject to a cap set by SAFE or its local office. Unless otherwise approved, domestic enterprises must convert all of their foreign currency proceeds into RMB as required by law.

Pursuant to the PRC Foreign Exchange Administration Regulations, foreign exchange earnings of domestic institutions and individuals may be repatriated into the PRC or deposited overseas. The conditions and time limitations for repatriation into the PRC or deposit overseas shall be specified by the State Council foreign exchange management departments in accordance with the international balance payments situations and the needs of foreign exchange management. Furthermore, foreign exchange earnings under current account items may be retained or sold to financial institutions that conduct the business of settlement, sale and payment of foreign exchange.

Enterprises in China, including foreign-invested enterprises, that require foreign exchange for transactions relating to current account items, may, without the approval of SAFE, effect payment from their foreign exchange account or convert and pay at the designated foreign exchange banks, upon presentation of valid receipts and proof. Foreign-invested enterprises that need foreign currencies for the distribution of profits to their shareholders, and Chinese enterprises that, in accordance with regulations, are required to pay dividends to shareholders in foreign currencies, may, with the approval of board resolutions on the distribution of profits, effect payment from their foreign exchange account or convert and pay at the designated foreign exchange banks.

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Convertibility of foreign exchange in respect of capital account items, like direct investment and capital contribution, is still subject to restrictions, including requirements to obtain prior approval from or to complete registration with, SAFE or its relevant local branch. Restrictions on the convertibility of the RMB for capital account transactions could affect the ability of our PRC subsidiaries and affiliated PRC operating companies to make investments overseas or to obtain foreign exchange through debt or equity financing, including by means of loans or capital contributions from us.

Our PRC subsidiaries have obtained requisite approvals or performed requisite formalities when processing conversion of foreign exchange under the above regulations.

Regulations on Foreign Exchange Registration of Offshore Investments by PRC Residents

The Notice on Issues Relating to the Administration of Foreign Exchange in Fund-Raising and Round-Trip Investment Activities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Circular 75, requires PRC residents to register with the relevant local branch of SAFE before establishing or controlling any company outside of China, referred to as an offshore special purpose company, for the purpose of raising funds from overseas to acquire or exchange the assets of, or acquiring equity interests in, PRC entities held by such PRC residents and to update such registration in the event of any significant changes with respect to that offshore company. SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, on July 4, 2014, which replaced the SAFE Circular 75. SAFE Circular 37 requires PRC residents to register with local branches of SAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents’ legally owned assets or equity interests in domestic enterprises or offshore assets or interests, referred to in SAFE Circular 37 as a “special purpose vehicle.” The term “control” under SAFE Circular 37 is broadly defined as the operation rights, beneficiary rights or decision-making rights acquired by the PRC residents in the offshore special purpose vehicles by such means as acquisition, trust, proxy, voting rights, repurchase, convertible bonds or other arrangements. SAFE Circular 37 further requires amendment to the registration in the event of any changes with respect to the basic information of the special purpose vehicle, such as changes in a PRC resident individual shareholder, name or operation period; or any significant changes with respect to the special purpose vehicle, such as increase or decrease of capital contributed by PRC individuals, share transfer or exchange, merger, division or other material event. If the shareholders of the offshore holding company who are PRC residents do not complete their registration with the local SAFE branches, the PRC subsidiaries may be prohibited from distributing their profits and proceeds from any reduction in capital, share transfer or liquidation to the offshore company, and the offshore company may be restricted in its ability to contribute additional capital to its PRC subsidiaries. Moreover, failure to comply with SAFE registration and amendment requirements described above could result in liability under PRC law for evasion of applicable foreign exchange restrictions.

We have requested our beneficial owners who are PRC residents to make the necessary applications, filings and amendments required by SAFE. However, we cannot provide any assurance that all of our beneficial owners who are PRC residents will make or obtain any applicable registrations or approvals required by these SAFE regulations. The failure or inability of our PRC resident beneficial owners to comply with SAFE rules and the registration procedures set forth therein may subject these beneficial owners or our PRC subsidiaries to fines and legal sanctions, restrict our cross-border cash flows, limit the ability of our PRC subsidiaries’ to distribute dividends, repay foreign loans or make other outbound payments, limit our ability to make capital contributions or foreign exchange-denominated loans to our PRC subsidiaries or other inbound payments, or otherwise adversely affect our business. Moreover, failure to comply with SAFE registration requirements could result in liabilities under PRC laws for evasion of foreign exchange restrictions.

As it is uncertain how the SAFE regulations will be interpreted or implemented, we cannot predict how these regulations will affect our business operations or future strategy. For example, we may be subject to a more stringent review and approval process with respect to our foreign exchange activities, such as remittance of dividends and foreign currency-denominated borrowings, which may adversely affect our results of operations and financial condition. In addition, if we decide to acquire a PRC domestic company, we cannot assure you that such company or the owners of such company will be able to obtain the necessary approvals or complete the necessary filings and registrations required by the SAFE regulations. This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects.

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Regulations on Loans to and Direct Investment in PRC Entities by Offshore Holding Companies

Pursuant to applicable PRC regulations on foreign debts, loans by foreign companies to their subsidiaries in China, which accordingly are foreign-invested enterprises, are considered foreign debt, and such loans must be registered with the local branches of SAFE. In addition, the total amount of the accumulated mid-term and long-term foreign debt and the balance of short-term debt borrowed by a foreign-invested enterprise is not allowed to exceed the difference between the total investment and the registered capital of the foreign-invested enterprise. Total investment of a foreign-invested enterprise is the total amount of capital that can be used for the operation of the foreign-invested enterprise, as approved by the Ministry of Commerce or its local counterpart, and may be increased or decreased upon approval by the Ministry of Commerce or its local counterpart. Registered capital of a foreign-invested enterprise is the total amount of capital contributions made to the foreign-invested enterprise by its foreign shareholders, as approved by the Ministry of Commerce or its local counterpart and registered at the State Administration for Industry and Commerce or its local counterpart.

Pursuant to applicable PRC regulations on foreign-invested enterprises, capital contributions from a foreign holding company to its PRC subsidiaries, which are considered foreign-invested enterprises, may only be made when the approval by the Ministry of Commerce or its local counterpart is obtained. In approving such capital contributions, the Ministry of Commerce or its local counterpart examines the business scope of each foreign-invested enterprise under review to ensure it complies with the Foreign Investment Industrial Guidance Catalogue.

Our PRC subsidiaries which are foreign-invested enterprises, such as E-House Shanghai, Shanghai CRIC, Shanghai SINA Leju and Shanghai City Rehouse Real Estate Agency Co., Ltd., are subject to the regulations discussed above.

Regulations on Employee Share Options

Under the applicable regulations and SAFE rules, PRC residents who participate in an employee stock ownership plan or a stock option plan in an overseas publicly listed company are required to register with SAFE and complete certain other procedures. In February 2012, SAFE promulgated the Notices on Issues concerning the Foreign Exchange Administration for Stock Incentive Plan of Overseas Publicly-Listed Company, or the Stock Option Rules, which terminated the Application Procedures of Foreign Exchange Administration for Domestic Individuals Participating in Employee Stock Ownership Plan or Stock Option Plan of Overseas Publicly-Listed Company issued by SAFE in March 2007. Pursuant to the Stock Option Rules, if a PRC resident who has an employment or labor relationship with a Chinese entity and participates in any stock incentive plan of an overseas publicly-listed company, a qualified PRC domestic agent, which could be a PRC subsidiary of such overseas publicly-listed company, must, among other things, file on behalf of such participant an application with SAFE to conduct the SAFE registration with respect to such stock incentive plan and obtain approval for an annual allowance with respect to the purchase of foreign exchange in connection with the exercise or sale of stock options or sale of stocks. In addition, the PRC agent is required to amend the SAFE registration with respect to the stock incentive plan if there is any material change to the stock incentive plan, the PRC agent or the overseas entrusted institution or other material aspects. Such participating PRC residents’ foreign exchange income received from the sale of stock and dividends distributed by the overseas publicly-listed company must be fully remitted into a PRC collective foreign currency account opened and managed by the PRC agent before distribution to such participants. Our PRC citizen employees who have been granted share options, or PRC option holders, are subject to these rules. If we or our PRC citizen employees fail to comply with these regulations, we or our PRC option holders may be subject to fines and legal sanctions.

In addition, the State Administration of Taxation has issued certain circulars concerning employee share options. Under these circulars, our employees working in the PRC who exercise share options will be subject to PRC individual income tax. Our PRC subsidiaries have obligations to file documents related to employee share options with relevant tax authorities and to withhold individual income taxes for those employees who exercise their share options. If our employees fail to pay or we fail to withhold their income taxes in compliance with relevant laws and regulations, we may face sanctions imposed by the tax authorities or other PRC government authorities.

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Regulations on Dividend Distribution

Under applicable PRC regulations, wholly foreign-owned enterprises and Sino-foreign equity joint ventures in China may pay dividends only out of their retained earnings, if any, determined in accordance with PRC accounting standards and regulations. Additionally, a wholly foreign-owned enterprise is required, as other enterprises subject to PRC laws, to set aside at least 10% of its after-tax profits each year, if any, to fund statutory reserve funds until the cumulative amount of such funds reaches 50% of its registered capital. For each of our PRC subsidiaries that has achieved profit under the PRC accounting standards, it has set aside at least 10% of its after-tax profits to meet the statutory reserve requirements. A wholly foreign-owned enterprise may, at its discretion, allocate a portion of its after-tax profits calculated based on the PRC accounting standards to staff welfare and bonus funds. None of our PRC subsidiaries has set aside its after-tax profits, if any, to fund these discretionary staff welfare and bonus funds. We have not implemented any policy or plan for our PRC subsidiaries to maintain discretionary staff welfare and bonus funds. These reserve funds and staff welfare and bonus funds are not distributable as cash dividends except in the event of liquidation and cannot be used for working capital purposes. These requirements apply to each of our PRC subsidiaries that are wholly foreign-owned enterprises. No dividends have been paid by any of our PRC subsidiaries that are wholly foreign-owned enterprises. If any of our PRC subsidiaries distribute dividends in the future, these requirements will apply to each of our PRC subsidiaries that are wholly foreign-owned enterprises.

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C.Organizational Structure

The following diagram illustrates our corporate structure, including our principal subsidiaries and VIEs as of the date hereof.

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(1)Beijing Leju is a VIE established in China in 2008 and is 80% owned by Mr. Xudong Zhu and 20% owned by Mr. Zuyu Ding. We effectively control Beijing Leju through contractual arrangements. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Contractual Agreements with Our VIEs.”

(2)Shanghai Yi Xin is a VIE established in China in 2011 and is 70% owned by Mr. Zuyu Ding and 30% owned by Mr. Weijie Ma. We effectively control Shanghai Yi Xin through contractual arrangements. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Contractual Agreements with Our VIEs.”

(3)Beijing Jiajujiu is a VIE established in China in 2012 and is 70% owned by Mr. Zuyu Ding and 30% owned by Mr. Weijie Ma. We effectively control Beijing Jiajujiu through contractual arrangements. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Contractual Agreements with Our VIEs.”

(4)Shanghai Kushuo is a VIE established in China in 2013 and is 50% owned by Mr. Zuyu Ding and 50% owned by Mr. Weijie Ma. We effectively control Shanghai Kushuo through contractual arrangements. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Contractual Agreements with Our VIEs.”

(5)Shanghai E-Cheng is a VIE established in China in 2014 and is 50% owned by Mr. Zuyu Ding and 50% owned by Mr. Weijie Ma. We effectively control Shanghai E-Cheng through contractual arrangements. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Contractual Agreements with Our VIEs.”

(6)Shanghai Fangjia is a VIE established in China in 2014 and is 50% owned by Mr. Zuyu Ding and 50% owned by Ms. Yan Zhang. We effectively control Shanghai Fangjia through contractual arrangements. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Contractual Agreements with Our VIEs.”

(7)Shanghai Weihui is a VIE established in China in 2014 and is 80% owned by Mr. Xudong Zhu and 20% owned by Mr. Xi Yang. We effectively control Shanghai Weihui through contractual arrangements. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Contractual Agreements with Our VIEs.”

D.Property, Plants and Equipment

Our headquarters are located in Shanghai, China, where we lease approximately 26,973 square meters of corporate office space. As of December 31, 2014, our offices in 62 cities occupy an aggregate of 112,995 square meters of leased space.

ITEM 4A.UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report on Form 20-F. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information—D. Risk Factors” or in other parts of this annual report on Form 20-F.

A.Operating Results

Overview

We are a leading real estate services company in China based on scope of services, brand recognition and geographic presence. We provide real estate online services (including e-commerce, online advertising and listing services), real estate brokerage services (including primary real estate agency services and secondary real estate brokerage services), real estate information and consulting services, community value-added services and other services (including real estate advertising services, real estate promotional event services, real estate investment fund management services and real estate financial services).Our clients mainly include leading domestic and international real estate developers, as well as individual customers. The geographic network of our services covers 259 cities across China.

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Our revenues increased 24% to $904.5 million for the year ended December 31, 2014 from $731.1 million for the year ended December 31, 2013. Starting in 2010, the PRC government adopted a series of restrictive policies for the real estate industry in China, which has had a material and adverse effect on the overall real estate market in China and hence our business operations. We had net income attributable to E-House shareholders of $36.2 million in 2010, and a net loss attributable to E-House shareholders of $270.4 million and $57.0 million in 2011 and 2012, respectively. In 2013 and 2014, we had net income attributable to E-House shareholders of $52.0 million and $40.0 million, respectively. We derive substantially all of our revenues from our operations in China.

Factors Affecting Our Results of Operations

Our results of operations are subject to general conditions typically affecting the real estate services industry, including changes in governmental policies and laws affecting real estate and real estate financing, uneven economic growth and development across different regions of China, supply of and demand for housing and other types of real estate in local markets, entry barriers and competition from other real estate services companies and increases in operating costs and expenses due to inflation and other factors. Our results of operations are also affected by the development of China’s internet industry, our ability to innovate and market acceptance of our products and services, our ability to maintain and expand our online platform and our ability to expand into new services and geographic areas in China. Unfavorable changes in any of these general conditions could negatively affect our results of operations. Our results of operations are more directly affected, however, by company-specific factors, including our revenue growth and ability to effectively manage our operating costs and expenses.

Revenues. We currently derive our revenues from the following sources: (1) real estate online services, (2) real estate brokerage services which consist of primary real estate agency services and secondary real estate brokerage services, (3) real estate information and consulting services, (4) real estate promotional event and advertising services, and (5) real estate fund management services. Real estate financial services and community value-added services were newly launched in 2014. We generated no revenue but incurred expenses with community value-added services in 2014. Real estate financial services had no material revenue or substantive expenses and have been classified as part of “other services”. In 2012, 2013 and 2014, real estate advertising service and promotional event services and real estate fund management did not generate a significant percentage of revenues and, accordingly, have been consolidated and also classified as “other services.” Our revenues are presented net of PRC business taxes and related surcharges. The following table sets forth the revenues generated by our business lines, both as an absolute amount and as a percentage of total revenues for the periods indicated.

	For The Years Ended December 31,
	2012			2013			2014
	$	%		$	%		$	%
Revenues:
Real estate online services	169,756	37	%	335,411	46	%	495,863	55	%
Real estate brokerage services	208,284	45	%	280,777	38	%	283,368	31	%
Real estate information and consulting services	54,518	12	%	76,683	11	%	82,679	9	%
Community value-added services	N/A	N/A		N/A	N/A		—	—
Other services	29,881	6	%	38,208	5	%	42,589	5	%
Total revenues	462,439	100	%	731,079	100	%	904,499	100	%

Real Estate Online Services. Revenues from our real estate online services constituted a significant portion of our total revenues. Our online business is operated through our majority-owned subsidiary, Leju, and currently generates revenues principally from, e-commerce, online advertising and listing services.

Our e-commerce revenues are principally generated from selling discount coupons to potential property buyers. The discount coupon allows a buyer to purchase specified properties from real estate developers at a discount greater than the price that we charge for the coupon. We recognize such e-commerce revenues upon obtaining confirmation that the discount coupon has been redeemed to purchase a property.

Revenues from online advertising services are generated principally from online advertising arrangements, sponsorship arrangements, and to a lesser extent, outsourcing arrangements and keyword advertising arrangements. Online advertising arrangements allow advertisers to place advertisements on particular areas of the websites we operate, in particular formats and over particular periods of time. Advertising revenues from online advertising arrangements are recognized ratably over the contract period of display. Sponsorship arrangements allow advertisers to sponsor a particular area on our websites in exchange for a fixed payment over the contract period. Advertising revenues from sponsorship arrangements are recognized ratably over the contract period. We also generate online advertising revenues from outsourcing certain regional sites for a fixed period of time to local outsourcing partners. In such cases, we earn a fixed advertising fee payable by the local outsourcing partner, which is responsible for website operation and advertising sale and is entitled to retain the fees generated by advertising sales. Our fixed fee is recognized ratably over the term of the contract. Keyword advertising revenues are recognized ratably over the contract period.

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We provide online property listing services to secondary brokers and individual property sellers. Listing services entitle secondary brokers to post and make changes to information for properties in a particular area on the website for a specified period of time, in exchange for a fixed fee. Listing revenues are recognized ratably over the contract period of display.

Real Estate Brokerage Services. Our real estate brokerage services consist of primary real estate agency services and secondary real estate brokerage services.

Revenues from our primary real estate agency services have constituted a significant portion of our total revenues. Our primary real estate agency services mainly consist of marketing and sale of new properties for developer clients. We earn sales commissions based on terms negotiated with our developer clients, which vary from project to project. Each of our agency contracts specifies commission rates that are expressed as percentages of transaction value. We define the transaction value of any project as the aggregate of the sales proceeds of all property units we have sold for the project. For certain projects, we are able to negotiate additional commissions payable upon our achieving specified sales targets in terms of GFA or average selling price of properties sold. The majority of our agency contracts stipulate that our developer clients are responsible for the cost of promotion and advertising, either by paying the costs directly or reimbursing us for promotion and advertising costs we incur. The other form of agency contracts provide for higher commission rates for us, in exchange for which we are required to bear all promotion and advertising costs.

We recognize revenues from our primary real estate agency services upon facilitating each “successful sale” of a property unit. “Successful sale” is defined in individual contracts with our developer clients to mean completion of various significant steps, which typically include the property purchaser’s execution of the sales contract and delivery of the down payment as well as the registration of the sales contract with relevant governmental authorities. We typically settle the payment of our commissions with our developer clients upon the completion of the entire project or a phase of a project based on successful sales achieved during the period, which typically lasts several months. The time lag between the time we actually make sales, bill our clients and collect the commissions owed to us, which we believe is typical of the real estate agency business in China, is reflected in our accounts receivable and has from time to time resulted in our operating with negative cash flows. As of December 31, 2014, our accounts receivable balance, net of allowance for doubtful accounts, totaled approximately $415.2 million. If a large portion of our accounts receivable becomes delinquent and must be written off, our results of operations may be materially and adversely affected.

We have in the past entered into, and expect to continue to enter into, contracts from time to time with developers requiring us to pay deposits, which has from time to time resulted in our operating with negative cash flows or, if we fail to recover such deposits, could have a material and adverse effect on our liquidity, financial condition and results of operations.

Revenues from our primary real estate agency services are significantly affected by the following operating measures that are widely used in the primary real estate agency services industry and appear throughout this annual report:

·total GFA of the properties we sell;

·total transaction value of the properties we sell; and

·commission rates

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In recent years, much of our revenue growth for our primary real estate agency services business has been driven by increased GFA and transaction value of the properties we sold. The total GFA of the properties whose sale we facilitate is largely affected by real estate market conditions in China in general, and local market conditions in particular, our ability to market and sell our services to real estate developers, our developer clients’ development and sales schedule and our ability to market and sell these properties. The total transaction value of the properties we sell is the aggregate sales proceeds of all the properties we have sold and, therefore, is affected by the total GFA and the average selling price of properties we sell. Our commission rates are based on individually negotiated contracts with our developer clients, which are typically affected by our ability to market and sell our services to developers, competitive pressure and developers’ perception of the level of difficulty of selling the properties. As our sales commissions are determined based on the transaction value of the properties we sell and our commission rates, any increase or decrease of the transaction value or our average commission rates may affect our revenues from primary real estate agency services.

Revenues from our secondary real estate brokerage services accounted for a small portion of our total revenues. Under applicable PRC law, we are permitted to represent both the seller and the purchaser and are entitled to receive 0.5% to 2.5% of the transaction value as the total sales commission from both sides in a secondary real estate sales transaction. In major cities, we typically represent both the seller and the purchaser in accordance with customary practice. For rental units, we are permitted under applicable PRC law to charge a one-time commission ranging from 50% to 100% of the contracted monthly rent for facilitating the rental transactions. For our secondary real estate brokerage services in Hong Kong and Macau, we normally charge a one-time commission based on negotiations. We recognize our commissions as revenue when the sales or rental contract is executed by all the parties to the contract, at which point we have fulfilled our obligations in connection with the sales or rental transaction.

Revenues from our secondary real estate brokerage services are significantly affected by real estate market conditions in China in general, and local market conditions in particular, the number of sales transactions we facilitate, the aggregate transaction value of the properties we facilitate and commission rates. The number of sales transactions we facilitate depends in large part on our network of storefronts, our brand recognition, our ability to attract a large number of potential sellers and purchasers, our ability to obtain information on potential sales leads and the quality of our services. Our commissions may be lower than the maximum rate permissible under PRC laws and regulations, as a result of negotiations with individual parties and in response to competition.

Real Estate Information and Consulting Services. Our real estate information services include primarily the sale of online subscriptions to our proprietary CRIC system and related customized real estate reports, which allow subscribers to search information in our CRIC system and generate analytical reports. Subscription fees vary depending on the number of terminals and number of cities covered. We receive subscription fees on an annual basis starting at the beginning of the subscription period and recognize revenues ratably over the subscription period. Revenues from our real estate information services depend primarily on the number of subscriptions to our CRIC system and customized reports, as well as unit subscription fees. The number of subscriptions we sell is in turn affected by the number of active real estate projects and developers at any given time as well as by our marketing and brand promotion efforts and the quality and usefulness of our database.

We provide real estate consulting services to customers in relation to land acquisition and property development. In certain instances, we agree to a consulting arrangement under which payment is contingent upon the delivery of a final product, such as closing a land acquisition transaction or providing a market study report. We recognize revenue under such arrangements upon delivery of the final product, assuming customer acceptance has occurred and the fee is no longer contingent. In other instances, we provide services periodically for a real estate project. The contractual period for such arrangements is usually between one and 12 months with revenue being recognized ratably over such period.

Revenues from our real estate consulting services are significantly affected by the number of major real estate developer clients we have and the scope and depth of consulting services they require from us. Generally, we maintain business relationships with national and regional real estate developers’ local subsidiaries or branches, and enter into individual contracts with each subsidiary or branch. However, in limited cases, such as our relationship with Evergrande, we maintain the business relationship with the headquarters of the real estate developer.

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Leveraging the strength of our real estate data, we officially launched the CRIC home price ratings website www.fangjiadp.com and its related mobile app (together, “Fangjiadp”) in July 2014. The website and app covered more than 5,000 new residential developments in 26 cities, as well as more than 30,000 existing residential compounds in 12 cities in China as of March 31, 2015. Fangjiadp provides independent home price estimates, qualitative reviews, and ratings for primary and secondary market residential compounds. By entering an address (down to each individual apartment unit level) or compound name, consumers can instantly obtain the estimated market value of both new and previously-owned properties, as well as CRIC’s expert opinions on other aspects of the properties. We have not started generating revenues from the CRIC home price ratings website and app.

Community value-added services. We started our community value-added services, through the launch of “Shi Hui” app, in July 2014. Users download Shi Hui and select their residential compounds, office buildings and/or schools and can win promotional products and free services provided by a variety of merchants and service providers on a daily basis. Users can also locate nearby restaurants, stores and other service providers, and participate in chat groups with people in the same communities. No revenue was generated from community value-added services in 2014.

Other Services. Our other services include real estate advertising services, real estate promotional event services, real estate investment fund management and real estate financial services.

We started providing real estate advertising sales services in 2009 by making wholesale purchases of advertising space in print and other media and reselling them to our developer clients. Revenues from our advertising sales services are significantly affected by real estate market conditions, our willingness and ability to purchase and resell a large number of advertising spaces from print and other media and our relationship with our developer clients.

We started providing promotional event services in 2010. Our promotional event services include securing venues, hiring caterers and other various service providers, formulating event themes and inviting speakers and guests for real estate promotional events. Revenues from our promotional event services are significantly affected by real estate market conditions, clients’ promotional budgets and the perceived effectiveness of the promotional events and our services.

Revenues from real estate fund management are based upon investment advisory and related agreements and are recognized as earned over the specified contract period. In addition to the fund management fees, we are entitled to performance-related carried interest, representing an allocation of profits in the event that investors in the fund achieve cumulative investment returns in excess of a specified amount. The carried interest is a component of our general partnership interests in the real estate funds. We record the carried interest as revenue at the end of the contract year.

We launched our real estate financial services P2P platform, “Fang Jin Suo”, and its associated website, www.fangjs.com, in July 2014. Fang Jin Suo serves to link qualified home buyers with borrowing needs to potential individual investors. We plan to charge a certain percentage of the borrowing amount as a platform fee. In 2014, no material revenue was generated from Fang Jin Suo.

Cost of Revenues. Cost of revenue for each of our main business segments is as follows:

·Cost of revenue for our real estate online services segment consists of costs associated with the operation of our websites, which includes fees paid to third parties for internet connection, internet content and services, editorial personnel related cost, amortization of intangible assets that relate to internet content, including our real estate advertising agreement with SINA, and the discounted present value of our payments for exclusive rights with Baidu; depreciation associated with website production equipment and fees paid to SINA for advertising inventory on SINA’s non-real estate channels.

·Cost of revenue for the real estate brokerage services segment includes costs directly related to providing services, which include costs incurred for marketing and sale of primary real estate projects for which we act as the agent, and rental expenses incurred for properties leased by us as brokerage stores and sales commission.

·Cost of revenue of real estate information and consulting services segment primarily consists of sales commission, service fees incurred for purchasing certain consulting reports and data and costs incurred for developing, maintaining and updating the CRIC database system, which includes cost of data purchased or licensed from third-party sources, technical personnel related costs and associated equipment depreciation.

·Cost of revenue for real estate promotional event and advertising services consists of fees paid to third parties for services directly related to promotional event services and the cost incurred to acquire advertising space for resale, and salaries of sales and support staff.

·There was no material cost of revenues associated with our real estate financial services and community value-added services in 2014 as these services were newly launched.

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Selling, General and Administrative Expenses. Our selling, general and administrative expenses primarily consist of compensation and benefits for our employees, expenses incurred in promoting our brand and services, costs of third-party professional services, costs related to industry research and the development of our CRIC system, rental payments relating to office and administrative functions and depreciation and amortization of property and equipment used in our corporate offices. In addition, our selling, general and administrative expenses have also included amortization of intangible assets resulting from business acquisitions.

Share-based Compensation Expenses

E-House awards. Our selling, general and administrative expenses also include share-based compensation expenses. We have adopted share incentive plans and have granted to certain of our directors, executive officers and employees options and restricted shares. See “Item 6. Directors, Senior Management and Employees—B. Compensation of Directors and Executive Officers—E-House Share Incentive Plan.” Share-based compensation expenses are recognized, generally over the vesting period of the award based on the fair value of the award on the grant date.

We determine share-based compensation expenses based on the fair value of the options as of the date of grant and amortize such expenses over the vesting period of the options. A change in the amount of share-based compensation expenses will primarily affect our net income, earnings per share and operating expenses.

We engaged an independent appraiser to assess the fair value of our options. Determining the fair value of options requires making complex and subjective judgments.

We recorded compensation expense of $26.5 million, $18.5 million and $12.1 million in 2012, 2013 and 2014, respectively, in connection with the options and restricted shares granted under our share incentive plan. As of December 31, 2014, there was $20.3 million of total unrecognized compensation expense related to unvested share options and restricted shares granted under our share incentive plan, including the options and restricted shares swapped from CRIC awards. That cost is expected to be recognized over a weighted-average period of 2.4 years.

CRIC awards. Our subsidiary, CRIC, granted options to purchase ordinary shares of CRIC and restricted shares to certain CRIC directors, executive officers and employees as well as some of our directors and officers who had made contributions to CRIC pursuant to its share incentive plan, prior to the completion of our merger with CRIC in April 2012. As of the Effective Time of our merger with CRIC, the CRIC share incentive plan was terminated, and we assumed each CRIC option that was outstanding as of the Effective Time, whether vested or unvested, and converted each CRIC option into E-House option pursuant to the formula set forth in the merger agreement. See “Item 4. Information on the Company—A. History and Development of the Company” for a description of the merger. At the Effective Time, we assumed the CRIC options and restricted shares and converted them into options to purchase an aggregate of 15,107,745 ordinary shares of E-House and 77,875 restricted shares of E-House. The terms of these E-House options and restricted shares are similar to those granted by CRIC under the CRIC share incentive plan. The total fair value of the replacement awards was approximately $54.8 million, of which $31.9 million was attributable to pre-merger services and included as a component of the consideration transferred in the merger, with the remainder being allocated to post-merger services and included in the E-House awards compensation cost after the merger.

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We recorded compensation expenses of $8.6 million for the options and restricted shares that were granted originally under the CRIC share incentive plan in 2012. The amount recorded in 2012 was for the period prior to our merger with CRIC. After the merger, the compensation expense related to the awards under the CRIC share incentive plan that were replaced by E-House awards was recorded in E-House awards described above.

Leju awards. Our subsidiary, Leju, adopted a share incentive plan in December 2013. The plan permits the grant of three types of awards: options, restricted shares and restricted share units. The maximum number of shares that may be issued pursuant to all awards under the plan is 10,434,783 ordinary shares. In December 2013, Leju granted options and restricted shares to certain of Leju’s employees and certain of our employees for the purchase of 7,192,000 ordinary shares at an exercise price or cost of $4.60 per share, pursuant to the Leju share incentive plan. Given the absence of an active market for its ordinary shares prior to the initial public offering of Leju, we engaged an independent appraiser to assist in performing contemporaneous valuations of ordinary shares of Leju. The grant-date fair value of the options granted was $2.21 per share. Later in December 2013, Leju replaced 600,000 options granted to two of our employees with the same number of restricted shares, with all other substantive terms remaining unchanged. In January 2014, Leju replaced 60,000 options granted to one of our employees with the same number of restricted shares, with all other substantive terms remaining unchanged. There is no incremental compensation cost from the replacement. In 2014, Leju granted a total of 1,095,400 restricted shares under the Leju Plan. The options expire ten years from the date of grant. The options and most of the restricted shares vest ratably at each grant date anniversary over a period of three years. In August 2014, Leju granted 229,400 restricted shares to certain of its employees under the Leju Plan, which vest over a period of eight months.

We recorded compensation expenses of $9.4 million for the options and restricted shares that were granted under the Leju share incentive plan in 2014. As of December 31, 2014, there was $18.4 million of total unrecognized compensation expense related to unvested share options and restricted shares granted under Leju awards. That cost is expected to be recognized over a weighted-average period of 1.9 years.

Scepter awards. Our 51% owned subsidiary, Scepter, adopted a share incentive plan (the “Scepter Plan”) in August 2014. The Scepter Plan permits the grant of options or restricted shares to Scepter’s employees, officers, and directors, as well as our employees who render services to Scepter. The maximum number of shares that may be issued pursuant to all awards under the Scepter Plan is 750,000 ordinary shares. In August 2014, Scepter granted options to certain of its employees and certain of our employees for the purchase of 455,000 ordinary shares at an exercise price of $3.30 per share, pursuant to the Scepter Plan. The grant-date fair value of the options was $1.12 per share. The options expire ten years from the date of grant and vest ratably at each grant date anniversary over a period of three years.

We recorded compensation expenses of $66,820 for the options that were granted under the Scepter Plan in 2014. As of December 31, 2014, there was $0.4 million of total unrecognized compensation expense related to unvested share options granted under the Scepter Plan. That cost is expected to be recognized over a weighted-average period of 2.6 years.

Taxation

We are incorporated in the Cayman Islands. We are not subject to income or capital gains tax under the current laws of the Cayman Islands. Payments of dividends and capital in respect of our shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of our shares.

Our subsidiaries in the British Virgin Islands are not subject to income or capital gains tax under the current laws of the British Virgin Islands.

Our operation in Hong Kong is subject to a profit tax at the rate of 16.5% on assessable profit determined under relevant Hong Kong tax regulations.

Our operation in Macau is subject to the complementary tax at a progressive tax rate of 0% to 12% on Macau sourced profits.

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The PRC Enterprise Income Tax Law applies a uniform 25% tax rate to both foreign-invested enterprises and domestic enterprises in the PRC. However, there are some tax incentives available for qualified enterprises under the PRC Enterprise Income Tax law. Shanghai SINA Leju was recognized as a qualified software enterprise in February 2009 and was further approved by the local tax authority in June 2009, and thus became eligible to be exempted from income tax for 2009, followed by a 50% reduction in income tax from 2010 through 2012. Shanghai SINA Leju was also granted status as a high and new technology enterprise and is entitled to enjoy a favorable statutory tax rate of 15% from 2013 through 2014. Shanghai SINA is in the process of applying to receive the preferential treatment of 15% income tax for 2015. Shanghai CRIC was also granted software enterprise status in September 2008 and was further approved by the local tax authority in May 2010 to become qualified to be exempted from income tax for 2009, followed by a 50% reduction in income tax from 2010 through 2012. Shanghai CRIC was approved as a high and new technology enterprise and is therefore subject to a 15% preferential income tax rate from 2013 through 2014. In March, 2014, Shanghai CRIC was approved as a key software enterprise and was therefore entitled to a 10% preferential income tax rate for the years from 2013 through 2014. In March 2015, Shanghai CRIC was approved as a high and new technology enterprise and was therefore entitled to a 15% preferential income tax rate for the years from 2015 through 2016. Shanghai Fangxin was recognized as a qualified software enterprise in February 2012 and was further approved by the local tax authority in October 2012 to become eligible for being exempted from income tax for 2012 and 2013, followed by a 50% reduction in income tax from 2014 through 2016. Qualified software enterprise status is subject to annual review. Shanghai SINA Leju, Shanghai CRIC and Shanghai Fangxin are in the process of completing the annual review for 2014.

Our wholly owned subsidiary, Chongqing E-House Western Real Estate Investment Consultant Co., Ltd., was established in the western region of China and was deemed to be engaged in an industry category encouraged by the government. In August 2012, Chongqing E-House Western Real Estate Investment Consultant Co., Ltd was approved to enjoy a preferential income tax rate of 15% from 2012 through 2014

VAT has been phased in since January 1, 2012 to replace the business tax in China. Some of our entities in China are recognized as VAT general taxpayers at the rate of 6% and have stopped paying business tax. The subjection to VAT does not have a material impact on our consolidated financial statements.

Under the PRC Enterprise Income Tax Law, dividends from our PRC subsidiaries to non-PRC entities that are attributable to profits earned on or after January 1, 2008, are subject to a withholding tax. This withholding tax may be as high as 20%, although under the detailed implementation rules promulgated by the PRC tax authorities, the effective withholding tax is currently 10%, unless otherwise reduced or exempted by treaties or applicable PRC law.

Dividends of PRC subsidiaries that are directly held by Hong Kong entities may benefit from a reduced withholding tax rate of 5% pursuant to the Arrangement between Mainland China and Hong Kong for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income, subject to the approval from the relevant local branch of the State Administration of Taxation in accordance with the Administrative Measures on Tax Treaty Treatment of Nonresidents (Trial) and other relevant tax rules. Our Hong Kong subsidiaries have not sought approval for such preferential withholding tax rate, given that no dividends have been paid by their respective PRC subsidiaries. Our current holding structure does not allow us to receive any further relief from tax treaties or arrangements. Dividend payments are not subject to tax in Hong Kong, Macau, the British Virgin Islands or the Cayman Islands.

Under the PRC Enterprise Income Tax Law, enterprises that are established under the laws of foreign countries or regions and whose “de facto management bodies” are located within the PRC territory are considered PRC resident enterprises, and will be subject to the PRC enterprise income tax at the rate of 25% on their worldwide income. Under the implementation rules of the PRC Enterprise Income Tax Law, “de facto management bodies” are defined as the bodies that have material and overall management and control over the manufacturing and business operations, personnel and human resources, finances and treasury, and acquisition and disposition of properties and other assets of an enterprise. We cannot assure you that we will not be deemed to be a PRC resident enterprise under the PRC Enterprise Income Tax Law and be subject to the PRC enterprise income tax at the rate of 25% on our worldwide income. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Dividends payable to us by our PRC subsidiaries may be subject to PRC withholding taxes, or we may be subject to PRC taxation on our worldwide income and dividends distributed to our investors may be subject to PRC withholding taxes under the PRC Enterprise Income Tax Law.”

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Critical Accounting Policies

We prepare our financial statements in conformity with U.S. GAAP, which require us to make judgments, estimates and assumptions. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates.

An accounting policy is considered critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time such estimate is made, and if different accounting estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the consolidated financial statements. We believe that the following accounting policies involve a higher degree of judgment and complexity in their application and require us to make significant accounting estimates. The following descriptions of critical accounting policies, judgments and estimates should be read in conjunction with our consolidated financial statements and other disclosures included in this annual report.

Revenue Recognition

We recognize revenue when there is persuasive evidence of an arrangement, when service has been rendered, the sales price is fixed or determinable and when collectability is reasonably assured. Revenues are recorded, net of sales related taxes.

Real estate online services

We generate online real estate revenues principally from e-commerce services, online advertising, and listing services.

Our e-commerce services primarily include discount coupon advertising and online property auctions. We also provide property viewing and pre-sale customer support free of charge in connection with the sale of discount coupons and online property auctions. E-commerce revenues are principally generated from selling discount coupons to potential property buyers. Those discount coupons allow buyers to purchase specified properties from real estate developers at discounts greater than the face value of the fees charged by us. The discount coupons are refundable to the buyers at any time before they are used to purchase the specified properties. We recognize such e-commerce revenues upon obtaining confirmation letters that prove the use of coupons by property buyers, and when collections are reasonably assured. Revenues are recognized based on the net proceeds received as we act as a marketing agent of the property developer in the transaction.

Revenue from online advertising services is generated principally from online advertising arrangements, sponsorship arrangements, and to a lesser extent, outsourcing arrangements, and keyword advertising arrangements. Online advertising arrangements allow advertisers to place advertisements on particular areas of our websites, in particular formats and over particular periods of time. Advertising revenues from online advertising arrangements are recognized ratably over the contract period of display when collectability is reasonably assured. Sponsorship arrangements allow advertisers to sponsor a particular area on our websites in exchange for a fixed payment over the contract period. Advertising revenues from sponsorship arrangements are recognized ratably over the contract period. We also generate online advertising revenues from outsourcing certain regional sites for a fixed period of time to local outsourcing partners, who are responsible for both website operation and related advertising sales. Advertising revenues from hosted websites are recognized ratably over the term of the contract. Keyword advertising revenues are recognized ratably over the contract period when collectability is reasonably assured.

We also provide listing services to real estate brokers. Listing services entitle real estate brokers to post and make changes to information for properties in a particular area on the website for a specified period of time, in exchange for a fixed fee. Listing revenues are recognized ratably over the contract period of display when collectability is reasonably assured.

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Real estate brokerage services

We provide marketing and sales agency services to primary real estate developers. We recognize the commission revenue when a successful sale of property has occurred and upon completing the services required to execute a successful sale without further contingency. A successful sale is defined in each agency contract and is usually achieved after the property buyer has executed the purchase contract, made the required down payment, and the purchase contract has been registered with the relevant government authorities. We may also be entitled to earn additional revenue on the agency services if certain sales and other performance targets are achieved, such as average sale price over a pre-determined period. These additional agency service revenues are recognized when we have accomplished the required targets.

We provide brokerage service for secondary real estate sale and rental transactions. For secondary real estate brokerage service, we recognize revenue upon execution of a transaction agreement between the buyer/lessee and the seller/lessor for which we act as the broker.

Real estate information and consulting services

We sell subscriptions to our proprietary CRIC system for which revenues are recognized ratably over the subscription period, which is usually six to 12 months. We also provide data integration services periodically, such as periodic market updates and research analysis that suit the specific needs and requirements of individual clients in addition to access to the CRIC system. The contractual period for such arrangements is usually between three to 12 months with revenue being recognized ratably over such period.

We provide real estate consulting services to customers in relation to land acquisition and project consulting services. Land acquisition consulting services involve advising customers in relation to land acquisition and facilitating the transfer of land development rights. Payment is usually contingent upon the delivery of a final product, such as closing a land acquisition transaction. We recognize revenue under such arrangements upon delivery of the final product, assuming customer acceptance has occurred and the fee is no longer contingent. Project consulting services involve providing consulting services, including project feasibility studies, analysis of the real estate transaction history of nearby development projects, marketing and advertising consulting, and development of comprehensive plans for clients’ development projects. Such arrangements include periodic consulting services arrangements and delivery based consulting services arrangements. Periodic consulting services involve providing consulting services which are tailored to meet the needs of real estate developer clients at various stages of the project development and sales process for a specified period, such as monthly market studies. The contractual period for such arrangements is usually between one and 12 months with revenue being recognized ratably over such period. Delivery based consulting services involve providing consulting services which are tailored to meet the specific need of real estate developer. Payment is usually contingent upon the delivery of a final product, such as providing a market study report. We recognize revenue under such arrangements upon delivery of the final product, assuming customer acceptance has occurred and the fee is no longer contingent.

Community value-added services

In 2014, no revenue was generated from the newly launched community value-added services.

Other services

We provide promotional events services, and recognize revenue when such services are rendered, assuming all other revenue recognition criterion have been met. We also generate revenues from advertising sales services by acquiring advertising space and subsequently reselling such space. Revenues under such arrangements are recognized when the related advertisement is placed. We recognize advertising sales revenues on a gross basis because we act as a principal and are the primary obligator in the arrangement.

We also generate revenues from real estate fund management fees, performance fees and allocations. Real estate fund management fees are based upon investment advisory and related agreements and are recognized as earned over the specified contract period. Performance fees and allocations represent the preferential allocations of profits (“carried interest”) that are a component of our general partnership interests in the real estate funds. We are entitled to an additional return from the investment fund in the event investors in the fund achieve cumulative investment returns in excess of a specified amount. We record the additional return from these carried interests as revenue at the end of the contract year.

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In 2014, no material revenue was generated from the newly launched real estate financial services.

Multiple element arrangements

We have multiple element arrangements that may include provision of primary real estate services, online services, promotional events services, consulting services and/or information services. We have determined that each of the deliverables listed above is considered a separate unit of account as each has value to the customer on a stand-alone basis and has been sold separately on a stand-alone basis, there is no general right of return on delivered items and the delivery or performance of the undelivered item(s) is considered probable and substantially in control by us.

We allocate arrangement consideration in multiple-deliverable revenue arrangements at the inception of an arrangement to all deliverables based on the relative selling price in accordance with the selling price hierarchy, which includes: (i) vendor-specific objective evidence (“VSOE”) if available; (ii) third-party evidence (“TPE”) if VSOE is not available; and (iii) best estimate of selling price (“BESP”) if neither VSOE nor TPE is available.

VSOE. We determine VSOE based on its historical pricing and discounting practices for the specific service when sold separately. In determining VSOE, we require that a substantial majority of the selling prices for the services fall within a reasonably narrow pricing range. We have historically priced our commission rate for the primary real estate services, periodic consulting services, subscription for the CRIC system and online services within a narrow range. As a result, we have used VSOE to allocate the selling price for these services when they were elements of a multiple element arrangement. We have not historically priced delivery based consulting service and promotional event services within a narrow range, therefore, we use TPE and BESP as discussed below.

TPE. When VSOE cannot be established for deliverables in multiple element arrangements, we apply judgment with respect to whether we can establish a selling price based on TPE. TPE is determined based on competitor prices for similar deliverables when sold separately. Generally, our marketing strategy differs from that of our peers and our offerings contain a significant level of differentiation such that the comparable pricing of services with similar functionality cannot be obtained. Furthermore, we are unable to reliably determine what similar competitor services’ selling prices are on a stand-alone basis. As a result, we have not been able to establish selling price based on TPE.

BESP. When we are unable to establish selling price using VSOE or TPE, we use BESP in our allocation of arrangement consideration. The objective of BESP is to determine the price at which we would transact a sale if the service were sold on a stand-alone basis. We determine BESP for deliverables by considering multiple factors including, but not limited to, prices charged for similar offerings, market conditions, specification of the services rendered and pricing practices. We have used BESP to allocate the selling price of project-based consulting service and promotional event services under the multiple element arrangements. The process for determining BESP involves management judgment. Our process considers multiple factors that may vary depending upon the unique facts and circumstances related to each deliverable. If the facts and circumstances underlying the factors we consider change, or should subsequent facts and circumstances lead us to consider additional factors, our BESP could change in future periods. We regularly review the evidence of selling price for our services and maintain internal controls over the establishment and updates of these estimates. There were no material changes in estimated selling price for our services during the years ended December 31, 2012, 2013 and 2014, nor do we expect material changes in BESP in the foreseeable future.

The total amounts of revenue earned by us related to agreements that have been accounted for as multiple element arrangements were $74.0 million, $71.9 million and $74.2 million in 2012, 2013 and 2014, respectively.

Deferred revenues are recognized when payments are received in advance of revenue recognition.

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Share-Based Compensation

We use a fair-value based method to account for share-based compensation. Accordingly, share-based compensation is measured at the grant date, based on the fair value of the award, and is recognized as expense over the employees’ requisite service period. Total compensation expense in 2012, 2013 and 2014 was $35.7 million, $18.9 million and $22.2 million, respectively.

Determining the value of our share based compensation expense in future periods requires the input of highly subjective assumptions, including the expected life of the share-based awards, estimated forfeitures and the price volatility of the underlying shares. The assumptions used in calculating the fair value of share-based awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and we use different assumptions, our share-based compensation expense could be materially different in the future.

Fair value of Leju’s ordinary shares

Before the initial public offering of Leju in April 2014, there was no ready public market for Leju’s shares as Leju was a closely held private company. We utilized the discounted cash flow method, or DCF, under the income approach for the valuation of Leju’s enterprise value. The income approach measures the current value of a business or asset by calculating the present value of its future economic benefits such as cash earnings, cost savings, tax deductions, and proceeds from disposition. Value indications are developed by discounting expected cash flows to their present value at a rate of return that incorporates the risk-free rate for the use of funds, the expected rate of inflation and risks associated with the particular investment. The discount rate selected is generally based on rates of return available from alternative investments of similar type and quality as of the valuation date.

The DCF methodology views a company as an operating entity, with the principal focus of the analysis on the operating entity’s ability to generate debt-free cash flow in the future. Debt-free cash flow is defined as cash that is available either to invest in new or existing businesses or to distribute to investors. Reasonable projections of revenues, expenses, and working capital and capital expenditures form the basis for estimating the future debt-free cash flows that a company will likely generate from its existing business. A market derived weighted-average cost of capital, or WACC, was used in determining the appropriate discount rate in the valuation. At different valuation dates, the WACC was calculated to be between 17.15% and 17.20%. In relation to the share-based compensation prior to Leju’s initial public offering in April 2014, we also applied discounts for lack of marketability, or DLOM, to its equity value. Based on the calculation of the put option and with consideration of timing to Leju’s initial public offering, the DLOM was estimated at 3.8% to 6.3% as at different valuation dates.

The other assumptions used in the income approach to derive the fair value of the ordinary shares of Leju included: no material changes in the existing political, legal and economic conditions in China; no major changes in the tax rates applicable to our subsidiaries and consolidated affiliated entities in China; our ability to retain competent management, key personnel and staff to support our ongoing operations; and no material deviation in market conditions from economic forecasts. Different assumptions and judgments would affect our calculation of the fair value of the underlying ordinary shares for the options granted.

Our Consolidated VIEs

We rely on Beijing Leju, Shanghai Yi Xin, Beijing Jiajujiu, Shanghai Kushuo, Shanghai E-Cheng, Shanghai Fangjia and Shanghai Weihui, and their respective shareholders for a portion of our operations. We have, through our PRC subsidiaries, entered into contractual arrangements with these entities and their shareholders such that they are considered variable interest entities for which we are considered their primary beneficiary. We believe we have substantive kick-out rights pursuant to the terms of the exclusive call option agreements, which give us the power to control the shareholders of these VIEs. More specifically, we believe that the terms of the exclusive call option agreements are currently exercisable and legally enforceable under PRC laws and regulations. We also believe that the minimum amount of consideration permitted by the applicable PRC law to exercise the option does not represent a financial barrier or disincentive for us to exercise our rights under the exclusive call option agreements. Under our shareholder voting rights proxy agreements with the VIEs and their shareholders, each of the shareholders of the VIEs irrevocably grants any person designated by us the power to exercise all voting rights to which he is entitled to as a shareholder of the VIEs at the time. Therefore, we believe this gives us the power to direct the activities that most significantly impact the VIEs’ economic performance. We believe that our ability to exercise effective control, together with the exclusive technical support agreements and the equity pledge agreements, give us the rights to receive substantially all of the economic benefits from the VIEs in consideration for the services provided by our PRC subsidiaries. Accordingly, as the primary beneficiary of the VIEs and in accordance with U.S. GAAP, we consolidate their financial results and assets and liabilities in our consolidated financial statements.

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In 2012, 2013 and 2014, entities apart from our consolidated VIEs contributed in aggregate 63%, 56% and 46%, respectively, of our total net revenues.  Our operations not conducted through contractual arrangements with our consolidated VIEs primarily consist of real estate brokerage services, real estate information and consulting services, promotion events services, outsourcing arrangements business, support services for online advertising business and agency services included with our e-commerce business. The following table sets forth our revenues, cost of revenues and net income (loss) for the consolidated VIEs and other group entities which are not our consolidated VIEs for the years indicated:

	2014
	VIEs		Other entities		Total
	(in thousands of $)
Total revenues	492,254		412,245		904,499
Cost of revenues	(43,761	)	(262,372	)	(306,133	)
Net income (loss)	(8,699	)	61,037		52,338

	2013
	VIEs		Other entities		Total
	(in thousands of $)
Total revenues	321,005		410,074		731,079
Cost of revenues	(59,920	)	(214,116	)	(274,036	)
Net income	1,504		49,582		51,086

	2012
	VIEs		Other entities		Total
	(in thousands of $)
Total revenues	172,402		290,037		462,439
Cost of revenues	(54,277	)	(148,894	)	(203,171	)
Net loss	(3,212	)	(67,837	)	(71,049	)

As of December 31, 2013 and 2014, entities apart from our consolidated VIEs accounted for an aggregate of 82% and 83%, respectively, of our total assets. The assets not associated with our consolidated VIEs primarily consist of cash, intangible assets and goodwill. The total assets held by the consolidated VIEs and other group entities which are not our consolidated VIEs were $238.1 million and $1,117.4 million, respectively, as of December 31, 2013, and $307.5 million and $1,469.4 million, respectively, as of December 31, 2014.

Pursuant to contractual arrangements that Shanghai SINA Leju, Shanghai Yi Yue, Beijing Maiteng, Shanghai Yifang, Baoyi Investment Consultant (Shanghai) Co., Ltd., or Shanghai Baoyi, Shanghai Weidian and Shanghai CRIC have with our consolidated VIEs, the earnings and cash of our consolidated VIEs are used to pay service fees in Renminbi to four of our PRC subsidiaries in the manner and amount set forth in the agreements. After paying the applicable withholding taxes and making appropriations for its statutory reserve requirement, the remaining net profits of our PRC subsidiaries would be available for distribution to our offshore companies. As of December 31, 2014, the net assets of our PRC subsidiaries and our consolidated VIEs which were restricted due to statutory reserve requirements and other applicable laws and regulations, and thus not available for distribution, was in aggregate $183.7 million. As an offshore holding company of our PRC subsidiaries and consolidated VIEs, we may make loans to our PRC subsidiaries and consolidated VIEs. Any loans to our PRC subsidiaries are subject to registrations with relevant governmental authorities in China. We may also finance our subsidiaries by means of capital contributions. See ‘‘Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from making loans or additional capital contributions to our PRC operating subsidiaries.’’

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Furthermore, cash transfers from our PRC subsidiaries to our offshore companies are subject to PRC government control of currency conversion. Restrictions on the availability of foreign currency may affect the ability of our PRC subsidiaries and our consolidated VIEs to remit sufficient foreign currency to pay dividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. See “Item 3. Key Information-D. Risk Factors-Risks Related to Doing Business in China- Governmental control of currency conversion may affect the value of your investment.” Cash and cash equivalents held by the consolidated VIEs was denominated in RMB and amounted to RMB433.5 million (US$71.1 million, based on an exchange rate of RMB6.0969 to US$1.00 as of December 31, 2013) and RMB610.2 million (US$99.7 million, based on an exchange rate of RMB6.1190 to US$1.00 as of December 31, 2014) as of December 31, 2013 and 2014, respectively.

We believe that our contractual arrangements with the VIEs are in compliance with PRC law and are legally enforceable. However, uncertainties in the PRC legal system could limit the our ability to enforce these contractual arrangements and the interests of the shareholders of the VIEs may diverge from that of our company and that may potentially increase the risk that they would seek to act contrary to the contractual terms, for example by influencing the VIEs not to pay the service fees when required to do so.

Allowance of Accounts Receivable and Customer Deposits

We regularly review the creditworthiness of our customers, and require collateral or other security from our customers in certain circumstances, including existing properties or a right to properties under construction, when accounts receivable become significantly overdue or customer deposits become due but are not duly paid by the real estate developers. In the event of non-payment, we would then resell the properties or the right to properties under construction for cash. The collection of these secured accounts receivable and customer deposits is dependent on the resale price of the underlying properties, which is subject to the then market conditions.

The carrying value of accounts receivable and customer deposits is reduced by an allowance that reflects our best estimate of the amounts that will not be collected. We make estimations of the collectability of accounts receivable and customer deposits. Many factors are considered in estimating the allowance, including but not limited to reviewing delinquent accounts receivable, performing aging analyses and customer credit analyses, analyzing historical bad debt records and current economic trends and assessing the fair value of collaterals. Additional allowance for specific doubtful accounts might be made if our customers are unable to make payments due to their deteriorating financial conditions.

Bad debt provision related to accounts receivable and customer deposits was $27.3 million, $29.1 million and $26.4 million for the years ended December 31, 2012, 2013 and 2014, respectively. The increase in the bad debt provision from 2012 to 2013 was primarily due to specific reserves provided in 2012 and 2013 for certain overdue and unsecured accounts receivable whose collectability became doubtful based on known changes in customers’ financial conditions and liquidity situation during the year.

Goodwill Valuation

We perform an annual goodwill impairment test comprised of two steps. The first step compares the fair value of each reporting unit to its carrying amount, including goodwill and indefinite lived intangible assets. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill and indefinite lived intangible assets to the carrying value of a reporting unit’s goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. This allocation process is only performed for purposes of evaluating goodwill impairment and does not result in an entry to adjust the value of any assets or liabilities. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill.

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We perform a goodwill impairment test for each of our reporting units as of December 31 of each year or when there is a triggering event causing us to believe it is more likely than not that the carrying amount of goodwill may be impaired.

We utilized the income approach valuation method (level 3). When determining the fair value of a reporting unit, we are required to make significant judgments that we believe are reasonable and supportable considering all available internal and external evidence at that time.

However, these estimates and assumptions by their nature require a higher degree of judgment. Fair value determinations are sensitive to changes in the underlying assumptions and factors including (i) those relating to estimating future operating cash flows to be generated from the reporting unit, which is dependent upon internal forecasts and projections developed as part of our routine, long-term planning process, (ii) our strategic plans, and (iii) estimates of long-term growth rates taking into account our assessment of the current economic environment and the timing and degree of any economic recovery.

The assumptions with the most significant impact on the fair value of the reporting unit are those relating to (i) future operating cash flows, which are forecasted for a five-year period from management’s budget and planning process, (ii) the terminal value, which is included for the period beyond five years from the balance sheet date based on the estimated cash flow in the fifth year and a terminal growth rate ranging from 2% to 3%, and (iii) discount rates, which are identified and applied by market-based inputs based on an estimation of weighted average cost of capital considering cost of debt, risk-free rate, equity risk premium, beta, size premium, company-specific risk premium and capital structure, ranging from 16% to 22% for our segments for the year ended December 31, 2012, and ranging from 17% to 18% for our segments for the year ended December 31, 2013, and ranging from 17% to 18 % for our segments for the year ended December 31, 2014.

Examples of events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately impact the estimated fair values of our reporting units may include: (i) deterioration of local economies or further slowdown of China’s real estate market under the government’s continued restrictive policies and further credit tightening measures, which could lead to changes in projected cash flows of us, (ii) an economic recovery that significantly differs from our assumptions, which could change the future growth rate and the terminal growth rate, and (iii) higher cost of capital in the markets, which could result in a higher discount rate. If the assumptions used in the impairment analysis are not met or materially change, we may be required to recognize a goodwill impairment loss which may be material to the financial condition of us.

2014:

Under the first step of the goodwill impairment testing for the year ended December 31, 2014, the fair value of the real estate online, real estate brokerage, and real estate information and consulting reporting unit was approximately 216%, 42%, and 78% in excess of its carrying value, respectively.

2013:

Under the first step of the goodwill impairment testing for the year ended December 31, 2013, the fair value of the real estate online, real estate brokerage, and real estate information and consulting reporting unit was approximately 136%, 139%, and 118% in excess of its carrying value, respectively. The increases in fair value of these reporting units were due to the strong operating performance and optimistic forecasts, which was also in line with the increased share price.

2012:

Under the first step of the goodwill impairment testing for the year ended December 31, 2012, the fair value of the real estate brokerage, real estate online, and real estate information and consulting reporting unit was approximately 13.8%, 19.1% and 11.3% in excess of its carrying value, respectively.

Significant increases in discount rate or decrease in future operating cash flows or terminal value in isolation would result in a significantly lower fair value measurement. We performed the following sensitivity analysis to show the maximum change (in isolation) of discount rate, future operating cash flow and terminal growth rate used in the income approach that would still result in the fair value of each reporting unit to be higher than its carrying value:

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	Discount rate increase:				Future free cash flow		Terminal growth rate decrease:
Segment	From		To		decreased by:		From		To
Real Estate Brokerage Service	22.0	%	26.5	%	17.0	%	3.0	%	—
Real Estate Online Service	16.5	%	18.6	%	13.0	%	2.0	%	—
Real Estate Information and Consulting Service	16.0	%	21.1	%	25.0	%	2.0	%	—

Based on the impairment tests performed, there were no goodwill impairment as of December 31, 2012, 2013 and 2014.

Fair value of equity investments in investment funds

Investment funds are not consolidated by us as we lack control given the limited partners have substantive kick-out rights that allow them to remove us without cause with a vote of 50% of the limited partners, excluding parties related to us.

Equity investments in investment funds are accounted for by the equity method of accounting. Under this method, our share of the post-acquisition profits or losses of investment funds is recognized in the income statement.

Investment funds are subject to Investment Company accounting, and need to apply the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 946, Financial Services - Investment Companies. Accordingly, all investments held by these investment funds are measured at fair value.

The investment funds invested by us mainly invest in private companies in real estate related industries. In the absence of observable market prices, the fair values of these private equity investments are determined by reference to the discounted cash flow method or market approach (Level 3 inputs). In applying the discounted cash flows method, investment funds discount the estimated future cash flows of the investees using the discount rate in similar industry plus the investee’s specific risk premium. Market approach may be derived by reference to observable valuation measures for comparable companies or transactions (for example, multiplying a key performance metric of the investee company such as sales and net assets for all the portfolio, and earnings for the investees with operating profits by a relevant valuation multiple observed in the range of comparable companies or transactions), adjusted by investment funds for differences between the investment and the referenced comparable. Private equity investments may also be valued at cost for a period of time after an acquisition as the best indicator of fair value.

The difference between fair value and initial cost of investments is reflected as unrealized appreciation/depreciation on investments in the income statement of the respective investment funds.

Fair value of investment in preferred shares of a private entity

The investment in preferred shares of a private entity is classified as available-for sale securities on the consolidated balance sheet. It is measured at fair value (level 3).

The difference between fair value and initial cost of investments is reflected as unrealized gains/losses on investments accounted in the accumulated other comprehensive income.

We utilized the discounted cash flow method, or DCF, under the income approach for the valuation of a private entity’s enterprise value. The income approach measures the current value of a business or asset by calculating the present value of its future economic benefits such as cash earnings, cost savings, tax deductions, and proceeds from disposition. Value indications are developed by discounting expected cash flows to their present value at a rate of return that incorporates the risk-free rate for the use of funds, the expected rate of inflation and risks associated with the particular investment. The discount rate selected is generally based on rates of return available from alternative investments of similar type and quality as of the valuation date.

The DCF methodology views a company as an operating entity, focusing principally on the operating entity’s ability to generate debt-free cash flows in the future. Debt-free cash flow is defined as cash that is available either to invest in new or existing businesses or to distribute to investors. Reasonable projections of revenues, expenses, and working capital and capital expenditures form the basis for estimating the future debt-free cash flows that a company will likely generate from its existing businesses.

The option-pricing method was used to allocate enterprise value to preferred and ordinary shares, taking into account the guidance prescribed by the AICPA Audit and Accounting Practice Aid, ‘‘Valuation of Privately-Held Company Equity Securities Issued as Compensation.’’ The method treats common stock and preferred stock as call options on the enterprise’s value, with exercise prices based on the liquidation preference of the preferred stock.

The option-pricing method involves making estimates of the anticipated timing of a potential liquidity event, such as a sale by us or an initial public offering, and estimates of the volatility of the equity securities we hold. The anticipated timing is based on the plans of our board of directors. Estimating the volatility of the share price of a privately held company is complex because there is no readily available market for the shares. We estimated the volatility of the equity securities we hold based on the historical volatilities of comparable publicly traded companies engaged in similar lines of business. If we had used different estimates of volatility, the allocations between preferred and ordinary shares would have been different.

The assumptions with the most significant impact on the fair value of a private entity’s enterprise value and the fair value of the preferred shares are those relating to (i) future operating cash flows, which are forecasted for a five-year period from our budget and planning process, (ii) the terminal value (the terminal value growth rate used was 3.0%), which is included for the period beyond five years from the balance sheet date based on the estimated cash flow in the fifth year, (iii) discount rates (the discount rate used was 21.5%), which are identified andapplied by market-based inputs based on an estimation of weighted average cost of capital considering cost of debt, risk-free rate, equity risk premium, beta, size premium, company-specific risk premium and capital structure, and (iv) discount for lack of marketability (DLOM) (the DLOM used was 9.0%), which takes into consideration factors like timing of a liquidity event and estimated volatility of the private entity’s shares.

The other assumptions used in the income approach to derive the fair value of the preferred shares of the private entity included: no material changes in the existing political, legal and economic conditions in China; no major changes in the tax rates applicable to the entity’s subsidiaries and consolidated affiliated entities in China; the ability to retain competent management, key personnel and staff to support the ongoing operations; and no material deviation in market conditions from economic forecasts. Different assumptions and judgments would affect our calculation of the fair value of the underlying preferred shares.

Income Taxes

We currently have deferred tax assets resulting from net operating loss carryforwards and deductible temporary differences. The largest components of our deferred tax assets are accrued salary expenses deductible when payment is made and operating loss carryforwards generated by our PRC subsidiaries due to their historical operating losses. In assessing whether such deferred tax assets can be realized in the future, we need to make judgments and estimates on the ability of each of our PRC subsidiaries to generate taxable income in future years. To the extent that we believe that it is more likely than not that some portion or the entire amount of deferred tax assets will not be realized, we establish a valuation allowance to offset the deferred tax assets.

We recorded this allowance against our gross deferred tax assets based on the following factors: (i) several of our PRC operating entities were loss making for the past consecutive three years and had no historical track record of profits to utilize the deferred tax assets; (ii) uncertainty related to the future tax profit plan; (iii) intense competition leading to uncertain success.

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A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2014. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future growth. On the basis of this evaluation, as of December 31, 2014, a valuation allowance of $13.3 million was recorded to record only the portion of the deferred tax assets that is not more likely than not to be realized. The amount of the deferred tax assets considered realizable, however, could be adjusted if estimates of future taxable income during the carryforwards period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth.

If we subsequently determine that all or a portion of the carryforwards are more likely than not to be realized, the valuation allowance will be released, which will result in a tax benefit in our consolidated statements of operations.

Results of Operations

The following table sets forth a summary of our consolidated results of operations for the periods indicated. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report. The results of operations in any period are not necessarily indicative of the results that may be expected for any future period.

	For the Years Ended December 31,
	2012		2013		2014
Consolidated Statement of Operations Data:
Revenues	462,439		731,079		904,499
Cost of revenues	(203,171	)	(274,036	)	(306,133	)
Selling, general and administrative expenses	(336,873	)	(400,947	)	(545,492	)
Goodwill impairment charge	—		—		—
Other operating income	6,475		4,918		8,787
Income (loss) from operations	(71,130	)	61,014		61,661
Interest expense	—		(193	)	(5,325	)
Interest income	1,606		2,180		3,210
Other income (loss), net	(732	)	(1,051	)	3,858
Income (loss) before taxes, equity in affiliates	(70,256	)	61,950		63,404
Income tax expenses	(1,169	)	(13,678	)	(14,901	)
Income (loss) before equity in affiliates	(71,425	)	48,272		48,503
Income from equity in affiliates	376		2,814		3,835
Net income (loss)	(71,049	)	51,086		52,338
Less: Net income (loss) attributable to non-controlling interest	(14,078	)	(871	)	12,336
Net income (loss) attributable to E-House shareholders	(56,971	)	51,957		40,002

Segment Information

We use the management approach to determine operating segments. The management approach considers the internal organization and reporting used by our chief operating decision maker, or CODM, for making decisions, allocating resources and assessing performance. Our CODM has been identified as the co-chairman and chief executive officer, who reviews consolidated and segment results when making decisions about allocating resources and assessing performance of us.

In 2012 and 2013, we had five operating segments: (1) real estate online services; (2) real estate brokerage services; (3) real estate information and consulting services; (4) real estate promotional event and advertising services; and (5) real estate fund management services. In 2014, two new operating segments were added to the above five operating segments: (1) real estate financial services, and (2) community value-added services.

In addition, the real estate promotional event and advertising services, real estate fund management services and real estate financial services did not meet the significance threshold for separate disclosure in any of the three years of 2012, 2013 and 2014, and have been combined in “other services” for segment reporting purposes.

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Our CODM reviews net revenue, cost of revenues, operating expenses, income from operations and net income and does not review balance sheet information. Corporate expenses of certain holding companies were not allocated among segments and were recorded as non-allocated items.

2014	Real estate online services		Real estate brokerage services		Real estate information and consulting services		CommunityValue-addedServices		Other services		Non-allocated		Total
	$		$		$		$		$		$		$
Revenues	495,862,635		283,367,930		82,679,298		—		42,588,930		—		904,498,793
Cost of revenues	(51,129,730	)	(204,101,162	)	(25,153,090	)	—		(25,749,228	)	—		(306,133,210	)
Selling general and administrative expenses	(365,150,431	)	(64,337,955	)	(59,703,161	)	(15,828,009	)	(14,662,201	)	(25,809,961	)	(545,491,718	)
Other operating income	2,525,496		2,223,460		3,301,932		—		736,003		—		8,786,891
Income (loss) from operation	82,107,970		17,152,273		1,124,979		(15,828,009	)	2,913,504		(25,809,961	)	61,660,756
Interest expense	—		—		—		—		—		(5,325,474	)	(5,325,474	)
Interest income	1,316,203		1,099,825		691,003		6,124		78,608		18,565		3,210,328
Other income (loss), net	35,799		(68,069	)	657,952		—		(8,987	)	3,240,844		3,857,539
Income (loss) before taxes and equity in affiliates	83,459,972		18,184,029		2,473,934		(15,821,885	)	2,983,125		(27,876,026	)	63,403,149
Income tax benefit (expense)	(15,545,964	)	(5,083,029	)	(236,440	)	3,932,057		(169,368	)	2,201,951		(14,900,793	)
Income (loss) before equity in affiliates	67,914,008		13,101,000		2,237,494		(11,889,828	)	2,813,757		(25,674,075	)	48,502,356
Income (loss) from equity in affiliates	(223,389	)	118,651		1,761,582		—		(367,621	)	2,545,579		3,834,802
Net income (loss)	67,690,619		13,219,651		3,999,076		(11,889,828	)	2,446,136		(23,128,496	)	52,337,158

2013	Real estate online services		Real estate brokerage services		Real estate information and consulting services		Other services		Non-allocated		Total
	$		$		$		$		$		$
Revenues	335,410,902		280,776,816		76,683,188		38,207,927		—		731,078,833
Cost of revenues	(63,990,693	)	(168,624,507	)	(14,526,318	)	(26,894,288	)	—		(274,035,806	)
Selling general and administrative expenses	(210,576,230	)	(74,728,461	)	(58,026,755	)	(12,404,049	)	(45,211,506	)	(400,947,001	)
Other operating income	599,894		1,647,257		1,950,223		720,268		—		4,917,642
Income (loss) from operations	61,443,873		39,071,105		6,080,338		(370,142	)	(45,211,506	)	61,013,668
Interest expense	—		—		—		—		(192,566	)	(192,566	)
Interest income	1,082,287		819,925		222,898		51,944		2,493		2,179,547
Other income (loss), net	(1,185,121	)	87,270		(479,313	)	(11,837	)	537,786		(1,051,215	)
Income (loss) before taxes and equity in affiliates	61,341,039		39,978,300		5,823,923		(330,035	)	(44,863,793	)	61,949,434
Income tax benefit (expense)	(5,447,524	)	(10,000,257	)	(3,606,417	)	(588,344	)	5,965,548		(13,676,994	)
Income (loss) before equity in affiliates	55,893,515		29,978,043		2,217,506		(918,379	)	(38,898,245	)	48,272,440
Income (loss) from equity in affiliates	(69,194	)	343,561		312,119		(9,320	)	2,236,683		2,813,849
Net income (loss)	55,824,321		30,321,604		2,529,625		(927,699	)	(36,661,562	)	51,086,289

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2012	Real estate online services		Real estate brokerage services		Real estate information and consulting services		Other services		Non-allocated		Total
	$		$		$		$		$		$
Revenues	169,755,893		208,284,503		54,517,612		29,881,360		—		462,439,368
Cost of revenues	(54,117,692	)	(114,667,241	)	(10,783,472	)	(23,602,280	)	—		(203,170,685	)
Selling general and administrative expenses	(146,997,279	)	(92,291,838	)	(53,977,975	)	(10,544,345	)	(33,062,087	)	(336,873,524	)
Other operating income	153,340		2,982,861		2,481,255		857,567		—		6,475,023
Income (loss) from operations	(31,205,738	)	4,308,285		(7,762,580	)	(3,407,698	)	(33,062,087	)	(71,129,818	)
Interest income	257,204		425,714		624,817		55,895		242,832		1,606,462
Other income (loss), net	(1,979,450	)	84,937		(59,136	)	(446	)	1,221,225		(732,870	)
Income (loss) before taxes and equity in affiliates	(32,927,984	)	4,818,936		(7,196,899	)	(3,352,249	)	(31,598,030	)	(70,256,226	)
Income tax benefit (expense)	2,329,338		(4,589,892	)	623,227		468,673		—		(1,168,654	)
Income (loss) before equity in affiliates	(30,598,646	)	229,044		(6,573,672	)	(2,883,576	)	(31,598,030	)	(71,424,880	)
Income (loss) from equity in affiliates	(881	)	195,874		(14,933	)	195,449		—		375,509
Net income (loss)	(30,599,527	)	424,918		(6,588,605	)	(2,688,127	)	(31,598,030	)	(71,049,371	)

Year Ended December 31, 2014 Compared to Year Ended December 31, 2013

Revenues. Our total revenues increased by 24% from $731.1 million in 2013 to $904.5 million in 2014 primarily due to the reasons discussed below.

·Real Estate Online Services. Revenues from real estate online services increased by 48% from $335.4 million in 2013 to $495.9 million in 2014, as a result of the growth of revenues from e-commerce and online advertising services. E-commerce revenues increased 92% to $326.7 million in 2014 from $170.2 million in 2013 primarily due to a substantial increase in discount coupon redeemed as a result of the expansion of our e-commerce business through partnerships with property developers. We sold a total of 323,495 discount coupons in 2014, 219,557 of which were redeemed. Online advertising revenues increased 7% to $154.9 million in 2014 from $145.4 million in 2013 primarily due to revenue growth in both our new home and home furnishing channels. Listing revenues decreased 28% to $14.3 million in 2014 from $19.8 million in 2013 primarily due to unfavorable market environment and the slowdown in secondary home sales.

·Real Estate Brokerage Services. Revenues from our real estate brokerage services increased slightly from $280.8 million in 2013 to $283.4 million in 2014. This increase was mainly due to a 2% increase of revenue from primary real estate agency services, which was in turn due to the slight increase of average commission rate, offset by a 15% decrease of secondary real estate brokerage services, mainly due to our closure of unprofitable physical stores.

·Real Estate Information and Consulting Services. Revenues from real estate information and consulting services increased by 8% from $76.7 million in 2013 to $82.7 million in 2014, mainly due to an increase in revenues from real estate information services as we received more subscriptions to our CRIC real estate database in 2014.

·Community Value-added Services. We launched community value-added services in 2014 and generated no revenues from this segment in 2014.

·Other Services. Revenues from other services, including offline real estate advertising services, promotional event services, real estate fund management and real estate financial services, increased by 11% from $38.2 million in 2013 to $42.5 million in 2014. The increase was mainly attributable to the carried interest recognized from real estate fund management services of $5.4 million in the third quarter of 2014. No material revenue was generated from real estate financial services as these services were newly launched in 2014.

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Cost of Revenues. Our cost of revenues increased by 12% from $274.0 million in 2013 to $306.1 million in 2014, primarily due to increased staff costs for primary real estate agency services, and increased consulting project costs for real estate information and consulting services, partially offset by the decrease of the fees paid to third parties for services in connection with our online listing business, and the decrease of the amortization expenses of intangible assets.

Selling, General and Administrative Expenses. Our selling, general and administrative expenses increased by 36% from $400.9 million in 2013 to $545.5 million in 2014. This increase was primarily due to higher online marketing expenses and increased staff-related expenses of our real estate online services, as well as increased marketing and staff expenses associated with our newly launched real estate financial services and community value-added services.

·Real Estate Online Services. Selling, general and administrative expense for our real estate online services increased by 73% from $210.6 million in 2013 to $365.2 million in 2014, primarily due to an increase in staff-related expenses and higher marketing expenses.

·Real Estate Brokerage Services. Selling, general and administrative expenses for our real estate brokerage agency services decreased by 14% from $74.7 million in 2013 to $64.3 million in 2014, primarily due to lower bonus payments in line with decreased profits, the decreases in allowance for doubtful accounts and decreased expenses for secondary real estate services which resulted from the closure of secondary real estate brokerage stores in 2014.

·Real Estate Information and Consulting Services. Selling, general and administrative expense for our real estate information and consulting services increased by 3% from $58.0 million in 2013 to $59.7 million in 2014, primarily due to increased rental expenses associated with expanded products and services compared to 2013.

·Community Value-added Services. We launched community value-added services in 2014 and incurred $15.8 million of selling, general and administrative expenses for the segment in 2014, mainly consisting of labor-related costs and marketing expenses used to promote the Shi Hui app and new user registration.

·Other Services. Selling, general and administrative expense for our other services increased by 18% from $12.4 million in 2013 to $14.7 million in 2014, primarily due to increased marketing and staff expenses associated with our newly launched real estate financial services.

Other Operating Income. Our other operating income, which consisted of subsidy income from the government, was $8.8 million in 2014, compared to $4.9 million in 2013.

Income from Operations. As a result of the foregoing, our income from operations was $61.7 million in 2014, a slight increase from $61.0 million in 2013.

Income Tax Expense. We had an income tax expense of $14.9 million in 2014, as compared to an income tax expense of $13.7 million in 2013, primarily due to higher income before tax and a slight increase in effective tax rate.

Net Income (Loss). As a result of the foregoing, our net income was $52.3 million in 2014, an increase of 2% from $51.1 million in 2013.

Net Income Attributable to Non-controlling Interest. Net income attributable to non-controlling interests was $12.3 million in 2014, which mainly included net income from our online services, partially offset by net loss from community value-added services and real estate financial services, compared to a net loss attributable to non-controlling interests of $0.9 million in 2013, when we had no non-controlling interest in our online services.

Net Income Attributable to E-House Shareholders. Full-year 2014 net income attributable to E-House shareholders was $40.0 million, or $0.26 per diluted ADS, a decrease of 23% from $52.0 million, or $0.38 per diluted ADS, for 2013.

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Year Ended December 31, 2013 Compared to Year Ended December 31, 2012

Revenues. Our total revenues increased by 58% from $462.4 million in 2012 to $731.1 million in 2013 primarily due to the reasons discussed below.

·Real Estate Online Services. Revenues from real estate online services increased by 98% from $169.8 million in 2012 to $335.4 million in 2013, as a result of growth in e-commerce revenues, online advertising revenues and listing revenues. E-commerce revenues increased 530.5% to $170.2 million in 2013 from $27.0 million in 2012 primarily due to a substantial increase in discount coupon sales as a result of the expansion of our e-commerce business through partnerships with more property developers. We began to sell discount coupons in the first quarter of 2012 and this business grew substantially in 2013. We sold a total of 231,008 discount coupons in 2013, 136,106 of which were redeemed. Online advertising revenues increased 6% to $145.4 million in 2013 from $137.2 million in 2012 primarily due to an increase in the volume of advertising sold. Listing revenues increased 257.4% to $19.8 million in 2013 from $5.5 million in 2012 primarily due to wider customer reach and an improved fee structure.

·Real Estate Brokerage Services. Revenues from our real estate brokerage services increased by 35% from $208.3 million in 2012 to $280.8 million in 2013. This increase was mainly due to 40% increase of revenue from primary real estate agency services, which was due to 26% increase in total GFA of new properties sold and a 41% increase in total transaction value of new properties sold. The increase in real estate brokerage services was partially offset by a 29% decrease of secondary real estate brokerage services, mainly due to the closure of a number of stores in 2013.

·Real Estate Information and Consulting Services. Revenues from real estate information and consulting services increased by 41% from $54.5 million in 2012 to $76.7 million in 2013, as a result of the increase in revenue from both information and consulting services. The revenues from information services of 2013 were $27.7 million, an increase of 24% from $22.3 million in 2012, which was mainly attributable to the increased number of database subscribers to our CRIC real estate database. The revenues from consulting services of 2013 were $49.0 million, an increase of 52% from $32.2 million in 2012, which was mainly attributable to the increased land-acquisition-related consulting services in 2013 compared to 2012, as a result of much more active land transactional activities in the Chinese real estate market in 2013 compared to 2012.

·Other Services. Revenues from other services, including real estate promotional event and advertising services and real estate fund management, increased by 28% from $29.9 million in 2012 to $38.2 million in 2013. The increase was mainly attributable to the revenue increase from promotional events services. The revenues from promotional events services were $31.3 million, an increase of $4.6 million from $27.0 million of 2012, primarily as a result of higher average service fees charged for organized events in 2013 compared to 2012.

Cost of Revenues. Our cost of revenues increased by 35% from $203.2 million in 2012 to $274.0 million in 2013, primarily due to higher salary expenses for additional sales staff and higher commissions associated with increased revenue from primary real estate agency services, higher editorial staff salaries and fees paid for content and services associated with our real estate online services, and higher costs associated with the increased revenues in promotional event services.

Selling, General and Administrative Expenses. Our selling, general and administrative expenses increased by 19% from $336.9 million in 2012 to $400.9 million in 2013. This increase was primarily due to higher online marketing expenses and increased staff-related expenses of our online services and primary real estate agency services.

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·Real Estate Online Services. Selling, general and administrative expense for our real estate online services increased by 43% from $147.0 million in 2012 to $210.6 million in 2013, primarily due to an increase in staff-related expenses and higher marketing expenses.

·Real Estate Brokerage Services. Selling, general and administrative expenses for our real estate brokerage agency services decreased by 19% from $92.3 million in 2012 to $74.7 million in 2013, primarily due to the decreases in salary and rental, which resulted from the closure of secondary real estate brokerage stores in 2013.

·Real Estate Information and Consulting Services. Selling, general and administrative expense for our real estate information and consulting services increased by 8% from $54.0 million in 2012 to $58.0 million in 2013, primarily due to increased bad debts provision compared to 2012.

·Other Services. Selling, general and administrative expense for our other services increased by 18% from $10.5 million in 2012 to $12.4 million in 2013, primarily due to higher bad debt provision and staff-related expenses for real estate promotional event services compared to 2012.

Other Operating Income. Our other operating income, which consisted of subsidy income from the government was $4.9 million in 2013, compared to $6.5 million in 2012.

Income (Loss) from Operations. As a result of the foregoing, our income from operations was $61.0 million in 2013, compared to loss from operations of $71.1 million in 2012.

Income Tax Expense. We had an income tax expense of $13.7 million in 2013 primarily due to higher income before tax, as compared to an income tax expense of $1.2 million in 2012.

Net Income (Loss). As a result of the foregoing, our net income was $51.1 million in 2013, compared to net loss of $71.0 million in 2012.

Net Income (Loss) Attributable to Non-controlling Interest. Net loss attributable to non-controlling interests was $0.9 million in 2013 as compared to a net loss attributable to non-controlling interests of $14.1 million in 2012.

Net Income (Loss) Attributable to E-House Shareholders. Full-year 2013 net income attributable to E-House shareholders was $52.0 million, or $0.38 per diluted ADS, as compared to net loss attributable to E-House shareholders of $57.0 million, or $0.54 loss per diluted ADS, for 2012.

Inflation

Since our inception, inflation in China has not materially impacted our results of operations. According to the National Bureau of Statistics of China, the year-over-year percent changes in the consumer price index for February 2013, 2014 and 2015 were increases of 3.2%, 2.0% and 1.4%, respectively. Although we have not been materially affected by inflation in the past, we can provide no assurance that we will not be affected in the future by higher rates of inflation in China. For example, certain operating costs and expenses, such as employee compensation and office operating expenses may increase as a result of higher inflation. Additionally, because a substantial portion of our assets consists of cash and cash equivalents, high inflation could significantly reduce the value and purchasing power of these assets. We are not able to hedge our exposure to higher inflation in China.

Impact of Foreign Currency Fluctuation

See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Fluctuation in the value of the RMB may have a material and adverse effect on your investment.” and “Item 11. Quantitative and Qualitative Disclosures About Market Risk—Foreign Exchange Risk.”

Impact of Governmental Policies

See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—Our business may be materially and adversely affected by government measures aimed at China’s real estate industry,”“Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China” and “Item 4. Information on the Company—B. Business Overview—Regulation.”

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B.Liquidity and Capital Resources

Our principal sources of liquidity have been cash generated from our operating activities, capital contributions, public offerings of our ordinary shares and CRIC shares, our convertible note offering in December 2013, our sale of an equity interest in Leju to Tencent in March 2014, Leju’s initial public offering and concurrent private placement to Tencent in April 2014 and borrowings from third-party lenders. Our cash and cash equivalents consist of cash on hand and liquid investments which are unrestricted as to withdrawal or use, and which have original maturities of three months or less that are placed with banks and other financial institutions. We currently anticipate that we will be able to meet our needs to fund operations for at least the next twelve months with operating cash flow and existing cash balances.

In December 2013 we issued $135,000,000 principal amount of 2.75% convertible senior notes due 2018. The notes bear interest at a rate of 2.75% per year, payable semiannually in arrears on June 15 and December 15 of each year, beginning on June 15, 2014. The notes will mature on December 15, 2018. The notes are convertible into ADSs, at the option of the holders, in integral multiples of $1,000 principal amount and at any time prior to the close of business on the second business day immediately preceding the maturity date. In connection with the issuance of the notes, we entered into a zero strike call option transaction with a notional amount of $45 million with Credit Suisse Capital LLC. The call option is intended to facilitate privately negotiated transactions by which investors in the notes hedged their investment. The net proceeds from the sale of the notes were and will be used to pay for the premium of the call option and the remainder for general corporate purposes. During 2014, we paid an aggregate of $3.7 million in interest payments related to these notes.

In March 2014, we entered into a share purchase and subscription agreement with Leju and Tencent, pursuant to which Tencent acquired from us 19,201,800 of Leju’s ordinary shares, or 15% of its total outstanding shares on a fully diluted basis, including all options and restricted shares and any other rights to acquire Leju’s shares were are granted and outstanding at the time, for $180 million in cash. In April 2014, Leju received net proceeds of $101.4 million, excluding underwriting commissions and the offering expenses payable by Leju, from the issuance of a total of 11,500,000 ordinary shares of Leju, represented by 11,500,000 Leju ADSs, at $10.00 per Leju ADS in connection with its initial public offering, and an additional $18.9 million from the issuance of 2,029,420 Leju ordinary shares to Tencent in a private placement concurrent with Leju’s initial public offering at $10.00 per Leju share, after deducting estimated fees and expenses payable by Leju.

The following table sets forth a summary of our cash flows for the periods indicated:

	For the Years Ended December 31,
	2012		2013		2014
Net cash provided by (used in) operating activities	(22,183	)	113,892		23,982
Net cash used in investing activities	(33,426	)	(53,093	)	(112,760	)
Net cash provided by (used in) financing activities	(125,773	)	135,757		307,160
Net increase (decrease) in cash and cash equivalents	(181,164	)	202,478		217,297
Cash and cash equivalents at the beginning of the year	392,005		210,841		413,319
Cash and cash equivalents at the end of the year	210,841		413,319		630,617

Operating Activities

We typically settle the payment of our commissions, consulting fees, and online advertising with our developer clients upon the completion of the entire project or a phase of a project, delivery of a final product (such as closing a land acquisition transaction or providing a market study report), and completion of advertising placements, which typically lasts several weeks to several months. Therefore, our working capital levels are affected by the lag between the time we provide services, bill our clients and the time we collect the payments owed to us. This is reflected in our accounts receivable and has from time to time resulted in negative operating cash flows. In addition, under some of the sales agency agreements we enter into, we are required to pay deposits to the developer customer prior to the commencement of sales. The payment of such deposits affects our cash position and liquidity. We expect to continue from time to time to enter into contracts with developers requiring us to pay deposits, which could have a material effect on our liquidity position. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—Our results of operations and cash flows may fluctuate due to seasonal variations in the real estate market and the non-recurring nature of our services provided to real estate developers.”

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Net cash provided by operating activities was $24.0 million in 2014, which was mainly attributable to a net income of $52.3 million and a $28.3 million increase in income tax payable and other tax payable, partially offset by $91.3 million increase in accounts receivable and a $25.5 million increase in customer deposit. The principal non-cash item accounting for the difference between the net income and the cash used in operating activities in 2014 were $33.3 million in depreciation and amortization expenses and $26.4 million in allowance for doubtful debts.

Net cash provided by operating activities was $113.9 million in 2013, which was mainly attributable to a net income of $51.1 million, an $59.1 million increase in income tax payable and other tax payable, a $40.2 million increase in other current liabilities and a $34.5 million increase in accrued payroll and welfare expenses, partially offset by an $80.1 million increase in accounts receivable, a $55.7 million increase in property held for sale and a $30.7 million increase in deferred tax assets. The principal non-cash item accounting for the difference between the net income and the cash used in operating activities in 2013 were $45.2 million in depreciation and amortization expenses, $29.1 million in allowance for doubtful debts and $18.9 million in share-based compensation expenses.

Net cash used in operating activities was $22.2 million in 2012, which was mainly attributable to a net loss of $71.0 million, an $88.3 million increase in accounts receivable and a $10.5 million increase in customer deposits, partially offset by an $18.6 million increase in payroll and welfare payable, and a $10.4 million increase in income tax payable. The principal non-cash item accounting for the difference between the net loss and the cash used in operating activities in 2012 were $47.4 million in depreciation and amortization expenses, $35.7 million in share-based compensation expenses and $28.0 million in allowance for doubtful debts.

Investing Activities

Our investing activities primarily relate to our acquisition activities, purchases and disposals of property, equipment and intangible assets, and investment in affiliates.

Net cash used in investing activities was $112.8 million in 2014, which was mainly attributable to $45.2 million for the deposit for and purchase of property and equipment and intangible assets, $38.3 cash deposited in the bank as collateral for bank loans, $25.7 million for the purchase of preferred shares in Jupai, a private third-party wealth management company, and $7.8 million of deposits paid for certain acquisition.

Net cash used in investing activities was $53.1 million in 2013, which was mainly attributable to $33.0 million for the deposit for and purchase of property and equipment and intangible assets and $15.7 million for investment in affiliates.

Net cash used in investing activities was $33.4 million in 2012, which was mainly attributable to $31.8 million for the deposit for and purchase of property and equipment and intangible assets and $2.2 million for investment in affiliates.

Financing Activities

Our financing activities primarily consist of capital contributions, our merger with CRIC in April 2012, share repurchases, our issuance of new ordinary shares to management in 2013, our convertible note offering in December 2013, our sale of Leju ordinary shares to Tencent in March 2014, the initial public offering of Leju ordinary shares, represented by Leju ADSs, an additional issuance of Leju ordinary shares to Tencent in a private placement concurrent with Leju’s initial public offering in April 2014, and dividends paid to ordinary shareholders.

Net cash provided by financing activities was $307.2 million in 2014, which was mainly comprised of the net proceeds of $176.4 million received from Tencent for Leju ordinary shares in March 2014, the net proceeds of $120.3 million from Leju’s initial public offering and concurrent private placement to Tencent in April 2014, the proceeds of $36.0 million from bank loans and the non-controlling capital contribution of $19.9 million, partially offset by the payment of $43.1 million of cash dividends to shareholders.

Net cash provided by financing activities was $135.8 million in 2013, which was mainly comprised of the net proceeds of $131.6 million from the issuance of convertible bonds, $62.6 million proceeds of the issuance of new ordinary shares to management and $15.3 million from the proceeds of exercise of the options, partially offset by the payment of a call option of $45.0 million associated with the convertible bond issuance, the payment of $19.9million for a cash dividend to shareholders in the second quarter of 2013 and the payment of $17.8 million for share repurchases.

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Net cash used in financing activities was $125.8 million in 2012, which was mainly comprised of the cash payment of $113.1 million for the merger with CRIC, and $11.9 million for a cash dividend to shareholders in the second quarter of 2012.

As of December 31, 2014, we had $671.0 million in cash and cash equivalents and restricted cash, and $36.0 million short-term borrowings, resulting in a liquid assets balance of $635.1 million, compared with $415.6 million at the end of 2013. We hold our cash and cash equivalents in interest-bearing U.S. dollar, HKD and RMB-denominated accounts at registered banks and AAA-rated money market funds.

Holding Company Structure

E-House is a holding company, and it relies principally on dividends from our PRC subsidiaries, to the extent existing cash in our offshore entities is fully utilized, to fund any cash and financing requirements it may have, including the funds necessary to pay dividends and other cash distributions to the shareholders and any debt it may incur. Current PRC regulations permit our PRC subsidiaries to pay dividends only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, each of our subsidiaries and VIEs in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital, and each of our subsidiaries with foreign investment is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund at the discretion of the board. These reserves are not distributable as cash dividends, loans or advances except in the event of liquidation. As a result of these PRC laws and regulations, our PRC subsidiaries and VIEs are restricted in their ability to transfer a portion of their net assets, including general reserve and registered capital, either in the form of dividends, loans or advances. Such restricted portion amounted to $183.7 million as of December 31, 2014. Furthermore, if our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to E-House. In addition, the PRC tax authorities may require us to adjust our taxable income under the contractual arrangements we currently have in place in a manner that would materially and adversely affect our PRC subsidiaries’ ability to pay dividends and other distributions. These regulations have not had a material and adverse impact on E-House’s ability to meet its cash obligations and we do not expect them to have a material and adverse impact in the future.

The PRC government imposes controls on the convertibility of RMB into foreign currencies and, in certain cases, the remittance of currency out of China. We receive substantially all of our revenues in RMB. Under our current structure, our income will be primarily derived from dividend payments from our PRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries and our VIEs to remit sufficient foreign currency to pay dividends or other payments to us, or otherwise satisfy their foreign currency—dominated obligations. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions, can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. However, for most capital account items, approval from appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of bank loans denominated in foreign currencies. The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. These controls have not had a material and adverse impact on our ability to meet our cash obligations and we do not expect them to have a material and adverse impact in the future.

Capital Expenditure

Our capital expenditures amounted to $31.8 million, $33.0 million and $45.2 million in 2012, 2013 and 2014, respectively. In the past, our capital expenditures consisted principally of purchases of property and equipment and intangible assets used in our operations. In 2012, 2013 and 2014 our capital expenditures also included $14.2 million, $15.3 million and $9.0 million in payments that we made for exclusive rights to operate the Baidu channels and sell the Baidu Brand Link product, respectively. We funded our capital expenditures primarily with cash on hand and cash generated from operating activities.

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C.Research and Development, Patents and Licenses, etc.

Research and Development

As of December 31, 2014, we had a total of 5,246 employees who conduct research and provide training across our business segments. In particular, we operate the E-House Research and Training Institute which is associated with East China Normal University and Shanghai University. In addition to providing training, our research staff support the operations of our services. Their research activities involve producing project feasibility studies for internal use or for our clients. Our research staff also collect, compile and analyze market and project data to update and verify information on the CRIC system. They produce periodic and topical reports on a weekly, monthly and annual basis for distribution on our CRIC system.

Intellectual Property

The “E-House” brand, our proprietary CRIC system, the “Leju” brand and other intellectual property rights contribute to our competitive advantage in the real estate services industry in China. To protect our brand, our CRIC system and other intellectual property, we rely on a combination of trademark, trade secret and copyright laws in China as well as imposing procedural and contractual confidentiality and invention assignment obligations on our employees, contractors and others.

We currently have the ““,”“,”“,”CRIC”, ““, “Leju”, and ““ registered trademarks in China. We are waiting for registration results from the Trademark Office with respect to the rest of the trademarks we have applied to register. We have registered our domain names, such as www.ehousechina.com, www.cityrehouse.com.cn, www.cric.com, www.dichan.com, www.fangjiadp.com, www.fangjs.com, www.leju.com, and www.jiaju.com, with the China Internet Network Information Center. We hold copyright registrations in China that cover the CRIC system’s core software. Our rights in the CRIC system, including but not limited to rights to publish, amend, issue and license the CRIC system’s software, are protected in accordance with the Regulations on the Protection of Computer Software and other relevant laws and regulations of the PRC. We have obtained a software copyright certificate covering the CRIC system’s core software, which provides enhanced intellectual property protection under PRC law.

As part of our acquisition of SINA’s real estate online business in October 2009, an affiliate of SINA granted us an exclusive license to use domain names, including house.sina.com.cn and jiaju.sina.com.cn, among others, in connection with our real estate online operations in China. In addition, this affiliate of SINA granted us a non-exclusive license to use three SINA trademarks and an exclusive license to use two SINA Leju trademarks. In addition, as part of our strategic cooperation with Baidu, we obtain the exclusive right to build and operate all of Baidu’s web channels related to real estate and home furnishing, including among others, house.baidu.com, leju.baidu.com and jiaju.baidu.com.

While we cannot assure you that our efforts will deter others from misappropriating our intellectual property rights, we will continue to create and protect our intellectual property rights in order to maintain our competitive position.

D.Trend Information

Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year 2014 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions.

E.Off-Balance Sheet Arrangements

Other than operating lease obligations set forth in the table below, we have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do nothave any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

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F.Tabular Disclosure of Contractual Obligations

The following table sets forth our contractual obligations as of December 31, 2014:

	Payment Due by Period
	Total	Less than 1- year	1-3 year	3-5 year	More than 5 years
	(in thousands of $)
Operating lease obligations(1)	99,423	23,165	33,779	12,202	30,277
Senior Convertible Notes(2)	142,425	3,712	138,713	—	—
Total	241,848	26,877	172,492	12,202	30,277

(1)Our operating lease obligations relate to our obligations under lease agreements with lessors of our corporate offices and secondary real estate brokerage services storefronts.

(2)The carrying amount of our senior convertible notes assuming all the senior convertible notes will not be converted and payments are made in full at maturity on December 15, 2018. Amounts include an unamortized discount of approximately $3.4 million and an interest of 2.75% per annum payable semiannually in arrears. The senior convertible notes are redeemable by investors on December 15, 2016.

We had a commitment of $57.3 million for properties to be held for sale as of December 31, 2014. We also had a commitment of $2.0 million as of December 31, 2014 for two floors of an office building which will be used as offices by one of our subsidiaries, which is payable within one year.

G.Safe Harbor

This annual report on Form 20-F contains forward-looking statements. These statements are made under the “safe harbor” provisions of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can be identified by terminology such as “will,”“expects,”“anticipates,”“future,”“intends,”“plans,”“believes,”“estimates,”“may,”“intend,”“is currently reviewing,”“it is possible,”“subject to” and similar statements. Among other things, the sections titled “Item 3. Key Information—D. Risk Factors,”“Item 4. Information on the Company,” and “Item 5. Operating and Financial Review and Prospects” in this annual report on Form 20-F, as well as our strategic and operational plans, contain forward-looking statements. We may also make written or oral forward-looking statements in our filings with the SEC, in our annual report to shareholders, in press releases and other written materials and in oral statements made by our officers, directors or employees to third parties. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements and are subject to change, and such change may be material and may have a material and adverse effect on our financial condition and results of operations for one or more prior periods. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained, either expressly or impliedly, in any of the forward-looking statements in this annual report on Form 20-F. Potential risks and uncertainties include, but are not limited to, continued low real estate transaction volume in China, government measures that may materially and adversely affect our business, a further slowdown in the growth of China’s economy, failure of the real estate services industry in China to develop or mature as quickly as expected, diminution of the value of our brand or image due to our failure to satisfy customer needs and/or other reasons, our inability to successfully execute the strategy of expanding into new geographical markets in China or the business plans for strategic alliances and other new business initiatives, our failure to manage growth, our loss of competitive advantage due to the failure to maintain and improve the proprietary CRIC system and/or other reasons, our reliance on a concentrated number of real estate developers, and other risks outlined in our filings with the SEC. All information provided in this annual report on Form 20-F and in the exhibits is as of the date of this annual report on Form 20-F, and we do not undertake any obligation to update any such information, except as required under applicable law.

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ITEM 6.DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.Directors and Senior Management

The following table sets forth information regarding our directors and executive officers as of the date of this annual report.

Directors and Executive Officers	Age	Position/Title
Xin Zhou	47	Co-Chairman and Chief Executive Officer
Charles Chao	49	Co-Chairman
Neil Nanpeng Shen	47	Independent Director
Bing Xiang	52	Independent Director
Hongchao Zhu	55	Independent Director
Jeffrey Zhijie Zeng	46	Independent Director
Winston Li	48	Independent Director
David Jian Sun	50	Independent Director
Canhao Huang	57	Director
Li-Lan Cheng	50	Chief Operating Officer
Bin Laurence	47	Chief Financial Officer
Jianjun Zang	47	Co-president
Zuyu Ding	41	Co-president
Yinyu He	40	Co-president

Mr. Xin Zhou is one of the co-founders of our company and co-chairman of our board of directors. He has served as our chairman since our inception. Mr. Zhou served as our chief executive officer from 2003 to 2009, and has been serving as our chief executive officer again since April 2012. Mr. Zhou has served as executive chairman of Leju since its inception and also served as co-chairman and chief executive officer of our subsidiary CRIC from 2009 to April 2012. Mr. Zhou has over 20 years of experience in China’s real estate industry. From 1997 to 2003, he served as director and general manager of Shanghai Real Estate Exchange Co., Ltd., and as deputy general manager of Shanghai Jinfeng Investments Co., Ltd., a company listed on the Shanghai Stock Exchange. Mr. Zhou was awarded the “Special Contribution Award in China’s Real Estate Services Industry” in 2005, named one of the “ten most influential people in the real estate services industry in 2005” from China City Property Exposition Commission, and received the “Outstanding Entrepreneur Award” from Enterprise Asia in 2010. Mr. Zhou currently serves as vice chairman of China Real Estate Association, and as chairman of Real Estate Service Committee of China Real Estate Association. He is also chairman of Shanghai Real Estate Broker Industry Association, executive director of Real Estate Industry Research Center of Shanghai Academy of Social Sciences and honorary vice chairman of Shanghai Young Entrepreneur Association. Mr. Zhou received his bachelor’s degree from Shanghai Industrial University in China.

Mr. Charles Chao has served as a co-chairman of our board of directors since April 2012. Mr. Chao has served as a director of Leju since April 2014, and currently serves as the chairman and chief executive officer of SINA and the chairman of Weibo Corporation, a leading social media platform in China and a majority owned subsidiary of SINA. Since joining SINA in September 1999, Mr. Chao has served various managerial positions, including as vice president of finance, chief financial officer, co-chief operating officer and president. Prior to that, Mr. Chao served as an audit manager at PricewaterhouseCoopers, LLP in Silicon Valley, California. Mr. Chao is currently an independent director of NetDragon Websoft Inc., a Hong Kong Stock Exchange listed company providing technology for online games. Mr. Chao received his master’s degree in professional accounting from University of Texas at Austin. He also holds a master’s degree in journalism from University of Oklahoma and a bachelor’s degree in journalism from Fudan University in China.

Mr. Neil Nanpeng Shen has served as our director since January 2005 and has been determined by our board of directors to be an independent director since March 2012. Mr. Shen was also a director of our subsidiary CRIC from 2009 to April 2012. Mr. Shen is the founding managing partner of Sequoia Capital China and has been with Sequoia Capital China since its inception in October 2005. Mr. Shen co-founded Ctrip.com International Ltd., or Ctrip, the largest travel consolidator in China listed on NASDAQ, and served as its chief financial officer from 2000 to October 2005 and as president from August 2003 to October 2005. He also cofounded Home Inns and Hotels Management, currently named Homeinns Hotel Group, or Homeinns, a leading economy hotel chain inChina listed on NASDAQ. Prior to founding Ctrip and Homeinns, Mr. Shen had more than 8 years of working experience in the investment banking industry in New York and Hong Kong. Currently, Mr. Shen is a director and co-chairman of Homeinns, an independent director of Ctrip, and a director of Qihoo 360 Technology Co. Ltd., an internet company listed on the NYSE. Mr. Shen also serves on the boards of a number of private companies based in China. Mr. Shen received a bachelor’s degree from Shanghai Jiao Tong University in China and a master’s degree from the School of Management at Yale University.

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Mr. Bing Xiang has served as our independent director since August 2007. Mr. Xiang is a Professor of accounting and Dean at the Cheung Kong Graduate School of Business. Prior to that, Mr. Xiang was a professor and founding director of EMBA and Executive Education programs at the Guanghua School of Management, Peking University. He also taught at the Hong Kong University of Science and Technology, Chinese University of Hong Kong and China-Europe International Business School. Mr. Xiang is an independent director of Perfect World Co., Ltd., an online game developer and operator listed on NASDAQ, and HC International, Inc., Dan Form Holdings Co., Ltd., Enerchina Holdings Ltd., Sinolink Worldwide Holdings Ltd., China Dongxiang (Group) Co., Ltd., Longfor Properties Co., Ltd. and Peak Sport Products Co., Limited, all listed on Hong Kong Stock Exchange, and Shaanxi Qinchuan Machinery Development Co., Ltd. and Yunnan Baiyao Group Co., Ltd., both listed on Shenzhen Stock Exchange. Mr. Xiang holds a bachelor’s degree from the Xi’an University of Transportation in China and a Ph.D. degree in accounting from the University of Alberta.

Mr. Hongchao Zhu has served as our independent director since August 2007. Mr. Zhu is the managing partner of Shanghai United Law Firm and has been practicing with Shanghai United Law Firm since 1986. Mr. Zhu is guest professor of East China University of Political Science and Law and Shanghai Institute of Foreign Trade, and is also an arbitrator of Shanghai Arbitration Association and China International Economic Trade Arbitration Commission. He is a legal adviser to Overseas Chinese Affairs Office of PRC State Council. Mr. Zhu once served as vice chairman of the All China Bar Association and chairman of the Shanghai Bar Association. Mr. Zhu received his master’s and bachelor’s degrees in law from Fudan University in China.

Mr. Jeffrey Zhijie Zeng has served as our independent director since August 2008. Mr. Zeng is the senior managing director of CITIC Capital Holdings Limited, and the general manager and managing partner of Kaixin Investment, a venture capital fund jointly founded by China Development Bank and CITIC Capital in May 2008. From 2001 to 2008, Mr. Zeng was a managing director of Walden International, a global venture capital firm, for which he was mainly responsible for venture investments in China. Prior to that, Mr. Zeng worked for CITIC Pacific Ltd. in Hong Kong and Mitsubishi Corporation in Tokyo, Japan. Presently, Mr. Zeng serves as an independent director of AutoNavi Holdings Limited, a NASDAQ-listed provider of digital map content and navigation and location-based solutions, Vimicro International Corporation, a NASDAQ-listed fabless semiconductor company, Chinasoft International Ltd. and Great Wall Technology Company Limited, both listed on the Hong Kong Stock Exchange. Mr. Zeng also serves on the boards of a number of private companies based in China. Mr. Zeng holds a bachelor’s degree in economics from the University of Nagasaki, Japan and a master’s degree in management from Stanford University.

Mr. Winston Li has served as our independent director since March 2014. Mr. Li has served as an independent director of Leju since April 2014. Mr. Li served as the chief financial officer of Sungy Mobile Ltd., a NASDAQ-listed provider of mobile internet products and services, until August 2014. Mr. Li is also an independent director of Country Style Cooking Restaurant Chain Co., Ltd., a China-based quick service restaurant chain listed on the NYSE. From 2004 to 2010, Mr. Li served as an independent director of ZTE Corporation, the largest public telecom equipment manufacturing company in China. Mr. Li served as a partner at the Hong Kong office of Linklaters LLP from 2002 to 2004 and an attorney at the Hong Kong office of Skadden Apps Slate Meagher & Flom LLP from 1997 to 2002. Mr. Li received his bachelor’s degree in biochemistry from Peking University and master of science degree from the University of Michigan, Ann Arbor. He received his juris doctor degree from Columbia Law School.

Mr. David Jian Sun has served as our independent director since March 2014. Mr. Sun has served as an independent director and a member of the compensation committee of Leju since April 2014. Mr. Sun also serves as director and the chief executive officer of Homeinns Hotel Group, a NASDAQ-listed economy hotel chain company. In addition, Mr. Sun serves as an independent director of eHai Car Services Ltd., a NYSE-listed car service provider. Mr. Sun has over ten years of consumer industry experience. From 2003 to 2004, Mr. Sun served as a vice president of operations for B&Q (China) Ltd., a subsidiary of Kingfisher plc, the third largest home improvement retail groupin the world, overseeing the operation of 15 B&Q superstores in China. From 2000 to 2003, Mr. Sun served as a vice president of marketing for B&Q (China) Ltd., leading B&Q’s market positioning and branding efforts in China. Mr. Sun received a bachelor’s degree in management from Shanghai Medical University.

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Mr. Canhao Huang has served as our director since April 2006. He has served as director of Leju since March 2014. Mr. Huang was our head of operations from September 2007 to December 2009. He served as a vice president from 2000 to September 2007. Prior to that, Mr. Huang was a manager at Shanghai No. 1 Department Store Co., Ltd. from 1985 to 2000. Mr. Huang received a bachelor’s degree from Shanghai University in China.

Mr. Li-Lan Cheng has served as our chief operating officer since April 2012 and was our chief financial officer from November 2006 to April 2012. Mr. Cheng has served as executive director of Leju since March 2014. Prior to joining us, Mr. Cheng served as the chief financial officer of SouFun Holdings Limited, a real estate internet company in China, from 2005 to 2006. From 2002 to 2004, Mr. Cheng served as an executive director and the chief financial officer of SOHO China Limited, a real estate developer in Beijing. Mr. Cheng was an assistant director and the head of the Asian transportation sector investment banking group of ABN AMRO Asia from 1997 to 2002. Mr. Cheng is an independent director and member of the audit committee of Country Style Cooking Restaurant Chain Co., Ltd., a China-based quick service restaurant chain listed on the NYSE and 51job, Inc., a human resource service provider listed on NASDAQ. Mr. Cheng received a bachelor’s degree in Economics from Swarthmore College and a Ph.D. degree in Economics from the Massachusetts Institute of Technology. Mr. Cheng is a chartered financial analyst (CFA).

Ms. Bin Laurence has served as our chief financial officer since April 2012. She served as the chief financial officer of our subsidiary CRIC from August 2009 to April 2012. Prior to joining CRIC, Ms. Laurence was a research analyst at SuttonBrook Capital Management LP, a hedge fund based in New York since 2005. Ms. Laurence served as a director in the distressed assets management division of BMO Financial Group in New York from 2002 to 2004. From 1996 to 2002, she served as an associate and a vice president successively covering the media/communications industry in the leveraged finance division of BMO Financial Group. From 1994 to 1996, Ms. Laurence was an analyst covering the media/communications industry in the investment banking division of Lehman Brothers, Inc. in New York. Ms. Laurence is an independent director, member of the audit committee and chairwoman of the compensation committee of ChinaCache International Holdings Ltd., an internet content and application delivery service provider listed on NASDAQ. Ms. Laurence received a bachelor’s degree from Wellesley College and an MBA from Columbia Business School.

Mr. Jianjun Zang has served as our co-president since April 2012 and served as our director and acting chief executive officer from September 2009 to April 2012. He was a co-head of our primary real estate agency service from 2001 to 2009. Mr. Zang served as a director of our company from December 2004 to August 2007. He was the chairman and general manager of Shanghai Yuanshang Real Estate Brokerage Co., Ltd. in 2000. Mr. Zang served as a director and general manager of Shanghai Yidu Real Estate Sales & Planning Co., Ltd. from 1998 to 2000, and as an operating director of Shanghai Lidahang Real Estate Consulting Co. from 1993 to 1998. Mr. Zang received a bachelor’s degree from Fudan University and an EMBA degree from Shanghai Jiao Tong University in China.

Mr. Zuyu Ding has served as our co-president since April 2012. He served as a director of our subsidiary CRIC from March 2011 to April 2012, president of CRIC from September 2011 to April 2012, and a co-president of CRIC from September 2009 to September 2011. Mr. Ding was our technology director from 2001 to January 2008. From 2001 to 2005, he served as the vice president of Shanghai Real Estate Sales (Group) Co., Ltd. Prior to that, from 1997 to 2000, he was the manager of the research and development department of Shanghai Real Estate Exchange Co., Ltd. Mr. Ding currently also serves as vice principal of the E-House Research and Training Institute, an executive director of the China Real Estate Research Association, secretary-general of the Real Estate Broker Professional Committee Intermediary Committee of China Real Estate Association, an advisor on the real estate market for the Ministry of Housing and Urban-Rural Development, an independent director of Shanghai Chengtou Holding Co., Ltd., a company listed on Shanghai Stock Exchange, an independent director of Sanxiang Co., Ltd., a company listed on Shenzhen Stock Exchange, and an independent director of Powerlong Real Estate Holdings limited, a company listed on Hong Kong Stock Exchange. Mr. Ding was named “Shanghai Outstanding Young Merchant” in 2012, and was named one of the “Top Ten Shanghai Young Merchants for 2011-2012” in 2013. Mr. Ding received a bachelor’s degree and a Ph.D. degree from Shanghai East China Normal University in China.

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Mr. Yinyu He has served as our co-president since January 2014 and as chief executive officer of Leju since September 2011 and vice-president of Leju from January 2011 to August 2011. Mr. He served as Leju’s director of strategic planning from August 2008 to December 2010. Prior to joining Leju, Mr. He was the publisher and chief editor of UBM’s InformationWeek China from 2004 to 2008. From 2000 to 2004, he served as a senior reporter and researcher covering China’s IT, telecom, financial, and media industries at Interfax (China) News Agency, where he was a founding member. He also worked as a journalist, reporter, commentator, and anchor for a number of media outlets including the China Business Network (CBN), Shanghai Television, Eastern Radio, Securities Herald, Eastday.com, and Finance Director magazine (part of The Economist Group). He received his bachelor’s degree and master’s degree from Shanghai University.

Employment Agreements

We have entered into employment agreements, labor service agreements or otherwise establish labor relationships with each of our executive officers. We may terminate an executive officer’s employment for cause, at any time, without notice or remuneration, for certain acts of the officer, including, but not limited to, a conviction or plea of guilty to a felony, negligent or dishonest acts to our detriment or misconduct or a failure to perform agreed duties. An executive officer may, upon advance written notice, terminate his or her employment if there is a material and substantial reduction in his or her authority and responsibilities and such resignation is approved by our board of directors. Each executive officer is entitled to certain benefits upon termination of the employment relationship, including severance pay, under certain circumstances as provided under PRC laws, including his or her resignation upon the approval of our board of directors. The severance pay comprises one, two or three months’ base salary if such termination or resignation becomes effective during the first year, during the second year or after the second anniversary, respectively, of the effective date of the employment agreement.

The benefits also include the officer’s entitlement to exercise his or her vested options as of the date of termination at any time within three months after the date of termination. Except for the foregoing, the officer is not entitled to any severance payments or benefits upon the termination of the employment for any reason. We will indemnify an executive officer for his or her losses based on or related to his or her acts and decisions made in the course of his or her performance of duties within the scope of his or her employment.

Each executive officer has agreed to hold in strict confidence any trade secrets or confidential information of our company. Each officer also agrees to faithfully and diligently serve our company in accordance with the employment agreement and the guidelines, policies and procedures of our company approved from time to time by our board of directors.

B.Compensation of Directors and Executive Officers

For the year ended December 31, 2014, we paid an aggregate of approximately $5.3 million in cash to our executive officers, and we did not pay any cash compensation to our non-executive directors.

E-House Share Incentive Plan

We adopted a share incentive plan, or the E-House Plan, in July 2007 to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants, and promote the success of our business. The E-House Plan was amended and restated on October 16, 2008. The E-House Plan permits us to grant three types of awards: stock options, restricted shares and restricted share units. The maximum aggregate number of shares which may be issued pursuant to all awards under the E-House Plan shall be 5% of our total outstanding shares on an as-converted basis as of the effective date of the E-House Plan, plus an additional number of shares to be added on each of the third, sixth and ninth anniversary of the effective date of the E-House Plan, as a result of which the additional shares reserved under the E-House Plan as of each applicable anniversary shall equal 5% of our then total outstanding shares. Notwithstanding the foregoing, on the effective date of the E-House Plan and each of the third, sixth and ninth anniversary of the effective date of the E-House Plan, no more than two million incentive share options may be issued until the next applicable anniversary. Accordingly, in July 2010, the third anniversary of the effective date of the E-House Plan, we increased the number of ordinary shares authorized for issuance under the E-House Plan by 4,013,619, and in August 2013, the six anniversary of the effective date of the E-House Plan, we increased the number of ordinary shares authorized for issuance under the E-House Plan by 6,644,659. We havegranted to certain of our directors, executive officers and employees restricted shares and options to purchase ordinary shares of our company as described below.

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Our subsidiary, CRIC, adopted a share incentive plan, or the CRIC Plan, on September 9, 2008. Prior to the completion of our merger with CRIC in April 2012, CRIC granted options to purchase ordinary shares of CRIC and restricted shares to certain CRIC directors, executive officers and employees as well as some of our directors and officers who had made contributions to CRIC. As of the Effective Time of our merger with CRIC, the CRIC Plan was terminated, and we assumed each CRIC option that was outstanding as of the Effective Time, whether vested or unvested, and converted each CRIC option into E-House options pursuant to the formula set forth in the merger agreement. See “Item 4. Information on the Company—A. History and Development of the Company” for a description of the merger. At the Effective Time, we assumed the CRIC options and restricted shares and converted them into options to purchase an aggregate of 15,107,745 ordinary shares of E-House and 77,875 restricted shares of E-House. The terms of these E-House options and restricted shares are similar to those granted by CRIC under the CRIC Plan.

As of March 31, 2015, the aggregate number of ordinary shares underlying outstanding options was 9,285,425 and the aggregate number of outstanding restricted shares granted was 2,678,715. The following table summarizes, as of March 31, 2015, the options and restricted shares granted to our executive officers, directors and to other individuals as a group, without giving effect to the options that were exercised or restricted shares that had vested, if any.

Name	Ordinary Underlying Options/ Restricted Shares		Exercise Price(2)  ($/Share)	Date of Grant	Date of Expiration(4)
Xin Zhou	1,112,500		3.38	January 1, 2009	December 31, 2018
	445,000		0.74	April 23, 2009	April 22, 2015
	100,000	*	N/A	November 24, 2010	N/A
	133,500		5.34	March 10, 2011	March 9, 2021
	2,492,000		4.22	October 10, 2011	October 9, 2021
	200,000		5.31	October 10, 2011	October 9, 2021
	100,000	*	N/A	December 1, 2012	N/A
	150,000	*	N/A	December 1, 2013	N/A
	150,000	*	N/A	December 1, 2014	N/A
Charles Chao	60,000		5.50	March 9, 2007	December 28, 2009
	20,000		5.37	April 15, 2008	December 28, 2009
	445,000		5.34	September 24, 2009	September 23, 2019
	89,000		5.34	March 10, 2011	March 9, 2021
	178,000		4.22	October 10, 2011	October 9, 2021
	50,000	*	N/A	December 1, 2012	N/A
	50,000	*	N/A	December 1, 2013	N/A
	50,000	*	N/A	December 1, 2014	N/A
Neil Nanpeng Shen	40,000		5.50	March 9, 2007	March 8, 2017
	20,000		5.37	April 15, 2008	April 14, 2018
	35,600		5.34	September 24, 2009	September 23, 2019
	10,000	*	N/A	December 21, 2009	N/A
	10,000	*	N/A	November 24, 2010	N/A
	22,250		5.34	March 10, 2011	March 9, 2021
	26,700		4.22	October 10, 2011	October 9, 2021
	20,000		5.31	October 10, 2011	October 9, 2021
	15,000	*	N/A	December 1, 2012	N/A
	15,000	*	N/A	December 1, 2013	N/A
	15,000	*	N/A	December 1, 2014	N/A
Bing Xiang	40,000		5.50	March 9, 2007	March 8, 2017
	20,000		5.37	April 15, 2008	April 14, 2018
	17,800		5.34	September 24, 2009	September 23, 2019
	10,000	*	N/A	December 21, 2009	N/A
	10,000	*	N/A	November 24, 2010	N/A
	20,000		5.31	October 10, 2011	October 9, 2021
	15,000	*	N/A	December 1, 2012	N/A
	15,000	*	N/A	December 1, 2013	N/A
	15,000	*	N/A	December 1, 2014	N/A

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Name	Ordinary Underlying Options/ Restricted Shares		Exercise Price(2)  ($/Share)	Date of Grant	Date of Expiration(4)
Hongchao Zhu	40,000		5.50	March 9, 2007	March 8, 2017
	20,000		5.37	April 15, 2008	April 14, 2018
	17,800		5.34	September 24, 2009	September 23, 2019
	10,000	*	N/A	December 21, 2009	N/A
	10,000	*	N/A	November 24, 2010	N/A
	20,000		5.31	October 10, 2011	October 9, 2021
	15,000	*	N/A	December 1, 2012	N/A
	15,000	*	N/A	December 1, 2013	N/A
	15,000	*	N/A	December 1, 2014	N/A
Jeffrey Zhijie Zeng	40,000		5.37	August 3, 2008	August 2, 2018
	17,800		5.34	September 24, 2009	September 23, 2019
	10,000	*	N/A	December 21, 2009	N/A
	10,000	*	N/A	November 24, 2010	N/A
	20,000		5.31	October 10, 2011	October 9, 2021
	15,000	*	N/A	December 1, 2012	N/A
	15,000	*	N/A	December 1, 2013	N/A
	15,000	*	N/A	December 1, 2014	N/A
Winston Li	20,000	*	N/A	March 7, 2014	N/A
	20,000	*	N/A	December 1, 2014	N/A
David Jian Sun	15,000	*	N/A	March 7, 2014	N/A
	15,000	*	N/A	December 1, 2014	N/A
Canhao Huang	40,000		5.37	April 15, 2008	April 14, 2018
	22,250		3.38	January 1, 2009	December 31, 2018
	44,500		5.34	September 24, 2009	September 23, 2019
	50,000	*	N/A	December 21, 2009	N/A
	60,000	*	N/A	November 24, 2010	N/A
	150,000		5.31	October 10, 2011	October 9, 2021
	50,000	*	N/A	December 1, 2012	N/A
	50,000	*	N/A	December 1, 2013	N/A
	50,000	*	N/A	December 1, 2014	N/A
Li-Lan Cheng	436,364	(1)	3.30	November 28, 2006	N/A
	40,000		5.37	April 15, 2008	April 14, 2018
	77,875	(1)	N/A	July 30, 2009	N/A
	80,000	*	N/A	December 21, 2009	N/A
	60,000	*	N/A	November 24, 2010	N/A
	150,000		5.31	October 10, 2011	October 9, 2021
	60,000	*	N/A	December 1, 2012	N/A
	100,000	*	N/A	December 1, 2013	N/A
	100,000	*	N/A	December 1, 2014	N/A
Bin Laurence	267,000		5.34	July 30, 2009	July 29, 2019
	89,000		5.34	March 10, 2011	March 9, 2021
	178,000		4.22	October 10, 2011	October 9, 2021
	60,000	*	N/A	December 1, 2012	N/A
	60,000	*	N/A	December 1, 2013	N/A
	60,000	*	N/A	December 1, 2014	N/A
Jianjun Zang	40,000		5.37	April 15, 2008	April 14, 2018
	22,250		3.38	January 1, 2009	December 31, 2018
	44,500		5.34	September 24, 2009	September 23, 2019
	80,000	*	N/A	December 21, 2009	N/A
	80,000	*	N/A	November 24, 2010	N/A
	200,000		5.31	October 10, 2011	October 9, 2021
	50,000	*	N/A	December 1, 2012	N/A
	50,000	*	N/A	December 1, 2013	N/A
	50,000	*	N/A	December 1, 2014	N/A

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Name	Ordinary Underlying Options/ Restricted Shares		Exercise Price(2)  ($/Share)	Date of Grant	Date of Expiration(4)
Zuyu Ding	100,000		5.37	July 17, 2007	July 16, 2017
	40,000		5.37	April 15, 2008	April 14, 2018
	814,350		3.38	January 1, 2009	December 31, 2018
	89,000		5.34	March 10, 2011	March 9, 2021
	178,000		4.22	October 10, 2011	October 9, 2021
	50,000	*	N/A	December 1, 2012	N/A
	50,000	*	N/A	December 1, 2013	N/A
	50,000	*	N/A	December 1, 2014	N/A
Yinyu He	8,900		0.72	September 6, 2008	September 5, 2014
	35,600		5.34	March 10, 2011	March 9, 2021
	71,200		4.22	October 10, 2011	October 9, 2021
	50,000	*	N/A	December 1, 2012	N/A
Other individuals as a group	13,785,332	(2)(3)**	0.72 to 5.50	March 9, 2007 to December 1, 2014	September 5, 2014 to October 9, 2021 or N/A

*These represent restricted shares.

**These include options and restricted shares.

(1)These options were subsequently surrendered for cancellation in exchange for the same number of restricted shares having the same vesting schedule and a purchase price equal to the original option exercise price.

(2)On November 7, 2008, our board of directors authorized the adjustment of the exercise price of some previously granted options to $5.37 per ordinary share and authorized the amendment of the terms of options granted pursuant to the E-House Plan. Modifications subsequently made to selected options pursuant to this authorization did not affect the manner in which we recognize share-based compensation expense.

(3)As of March 31, 2015, options and restricted shares representing an aggregate of 1,265,913 ordinary shares previously granted to various individuals had been cancelled.

(4)Options granted under E-House Plan have a ten-year term from the date of grant, whereas restricted shares are not subject to such a term.

The following paragraphs summarize the terms of the E-House Plan.

E-House Plan Administration. Our board of directors, or a committee designated by our board or directors, will administer the E-House Plan. The committee or the full board of directors, as appropriate, will determine the provisions and terms and conditions of granting awards under the E-House Plan.

Award Agreement. Options and other awards granted under the E-House Plan are evidenced by an award agreement that sets forth the terms, conditions and limitations for each grant. In addition, the award agreement may also provide that securities granted are subject to a 180-day lock-up period following the effective date of a registration statement filed by us under the Security Act, if so requested by us or any representative of the underwriters in connection with any registration of the offering of any of our securities. The exercise price of granted options may be amended or adjusted in the absolute discretion of the compensation committee or the board of directors, without the approval of our shareholders or the recipients of the options.

Eligibility. We may grant awards to employees, directors and consultants of our company or any of our related entities, which include our subsidiaries or any entities in which we hold a substantial ownership interest.

Acceleration of Awards upon Corporate Transactions. The outstanding awards will terminate and accelerate upon occurrence of a change-of-control corporate transaction where the successor entity does not assumeour outstanding awards under the E-House Plan. In such event, each outstanding award will become fully vested and immediately exercisable, and the transfer restrictions on the awards will be released and the repurchase or forfeiture rights will terminate immediately before the date of the change-of-control transaction provided that the grantee’s continuous service with us shall not be terminated before that date.

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Term of the Awards. The term of each award grant shall be stated in the relevant award agreement, provided that the term shall not exceed 10 years from the date of the grant.

Vesting Schedule. In general, the E-House Plan administrator determines, or the relevant award agreement specifies, the vesting schedule.

Transfer Restrictions. Awards granted under the E-House Plan may not be transferred in any manner by the grantee other than by will or the laws of succession and may be exercised during the lifetime of the grantee only by the grantee.

Termination of the E-House Plan. Unless terminated earlier, the E-House Plan will terminate automatically in 2017. Our board of directors has the authority to amend or terminate the E-House Plan subject to shareholder approval to the extent necessary to comply with applicable law. However, no such action may (i) impair the rights of any grantee unless agreed by the grantee and the E-House Plan administrator or (ii) affect the E-House Plan administrator’s ability to exercise the powers granted to it under the E-House Plan.

Leju Share Incentive Plan

In November 2013, Leju, our subsidiary, adopted a share incentive plan, or the Leju Plan, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants, and promote the success of the subsidiary. The Leju Plan permits the grant of three types of awards: options, restricted shares and restricted share units. The maximum number of shares that may be issued pursuant to all awards under the Leju Plan is 10,434,783 ordinary shares of Leju initially, and will be increased automatically by 5% of the then total outstanding shares on an as-converted fully diluted basis on each of the third, sixth and ninth anniversaries of the effective date of the Leju Plan. We have granted options to purchase ordinary shares of Leju to certain directors, executive officers and employees of Leju as well as some of our directors and executive officers who have made contributions to Leju.

As of March 31, 2015, the aggregate number of ordinary shares of Leju underlying outstanding options granted under the Leju Plan is 5,897,635 and the aggregated number of outstanding restricted shares of Leju granted under the Leju Plan is 1,230,136. The following table summarizes, as of March 31, 2015, the options and restricted shares granted under the Leju Plan to directors and executive officers of our company and to other individuals as a group, without giving effect to the options that were exercised or restricted shares that had vested, if any.

Name	Ordinary Underlying Options/ Restricted Shares		Exercise Price ($/Share)	Date of Grant	Date of Expiration(1)
Xin Zhou	360,000	*	4.6	December 1, 2013	N/A
Charles Chao	360,000		4.6	December 1, 2013	November 30,2023
Neil Nanpeng Shen	20,000		4.6	December 1, 2013	November 30,2023
Bing Xiang	20,000		4.6	December 1, 2013	November 30,2023
Hongchao Zhu	20,000		4.6	December 1, 2013	November 30,2023
Jeffrey Zhijie Zeng	20,000		4.6	December 1, 2013	November 30,2023
Winston Li	40,000	*	N/A	March 18, 2014	N/A
David Jian Sun	40,000	*	N/A	March 18, 2014	N/A
Canhao Huang	30,000		4.6	December 1, 2013	November 30,2023
Li-Lan Cheng	240,000	*	4.6	December 1, 2013	N/A
Bin Laurence	60,000	*	4.6	December 1, 2013	N/A
Jianjun Zang	30,000		4.6	December 1, 2013	November 30,2023
Zuyu Ding	30,000		4.6	December 1, 2013	November 30,2023
Yinyu He	720,000		4.6	December 1, 2013	November 30,2023
	100,000	*	N/A	March 18, 2014	N/A
Other individuals as a group	5,873,462	**		December 1, 2013 to March 18, 2014	November 30,2023 or N/A

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(1)Options granted under the Leju Plan have a ten-year term from the date of grant, whereas restricted shares are not subject to such a term.

*Represents restricted shares.

**Includes options and restricted shares.

The remaining terms of the Leju Plan are substantially identical to the terms of the E-House Plan described above.

Scepter Share Incentive Plan

In August 2014, Scepter, our 51% owned subsidiary, adopted a share incentive plan, or the Scepter Plan, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants, and promote the success of the subsidiary. The Scepter Plan permits the grant of options and restricted shares to Scepter’s employees, officers and directors, as well as our employees who render services to Scepter. The maximum number of shares that may be issued pursuant to all awards under the Scepter Plan is 750,000 ordinary shares of Scepter. In August 2014, Scepter granted options to certain of its employees and certain of our employees for the purchase of 455,000 ordinary shares pursuant to the Scepter Plan.

As of March 31, 2015, the aggregate number of ordinary shares of Scepter underlying outstanding options granted under the Scepter Plan is 440,000. The following table summarizes, as of March 31, 2015, the options granted under the Scepter Plan to directors and executive officers of our company and to other individuals as a group, without giving effect to the options that were exercised, if any.

Name	Ordinary Underlying Options	Exercise Price ($/Share)	Date of Grant	Date of Expiration(1)
Xin Zhou	15,000	3.30	August 8, 2014	August 7, 2024
Charles Chao	15,000	3.30	August 8, 2014	August 7, 2024
Neil Nanpeng Shen	15,000	3.30	August 8, 2014	August 7, 2024
Bing Xiang	15,000	3.30	August 8, 2014	August 7, 2024
Hongchao Zhu	15,000	3.30	August 8, 2014	August 7, 2024
Jeffrey Zhijie Zeng	15,000	3.30	August 8, 2014	August 7, 2024
Winston Li	15,000	3.30	August 8, 2014	August 7, 2024
David Jian Sun	15,000	3.30	August 8, 2014	August 7, 2024
Canhao Huang	15,000	3.30	August 8, 2014	August 7, 2024
Li-Lan Cheng	15,000	3.30	August 8, 2014	August 7, 2024
Bin Laurence	10,000	3.30	August 8, 2014	August 7, 2024
Jianjun Zang	5,000	3.30	August 8, 2014	August 7, 2024
Zuyu Ding	10,000	3.30	August 8, 2014	August 7, 2024
Yinyu He	5,000	3.30	August 8, 2014	August 7, 2024
		3.30	August 8, 2014	August 7, 2024
Other individuals as a group	260,000	3.30	August 8, 2014	August 7, 2024

(1)Options granted under the Scepter Plan have a ten-year term from the date of grant.

The remaining terms of the Scepter Plan are substantially identical to the terms of the E-House Plan described above.

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C.Board Practices

Our board of directors currently consists of nine directors. A director is not required to hold any shares in our company by way of qualification. A director who is in any way, whether directly or indirectly, interested in a contract or transaction or proposed contract or transaction with us must declare the nature of his interest at a meeting of the directors. Subject to the NYSE rules and disqualification by the chairman of the relevant board meeting, a director may vote in respect of any contract or transaction or proposed contract or transaction notwithstanding that he may be interested therein, and, if he does so, his vote must be counted and he may be counted in the quorum at the relevant board meeting at which such contract or transaction or proposed contract or transaction is considered. The directors may exercise all the powers of our company to borrow money, to mortgage or charge its undertaking, property and uncalled capital, and to issue debentures or other securities whenever outright or as security for any debt, liability or obligation of our company or of any third party. None of our non-executive directors has a service contract with us that provides for benefits upon termination of employment.

In 2014, our board of directors held meetings or passed unanimous written resolution in lieu of meeting seven times.

Committees of the Board of Directors

We have established three committees under the board of directors: the audit committee, the compensation committee and the nominating and corporate governance committee. We have adopted a charter for each of the board committees. Each committee’s members and functions are described below.

Audit Committee. Our audit committee consists of Winston Li, Jeffrey Zhijie Zeng and Bing Xiang, all of whom satisfy the “independence” requirements of Section 303A of the Corporate Governance Rules of the NYSE and the “independence” standards under Rule 10A-3 under the Securities Exchange Act of 1934, as amended. Winston Li is the chair of our audit committee. The purpose of the audit committee is to assist our board of directors with its oversight responsibilities regarding: (i) the integrity of our financial statements, (ii) our compliance with legal and regulatory requirements, (iii) the independent auditor’s qualifications and independence, and (iv) the performance of our internal audit function and independent auditor.

The audit committee will be responsible for, among other things:

·appointing the independent auditors and pre-approving all audit and non-audit services permitted to be performed by the independent auditors;

·reviewing with the independent auditors any audit problems or difficulties and management’s response;

·reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act;

·discussing the annual audited financial statements with management and the independent auditors;

·reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies; and

·meeting separately and periodically with management and the independent auditors.

In 2014, our audit committee held meetings or passed unanimous written resolutions in lieu of meeting five times.

Compensation Committee. Our compensation committee consists of Hongchao Zhu and David Jian Sun, both of whom satisfy the “independence” requirements of Section 303A of the Corporate Governance Rules of the NYSE. Hongchao Zhu is the chair of our compensation committee. The purpose of the compensation committee is, among other things, to discharge the responsibilities of our board of directors relating to compensation of our directors and executive officers, including reviewing and evaluating and, if necessary, revising the compensation plans, policies and programs of our company adopted by our management. Our chief executive officer may not bepresent at any committee meeting during which his compensation is deliberated. The compensation committee will be responsible for, among other things:

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·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

In 2014, our compensation committee held meetings and passed unanimous written resolutions in lieu of meeting twice.

Nominating and Corporate Governance Committee. Our nominating and corporate governance committee consists of David Jian Sun and Hongchao Zhu, both of whom satisfy the “independence” requirements of Section 303A of the Corporate Governance Rules of the NYSE. Jian Sun is the chair of our nominating and corporate governance committee.

The purpose of this committee is to assist our board of directors in discharging the board’s responsibilities regarding, among other things, identification and recommendation of qualified candidates as members of our board and its committees, and annual review of the composition of our board and its committees. The nominating and corporate governance committee will be responsible for, among other things:

·recommending to our board of directors for nomination or appointment by the board such candidates as the committee has found to be well qualified and willing and ready to be elected or reelected to serve as our members of our board or its committees or to fill any vacancies on our board or its committees, respectively;

·reviewing annually the composition of our board of directors and its committees in light of the characteristics of independence, qualification, experience and availability of the board members;

·developing and recommending to our board of directors a set of corporate governance guidelines and principles applicable to our company; and

·monitoring of compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our internal rules and procedures to ensure compliance with applicable laws and regulations

In 2014, our nominating and corporate governance committee passed unanimous written resolutions in lieu of meeting once.

Duties of Directors

Under Cayman Islands law, our directors owe fiduciary duties to act honestly and in good faith with a view to our best interests. Our directors also owe to our company a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his duties a greater degree of skill than may reasonably be expected from a person of his knowledge and experience. However, English and commonwealth courts have moved towards an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association, as amended and restated from time to time. Our company has the right to seek damages if a duty owed by our directors is breached.

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Terms of Directors and Officers

Our officers are elected by and serve at the discretion of our shareholders or the board of directors. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respective successors have been elected and qualified in accordance with our shareholders agreement and our articles of association. A director will be cease to be a director if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; (ii) dies or is found to be or becomes of unsound mind; (iii) resigns his office by notice in writing to the Company; (iv) without special leave of absence from our board of directors, is absent from meetings of our board of directors for six consecutive months and the board resolves that his office be vacated; or (v) is removed from office pursuant to any other provision of our memorandum and articles of association..

D.Employees

We had 15,088, 18,927 and 23,129 employees as of December 31, 2012, 2013 and 2014, respectively. The table sets forth the number of employees by area of business as of December 31, 2014:

	Number of Employees	Percentage of Employees
Corporate Offices	3,523	15.23	%
Research Department	5,246	22.68	%
Sales Staff	14,360	62.09	%
Total	23,129	100.00	%

We consider our relations with our employees to be good.

E.Share Ownership

The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of March 31, 2015 by:

·each of our directors and executive officers; and

·each person known to us to own beneficially more than 5.0% of our ordinary shares.

As of March 31, 2015, we had 148,254,830 ordinary shares issued. Among the 148,254,830 ordinary shares issued, 5,928,517 ordinary shares that had been issued to our depositary and reserved for future grants under our share incentive plan are not deemed as outstanding for the purpose of calculating the beneficial ownership in the following table. Beneficial ownership is determined in accordance with the rules and regulations of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days from March 31, 2015, including through the exercise of any option, warrant or other right or the conversion of any other security. These shares, however, are not included in the computation of the percentage ownership of any other person.

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	Shares BeneficiallyOwned
	Number	%
Directors and Officers(1):
Xin Zhou(2)(†)	34,919,591	24.0
Charles Chao	*	*
Neil Nanpeng Shen(3)	3,648,363	2.6
Bing Xiang	*	*
Hongchao Zhu	*	*
Jeffrey Zhijie Zeng	*	*
Winston Li	*	*
David Jian Sun	*	*
Canhao Huang(†)	*	*
Li-Lan Cheng(†)	*	*
Bin Laurence(†)	*	*
Jianjun Zang(4)(†)	3,048,632	2.1
Zuyu Ding(†)	*	*
Yinyu He(†)	*	*
All Directors and Executive Officers as a Group(†)	40,656,693	27.6
Principal Shareholders:
SINA Corporation(5)	29,333,740	20.6
Kanrich Holdings Limited(6)	17,790,125	12.5
Jun Heng Investment Limited(7)(†)	9,665,000	6.8
Accounts managed by Kylin Management LLC(8)	8,237,538	5.8
GIC Private Limited(9)	8,214,449	5.8

*Less than 1% of our total outstanding shares.

(†)Each of these directors and executive officers is a beneficial owner of our shares through On Chance Inc., or On Chance, Jun Heng Investment Limited, or Jun Heng, and/or Kanrich Holdings Limited, or Kanrich, as the case may be. On Chance is also a shareholder of Jun Heng.

(1)Except where otherwise disclosed in the footnotes below, the business address of each of our directors and executive officers is Qiushi Building, 11/F, 383 Guangyan Road, Zhabei District, Shanghai 200072, People’s Republic of China.

(2)Includes (i) 216,666 ordinary shares that Mr. Zhou personally held, (ii) 3,183,000 ordinary shares that Mr. Zhou has the right to acquire upon exercise of options within 60 days after March 31, 2015, (iii) 4,064,800 shares beneficially owned by On Chance, (iv) 9,665,000 shares beneficially owned by Jun Heng, and (v) 17,790,125 ordinary shares held by Kanrich. Each of On Chance, Jun Heng and Kanrich is a company incorporated in British Virgin Islands and controlled by Mr. Zhou. Mr. Zhou disclaims beneficial ownership of the ordinary shares owned by On Chance, Jun Heng and Kanrich except to the extent of his pecuniary interest therein. A total of 31,500,000 ordinary shares held by Kanrich, On Chance and Jun Heng are subject to a share charge for the benefit of a third-party lender, which has entered into a margin loan facility agreement and related share and account charge with Kanrich to provide financing for Kanrich’s purchase of certain ordinary shares from us.

(3)Includes 2,084,874 ordinary shares directly held by Smart Create Group Limited, a British Virgin Islands company solely owned and controlled by Mr. Shen, 1,363,939 ordinary shares directly held by Smart Master International Limited, a British Virgin Islands company solely owned and controlled by Mr. Shen, 35,000 ordinary shares that Mr. Shen personally held, and 164,550 ordinary shares that Mr. Shen has the right to acquire upon exercise of options within 60 days after March 31, 2015. The business address of Mr. Shen is Suite 2215, 22/F, Two Pacific Place, 88 Queensway Road, Hong Kong.

(4)Includes (i) 20,185 ordinary shares that Mr. Zang personally held, (ii) 306,750 ordinary shares that Mr. Zang has the right to acquire upon exercise of options within 60 days after March 31, 2015, (iii) 2,632,746 ordinary shares held by Jun Heng which is approximately 27.24% owned by Mr. Zang, and (iv) 88,951 ordinary shares held by Kanrich which is 0.5% owned by Mr. Zang.

(5)Includes 28,600,000 ordinary shares and 733,740 ADSs. SINA Corporation is a company incorporated in Cayman Islands, and its business address is Room 1802, United Plaza, 1468 Nan Jing Road West, Shanghai 200040, People’s Republic of China.

(6)Kanrich is a company incorporated in British Virgin Islands and controlled by Xin Zhou. The registered office of Kanrich is Commence Chambers, P.O. Box 2208, Road Town, Tortola, British Virgin Islands.

(7)Includes 9,665,000 ordinary shares. Jun Heng is a company incorporated in British Virgin Islands and controlled by Xin Zhou. The registered address of Jun Heng is Beaufort House, P.O. Box 438, Road Town, Tortola, British Virgin Islands.

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(8)Based on Schedule 13G filed by Kylin Offshore Master Fund Ltd., Kylin Offshore Long Master Fund Ltd., Kylin Capital LLC, Kylin Management LLC and Mr. Ted Kang on February 17, 2015. Kylin Management LLC is the investment manager of Kylin Offshore Master Fund Ltd. and other accounts it separately manages. Kylin Offshore Master Fund Ltd. holds 6,303,280 ADSs and the separately managed accounts hold in the aggregate an additional 1,919,442 ADSs. Mr. Ted Kang is the manager of Kylin Management LLC. Kylin Management LLC and Mr. Kang may each be deemed to have voting and dispositive power with respect to the shares held by Kylin Offshore Master Fund Ltd. and the separately managed accounts. Kylin Capital LLC is the investment manager of Kylin Offshore Long Master Fund Ltd. Kylin Offshore Long Master Fund Ltd. holds 14,816 ADSs. Mr. Ted Kang is the manager of Kylin Capital LLC. Kylin Capital LLC and Mr. Kang may each be deemed to have voting and dispositive power with respect to the shares held by Kylin Offshore Long Master Fund Ltd. The business address of each of Kylin Management LLC, Kylin Capital LLC and Mr. Kang is 366 Madison Avenue, 16th Floor, New York, New York 10017. The business address of each of Kylin Offshore Master Fund Ltd. and Kylin Offshore Long Master Fund Ltd. is c/o Citco (Canada) Inc., 2 Bloor Street, Suite 2700, Toronto, Ontario M4W 1A8, Canada.

(9)Based on Schedule 13G filed by GIC Private Limited on February 11, 2015. GIC Private Limited is a fund manager and only has two clients — the Government of Singapore and the Monetary Authority of Singapore. The Government of Singapore beneficially owns 6,765,014 ADSs, including 746,527 ADSs that might be acquired upon conversion of the convertible notes issued by us, and the Monetary Authority of Singapore beneficially owns 1,449,435 securities, including 248,930 ADSs that might be acquired upon conversion of convertible notes issued by us. GIC Private Limited may be deemed to have voting and dispositive power with respect to the shares held by the Government of Singapore and the Monetary Authority of Singapore. The business address of GIC Private Limited is 168, Robinson Road, #37-01, Capital Tower, Singapore 068912.

Immediately following our initial public offering, Xin Zhou held 41.7% of our ordinary shares and as of March 31, 2015, he beneficially owned 24.0% of our ordinary shares.

None of our existing shareholders has different voting rights from other shareholders. Pursuant to an Investor Rights Agreement we entered into with SINA on August 16, 2012, we agreed to provide SINA with certain registration rights in respect of our ordinary shares and ADSs owned by SINA, and right to designate one director to our board of directors, subject to certain limitations. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Investor Rights Agreement with SINA.”

To our knowledge, to fund part of the purchase price for the share issuance closed on March 22, 2013, Kanrich and Prominent Asset Investment Limited entered into a margin loan facility agreement on March 22, 2013, pursuant to which Kanrich obtained a two-year term loan from Prominent Asset Investment Limited in the principal amount of $44.0 million, and on March 20, 2015, Kanrich and Prominent Asset Investment Limited entered into an amendment agreement to the original margin loan facility agreement, which, among others, has extended the term of the loan for another two years. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Transactions with Management and Affiliates—Share Issuance to Management.” In connection with the margin loan, Kanrich, Jun Heng and On Chance charged in favor of Prominent Asset Investment Limited all their present and future rights, title and interest in and to the 17,790,125 ordinary shares, 9,665,000 ordinary shares and 4,044,875 ordinary shares held by them, respectively, and all their present and future rights, title and interest in respect of or represented by each relevant securities account each of them maintains with the custodian of Prominent Asset Investment Limited, as the continuing security for the due and punctual performance and discharge of all the obligations under the margin loan facility agreement and other documents relating to the margin loan. Except for the above, we are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.

To our knowledge, as of March 31, 2015, 83,760,539 of our ordinary shares were held by one record holder in the United States, which was JPMorgan Chase Bank, N.A., the depositary of our ADS program. 5,928,517 of the 83,760,539 ordinary shares held by JPMorgan Chase Bank, N.A. are reserved for future grants under our share incentive plan. The number of beneficial owners of our ADSs in the United States is likely to be much larger than the number of record holders of our ordinary shares in the United States.

For the options granted to our directors, officers and employees, please refer to “—B. Compensation of Directors and Executive Officers.”

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ITEM 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.Major Shareholders

Please refer to “Item 6. Directors, Senior Management and Employees—E. Share Ownership.”

B.Related Party Transactions

Merger with CRIC

Please refer to “Item 4. Information on the Company—A. History and Development of the Company.”

Prior to the initial public offering of CRIC in October 2009, we entered into a series of agreements with CRIC with respect to various ongoing relationships between us. These include a master transaction agreement, an offshore transitional services agreement, an onshore transitional services agreement, a non-competition agreement, an onshore cooperation agreement and a consulting and services agreement. These agreements were terminated by mutual consent following the completion of our merger with CRIC in April 2012.

Agreements with Leju

Carve-out Agreements

Leju is currently our majority-owned subsidiary. Prior to the initial public offering of Leju, we provided Leju with accounting, administrative, marketing, internal control, customer service and legal support services, and also provided Leju with the services of a number of our executives and employees.

We have entered into agreements with Leju with respect to various ongoing relationships between us. These include a master transaction agreement, an offshore transitional services agreement, an onshore transitional services agreement, a non-competition agreement, and an onshore cooperation agreement. The following are summaries of these agreements.

Master Transaction Agreement

The master transaction agreement contains provisions relating to Leju’s carve-out from us. The master transaction agreement provides for cross-indemnities that generally will place the financial responsibility on Leju for all liabilities associated with the current and historical real estate online services business and operations that have been conducted by or transferred to Leju, and generally will place on us the financial responsibility for liabilities associated with all of our other current and historical businesses and operations, in each case regardless of the time those liabilities arise. The master transaction agreement also contains indemnification provisions under which we and Leju will indemnify each other with respect to breaches of the master transaction agreement or any related inter-company agreement.

In addition, Leju has agreed to indemnify us against liabilities arising from misstatements or omissions in the prospectus or the registration statement of which it is a part in connection with Leju’s proposed initial public offering, except for misstatements or omissions relating to information that we provided to Leju specifically for inclusion in such prospectus or such registration statement of which it forms a part. Leju has also agreed to indemnify us against liabilities arising from any misstatements or omissions in our subsequent SEC filings and from information Leju provides to us specifically for inclusion in our annual or quarterly reports following the completion of Leju’s initial public offering, but only to the extent that the information pertains to Leju or its business or to the extent we provide Leju prior written notice that the information will be included in our annual or quarterly reports and the liability does not result from the action or inaction of us. Similarly, we will indemnify Leju against liabilities arising from misstatements or omissions in our subsequent SEC filings or with respect to information that we provided to Leju specifically for inclusion in the prospectus in connection with Leju’s proposed initial public offering, the registration statement of which the prospectus forms a part, or our annual or quarterly reports following the completion of Leju’s initial public offering.

The master transaction agreement contains a general release, under which the parties will release each other from any liabilities arising from events occurring on or before the initial filing date of the registration statement of which the prospectus in connection with Leju’s proposed initial public offering forms a part, including in connection with the activities to implement such initial public offering. The general release does not apply to liabilities allocated between the parties under the master transaction agreement or the other inter-company agreements.

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Furthermore, under the master transaction agreement, Leju has agreed to use its reasonable best efforts to use the same independent certified public accounting firm selected by us and to maintain the same fiscal year as us until our first fiscal year-end occurring after the earlier of (1) the first date when we no longer own at least 20% of the voting power of our then outstanding securities and (2) the first date when we cease to be the largest beneficial owner of Leju’s then outstanding voting securities (without considering holdings by certain institutional investors). This earlier date is referred to as the control ending date herein. Leju also has agreed to use its reasonable best efforts to complete its audit and provide us with all financial and other information on a timely basis so that we may meet our deadlines for our filing of annual and quarterly financial statements.

The master transaction agreement will automatically terminate five years after the first date upon which we cease to own in aggregate at least 20% of the voting power of Leju’s then outstanding securities. This agreement can be terminated early by mutual written consent of the parties.

Offshore Transitional Services Agreement

Under the offshore transitional services agreement, we have agreed that, during the service period, we will provide Leju with various corporate support services, including:

·accounting support;

·administrative support;

·marketing support;

·internal control support;

·customer service support; and

·legal support.

We also may provide Leju with additional services that we and Leju may identify from time to time in the future. We may engage third parties to provide services covered by the offshore transitional service agreement.

The offshore transitional service agreement provides that the performance of a service according to the agreement will not subject the provider of such service to any liability whatsoever except as directly caused by the gross negligence or willful misconduct of the service provider. Liability for gross negligence or willful misconduct is limited to the lower of the price paid for the particular service or the cost of the service’s recipient performing the service itself or hiring a third party to perform the service. Under the offshore transitional services agreement, the service provider of each service is indemnified by the recipient against all third-party claims relating to provision of services or the recipient’s material breach of a third-party agreement, except where the claim is directly caused by the service provider’s gross negligence or willful misconduct.

The price to be paid for the services provided under the offshore transitional service agreement shall be the actual direct costs and indirect costs of providing such services. Direct costs include compensation and travel expenses attributable to employees, temporary workers, and contractors directly engaged in performing the services as well as materials and supplies consumed in performing the services. Indirect costs include occupancy, information technology supervision and other overhead costs of the department incurring the direct costs of providing the service.

The offshore transitional services agreement provides for a service period commencing on the date when the registration statement on Form F-1 in connection with Leju’s initial public offering is first publicly filed with the SEC, and ending on the date when we cease to own in aggregate at least 20% of the voting power of Leju’s then outstanding securities or cease to be the largest beneficial owner of Leju’s then outstanding voting securities, without considering holdings of institutional investors that have acquired Leju’s securities in the ordinary course of their business and not with a purpose nor with the effect of changing or influencing Leju’s control.

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Either party may terminate the offshore transitional services agreement with respect to either all or part of the services by giving a 90-day prior written notice to the other party. The agreement provides for an early termination fee in the case of early termination by us, but does not quantify the amount of or specify the calculation method, for such fee.

Onshore Transitional Services Agreement

The onshore transitional services agreement adopts terms and conditions similar to those of the offshore transitional services agreement. Under the onshore transitional services agreement, Shanghai Real Estate Sales (Group) Co., Limited, our indirectly wholly-owned subsidiary, or E-House Shanghai, agrees, during the applicable service period, to provide Beijing Leju, Beijing Jiajujiu, Shanghai Yi Xin, Shanghai SINA Leju, Beijing Maiteng, Shanghai Yi Yue and E-House City Rehouse Real Estate Broker (Shanghai) Co., Ltd., or the Leju PRC Entities, and/or their designated PRC affiliates, with various corporate support services, including accounting support, internal control and internal audit support, marketing support, customer service support and legal support. E-House Shanghai also may provide the Leju PRC Entities with additional services that the Leju PRC Entities and E-House Shanghai may identify from time to time in the future. E-House Shanghai may engage its PRC affiliates or other third parties to provide services covered by the onshore transitional services agreement.

The price to be paid for the services provided under the onshore transitional service agreement shall be the actual direct costs and indirect costs of providing such services. Direct costs include compensation and travel expenses attributable to employees, temporary workers, and contractors directly engaged in performing the services as well as materials and supplies consumed in performing the services. Indirect costs include occupancy, information technology supervision and other overhead costs of the department incurring the direct costs of providing the service.

The onshore transitional services agreement provides for a service period commencing on the date when the registration statement on Form F-1 in connection with Leju’s initial public offering is first publicly filed with the SEC, and ending on the date when we cease to own in aggregate at least 20% of the voting power of Leju’s then outstanding securities or cease to be the largest beneficial owner of Leju’s then outstanding voting securities, without considering holdings of institutional investors that have acquired our securities in the ordinary course of their business and not with a purpose nor with the effect of changing or influencing our control.

Either E-House Shanghai or the Leju PRC Entities may terminate either all or part of the services by giving a 90-day prior written notice to the other party. The agreement provides for an early termination fee in the case of early termination by the Leju PRC Entities, but does not quantify the amount of or specify the calculation method, for such fee.

Non-competition Agreement

The non-competition agreement provides for a non-competition period beginning on the date of the agreement and ending on the later of (1) three years after the first date when we cease to own in aggregate at least 20% of the voting power of Leju’s then outstanding securities and (2) five years after the date that the registration statement on Form F-1 in connection with Leju’s initial public offering is first publicly filed with the SEC. This agreement can be terminated early by mutual written consent of the parties.

We have agreed not to compete with Leju during the non-competition period in the business of providing real estate e-commerce, online advertising and listing services, anywhere in the world. Leju has agreed not to compete with us during the non-competition period in any business conducted by us as described in our periodic filings with the SEC, other than the businesses Leju is engaged in as described in initial public offering prospectus.

The non-competition agreement also provides for a mutual non-solicitation obligation that neither Leju nor we may, during the non-competition period, hire, or solicit for hire, any active employees of or individuals providing consulting services to the other party, or any former employees of or individuals providing consulting services to the other party within six months of the termination of their employment or consulting services, without the other party’s consent, except for solicitation activities through generalized non-targeted advertisement not directed to such employees or individuals that do not result in a hiring within the non-competition period.

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Onshore Cooperation Agreement

Under the onshore cooperation agreement, E-House Shanghai, Beijing Leju, Beijing Jiajujiu and Shanghai Yi Xin agree that they will cooperate with each other in sharing information about potential demand for products and/or services and developing clients. If any party is aware that its customers, suppliers or other business partners may have demands for the products and/or services of the primary business of any other party, it will share such information with such other party, to the extent not in violation of any applicable law and its confidentiality obligations or other terms under any contract binding on such party. Furthermore, the parties agree to cooperate with each other, to the extent commercially reasonable and in the manner deemed to be appropriate, in referring the principal products and/or services of any other party, joint pitching for and negotiating with clients, and entering into agreements with clients. In the event the parties jointly enter into an agreement with a client, they shall determine their respective rights and obligations in writing through amicable negotiations, and based on the principle of fairness and the fair market values of the products and/or services offered by the parties. The parties agree not to charge any fees for their cooperation and assistance provided under the agreement unless they separately and explicitly agree otherwise.

The onshore cooperation agreement provides for a term commencing on its date of execution and ending on the date when we cease to own in aggregate at least 20% of the voting power of Leju’s then outstanding securities or cease to be the largest beneficial owner of Leju’s then outstanding voting securities, without considering holdings of institutional investors that have acquired Leju’s securities in the ordinary course of their business and not with a purpose nor with the effect of changing or influencing Leju’s control. The onshore cooperation agreement does not provide any early termination right.

Investor Rights Agreement regarding Leju

On March 21, 2014, we entered into a share purchase and subscription agreement with Leju and Tencent, pursuant to which Tencent acquired from us 19,201,800 of Leju ordinary shares, or 15% of Leju’s total outstanding shares on a fully diluted basis, including all options and restricted shares and any other rights to acquire Leju shares that are granted and outstanding, for $180 million in cash. Concurrent with the consummation of the IPO of Leju, Tencent subscribed for 2,029,420 additional Leju ordinary shares, at a price per ordinary share equal to the initial public offering price per ordinary share, sufficient for Tencent to maintain a 15% equity interest in Leju on a fully diluted basis as of the consummation of the IPO of Leju. On March 31, 2014, being the closing date of our sale of Leju shares to Tencent under the share purchase and subscription agreement, we entered into an investor rights agreement with Leju and Tencent, which granted Tencent and us certain registration rights with respect to Leju ordinary shares and placed certain restrictions on the transfer of Leju ordinary shares by Tencent or us.

Demand registration rights. We and Tencent have the right to demand that Leju effect a registration covering the offer and sale of the Leju ordinary shares owned by us and Tencent, respectively. We and Tencent are each entitled to an aggregate of three such registrations. Leju, however, is not required to prepare and file (i) more than two demand registration statements in any 12-month period, or (ii) any demand registration statement within 120 days following the date of effectiveness of any other registration statement.

Shelf registration rights. Once Leju is eligible to file a shelf registration statement pursuant to Rule 415 promulgated under the Securities Act, we and Tencent will have the right to demand that Leju file a shelf registration statement covering the Leju ordinary shares owned by us and Tencent, respectively. Leju, however, will not be required to prepare and file more than two shelf registration statements in any 12-month period.

Piggyback registration rights. If Leju proposes to file a registration statement for an offering of its ordinary shares, other than in a transaction of the type referred to in Rule 145 under the Securities Act or to its employees pursuant to any employee benefit plan, then Leju must offer us and Tencent an opportunity to include in the registration all or any part of our and Tencent’s registrable securities.

Blackout periods. Leju is entitled to two blackout periods, aggregating to no more than 90 days in any consecutive 12-month period, during which Leju can delay the filing or effectiveness of a registration statement, if it would, in the good faith judgment of its board of directors, be required to disclose in the prospectus information not otherwise then required by law to be publicly disclosed, and there is a reasonable likelihood that such disclosure, or any other action to be taken in connection with the prospectus, would materially and adversely affect or interfere with any significant financing, acquisition, merger, disposition of assets, corporate reorganization or other material transaction of negotiations involving Leju.

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Expenses of registration. Leju will pay all expenses relating to any demand or piggyback registration, except that we and Tencent shall bear and pay all (i) brokerage commissions, (ii) ADS issuance fees payable to any depositary institution, (iii) commissions, fees, spreads, discounts, transfer taxes, stamp duties, (iv) fees and expenses of counsel or other advisers, subject to certain amounts that Leju will pay, and (v) out-of-pocket expenses, in each case, with respect to only such holder’s registrable securities.

Restrictions on transfer. For so long as Tencent is the beneficial owner of at least 10% of Leju’s issued and outstanding ordinary shares, Tencent’s prior written consent will be required for (i) a change of control of Leju that results in certain specified entities, as agreed by Leju and Tencent, controlling Leju, (ii) the issuance, by way of a privately negotiated transaction, of equity securities representing more than 10% of Leju’s issued and outstanding share capital to certain specified entities, or (iii) the transfer or other disposition, by way of a privately negotiated transaction, of equity securities representing more than 10% of Leju’s issued and outstanding share capital by us to certain specified entities, in each case, subject to certain exceptions. Tencent will not, without Leju’s prior written consent, transfer or otherwise dispose, by way of a privately negotiated transaction, of Leju equity securities held by Tencent to certain specified entities, subject to certain exceptions.

Agreements with SINA

Investor Rights Agreement with SINA

On August 16, 2012, we entered into an Investor Rights Agreement with SINA, which had been the largest holder of our ordinary shares since the completion of our merger with CRIC in April 2012. Pursuant to the agreement, we agreed to provide SINA with certain registration rights in respect of our ordinary shares and ADSs owned by SINA, subject to certain limitations, and entitled SINA to designate one director to our board of directors so long as SINA remains the beneficial owner of at least 10% of the outstanding shares of us.

Registration Rights. Following the date of the Investor Rights Agreement, SINA may request us to file a registration statement with the SEC covering all or part of the ordinary shares or ADSs held by SINA. SINA is entitled to demand up to three such registrations provided that we are not required to prepare and file (i) more than one demand registration statement in any twelve-month period or (ii) any demand registration statement within 180 days of the date of effectiveness of any other registration statement filed by us pursuant to the Investor Rights Agreement.

If, at any time, we propose to file a registration statement for an offering of our ordinary shares or ADSs, other than in a transaction of the type referred to in Rule 145 under the Securities Act or to our employees pursuant to any employee benefit plan, we must offer SINA an opportunity to include in the registration all or any part of the ordinary shares or ADSs held by SINA, subject only to certain prescribed limitations provided in the Investor Rights Agreement.

We are entitled to two blackout periods, aggregating to no more than 120 days in any 12-month period, during which we can defer the filing or effectiveness of a registration statement, if in the good faith judgment of our board of directors, we would be required to disclose in the prospectus information not otherwise then required by law to be publicly disclosed, and there is a likelihood that such disclosure, or any other action to be taken in connection with the prospectus, would materially and adversely affect or interfere with any significant financing, acquisition, merger, disposition of assets, corporate reorganization or other material transaction of negotiations involving us.

Board Representation. The Investor Rights Agreement provides that SINA will have the right, following consultation with us, to designate one director for nomination for election to our board of directors and SINA retains this right until the first date on which SINA is no longer a beneficial owner of at least 10% of the total outstanding shares of us. As of and after such time as SINA is no longer a beneficial owner of at least 10% of the total outstanding shares of us, we have the right to remove or procure the removal of, and SINA must render all necessary assistance for the purpose of removal of, the director who was designated by SINA, from our board of directors.

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Agreements between Leju and SINA

In 2008, SINA reorganized its real estate and home furnishing websites and online real estate advertising business into a separate unit with its own legal entities, management team, advertising operations, systems and physical facilities. Pursuant to the reorganization, we and SINA formed a joint venture, China Online Housing, which subsequently became a wholly owned subsidiary of Leju in December 2013 as part of our corporate reorganization. The terms of the joint venture provided China Online Housing with the rights, for an initial term of ten years, to use our real estate information database and operate the SINA real estate and home furnishing websites, including licenses to use SINA’s trademark, domain names, website technologies and certain software. In 2009, SINA and China Online Housing entered into an amended and restated advertising inventory agency agreement, a domain name and content license agreement, a restated trademark license agreement and a software license and support services agreement. In March 2014, Leju and SINA entered into an advertising inventory agency agreement, an amended and restated domain name and content license agreement, an amended and restated trademark license agreement and an amended and restated software license and support services agreement. The principal effect of the agreements entered into in March 2014 is to extend the term of agreements with SINA through 2024.

Advertising Inventory Agency Agreement. Under the advertising inventory agency agreement, Leju has the exclusive right to sell advertising to real estate, home furnishing and construction materials advertisers on all SINA non-real estate websites. Leju is required to pay SINA fees of approximately 15% of the revenues generated from sales of advertising on SINA non-real estate websites, subject to certain limitations on the amount of advertising that it may sell and fees payable by Leju to SINA based on the amount of advertising sold. In addition, Leju authorizes SINA as its exclusive agent to sell non-real estate-related advertising on its directly operated websites. Leju is entitled to receive approximately 85% of the revenues generated from these sales. The initial term of the amended and restated advertising inventory agency agreement is ten years, expiring in 2024.

Domain Name and Content License Agreement. Under the amended and restated domain name and content license agreement, an affiliate of SINA, or licensor, granted to Leju an exclusive license to use its five domain names, namely, house.sina.com.cn, jiaju.sina.com.cn, construction.sina.com.cn, dichan.sina.com.cn, and esf.sina.com.cn in connection with Leju’s real estate internet operations in China. In addition, the licensor also granted to Leju an exclusive license to use all contents, whose copyrights are owned by the licensor or owned by a third-party provider but is sub-licensable by the licensor without requiring payment of any additional fees and without violating the terms of any agreement with such third party provider, in connection with websites associated with the domain names licensed to Leju. For other operating contents, Leju may enter into an agreement with the owner independently and will be responsible for the costs associated with procuring the contents. The licenses are for an initial term of ten years expiring in 2024.

Amended and Restated Trademark License Agreement. Under the amended and restated trademark license agreement, an affiliate of SINA granted to Leju a non-exclusive license to use three SINA trademarks and an exclusive license to use four SINA related trademarks in connection with Leju’s real estate online operations in China through websites located at leju.com and the websites located at house.sina.com.cn, jiaju.sina.com.cn, construction.sina.com.cn, dichan.sina.com.cn and esf.sina.com.cn. The licenses are for an initial term of ten years expiring in 2024.

Amended and Restated Software License and Support Services Agreement. Under the amended and restated software license and support services agreement, a subsidiary of SINA, or licensor, granted to Leju a non-exclusive license to use (i) the proprietary software used for, among other things, internet content publishing, advertising publishing, sales management, procurement reimbursement, financial management flow, statistics, monitoring and censoring; (ii) certain current software products and interfaces necessary to facilitate Leju’s use of such current software products; (iii) the databases; (iv) certain improvements to the licensed software; and (v) related documentation and hardware, in each case to the extent such items (other than licensor improvements) exist and have been delivered to Leju under the software license and support service agreement executed in 2009. The licensor also provided to Leju infrastructure necessary to operate its websites and facilitate its use of the licensed software. In addition, the licensor also provided support services, including routine maintenance, technical support and hardware support. The licenses are for an initial term of ten years expiring in 2024 and free of any fees (subject to certain exceptions). However, to the extent that there are any reasonable, incremental costs for use of the licensed software or the infrastructure, or provision of the support services, due to a change in the business needs, Leju is required to reimburse the licensor for all such costs.

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Transactions with Management and Affiliates

Share Issuance to Management

We entered into a share purchase agreement with Kanrich, an entity jointly established by Mr. Xin Zhou, our co-chairman and chief executive officer, and certain other management members and controlled by Mr. Xin Zhou, on December 27, 2012, and an amendment to the share purchase agreement on March 22, 2013. Pursuant to the share purchase agreement and the amendment, we issued to Kanrich 17,790,125 ordinary shares at a purchase price of approximately $62.6 million at a closing that occurred on March 22, 2013. The shares issued to Kanrich were subject to a 12-month lock-up restriction. This lock-up restriction was not applicable to the creation or enforcement of the share charge created by Kanrich for the benefit of Prominent Asset Investment Limited, a third-party lender, which entered into a margin loan facility agreement and related share and account charge with Kanrich to provide financing for the purchase of the 17,790,125 ordinary shares from us. We have agreed to register part or all of the shares subject to the share charge on a shelf registration statement at the expense of Kanrich under certain conditions and upon occurrence of certain circumstances, if ever.

Other Transactions with Management

As of December 31, 2014, we had a payable balance of $2.0 million to our management. The amount represents consideration paid by management for unvested restricted shares granted under the Leju Plan.

As of December 31, 2013, we had a payable balance of $2.8 million to our management. The amount represents consideration paid by management for unvested restricted shares granted under the Leju Plan.

As of December 31, 2012, we had a payable balance of $0.3 million to one member of our management. The amount represents consideration paid by the member of management for unvested restricted shares. See also “Item 6. Directors, Senior Management and Employees—B. Compensation of Directors and Executive Officers.”

Transactions with Affiliates

Transactions with Shanghai Yueshun Real Estate Development Co., Ltd. Shanghai Yueshun Real Estate Development Co., Ltd. is an entity partially owned by Mr. Xin Zhou. As of December 31, 2012, 2013 and 2014, we had a receivable balance of $0.3 million, $0.3 million and $0.3 million, respectively, from Shanghai Yueshun Real Estate Development Co., Ltd., representing rental cost paid on behalf of this entity.

Transactions with Shanghai Jinyue Real Estate Development Co., Ltd. Mr. Xin Zhou is a director of Shanghai Jinyue Real Estate Development Co., Ltd. As of December 31, 2012, 2013 and 2014, we had a payable balance of $0.4 million, $0.4 million and $0.4 million, respectively, to Shanghai Jinyue Real Estate Development Co., Ltd., representing the rental expenses paid by Shanghai Jinyue Real Estate Development Co., Ltd. on behalf of us.

Transactions with Beijing China Real Estate Research Association Technology Ltd. Beijing China Real Estate Research Association Technology Ltd. is a joint venture formed by us with China Real Estate Research Association and China Real Estate Association. In 2012, we purchased services from Beijing China Real Estate Research Association Technology Ltd. for an amount of $0.5 million. Our payable balance due to Beijing China Real Estate Research Association Technology Ltd. for these services was $3,892 and nil as of December 31, 2013 and 2014, respectively. Moreover, we generate revenues of $51,120, $1.1 million and $0.1 million from Beijing China Real Estate Research Association Technology Ltd. for the years ended December 31, 2012, 2013, and 2014, respectively. Additionally, as of December 31, 2013 and 2014, we had a receivable balance of $1.0 million and $684 from Beijing China Real Estate Research Association Technology Ltd.

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Transactions with SINA. The total cost recognized for the advertising agency fee purchased from SINA in 2012, 2013 and 2014 was $5.1 million, $6.0 million and $6.6 million, respectively. The selling and general expenses recognized for advertising purchased from SINA was nil, nil and $4.9 million in 2012, 2013 and 2014, respectively. The intangible assets purchased from SINA was nil, nil and $1.5 million in 2012, 2013 and 2014, respectively. As of December 31, 2013 and 2014, we had a payable balance of $1.7 million and $3.7 million to SINA, representing online advertising agency fee payable to SINA and payable in connection with the purchase of intangible assets from SINA. In 2012, we provided online advertising services to SINA, from which we generated $1,855 in revenues. In 2014, we provided consulting services to SINA, from which we generated $0.4 million in revenues. As of December 31, 2014, we had a receivable balance of $0.1 million from SINA. Mr. Charles Chao, SINA’s chairman and chief executive Officer, has served as a co-chairman of our board of directors since April 2012 and SINA became our related party since then.

Transactions with Hangzhou Kuyue Technology Limited, or Hangzhou Kuyue. As of December 31, 2014, we had a payable balance of $0.9 million to Hangzhou Kuyue, representing the mobile platform purchased from Hangzhou Kuyue and the total intangible assets of $1.8 million recognized from Hangzhou Kuyue in 2014. We have 21% equity interest in Hangzhou Kuyue.

Transactions with Shanghai Guanfu Treasure-house Assets Management Co., Ltd., or Shanghai Guanfu. Shanghai Guanfu is indirectly controlled by Mr. Xin Zhou. As of December 31, 2014, we had a payable balance of $0.3 million to Shanghai Guanfu, representing the rental services purchased from Shanghai Guanfu in 2014. The total consideration for the rental services purchased from Shanghai Guanfu in 2014 was $0.4 million.

All of the receivable balances and payable balances stated above were unsecured, interest free and had no fixed repayment term.

Real Estate Investment Fund Management

In January 2008, we formed E-House China Real Estate Investment Fund I, L.P., or the Fund, which seeks to invest in China’s real estate sector through diversified investment strategies at all levels of the real estate value chain. Major investors of the Fund include institutions and high net worth individuals. Mr. Xin Zhou, our co-chairman and chief executive officer, and Mr. Neil Nanpeng Shen, our director, invested a total of $28.0 million in the Fund. They are also among the non-controlling shareholders of the general partner. We have no investment in the Fund. We manage the Fund through our 51% owned subsidiary, E-House Real Estate Asset Management Limited, which acts as the Fund’s general partner. The general partner receives annual management fees and carried interest. We are entitled to carried interest from the Fund in the event that the investors in the Fund achieve cumulative investment returns in excess of a specified amount at the end of the contract year. We generated $0.2 million, $63,567 and $5.4 million of revenues from the Fund in 2012, 2013 and 2014, respectively. As of December 31, 2013 and 2014, the receivable balance from the Fund was nil and $5.4 million, respectively.

In January 2010, we formed E-House Shengyuan Equity Investment Center, or Shengyuan Center, which seeks equity investment in China’s real estate sector. Our 51% owned subsidiary, Shanghai Yidezeng Equity Investment Center, acts as Shengyuan Center’s general partner. The general partner receives annual management fees and carried interest. We are entitled to carried interest from Shengyuan Center in the event that the investors in Shengyuan Center achieve cumulative investment returns in excess of a specified amount at the end of the contract year. We had an investment commitment of RMB65.0 million (US$10.5 million) to Shengyuan Center, half of which was paid in February 2010 and the other half was paid in December 2011. Mr. Xin Zhou, our co-chairman and chief executive officer, had an investment commitment of RMB40.0 million (US$6.4 million) to Shengyuan Center, half of which was paid in February 2010 and the other half was paid in December 2011. In 2013 and 2014, respectively, we received RMB2.8 million (US$0.5 million) and RMB10.9 million (US$1.8 million) capital return from Shengyuan Center. We earned $1.6 million, $1.5 million and $1.4 million in management fees from the Center in 2012, 2013 and 2014, respectively, which were fully collected in the year when such management fees were earned.

In April 2010, we formed E-House Shengquan Equity Investment Center, or Shengquan Center, which seeks to invest in China’s real estate sector through diversified investment strategies at all levels of the real estate value chain. Our 51% owned subsidiary, Shanghai Yidexin Equity Investment Management Co., Ltd., acts as Shengquan Center’s general partner. The general partner will receive annual management fee and carried interest. We are entitled to carried interest from Shengquan Center in the event that the investors in Shengquan Center achieve cumulative investment returns in excess of a specified amount at the end of the contract year. Mr. Xin Zhou, our co-chairman and chief executive officer, had an investment commitment of RMB9.0 million (US$1.5 million) to Shengquan Center, half of which was paid in May 2010 and the other half was paid in July 2011. We earned $0.6 million, $0.6 million and $0.6 million in management fees from Shengquan Center in 2012, 2013 and 2014, respectively, which were fully collected in the year when such management fees were earned. We have no investment in Shengquan Center.

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In May 2012, we formed a limited partnership, Wuling Center, in Shanghai, for the purpose of making equity investments in suitable industries. Our 51% owned subsidiary, Shanghai Yidezhen Equity Investment Center, acts as Wuling Center’s general partner. The general partner will receive annual management fees and carried interest. We are entitled to carried interest from Wuling Center in the event that the investors in Wuling Center achieve cumulative investment returns in excess of a specified amount at the end of the contract year. We committed to invest RMB60.0 million (US$9.7 million) in Wuling Center, of which RMB15.0 million (US$2.4 million) was paid in November 2012, and RMB27.0 million (US$4.4 million) was paid in 2013, and the remaining balance of RMB18.0 million (US$2.9 million) was paid in 2014. An entity controlled by Mr. Xin Zhou, our co-chairman and chief executive officer, committed to invest RMB45.0 million (US$7.3 million) in Wuling Center, of which RMB31.5 million (US$5.1 million) was paid in 2013, and the remaining balance of RMB13.5 million (US$2.2 million) was paid in 2014. We earned $3.8 million and $3.0 million in management fees from Wuling Center in 2013 and 2014, respectively, which was fully collected in the year when such management fees were earned.

We hold 0.6%, 0.5% and 0.5% equity interest of Suzhou Hehui Xuyuechang Equity Investment Center, Suzhou Hehui Xuyuerong Equity Investment Center and Suzhou Hehui Xuyuezhen Equity Investment Center, respectively. We also act as a non-acting general partner and provide investment advice to the entities. We earned an aggregate of $0.3 million and $1.1 million in management fees from such funds in 2013 and 2014, respectively. The management fees earned in 2013 was fully collected as earned, and we had an aggregate of $0.6 million in advanced management fees from above three funds as of December 31, 2013. Part of the management fees earned in 2014 was not collected as earned, and we had an aggregate of $0.4 million of management fees receivables from above three funds as of December 31, 2014.

In 2014, we formed a limited partnership, Shanghai Shouxin Equity Investment Center, or Shouxin Center, for the purpose of making equity investments suitable industries. Shanghai Yidezhao Equity Investment Center, our 51% owned subsidiary, acts as Shouxin Center’s general partner. The general partner receives annual management fee and carried interest on a success basis. We prepaid RMB15.0 million (US$2.4 million) in 2013 for a 13.0% equity interest in Shouxin Center, which did not finalize its registration until 2014. In August 2014, we disposed of 12.2% equity interest in Shouxin Center for a total consideration of $2.3 million, of which 4.8% was transferred to an unrelated third party investor, 7.4% was transferred to two employees of our company, at the same unit price. The equity interests were transferred at book value, which approximated their fair value at the time as the entity was just established with no material change in fair value. Therefore, no gain or loss was recognized from the disposal of our equity interests in Shouxin Center in 2014. We continue to account for the remaining 0.9% equity interest using equity method of accounting. We earned $0.1 million management fees from Shouxin Center in 2014, which was fully collected in the year when such management fees were earned.

In 2014, we formed a limited partnership, Shanghai Muxin Equity Investment Center, or Muxin Center, for the purpose of making equity investments in suitable industries. Shanghai Yidezhao Equity Investment Center acts as Muxin Center’s general partner. The general partner receives annual management fee and carried interest on a success basis. We prepaid RMB25.0 million (US$4.0 million) in 2013 for a 23.4% equity interest in Muxin Center, which did not finalize its registration until 2014. We earned $0.2 million management fees from Muxin Center in 2014, which was fully collected in the year when such management fees were earned. We also received $0.1 million as advance management fees from Muxin Center as of December 31, 2014.

Contractual Agreements with Tian Zhuo

Prior to October 2012, Tian Zhuo was our consolidated variable interest entity as a result of the contractual arrangements entered into between Shanghai CRIC, Tian Zhuo and the shareholders of Tian Zhuo. In October 2012, the shareholders of Tian Zhuo, Mr. Xin Zhou and Mr. Xudong Zhu, transferred all of their equity interests in Tian Zhuo to Shanghai Lerong Information Technology Co., Ltd., a subsidiary of Beijing Leju, so that Tian Zhuo became an indirect wholly owned subsidiary of Beijing Leju, and the previous contractual arrangement among Shanghai CRIC, Tian Zhuo and its shareholders was terminated accordingly. In connection with the transfer of equity interest, Mr. Xin Zhou assigned the loans in an aggregate amount of RMB89.0 million (US$14.3 million) that he previously extended to Tian Zhou for various business purposes to Shanghai CRIC to satisfy his own payment obligations to Shanghai CRIC in the same amount under the three loan agreements he entered into with Shanghai CRIC on April 1, 2008, September 8, 2008 and July 20, 2009, respectively. In December 2013, Shanghai Lerong Information Technology Co., Ltd. transferred all of its equity interests in Tian Zhuo to Shanghai Kushuo, so that Tian Zhuo has become a wholly owned subsidiary of Shanghai Kushuo.

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Contractual Agreements with Our VIEs

Contractual Agreements with Beijing Leju

Beijing Leju is 80% owned by Xudong Zhu and 20% owned by Zuyu Ding. Our majority-owned indirect subsidiary, Shanghai SINA Leju, has entered into agreements with Beijing Leju and its shareholders, which provide Shanghai SINA Leju with the substantial ability to control Beijing Leju and make it a primary beneficiary of Beijing Leju. We operate our real estate online business through these contractual arrangements with Beijing Leju and its shareholders. Under PRC law, each of Shanghai SINA Leju and Beijing Leju is an independent legal person and is not exposed to liabilities incurred by the other party. Other than pursuant to the contractual arrangements between Shanghai SINA Leju and Beijing Leju, Beijing Leju does not transfer any other funds generated from its operations to Shanghai SINA Leju.

Agreements that Provide Us with Effective Control over Beijing Leju

Exclusive Call Option Agreement. Under the exclusive call option agreement among Shanghai SINA Leju, Beijing Leju, Xudong Zhu and Zuyu Ding, dated September 10, 2011, each of Xudong Zhu and Zuyu Ding granted an irrevocable and unconditional option to Shanghai SINA Leju, that entitles Shanghai SINA Leju or its designated entity or individual to acquire all or part of the equity interests held by him in Beijing Leju at its sole discretion, to the extent as permitted by PRC laws and regulations then in effect. The consideration for such acquisition of all equity interests in Beijing Leju will be equal to the registered capital of Beijing Leju, and if there is any limitation imposed by PRC law that requires the consideration to be greater than the registered capital, the consideration will be the minimum amount as permitted by PRC law. In addition, Beijing Leju irrevocably and unconditionally granted Shanghai SINA Leju an exclusive option to purchase, to the extent permitted under the PRC law, all or part of the assets of Beijing Leju. The exercise price for purchasing the assets of Beijing Leju will be equal to their respective book values unless otherwise required by the PRC law. The call option may be exercised by Shanghai SINA Leju or any third party designated by Shanghai SINA Leju. This agreement will terminate after all the equity interest in and the assets of Beijing Leju are lawfully transferred to Shanghai SINA Leju and/or any other entity or individual designated by Shanghai SINA Leju.

Loan Agreement. Under the loan agreement among Shanghai SINA Leju, Xudong Zhu and Zuyu Ding, dated September 10, 2011, Shanghai SINA Leju granted an interest-free loan of RMB8.0 million (US$1.3 million) to Xudong Zhu and RMB2.0 million (US$0.3 million) to Zuyu Ding, respectively, solely for their purchase of equity interests in Beijing Leju. The loan will be due upon the earlier of September 9, 2031 or the expiration of the term of business of either Shanghai SINA Leju or Beijing Leju.

Shareholder Voting Rights Proxy Agreement. Under the shareholder voting rights proxy agreement among Shanghai SINA Leju, Beijing Leju, Xudong Zhu and Zuyu Ding, dated September 10, 2011, each of Xudong Zhu and Zuyu Ding will irrevocably grant any person designated by Shanghai SINA Leju the power to exercise all voting rights which he will be entitled to as shareholder of Beijing Leju at that time. The agreement will expire on September 9, 2031, 20 years from the date of execution. The term of the agreement can be automatically extended for one year upon expiration of the initial term or the extension thereof, if Shanghai SINA Leju gives a written notice requesting extension.

Power of Attorney. Under each of the powers of attorneys signed by Xudong Zhu and Zuyu Ding, respectively, on September 10, 2011, each of Xudong Zhu and Zuyu Ding irrevocably granted Xin Zhou, a person designated by Shanghai SINA Leju, the power to exercise all voting rights which he is entitled to as a shareholder of Beijing Leju. Each of the powers of attorneys will be valid until the expiration or the early termination of the shareholder voting right proxy agreement among Shanghai SINA Leju, Beijing Leju, Xudong Zhu and Zuyu Ding, dated September 10, 2011, unless Shanghai SINA Leju designates another person to replace Xin Zhou.

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Equity Pledge Agreement. Under the equity pledge agreement among Shanghai SINA Leju, Beijing Leju, Xudong Zhu and Zuyu Ding, dated September 10, 2011, all of the equity interest in Beijing Leju was pledged to Shanghai SINA Leju to guarantee the performance of the obligations of Beijing Leju, Xudong Zhu and Zuyu Ding under the exclusive call option agreement, the loan agreement, the shareholder voting rights proxy agreement and the exclusive technical support agreement. If Xudong Zhu, Zuyu Ding or Beijing Leju breach their respective contractual obligations, Shanghai SINA Leju, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. Pursuant to the equity pledge agreement, Xudong Zhu and Zuyu Ding shall not transfer, sell, pledge, dispose of or otherwise create any new encumbrance on their respective equity interest in Beijing Leju without the prior written consent of Shanghai SINA Leju. The equity pledge right enjoyed by Shanghai SINA Leju will expire when Xudong Zhu, Zuyu Ding and Beijing Leju have fully performed their respective obligations under the above agreements.

Agreement that Transfers Economic Benefits of Beijing Leju to Us

Exclusive Technical Support Agreement. Pursuant to an exclusive technical support agreement between Shanghai SINA Leju and Beijing Leju dated as of May 8, 2008, Shanghai SINA Leju provides Beijing Leju with a series of technical support services and is entitled to receive related fees. Unless expressly provided by this agreement, without prior written consent of Shanghai SINA Leju, Beijing Leju may not engage any third party to provide the services offered by Shanghai SINA Leju under this agreement. Beijing Leju shall pay service fees to Shanghai SINA Leju for the technology services provided based on the number of working hours of Shanghai SINA Leju’s engineers who provide the technology services: for the technology service provided by a senior engineer, the service fee is at the rate of RMB4,000 (US$645) per hour per person; for the technology service provided by a mid-level engineer, the service fee is at the rate of RMB2,000 (US$322) per hour per person; for the technology service provided by a junior engineer, the service fee is at the rate of RMB1,000 (US$161) per hour per person. The term of this exclusive technical support agreement will expire upon dissolution of Beijing Leju.

Contractual Agreements with Shanghai Yi Xin

Our wholly owned subsidiary, Evercrest Holdings Limited, through its indirect wholly-owned subsidiary in Hong Kong, established a wholly-owned subsidiary in China, Shanghai Yi Yue. Shanghai Yi Yue operates real estate e-commerce business through its contractual arrangements with Shanghai Yi Xin and its shareholders.

In December 2011, Zuyu Ding and Weijie Ma became the shareholders of Shanghai Yi Xin, through initial contribution to its registered capital. Shanghai Yi Xin is 70% owned by Zuyu Ding and 30% owned by Weijie Ma. Shanghai Yi Yue has entered into agreements with Shanghai Yi Xin and its shareholders, which provide Shanghai Yi Yue with the substantial ability to control Shanghai Yi Xin and make it a primary beneficiary of Shanghai Yi Xin. Under PRC law, each of Shanghai Yi Yue and Shanghai Yi Xin is an independent legal person and is not exposed to liabilities incurred by the other party. Other than pursuant to the contractual arrangements between Shanghai Yi Yue and Shanghai Yi Xin, Shanghai Yi Xin does not transfer any other funds generated from its operations to Shanghai Yi Yue.

Agreements that Provide Us with Effective Control over Shanghai Yi Xin

Exclusive Call Option Agreement. Under the exclusive call option agreement among Shanghai Yi Yue, Shanghai Yi Xin, Zuyu Ding and Weijie Ma, dated December 5, 2011, each of Zuyu Ding and Weijie Ma granted an irrevocable and unconditional option to Shanghai Yi Yue, that entitles Shanghai Yi Yue or its designated entity or individual to acquire all or part of the equity interests held by him in Shanghai Yi Xin at its sole discretion, to the extent as permitted by PRC laws and regulations then in effect. The consideration for such acquisition of all equity interests in Shanghai Yi Xin will be equal to the registered capital of Shanghai Yi Xin, and if PRC law requires the consideration to be greater than the registered capital, the consideration will be the minimum amount as permitted by PRC law. In addition, Shanghai Yi Xin irrevocably and unconditionally granted Shanghai Yi Yue an exclusive option to purchase, to the extent permitted under the PRC law, all or part of the assets of Shanghai Yi Xin. The exercise price for purchasing the assets of Shanghai Yi Xin will be equal to their respective book values, and if PRC law requires the price to be greater than the book value, the price will be the minimum amount as permitted by PRC law. The call option may be exercised by Shanghai Yi Yue or any third party designated by Shanghai Yi Yue. This agreement will terminate after all the equity interest in and the assets of Shanghai Yi Xin are lawfully transferred to Shanghai Yi Yue and/or any other entity or individual designated by Shanghai Yi Yue.

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Loan Agreement. Under the loan agreement among Shanghai Yi Yue, Zuyu Ding and Weijie Ma dated September 20, 2011, Shanghai Yi Yue granted an interest-free loan of RMB10.5 million (US$1.7 million) to Zuyu Ding and RMB4.5 million (US$0.7 million) to Weijie Ma, respectively, solely for their purchase of equity interests in Shanghai Yi Xin. The loan will be due upon the earlier of September 20, 2031 or the expiration of the term of business of either Shanghai Yi Yue or Shanghai Yi Xin.

Shareholder Voting Right Proxy Agreement. Under the shareholder voting right proxy agreement among Shanghai Yi Yue, Shanghai Yi Xin, Zuyu Ding and Weijie Ma, dated December 5, 2011, each of Zuyu Ding and Weijie Ma will irrevocably grant any person designated by Shanghai Yi Yue the power to exercise all voting rights which he will be entitled to as shareholder of Shanghai Yi Xin at that time. The agreement will expire on December 4, 2031, 20 years from the date of execution. The term of the agreement can be automatically extended for one year upon expiration of the initial term or the extension thereof, if Shanghai Yi Yue gives a written notice requesting extension.

Power of Attorney. Under each of the powers of attorneys signed by Zuyu Ding and Weijie Ma, respectively, on December 5, 2011, each of Zuyu Ding and Weijie Ma irrevocably granted Xin Zhou, a person designated by Shanghai Yi Yue, the power to exercise all voting rights he is entitled to as a shareholder of Shanghai Yi Xin. Each of the powers of attorneys will be valid until the expiration or the early termination of the shareholder voting right proxy agreement among Shanghai Yi Yue, Shanghai Yi Xin, Zuyu Ding and Weijie Ma, dated December 5, 2011, unless Shanghai Yi Yue designates another person to replace Xin Zhou.

Equity Pledge Agreement. Under the equity pledge agreement among Shanghai Yi Yue, Shanghai Yi Xin, Zuyu Ding and Weijie Ma, dated December 5, 2011, all of the equity interest in Shanghai Yi Xin was pledged to Shanghai Yi Yue to guarantee the performance of the obligations of Shanghai Yi Xin, Zuyu Ding and Weijie Ma under the exclusive call option agreement, the loan agreement and the shareholder voting right proxy agreement. If Zuyu Ding, Weijie Ma or Shanghai Yi Xin breach their respective contractual obligations, Shanghai Yi Yue, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. Pursuant to the equity pledge agreement, Zuyu Ding and Weijie Ma shall not transfer, sell, pledge, dispose of or otherwise create any new encumbrance on their respective equity interest in Shanghai Yi Xin without the prior written consent of Shanghai Yi Yue. The equity pledge right enjoyed by Shanghai Yi Yue will expire when Zuyu Ding, Weijie Ma and Shanghai Yi Xin have fully performed their respective obligations under the above agreements.

Agreement that Transfers Economic Benefits of Shanghai Yi Xin to Us

Exclusive Technical Support Agreement. Pursuant to an exclusive technical support agreement between Shanghai Yi Yue and Shanghai Yi Xin dated December 5, 2011, Shanghai Yi Yue provides Shanghai Yi Xin with a series of technical support services and is entitled to receive related fees. Unless expressly provided by this agreement, without prior written consent of Shanghai Yi Yue, Shanghai Yi Xin may not engage any third party to provide the services offered by Shanghai Yi Yue under this agreement. Shanghai Yi Xin shall pay service fees to Shanghai Yi Yue for the technology services provided based on the number of working hours of Shanghai Yi Yue’s engineers who provide the technology services: for the technology service provided by a senior engineer, the service fee is at the rate of RMB4,000 (US$645) per hour per person; for the technology service provided by a mid-level engineer, the service fee is at the rate of RMB2,000 (US$322) per hour per person; for the technology service provided by a junior engineer, the service fee is at the rate of RMB1,000 (US$161) per hour per person. The fee for technical support is at the rate of RMB20,000 (US$3,223) per month; the fee for technical training is at the rate of RMB10,000 (US$1,612) per month; and the fee for technical consulting is at the rate of RMB20,000 (US$3,223) per month. The term of this exclusive technical support agreement will expire upon dissolution of Shanghai Yi Xin.

Contractual Agreements with Beijing Jiajujiu

In April 2012, Zuyu Ding and Weijie Ma became the shareholders of Beijing Jiajujiu, through initial contribution to its registered capital. Beijing Jiajujiu is 70% owned by Zuyu Ding and 30% owned by Weijie Ma. Beijing Maiteng has entered into agreements with Beijing Jiajujiu and its shareholders, which provide Beijing Maiteng with the substantial ability to control Beijing Jiajujiu and make it a primary beneficiary of Beijing Jiajujiu. We operate our online home furnishing websites through these contractual arrangements with Beijing Jiajujiu and its shareholders. Under PRC law, each of Beijing Maiteng and Beijing Jiajujiu is an independent legal person and is not exposed to liabilities incurred by the other party. Other than pursuant to the contractual arrangements between Beijing Maiteng and Beijing Jiajujiu, Beijing Jiajujiu does not transfer any other funds generated from its operations to Beijing Maiteng.

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Agreements that Provide Us with Effective Control over Beijing Jiajujiu

Exclusive Call Option Agreement. Under the exclusive call option agreement among Beijing Maiteng, Beijing Jiajujiu, Zuyu Ding and Weijie Ma, dated April 1, 2012, each of Zuyu Ding and Weijie Ma granted an irrevocable and unconditional option to Beijing Maiteng, that entitles Beijing Maiteng or its designated entity or individual to acquire all or part of the equity interests held by him in Beijing Jiajujiu at its sole discretion, to the extent as permitted by PRC laws and regulations then in effect. The consideration for such acquisition of all equity interests in Beijing Jiajujiu will be equal to the registered capital of Beijing Jiajujiu, and if PRC law requires the consideration to be greater than the registered capital, the consideration will be the minimum amount as permitted by PRC law. In addition, Beijing Jiajujiu irrevocably and unconditionally granted Beijing Maiteng an exclusive option to purchase, to the extent permitted under the PRC law, all or part of the assets of Beijing Jiajujiu. The exercise price for purchasing the assets of Beijing Jiajujiu will be equal to their respective book values, and if PRC law requires the price to be greater than the book value, the price will be the minimum amount as permitted by PRC law. The call option may be exercised by Beijing Maiteng or any third party designated by Beijing Maiteng. This agreement will terminate after all the equity interest in and the assets of Beijing Jiajujiu are lawfully transferred to Beijing Maiteng and/or any other entity or individual designated by Beijing Maiteng.

Loan Agreement. Under the loan agreement among Beijing Maiteng, Zuyu Ding and Weijie Ma dated February 1, 2012, Beijing Maiteng granted an interest-free loan of RMB10.5 million (US$1.7 million) to Zuyu Ding and RMB4.5 million (US$0.7 million) to Weijie Ma, respectively, solely for their purchase of equity interests in Beijing Jiajujiu. The loan will be due upon the earlier of February 1, 2032 or the expiration of the term of business of either Beijing Maiteng or Beijing Jiajujiu.

Shareholder Voting Right Proxy Agreement. Under the shareholder voting right proxy agreement among Beijing Maiteng, Beijing Jiajujiu, Zuyu Ding and Weijie Ma, dated April 1, 2012, each of Zuyu Ding and Weijie Ma will irrevocably grant any person designated by Beijing Maiteng the power to exercise all voting rights which he will be entitled to as shareholder of Beijing Jiajujiu at that time. The agreement will expire on March 31, 2032, 20 years from the date of execution. The term of the agreement can be automatically extended for one year upon expiration of the initial term or the extension thereof, if Beijing Maiteng gives a written notice requesting extension.

Power of Attorney. Under each of the powers of attorneys signed by Zuyu Ding and Weijie Ma, respectively, on April 1, 2012, each of Zuyu Ding and Weijie Ma irrevocably granted Xin Zhou, a person designated by Beijing Maiteng, the power to exercise all voting rights which he is entitled to as a shareholder of Beijing Jiajujiu. Each of the powers of attorneys will be valid until the expiration or the early termination of the shareholder voting right proxy agreement among Beijing Maiteng, Beijing Jiajujiu, Zuyu Ding and Weijie Ma, dated April 1, 2012, unless Beijing Maiteng designates another person to replace the attorney.

Equity Pledge Agreement. Under the equity pledge agreement among Beijing Maiteng, Beijing Jiajujiu, Zuyu Ding and Weijie Ma, dated April 1, 2012, all of the equity interest in Beijing Jiajujiu was pledged to Beijing Maiteng to guarantee the performance of the obligations of Beijing Jiajujiu, Zuyu Ding and Weijie Ma under the exclusive call option agreement, the loan agreement and the shareholder voting right proxy agreement. If Zuyu Ding, Weijie Ma or Beijing Jiajujiu breach their respective contractual obligations, Beijing Maiteng, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. Pursuant to the equity pledge agreement, Zuyu Ding and Weijie Ma shall not transfer, sell, pledge, dispose of or otherwise create any new encumbrance on their respective equity interest in Beijing Jiajujiu without the prior written consent of Beijing Maiteng. The equity pledge right enjoyed by Beijing Maiteng will expire when Zuyu Ding, Weijie Ma and Beijing Jiajujiu have fully performed their respective obligations under the above agreements.

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Agreement that Transfers Economic Benefits of Beijing Jiajujiu to Us

Exclusive Technical Support Agreement. Pursuant to an exclusive technical support agreement between Beijing Maiteng and Beijing Jiajujiu dated April 1, 2012, Beijing Maiteng provides Beijing Jiajujiu with a series of technical support services and is entitled to receive related fees. Unless expressly provided by this agreement, without prior written consent of Beijing Maiteng, Beijing Jiajujiu may not engage any third party to provide the services offered by Beijing Maiteng under this agreement. Beijing Jiajujiu shall pay service fees to Beijing Maiteng for the technology services provided based on the number of working hours of Beijing Maiteng’s engineers who provide the technology services: for the technology service provided by a senior engineer, the service fee is at the rate of RMB4,000 (US$645) per hour per person; for the technology service provided by a mid-level engineer, the service fee is at the rate of RMB2,000 (US$322) per hour per person; for the technology service provided by a junior engineer, the service fee is at the rate of RMB1,000 (US$161) per hour per person. The fee for technical support is at the rate of RMB20,000 (US$3,223) per month; the fee for technical training is at the rate of RMB10,000 (US$1,612) per month; and the fee for technical consulting is at the rate of RMB20,000 (US$3,223) per month. The term of this exclusive technical support agreement will expire upon dissolution of Beijing Jiajujiu.

Contractual Agreements with Shanghai Kushuo

In December 2013, Zuyu Ding and Weijie Ma became the shareholders of Shanghai Kushuo, through initial contribution to its registered capital. Shanghai Kushuo is 50% owned by Zuyu Ding and 50% owned by Weijie Ma. Shanghai Yifang Software Co., Ltd., or Shanghai Yifang, has entered into agreements with Shanghai Kushuo and its shareholders, which provide Shanghai Yifang with the substantial ability to control Shanghai Kushuo and make it a primary beneficiary of Shanghai Kushuo. We operate our real estate offline advertising business, real estate financial services and community value-added services through these contractual arrangements with Shanghai Kushuo and its shareholders. Under PRC law, each of Shanghai Yifang and Shanghai Kushuo is an independent legal person and is not exposed to liabilities incurred by the other party. Other than pursuant to the contractual arrangements between Shanghai Yifang and Shanghai Kushuo, Shanghai Kushuo does not transfer any other funds generated from its operations to Shanghai Yifang.

Agreements that Provide Us with Effective Control over Shanghai Kushuo

Exclusive Call Option Agreement. Under the exclusive call option agreement among Shanghai Yifang, Shanghai Kushuo, Zuyu Ding and Weijie Ma, dated December 31, 2013, each of Zuyu Ding and Weijie Ma granted an irrevocable and unconditional option to Shanghai Yifang, that entitles Shanghai Yifang or its designated entity or individual to acquire all or part of the equity interests held by him in Shanghai Kushuo at its sole discretion, to the extent as permitted by PRC laws and regulations then in effect. The consideration for such acquisition of all equity interests in Shanghai Kushuo will be equal to the registered capital of Shanghai Kushuo, and if PRC law requires the consideration to be greater than the registered capital, the consideration will be the minimum amount as permitted by PRC law. In addition, Shanghai Kushuo irrevocably and unconditionally granted Shanghai Yifang an exclusive option to purchase, to the extent permitted under the PRC law, all or part of the assets of Shanghai Kushuo. The exercise price for purchasing the assets of Shanghai Kushuo will be equal to their respective book values, and if PRC law requires the price to be greater than the book value, the price will be the minimum amount as permitted by PRC law. The call option may be exercised by Shanghai Yifang or any third party designated by Shanghai Yifang. This agreement will terminate after all the equity interest in and the assets of Shanghai Kushuo are lawfully transferred to Shanghai Yifang and/or any other entity or individual designated by Shanghai Yifang.

Loan Agreement. Under the loan agreement among Shanghai Yifang, Zuyu Ding and Weijie Ma dated November 26, 2013, Shanghai Yifang granted an interest-free loan of RMB5 million (US$0.8 million) to Zuyu Ding and RMB5 million (US$0.8 million) to Weijie Ma, respectively, solely for their contribution of register capital of Shanghai Kushuo. The loan will be due upon the earlier of November 25, 2033 or the expiration of the term of business of either Shanghai Yifang or Shanghai Kushuo.

Shareholder Voting Right Proxy Agreement. Under the shareholder voting right proxy agreement among Shanghai Yifang, Shanghai Kushuo, Zuyu Ding and Weijie Ma, dated December 31, 2013, each of Zuyu Ding and Weijie Ma will irrevocably grant any person designated by Shanghai Yifang the power to exercise all voting rights which he will be entitled to as shareholder of Shanghai Kushuo at that time. The agreement will expire on November 25, 2033, 20 years from the date of execution. The term of the agreement can be automatically extended for one year upon expiration of the initial term or the extension thereof, if Shanghai Yifang gives a written notice requesting extension.

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Power of Attorney. Under each of the powers of attorneys signed by Zuyu Ding and Weijie Ma, respectively, on December 31, 2013, each of Zuyu Ding and Weijie Ma irrevocably granted Xin Zhou, a person designated by Shanghai Yifang, the power to exercise all voting rights which he is entitled to as a shareholder of Shanghai Kushuo. Each of the powers of attorneys will be valid until the expiration or the early termination of the shareholder voting right proxy agreement among Shanghai Yifang, Shanghai Kushuo, Zuyu Ding and Weijie Ma, dated December 31, 2013, unless Shanghai Yifang designates another person to replace the attorney.

Equity Pledge Agreement. Under the equity pledge agreement among Shanghai Yifang, Shanghai Kushuo, Zuyu Ding and Weijie Ma, dated December 31, 2013, all of the equity interest in Shanghai Kushuo was pledged to Shanghai Yifang to guarantee the performance of the obligations of Shanghai Kushuo, Zuyu Ding and Weijie Ma under the exclusive call option agreement, the loan agreement and the shareholder voting right proxy agreement. If Zuyu Ding, Weijie Ma or Shanghai Kushuo breach their respective contractual obligations, Shanghai Yifang, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. Pursuant to the equity pledge agreement, Zuyu Ding and Weijie Ma shall not transfer, sell, pledge, dispose of or otherwise create any new encumbrance on their respective equity interest in Shanghai Kushuo without the prior written consent of Shanghai Yifang. The equity pledge right enjoyed by Shanghai Yifang will expire when Zuyu Ding, Weijie Ma and Shanghai Kushuo have fully performed their respective obligations under the above agreements.

Agreement that Transfers Economic Benefits of Shanghai Kushuo to Us

Exclusive Technical Support Agreement. Pursuant to an exclusive technical support agreement between Shanghai Yifang and Shanghai Kushuo dated December 31, 2013, Shanghai Yifang provides Shanghai Kushuo with a series of technical support services and is entitled to receive related fees. Unless expressly provided by this agreement, without prior written consent of Shanghai Yifang, Shanghai Kushuo may not engage any third party to provide the services offered by Shanghai Yifang under this agreement. Shanghai Kushuo shall pay service fees to Shanghai Yifang for the technology services provided based on the number of working hours of Shanghai Yifang’s engineers who provide the technology services: for the technology service provided by a senior engineer, the service fee is at the rate of RMB4,000 (US$645) per hour per person; for the technology service provided by a mid-level engineer, the service fee is at the rate of RMB2,000 (US$322) per hour per person; for the technology service provided by a junior engineer, the service fee is at the rate of RMB1,000 (US$161) per hour per person. The fee for technical support is at the rate of RMB20,000 (US$3,223) per month; the fee for technical training is at the rate of RMB10,000 (US$1,612) per month; and the fee for technical consulting is at the rate of RMB20,000 (US$3,223) per month. The term of this exclusive technical support agreement will expire upon dissolution of Shanghai Kushuo.

Contractual Agreements with Shanghai E-Cheng

In May 2014, Zuyu Ding and Weijie Ma became the shareholders of Shanghai E-Cheng, through initial contribution to its registered capital. Shanghai E-Cheng is 50% owned by Zuyu Ding and 50% owned by Weijie Ma. Shanghai Baoyi has entered into agreements with Shanghai E-Cheng and its shareholders, which provide Shanghai Baoyi with the substantial ability to control Shanghai E-Cheng and make it a primary beneficiary of Shanghai E-Cheng. We operate financing and fund management business through these contractual arrangements with Shanghai E-Cheng and its shareholders. Under PRC law, each of Shanghai Baoyi and Shanghai E-Cheng is an independent legal person and is not exposed to liabilities incurred by the other party. Other than pursuant to the contractual arrangements between Shanghai Baoyi and Shanghai E-Cheng, Shanghai E-Cheng does not transfer any other funds generated from its operations to Shanghai Baoyi.

Agreements that Provide Us with Effective Control over Shanghai E-Cheng

Exclusive Call Option Agreement. Under the exclusive call option agreement among Shanghai Baoyi, Shanghai E-Cheng, Zuyu Ding and Weijie Ma, dated May 14, 2014, each of Zuyu Ding and Weijie Ma granted an irrevocable and unconditional option to Shanghai Baoyi, that entitles Shanghai Baoyi or its designated entity or individual to acquire all or part of the equity interests held by him in Shanghai E-Cheng at its sole discretion, to the extent as permitted by PRC laws and regulations then in effect. The consideration for such acquisition of all equity interests in Shanghai E-Cheng will be equal to the registered capital of Shanghai E-Cheng, and if PRC law requires the consideration to be greater than the registered capital, the consideration will be the minimum amount as permitted by PRC law. In addition, Shanghai E-Cheng irrevocably and unconditionally granted Shanghai Baoyi an exclusive option to purchase, to the extent permitted under the PRC law, all or part of the assets of Shanghai E-Cheng. The exercise price for purchasing the assets of Shanghai E-Cheng will be equal to their respective book values, and if PRC law requires the price to be greater than the book value, the price will be the minimum amount as permitted by PRC law. The call option may be exercised by Shanghai Baoyi or any third party designated by Shanghai Baoyi. This agreement will terminate after all the equity interest in and the assets of Shanghai E-Cheng are lawfully transferred to Shanghai Baoyi and/or any other entity or individual designated by Shanghai Baoyi.

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Loan Agreement. Under the loan agreement among Shanghai Baoyi, Zuyu Ding and Weijie Ma dated April 28, 2014, Shanghai Baoyi granted an interest-free loan of RMB0.5 million (US$0.1 million) to Zuyu Ding and RMB0.5 million (US$0.1 million) to Weijie Ma, respectively, solely for their contribution of register capital of Shanghai E-Cheng. The loan will be due upon the earlier of April 27, 2034 or the expiration of the term of business of either Shanghai Baoyi or Shanghai E-Cheng.

Shareholder Voting Right Proxy Agreement. Under the shareholder voting right proxy agreement among Shanghai Baoyi, Shanghai E-Cheng, Zuyu Ding and Weijie Ma, dated May 14, 2014, each of Zuyu Ding and Weijie Ma will irrevocably grant any person designated by Shanghai Baoyi the power to exercise all voting rights which he will be entitled to as shareholder of Shanghai E-Cheng at that time. The agreement will expire on May 13, 2034, 20 years from the date of execution. The term of the agreement can be automatically extended for one year upon expiration of the initial term or the extension thereof, if Shanghai Baoyi gives a written notice requesting extension at least thirty (30) days prior to the expiration.

Power of Attorney. Under each of the powers of attorneys signed by Zuyu Ding and Weijie Ma, respectively, on May 14, 2014, each of Zuyu Ding and Weijie Ma irrevocably granted Xin Zhou, a person designated by Shanghai Baoyi, the power to exercise all voting rights which he is entitled to as a shareholder of Shanghai E-Cheng. Each of the powers of attorneys will be valid until the expiration or the early termination of the shareholder voting right proxy agreement among Shanghai Baoyi, Shanghai E-Cheng, Zuyu Ding and Weijie Ma, dated May 14, 2014, unless Shanghai Baoyi designates another person to replace the attorney.

Equity Pledge Agreement. Under the equity pledge agreement among Shanghai Baoyi, Shanghai E-Cheng, Zuyu Ding and Weijie Ma, dated May 14, 2014, all of the equity interest in Shanghai E-Cheng was pledged to Shanghai Baoyi to guarantee the performance of the obligations of Shanghai E-Cheng, Zuyu Ding and Weijie Ma under the exclusive call option agreement, the loan agreement and the shareholder voting right proxy agreement. If Zuyu Ding, Weijie Ma or Shanghai E-Cheng breach their respective contractual obligations, Shanghai Baoyi, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. Pursuant to the equity pledge agreement, Zuyu Ding and Weijie Ma shall not transfer, sell, pledge, dispose of or otherwise create any new encumbrance on their respective equity interest in Shanghai E-Cheng without the prior written consent of Shanghai Baoyi. The equity pledge right enjoyed by Shanghai Baoyi will expire when Zuyu Ding, Weijie Ma and Shanghai E-Cheng have fully performed their respective obligations under the above agreements.

Agreement that Transfers Economic Benefits of Shanghai E-Cheng to Us

Exclusive Support Agreement. Pursuant to an exclusive support agreement between Shanghai Baoyi and Shanghai E-Cheng dated May 14, 2014, Shanghai Baoyi provides Shanghai E-Cheng with a series of consulting support services and is entitled to receive related fees. Unless expressly provided by this agreement, without prior written consent of Shanghai Baoyi, Shanghai E-Cheng may not engage any third party to provide the services offered by Shanghai Baoyi under this agreement. Shanghai E-Cheng shall pay service fees to Shanghai Baoyi for the consulting services provided based on the number of working hours of Shanghai Baoyi’s personnel who provide the consulting services, at the rate of RMB4,000 (US$645) per hour per person. The fee for consulting support is at the rate of RMB20,000 (US$3,223) per month, and the fee for training is at the rate of RMB50,000 (US$8,059) per month. The term of this exclusive support agreement will expire upon dissolution of Shanghai E-Cheng.

Contractual Agreements with Shanghai Fangjia

In October 2014, Zuyu Ding and Yan Zhang became the shareholders of Shanghai Fangjia, through initial contribution to its registered capital. Shanghai Fangjia is 50% owned by Zuyu Ding and 50% owned by Yan Zhang. Shanghai CRIC has entered into agreements with Shanghai Fangjia and its shareholders, which provide Shanghai CRIC with the substantial ability to control Shanghai Fangjia and make it a primary beneficiary of Shanghai Fangjia. We operate our real estate home price rating services through these contractual arrangements with Shanghai Fangjia and its shareholders. Under PRC law, each of Shanghai CRIC and Shanghai Fangjia is an independent legal person and is not exposed to liabilities incurred by the other party. Other than pursuant to the contractual arrangements between Shanghai CRIC and Shanghai Fangjia, Shanghai Fangjia does not transfer any other funds generated from its operations to Shanghai CRIC.

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Agreements that Provide Us with Effective Control over Shanghai Fangjia

Exclusive Call Option Agreement. Under the exclusive call option agreement among Shanghai CRIC, Shanghai Fangjia, Zuyu Ding and Yan Zhang, dated October 29, 2014, each of Zuyu Ding and Yan Zhang granted an irrevocable and unconditional option to Shanghai CRIC, that entitles Shanghai CRIC or its designated entity or individual to acquire all or part of the equity interests held by him in Shanghai Fangjia at its sole discretion, to the extent as permitted by PRC laws and regulations then in effect. The consideration for such acquisition of all equity interests in Shanghai Fangjia will be equal to the registered capital of Shanghai Fangjia, and if PRC law requires the consideration to be greater than the registered capital, the consideration will be the minimum amount as permitted by PRC law. In addition, Shanghai Fangjia irrevocably and unconditionally granted Shanghai CRIC an exclusive option to purchase, to the extent permitted under the PRC law, all or part of the assets of Shanghai Fangjia. The exercise price for purchasing the assets of Shanghai Fangjia will be equal to their respective book values, and if PRC law requires the price to be greater than the book value, the price will be the minimum amount as permitted by PRC law. The call option may be exercised by Shanghai CRIC or any third party designated by Shanghai CRIC. This agreement will terminate after all the equity interest in and the assets of Shanghai Fangjia are lawfully transferred to Shanghai CRIC and/or any other entity or individual designated by Shanghai CRIC.

Loan Agreement. Under the loan agreement among Shanghai CRIC, Zuyu Ding and Yan Zhang dated September 16, 2014, Shanghai CRIC granted an interest-free loan of RMB2.5 million (US$0.4 million) to Zuyu Ding and RMB2.5 million (US$0.4 million) to Yan Zhang, respectively, solely for their contribution of register capital of Shanghai Fangjia. The loan will be due upon the earlier of September 15, 2034 or the expiration of the term of business of either Shanghai CRIC or Shanghai Fangjia.

Shareholder Voting Right Proxy Agreement. Under the shareholder voting right proxy agreement among Shanghai CRIC, Shanghai Fangjia, Zuyu Ding and Yan Zhang, dated October 29, 2014, each of Zuyu Ding and Yan Zhang will irrevocably grant any person designated by Shanghai CRIC the power to exercise all voting rights which he will be entitled to as shareholder of Shanghai Fangjia at that time. The agreement will expire on October 28, 2034, 20 years from the date of execution. The term of the agreement can be automatically extended for one year upon expiration of the initial term or the extension thereof, if Shanghai CRIC gives a written notice requesting extension at least thirty (30) days prior to the expiration.

Power of Attorney. Under each of the powers of attorneys signed by Zuyu Ding and Yan Zhang, respectively, on October 29, 2014, each of Zuyu Ding and Yan Zhang irrevocably granted Xin Zhou, a person designated by Shanghai CRIC, the power to exercise all voting rights which he is entitled to as a shareholder of Shanghai Fangjia. Each of the powers of attorneys will be valid until the expiration or the early termination of the shareholder voting right proxy agreement among Shanghai CRIC, Shanghai Fangjia, Zuyu Ding and Yan Zhang, dated October 29, 2014, unless Shanghai CRIC designates another person to replace the attorney.

Equity Pledge Agreement. Under the equity pledge agreement among Shanghai CRIC, Shanghai Fangjia, Zuyu Ding and Yan Zhang, dated October 29, 2014, all of the equity interest in Shanghai Fangjia was pledged to Shanghai CRIC to guarantee the performance of the obligations of Shanghai Fangjia, Zuyu Ding and Yan Zhang under the exclusive call option agreement, the loan agreement and the shareholder voting right proxy agreement. If Zuyu Ding, Yan Zhang or Shanghai Fangjia breach their respective contractual obligations, Shanghai CRIC, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. Pursuant to the equity pledge agreement, Zuyu Ding and Yan Zhang shall not transfer, sell, pledge, dispose of or otherwise create any new encumbrance on their respective equity interest in Shanghai Fangjia without the prior written consent of Shanghai CRIC. The equity pledge right enjoyed by Shanghai CRIC will expire when Zuyu Ding, Yan Zhang and Shanghai Fangjia have fully performed their respective obligations under the above agreements.

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Agreement that Transfers Economic Benefits of Shanghai Fangjia to Us

Exclusive Technical Support Agreement. Pursuant to an exclusive technical support agreement between Shanghai CRIC and Shanghai Fangjia dated October 29, 2014, Shanghai CRIC provides Shanghai Fangjia with a series of technical support services and is entitled to receive related fees. Unless expressly provided by this agreement, without prior written consent of Shanghai CRIC, Shanghai Fangjia may not engage any third party to provide the services offered by Shanghai CRIC under this agreement. Shanghai Fangjia shall pay service fees to Shanghai CRIC for the technology services provided based on the number of working hours of Shanghai CRIC’s engineers who provide the technology services: for the technology service provided by a senior engineer, the service fee is at the rate of RMB4,000 (US$645) per hour per person; for the technology service provided by a mid-level engineer, the service fee is at the rate of RMB2,000 (US$322) per hour per person; for the technology service provided by a junior engineer, the service fee is at the rate of RMB1,000 (US$161) per hour per person. The fee for technical support is at the rate of RMB20,000 (US$3,223) per month; the fee for technical training is at the rate of RMB10,000 (US$1,612) per month; and the fee for technical consulting is at the rate of RMB20,000 (US$3,223) per month. The term of this exclusive technical support agreement will expire upon dissolution of Shanghai Fangjia.

Contractual Agreements with Shanghai Weihui

In October 2014, Xudong Zhu and Xi Yang became the shareholders of Shanghai Weihui by acquiring equity interest in Shanghai Weihui from Shanghai Weimi Commercial Information Consulting Co., a subsidiary of Shanghai Kushuo. Shanghai Weihui is 80% owned by Xudong Zhu and 20% owned by Xi Yang. Shanghai Weidian has entered into agreements with Shanghai Weihui and its shareholders, which provide Shanghai Weidian with the substantial ability to control Shanghai Weihui and make it a primary beneficiary of Shanghai Weihui. We plan to operate our community value-added service, which is currently operated through Shanghai Kushuo, through these contractual arrangements with Shanghai Weihui and its shareholders. Under PRC law, each of Shanghai Weidian and Shanghai Weihui is an independent legal person and is not exposed to liabilities incurred by the other party. Other than pursuant to the contractual arrangements between Shanghai Weidian and Shanghai Weihui, Shanghai Weihui does not transfer any other funds generated from its operations to Shanghai Weidian.

Agreements that Provide Us with Effective Control over Shanghai Weihui

Exclusive Call Option Agreement. Under the exclusive call option agreement among Shanghai Weidian, Shanghai Weihui, Xudong Zhu and Xi Yang, dated October 23, 2014, each of Xudong Zhu and Xi Yang granted an irrevocable and unconditional option to Shanghai Weidian, that entitles Shanghai Weidian or its designated entity or individual to acquire all or part of the equity interests held by him in Shanghai Weihui at its sole discretion, to the extent as permitted by PRC laws and regulations then in effect. The consideration for such acquisition of all equity interests in Shanghai Weihui will be equal to the registered capital of Shanghai Weihui, and if PRC law requires the consideration to be greater than the registered capital, the consideration will be the minimum amount as permitted by PRC law. In addition, Shanghai Weihui irrevocably and unconditionally granted Shanghai Weidian an exclusive option to purchase, to the extent permitted under the PRC law, all or part of the assets of Shanghai Weihui. The exercise price for purchasing the assets of Shanghai Weihui will be equal to their respective book values, and if PRC law requires the price to be greater than the book value, the price will be the minimum amount as permitted by PRC law. The call option may be exercised by Shanghai Weidian or any third party designated by Shanghai Weidian. This agreement will terminate after all the equity interest in and the assets of Shanghai Weihui are lawfully transferred to Shanghai Weidian and/or any other entity or individual designated by Shanghai Weidian.

Loan Agreement. Under the loan agreement among Shanghai Weidian, Xudong Zhu and Xi Yang dated October 8, 2014, Shanghai Weidian granted an interest-free loan of RMB1.6 million (US$0.3 million) to Xudong Zhu and RMB0.4 million (US$64,468) to Xi Yang, respectively, solely for their acquisition of equity interest in Shanghai Weihui. The loan will be due upon the earlier of October 7, 2034 or the expiration of the term of business of either Shanghai Weidian or Shanghai Weihui.

Shareholder Voting Right Proxy Agreement. Under the shareholder voting right proxy agreement among Shanghai Weidian, Shanghai Weihui, Xudong Zhu and Xi Yang, dated October 23, 2014, each of Xudong Zhu and Xi Yang will irrevocably grant any person designated by Shanghai Weidian the power to exercise all voting rights which he will be entitled to as shareholder of Shanghai Weihui at that time. The agreement will expire on October 22, 2034, 20 years from the date of execution. The term of the agreement can be automatically extended for one year upon expiration of the initial term or the extension thereof, if Shanghai Yifang gives a written notice requesting extension at least thirty (30) days prior to the expiration.

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Power of Attorney. Under each of the powers of attorneys signed by Xudong Zhu and Xi Yang, respectively, on October 23, 2014, each of Xudong Zhu and Xi Yang irrevocably granted Xin Zhou, a person designated by Shanghai Weidian, the power to exercise all voting rights which he is entitled to as a shareholder of Shanghai Weihui. Each of the powers of attorneys will be valid until the expiration or the early termination of the shareholder voting right proxy agreement among Shanghai Weidian, Shanghai Weihui, Xudong Zhu and Xi Yang, dated October 23, 2014, unless Shanghai Weidian designates another person to replace the attorney.

Equity Pledge Agreement. Under the equity pledge agreement among Shanghai Weidian, Shanghai Weihui, Xudong Zhu and Xi Yang, dated October 23, 2014, all of the equity interest in Shanghai Weihui was pledged to Shanghai Weidian to guarantee the performance of the obligations of Shanghai Weihui, Xudong Zhu and Xi Yang under the exclusive call option agreement, the loan agreement, the shareholder voting right proxy agreement and the exclusive technical support agreement. If Xudong Zhu, Xi Yang or Shanghai Weihui breach their respective contractual obligations, Shanghai Weidian, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. Pursuant to the equity pledge agreement, Xudong Zhu and Xi Yang shall not transfer, sell, pledge, dispose of or otherwise create any new encumbrance on their respective equity interest in Shanghai Weihui without the prior written consent of Shanghai Weidian. The equity pledge right enjoyed by Shanghai Weidian will expire when Xudong Zhu, Xi Yang and Shanghai Weihui have fully performed their respective obligations under the aforementioned agreements.

Agreement that Transfers Economic Benefits of Shanghai Weihui to Us

Exclusive Technical Support Agreement. Pursuant to an exclusive technical support agreement between Shanghai Weidian and Shanghai Weihui dated October 23, 2014, Shanghai Weidian provides Shanghai Weihui with a series of technical support services and is entitled to receive related fees. Unless expressly provided by this agreement, without prior written consent of Shanghai Weidian, Shanghai Weihui may not engage any third party to provide the services offered by Shanghai Weidian under this agreement. Shanghai Weihui shall pay service fees to Shanghai Weidian for the technology services provided based on the number of working hours of Shanghai Weidian’s engineers who provide the technology services: for the technology service provided by a senior engineer, the service fee is at the rate of RMB4,000 (US$645) per hour per person; for the technology service provided by a mid-level engineer, the service fee is at the rate of RMB2,000 (US$322) per hour per person; for the technology service provided by a junior engineer, the service fee is at the rate of RMB1,000 (US$161) per hour per person. The fee for technical support is at the rate of RMB20,000 (US$3,223) per month; the fee for technical training is at the rate of RMB10,000 (US$1,612) per month; and the fee for technical consulting is at the rate of RMB20,000 (US$3,223) per month. The term of this exclusive technical support agreement will expire upon dissolution of Shanghai Weihui.

Share Options and Restricted Shares

See “Item 6. Directors, Senior Management and Employees—B. Compensation of Directors and Executive Officers—E-House Share Incentive Plan” and “—CRIC Share Incentive Plan.”

C.Interests of Experts and Counsel

Not applicable.

ITEM 8.FINANCIAL INFORMATION

A.Consolidated Statements and Other Financial Information

We have appended consolidated financial statements filed as part of this annual report.

Legal Proceedings

We are subject to legal proceedings, investigations and claims incidental to the conduct of our business from time to time. We are not currently a party to, nor are we aware of, any legal proceeding, investigation or claim which, in the opinion of our management, is likely to have a material and adverse effect on our business, financial condition or results of operations.

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Dividend Policy

We paid a cash dividend of $0.15 per ordinary share, or $0.15 per ADS on April 23, 2012, a cash dividend of $0.15 per ordinary share, or $0.15 per ADS on May 30, 2013, a cash dividend of $0.20 per ordinary share, or $0.20 per ADS on May 30, 2014, and a cash dividend of $0.20 per ordinary shares, or $0.20 per ADS, on January 15, 2015. We were approved by our board of directors in December 2014 and completed on January 15, 2015 a partial spin-off of Leju by distributing in the form of a dividend of 0.05 ordinary shares, par value $0.001, of Leju, for each of E-House’s ordinary shares outstanding as of December 3, 2014, or 0.05 ADSs of Leju, for each of E-House’s ADSs outstanding as of December 3, 2014. We distributed a total of 7,103,280 ordinary shares of Leju to holders of our ordinary shares in this manner, which include a total of 3,877,658 ordinary shares of Leju in the form of 3,877,658 ADSs of Leju to our ADS holders through our depositary bank. Following the completion of the partial spin-off, we owned 93,694,920 ordinary shares of Leju, representing approximately 70% of Leju’s total outstanding ordinary shares. We have also been authorized and intend to pay a cash dividend of $0.15 per ordinary share, or $0.15 per ADS on or about May 15, 2015 to shareholders of record as of the close of business on April 10, 2015. We will determine future dividend payments based on our future results of operations, cash flow and capital requirements.

We rely principally on dividends from our PRC subsidiaries for our cash requirements, to the extent existing cash in our offshore entities is fully utilized, including any debt we may incur. Current PRC regulations permit our subsidiaries to pay dividends to us only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our PRC subsidiaries is required to set aside a certain amount of its after-tax profits each year, if any, to fund certain statutory reserves. These reserves are not distributable as cash dividends. Furthermore, if our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us. In addition, the PRC tax authorities may require us to adjust our taxable income under the contractual arrangements we currently have in place in a manner that would materially and adversely affect our subsidiaries’ ability to pay dividends and other distributions to us.

Our board of directors has complete discretion as to whether to distribute dividends, subject to our memorandum and articles of association and certain restrictions under Cayman Islands law. Our shareholders may by ordinary resolutions declare a dividend, but no dividend may exceed the amount recommended by our board of directors. Our board of directors intends on paying dividends only to the extent cash is available in the offshore entities. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant. If we pay any dividends, we will pay our ADS holders to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including the fees and expenses payable thereunder. See “Description of American Depositary Shares” in our registration statement on Form F-1 (File No. 333-148729), as amended, initially filed with the Commission on January 17, 2008. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.

B.Significant Changes

Except as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our audited consolidated financial statements included in this annual report.

ITEM 9.THE OFFER AND LISTING

A.Offering and Listing Details

Our ADSs have been listed on the NYSE since August 8, 2007 under the symbol “EJ”. Each ADS represents one of our ordinary shares.

In 2014, the trading price of our ADSs on the NYSE ranged from $6.88 to $16.09 per ADS.

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The following table sets forth, for the periods indicated, the high and low trading prices on the NYSE for our ADSs.

	Sales Price ($)
	High	Low
2010	21.09	13.01
2011	16.25	4.02
2012	7.61	2.95
2013	15.08	3.94
First quarter	5.42	5.42
Second quarter	5.15	3.94
Third quarter	10.24	4.33
Fourth quarter	15.08	8.35
2014
First quarter	16.09	10.31
Second quarter	12.37	6.88
Third quarter	11.62	8.04
Fourth quarter	9.87	7.10
October	9.55	7.73
November	9.87	7.31
December	9.19	7.10
2015
January	8.48	6.54
February	7.88	6.64
March	7.13	4.93
April (through April 20, 2015)	6.57	5.44

B.Plan of Distribution

Not applicable.

C.Markets

Our ADSs, each representing one of our ordinary shares, have been traded on the NYSE since August 8, 2007. Our ADSs trade under the symbol “EJ.”

D.Selling Shareholders

Not applicable.

E.Dilution

Not applicable.

F.Expenses of the Issue

Not applicable.

ITEM 10.      ADDITIONAL INFORMATION

A.Share Capital

Not applicable.

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B.Memorandum and Articles of Association

We incorporate by reference into this annual report our amended and restated memorandum and articles of association filed as Exhibit 3.2 to our F-1 registration statement (File No. 333-148729), as amended, initially filed with the SEC on January 17, 2008.

C.Material Contracts

We have not entered into any material contracts other than in the ordinary course of business and other than those described in “Item 4. Information on the Company” or elsewhere in this annual report on Form 20-F.

D.Exchange Controls

See “Item 4. Information on the Company—B. Business Overview—Regulation—Regulations on Foreign Exchange Registration of Offshore Investments by PRC Residents.”

E.Taxation

Cayman Islands Taxation

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in or brought within the jurisdiction of the Cayman Islands, or produced before a court of the Cayman Islands. The Cayman Islands is not party to any double tax treaties that are applicable to any payments made to or by our company. There are no exchange control regulations or currency restrictions in the Cayman Islands.

People’s Republic of China Taxation

Under the Enterprise Income Tax Law, enterprises established outside of China but whose “de facto management body” is located in China are considered “resident enterprises” for PRC tax purposes. Under the applicable implementation regulations, “de facto management body” is defined as the organizational body that effectively exercises overall management and control over production and business operations, personnel, finance and accounting, and properties of the enterprise. If we are treated as a “resident enterprise” for PRC tax purposes, foreign entity holders of our ADSs or ordinary shares which are non-resident enterprises under the Enterprise Income Tax Law may be subject to a 10% PRC withholding tax upon dividends payable by us and on gains realized on their sales or other dispositions of our ADSs or ordinary shares, unless such holders’ jurisdiction of incorporation has a tax treaty with China that provides for a reduced rate of withholding, or the tax is otherwise exempted or reduced pursuant to the PRC tax laws. See “Item 3. Key Information—D. Risk Factors— Dividends payable to us by our PRC subsidiaries may be subject to PRC withholding taxes, or we may be subject to PRC taxation on our worldwide income and dividends distributed to our investors may be subject to PRC withholding taxes under the PRC Enterprise Income Tax Law.”

U.S. Federal Income Taxation

The following discussion is a summary of U.S. federal income tax considerations relating to the ownership and disposition of our ADSs or ordinary shares by a U.S. Holder (as defined below) that holds our ADSs or ordinary shares as “capital assets” (generally, property held for investment) under the U.S. Internal Revenue Code of 1986, as amended, or the Code. This discussion is based upon existing U.S. federal income tax law, which is subject to differing interpretations or change, possibly with retroactive effect. No ruling has been sought from the Internal Revenue Service, or the IRS, with respect to any U.S. federal income tax consequences described below, and there can be no assurance that the IRS or a court will not take a contrary position. This discussion does not describe all aspects of United States federal income taxation that may be important to particular investors in light of their individual investment circumstances, including investors subject to special tax rules that differ significantly from those summarized below (for example, financial institutions, insurance companies, broker-dealers, traders in securities that have elected the mark-to-market method of accounting for their securities, partnerships and their partners, regulated investment companies, real estate investment trusts, and tax-exempt organizations (including private foundations), holders who are not U.S. Holders, holders who own (directly, indirectly, or constructively) 10% or more of our voting stock, or investors that hold their ADSs or ordinary shares as part of a straddle, hedge, conversion, constructive sale, or other integrated transaction for U.S. federal income tax purposes, or investors that have a functional currency other than the U.S. dollar. In addition, except to the extent expressly provided below, this discussion does not address U.S. federal estate, gift, Medicare, and alternative minimum tax considerations, or any non-U.S., state, and local tax considerations.

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U.S. HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS ABOUT THE APPLICATION OF THE U.S. FEDERAL INCOME TAX RULES TO THEIR PARTICULAR CIRCUMSTANCES AS WELL AS THE STATE LOCAL, NON-U.S. AND OTHER TAX CONSEQUENCES TO THEM OF THE OWNERSHIP AND DISPOSITION OF ADSs OR ORDINARY SHARES.

For purposes of this summary, a “U.S. Holder” is a beneficial owner of ADSs or ordinary shares that is, for U.S. federal income tax purposes, (1) an individual who is a citizen or resident of the United States, (2) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created in, or organized under the law of, the United States or any State thereof or the District of Columbia, (3) an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source, or (4) a trust (A) the administration of which is subject to the primary supervision of a U.S. court and which has or more U.S. persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise elected to be treated as a U.S. person under the Code.

If a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of ADSs or ordinary shares, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. Partnerships holding ADSs or ordinary shares and partners in such partnerships are urged to consult their tax advisors regarding the tax consequences of an investment in the ADSs or ordinary shares.

For U.S. federal income tax purposes, it is generally expected that a U.S. Holder holds ADSs will generally be treated as the beneficial owner of the underlying ordinary shares represented by those ADSs. The remainder of this discussion assumes that a U.S. Holder of our ADSs will be treated in this manner. Accordingly, deposits or withdrawals of ordinary shares for ADSs will generally not be subject to U.S. federal income tax.

Passive Foreign Investment Company Considerations

A non-U.S. corporation, such as our company, will be classified as a “passive foreign investment company,” or a PFIC, for U.S. federal income tax purposes, for any taxable year if either (i) 75% or more of its gross income for such year consists of certain types of “passive” income or (ii) 50% or more of the value of its assets (as determined on the basis of a quarterly average) during such year produce or are held for the production of passive income (the “asset test”). For this purpose, cash and assets readily convertible into cash are categorized as passive assets, and the company’s goodwill and other unbooked intangibles are taken into account for determining the value of its assets. Passive income generally includes, among other things, dividends, interest, certain types of rents and royalties, and net gain from the sale or exchange of property producing such income. A non-U.S. corporation will be treated as owning its proportionate share of the assets and earning its proportionate share of the income of any other corporation in which it owns, directly or indirectly, more than 25% (by value) of the stock.

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Although the law in this regard is unclear, we treat our consolidated VIEs as being owned by us for U.S. federal income tax purposes, not only because we exercise effective control over the operation of such entities but also because we are entitled to substantially all of their economic benefits, and, as a result, we consolidate their results of operations in our consolidated financial statements.

If it were determined that we are not the owner of our consolidated VIEs for U.S. federal income tax purposes, our risk of being classified as a PFIC may substantially increase. Assuming that we are the owner of our consolidated VIEs for U.S. federal income tax purposes, and based upon our current income and assets and projections as to the value of our ADSs and ordinary shares, we do not presently expect to be classified as a PFIC for the current taxable year or the foreseeable future.

While we do not expect to be a PFIC in the current or future taxable years, no assurance can be given in this regard because the determination of whether we will be or become a PFIC is a factual determination made annually that will depend, in part, upon the composition of our income and assets. Fluctuations in the market price of our ADSs and ordinary shares may cause us to become a PFIC for the current taxable year or future taxable years because the value of our assets for purposes of the asset test, including the value of our goodwill and other unbooked intangibles, may be determined by reference to the market price of our ADSs from time to time (which may be volatile). In estimating the value of our goodwill and other unbooked intangibles, we have taken into account our market capitalization. Among other matters, if market capitalization is less than anticipated or subsequently declines, we may be classified as a PFIC for the current or future taxable years.

Furthermore, the determination of whether we will be or become a PFIC will also be affected by how, and how quickly, we use our liquid assets. Under circumstances where our revenue from activities that produce passive income significantly increase relative to our revenue from activities that produce non-passive income, or where we determine not to deploy significant amounts of cash for active purposes, our risk of being classified as a PFIC may substantially increase. In addition, because there are uncertainties in the application of the relevant rules, it is also possible that the Internal Revenue Service may challenge our classification or valuation of our goodwill and other unbooked intangibles, which may result in our company being or, becoming classified as, a PFIC for the current or future taxable years. There can be no assurance our business plans will not change in a manner that will affect our PFIC status. If we were classified as a PFIC for any year during which a U.S. Holder held our ADSs or ordinary shares, we generally would continue to be treated as a PFIC for all succeeding years during which such U.S. Holder held our ADSs or ordinary shares.

The discussion below under “Dividends” and “Sale or Other Disposition of ADSs or Ordinary Shares” is written on the basis that we will not be classified as a PFIC for U.S. federal income tax purposes. The U.S. federal income tax rules that apply if we are classified as a PFIC for the current taxable year or any subsequent taxable year are generally discussed below under “Passive Foreign Investment Company Rules.” Each U.S. Holder is urged to consult with its tax advisor regarding the U.S. federal income tax consequences of an investment in our ADSs or ordinary shares if we are or become classified as a PFIC, including the possibility of making a “mark-to-market” election.

Dividends

Subject to the PFIC rules discussed below in “—Passive Foreign Investment Company Rules,” any cash distributions (including the amount of any taxes withheld) paid on ADSs or ordinary shares out of current or accumulated earnings and profits, as determined under U.S. federal income tax principles, will be includable in the gross income of a U.S. Holder as dividend income on the day actually or constructively received by the U.S. Holder, in the case of ordinary shares, or by the depositary, in the case of ADSs. Because we do not intend to calculate our earnings and profits under U.S. federal income tax principles, any distribution paid will generally be reported as a “dividend” for U.S. federal income tax purposes. A non-corporate recipient of dividend income will generally be subject to tax on dividend income from a “qualified foreign corporation” at a reduced U.S. federal tax rate rather than the marginal tax rates generally applicable to ordinary income provided that certain holding period and other requirements are met.

A non-U.S. corporation (other than a corporation that is classified as a PFIC for the taxable year in which the dividend is paid or the preceding taxable year) will generally be considered to be a qualified foreign corporation (a) if it is eligible for the benefits of a comprehensive tax treaty with the United States which the Secretary of Treasury of the United States determines is satisfactory for purposes of this provision and which includes an exchange of information program, or (b) with respect to any dividend it pays on stock (or ADSs in respect of such stock) which is readily tradable on an established securities market in the United States. Our ADSs are listed on the NYSE, which is an established securities market in the United States, and will be considered readily tradable on the NYSE for as long as the ADSs continue to be listed on such exchange. Thus, we believe that dividends we pay on our ADSs will meet the conditions required for the reduced tax rate, but there can be no assurance that our ADSs will continue to be considered readily tradable on an established securities market in later years. Since we do not expect that our ordinary shares will be listed on established securities markets, it is unclear whether dividends that we pay on our ordinary shares that are not backed by ADSs currently meet the conditions required for the reduced tax rate.

However, in the event that we are deemed to be a PRC “resident enterprise” and are liable to pay tax under the PRC Enterprise Income Tax Law (see “People’s Republic of China Taxation”), we may be eligible for the benefits of the U.S.-PRC income tax treaty (which the Secretary of Treasury of the United States has determined is satisfactory for this purpose) and be treated as a qualified foreign corporation with respect to dividends paid on our ADSs or ordinary shares. Dividends received on the ADSs or ordinary shares will not be eligible for the dividends-received deduction allowed to corporations. Each U.S. Holder is advised to consult its tax advisors regarding the availability of the reduced tax rate applicable to qualified dividend income for any dividends we pay with respect to our ADSs or ordinary shares.

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Dividends will generally be treated as income from foreign sources for U.S. foreign tax credit purposes and will generally constitute passive category income. In the event that we are deemed to be a PRC resident enterprise under the PRC Enterprise Income Tax Law, a U.S. Holder may be subject to PRC withholding taxes on dividends paid on our ADSs or ordinary shares. A U.S. Holder may be eligible, subject to a number of complex limitations, to claim a foreign tax credit in respect of any foreign withholding taxes imposed on dividends received on ADSs or ordinary shares. A U.S. Holder who does not elect to claim a foreign tax credit for foreign tax withheld may instead claim a deduction, for U.S. federal income tax purposes, in respect of such withholdings, but only for a year in which such U.S. Holder elects to do so for all creditable foreign income taxes. The rules governing the foreign tax credit are complex. Each U.S. Holder is advised to consult its tax advisors regarding the availability of the foreign tax credit under their particular circumstances.

Sale or Other Disposition of ADSs or Ordinary Shares

Subject to the PFIC rules discussed above under “—Passive Foreign Investment Company Rules,” a U.S. Holder generally will recognize capital gain or loss upon the sale or other disposition of ADSs or ordinary shares in an amount equal to the difference between the amount realized upon the disposition and the U.S. Holder’s adjusted tax basis in such ADSs or ordinary shares. Any capital gain or loss will be long-term capital gain or loss if the ADSs or ordinary shares have been held for more than one year and generally will be U.S.-source gain or loss for U.S. foreign tax credit purposes. The deductibility of a capital loss may be subject to limitations. In the event that we are treated as a PRC resident enterprise under the PRC Enterprise Income Tax Law and gain from the disposition of the ADSs or ordinary shares is subject to tax in the PRC, such gain may be treated as PRC-source gain for foreign tax credit purposes under the U.S.-PRC income tax treaty. Each U.S. Holder is advised to consult its tax advisor regarding the tax consequences if a foreign tax is imposed on a disposition of the ADSs or ordinary shares, including the availability of the foreign tax credit under their particular circumstances.

Passive Foreign Investment Company Rules

If we are classified as a PFIC for any taxable year during which a U.S. Holder holds our ADSs or ordinary shares, and unless the U.S. Holder makes a mark-to-market election (as described below) with respect to the ADSs, the U.S. Holder will generally be subject to special tax rules that have a penalizing effect, regardless of whether we remain a PFIC, on (i) any excess distribution that we make to the U.S. Holder (which generally means any distribution paid during a taxable year to a U.S. Holder that is greater than 125% of the average annual distributions paid in the three preceding taxable years or, if shorter, the U.S. Holder’s holding period for the ADSs or ordinary shares) and (ii) any gain realized on the sale or other disposition, including a pledge, of ADSs or ordinary shares.

Under the PFIC rules:

·the excess distribution or gain will be allocated ratably over the U.S. Holder’s holding period for the ADSs or ordinary shares;

·the 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 were a PFIC (each, a “pre-PFIC year”), will be taxable as ordinary income;

·the 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 applicable to the U.S. Holder for that year; and

·an additional tax equal to the 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.

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If we are a PFIC for any taxable year during which a U.S. Holder holds ADSs or ordinary shares and any of our non-U.S. subsidiaries is also a PFIC, such U.S. Holder would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC for purposes of the application of these rules. Each U.S. Holder is advised to consult its tax advisors regarding the application of the PFIC rules to any of our subsidiaries.

As an alternative to the foregoing rules, a U.S. Holder of “marketable stock” in a PFIC may make a mark-to-market election with respect to our ADSs, provided that the ADSs are regularly traded on the NYSE. We anticipate that the ADSs should qualify as being regularly traded on the NYSE, but no assurances may be given in this regard. If a mark-to-market election is made, the U.S. Holder will generally (i) include as ordinary income for each taxable year that we are a PFIC the excess, if any, of the fair market value of ADSs held at the end of the taxable year over the adjusted tax basis of such ADSs and (ii) deduct as an ordinary loss the excess, if any, of the adjusted tax basis of the ADSs over the fair market value of such ADSs held at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. The U.S. Holder’s adjusted tax basis in the ADSs would be adjusted to reflect any income or loss resulting from the mark-to market election. If a U.S. Holder makes an effective mark-to-market election, in each year that we are a PFIC, any gain recognized upon the sale or other disposition of the ADSs will be treated as ordinary income and loss will be treated as ordinary loss, but only to the extent of the net amount previously included in income as a result of the mark-to-market election.

If a U.S. Holder makes a mark-to-market election in respect of our ADSs and we cease to be a PFIC, the U.S. Holder will not be required to take into account the mark-to-market gain or loss described above during any period that we are not a PFIC.

Because a mark-to-market election cannot be made for any lower-tier PFICs that we may own, a U.S. Holder may continue to be subject to the PFIC rules with respect to such U.S. Holder’s indirect interest in any of our non-U.S. subsidiaries that is classified as a PFIC.

We do not intend to provide information necessary for U.S. Holders to make qualified electing fund elections, which, if available, would result in tax treatment different from the general tax treatment for PFICs described above.

Dividends that we pay on our ADSs or ordinary shares will not be eligible for the reduced tax rate that applies to qualified dividend income discussed above under “Dividends” if we are classified as a PFIC for the taxable year in which the dividend is paid or the preceding taxable year. If a U.S. Holder holds ADSs or ordinary shares in any year in which a non-U.S. corporation is treated as a PFIC with respect to such U.S. Holder, the U.S. Holder will generally be required to file IRS Form 8621 and such other forms as may be required by the U.S. Treasury Department. Each U.S. Holder is urged to consult its tax advisor regarding the application of the PFIC rules if E-House is or becomes a PFIC, including the possibility of making a mark-to-market election.

Information Reporting

U.S. Holders may be subject to information reporting to the IRS with respect to dividends on and proceeds from the sale or other disposition of our ADSs or common shares. U.S. Holders are advised to consult their tax advisors regarding the application of the U.S. information reporting rules to their particular circumstances.

Certain U.S. Holders are required to report information to the IRS relating to an interest in “specified foreign financial assets.” including stock of a non-U.S. corporation that is not held in an account maintained by a U.S. “financial institution,” for any year in which the aggregate value of all specified foreign financial assets exceeds $50,000 (or a higher dollar amount prescribed by the IRS), subject to certain exceptions (including an exception for shares held in custodial accounts maintained with a U.S. financial institution). A U.S. Holder who fails to timely furnish the required information may be subject to a penalty. Each U.S. Holder is advised to consult its tax advisor regarding its reporting obligations under this legislation.

F.Dividends and Paying Agents

Not applicable.

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G.Statement by Experts

Not applicable.

H.Documents on Display

We are subject to the periodic reporting and other informational requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Under the Exchange Act, we are required to file reports and other information with the SEC. Specifically, we are required to file annually a Form 20-F no later than four months after the close of each fiscal year, which is December 31. Copies of reports and other information, when so filed, may be inspected without charge and may be obtained at prescribed rates at the public reference facilities maintained by the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. The public may obtain information regarding the Washington, D.C. Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site at www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make electronic filings with the SEC using its EDGAR system.

Our website is www.ehousechina.com. We make our annual reports on Form 20-F and any amendments to such reports available free of charge on our website as soon as reasonably practicable following the electronic filing of each report with the SEC. In addition, we provide electronic or paper copies of our filings free of charge upon request. The information contained on our website is not part of this or any other report filed with or furnished to the SEC.

As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of quarterly reports and proxy statements, and officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.

Our financial statements have been prepared in accordance with U.S. GAAP.

We will furnish our shareholders with annual reports, which will include a review of operations and annual audited consolidated financial statements prepared in conformity with U.S. GAAP.

I.Subsidiary Information

For a listing of our subsidiaries, see “Item 4. Information on the Company—C. Organizational Structure.”

ITEM 11.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Our exposure to interest rate risk primarily relates to the interest rates for our outstanding debt and the interest income generated by excess cash invested in liquid investments with original maturities of three months or less. As of December 31, 2014, we had borrowings of $36.0 million, all of which was subject to interest at a fixed rate. We have not used any derivative financial instruments to manage our interest risk exposure. Interest-earning instruments carry a degree of interest rate risk. We have not been exposed to material risks due to changes in interest rates. However, our future interest income may be lower than expected due to changes in market interest rates.

Foreign Exchange Risk

Our financial statements are expressed in U.S. dollars, which is our reporting and functional currency. However, substantially all of our revenues and most of our expenses are denominated in RMB. Our exposure to foreign exchange risk primarily relates to cash and cash equivalents denominated in U.S. dollars as a result of our financing activities. Although in general our exposure to foreign exchange risks should be limited, the value of your investment in our ADSs will be affected by the foreign exchange rate between U.S. dollars and RMB because the value of our business is effectively denominated in RMB, while the ADSs will be traded in U.S. dollars. We have not hedged exposures denominated in foreign currencies or any other derivative financial instruments.

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The value of the RMB against the U.S. dollar and other currencies is affected by changes in China’s political and economic conditions and by China’s foreign exchange policies, among other things. In July 2005, the PRC government changed its decades-old policy of pegging the value of the RMB to the U.S. dollar, and the RMB appreciated more than 20% against the U.S. dollar over the following three years. Between July 2008 and June 2010, this appreciation halted and the exchange rate between the RMB and the U.S. dollar remained within a narrow band. After June 2010, the RMB began to appreciate against the U.S. dollar again, although there have been some periods when it has lost value against the U.S. dollar, as it did for example during 2014. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future.

To the extent that we need to convert U.S. dollars into RMB for our operations, acquisitions or other uses within the PRC, appreciation of the RMB against the U.S. dollar would have an adverse effect on the RMB amount we receive from the conversion. To the extent that we seek to convert RMB into U.S. dollars, depreciation of the RMB against the U.S. dollar would have an adverse effect on the U.S. dollar amount we receive from the conversion. As of December 31, 2014, we had RMB or HKD denominated cash balances of $424.4 million and U.S. dollar-denominated cash balances of $246.6 million. Assuming we had converted the U.S. dollar-denominated cash balance of $246.6 million as of December 31, 2014 into RMB at the exchange rate of US$1.00 for RMB6.2046 as of December 31, 2014, this cash balance would have been RMB1,530.2 million. Assuming a further 1% appreciation of the RMB against the U.S. dollar, this cash balance would have decreased to RMB1,515.0 million as of December 31, 2014.

ITEM 12.      DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

A.Debt Securities

Not applicable.

B.Warrants and Rights

Not applicable.

C.Other Securities

Not applicable.

D.American Depositary Shares

Fees and Charges Our ADS Holders May Have to Pay

ADS holders will be charged a fee for each issuance of ADSs, including issuances resulting from distributions of ordinary shares, rights and other property, and for each surrender of ADSs in exchange for deposited securities. The fee in each case is $5.00 for each 100 ADSs (or any portion thereof) issued or surrendered.

The following additional charges shall be incurred by the ADS holders, by any party depositing or withdrawing ordinary shares or by any party surrendering ADSs or to whom ADSs are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by us or an exchange of stock regarding the ADSs or the deposited securities or a distribution of ADSs), whichever is applicable:

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·a fee of $1.50 per ADS or ADSs for transfers of certificated or direct registration ADSs;

·a fee of up to $0.05 per ADS (or portion thereof) for any cash distribution made pursuant to the deposit agreement;

·an aggregate fee of up to $0.05 per ADS (or portion thereof) per calendar year for services performed by the depositary in administering the ADSs (which fee may be charged on a periodic basis during each calendar year and shall be assessed against holders of our ADSs as of the record date or record dates set by the depositary during each calendar year and shall be payable at the sole discretion of the depositary by billing these holders or by deducting the charges from one or more cash dividends or other cash distributions);

·any other charge payable by the depositary or any of the depositary’s agents, including, without limitation, the custodian, or the agents of the depositary’s agents in connection with the servicing of our ordinary shares or other deposited securities (which charge shall be assessed against registered holders of our ADSs as of the record date or dates set by the depositary and shall be payable at the sole discretion of the depositary by billing such registered holders or by deducting such charge from one or more cash dividends or other cash distributions);

·a fee for the distribution of securities (or the sale of securities in connection with a distribution), such fee being in an amount equal to the fee for the execution and delivery of ADSs which would have been charged as a result of the deposit of such securities (treating all such securities as if they were shares) but which securities or the net cash proceeds from the sale thereof are instead distributed by the depositary to those holders entitled thereto;

·stock transfer or other taxes and other governmental charges;

·cable, telex and facsimile transmission and delivery charges incurred at your request;

·transfer or registration fees for the registration of transfer of deposited securities on any applicable register in connection with the deposit or withdrawal of deposited securities;

·expenses of the depositary in connection with the conversion of foreign currency into U.S. dollars; and

·such fees and expenses as are incurred by the depositary (including without limitation expenses incurred in connection with compliance with foreign exchange control regulations or any law or regulation relating to foreign investment) in delivery of deposited securities or otherwise in connection with the depositary’s or its custodian’s compliance with applicable laws, rules or regulations.

We will pay all other charges and expenses of the depositary and any agent of the depositary (except the custodian) pursuant to agreements from time to time between us and the depositary. The fees described above may be amended from time to time.

Fees and Other Payments Made by the Depositary to Us

Our depositary has agreed to reimburse us for certain expenses we incur that are related to establishment and maintenance of the ADS program, including investor relations expenses and exchange application and listing fees. There are limits on the amount of expenses for which the depositary will reimburse us, but the amount of reimbursement available to us is not related to the amounts of fees the depositary collects from investors. For the years ended December 31, 2012, 2013 and 2014, we received approximately $0.4 million, $0.2 million and nil, respectively, from the depositary as reimbursement for our expenses incurred in connection with the establishment and maintenance of the ADS program.

PART II

ITEM 13.      DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14.      MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

None.

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ITEM 15.      CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of the end of the period covered by this annual report, our management, with the participation of our chief executive officer and chief financial officer, has performed an evaluation of the effectiveness of our disclosure controls and procedures within the meaning of Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based upon this evaluation, our management has concluded that, as of the end of the period covered by this annual report, our existing disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in the reports that we file and furnish under the Exchange Act was recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of its published consolidated financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective may not prevent or detect misstatements and can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2014. In making this assessment, it used the criteria established within the Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on this assessment, our management has concluded that, as of December 31, 2014, our internal control over financial reporting was effective.

Our independent registered public accounting firm, Deloitte Touche Tohmatsu Certified Public Accountants LLP, has audited the effectiveness of our internal control over financial reporting as of December 31, 2014, as stated in its report, which appears on page F-3 of this annual report on Form 20-F.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 16.

ITEM 16A.   AUDIT COMMITTEE FINANCIAL EXPERT

Our board of directors has determined that Winston Li, Bing Xiang and Jeffrey Zhijie Zeng, members of our audit committee, are audit committee financial experts. Each of Winston Li, Bing Xiang and Jeffrey Zhijie Zeng are independent directors (under the standards set forth in Section 303A of the Corporate Governance Rules of the NYSE and Section 10A-3 of the Exchange Act).

ITEM 16B.   CODE OF ETHICS

Our board of directors has adopted a code of ethics that applies to our directors, officers, employees and agents, including certain provisions that specifically apply to our chief executive officer, chief financial officer, chief operating officer, chief technology officer, vice presidents and any other persons who perform similar functions for us. We have filed our code of business conduct and ethics as an exhibit to our registration statement onForm F-1 (No. 333-144451) and the code is also available on our official website under the investor relations section at ir.ehousechina.com.

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ITEM 16C.PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered by Deloitte Touche Tohmatsu Certified Public Accountants LLP, our principal external auditors, for the periods indicated. We did not pay any other fees to our auditors during the periods indicated below.

	For the Years Ended December 31,
	2013	2014
Audit fees(1)	1,391,678	2,516,507
Audit-Related fees(2)	200,000	301,779
Tax fees(3)	19,387	72,038

(1)“Audit fees” means the aggregate fees billed for professional services rendered by our principal auditors for the audit of our annual financial statements and the review of our comparative interim financial statements.

(2)“Audit-Related Fees” represent the aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review of our financial statements and are not reported as audit fees.

(3)“Tax fees” represents aggregate fees billed for professional services rendered by our principal auditors, primarily in connection with our transfer price study activities and compliance services.

The policy of our audit committee is to pre-approve all audit and non-audit services provided by Deloitte Touche Tohmatsu Certified Public Accountants LLP, including audit services, audit-related services, tax services and other services as described above, other than those for de minimis services which are approved by the Audit Committee prior to the completion of the audit.

ITEM 16D.EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

None.

ITEM 16E.PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

None.

ITEM 16F.CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

Not applicable.

ITEM 16G.CORPORATE GOVERNANCE

Our corporate governance practices do not differ in any significant way from those followed by domestic companies under the listing standards of the NYSE.

ITEM 16H.MINE SAFETY DISCLOSURE

Not applicable.

PART III

ITEM 17.FINANCIAL STATEMENTS

We have elected to provide financial statements pursuant to Item 18.

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ITEM 18.FINANCIAL STATEMENTS

The consolidated financial statements of E-House (China) Holdings Limited and its subsidiaries are included at the end of this annual report.

ITEM 19.EXHIBITS

Exhibit Number	Description of Document
1.1	Amended and Restated Memorandum and Articles of Association (incorporated by reference to Exhibit 3.2 from our F-1 registration statement (File No. 333-148729), as amended, initially filed with the Commission on January 17, 2008).
2.1	Form of Amended and Restated Deposit Agreement between E-House (China) Holding Limited and JPMorgan Chase Bank, N.A. and holder of the American Depositary Receipts (incorporated by reference to Exhibit 99.(a) to our Registration Statement on Form F-6 (File No. 333-181404) filed with the Securities and Exchange Commission on May 14, 2012)
2.2	Registrant’s Specimen American Depositary Receipt (incorporated by reference to Exhibit A to Exhibit 99.(a) to our F-6 registration statement (File No. 333-181404) filed with the Securities and Exchange Commission on May 14, 2012)
2.3	Registrant’s Specimen Certificate for Ordinary Shares (incorporated by reference to Exhibit 4.2 of from our F-1 registration statement (File No. 333-148729), as amended, initially filed with the Commission on January 17, 2008)
2.4	Investor Rights Agreement, dated August 16, 2012, by and among E-House (China) Holdings Limited and SINA Corporation(incorporated by reference to Exhibit 2.4 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 24, 2013)
2.5	Indenture, dated December 17, 2013 between E-House (China) Holdings Limited and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 2.5 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2014)
2.6	Form of 144A 2.75% Convertible Senior Note due 2018 (incorporated by reference to Exhibit 2.6 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2014)
2.7	Form of Regulation S Convertible Senior Note due 2018 (incorporated by reference to Exhibit 2.7 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2014)
2.8	Restricted Deposit Agreement between E-House (China) Holding Limited and JPMorgan Chase Bank, N.A. and holders of the restricted American Depositary Receipts (incorporated by reference to Exhibit 2.8 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2014)
4.1	E-House Share Incentive Plan, as amended and restated on October 16, 2008 (incorporated by reference to Exhibit 10.1 from our S-8 registration statement (File No. 333-148058), filed with the Commission on December 23, 2008).
4.2	CRIC Share Incentive Plan adopted as of September 9, 2008 (incorporated by reference to Exhibit 4.2 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on May 4, 2009).
4.3	Form of Indemnification Agreement with the Registrant’s directors (incorporated by reference to Exhibit 10.2 from our F-1 registration statement (File No. 333-148729), as amended, initially filed with the Commission on January 17, 2008).
4.4	Form of Employment Agreement with the Registrant’s senior executives (incorporated by reference to Exhibit 10.3 from our F-1 registration statement (File No. 333-148729), as amended, initially filed with the Commission on January 17, 2008).
4.5	English translation of Exclusive Call Option Agreement dated September 10, 2011 between Shanghai SINA Leju Information Technology Co., Ltd., Beijing Yisheng Leju Information Services Co., Ltd., Xudong Zhu and Zuyu Ding (incorporated by reference to Exhibit 10.15 from our F-4 registration statement (File No. 333-179004), filed with the Commission on January 13, 2012).

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Exhibit Number	Description of Document
4.6	English translation of Loan Agreement dated September 10, 2011 between Shanghai SINA Leju Information Technology Co., Ltd., Xudong Zhu and Zuyu Ding (incorporated by reference to Exhibit 10.16 from our F-4 registration statement (File No. 333-179004), filed with the Commission on January 13, 2012).
4.7	English translation of Shareholder Voting Rights Proxy Agreement dated September 10, 2011 between Shanghai SINA Leju Information Technology Co., Ltd., Beijing Yisheng Leju Information Services Co., Ltd., Xudong Zhu and Zuyu Ding (incorporated by reference to Exhibit 10.17 from our F-4 registration statement (File No. 333-179004), filed with the Commission on January 13, 2012).
4.8	English translation of Power of Attorney dated September 10, 2011 issued by Xudong Zhu to Xin Zhou(incorporated by reference to Exhibit 4.8 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 24, 2013)
4.9	English translation of Power of Attorney dated September 10, 2011 issued by Zuyu Ding to Xin Zhou(incorporated by reference to Exhibit 4.9 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 24, 2013)
4.10	English translation of Equity Pledge Agreement dated September 10, 2011 between Shanghai SINA Leju Information Technology Co., Ltd., Beijing Yisheng Leju Information Services Co., Ltd., Xudong Zhu and Zuyu Ding (incorporated by reference to Exhibit 10.18 from our F-4 registration statement (File No. 333-179004), filed with the Commission on January 13, 2012).
4.11	English translation of Exclusive Technical Support Agreement dated May 8, 2008 between Shanghai SINA Leju Information Technology Co., Ltd. and Beijing Yisheng Leju Information Services Co., Ltd. (incorporated by reference to Exhibit 4.19 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2010).
4.12	English translation of Exclusive Call Option Agreement, dated December 5, 2011, between Shanghai Yi Yue Information Technology Co. Ltd., Shanghai Yi Xin E-Commerce Co., Ltd., Zuyu Ding and Weijie Ma (incorporated by reference to Exhibit 10.20 from our F-4 registration statement (File No. 333-179004), filed with the Commission on January 13, 2012).
4.13	English translation of Loan Agreement, dated September 20, 2011, between Shanghai Yi Yue Information Technology Co. Ltd., Zuyu Ding and Weijie Ma (incorporated by reference to Exhibit 10.21 from our F-4 registration statement (File No. 333-179004), filed with the Commission on January 13, 2012).
4.14	English translation of Shareholder Voting Right Proxy Agreement, dated December 5, 2011, between Shanghai Yi Yue Information Technology Co. Ltd., Shanghai Yi Xin E-Commerce Co., Ltd., Zuyu Ding and Weijie Ma (incorporated by reference to Exhibit 10.22 from our F-4 registration statement (File No. 333-179004), filed with the Commission on January 13, 2012).
4.15	English translation of Power of Attorney dated December 5, 2011 issued by Zuyu Ding to Xin Zhou(incorporated by reference to Exhibit 4.15 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 24, 2013)
4.16	English translation of Power of Attorney dated December 5, 2011 issued by Weijie Ma to Xin Zhou(incorporated by reference to Exhibit 4.16 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 24, 2013)
4.17	English translation of Equity Pledge Agreement, dated December 5, 2011, between Shanghai Yi Yue Information Technology Co. Ltd., Shanghai Yi Xin E-Commerce Co., Ltd., Zuyu Ding and Weijie Ma (incorporated by reference to Exhibit 10.23 from our F-4 registration statement (File No. 333-179004), filed with the Commission on January 13, 2012).
4.18	English translation of Exclusive Technical Support Agreement, dated December 5, 2011, between Shanghai Yi Yue Information Technology Co. Ltd. and Shanghai Yi Xin E-Commerce Co., Ltd. (incorporated by reference to Exhibit 10.24 from our F-4 registration statement (File No. 333-179004), filed with the Commission on January 13, 2012).
4.19	English translation of Exclusive Call Option Agreement, dated April 1, 2012, between Beijing Maiteng Fengshun Science and Technology Co., Ltd., Beijing Jiajujiu E-Commerce Co., Ltd., Zuyu Ding and Weijie Ma(incorporated by reference to Exhibit 4.25 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 24, 2012)

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Exhibit Number	Description of Document
4.20	English translation of Loan Agreement, dated February 1, 2012, between Beijing Maiteng Fengshun Science and Technology Co., Ltd., Zuyu Ding and Weijie Ma(incorporated by reference to Exhibit 4.26 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 24, 2012)
4.21	English translation of Shareholder Voting Right Proxy Agreement, dated April 1, 2012, between Beijing Maiteng Fengshun Science and Technology Co., Ltd., Beijing Jiajujiu E-Commerce Co., Ltd., Zuyu Ding and Weijie Ma(incorporated by reference to Exhibit 4.27 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 24, 2012)
4.22	English translation of Power of Attorney dated April 1, 2012 issued by Zuyu Ding to Xin Zhou(incorporated by reference to Exhibit 4.22 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 24, 2013)
4.23	English translation of Power of Attorney dated April 1, 2012 issued by Weijie Ma to Xin Zhou(incorporated by reference to Exhibit 4.23 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 24, 2013)
4.24	English translation of Equity Pledge Agreement, dated April 1, 2012, between Beijing Maiteng Fengshun Science and Technology Co., Ltd., Beijing Jiajujiu E-Commerce Co., Ltd., Zuyu Ding and Weijie Ma(incorporated by reference to Exhibit 4.28 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 24, 2012)
4.25	English translation of Exclusive Technical Support Agreement, dated April 1, 2012, between Beijing Maiteng Fengshun Science and Technology Co., Ltd. and Beijing Jiajujiu E-Commerce Co., Ltd.(incorporated by reference to Exhibit 4.29 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 24, 2012)
4.26	Agreement and Plan of Merger, dated December 28, 2011, between E-House (China) Holdings Limited, CRIC (China) Holdings Limited and China Real Estate Information Corporation (incorporated by reference to Exhibit 2.1 from our registration statement on Form F-4 (File No. 333-179004), initially filed with the Commission on January 13, 2012).
4.27	English translation of Equity Transfer Agreement, dated October 25, 2012, between Xin Zhou, Xudong Zhu, Shanghai Lerong Information Technology Co., Ltd. and Shanghai Tian Zhuo Advertising Co., Ltd.(incorporated by reference to Exhibit 4.27 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 24, 2013)
4.28	English translation of Termination Agreement, dated October 25, 2012, between Shanghai CRIC Information Technology Co., Ltd., Xin Zhou, Xudong Zhu and Shanghai Tian Zhuo Advertising Co., Ltd.(incorporated by reference to Exhibit 4.28 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 24, 2013)
4.29	English translation of Debt Restructuring Agreement, dated October 25, 2012, between Shanghai CRIC Information Technology Co., Ltd., Xin Zhou, Xudong Zhu and Shanghai Tian Zhuo Advertising Co., Ltd.(incorporated by reference to Exhibit 4.29 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 24, 2013)
4.30	Share Purchase Agreement, dated December 27, 2012, between E-House (China) Holdings Limited and Kanrich Holdings Limited(incorporated by reference to Exhibit 4.30 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 24, 2013)
4.31	Amendment to Share Purchase Agreement, dated March 22, 2013, between E-House (China) Holdings Limited and Kanrich Holdings Limited(incorporated by reference to Exhibit 4.31 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 24, 2013)
4.32	English translation of Exclusive Call Option Agreement, dated December 31, 2013, between Shanghai Yifang Software Co., Ltd., Shanghai Kushuo Information Technology Co., Ltd., Zuyu Ding and Weijie Ma (incorporated by reference to Exhibit 4.32 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2014)
4.33	English translation of Loan Agreement, dated November 26, 2013, between Shanghai Yifang Software Co., Ltd., Zuyu Ding and Weijie Ma (incorporated by reference to Exhibit 4.33 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2014)

130

Exhibit Number	Description of Document
4.34	English translation of Shareholder Voting Right Proxy Agreement, dated December 31, 2013, between Shanghai Yifang Software Co., Ltd., Shanghai Kushuo Information Technology Co., Ltd., Zuyu Ding and Weijie Ma (incorporated by reference to Exhibit 4.34 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2014)
4.35	English translation of Power of Attorney dated December 31, 2013 issued by Zuyu Ding to Xin Zhou (incorporated by reference to Exhibit 4.35 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2014)
4.36	English translation of Power of Attorney dated December 31, 2013 issued by Weijie Ma to Xin Zhou (incorporated by reference to Exhibit 4.36 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2014)
4.37	English translation of Equity Pledge Agreement, dated December 31, 2013, between Shanghai Yifang Software Co., Ltd., Shanghai Kushuo Information Technology Co., Ltd., Zuyu Ding and Weijie Ma (incorporated by reference to Exhibit 4.37 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2014)
4.38	English translation of Exclusive Technical Support Agreement, dated December 31, 2013, between Shanghai Yifang Software Co., Ltd. and Shanghai Kushuo Information Technology Co., Ltd. (incorporated by reference to Exhibit 4.38 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2014)
4.39	Master Transaction Agreement, dated as of March 2014, between the Leju Holdings Limited and E-House (China) Holdings Limited. (incorporated by reference to Exhibit 4.39 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2014)
4.40	Offshore Transitional Services Agreement, dated as of March 2014, between the Leju Holdings Limited and E-House (China) Holdings Limited. (incorporated by reference to Exhibit 4.40 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2014)
4.41	English translation of Onshore Transitional Services Agreement, dated as of March 2014, between Shanghai Real Estate Sales (Group) Co., Ltd. and certain subsidiaries of Leju Holdings Limited (incorporated by reference to Exhibit 4.41 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2014)
4.42	Non-Competition Agreement, dated as of March 2014, between the Leju Holdings Limited and E-House (China) Holdings Limited. (incorporated by reference to Exhibit 4.42 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2014)
4.43	English translation of Onshore Cooperation Agreement, dated as of March 2014, by and among Shanghai Real Estate Sales (Group) Co., Ltd., Beijing Yisheng Leju Information Services Co., Ltd., Shanghai Yi Xin E-Commerce Co., Ltd. and Beijing Jiajujiu E-Commerce Co., Ltd. (incorporated by reference to Exhibit 4.43 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2014)
4.44	English translation of Advertising Inventory Sale Agency Agreement, dated March 7, 2014, between SINA Corporation and Leju Holdings Limited. (incorporated by reference to Exhibit 4.44 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2014)
4.45	Amended and Restated Domain Name and Content License Agreement, dated March 7, 2014, between Beijing SINA Internet Information Service Co., Ltd. and Beijing Yisheng Leju Information Services Co., Ltd. (incorporated by reference to Exhibit 4.45 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2014)
4.46	Amended and Restated Trademark License Agreement, dated March 7, 2014, between Beijing SINA Internet Information Service Co., Ltd. and Beijing Yisheng Leju Information Services Co., Ltd. (incorporated by reference to Exhibit 4.46 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2014)
4.47	Amended and Restated Software License and Support Services Agreement, dated March 7, 2014, between SINA.com Technology (China) Co. Ltd. and Shanghai SINA Leju Information Technology Co., Ltd. (incorporated by reference to Exhibit 4.47 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2014)

131

Exhibit Number	Description of Document
4.48	Strategic Cooperation Agreement, dated March 10, 2014, between Shanghai Yi Yue Information Technology Co., Ltd. and Shenzhen Tencent Computer Systems Company Limited (incorporated by reference to Exhibit 4.48 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2014)
4.49	Share Purchase and Subscription Agreement, dated March 21, 2014, between E-House (China) Holdings Limited, THL O Limited, Shenzhen Tencent Computer Systems Company Limited, Shanghai Yi Yue Information Technology Co., Ltd. and the Registrant (incorporated by reference to Exhibit 4.49 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2014)
4.50	Amendment to Share Purchase and Subscription Agreement, dated March 21, 2014, between E-House (China) Holdings Limited, THL O Limited and the Registrant (incorporated by reference to Exhibit 4.50 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2014)
4.51	Investor Rights Agreement dated, March 31, 2014 between E-House (China) Holdings Limited, THL O Limited and the Registrant (incorporated by reference to Exhibit 4.51 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on April 23, 2014)
4.52	Leju 2013 Share Incentive Plan (incorporated by reference to Exhibit 4.52 from our annual report on Form 4.52 (File No. 001-33616), filed with the Commission on April 23, 2014)
4.53*	English translation of executed form of Exclusive Call Option Agreement between a PRC subsidiary of the Registrant, a variable interest entity of the Registrant, and each of the shareholders of the variable interest entity.
4.54*	English translation of executed form of Loan Agreement between a PRC subsidiary of the Registrant (as the lender), and each of the shareholders of a variable interest entity of the Registrant (as the borrowers).
4.55*	English translation of executed form of Shareholder Voting Right Proxy Agreement between a PRC subsidiary of the Registrant, a variable interest entity of the Registrant, and each of the shareholders of the variable interest entity.
4.56*	English translation of executed form of Power of Attorneys issued by each of the shareholders of a variable interest entity of the Registrant.
4.57*	English translation of executed form of Equity Pledge Agreement between a PRC subsidiary of the Registrant (as the pledgee), a variable interest entity of the Registrant, and each of the shareholders of the variable interest entity (as the pledgers).
4.58*	English translation of executed form of Exclusive Technical Support Agreement between a PRC subsidiary of the Registrant and a variable interest entity of the Registrant.
4.59*	English translation of the Exclusive Support Agreement, dated May 14, 2014, between Baoyi Investment Consultant (Shanghai) Co., Ltd. and Shanghai E-Cheng Asset Management Co., Ltd.
4.60*	Material terms of contractual agreements for each of Shanghai Fangjia Information Technology Co., Ltd., Shanghai Weihui Business Information Consulting Co., Ltd., and Shanghai E-Cheng Asset Management Co., Ltd.
8.1*	Principal Subsidiaries and Consolidated Variable Interest Entities of the Registrant
11.1	Code of Business Conduct and Ethics of the Registrant (incorporated by reference to Exhibit 99.1 from our F-1 registration statement (File No. 333-144451), as amended, initially filed with the Commission on July 10, 2007)
12.1*	CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2*	CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1**	CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2**	CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1*	Consent of Deloitte Touche Tohmatsu Certified Public Accountants LLP
15.2*	Consent of Fangda Partners
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Scheme Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

*Filed herewith

**Furnished herewith

132

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

	E-HOUSE (CHINA) HOLDINGS LIMITED
	By:	/s/ Xin Zhou
	Name:	Xin Zhou
	Title:	Co-Chairman of the Board of Directors and
		Chief Executive Officer
Date: April 21, 2015

133

E-HOUSE (CHINA) HOLDINGS LIMITED

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014

Reports of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2013 and 2014	F-4
Consolidated Statements of Operations for the Years Ended December 31, 2012, 2013 and 2014	F-5
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2012, 2013 and 2014	F-6
Consolidated Statements of Changes in Equity for the Years Ended December 31, 2012, 2013 and 2014	F-7
Consolidated Statements of Cash Flows for the Years Ended December 31, 2012, 2013 and 2014	F-8
Notes to Consolidated Financial Statements for the Years Ended December 31, 2012, 2013 and 2014	F-9

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of E-House (China) Holdings Limited

We have audited the accompanying consolidated balance sheets of E-House (China) Holdings Limited and subsidiaries (the “Group”) as of December 31, 2013 and 2014, and the related consolidated statements of operations, comprehensive income (loss), changes in equity, and cash flows for each of the three years in the period ended December 31, 2014. These financial statements are the responsibility of the Group’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Group as of December 31, 2013 and 2014, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2014, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Group’s internal control over financial reporting as of December 31, 2014, based on the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated April 21, 2015 expressed an unqualified opinion on the Group’s internal control over financial reporting.

/s/ Deloitte Touche Tohmatsu Certified Public Accountants LLP

Shanghai, China

April 21, 2015

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of E-House (China) Holdings Limited

We have audited the internal control over financial reporting of E-House (China) Holdings Limited and subsidiaries (the “Group”) as of December 31, 2014, based on the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Group’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Group’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Group maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended December 31, 2014 of the Group and our report dated April 21, 2015 expressed an unqualified opinion on those financial statements.

/s/ Deloitte Touche Tohmatsu Certified Public Accountants LLP

Shanghai, China

April 21, 2015

F-3

E-HOUSE (CHINA) HOLDINGS LIMITED

CONSOLIDATED BALANCE SHEETS

(In U.S. dollar except for share data)

	December 31,
	2013		2014
	$		$
ASSETS
Current assets:
Cash and cash equivalents	413,319,174		630,616,635
Restricted cash	2,310,116		40,401,864
Customer deposits, net of allowance for doubtful accounts of $585,955 and $583,836 at December 31, 2013 and 2014, respectively	67,602,275		92,796,714
Accounts receivable, net of allowance for doubtful accounts of $60,232,453 and $ 44,002,810 at December 31, 2013 and 2014, respectively	357,442,102		415,150,008
Advance payment for properties to be held for sale, current	60,076,026		51,983,436
Properties held for sale	15,304,927		34,841,895
Short-term Investment	1,279,340		—
Deferred tax assets	66,331,906		64,804,392
Prepaid expenses and other current assets	44,234,499		39,339,526
Amounts due from related parties	1,263,416		6,094,260
Total current assets	1,029,163,781		1,376,028,730
Property and equipment, net	50,076,925		49,109,467
Intangible assets, net	141,231,750		120,380,671
Investment in affiliates	39,051,743		51,681,339
Goodwill	51,600,039		51,539,654
Customer deposits, non-current	652,300		797,024
Investment in preferred shares of a private entity	—		39,484,906
Other non-current assets	43,743,560		87,901,450
TOTAL ASSETS	1,355,520,098		1,776,923,241
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable (including accounts payable of the consolidated VIEs without recourse to E-House of $1,505,942 and $600,735 as of December 31, 2013 and 2014, respectively)	11,264,939		8,260,681
Accrued payroll and welfare expenses (including accrued payroll and welfare expenses of the consolidated VIEs without recourse to E-House of $29,309,329 and $44,321,824 as of December 31, 2013 and 2014, respectively)	102,632,157		116,577,317
Income tax payable (including income tax payable of the consolidated VIEs without recourse to E-House of $28,793,459 and $28,337,431 as of December 31, 2013 and 2014, respectively)	98,685,965		117,593,159
Other tax payable (including other tax payable of the consolidated VIEs without recourse to E-House of $11,188,055 and $16,032,365 as of December 31, 2013 and 2014, respectively)	40,000,505		49,390,175
Amounts due to related parties (including amounts due to related parties of the consolidated VIEs without recourse to E-House of $2,383,293 and $4,175,247 as of December 31, 2013 and 2014, respectively)	5,535,512		7,356,186
Advance from property buyers	2,453,472		2,261,387
Short-term borrowings	—		35,953,500
Dividend payables	—		12,902,488
Advance from customers and deferred revenue(including advance from customers and deferred revenue of the consolidated VIEs without recourse to E-House of $7,150,344 and $5,073,492 as of December 31, 2013 and 2014, respectively)	24,617,144		19,013,041
Liability for exclusive rights, current (including exclusive rights, current of the consolidated VIEs without recourse to E-House of $8,967,972 and nil as of December 31, 2013 and 2014, respectively)	8,967,972		—
Other current liabilities (including other current liabilities of the consolidated VIEs without recourse to E-House of $9,917,349 and $36,291,161 as of December 31, 2013 and 2014, respectively)	62,466,610		85,836,572
Total current liabilities	356,624,276		455,144,506
Deferred tax liabilities (including deferred tax liabilities, non-current of the consolidated VIEs without recourse to E-House of $655,563 and $469,579 as of December 31, 2013 and 2014, respectively)	29,900,565		28,203,218
Convertible senior notes	131,650,949		132,751,540
Other non-current liabilities	1,473,279		658,357
Total liabilities	519,649,069		616,757,621
Commitments and contingencies (Note 23)
Equity:
Ordinary shares ($0.001 par value): 1,000,000,000 shares authorized, 137,816,482 and 142,123,368 shares issued and outstanding, as of December 31, 2013 and 2014, respectively	137,817		142,124
Additional paid-in capital	859,467,949		991,645,842
Accumulated deficit	(107,704,675	)	(67,703,190	)
Accumulated other comprehensive income	72,184,594		83,901,136
Subscription receivables	(2,147,932	)	(196,407	)
Total E-House equity	821,937,753		1,007,789,505
Non-controlling interest	13,933,276		152,376,115
Total equity	835,871,029		1,160,165,620
TOTAL LIABILITIES AND EQUITY	1,355,520,098		1,776,923,241

The accompanying notes are an integral part of these consolidated financial statements.

F-4

E-HOUSE (CHINA) HOLDINGS LIMITED

CONSOLIDATED

STATEMENTS OF OPERATIONS

(In U.S. dollar except for share data)

	Years Ended December 31,
	2012			2013			2014
	$			$			$
Total revenues	462,439,368			731,078,833			904,498,793
Cost of revenues	(203,170,685		)	(274,035,806		)	(306,133,210		)
Selling, general and administrative expenses	(336,873,524		)	(400,947,001		)	(545,491,718		)
Other operating income	6,475,023			4,917,642			8,786,891
Income (loss) from operations	(71,129,818		)	61,013,668			61,660,756
Interest expense	—			(192,566		)	(5,325,474		)
Interest income	1,606,462			2,179,547			3,210,328
Other income (loss), net	(732,870		)	(1,051,215		)	3,857,539
Income (loss) before taxes and equity in affiliates	(70,256,226		)	61,949,434			63,403,149
Income tax expense	(1,168,654		)	(13,676,994		)	(14,900,793		)
Income (loss) before equity in affiliates	(71,424,880		)	48,272,440			48,502,356
Income from equity in affiliates	375,509			2,813,849			3,834,802
Net income (loss)	(71,049,371		)	51,086,289			52,337,158
Less: Net income (loss) attributable to non-controlling interest	(14,077,967		)	(871,136		)	12,335,673
Net income (loss) attributable to E-House shareholders	(56,971,404		)	51,957,425			40,001,485
Earnings (loss) per share:
Basic	$	(0.54	)	$	0.40		$	0.29
Diluted	$	(0.54	)	$	0.38		$	0.26
Shares used in computation:
Basic	106,159,388			130,163,165			139,211,442
Diluted	106,159,388			135,779,997			146,687,835

The accompanying notes are an integral part of these consolidated financial statements.

F-5

E-HOUSE (CHINA) HOLDINGS LIMITED

CONSOLIDATED

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In U.S. dollar)

	Years Ended December 31,
	2012		2013		2014
	$		$		$
Net income (loss)	(71,049,371	)	51,086,289		52,337,158
Other comprehensive income, net of tax of nil:
Unrealized gains for investment in preferred shares of a private entity	—		—		13,765,098
Foreign currency translation adjustment	1,828,717		17,532,967		(2,119,684	)
Comprehensive income (loss)	(69,220,654	)	68,619,256		63,982,572
Less: Comprehensive income (loss) attributable to non-controlling interests	(14,124,962	)	(404,808	)	12,269,668
Comprehensive income (loss) attributable to E-House shareholders	(55,095,692	)	69,024,064		51,712,904

The accompanying notes are an integral part of these consolidated financial statements.

F-6

E-HOUSE (CHINA) HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In U.S. dollar)

							Retained		Accumulated
					Additional		Earnings		Other				Equity (Deficit)
					Paid-in		(Accumulated		Comprehensive		Subscription		Attributable to		Non-controlling		Total
	Ordinary Shares				Capital		Deficit)		Income		Receivables		E-House		Interest		Equity
	Number		$		$		$		$		$		$		$		$
Balance at January 1, 2012	79,065,624		79,066		688,093,431		(101,063,764	)	46,253,035		—		633,361,768		271,006,234		904,368,002
Net loss	—		—		—		(56,971,404	)	—		—		(56,971,404	)	(14,077,967	)	(71,049,371	)
Foreign currency translation adjustments	—		—		—		—		1,875,712		—		1,875,712		(46,995	)	1,828,717
Dividends	—		—		(11,866,670	)	—		—		—		(11,866,670	)	—		(11,866,670	)
Dividends to non-controlling interest	—		—		—		—		—		—		—		(856,121	)	(856,121	)
Share-based compensation	—		—		31,900,606		—		—		—		31,900,606		3,755,919		35,656,525
Exercise of share options	194,721		195		259,721		—		—		(11,798	)	248,118		567,404		815,522
Vesting of restricted shares	567,489		567		38,755		—		—		—		39,322		223,272		262,594
Capital injection and non-controlling interest recognized in connection with business acquisition	—		—		—		—		—		—		—		291,839		291,839
Shares issued in connection with the merger of CRIC	38,785,588		38,786		252,067,537		—		—		—		252,106,323		—		252,106,323
Replacement of CRIC share options and restricted shares	—		—		31,897,646		—		—		—		31,897,646		—		31,897,646
Reversal of ASC 740 uncertain tax position	—		—		—		200,000		—		—		200,000		—		200,000
Changes in equity ownership on partial disposal of subsidiaries	—		—		175,735		—		—		—		175,735		(18,376	)	157,359
Repurchase of shares	(371,141	)	(371	)	(1,569,444	)	—		—		—		(1,569,815	)	—		(1,569,815	)
Movement arising from merger of CRIC	—		—		(149,461,182	)	—		6,989,208		—		(142,471,974	)	(254,656,627	)	(397,128,601	)
Balance at December 31, 2012	118,242,281		118,243		841,536,135		(157,835,168	)	55,117,955		(11,798	)	738,925,367		6,188,582		745,113,949
Net income	—		—		—		51,957,425		—		—		51,957,425		(871,136	)	51,086,289
Foreign currency translation adjustments	—		—		—		—		17,066,639		—		17,066,639		466,328		17,532,967
Dividends	—		—		(19,946,745	)	—		—		—		(19,946,745	)	—		(19,946,745	)
Dividends to non-controlling interest	—		—		—		—		—		—		—		(338,941	)	(338,941	)
Share-based compensation	—				18,903,027		—		—		—		18,903,027		—		18,903,027
Exercise of share options	4,596,761		4,596		17,460,926		—		—		(2,136,134	)	15,329,388		—		15,329,388
Vesting of restricted shares	769,448		770		262,336		—		—		—		263,106		—		263,106
Capital injection and non-controlling interest recognized in connection with business acquisition	—		—		—		—		—		—		—		8,079,333		8,079,333
Call option in connection with issuance of convertible senior notes	—		—		(44,999,998	)	—		—		—		(44,999,998	)	—		(44,999,998	)
New shares issued to management	17,790,125		17,790		62,603,450		—		—		—		62,621,240		—		62,621,240
Repurchase of shares	(3,582,133	)	(3,582	)	(15,942,072	)	(1,826,932	)	—		—		(17,772,586	)	—		(17,772,586	)
Changes in equity ownership on acquisition of non-controlling interest	—		—		(409,110	)	—		—		—		(409,110	)	409,110		—
Balance at December 31, 2013	137,816,482		137,817		859,467,949		(107,704,675	)	72,184,594		(2,147,932	)	821,937,753		13,933,276		835,871,029
Net income	—		—		—		40,001,485		—		—		40,001,485		12,335,673		52,337,158
Foreign currency translation adjustments	—		—		—		—		(2,053,679	)	—		(2,053,679	)	(66,005	)	(2,119,684	)
Dividends (note 14)	—		—		(77,582,930	)	—		—		—		(77,582,930	)	21,569,028		(56,013,902	)
Dividends declared by subsidiaries	—		—		—		—		—		—		—		(2,508,620	)	(2,508,620	)
Share-based compensation	—		—		19,843,733		—		—		—		19,843,733		1,797,388		21,641,121
Exercise of share options	3,446,585		3,447		12,039,145		—		—		1,951,525		13,994,117		—		13,994,117
Vesting of restricted shares	860,301		860		(860	)	—		—		—		—		—		—
Exercise of Leju share options	—		—		(202,093	)	—		—		—		(202,093	)	737,628		535,535
Vesting of Leju restricted shares	—		—		260,433		—		—		—		260,433		751,567		1,012,000
Capital injection from non-controlling interest	—		—		—		—		—		—		—		19,925,043		19,925,043
Changes in equity ownership on partial disposal of subsidiaries	—		—		138,472,457		—		5,123		—		138,477,580		38,226,837		176,704,417
Changes in equity ownership on acquisition of non-controlling interest	—		—		(30,720,088	)	—		—		—		(30,720,088	)	(4,515,188	)	(35,235,276	)
Recognition of change in E-House’s economic interests in Leju in connection with Leju’s IPO	—		—		70,068,096		—		—		—		70,068,096		50,189,488		120,257,584
Unrealized gains for investment in preferred shares of a private entity	—		—		—		—		13,765,098		—		13,765,098		—		13,765,098
Balance at December 31, 2014	142,123,368		142,124		991,645,842		(67,703,190	)	83,901,136		(196,407	)	1,007,789,505		152,376,115		1,160,165,620

The accompanying notes are an integral part of these consolidated financial statements.

F-7

E-HOUSE (CHINA) HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In U.S. dollar)

	As of December 31,
	2012		2013		2014
	$		$		$
Operating activities:
Net income (loss)	(71,049,371	)	51,086,289		52,337,158
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	47,386,277		45,215,493		33,336,600
Unrealized loss on marketable securities	(804,621	)	—		—
Realized gain on marketable securities	(734,904	)	(234,338	)	(2,903,786	)
Income from equity in affiliates	(375,509	)	(2,813,849	)	(3,834,802	)
Allowance for doubtful accounts	27,958,218		29,146,892		26,381,555
Share-based compensation	35,656,525		18,903,027		22,175,722
Amortization of discounts related to liability for exclusive rights	1,882,804		935,177		52,922
Amortization of debt discount and issuance cost	—		37,879		1,627,183
Others	1,155,317		(172,944	)	(1,031,539	)
Changes in operating assets and liabilities:
Restricted cash	(167,175	)	438,860		198,730
Customer deposits	(10,479,863	)	14,848,744		(25,477,768	)
Accounts receivable	(88,257,121	)	(80,108,256	)	(91,288,124	)
Marketable securities	5,826,280		3,916,706		2,897,049
Amounts due from related parties	1,181,561		(944,036	)	(4,830,844	)
Properties held for sale and advance payment for properties to be held for sale	980,571		(55,657,811	)	(3,499,706	)
Prepaid expenses and other current assets	4,908,018		(1,573,079	)	(5,190,461	)
Other non-current assets	(4,889,458	)	(14,399,728	)	550,250
Accounts payable	1,726,897		3,688,255		(3,007,370	)
Accrued payroll and welfare expenses	18,570,558		34,489,244		13,930,717
Income tax payable	10,449,070		43,664,036		18,887,611
Other tax payable	5,612,517		15,485,548		9,379,946
Amounts due to related parties	2,769,138		(1,243,912	)	1,669,193
Other current liabilities	3,952,552		40,174,923		(5,695,764	)
Other non-current liabilities	203,288		(245,919	)	(814,929	)
Deferred taxes	(15,644,865	)	(30,745,061	)	(11,867,112	)
Net cash provided by (used in) operating activities	(22,183,296	)	113,892,140		23,982,431
Investing activities:
Deposit for and purchase of property and equipment and intangible assets	(31,847,330	)	(32,971,714	)	(45,244,388	)
Purchase of subsidiaries, net of cash acquired	—		(5,259,451	)	—
Prepayment for investment	—		(15,745,728	)	(7,766,948	)
Restricted cash for collateral of bank loans	—		—		(38,290,478	)
Proceeds from disposal of subsidiaries	157,359		—		—
Investment in affiliates	(2,161,001	)	(5,766,873	)	(8,890,449	)
Capital return of investment in affiliates	—		6,202,093		6,525,361
Proceeds from disposal of property and equipment	425,432		1,727,724		5,350,020
Investment in preferred shares of a private entity	—		—		(25,719,808	)
Payment of short-term investment	—		(1,279,340	)	—
Receipt of short-term investment	—		—		1,277,032
Net cash used in investing activities	(33,425,540	)	(53,093,289	)	(112,759,658	)
Financing activities:
Purchases of non-controlling interest	—		—		(14,613,056	)
Proceeds from issuance of ordinary shares of Leju upon initial public offering, net of paid issuance costs of $15,036,616	—		—		120,257,584
Short-term borrowing	—		—		35,953,500
Purchases of shares of CRIC from public	(113,124,632	)	—		—
New shares issued to management	—		62,621,240		—
Contribution from non-controlling interest	291,839		8,030,815		19,925,043
Proceeds from exercise of options	815,522		15,329,388		14,529,652
Advance from related parties	—		2,760,000		276,000
Repayment of loans from non-controlling interests	—		—		(253,400	)
Proceeds from issuance of convertible senior notes, net of discount of $3,375,000	—		131,625,000		—
Proceeds from partial disposal of subsidiaries	—		—		176,704,417
Debt issuance costs	—		(1,551,570	)	—
Payment of call option	—		(44,999,998	)	—
Repurchase of shares	(1,569,815	)	(17,772,586	)	—
Dividends	(11,866,670	)	(19,946,745	)	(43,111,414	)
Dividends to non-controlling interests shareholders	(319,675	)	(338,941	)	(2,508,620	)
Net cash provided by (used in) financing activities	(125,773,431	)	135,756,603		307,159,706
Effect of exchange rate changes on cash and cash equivalents	218,282		5,922,352		(1,085,018	)
Net increase (decrease) in cash and cash equivalents	(181,163,985	)	202,477,806		217,297,461
Cash and cash equivalents at the beginning of the year	392,005,353		210,841,368		413,319,174
Cash and cash equivalents at the end of the year	210,841,368		413,319,174		630,616,635
Supplemental disclosure of cash flow information:
Income taxes paid	6,568,082		4,986,562		7,175,015
Interest paid	—		—		3,691,875
Non-cash investing and financing activities:
Decrease in amount due to related party due to vesting of restricted shares	(262,594	)	(263,106	)	(1,012,000	)
Ordinary shares issued in connection with the merger of CRIC	38,786		—		—
Additional paid-in capital recognized in connection with the merger of CRIC	102,606,355		—		—
Non-controlling interest recognized in connection with business acquisition	—		48,518		—
Non-controlling interest derecognized in connection with the merger of CRIC	254,656,627		—		—
Consideration payable for amount recognized in purchase of exclusive rights	22,892,042		8,967,972		—
Dividend payable to non-controlling interest	536,446		536,446		536,446
Dividend payable to E-House shareholders	—		—		12,902,488
Non-controlling interest recognized in connection with the distribution of Leju ordinary shares to E-House shareholders as dividends	—		—		21,569,028
Payable for acquisition of non-controlling interest	—		—		25,645,630
Waive the payable to non-controlling interest in connection with the acquisition of non-controlling interest	—		—		746,600
Unrealized gains for investment in preferred shares of a private entity	—		—		13,765,098

The accompanying notes are an integral part of these consolidated financial statements.

F-8

E-HOUSE (CHINA) HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014

(In U.S. dollar)

1. Organization and Principal Activities

E-House (China) Holdings Limited (the “Company” or “E-House”) was incorporated on August 27, 2004 in the Cayman Islands as an exempted company with limited liability under the Companies Law of the Cayman Islands. The Company, through its subsidiaries and consolidated variable interest entities (“VIEs”), offers a wide range of services to the real estate industry, including online services, primary agency, secondary brokerage, information and consulting, promotional events, real estate advertising, real estate fund management services, community value-added services and real estate financial services in the People’s Republic of China (“PRC”). The Company, its subsidiaries and consolidated VIEs are collectively referred to as the “Group”.

The Group commenced operations in 2000 through an operating subsidiary, Shanghai Real Estate Sales (Group) Co., Ltd. (“E-House Shanghai”), a company established in the PRC, and its subsidiaries and affiliates.

In October 2009, China Real Estate Information Corporation (‘‘CRIC’’), a subsidiary of E-House, acquired SINA Corporation’s (“SINA”) 66% interest in China Online Housing Technology Corporation (“COHT”) and COHT became a wholly-owned subsidiary of CRIC. In April 2012, E-House Holdings acquired all the outstanding shares of CRIC that it did not already own (the ‘‘Merger’’). As a result, CRIC became a wholly-owned subsidiary of E-House Holdings. E-House retained the controlling interest in CRIC before and after the Merger.

The Company’s subsidiary, Leju Holdings Limited (‘‘Leju’’) is principally engaged in providing online advertising, e-commerce services and listing services in the PRC. In March 2014, the Company sold a 15% equity interest in Leju on a fully diluted basis, including all options and restricted shares and any other rights to acquire Leju’s shares, to Tencent Holdings Limited, a provider of comprehensive internet services in PRC, and $176.4 million net proceeds after deducting commissions and related expenses were received. In April 2014, Leju completed its initial public offering (‘‘IPO’’) and became listed on New York Stock Exchange (NYSE:LEJU). Leju raised from this initial public offering approximately $101.4 million in net proceeds after deducting underwriting commissions and the offering expenses payable by Leju. Concurrently with the initial public offering, Leju also raised from Tencent in a private placement $18.9 million in net proceeds after deducting estimated fees and expenses payable by Leju. In December 2014, E-House was approved and announced a partial spin-off of Leju by distributing in the form of a dividend of 0.05 ordinary shares, par value $0.001, of Leju, for each of E-House ordinary shares outstanding as of December 3, 2014, or 0.05 ADSs of Leju, for each of E-House ADSs outstanding as of December 3, 2014. As of December 31, 2014, E-House held a 69.9% equity interest in Leju. The Spin-off of Leju was completed in January 2015.

In June 2014, the Company reorganized its fund management services segment. It’s 51% owned subsidiary, Scepter Pacific Limited (“Scepter”), became the holding company of the segment through the 100% acquisition of subsidiaries operating fund management services in PRC through its new established VIE, Shanghai E-Cheng Asset Management Co. Ltd. (“Shanghai E-Cheng”).

The following table lists major subsidiaries and the consolidated VIEs of the Company as of December 31, 2014:

	Date of	Place of	Percentage of
	incorporation	incorporation	Ownership
Shanghai Real Estate Sales (Group) Co., Ltd.	15-Aug-00	PRC	100	%
Shanghai City Rehouse Real Estate Agency Ltd.	17-May-02	PRC	85	%
Scepter	8-Jan-08	BVI	51	%
Shanghai CRIC Information Technology Co., Ltd. (“Shanghai CRIC”)	03-Jul-06	PRC	100	%
Leju Holdings Ltd.	20-Nov-13	Cayman	70	%
Shanghai Xinju Finance Information Services Co., Ltd.(“Shanghai Xinju”)	22-May-14	PRC	56	%
Shanghai Weidian Information Technology Co., Ltd. (“Shanghai Weidian”)	20-Aug-14	PRC	55	%
Beijing Yisheng Leju Information Services Co., Ltd. (“Beijing Leju”)	13-Feb-08	PRC	VIE
Shanghai Yi Xin E-Commerce Co., Ltd. (“Shanghai Yi Xin”)	05-Dec-11	PRC	VIE
Beijing Jiajujiu E-Commerce Co., Ltd. (“Beijing Jiajujiu”)	22-Mar-12	PRC	VIE
Shanghai Kushuo Information Technology Co., Ltd. (“Shanghai Kushuo”)	31-Dec-13	PRC	VIE
Shanghai E-Cheng	14-May-14	PRC	VIE
Shanghai Fangjia Information Technology Co., Ltd. (“Shanghai Fangjia”)	29-Oct-14	PRC	VIE
Shanghai Weihui Business Information Consulting Co., Ltd. (“Shanghai Weihui”)	11-Sep-14	PRC	VIE

2. Summary of Principal Accounting Policies

(a) Basis of presentation

The consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

F-9

(b) Basis of consolidation

The consolidated financial statements include the financial statements of E-House, its majority owned subsidiaries and its VIEs, Beijing Leju, Shanghai Yi Xin, Beijing Jiajujiu, Shanghai Kushuo, Shanghai E-Cheng, Shanghai Fangjia and Shanghai Weihui. All inter-company transactions and balances have been eliminated in consolidation.

In 2012, the contractual arrangements among the shareholders of Shanghai Tian Zhuo Advertising Co., Ltd. (“Tian Zhuo”), Tian Zhuo and Shanghai CRIC Information Technology Co., Ltd. (“Shanghai CRIC”) were terminated. Upon the termination, the shareholders of Tian Zhuo transferred all of their equity interests in Tian Zhuo to Beijing Leju to make Tian Zhuo a wholly owned subsidiary of Beijing Leju. In December 2013, Beijing Leju transferred all of its equity interest in Tian Zhuo to Shanghai Kushuo to make Tian Zhuo a wholly owned subsidiary of Shanghai Kushuo.

The Group evaluates each of its interests in private companies to determine whether or not the investee is a VIE and, if so, whether the Group is the primary beneficiary of such VIE. In determining whether the Group is the primary beneficiary, the Group considers if the Group (1) has power to direct the activities that most significantly affects the economic performance of the VIE, and (2) receives the economic benefits of the VIE that could be significant to the VIE. If deemed the primary beneficiary, the Group consolidates the VIE.

The VIE arrangements

PRC regulations currently prohibit or restrict foreign ownership of companies that provide Internet content and advertising services. To comply with these regulations, the Group provides such activities relating to Internet content and advertising services through its VIEs and their subsidiaries.

To provide the Group effective control over and the ability to receive substantially all of the economic benefits of its VIEs and their subsidiaries, the Company’s subsidiaries Shanghai Yifang Software Co., Ltd. (“Shanghai Yifang”), Shanghai SINA Leju Information Technology Co., Ltd. (“Shanghai SINA Leju”) and Shanghai Yi Yue Information Technology Co. Ltd. (“Shanghai Yi Yue”), Beijing Maiteng Fengshun Science and Technology Co., Ltd., (“Beijing Maiteng”), Baoyi Investment Consultant (Shanghai) Co., Ltd (“Shanghai Baoyi”), Shanghai CRIC, and Shanghai Weidian (collectively, the “Foreign Owned Subsidiaries”) entered into a series of contractual arrangements with Shanghai Kushuo, Beijing Leju, Shanghai Yi Xin, Beijing Jiajujiu, Shanghai E-Cheng, Shanghai Fangjia and Shanghai Weihui (collectively the “VIEs”) and their respective shareholders, respectively, as summarized below:

Name of Foreign Owned	Foreign Owned Subsidiaries’ Economic Ownership
Subsidiaries	of VIEs		Name of VIEs	Activities of VIEs
Shanghai Yifang	100	%	Shanghai Kushuo	Operate the real estate offline advertising business
Shanghai SINA Leju	100	%	Beijing Leju	Operate the online advertising and listing business
Shanghai Yi Yue	100	%	Shanghai Yi Xin	Operate the e-commerce business
Beijing Maiteng	100	%	Beijing Jiajujiu	Operate the online home furnishing business
Shanghai Baoyi	100	%	Shanghai E-Cheng	Operate the real estate fund management business
Shanghai CRIC	100	%	Shanghai Fangjia	Operate the information and consulting business
Shanghai Weidian	100	%	Shanghai Weihui	Operate the community value-added business

The VIEs hold the requisite licenses and permits necessary to conduct Internet content and advertising services activities relating to real estate projects from which foreign ownership of companies are prohibited or restricted. Foreign-invested enterprises incorporated in the PRC are not expressly prohibited from providing asset management services in PRC. However, according to local business practice, as a general partner of a fund, the Group must invest as a limited partner before the fund is established. Some investments of the fund managed by the Group are in the foreign-invested enterprise prohibited, or not encouraged industries, which requires all investors not to be foreign-invested enterprises. Therefore the Group provides asset management services through its VIE entities. In addition, the VIEs hold leases and other assets necessary to operate such business and generate substantial of the Group’s online and advertising revenues.

Agreements that Transfer Economic Benefits of the VIEs to the Group

Exclusive Consultancy Services/Technical Support Agreement. Pursuant to an exclusive Consultancy services/technical support agreement between the Foreign Owned Subsidiaries and the respective VIEs, the Foreign Owned Subsidiaries provide the respective VIEs with a series of Consultancy services/technical support services and are entitled to receive related fees. The term of this exclusive technical support agreement will expire upon dissolution of the VIEs. Unless expressly provided by this agreement, without prior written consent of the Foreign Owned Subsidiaries, the VIEs may not engage any third party to provide the services offered by the Foreign Owned Subsidiaries under this agreement.

Agreements that Provide Effective Control over VIEs

Exclusive Call Option Agreement. Each of shareholders of the VIEs has entered into an exclusive call option agreement with the respective Foreign Owned Subsidiaries. Pursuant to these agreements, each of the shareholders of the VIEs has granted an irrevocable and unconditional option to the respective Foreign Owned Subsidiaries or their designees to acquire all or part of such shareholder’s equity interests in VIEs at its sole discretion, to the extent as permitted by PRC laws and regulations then in effect. The consideration for such acquisition of all equity interests in VIEs will be equal to the registered capital of the VIEs, and if PRC law requires the consideration to be greater than the registered capital, the consideration will be the minimum amount as permitted by PRC law. In addition, the VIEs irrevocably and unconditionally granted respective Foreign Owned Subsidiaries an exclusive option to purchase, to the extent permitted under the PRC law, all or part of the assets of the VIEs. The exercise price for purchasing the assets of the VIEs will be equal to their respective book values, and if PRC law requires the price to be greater than the book value, the price will be the minimum amount as permitted by PRC law. The call option may be exercised by respective Foreign Owned Subsidiaries or their designees.

F-10

Loan Agreement. Under the loan agreement among shareholders of the VIEs and the respective Foreign Owned Subsidiaries, the respective Foreign Owned Subsidiaries granted an interest-free loan to the shareholders of VIE, solely for their purchase of equity interest of the VIEs, investing or operating activities conducted in the VIEs. Each loan agreement has a term of twenty years.

Shareholder Voting Right Proxy Agreement. Each of shareholders of the VIEs irrevocably grant any person designated by the respective Foreign Owned Subsidiaries the power to exercise all voting rights to which he will be entitled to as shareholder of the VIEs at that time, including the right to declare dividends, appoint and elect board members and senior management members and other voting rights.

Each shareholder voting right proxy agreement has a term of twenty years, unless it is early terminated by all parties in writing or pursuant to provision of this agreement. The term of the agreement will be automatically extended for one year upon the expiration, if the Foreign Owned Subsidiary gives the other Parties written notice requiring the extension thereof and the same mechanism will apply subsequently upon the expiration of each extended term.

Equity Pledge Agreement. Each of shareholders of the VIEs has also entered into an equity pledge agreement with the respective Foreign Owned Subsidiaries. Pursuant to which these shareholders pledged their respective equity interest in the VIEs to guarantee the performance of the obligations of the VIEs. The Foreign Owned Subsidiaries, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. Pursuant to the equity pledge agreement, each shareholder of the VIEs cannot transfer, sell, pledge, dispose of or otherwise create any new encumbrance on their respective equity interest in the VIEs without the prior written consent of the respective Foreign Owned Subsidiaries. The equity pledge right enjoyed by the Foreign Owned Subsidiaries will expire when shareholders of the VIEs have fully performed their respective obligations under the above agreements. The equity pledges of the VIEs have been registered with the relevant local branch of the State Administration for Industry and Commerce, or SAIC.

Risks in relation to the VIE structure

The Company believes that the Foreign Owned Subsidiaries’ contractual arrangements with the VIEs are in compliance with PRC law and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements and the interests of the shareholders of the VIEs may diverge from that of the Company and that may potentially increase the risk that they would seek to act contrary to the contractual terms, for example by influencing the VIEs not to pay the service fees when required to do so.

The Company’s ability to control the VIEs also depends on the power of attorney the Foreign Owned Subsidiaries have to vote on all matters requiring shareholder approval in the VIEs. As noted above, the Company believes this power of attorney is legally enforceable but may not be as effective as direct equity ownership.

In addition, if the legal structure and contractual arrangements were found to be in violation of any existing PRC laws and regulations, the Company may be subject to fines or other actions. The Company does not believe such actions would result in the liquidation or dissolution of the Company, the Foreign Owned Subsidiaries or the VIEs.

The Group, through its subsidiaries and through the contractual arrangements, has (1) the power to direct the activities of the VIEs that most significantly affect the entity’s economic performance and (2) the right to receive benefits from the VIEs. Accordingly, the Group is the primary beneficiary of the VIEs and has consolidated the financial results of the VIEs.

The following financial statement amounts and balances of the Group’s VIEs were included in the accompanying consolidated financial statements:

	As of December 31,
	2013	2014
	$	$
Cash and cash equivalents	71,095,466	99,718,317
Accounts receivable, net of allowance for doubtful accounts	87,835,551	118,223,577
Other current assets	29,693,275	34,132,543
Amounts due from related parties	—	424,864
Total current assets	188,624,292	252,499,301
Total non-current assets	49,517,785	55,033,244
Total assets	238,142,077	307,532,545
Accounts payable	1,505,942	600,735
Accrued payroll and welfare expenses	29,309,329	44,321,824
Income tax payable	28,793,459	28,337,431
Other tax payable	11,188,055	16,032,365
Amounts due to related parties	2,383,293	4,175,247
Advance from customers and deferred revenue	7,150,344	5,073,492
Liability for exclusive rights, current	8,967,972	—
Other current liabilities	9,917,349	36,291,161
Total current liabilities	99,215,743	134,832,255
Deferred tax liabilities, non-current	655,563	469,579
Total liabilities	99,871,306	135,301,834

F-11

	Years Ended December 31,
	2012		2013		2014
	$		$		$
Total revenues	172,402,066		321,004,846		492,253,803
Cost of revenues	(54,276,512	)	(59,920,429	)	(43,760,890	)
Net income (loss)	(3,212,138	)	1,503,897		(8,699,386	)
Net cash provided by operating activities	16,020,624		72,877,862		55,495,458
Net cash used in investing activities	(17,544,270	)	(18,042,241	)	(17,245,460	)
Net cash provided by (used in) financing activities	26,686,813		(40,248,296	)	(17,043,942	)

There are no consolidated VIEs’ assets that are collateral for the VIEs’ obligations or are restricted solely to settle the VIEs’ obligations. The Company has not provided any financial support that it was not previously contractually required to provide to the VIEs.

(c) Use of estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from such estimates. Significant accounting estimates reflected in the Group’s financial statements include useful lives and valuation of long-lived assets, valuation of goodwill, allowance for doubtful accounts, assumptions related to share-based compensation arrangements, assumptions related to the consolidation of entities in which the Group holds variable interests, fair value of equity investments in funds invested by the Company, valuation allowance on deferred tax assets and estimated selling prices in multiple-deliverable revenue arrangements, valuation of fair value of investment in preferred shares of a private entity, and assumptions related to the valuation of fair value of Leju and Scepter’s ordinary shares.

(d) Fair value of financial instruments

The Group records certain of its financial assets and liabilities at fair value on a recurring basis. Fair value reflects the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability.

The Group applies a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. There are three levels of inputs that may be used to measure fair value:

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

(e) Business combinations

Business combinations are recorded using the purchase method of accounting and, accordingly, the acquired assets and liabilities are recorded at their fair market value at the date of acquisition. Any excess of acquisition cost over the fair value of the acquired assets and liabilities, including identifiable intangible assets, is recorded as goodwill.

(f) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and demand deposits, which are unrestricted as to withdrawal and use, and which have original maturities of three months or less.

F-12

(g) Restricted cash

The Group is required to maintain certain bank deposits as collateral for the bank loans to the Group (see Note 11). These balancers are subject to withdrawal restrictions and totaled nil and $38,290,478 as of December 31, 2013 and 2014, respectively.

The Group provides brokerage service for secondary properties. Upon consent of the property buyers and sellers, the sales proceeds can be paid through the Group’s accounts, which are put into the custody of the designated bank and can only be used as consideration to the property sellers when the transactions are completed. The Group records the proceeds relating to these transactions as restricted cash and other current liabilities. These restricted cash accounts totaled $2,146,098 and $1,947,961 as of December 31, 2013 and 2014, respectively. In connection with certain primary real estate agency agreements, the Group is required by the developers to maintain certain bank deposits under both parties’ custody through the contract periods or until the presale permits are obtained for the underlying projects. These restricted cash accounts were $164,018 and $163,425 as of December 31, 2013 and 2014, respectively.

(h) Investment in debt and equity securities

The Group invests in debt securities and equity securities with readily determinable fair values, and accounts for the investments based on the nature of the products invested, and the Group’s intent and ability to hold the investments to maturity.

The Group’s investments in debt securities that have a stated maturity and normally pay a prospective fixed rate of return. The Group classifies the investments in debt securities as held-to-maturity when it has both the positive intent and ability to hold them until maturity. Held-to-maturity investments are recorded at amortized cost and are classified as long-term or short-term according to their contractual maturity. Long-term investments are reclassified as short-term when their contractual maturity date is less than one year. Investments that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value with changes in fair value recognized in earnings. Investments that do not meet the criteria of held-to-maturity or trading securities are classified as available-for-sale, and are reported at fair value with changes in fair value included in other comprehensive income.

The Group reviews its investments, except for those classified as trading securities, for other-than-temporary impairment based on the specific identification method and considers available quantitative and qualitative evidence in evaluating potential impairment. If the cost of an investment exceeds the investment’s fair value, the Group considers, among other factors, general market conditions, government economic plans, the duration and the extent to which the fair value of the investment is less than cost and the Group’s intent and ability to hold the investment to determine whether another-than-temporary impairment has occurred.

The Group recognizes other-than-temporary impairment in earnings if it has the intent to sell the debt security or if it is more-likely-than-not that it will be required to sell the debt security before recovery of its amortized cost basis. Additionally, the Group evaluates expected cash flows to be received and determines if credit-related losses on debt securities exist, which are considered to be other-than-temporary, should be recognized in earnings.

If the investment’s fair value is less than the cost of an investment and the Group determines the impairment to be other-than-temporary, the Group recognizes an impairment loss based on the fair value of the investment.

(i) Customer deposits

The Group provides sales agency services for primary real estate development projects, some of which require the Group to pay an upfront and refundable deposit as demonstration of the Group’s financial strength and commitment to provide high quality service. These deposits are refunded to the Group subject to certain pre-determined criteria at a date specified in the agency contracts. The pre-determined criteria are based on sales progress on a project, which may take into account factors such as gross floor area of properties sold and transaction value. Certain of the Group’s contracts provide that if the group breaches the contract, any corresponding penalties may be deducted from the deposit. Customer deposits are recorded as either current or non-current assets based on the Group’s estimate of the date of refund.

The Group did not experience any material non-payment in history. In the event that any customer deposit becomes due but is not duly paid by the real estate developers, the Group requires collateral or other security from such developers, including existing properties or a right to properties under construction. In the event of non-payment, the Group would then resell the properties or the right to properties under construction for cash. The collection of these secured customer deposits is dependent on the resale price of the underlying properties, which is subject to the then market conditions.

(j) Accounts receivable

Accounts receivable, net of allowance for doubtful accounts of $60,232,453 and $44,002,810 at December 31, 2013 and 2014, respectively, consists of following:

	As of December 31,
	2013	2014
	$	$
Unbilled accounts receivable	268,589,167	306,282,419
Billed accounts receivable	88,852,935	108,867,589
Total	357,442,102	415,150,008

F-13

Unbilled accounts receivable represents amounts recognized in revenue prior to issuing official tax receipts to customers. The Group regularly reviews the collectability of unbilled accounts receivable in the same method as billed accounts receivable disclosed in Note 2 (y).

(k) Properties held for sale

Properties held for sale are stated at the lower of cost or net realizable value. Cost comprises the cost of purchase and, where applicable, direct costs associated with the purchase. Properties held for sale obtained through taking possession of collateral to settle the accounts receivable, are recorded at value of the receivables that are settled. The Group also recognizes acquired properties as properties held for sale when the Group has intent and ability to sell them within one year. The Group evaluates its properties held for sale for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. No impairment was provided for properties held for sale for the years ended December 31, 2012, 2013 and 2014.

(l) Investment in affiliates

Affiliated companies are entities over which the Group has significant influence, but which it does not control. The Group generally considers an ownership interest of 20% or higher to represent significant influence. And the Group considers an equity interest of 3% or higher to represent more than minor influence for investments in investment funds.

Investment funds are subject to Investment Company accounting, and need to apply the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 946, Financial Services - Investment Companies. Accordingly, all investments held by these investment funds are measured at fair value. The difference between fair value and initial cost of investments is reflected as unrealized appreciation/depreciation on investments in the income statement. Investment funds determine the fair value of the investments based on relevant comparable market data such as comparisons of multiples of peer companies, evaluation of financial and operating data, company specific developments, market valuations of comparable companies, and latest transaction price factors (Level 3 inputs).

Investments in affiliates are accounted for by the equity method of accounting. Under this method, the Group’s share of the post-acquisition profits or losses of affiliated companies is recognized in the income statement and its shares of post-acquisition movements in other comprehensive income are recognized in other comprehensive income. Unrealized gains on transactions between the Group and its affiliated companies are eliminated to the extent of the Group’s interest in the affiliated companies; unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. When the Group’s share of losses in an affiliated company equals or exceeds its interest in the affiliated company, the Group does not recognize further losses, unless the Group has incurred obligations or made payments on behalf of the affiliated company. The Group records its income (loss) from the investment funds one quarter in arrears to enable it to have more time to collect and analyze the investments’ result.

The Group is required to perform an impairment assessment of its investments whenever events or changes in business circumstances indicate that the carrying value of the investment may not be fully recoverable. An impairment loss is recorded when there has been a loss in value of the investment that is other than temporary. The Group has not recorded any impairment losses in any of the periods reported. As of December 31, 2013 and 2014, the Group determined that no such events were present.

(m) Property and equipment, net

Property and equipment is recorded at cost less accumulated depreciation. Depreciation is computed on a straight-line basis over the following estimated useful lives:

Leasehold improvements	Over the shorter of the lease term or their estimated useful lives
Buildings	30 years
Furniture, fixtures and equipment	3 - 5 years
Motor vehicles	5 years

Gains and losses from the disposal of property and equipment are included in income from operations.

(n) Intangible assets, net

Acquired intangible assets mainly consist of license agreements with SINA, a real estate advertising agency agreement with SINA, database license agreement, exclusive rights with Baidu, Inc. (“Baidu”), favorable lease terms, customer relationships, non-compete agreements and trademarks from business combinations and are recorded at fair value on the acquisition date. All intangible assets, with the exception of customer relationships, are amortized ratably over the contract period. Intangible assets resulting out of acquired customer relationships are amortized based on the timing of the revenue expected to be derived from the respective customer.

(o) Impairment of long-lived assets

The Group evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When these events occur, the Group measures impairment by comparing the carrying amount of the assets to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Group would recognize an impairment loss equal to the excess of the carrying amount over the fair value of the assets.

F-14

(p) Impairment of goodwill and indefinite lived intangible assets

The Group performs an annual goodwill impairment test comprised of two steps. The first step compares the fair value of each reporting unit to its carrying amount, including goodwill and indefinite lived intangible assets. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill and indefinite lived intangible assets to the carrying value of a reporting unit’s goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. This allocation process is only performed for purposes of evaluating goodwill impairment and does not result in an entry to adjust the value of any assets or liabilities. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill.

Management performs a goodwill impairment test for each of its reporting units as of December 31 of each year or when there is a triggering event causing management to believe it is more likely than not that the carrying amount of goodwill may be impaired.

Intangible assets with an indefinite life are tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test consists of a comparison of the fair value of the intangible asset to its carrying amount. If the carrying amount exceeds the fair value, an impairment loss is recognized equal in amount to that excess.

(q) Income taxes

Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities, and their reported amounts in the financial statements, net operating loss carry forwards and credits by applying enacted statutory tax rates applicable to future years when the reported amounts of the asset or liability are expected to be recovered or settled, respectively. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on the classification of the related assets and liabilities for financial reporting purposes.

The Group only recognizes tax benefits related to uncertain tax positions when such positions are more likely than not of being sustained upon examination. For such positions, the amount of tax benefit that the Group recognizes is the largest amount of tax benefit that is more than fifty percent likely of being sustained upon the ultimate settlement of such uncertain position. The Group records interest and penalties as a component of income tax expense.

(r) Debt issuance costs and debt discounts

Debt issuance costs and debt discounts are amortized as interest expense, using the effective interest method, through the earlier of the maturity date of the Convertible Senior Notes or the date of conversion, if any. Debt issuance costs are recorded as deferred assets, and debt discounts are recorded as a direct deduction from the face amount of Convertible Senior Notes.

(s) Share-based compensation

Share-based compensation cost is measured on the grant date, based on the fair value of the award, and recognized as an expense over the requisite service period. Management has made an estimate of expected forfeitures and recognizes compensation cost only for those equity awards expected to vest.

(t) Revenue recognition

The Group recognizes revenue when there is persuasive evidence of an arrangement, service has been rendered, the sales price is fixed or determinable and collectability is reasonably assured. Revenues are recorded, net of sales related taxes.

Real estate online services

The Group generates real estate online revenues principally from e-commerce, online advertising, and listing services.

The Group e-commerce services primarily include discount coupon advertising and online property auctions. The Group also provides property viewing and pre-sale customer support free of charge in connection with the sale of discount coupons and online property auctions. E-commerce revenues are principally generated from selling discount coupons to potential property buyers. Those discount coupons allow buyers to purchase specified properties from real estate developers at discounts greater than the face value of the fees charged by the Group. The discount coupons are refundable to the buyers at any time before they are used to purchase the specified properties. The Group recognizes such e-commerce revenues upon obtaining confirmation letters that prove the use of coupons by property buyers, and when collections are reasonably assured. Revenues are recognized based on the net proceeds received as the Group acts as a marketing agent of the property developer in the transaction.

Revenue from online advertising services is generated principally from online advertising arrangements, sponsorship arrangements, and to a lesser extent, outsourcing arrangements, and keyword advertising arrangements. Online advertising arrangements allow advertisers to place advertisements on particular areas of the Group’s websites, in particular formats and over particular periods of time. Advertising revenues from online advertising arrangements are recognized ratably over the contract period of display when collectability is reasonably assured. Sponsorship arrangements allow advertisers to sponsor a particular area on the Group’s websites in exchange for a fixed payment over the contract period. Advertising revenues from sponsorship arrangements are recognized ratably over the contract period. The Group also generates online advertising revenues from outsourcing certain regional sites for a fixed period of time to local outsourcing partners, who are responsible for both website operation and related advertising sales. Advertising revenues from hosted websites are recognized ratably over the term of the contract. Keyword advertising revenues are recognized ratably over the contract period when collectability is reasonably assured.

F-15

The Group also provides listing services to real estate brokers. Listing services entitle real estate brokers to post and make changes to information for properties in a particular area on the website for a specified period of time, in exchange for a fixed fee. Listing revenues are recognized ratably over the contract period of display when collectability is reasonably assured.

Real estate brokerage services

The Group provides marketing and sales agency services to primary real estate developers. The Group recognizes the commission revenue when a successful sale of property has occurred and upon completing the services required to execute a successful sale without further contingency. A successful sale is defined in each agency contract and is usually achieved after the property buyer has executed the purchase contract, made the required down payment, and the purchase contract has been registered with the relevant government authorities. The Group may also be entitled to earn additional revenue on the agency services if certain sales and other performance targets are achieved, such as average sale price over a pre-determined period. These additional agency service revenues are recognized when the Group has accomplished the required targets.

The Group provides brokerage service for secondary real estate sale and rental transactions. For secondary real estate brokerage service, the Group recognizes revenue upon execution of a transaction agreement between the buyer/lessee and the seller/lessor for which the Group acts as the broker.

Real estate information and consulting services

The Group sells subscriptions to its proprietary CRIC system for which revenues are recognized ratably over the subscription period, which is usually six to 12 months. The Group also provides data integration services periodically, such as periodic market updates and research analysis that suit the specific needs and requirements of individual clients in addition to access to the CRIC system. The contractual period for such arrangements is usually between three to 12 months with revenue being recognized ratably over such period.

The Group provides real estate consulting services to customers in relation to land acquisition and project consulting services. Land acquisition consulting services involve advising customers in relation to land acquisition and facilitating the transfer of land development rights. Payment is usually contingent upon the delivery of a final product, such as closing a land acquisition transaction. The Group recognizes revenue under such arrangements upon delivery of the final product, assuming customer acceptance has occurred and the fee is no longer contingent. Project consulting services involve providing consulting services, including project feasibility studies, analysis of the real estate transaction history of nearby development projects, marketing and advertising consulting, and development of comprehensive plans for their development projects. Such arrangements include periodic consulting services arrangements and delivery based consulting services arrangements. Periodic consulting services involve providing consulting services which are tailored to meet the needs of real estate developer clients at various stages of the project development and sales process for a specified period, such as monthly market studies. The contractual period for such arrangements is usually between one and 12 months with revenue being recognized ratably over such period. Delivery based consulting services involve providing consulting services which are tailored to meet the specific need of real estate developer. Payment is usually contingent upon the delivery of a final product, such as providing a market study report. The Group recognizes revenue under such arrangements upon delivery of the final product, assuming customer acceptance has occurred and the fee is no longer contingent.

Community value-added services

The Group launched community value-added services in 2014. No revenue was generated from these services yet in the year ended December 31, 2014.

Other services

The Group provides promotional events services, and recognizes revenue when such services are rendered, assuming all other revenue recognition criterion have been met. The Group also generates revenues from advertising sales services by acquiring advertising space and subsequently reselling such space. Revenues under such arrangements are recognized when the related advertisement is placed. The Group recognizes advertising sales revenues on a gross basis because it acts as principal and is the primary obligator in the arrangement.

The Group also generates revenues from real estate fund management fees, performance fees and allocations. Real estate fund management fees are based upon investment advisory and related agreements and are recognized as earned over the specified contract period. Performance fees and allocations represent the preferential allocations of profits (“carried interest”) that are a component of the Group’s general partnership interests in the real estate funds. The Group is entitled to an additional return from the investment fund in the event investors in the fund achieve cumulative investment returns in excess of a specified amount. The Group records the additional return from these carried interests as revenue at the end of the contract year.

The Group launched real estate financial services in 2014. No material revenue was generated from these services yet in the year ended December 31, 2014.

F-16

Multiple element arrangements

The Group has multiple element arrangements that may include provision of primary real estate services, online advertising, promotional events services, consulting services and/or information services. The Group has determined that each of the deliverables listed above is considered a separate unit of account as each has value to the customer on a standalone basis and has been sold separately on a standalone basis, there is no general right of return on delivered items and the delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Group.

The Group allocates arrangement consideration in multiple-deliverable revenue arrangements at the inception of an arrangement to all deliverables based on the relative selling price in accordance with the selling price hierarchy, which includes: (i) vendor-specific objective evidence (“VSOE”) if available; (ii) third-party evidence (“TPE”) if VSOE is not available; and (iii) best estimate of selling price (“BESP”) if neither VSOE nor TPE is available.

VSOE . The Group determines VSOE based on its historical pricing and discounting practices for the specific service when sold separately. In determining VSOE, the Group requires that a substantial majority of the selling prices for these services fall within a reasonably narrow pricing range. The Group has historically priced its commission rate for the primary real estate services, periodic consulting services, subscription for the CRIC system and online advertising within a narrow range. As a result, the Group has used VSOE to allocate the selling price for these services when elements of a multiple element arrangement. The Group has not historically priced delivery based consulting service and promotional event services within a narrow range, therefore, the Group considers TPE and BESP as discussed below.

TPE . When VSOE cannot be established for deliverables in multiple element arrangements, the Group applies judgment with respect to whether it can establish a selling price based on TPE. TPE is determined based on competitor prices for similar deliverables when sold separately. Generally, the Group’s marketing strategy differs from that of its peers and its offerings contain a significant level of differentiation such that the comparable pricing of services with similar functionality cannot be obtained. Furthermore, the Group is unable to reliably determine what similar competitor services’ selling prices are on a stand-alone basis. As a result, the Group has not been able to establish selling price based on TPE.

BESP . When it is unable to establish selling price using VSOE or TPE, the Group uses BESP in its allocation of arrangement consideration. The objective of BESP is to determine the price at which the Group would transact a sale if the service were sold on a stand-alone basis. The Group determines BESP for deliverables by considering multiple factors including, but not limited to, prices it charged for similar offerings, market conditions, specification of the services rendered and pricing practices. The Group has used BESP to allocate the selling price of project-based consulting service and promotional event services under these multiple element arrangement. The process for determining BESP involves management judgment. The Group’s process considers multiple factors that may vary depending upon the unique facts and circumstances related to each deliverable. If the facts and circumstances underlying the factors the Group considers change, or should subsequent facts and circumstances lead the Group to consider additional factors, the Group’s BESP could change in future periods. The Group regularly reviews the evidence of selling price for its services and maintains internal controls over the establishment and updates of these estimates. There were no material changes in estimated selling price for its services during the years ended December 31, 2012, 2013 and 2014, nor does the Group expect a material changes in BESP in the foreseeable future.

The total amounts of revenue earned by the Group related to agreements that have been accounted for as multiple element arrangements were $74,042,253, $71,908,552, and $74,189,077 in 2012, 2013 and 2014, respectively.

Deferred revenues are recognized when payments are received in advance of revenue recognition.

(u) Cost of revenue

Cost of revenue for the real estate online services segment consists of costs associated with the production of websites, which includes fees paid to third parties for Internet connection, content and services, editorial personnel related costs, amortization of intangible assets, depreciation associated with website production equipment and fees paid to SINA for advertising inventory on non-real estate channels. Cost of revenue for the real estate brokerage services segment includes costs directly related to providing services, which include costs incurred for marketing and sale of primary real estate projects for which the Group acts as the agent, and rental expenses incurred for properties leased by the Group as brokerage stores and sales commission. Cost of revenue of real estate information and consulting services segment primarily consists of sales commission, the service fee for purchase some consulting reports and costs incurred for developing, maintaining and updating the CRIC database system, which includes cost of data purchased or licensed from third-party sources, technical personnel related costs and associated equipment depreciation. Cost of revenue for real estate promotional events and advertising services consists of fees paid to third parties to acquire advertising space for resale, and salaries of sales and support staff and fees paid to third parties for the services directly related to promotional event services. Cost of revenue for the real estate fund management services consists of cost associated with investing department.

(v) Marketing and advertising expenses

Marketing and advertising expenses consists primarily of targeted online and offline marketing costs for promoting the Group’s e-commerce projects, increasing visibility and building brand, such as Leju property visit, sponsored marketing campaigns, online or print advertising, public relations and sponsored events. The Company expenses all marketing advertising costs as incurred and record these costs within “Selling, general and administrative expenses” on the consolidated statements of operations when incurred. The nature of the Company’s direct marketing activities is such that they are intended to attract subscribers for the online advertising and potential property buyers to purchase the discount coupons. The Group incurred advertising expenses amounting to $51,936,863, $100,457,370 and $208,667,609 for the years ended December 31, 2012, 2013 and 2014, respectively.

F-17

(w) Foreign currency translation

The functional currency of the Company is the United States dollar (“U.S. dollar”) and is used as the reporting currency of the Group. Monetary assets and liabilities denominated in currencies other than the U.S. dollar are translated into U.S. dollar at the rates of exchange ruling at the balance sheet date. Equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses are translated using the average rate for the year. Translation adjustments are reported as foreign currency translation adjustment and are shown as a separate component of other comprehensive income in the consolidated statements of changes in equity and comprehensive income.

The financial records of certain of the Company’s subsidiaries are maintained in local currencies other than the U.S. dollar, such as Renminbi (“RMB”) and Hong Kong dollar (“HKD”), which are their functional currencies. Transactions in other currencies are recorded at the rates of exchange prevailing when the transactions occur.

The Group recorded an exchange loss of $379,530, $862,383 and exchange gain $613,227 for the years ended December 31, 2012, 2013 and 2014, respectively, as a component of other income (loss), net.

(x) Government subsidies

Government subsidies include cash subsidies received by the Company’s subsidiaries in the PRC from local governments. These subsidies are generally provided as incentives for conducting business in certain local districts. Cash subsidies of $6,475,023, $4,917,642 and $8,786,891 were included in other operating income for the years ended December 31, 2012, 2013 and 2014, respectively. Subsidies are recognized when cash is received and when all the conditions for their receipt have been satisfied.

(y) Concentration of credit risk

Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and customer deposits. The Group places its cash and cash equivalents with reputable financial institutions.

The Group regularly reviews the creditworthiness of its customers, and requires collateral or other security from its customers in certain circumstances when accounts receivables become long overdue. The Group establishes an allowance for doubtful accounts and customer deposits primarily based upon factors surrounding the credit risk of specific customers, including creditworthiness of the clients, aging of the receivables and other specific circumstances related to the accounts.

Movement of the allowance for doubtful accounts for accounts receivable and customer deposits is as follows:

	2012		2013		2014
	$		$		$
Balance as of January 1	14,811,322		36,537,817		60,818,408
Provisions for doubtful accounts	27,297,288		29,099,216		26,363,611
Write offs	(5,633,500	)	(6,298,025	)	(42,404,691	)
Changes due to foreign exchange	62,707		1,479,400		(190,682	)
Balance as of December 31	36,537,817		60,818,408		44,586,646

The allowance for other receivables was immaterial for all periods presented.

(z) Earnings per share

Basic earnings per share are computed by dividing income attributable to holders of ordinary shares by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per ordinary share reflects the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares.

The following table sets forth the computation of basic and diluted income per share for the periods indicated:

F-18

	Years Ended December 31,
	2012			2013		2014
Net income (loss) attributable to E-House ordinary shareholders — basic	$	(56,971,404	)	$	51,957,425	$	40,001,485
Decrease of income from Leju*	—			—		(2,208,892		)
Interest of Convertible Senior Notes (including stated interest and amortization of discount and issuance costs)	—			192,566		—
Net income (loss) attributable to E-House ordinary shareholders — diluted	$	(56,971,404	)	$	52,149,991	$	37,792,593
Weighted average ordinary shares outstanding— basic	106,159,388			130,163,165		139,211,442
Convertible senior notes	—			334,821		—
Share options and restricted shares	—			5,282,011		7,476,393
Weighted average number of ordinary shares outstanding — diluted	106,159,388			135,779,997		146,687,835
Basic earnings (loss) per share	$	(0.54	)	$	0.40	$	0.29
Diluted earnings (loss) per share	$	(0.54	)	$	0.38	$	0.26

* In calculating diluted earnings (loss) per share, the amount of Leju’s net income included in net income (loss) attributable to E-House’s ordinary shareholders is calculated by multiplying Leju’s diluted EPS by the weighted average number of Leju shares held by E-House’s during the period, which may result in net income (loss) attributable to E-House ordinary shareholders, for purposes of computing diluted earnings (loss) per share, being different from that actually recorded in the consolidated statements of operations. This difference is presented as increase (decrease) of income (loss) from Leju.

Diluted earnings (loss) per share do not include the following instruments as their inclusion would have been anti-dilutive:

	Years Ended December 31,
	2012	2013	2014
Share options and restricted shares	14,660,788	—	—
Convertible senior notes	—	—	8,959,127

(aa) Non-controlling interest

As of December 31, 2014, the majority of the Group’s non-controlling interest is attributable to Leju. As of December 31, 2014, E-House retained a 69.9% equity interest in Leju. Non-controlling interest in Leju included in the Company’s consolidated balance sheets was $124,892,590 as of December 31, 2014. For the year ended December 31, 2014, $50,702,835 of the Group’s consolidated net income was attributable to Leju.

Before the merger of the Company with CRIC, the majority of the Group’s non-controlling interest is attributable to CRIC, which mainly operates the Company’s real estate information and consulting and real estate online services segments. In April 2012, CRIC became a wholly-owned subsidiary of the Company after the Merger. For the year ended December 31, 2012, $13,547,386 of the Group’s consolidated net loss was attributable to CRIC.

The following schedule shows the effects of changes in E-House’s ownership interest in CRIC and Leju and other significantly less than wholly owned subsidiaries on equity attributable to E-House:

	Years Ended December 31,
	2012		2013	2014
Net income (loss) attributable to E-House	(56,971,404	)	51,957,425	40,001,485
Transfers to the non-controlling interest:
Decrease in E-House’s additional paid-in capital for purchase of 64,642,647 CRIC common shares for the years ended December 31 2012	(149,461,182	)	—	—
Decrease in E-House’s additional paid-in capital for the exercise of CRIC’s options and the vesting of CRIC’s restricted shares	(332,951	)	—	—
Increase in E-House’s equity by partial disposal of subsidiaries	—		—	138,477,580
Increase in E-House’s additional paid-in capital for issuing Leju’s shares to public	—		—	70,068,096
Decrease in E-House’s additional paid-in capital for Leju share distribution to E-House’s shareholders	—		—	(21,569,028	)
Decrease in E-House’s additional paid-in capital for acquisition of non-controlling interest	—		—	(30,720,088	)
Increase in E-House’s additional paid-in capital for the exercise of Leju’s options and the vesting of Leju’s restricted shares	—		—	58,340
Net transfers from (to) non-controlling interest	(149,794,133	)	—	156,314,900
Change from net income attributable to E-House and transfers (to) from non-controlling interest	(206,765,537	)	51,957,425	196,316,385

(ab) Comprehensive income

Comprehensive income includes all changes in equity except those resulting from investments by owners and distributions to owners. For the years presented, total comprehensive income included net income, foreign currency translation adjustments and the unrealized gain/loss due to the changes in fair value of the available-for-sale investment.

F-19

(ac) Recently issued accounting pronouncements

In May 2014, the Federal Accounting Standard Board (“FASB”) issued, Accounting Standards Update (“ASU”) 2014-09, ‘‘Revenue from Contracts with Customers (Topic 606)’’. The guidance substantially converges final standards on revenue recognition between the FASB and the International Accounting Standards Board providing a framework on addressing revenue recognition issues and, upon its effective date, replaces almost all exiting revenue recognition guidance, including industry specific guidance, in current U.S. generally accepted accounting principles. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps:

Step 1: Identify the contract(s) with a customer.

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction price.

Step 4: Allocate the transaction price to the performance obligations in the contract.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Group is in the process of evaluating the impact of adoption of this guidance on the Group’s consolidated financial statements.

In June 2014, the FASB issued a new pronouncement which requires that a performance target that affects vesting and that could be achieved after the requisite service period is treated as a performance condition. A reporting entity should apply existing guidance in Topic 718, Compensation-Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The Group does not expect the adoption of this guidance will have a significant effect on the Group’s consolidated financial statements.

In August 2014, the FASB issued a new pronouncement which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date of issuance of the entity’s financial statements. Further, an entity must provide certain disclosures if there is ‘‘substantial doubt about the entity’s ability to continue as a going concern.’’ The new standard is effective for fiscal years ending after December 15, 2016. The Group does not expect the adoption of this guidance will have a significant effect on the Group’s consolidated financial statements.

In November 2014, the FASB issued a new pronouncement which provides guidance an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. An acquired entity may elect the option to apply pushdown accounting in the reporting period in which the change- in-control event occurs. An acquired entity should determine whether to elect to apply pushdown accounting for each individual change-in-control event in which an acquirer obtains control of the acquired entity. If pushdown accounting is not applied in the reporting period in which the change- in-control event occurs, an acquired entity will have the option to elect to apply pushdown accounting in a subsequent reporting period to the acquired entity’s most recent change-in-control event. An election to apply pushdown accounting in a reporting period after the reporting period in which the change-in-control event occurred should be considered a change in accounting principle in accordance with Topic 250, Accounting Changes and Error Corrections. If pushdown accounting is applied to an individual change- in-control event, that election is irrevocable. The amendments in this Update are effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change- in-control events or to its most recent change-in-control event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle. The Group does not expect the adoption of this guidance will have a significant effect on the Group’s consolidated financial statements.

In February 2015, the FASB issued, ASU 2015-02, ‘‘Amendments to the Consolidation Analysis’’, regarding consolidation of legal entities such as limited partnerships, limited liability corporations, and securitization structures. The guidance eliminates the deferral issued by the FASB in February 2010 of the accounting guidance for VIEs for certain investment funds, including mutual funds, private equity funds and hedge funds. In addition, the guidance amends the evaluation of fees paid to a decision maker or a service provider, and exempts certain money market funds from consolidation. The guidance will be effective for accounting periods beginning after December 15, 2015 with early adoption permitted. The Group is currently evaluating the potential impact on the Group’s consolidated financial statements.

3. Properties Held for Sale

In 2012, 2013 and 2014, customers transferred legal ownership of six, 14 properties including five car-parking spaces and 30 properties including 20 residential properties, five car-parking spaces, and five commercial properties, to the Group to settle $970,625, $6,678,302 and $7,122,155 in accounts receivable, respectively. Customers also transferred legal ownership of nil, 36 and nil properties to the Group to settle nil, $9,928,558 and nil in customer deposit.

F-20

Properties with values of $1,281,008, nil and nil were transferred to property and equipment for the years ended December 31, 2012, 2013 and 2014, respectively, due to the change of management’s intention with respect to these properties.

In 2013, the Group acquired 237 properties that the Group has intent and ability to sell within one year. As of December 31, 2013, title transfers of 140 residential properties, five car-parking places and 52 commercial properties were still in process, and the associated consideration of $60,076,026 was recorded as advance payment for properties to be held for sale in the consolidated balance sheet. 101 residential properties were transferred to properties held for sale in 2014. As of December 31, 2014, title transfers of 113 residential properties and 55 commercial properties were still in process, and the associated consideration of $51,983,436 was recorded as advance payment for properties to be held for sale in the consolidated balance sheet.

The Group recorded gains of $45,936, $118,559 and nil from selling of the properties held for sale for the years ended December 31, 2012, 2013 and 2014, respectively. As of December 31, 2014, the Group held 147 residential properties, five commercial properties and nine car-parking spaces with a total carrying value of $34,841,895. As of December 31, 2013, the Group held 44 residential properties and five car-parking spaces with a total carrying value of $15,304,927.

4. Investment in Affiliates

In 2011, the Group paid RMB100,000,000 ($15,735,900) for a 3.8% equity interest in Shanghai Star Capital Equity Investment Center (“Star Capital”) as a limited partner. The Group’s interest in Star Capital is more than minor and thus is subject to the equity method. In 2013 and 2014, the Group received RMB35,000,000 ($5,740,630) and RMB15,000,000 ($2,455,830) capital return from Star Capital, respectively.

In May 2012, the Group formed a limited partnership, Shanghai Wuling Investment Center (“Wuling Center”) in Shanghai, for the purpose of making equity investments in areas deemed suitable by the general partner. Shanghai Yidezhen Equity Investment Center, a subsidiary of Shanghai E-cheng, acts as Wuling Center’s general partner. The general partner receives annual management fees and carried interest on a success basis. The Group invested RMB15,000,000 ($2,386,440), RMB27,000,000 ($4,428,486) and RMB18,000,000 ($2,946,996) into Wuling Center in 2012, 2013 and 2014 for a total of 6.5% equity interest, respectively. An entity controlled by Mr. Xin Zhou, the Company’s co-chairman and chief executive officer, owned 4.9% equity interest in Wuling Center and is a limited partner. The Wuling Center is not consolidated by the Group as the Group does not control the Wuling Center given the unrelated limited partners have substantive kick-out rights that allow them to remove the general partner without cause with a vote of 50% of the limited partners. The Group’s investments in Wuling Center are accounted for using the equity method as its role as a general partner provides it with significant influence over their operating and financial policies of the investee.

In 2014, the Group formed a limited partnership, Shanghai Shouxin Equity Investment Center (“Shouxin Center”) in Shanghai, for the purpose of making equity investments in areas deemed suitable by the general partner and Shanghai Yidezhao Equity Investment Center, a subsidiary of Shanghai E-cheng, acts as Shouxin Center’s general partner. The general partner will receive annual management fee and carried interest on a success basis. The Group prepaid $2,437,920 (RMB15,000,000) in 2013 into Shouxin Center for a 13.0% equity interest. Shouxin Center did not finalize its registration until 2014. Yidezhao’s related parties, E-House Shengyuan Equity Investment Center (“Shengyuan Center”) and E-House Shengquan Equity Investment Center (“Shenquan Center”) own 41.6% and 28.0% equity interest in Shouxin Center respectively, as limited partners. Shenyuan Center is the deemed the primary beneficiary of Shouxin Center given the substantive participating rights held by Shenyuan Center in certain financial and operating decisions of the limited partnership in the ordinary course of business, and the biggest equity holding in the limited partnership in the related party group. As such, the Group does not consolidate Shouxin Center. The Group’s investments in Shouxin Center are accounted for using the equity method as its role as a general partner provides it with significant influence over the operating and financial policies of the investees. The Group records its income (loss) from this investment one quarter in arrears to enable it to have more time to collect and analyze the investments’ results. In August 2014, the Group disposed of 12.2% equity interest for a total consideration of $2,287,950, of which 4.8% was transferred to an unrelated third party investor, and 7.4% was transferred to two employees of the Group. The unit price transferred to each individual was the same. The equity interests were transferred at book value, which approximated fair value at the time as the entity was just established with no material change in fair value. Therefore, no gain or loss was recognized from the disposal. The Group continues to account for the remaining 0.9% equity interest using equity method of accounting.

In 2014, the Group formed a limited partnership, Shanghai Muxin Equity Investment Center (“Muxin Center”) in Shanghai, for the purpose of making equity investments in areas deemed suitable by the general partner and Shanghai Yidezhao Equity Investment Center, a subsidiary of Shanghai E-Cheng, acts as Muxin Center’s general partner. The general partner will receive annual management fee and carried interest on a success basis. The Group prepaid $4,085,625 (RMB25,000,000) in 2013 into Muxin Center for a 23.4% equity interest. Muxin Center did not finalize its registration until 2014. The Group was not the deemed the primary beneficiary of Muxin Center. As such, the Group does not consolidate Muxin Center. The Group’s investments in Muxin Center are accounted for using the equity method as its role as a general partner provides it with significant influence over the operating and financial policies of the investees.

In January 2014, the Group paid $4,085,625 (RMB25,000,000) for a 21.0% equity interest in Hangzhou Kuyue Technology Limited (“Hangzhou Kuyue”), for the purpose of obtaining the mobile platform to operate the community value-added business. The Group’s interest in Hangzhou Kuyue is accounted for using equity method of accounting as the group can exercise significant influence over the operating and financial policies of the investee. In November 2014, the Group signed the agreement to acquire Hangzhou Kuyue as a wholly-owned subsidiary to integrate the internet resources in order to create leading Community Integration Information Service Platform. The consideration for the further 79.0% equity interest was $15,607,088 (RMB 95,500,000), of which $5,066,175 (RMB31,000,000) was paid in December 2014. The prepayment was recorded as other non-current assets in the consolidated balance sheet. The transaction was still in process as of December 31, 2014.

F-21

5. Acquisitions of Subsidiaries

Acquisition of CRIC

On April 20, 2012, the Group acquired all the outstanding shares of CRIC that it did not already own, and CRIC became a wholly-owned subsidiary of E-House. E-House paid 0.6 of E-House ADSs and $1.75 in cash in exchange for each CRIC share. In total, E-House paid $113,124,632 in cash and issued 38,785,588 ordinary shares for the Merger. The total consideration consists of the following:

	Amount
	$
Cash	113,124,632
Fair value of E-House ordinary shares issued *	252,106,323
Replacement of CRIC share options **	31,897,646
Total consideration	397,128,601

*The fair value of E-House ordinary shares is based on the closing price of E-House shares as of April 20, 2012

** As disclosed in Note 17, E-House issued the E-House replacement share options and restricted shares in connection with the Merger. The total fair value of the replacement awards was $54,787,620, of which $31,897,646 was attributable to pre-Merger services and included as a component of the consideration transferred in the Merger with the remainder allocated to post-Merger services and included in the Company’s compensation cost after the Merger. The amount attributable to the pre-Merger services was determined based on the fair value of the replacement awards on the date of Merger and a ratio of the pre-Merger services to the greater of the total service period or the original service period of the replacement awards.

As E-House retains the controlling interest in CRIC before and after the Merger, the Merger was accounted for as an equity transaction. Therefore, no gain or loss was recognized in consolidated net income or comprehensive income. The carrying amount of the non-controlling interest in CRIC was adjusted to reflect the change in E-House’s ownership interest in CRIC. Any difference between the fair value of the consideration paid and the amount by which the non-controlling interest was adjusted was recognized in equity.

The consideration has been allocated as follows:

	Amount
	$
Non-controlling interest	254,656,627
Accumulated other comprehensive income	(6,989,208	)
Additional paid-in capital	149,461,182
Total consideration	397,128,601

Other Acquisitions

In July 2013, the Group acquired Samas Asia Limited (“Samas”) for $6,000,000. Samas owned leasing contracts of four commercial buildings in Shanghai and was developing such buildings for subsequent sub-lease. The Group acquired Samas to develop its real estate asset management business. The goodwill mainly reflected the competitive advantages the Company expected to realize from Samas in the asset management industry, including synergies related to properties management and customer development. The purchase price was allocated as follows:

	Allocated		Amortization
	Value		Period
	$
Cash	1,061,330
Total tangible assets acquired	5,192,503
Liabilities assumed	(3,085,972	)
Favorable lease term	1,379,556		17.3 years
Customer relationship	184,987		17.3 years
Outstanding contracts	261,863		6.4 years
Goodwill	1,462,335
Deferred tax liabilities	(456,602	)
Total	6,000,000

The goodwill was allocated to the real estate information and consulting services segment and is not deductible for tax purposes.

F-22

6. Acquisition of Non-controlling Interests

There were 3 major acquisitions of non-controlling interests completed in 2014.

In January 2014, the Group entered into an equity transfer agreement with two individual shareholders of Beijing Lotta Times Advertising Co., Ltd (“Beijing Lotta”), a subsidiary of Beijing Leju, to purchase the remaining 40% shares of Beijing Lotta that it did not already own with a total consideration of $16,254,600 (RMB100,000,000). After the acquisition, Beijing Lotta became a wholly-owned subsidiary of the Group. As the Group retains the controlling interest in Beijing Lotta before and after the acquisition, the acquisition was accounted for as an equity transaction. The carrying amount of the non-controlling interest in the subsidiary was adjusted to reflect the change in Group’s ownership interest in Beijing Lotta. Any difference between the fair value of the consideration paid and the amount by which the non-controlling interest was adjusted was recognized in equity. As a result of the transaction, $15,112,828 additional paid capital and $1,141,772 non-controlling interest were derecognized. As of December 31, 2014, $7,190,700 (RMB44,000,000) was unpaid and was due at December 31, 2015.

In September 2014, the Group entered into an equity transfer agreement with six individual shareholders (five of them are employees of the Group) of Beijing Yisheng Leju Advertising Co., Ltd (“Beijing Leju Advertisement”) and Yisheng Leju (Shanghai) Information Service Co., Ltd.( “Yisheng Shanghai”), two subsidiaries of Beijing Leju, to purchase the remaining 24.5% shares of Beijing Leju Advertisement and Yisheng Shanghai that it did not own with a total consideration of $19,074,412 (RMB117,355,000). Considerations to the five employees shareholders are $16,054,493 (RMB98,775,000) for 19.5% equity interest, equivalent to $823,307 per 1% equity interest, while the consideration for the rest 5.0% to the non-employee shareholder is $3,019,919 (RMB18,580,000), equivalent to $603,984 per 1% of equity interest. In connection with the equity transfer, the five employees are also required to serve for the Group for two years from the closing date of the transaction. The Group considers the purchase price to the nonemployee shareholder to represent fair value of the equity interest on the date of transfer. The consideration premium of $4,276,810 paid to the employee shareholders was treated as share-based compensation to be amortized over the 2-year service period. After the acquisition, Beijing Leju Advertisement and Yisheng Shanghai became wholly-owned subsidiaries of the Group. As the Group retains the controlling interest in Beijing Leju Advertisement and Yisheng Shanghai before and after the acquisition, the acquisition was accounted for as an equity transaction. The carrying amount of the non-controlling interest in two subsidiaries were adjusted to reflect the change in Group’s ownership interest in them. Any difference between the fair value of the consideration paid and the amount by which the non-controlling interest was adjusted was recognized in equity. As a result of the equity transaction, $12,906,772 additional paid capital and $1,890,830 non-controlling interest were derecognized. As of December 31, 2014, $15,534,635 was unpaid and was due at December 31, 2015.

In September 2014, the Group entered into an equity transfer agreement with an individual shareholder of Tianjin Yisheng Leju Advertising Co., Ltd (“Tianjin Leju”), a subsidiary of Beijing Leju, to purchase the remaining 30% shares of Tianjin Leju that it did not own with a total consideration of $4,685,913 (RMB28,830,000). After the acquisition, Tianjn Leju becomes a wholly-owned subsidiary of the Group. As the Group retains the controlling interest in Tianin Leju before and after the acquisition, the acquisition was accounted for as an equity transaction. The carrying amount of the non-controlling interest in the subsidiary was adjusted to reflect the change in Group’s ownership interest in Tianjin Leju. Any difference between the fair value of the consideration paid and the amount by which the non-controlling interest was adjusted was recognized in equity. As a result of the transaction, $4,449,469 additional paid capital and $236,444 non-controlling interest were derecognized. As of December 31, 2014, $2,871,268 was unpaid and was due at December 31, 2015.

7. Property and Equipment, Net

Property and equipment, net consists of the following:

	As of December 31,
	2013		2014
	$		$
Leasehold improvements	29,942,721		33,760,211
Buildings	21,787,018		18,348,855
Furniture, fixtures and equipment	26,076,914		30,424,438
Motor vehicles	7,072,583		7,427,714
Total	84,879,236		89,961,218
Accumulated depreciation	(34,802,311	)	(40,851,751	)
Property and equipment, net	50,076,925		49,109,467

Depreciation expense was $8,684,626, $8,206,163 and $8,659,092 for the years ended December 31, 2012, 2013 and 2014, respectively.

F-23

8. Intangible Assets, Net

					Weighted
					Average
	As of December 31,				Amortization
	2013		2014		Periods
	$		$		In years
Intangible assets not subject to amortization are comprised of the following:
Trademark	782,607		781,085
Intangible assets subject to amortization are comprised of the following:
Advertising agency agreement with SINA	106,790,000		106,790,000		9.75
License agreements with SINA	80,660,000		80,660,000		9.75
Exclusive rights with Baidu	45,315,329		45,151,494		0.25
Customer relationship	12,100,847		12,084,676		5.13
Database license	8,300,000		8,300,000		3.25
Favorable lease term	9,541,891		9,541,891		16.95
Computer software licenses	5,708,188		9,534,433		4.88
Non-compete agreements	3,420,712		3,415,152		0.75
Customer contracts	1,057,842		1,054,964		4.94
Domain name	214,611		229,709		4.68
	273,109,420		276,762,319		9.55
Less: Accumulated amortization
Advertising agency agreement	(44,495,832	)	(51,286,533	)
License agreements with SINA	(34,280,500	)	(39,377,764	)
Exclusive rights with Baidu	(34,693,471	)	(43,034,803	)
Customer relationship	(6,464,705	)	(8,086,039	)
Database license	(4,150,001	)	(5,126,472	)
Favorable lease term	(637,435	)	(1,167,905	)
Computer software licenses	(3,963,457	)	(4,784,950	)
Non-compete agreements	(3,097,470	)	(3,349,230	)
Customer contracts	(832,950	)	(871,174	)
Domain name	(44,456	)	(77,863	)
Intangible assets subject to amortization, net	140,449,143		119,599,586
Total intangible assets, net	141,231,750		120,380,671

In 2011, the Group purchased exclusive rights from Baidu, Inc (‘‘Baidu’’) which allow it to sell Baidu’s real estate related Brand Link product, which is a form of keyword advertising, and to use and operate Baidu’s exclusive real estate-related web channel for $47,612,100 through August 2014. In October 2013, the Group extended these rights with Baidu to March 2015, without paying additional consideration. The payment schedule of the remaining liability for exclusive rights was also deferred through the extension period. The fair value of $43,847,992 was recognized in 2011 and calculated by discounting the future cash payments to be made from 2012 to 2014. The difference between the fair value and the principal amount of $3,764,108 is being amortized using the effective interest method over the term of the exclusive rights and amounted to $1,882,804, $935,177 and $52,922 for the years ended December 31, 2012, 2013 and 2014, respectively.

The advertising agency agreement and license agreements with SINA were recognized in connection with the Group’s acquisition of COHT in 2009, which allows the Group to operate SINA’s existing real estate and home furnishing related channels and have the exclusive right to sell advertising relating to real estate, home furnishing and construction materials on these channels as well as SINA’s other websites through 2019. If the Group sells advertising on SINA’s websites other than above channels, it will pay SINA fees of approximately 15% of the revenues generated from these sales. The acquisition cost was recognized as an intangible asset and amortized over the term of the agreement. In March 2014, the advertising agency agreement and license agreements originally signed between the Group and SINA in 2009 were extended an additional five years to March 2024 for no additional consideration. All other terms of the agreements remain the same.

The Group paid $14,249,180, $15,347,915 and $9,004,710 in connection with the exclusive rights in 2012, 2013 and 2014, respectively.

Amortization expense was $38,701,651, $37,009,330 and $24,677,508 for the years ended December 31, 2012, 2013 and 2014, respectively. The Group expects to record amortization expenses of $16,648,450, $14,183,003, $13,932,242, $12,813,362 and $11,936,725 for the years ending December 31, 2015, 2016, 2017, 2018 and 2019, respectively.

9. Goodwill

Changes in the carrying amount of goodwill by segment for the years ended December 31, 2012, 2013 and 2014 are as follows:

F-24

					Real Estate
	Real Estate		Real Estate		Information
	Online		Brokerage		and Consulting
	Services		Services		Services	Total
	$		$		$	$
Balance as of January 1, 2012	40,152,022		3,509,326		5,667,004	49,328,352
Exchange rate translation	63,965		8,422		—	72,387
Balance as of December 31, 2012	40,215,987		3,517,748		5,667,004	49,400,739
Goodwill recognized upon acquisition	—		—		1,698,098	1,698,098
Exchange rate translation	394,633		106,569		—	501,202
Balance as of December 31, 2013	40,610,620		3,624,317		7,365,102	51,600,039
Exchange rate translation	(47,545	)	(12,840	)	—	(60,385	)
Balance as of December 31, 2014	40,563,075		3,611,477		7,365,102	51,539,654
As of December 31, 2012
Goodwill, gross	458,038,291		3,517,748		5,667,004	467,223,043
Accumulated impairment charge	(417,822,304	)	—		—	(417,822,304	)
Goodwill, net	40,215,987		3,517,748		5,667,004	49,400,739
As of December 31, 2013
Goodwill, gross	458,432,924		3,624,317		7,365,102	469,422,343
Accumulated impairment charge	(417,822,304	)	—		—	(417,822,304	)
Goodwill, net	40,610,620		3,624,317		7,365,102	51,600,039
As of December 31, 2014
Goodwill, gross	458,385,379		3,611,477		7,365,102	469,361,958
Accumulated impairment charge	(417,822,304	)	—		—	(417,822,304	)
Goodwill, net	40,563,075		3,611,477		7,365,102	51,539,654

The Group utilized the income approach valuation method (Level 3) to compute the fair value of its reporting units. The key assumptions used in the income approach, which requires significant management judgment, include business assumptions, terminal value, and discount rate. Significant increases in discount rate or decrease in terminal value in isolation would result in a significantly lower fair value measurement.

Based on the impairment tests performed, the Group did not record a goodwill impairment charge for the years ended December 31, 2012, 2013 and 2014.

10. Investment in preferred shares of a private entity

In May 2014, the Group and Jupai Holdings Limited (“Jupai”), a third-party wealth management service provider in China, entered into a Series B Convertible Redeemable Preferred Shares (“Series B Preferred Shares”) Purchase Agreement that included (a) the issuance and sale by Jupai of 12,918,340 shares of Series B Preferred Shares of Jupai to the Group at an aggregate consideration of RMB48,000,000 ($7,801,728); (b) the sale and transfer by a shareholder of Jupai of 12,918,340 shares of ordinary shares of Jupai to the Group at an aggregate consideration of RMB48,000,000 ($7,801,728) and these ordinary shares were re-designated into 12,918,340 Series B preferred shares at the closing of the transaction. In August 2014, the group further acquired 12,918,340 ordinary shares Jupai from a shareholder of Jupai for $10,116,352. These ordinary shares were re-designated into 12,918,340 Series B Preferred Shares in December, 2014. Given the redemption right exercisable by the Group, the investment was accounted for as available-for-sale investment measured at fair value, with changes in fair value recognized in accumulated other comprehensive income. As of December 31, 2014, the fair value of the Series B Preferred Shares was $39,484,906, and the Group recognized $13,765,098 of unrealized gains in accumulated other comprehensive income for the year ended December 31, 2014.

11. Short-Term Borrowings

Short-term borrowing is the short-term bank loan borrowed from a PRC commercial bank and is guaranteed by CRIC Commercial Consultancy Holdings Limited, a subsidiary of the Group registered in BVI by RMB234,300,000 ($38,290,478). The term of the loan is 12 months from the date the Group received the loan with an annual interest rate of 6.5%. As of December 31, 2014, the balance of the short-term loan was $35,953,500 (RMB 220,000,000) denominated in RMB. For the year ended 31 December, 2014, $6,416 interest expense was accrued for the short-term loan.

12. Convertible Senior Notes

In December 2013, the Company issued $135,000,000 in aggregate principal amount of 2.75% Convertible Senior Notes due 2018 (the “Notes”). The Notes can be converted into the Company’s American Depositary Shares (“ADSs”), each representing one ordinary share of E-House, par value $0.001 per share (the “ordinary shares”), at the option of the holders, based on an initial conversion rate of 59.5380 of the Company’s ADSs per $1,000 principal amount of Notes ($16.80 per ADS). Holders of the Notes will have the right to require the Company to repurchase for cash all or part of their Notes on December 15, 2016 or upon the occurrence of certain fundamental changes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date. The Notes will bear interest at a rate of 2.75% per year, payable semiannually in arrears on June 15 and December 15 of each year, beginning on June 15, 2014. The Notes will mature on December 15, 2018, unless previously repurchased or converted in accordance with their terms prior to such date.

F-25

The net proceeds from the Notes offering were $130,073,430, after deducting discounts to the initial purchaser of $3,375,000 and debt issuance costs of $1,551,570. Debt issuance costs are recorded as deferred assets and debt discounts are recorded as a direct deduction from the face amount of Convertible Senior Notes, and they are amortized as interest expenses, using the effective interest method, to the first put date of the Notes (December 15, 2016). The interest expense was nil, $192,566, and $5,319,058 for the years ended December 31, 2012, 2013 and 2014, respectively.

In connection with the offering, the Company also used $44,999,998 of the net proceeds from the offering to enter into a zero-strike call option (the “Call Option”), covering 3,482,972 ADSs, with an affiliate of the initial purchaser (the “option counterparty”). The Call Option is in substance a prepaid forward contract and is intended to facilitate privately negotiated transactions by which investors in the Notes will hedge their investment in the Notes. The Call Option expires on the maturity date of the Notes and requires physical settlement. However, at expiration or when the Call Option is unwound, the Company has the right to choose cash settlement.

The Company recorded the Notes as a liability in their entirety, and the conversion feature or any other feature does not need to be bifurcated and accounted for separately. The Call Option was deemed as a prepaid forward to purchase the Company’s own shares and was classified in permanent equity at its fair value at inception, recorded as a reduction to equity in the consolidated balance sheet. The shares underlying the Call Option are included in the basic and diluted EPS calculation given that it is uncertain whether the Call Option will be physically settled and the shares will ultimately be repurchased back.

As of December 31, 2014, none of the Notes had been converted.

13. Repurchase of Shares

In 2012, the Company’s board of directors approved a share repurchase program. Under the program, the Company was authorized, but not obligated, to use up to all of the expected proceeds from the share issuance to management to repurchase the Company’s ADSs on the open market in compliance with applicable law. As of December 31, 2012, the Company has repurchased a total of 371,141 ADSs for $1,569,815. The excess of $1,569,444 of purchase price over par value was allocated between additional paid in capital and retained earnings of $1,569,444 and nil, respectively.

In 2013, The Company repurchased a total of 3,582,133 ADSs for $17,772,586. The excess of $17,769,004 of purchase price over par value was allocated between additional paid in capital and retained earnings of $15,942,072 and $1,826,932, respectively.

The portion of the excess allocated to additional paid-in capital was limited to the pro rata portion of capital surplus from stock issuance. All the repurchased shares were retired.

14. Dividends

In 2012, the Company’s board of directors approved the payment of a cash dividend of $0.15 per ordinary share ($0.15 per ADS) directly from the additional paid-in capital account, for a total of $11,866,670, which was paid in April 2012 to shareholders of record as of the close of business on April 10, 2012.

In 2013, the Company’s board of directors approved the payment of a cash dividend of $0.15 per ordinary share ($0.15 per ADS) directly from the additional paid-in capital account, for a total of $19,946,745, which was paid in May 2013 to shareholders of record as of the close of business on April 10, 2013.

In March 2014, the Company’s board of directors approved the payment of a cash dividend of $0.20 per ordinary share ($0.20 per ADS) directly from the additional paid-in capital account, for a total of $27,598,118, which was paid in May 2014 to shareholders of record as of the close of business on May 2, 2014.

In November 2014, the Company’s board of directors approved the payment of a cash dividend of $0.20 per ordinary share ($0.20 per ADS) directly from the additional paid-in capital account, for a total of $28,415,784, of which $15,513,296 was paid in December 2014 to shareholders of record as of the close of business on December 3, 2014. The Company’s board of directors also approved the Company’s distribution of 0.05 Leju ordinary shares to the holder of each E-House ordinary share (or 0.05 Leju ADSs for each E-House ADS), to holders of E-House’s ordinary shares and ADSs. As a result of the distribution of Leju ordinary shares, $21,569,028 non-controlling interest was recognized. The additional paid-in capital was reduced by $77,582,930.

15. Other Income (Loss), Net

	Years Ended December 31,
	2012		2013		2014
	$		$		$
Gains on marketable securities, realized portion	734,904		234,338		2,903,786
Gains on marketable securities, unrealized portion	804,621		—		—
Foreign exchange gain (loss)	(379,530	)	(862,383	)	613,227
Amortized discounts related to liability for exclusive rights with Baidu	(1,882,804	)	(935,177	)	(52,922	)
Others	(10,061	)	512,007		393,448
Total other income (loss)	(732,870	)	(1,051,215	)	3,857,539

F-26

16. Income Tax

The following table summarizes income (loss) before income taxes incurred in the PRC and outside of the PRC:

	Years Ended December 31,
	2012		2013		2014
	$		$		$
Income (loss) before income taxes:
The PRC	(32,340,085	)	125,404,634		107,163,481
Outside of the PRC	(37,916,141	)	(63,455,200	)	(43,760,332	)
Total	(70,256,226	)	61,949,434		63,403,149

The expense (benefit) for income taxes is comprised of:

	Years Ended December 31,
	2012		2013		2014
	$		$		$
Current Tax
The PRC	16,813,520		44,386,281		26,698,260
Outside of the PRC	—		35,774		69,645
	16,813,520		44,422,055		26,767,905
Deferred Tax
The PRC	(15,644,866	)	(30,745,061	)	(11,867,112	)
Outside of the PRC	—		—		—
	(15,644,866	)	(30,745,061	)	(11,867,112	)
Income tax expense	1,168,654		13,676,994		14,900,793

The Company is incorporated in the Cayman Islands, which is exempted from tax.

On January 1, 2008, a new Enterprise Income Tax Law in China took effect. The new law applies a statutory 25% enterprise income tax rate to both foreign invested enterprises and domestic enterprises.

Shanghai CRIC was approved as a high and new technology enterprise and is therefore subject to a 15% preferential income tax rate for the years from 2011 through 2014. In May 2010, Shanghai CRIC was granted software enterprise status, which exempted it from income taxes for 2009 and provided a 50% reduction in its income tax rate, or a rate of 12.5%, from 2010 through 2012. In 2013, Shanghai CRIC was approved as key software enterprise and is subject to a 10% preferential income tax rate for the years from 2013 through 2014. In March 2015, Shanghai CRIC was approved as a high and new technology enterprise and was therefore entitled to a 15% preferential income tax rate for the years from 2015 through 2016.

In February 2009, Shanghai SINA Leju, the Group’s subsidiary in China, was granted software enterprise status, which qualified the subsidiary to be exempted from income taxes for 2009, followed by a 50% reduction in its income tax rate, or a rate of 12.5%, from 2010 through 2012. Shanghai SINA Leju was also granted status as a high and new technology enterprise and was entitled to enjoy a favorable statutory tax rate of 15% from 2013 through 2014. Shanghai SINA Leju is in the process of applying to receive the preferential treatment of 15% income tax for 2015.

In February 2012, Shanghai Fangxin information technology Co., Ltd., the Group’s subsidiary in China, was granted software enterprise status, which exempted it from income taxes for 2012 and 2013 and provided a 50% reduction in its income tax rate, or a rate of 12.5%, from 2014 through 2016.

Chongqing E-House Western Real Estate Investment Consultant Co., Ltd. was established in the western region of China and was deemed to be engaged in an industry category encouraged by the government. In August, 2012 Chongqing E-House Western Real Estate Investment Consultant Co., Ltd was approved to enjoy a preferential income tax rate of 15% for 2012 to 2014.

The Group’s subsidiaries in Hong Kong are subject to a profit tax at the rate of 16.5% on assessable profit determined under relevant Hong Kong tax regulations.

The Group’s subsidiary in Macau is subject to the complementary tax at a progressive tax rate of 0% to 12% on Macau sourced profits.

F-27

The Company’s subsidiaries incorporated in the BVI are not subject to taxation.

The Group does not have uncertain tax positions in accordance with ASC740-10, nor does it anticipate any significant increase to its liability for unrecognized tax benefit within next 12 months. The Group will classify interest and penalties related to income tax matters, if any, in income tax expense.

According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to tax authority’s mistake or due to computational errors made by the taxpayer. The statute of limitations will be extended to five years under special circumstances, which are not clearly defined, but an underpayment of tax liability exceeding RMB100,000 ($16,343) is specifically listed as a special circumstance. In the case of a transfer pricing related adjustment, the statute of limitations is 10 years. There is no statute of limitations in the case of tax evasion.

The principal components of the deferred income tax assets/ liabilities are as follows:

	As of December 31,
	2013		2014
	$		$
Deferred tax assets:
Accrued salary expenses	24,396,931		28,416,464
Bad debt provision	19,233,885		11,378,650
Net operating loss carry forwards	23,846,831		37,530,099
Advertising expenses temporarily non-deductible	19,970,491		21,707,365
Other	71,177		463,286
Gross deferred tax assets	87,519,315		99,495,864
Valuation allowance	(11,237,880	)	(13,336,847	)
Total deferred tax assets	76,281,435		86,159,017
Analysis as:
Current	66,331,906		64,804,392
Non-current	9,949,529		21,354,625
Deferred tax liabilities:
Amortization of intangible and other assets	29,900,565		28,203,218
Total deferred tax liabilities	29,900,565		28,203,218
Analysis as:
Current	—		—
Non-current	29,900,565		28,203,218

Movement of the valuation allowance is as follows:

	Years Ended December 31,
	2012	2013	2014
	$	$	$
Balance as of January 1,	689,076	7,324,717	11,237,880
Additions	6,625,864	3,631,241	2,646,753
Write off	—	—	(302,750	)
Changes due to foreign exchange	9,777	281,922	(245,036	)
Balance as of December 31,	7,324,717	11,237,880	13,336,847

The Group has recognized a valuation allowance against deferred tax assets on tax loss carry forwards of $6,625,864, $3,631,241 and $2,646,753 for the years ended December 31, 2012, 2013 and 2014, respectively.

The Group assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three years period ended December 31, 2014. Such objective evidence limits the Group’s ability to consider other subjective evidence such as our projections for future growth and our tax planning strategies.

F-28

On the basis of this evaluation, as of December 31, 2014, a valuation allowance of $13,336,847 was recorded to reflect only the portion of the deferred tax assets that is not more likely than not to be realized. The amount of the deferred tax assets considered realizable, however, could be adjusted if estimates of future taxable income during the carry forwards period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth.

Reconciliation between the provision for income tax computed by applying the statutory tax rate to income before income taxes and the actual provision for income taxes is as follows:

	Years Ended December 31,
	2012		2013		2014
	$		$		$
PRC income tax rate	25.00	%	25.00	%	25.00	%
Expenses not deductible for tax purposes	(14.86	)%	13.60	%	10.92	%
Effect of tax preference	(1.91	)%	(17.16	)%	(20.31	)%
Effect of different tax rate of subsidiary operation in other jurisdiction	(2.14	)%	(1.47	)%	2.45	%
Valuation allowance movement	(9.48	)%	5.86	%	4.17	%
Effect of different tax rate of DTA and DTL applied	0.55	%	(3.22	)%	2.99	%
Others	1.18	%	(0.53	)%	(1.72	)%
	(1.66	)%	22.08	%	23.50	%

The aggregate amount and per share effect of the tax holiday are as follows:

	Years Ended December 31,
	2012		2013	2014
	$		$	$
The aggregate dollar effect	(1,336,133	)	10,628,117	12,875,656
Per share effect — basic	(0.01	)	0.08	0.09
Per share effect — diluted	(0.01	)	0.08	0.09

As of December 31, 2013 and 2014, the Group had tax losses carry forward of $93,844,512 and $150,106,326, respectively. These tax losses are available for offset against future profits that may be carried forward until calendar year 2018 and 2019, respectively.

Undistributed earnings of the Company’s PRC subsidiaries of approximately $435.2 million at December 31, 2014 are considered to be indefinitely reinvested and, accordingly, no provision for PRC dividend withholding tax has been provided thereon. Upon distribution of those earnings generated after January 1, 2008, in the form of dividends or otherwise, the Group would be subject to the then applicable PRC tax laws and regulations. Distributions of earnings generated before January 1, 2008 are exempt from PRC dividend withholding tax. The amounts of unrecognized deferred tax liabilities for these earnings are in the range of $19.0 million to $38.0 million, as the withholding tax rate of the profit distribution will be 5% or 10% depending on whether the immediate offshore companies can enjoy the preferential withholding tax rate of 5%.

17. Share-Based Compensation

E-House’s Share Incentive Plan (the “E-House Plan”)

In 2006, the Company adopted the E-House Plan, which allows the Company to offer a variety of share-based incentive awards to employees, officers, directors and individual consultants who render services to the Company. Under the E-House Plan, the Company authorized 3,636,364 ordinary shares, or 5% of the then total shares outstanding, to grant as options or restricted shares over a three-year period. In October 2010, the Company authorized an increase of 4,013,619 ordinary shares to the award pool. In November 2012, the Company further authorized an increase of 1,273,000 ordinary shares to the award pool. In August, 2013, E-House Holdings authorized an increase of 6,644,659 ordinary shares to the award pool. Options have a ten-year life. Share options granted under the E-House Plan can be settled by the employee either by cash or net settled by shares.

Share Options:

In connection with its merger with CRIC in 2012, the Company exchanged 15,107,745 of its options (“E-House Replacement Options”) at an exercise prices from $0.72 to $8.99 under E-House plan for 16,975,028 of options granted under CRIC plan at an exercise prices from $0.64 to $8.00 (“CRIC Replaced Options”), with other terms unchanged. As a result, CRIC’s Share Incentive Plan (the “CRIC Plan”) merged into the E-House Plan and ceased to exist on its own. The incremental compensation cost of $289,930 was measured as the excess of the fair value of the E-House Replacement Options over the fair value of the CRIC Replaced Options at the exchange date.

The Company used the binomial model to estimate the fair value of both the E-House Replacement Options and CRIC Replaced Options using the following assumptions:

F-29

	E-House	CRIC
	Replacement	Replaced
	Options	Options
Average risk-free rate of return	2.62%	2.62%
Contractual life of option	7.53 years	7.53 years
Average estimated volatility rate	50.42%	54.21%
Average dividend yield	2.03%	—

On May 9, 2012, 396,050 outstanding options granted from September 24, 2009 to October 10, 2011 held by 3 directors of CRIC were modified to be fully vested on the modification date, with other terms unchanged. The unrecognized compensation cost from the initial grant date was immediately expensed.

On May 29, 2012, the exercise price of 4,211,879 outstanding options, previously granted from July 15, 2009 to March 10, 2011, held by 394 employees was reduced from between $6.75 and $8.99 to $5.34, with other terms unchanged. In connection with the above modifications, incremental compensation cost was measured as the excess of the fair value of the modified options over the fair value of the original options immediately before their terms were modified, measured based on the share price and other pertinent factors at the modification date. Total incremental compensation cost was $1,811,935.

The Company used the binomial model to estimate the fair value of the modified options using the following assumptions:

	2012
Average risk-free rate of return	2.78%
Contractual life of option	8.02 years
Average estimated volatility rate	62.23%
Average dividend yield	2.45%

The Company recorded compensation expense of $17,157,015, $12,817,935 and $5,950,940 for the years ended December 31, 2012, 2013 and 2014, respectively. During the years ended December 31, 2012, 2013 and 2014, 194,721, 4,596,761 and 3,446,585 options were exercised having a total intrinsic value of $436,259, $25,248,554and $23,679,729, respectively.

A summary of option activity under the E-House Plan during the year ended December 31, 2014 is presented below:

	Number of Options		Weighted Average Exercise Price	Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value of Options
			$		$
Outstanding, as of January 1, 2014	12,949,951		4.25		140,247,969
Exercised	(3,446,585	)	3.49		23,679,729
Forfeited	(26,662	)	4.94
Outstanding, as of December 31, 2014	9,476,704		4.52	5.58	25,776,635
Vested and expected to vest as of December 31, 2014	9,476,704		4.52	5.58	25,776,635
Exercisable as of December 31, 2014	9,476,704		4.52	5.58	25,776,635

As of December 31, 2014, there is no unrecognized compensation expense related to unvested share options granted under the E-House Plan.

Restricted Shares:

The Company granted 1,273,000, 1,303,000 and 1,439,000 restricted shares to certain employees, directors and officers in 2012, 2013 and 2014 respectively. Under the terms of each restricted shares, restricted shares vest over three years.

In connection with its merger with CRIC, the Company exchanged 77,875 of its restricted shares (“E-House Replacement Restricted Shares”) at an exercise prices from $3.38 to $6.75 under E-House plan for 87,500 of restricted shares granted under CRIC plan at an exercise prices from $3.00 to $6.00 (“CRIC Replaced Restricted Shares”), with other terms unchanged. No incremental compensation cost was recognized from the exchange.

	E-House	CRIC
	Replacement	Replacement
	Restricted	Restricted
	Shares	Shares
Average risk-free rate of return	2.43%	2.43%
Contractual life of option	0.85 years	0.85 years
Average estimated volatility rate	50.42%	54.21%
Average dividend yield	2.03%	—

F-30

A summary of restricted share activity under the E-House Plan during the year ended December 31, 2014 is presented below:

	Number of Restricted Shares		Weighted Average Grant-date Fair Value
			$
Unvested as of January 1, 2014	2,151,684		7.77
Granted	1,439,000		8.72
Vested	(860,301	)	7.08
Forfeited	(33,334	)	7.78
Unvested as of December 31, 2014	2,697,049		8.50

The total fair value of restricted shares vested in 2012, 2013 and 2014 was $9,127,103, $5,612,379 and $6,094,602, respectively.

As of December 31, 2014, there was $20,310,709 of total unrecognized compensation expense related to restricted shares granted under the E-House Plan. That cost is expected to be recognized over a weighted-average period of 2.43 years.

The Company recorded compensation expense of $9,348,941, $5,668,460 and $6,174,583, for the years ended December 31, 2012 and 2013 and 2014, respectively, related to restricted shares.

Leju Plan

In November 2013, Leju adopted a share incentive plan (“Leju Plan”), which allows Leju to offer a variety of share-based incentive awards to employees, officers, directors and individual consultants who render services to Leju. Under the Leju Plan, the maximum number of shares that may be issued shall be 8% of the then total shares outstanding, to grant as options or restricted shares over a three-year period. Options have a ten-year life.

Share Options:

On December 1, 2013, Leju granted 7,192,000 options to purchase its ordinary shares to certain of Leju’s employees and E-House’s employees at an exercise price of $4.60 per share. The options expire ten years from the date of grant and vest ratably at each grant date anniversary over a period of three years.

On December 16, 2013, Leju granted 600,000 restricted shares to a director of Leju and an E-House employee to replace the same number of options previously granted under the Leju plan, with all other terms unchanged. The purchase price of the restricted shares is $4.60 per share, which was the exercise prices of the options that were replaced. The modification did not result in any incremental compensation expense. Cash received from the advance payment of the restricted shares are recorded as an amount due to related parties as of December 31, 2013.

In January, 2014, Leju granted 60,000 restricted shares to an E-House employee to replace the same number of options previously granted under the Leju plan, with all other terms unchanged. The purchase price of the restricted shares is $4.60 per share, which were the exercise prices of the options that were replaced. The modification did not result in any incremental compensation expense. Cash received from the advance payment of the restricted shares are recorded as an amount due to related parties as of December 31, 2014.

Leju has used the binomial model to estimate the fair value of the options granted under the Leju Plan. The fair value per option was estimated at the date of grant using the following assumptions:

	2013
Average risk-free rate of return	2.98%
Contractual life of option	10 years
Average estimated volatility rate	56.74%
Average dividend yield	0.00%

A summary of option activity under the Leju Plan during the year ended December 31, 2014 is presented below:

	Number of Options		Exercise Price	Remaining Contractual Term	Aggregate Intrinsic Value of Options
			$
Outstanding, as of January 1, 2014	6,592,000		4.60		—
Granted	—
Replaced by Restricted Share	(60,000	)	4.60
Exercised	(266,201	)	4.60		1,668,693
Forfeited	(132,000	)	4.60
Outstanding, as of December 31, 2014	6,133,799		4.60	8.92	37,784,202
Vested and expected to vest as of December 31, 2014	5,943,719		4.60	8.92	36,613,309
Exercisable as of December 31, 2014	1,867,132		4.60	8.92	11,501,535

F-31

The grant-date fair value of the options granted in December 2013 was $2.21 per share. For the year ended December 31, 2013 and 2014, the Group recorded compensation expenses of $381,874 and $4,525,552, respectively.

As of December 31, 2014, there was $8,676,222 of total unrecognized compensation expense related to unvested share options granted under the Leju Plan. That cost is expected to be recognized over a weighted-average period of 1.92 years.

Restricted Shares:

On March 18, 2014, Leju granted 866,000 restricted shares to certain employees, directors and officers, under the terms of each restricted shares, restricted shares vest over three years. On August 21, 2014, Leju granted 229,400 restricted shares to certain employees and officers, under the terms of each restricted shares, restricted shares vest over eight months.

A summary of restricted share activity under the Leju Plan during the year ended December 31, 2014 is presented below:

	Number of Restricted Shares		Weighted Average Grant-date Fair Value
Unvested as of January 1, 2014	600,000		2.21
Converted from option	60,000		2.21
Granted	1,095,400		12.37
Vested	(220,000	)	2.21
Forfeited	(8,800	)	16.25
Unvested as of December 31, 2014	1,526,600		9.42

The total fair value of restricted shares vested in 2012, 2013 and 2014 was nil, nil and $486,200, respectively.

For the year ended December 31, 2013 and 2014, the Group recorded compensation expenses of $34,758 and $4,923,226, respectively, for the restricted shares granted to the Group’s employees.

As of December 31, 2014, there was $9,699,247 of total unrecognized compensation expense related to unvested restricted shares granted under the Leju Plan. That cost is expected to be recognized over a weighted-average period of 1.88 years.

Scepter Plan

In August 2014, Scepter adopted a share incentive plan (“Scepter Plan”), which authorized Scepter to offer a variety of share-based incentive awards to employees, officers, directors and E-House’s employees. Under the Scepter Plan, the maximum number of shares that may be issued shall be 750,000 to grant as options or restricted shares over a three-year period. Options have a ten-year life.

Share Options:

On August 8, 2014, Scepter granted 455,000 options to purchase ordinary shares of Scepter to certain of the Scepter’s employees and E-House’s employees for their services of next three years at an exercise price of $3.3 per share. The options expire ten years from the date of grant and vest ratably at each grant date anniversary over a period of three years.

	2014
Average risk-free rate of return	4.3%
Contractual life of option	10 years
Average estimated volatility rate	50.0%
Average dividend yield	1.7%

A summary of option activity under the Scepter Plan during the year ended December 31, 2014 is presented below:

	Number of Options		Exercise Price	Remaining Contractual Term	Aggregate Intrinsic Value of Options
			$
Outstanding, as of January 1, 2014	—
Granted	455,000		3.30	10.00
Forfeited	(5,000	)
Outstanding, as of December 31, 2014	450,000		3.30	9.60	—
Vested and expected to vest as of December 31, 2014	449,526		3.30	9.60	—
Exercisable as of December 31, 2014	—		3.30	9.60	—

F-32

The grant-date fair value of the options granted in August was $1.12 per share. For the year ended December 31, 2014, the Group recorded compensation expenses of $66,820 for the share options granted to the Group’s employees.

As of December 31, 2014 there was $439,892 of total unrecognized compensation expense related to unvested share options granted under the Scepter Plan. That cost is expected to be recognized over a weighted-average period of 2.60 years.

CRIC Plan

On September 9, 2008, CRIC adopted the CRIC Plan to provide additional incentives to employees, directors and consultants who render services to CRIC. Under the CRIC Plan, the maximum number of shares that may be issued shall be 15% of the total outstanding shares of CRIC on an as-converted basis assuming all options outstanding were converted into shares as of the effective date of the CRIC Plan, plus an additional number of shares to be added on each of the third, sixth and ninth anniversary of the effective date of the CRIC Plan.

In April 2012, all the options and restricted shares granted under the CRIC Plan were replaced by E-House’s options and restricted shares under E-House plan. After that, there was no compensation cost of the options and restricted shares under CRIC Plan.

Share Options:

CRIC recorded compensation expense of $8,532,772 for the year ended 2012.

The total intrinsic value of options under CRIC Plan exercised was $750,115, during the year ended December 31, 2012.

Restricted Shares:

The Group recorded compensation expense of $54,688 for CRIC restricted shares granted to the E-House’s employee for the year ended December 31, 2012.

The total fair value of restricted shares vested was $130,000 during the year ended December 31, 2012.

Other Equity Compensation:

In September 2014, the Group acquired noncontrolling interests from certain employee shareholders. The price premium paid over the fair value of the ordinary shares amounting $4,276,810 was recorded as share-based compensation costs and to be amortized over the required two-year service period (See Note 6). $534,601 stock compensation expense was recognized for the year ended December 31, 2014. As of December 31, 2014, there was $3,742,209 of total unrecognized compensation expense related to this compensation agreement.

18. Employee Benefit Plans

The Group’s PRC subsidiaries and VIEs are required by law to contribute a certain percentages of applicable salaries for retirement benefits, medical insurance benefits, housing funds, unemployment and other statutory benefits. The PRC government is directly responsible for the payments of such benefits. The Group contributed $40,724,902, $45,924,681 and $58,365,171, for the years ended December 31, 2012, 2013 and 2014, respectively, for such benefits.

19. Distribution of Profits

Relevant PRC statutory laws and regulations permit payment of dividends by the Group’s PRC subsidiaries and VIEs only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under PRC law, each of the Group’s PRC subsidiaries and VIEs is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Each of the Group’s subsidiaries with foreign investment is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund at the discretion of the board. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends, loans or advances except in the event of liquidation of these subsidiaries.

The amount of the reserve fund for the Group as of December 31, 2013 and 2014 was $35,633,687 and $40,478,568, respectively.

As a result of these PRC laws and regulations, the Group’s PRC subsidiaries and VIEs are restricted in their ability to transfer a portion of their net assets, including general reserve and registered capital, either in the form of dividends, loans or advances. Such restricted portion amounted to $174,046,356 and $183,740,692, of which $9,977,982 and $12,076,642 was attributed to general reserve and registered capital of the VIEs, as of December 31, 2013 and 2014, respectively.

F-33

20. Fair Value Measurement

As of December 31, 2013 and 2014, information about inputs into the fair value measurements of the Company’s assets and liabilities that are measured at fair value on a recurring basis in periods subsequent to their initial recognition is as follows:

			Fair Value Measurements at Reporting Date Using
Description	Year Ended December 31, 2014		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Investment in preferred shares of a private entity	$	39,484,906	—	—	$	39,484,906

The following table summarizes the quantitative inputs and assumptions used for investment in preferred shares of a private entity categorized in Level 3 of the fair value hierarchy as of December 31, 2014:

Financial Assets	Fair Value		Valuation Techniques	Unobservable Inputs	Rate
Investment in preferred shares of a private entity	$	39,484,906	Discounted cash flow & option pricing method	Discount Rate	21.5	%
				Discount for Lack of Marketability (“DLOM”)	9.0	%
				Terminal growth rate	3.0	%

The following tables summarize the changes in financial assets measured at fair value for which the Group has used Level 3 inputs to determine fair value. Total realized and unrealized gains and losses recorded for Level 3 investments are reported in accumulated other comprehensive income.

	Level 3 Financial Assets at Fair Value Year Ended 31,
	2013	2014
	$	$
Balance as of January 1,	—	—
Purchased	—	25,719,808
Changes in Gains Included in Other Comprehensive Income	—	13,765,098
Balance as of December 31	—	39,484,906
Unrealized Gains	—	13,765,098

There have been no fair value transfers within Level 1, Level 2 and Level 3 in 2013 or 2014.

There was no asset or liability measured at fair value on a nonrecurring basis in 2012, 2013 or 2014.

The Group’s financial instruments that are not recorded at fair value in the consolidated balance sheets include cash and cash equivalents, restricted cash, accounts receivable, advance from customers, short-term investment of held-to-maturity investment, customer deposits, other receivables, short-term borrowing, accounts payable, other payables, liabilities for exclusive rights, amounts due from/to related parties and convertible senior notes. For financial instruments other than the non-current portion of customer deposit and convertible senior notes, the carrying value approximates the fair value due to their short-term nature. The fair value of the non-current portion of customer deposits was $614,507 and $751,909 as of December 31, 2013 and 2014, respectively. The fair value was estimated using discounted cash flows method by discounting the estimated future collections or payment using the Company’s incremental borrowing rate for an instrument with similar terms on the measurement date. As the future cash flows from collections or payments were management’s best estimates based on information available on the valuation date, which were not observable or cannot be corroborated with market information, the fair value measurements were classified as level 3 measurements. Any change in the estimated timing of cash inflow or outflow would result in a change in the fair value measurement in the same direction. It is not practicable to estimate the fair value of convertible senior notes, as a quoted market price is not available and valuation would involve complex models with excessive costs by engaging an independent valuer.

21. Segment Information

The Group uses the management approach to determine operating segments. The management approach considers the internal organization and reporting used by the Group’s chief operating decision maker (“CODM”) for making decisions, allocating resources and assessing performance. The Group’s CODM has been identified as the co-chairman and chief executive officer, who reviews consolidated and segment results when making decisions about allocating resources and assessing performance of the Group.

In 2012 and 2013, the Group had five operating segments: 1) real estate online services; 2) real estate brokerage services; 3) real estate information and consulting services; 4) real estate promotional events and advertising services; and 5) real estate fund management services.

F-34

In 2014, the Group established two new operating segments: community value-added services and real estate finance services.

In addition, the real estate promotional events and advertising services, real estate fund management services and real estate finance services did not meet the significance threshold for separate disclosure in any of the three years of 2012, 2013 and 2014, and have been combined in the other services segment for segment reporting purposes.

The Group’s CODM reviewed net revenue, cost of sales, operating expenses, income from operations and net income and did not review balance sheet information. Corporate expenses of certain holding companies were not allocated among segments and were recorded as non-allocated items.

The following tables summarize the selected revenue and expense information for each operating segment:

For the years ended December 31,

					Real Estate
	Real Estate		Real Estate		Information
	Online		Brokerage		and Consulting		Other
2012	Services		Services		Services		Services		Non-allocated		Total
	$		$		$		$		$		$
Revenues	169,755,893		208,284,503		54,517,612		29,881,360		—		462,439,368
Cost of revenues	(54,117,692	)	(114,667,241	)	(10,783,472	)	(23,602,280	)	—		(203,170,685	)
Selling, general and administrative expenses	(146,997,279	)	(92,291,838	)	(53,977,975	)	(10,544,345	)	(33,062,087	)	(336,873,524	)
Other operating income	153,340		2,982,861		2,481,255		857,567		—		6,475,023
Income (loss) from operations	(31,205,738	)	4,308,285		(7,762,580	)	(3,407,698	)	(33,062,087	)	(71,129,818	)
Interest income	257,204		425,714		624,817		55,895		242,832		1,606,462
Other income (expense), net	(1,979,450	)	84,937		(59,136	)	(446	)	1,221,225		(732,870	)
Income (loss) before taxes and equity in affiliates	(32,927,984	)	4,818,936		(7,196,899	)	(3,352,249	)	(31,598,030	)	(70,256,226	)
Income tax benefit (expense)	2,329,338		(4,589,892	)	623,227		468,673		—		(1,168,654	)
Income (loss) before equity in affiliates	(30,598,646	)	229,044		(6,573,672	)	(2,883,576	)	(31,598,030	)	(71,424,880	)
Income (loss) from equity in affiliates	(881	)	195,874		(14,933	)	195,449		—		375,509
Net income (loss)	(30,599,527	)	424,918		(6,588,605	)	(2,688,127	)	(31,598,030	)	(71,049,371	)

					Real Estate
	Real Estate		Real Estate		Information
	Online		Brokerage		and Consulting		Other
2013	Services		Services		Services		Services		Non-allocated		Total
	$		$		$		$		$		$
Revenues	335,410,902		280,776,816		76,683,188		38,207,927		—		731,078,833
Cost of revenues	(63,990,693	)	(168,624,507	)	(14,526,318	)	(26,894,288	)	—		(274,035,806	)
Selling, general and administrative expenses	(210,576,230	)	(74,728,461	)	(58,026,755	)	(12,404,049	)	(45,211,506	)	(400,947,001	)
Other operating income	599,894		1,647,257		1,950,223		720,268		—		4,917,642
Income (loss) from operations	61,443,873		39,071,105		6,080,338		(370,142	)	(45,211,506	)	61,013,668
Interest expenses	—		—		—		—		(192,566	)	(192,566	)
Interest income	1,082,287		819,925		222,898		51,944		2,493		2,179,547
Other income (expense), net	(1,185,121	)	87,270		(479,313	)	(11,837	)	537,786		(1,051,215	)
Income (loss) before taxes and equity in affiliates	61,341,039		39,978,300		5,823,923		(330,035	)	(44,863,793	)	61,949,434
Income tax benefit (expense)	(5,447,524	)	(10,000,257	)	(3,606,417	)	(588,344	)	5,965,548		(13,676,994	)
Income (loss) before equity in affiliates	55,893,515		29,978,043		2,217,506		(918,379	)	(38,898,245	)	48,272,440
Income (loss) from equity in affiliates	(69,194	)	343,561		312,119		(9,320	)	2,236,683		2,813,849
Net income (loss)	55,824,321		30,321,604		2,529,625		(927,699	)	(36,661,562	)	51,086,289

F-35

					Real Estate
	Real Estate		Real Estate		Information		Community
	Online		Brokerage		and Consulting		Value-added		Other
2014	Services		Services		Services		Services		Services		Non-allocated		Total
	$		$		$		$		$		$		$
Revenues	495,862,635		283,367,930		82,679,298		—		42,588,930		—		904,498,793
Cost of revenues	(51,129,730	)	(204,101,162	)	(25,153,090	)	—		(25,749,228	)	—		(306,133,210	)
Selling, general and administrative expenses	(365,150,431	)	(64,337,955	)	(59,703,161	)	(15,828,009	)	(14,662,201	)	(25,809,961	)	(545,491,718	)
Other operating income	2,525,496		2,223,460		3,301,932		—		736,003		—		8,786,891
Income (loss) from operations	82,107,970		17,152,273		1,124,979		(15,828,009	)	2,913,504		(25,809,961	)	61,660,756
Interest expenses	—		—		—		—		—		(5,325,474	)	(5,325,474	)
Interest income	1,316,203		1,099,825		691,003		6,124		78,608		18,565		3,210,328
Other income (expense), net	35,799		(68,069	)	657,952		—		(8,987	)	3,240,844		3,857,539
Income (loss) before taxes and equity in affiliates	83,459,972		18,184,029		2,473,934		(15,821,885	)	2,983,125		(27,876,026	)	63,403,149
Income tax benefit (expense)	(15,545,964	)	(5,083,029	)	(236,440	)	3,932,057		(169,368	)	2,201,951		(14,900,793	)
Income (loss) before equity in affiliates	67,914,008		13,101,000		2,237,494		(11,889,828	)	2,813,757		(25,674,075	)	48,502,356
Income (loss) from equity in affiliates	(223,389	)	118,651		1,761,582		—		(367,621	)	2,545,579		3,834,802
Net income (loss)	67,690,619		13,219,651		3,999,076		(11,889,828	)	2,446,136		(23,128,496	)	52,337,158

Geographic

Substantially all of the Group’s revenues from external customers and long-lived assets are located in the PRC.

Major customers

Details of the revenues for customers accounting for 10% or more of total net revenues are as follows:

	Years Ended December 31,
	2012	2013	2014
	$	$	$
Customer A	55,924,621	*	*

* indicates the revenue from the customer was less than 10% of total revenue in the year.

Revenue generated from Customer A for real estate online services, real estate brokerage services, real estate information and consulting services, and other services were $6,871,686, $42,483,101, $6,356,080, and $213,754 respectively, for 2012.

Details of the accounts receivable from customers accounting for 10% or more of total net accounts receivable are as follows:

	As of December 31,
	2013	2014
	$	$
Customer A	43,318,976	53,534,294

Details of the customer deposits from customers accounting for 10% or more of total net customer deposits are as follows:

F-36

	As of December 31,
	2013	2014
	$	$
Customer B	56,000,000	33,540,800
Customer C	—	24,513,750
Customer D	—	23,206,350
Customer E	8,200,900	*

* indicates the balance of customer deposit of the customer was less than 10% of total customer deposits as of 31 December, 2014.

22. Related Party Balances and Transactions

Amounts due from related parties are comprised of the following:

	As of December 31,
	2013	2014
	$	$
Customer and supplier	981,648	684
Other	281,768	6,093,576
Total amounts due from related parties	1,263,416	6,094,260

Amounts due to related parties are comprised of the following:

	As of December 31,
	2013	2014
	$	$
Management	2,760,000	2,024,000
Customer and supplier	1,745,263	4,831,288
Other	1,030,249	500,898
Total amounts due to related parties	5,535,512	7,356,186

(a) Customer and supplier

Transactions with customers and suppliers who are related parties are as follows:

Revenue recognized by the Group:

	Years Ended December 31,
	2012	2013	2014
	$	$	$
Beijing China Real Estate Research Association Technology Ltd (“CRERAT”)	52,120	1,084,047	136,708
SINA Corporation (“SINA”)	1,855	—	445,733

Selling, general and administrative expenses recorded by the Group:

	Years Ended December 31,
	2012	2013	2014
	$	$	$
CRERAT	476,706	—	—
SINA	—	—	4,911,660
Shanghai Guanfu Treasure-house Assets Management Co., Ltd (“Guanfu Treasure-house”)	—	—	409,305

Cost of revenue recorded by the Group:

	Years Ended December 31,
	2012	2013	2014
	$	$	$
SINA	5,145,039	6,033,036	6,643,317

Intangible assets purchased by the Group:

	Years Ended December 31,
	2012	2013	2014
	$	$	$
SINA	—	—	1,473,498
Hangzhou Kuyue	—	—	1,778,188

F-37

Amount due from (to) customers and suppliers who are related parties are as follows:

Amount due from (to) related parties

	As of December 31,
	2013		2014
	$		$
CRERAT	981,648		684
CRERAT	(3,892	)	—
SINA	(1,741,371	)	(3,616,957	)
Guanfu Treasure-house	—		(326,850	)
Hangzhou Kuyue	—		(887,481	)

CRERAT is a joint venture formed by the Group with China Real Estate Research Association and China Real Estate Association, with the Group owning 51% equity interest of the entity.

Mr. Charles Chao, SINA’s chairman and chief executive officer, has served as a co-chairman of the Company’s board of directors after the Merger on April 2012 (related party since April, 2012), and SINA has been a major shareholder of the Company since then.

Guanfu Treasure-house, an entity controlled by Mr. Xinzhou, co-chairman and chief executive officer of the Group, controls Guanfu Treasure-house. The amount due to Guanfu Treasure-house represents payables for the services provided by the entity.

The group acquired 21% equity interest of Hangzhou Kuyue in 2014, and the group can exercise significant influence over the entity.

(b) Affiliates

Amounts due from (to) affiliates are comprised as the following:

	As of December 31,
	2013		2014
	$		$
Shanghai Yueshun Real Estate Development Co., Ltd. (1)	281,768		280,750
Shanghai Jin Yue Real Estate Development Co., Ltd. (2)	(392,219	)	(390,801	)
Suzhou Hehui Xuyuechang Equity Investment Center (“Xuyuechang Center”) (3)	(103,331	)	285,272
Suzhou Hehui Xuyuerong Equity Investment Center (“Xuyuerong Center”) (3)	(480,081	)	23,461
Suzhou Hehui Xuyuezhen Equity Investment Center (“Xuyuezhen Center”) (3)	(54,618	)	115,447
E-House (China) Real Estate Investment Fund 1 L.P. (the “Fund”)(4)	—		5,388,646
Muxin Center(5)	—		(110,097	)

Notes:

(1)Xin Zhou is a director of the entity. The amount receivable (payable) is the rental cost paid (rental income received) by the Group on behalf of the entity.

(2)Xin Zhou is a director of the entity. The amount payable is rental expense paid by the entity on behalf of E-Commercial (Shanghai) Real Estate Advisory Co, Ltd.

(3)The Group holds 0.6%, 0.5% and 0.5% equity interest of Xuyuechang Center, Xuyuerong Center and Xuyuezhen Center, respectively. The Group also acts as a non-acting general partner and provides investment advice to the entities. The amount payable of December 31, 2013 is the advance management fee received by the Group while the amount receivable of December 31, 2014 is the management fee receivable from the entities.

(4)In January 2008, the Group formed the Fund, which seeks to invest in China’s real estate sector through diversified investment strategies at all levels of the real estate value chain. The Group’s 51% owned subsidiary, E-House Real Estate Asset Management Limited, acts as the Fund’s general partner. The general partner receives annual management fee and carried interest on a success basis. Major investors of the Fund include institutions and high net worth individuals. Mr. Xin Zhou, the Company’s co-chairman and chief executive officer, and Mr. Neil Nanpeng Shen, director of the Company, invested a total of $28 million in the Fund. They are also among the minority shareholders of the general partner. The Group has no investment in the Fund. The amount receivable is the carried interest receivable from the Fund.

(5)The Group holds 23.4% equity interest of Muxin Center. The Group also acts as general partner and provides investment advice to the entities. The amount payable is the advance management fee received by the Group.

F-38

(c) Management

The amount due to management represents consideration paid by management for unvested restricted shares under Leju Plan.

On March 25, 2013, E-House (China) Holdings Limited issued an aggregate of 17,790,125 ordinary shares of the Company to Kanrich Holdings Limited (“Kanrich”), a British Virgin Islands company owned by certain key members of the Company’s management, including Mr. Xin Zhou, co-chairman of the Company’s board of directors and chief executive officer, for an aggregate purchase price of $62,621,240.

(d) Real Estate Investment Fund Management

Management fees or carried interest from funds are comprised of the following:

	Years Ended December 31,
	2012	2013	2014
	$	$	$
E-House (China) Real Estate Investment Fund 1 L.P. (the “Fund”)	202,198	63,567	5,386,412
E-House Shengyuan Equity Investment Center (“Shengyuan Center”)	1,580,360	1,549,416	1,410,790
E-House Shengquan Equity Investment Center (“Shengquan Center”)	619,857	611,205	559,100
Wuling Center (Note 4)	—	3,804,667	3,012,485
Shouxin Center (Note 4)	—	—	120,858
Muxin Center (Note 4)	—	—	191,770
Others(1)	—	305,343	1,061,829
Total management fee or carried interest earned	2,402,415	6,334,198	11,743,244

The amount presented in the table is the revenue without net of sales tax.

Notes:

(1)Others represent Xuyuechang Center, Xuyuerong Center and Xuyuezhen Center. The amount represents the management fee recognized from these entities during the periods.

In January 2010, the Group formed a limited partnership, Shengyuan Center in Shanghai, for the purpose of making equity investments in areas deemed suitable by the general partner. The Group’s 51% owned subsidiary, Shanghai Yidezeng Equity Investment Center, acts as Shengyuan Center’s general partner. The general partner receives annual management fees and carried interest on a success basis. The Group invested $10,065,348 (RMB65,000,000) into the Shengyuan Center for a 13% equity interest. Mr. Xin Zhou, the Company’s co-chairman and chief executive officer, owns an 8% equity interest in the Shengyuan Center and is a limited partner. In 2013 and 2014, the Group received $461,463 (RMB2,813,487) and $1,781,581 (RMB10,881,747 ) capital return from Shengyuan Center, respectively.

In April 2010, the Group formed Shengquan Center, which seeks to invest in China’s real estate sector through diversified investment strategies at all levels of the real estate value chain. The Group’s 51% owned subsidiary, Shanghai Yidexin Equity Investment Center, acts as Shengquan Center’s general partner. The general partner receives annual management fee and carried interest on a success basis. Mr. Xin Zhou, the Company’s co-chairman and chief executive officer, holds a 2.4% equity interest in the Shengquan Center.

23. Commitments and Contingencies

(a) Operating lease commitments

The Group has operating lease agreements principally for its office properties in the PRC. Such leases have remaining terms ranging from six to 240 months and are renewable upon negotiation. Rental expenses were $24,418,965, $23,033,850, and $28,223,879 for the years ended December 31, 2012, 2013 and 2014, respectively. Future minimum lease payments under non-cancelable operating lease agreements at December 31, 2014 were as follows:

	Amount
Year Ended December 31	$
2015	23,164,631
2016	19,986,357
2017	13,792,164
2018	7,556,084
2019	4,646,363
Then thereafter	30,277,284
Total	99,422,883

(b) Properties payment commitments

As of December 31, 2014, the Group had a commitment of $57,287,504 for properties to be held for sales within one year.

As of December 31, 2014, the Group had a commitment of $2,044,054 for two floors of an office building which will be used as offices by a subsidiary of the Group and is payable within one year.

F-39

(c) Contingencies

The Group is subject to claims and legal proceedings that arise in the ordinary course of its business. Each of these matters is subject to various uncertainties, and it is possible that some of these matters may be decided unfavorably to the Group. The Group does not believe that any of these matters will have a material adverse effect on its business, assets or operations. The Group also assessed all currently pending matters and concluded that the possibility of an asset had been impaired or a liability had been incurred at the date of the financial statements was remote.

The Group has a clawback obligation to the Fund for which the Group acts as the general partner. Carried interest is subject to clawback to the extent that the limited partners have not received a certain level of aggregate distributions or the carried interest exceeds a certain level based on cumulative results. The Group recognize carried interest income of nil, nil and $5,386,412 for the years ended December 31, 2012, 2013 and 2014, respectively. The Group did not have any clawback obligations as of December 31, 2013 and 2014.

24. Subsequent Events

In January 2015, the Group entered a property purchase agreement with a total amount of RMB 168,930,000. The property will be used as offices by the Group. The commitment is payable within one year.

In March 2015, the Group and Baidu agreed to extend the strategic cooperation agreement for the exclusive rights for another nine months through December 2015 for consideration of RMB 75,000,000.

On March 18, 2015, the Company announced that its board of directors had authorized and approved the Company’s payment of a cash dividend of $0.15 per ordinary share ($0.15 per ADS). The cash dividend will be payable on or about May 15, 2015 to shareholders of record as of the close of business on April 10, 2015.

On March 18, 2015, Leju also announced that its board of directors has authorized and approved Leju’s payment of a cash dividend of $0.20 per ordinary share ($0.20 per ADS). The cash dividend will be payable on or about May 15, 2015 to Leju’s shareholders of record as of the close of business on April 10, 2015.

In April 2015, the Group entered into a binding agreement with Jupai to sell its real estate fund management services to Jupai (“Transaction”). The real estate fund management services are held by Scepter, a consolidated subsidiary 51% by the Group, with the remaining 49% owned by Reckon Capital Limited, a company incorporated in the British Virgin Islands (“Reckon Capital”) and majority owned and controlled by Mr. Xin Zhou. Pursuant to the agreement, the Group and Reckon Capital will transfer all of their respective equity interests in Scepter in exchange for Jupai’s issuance of ordinary shares equal to 20% of Jupai’s total post-issuance equity interest on a fully diluted basis upon completion of a proposed initial public offering of Jupai (“Proposed IPO”), without giving effect to shares issued in the Proposed IPO. In addition, the Series B Preferred Shares of Jupai currently held by the Group will be converted to ordinary shares upon the Proposed IPO. Immediately upon the closing of the Transaction and the conversion of Series B Preferred Shares, E-House will become the largest shareholder of Jupai with an approximately 37% equity interest in Jupai (without giving effect to the shares issued in the Proposed IPO).

F-40

EX-4.53

Exhibit 4.53

[Shareholder A]

[Shareholder B]

[E-House Entity]

AND

[VIE]

Exclusive Call Option Agreement

In Respect Of [VIE]

[Date]

EXCLUSIVE CALL OPTION AGREEMENT

This EXCLUSIVE CALL OPTION AGREEMENT (this “Agreement”) is entered into as of                                           by and among the following parties:

1.[Shareholder A]

Identity Card No.:

2.[Shareholder B]

Identity Card No.:

([Shareholder A] and [Shareholder B] are hereinafter referred to individually as a “Company Shareholder” and collectively as the “Company Shareholders”.)

3.[E-House Entity] (the “[E-House Entity]”)

Registered address:

4.[VIE] (the “Company”)

Registered address:

(In this Agreement, the above parties are hereinafter referred to individually as a “Party” and collectively as the “Parties”.)

WHEREAS:

(1)The Company Shareholders are shareholders of the Company, legally holding all the equity interest in the Company. Appendix 1 sets forth the capital contribution amount and the shareholding percentage of each Company Shareholder in the registered capital of the Company as of the signing date of this Agreement.

(2)To the extent not in violation of the PRC Law, the Company Shareholders intend to transfer all their respective equity interest in the Company to the [E-House Entity] and/or any other entity or individual designated by the [E-House Entity] after the Equity Interest Transfer takes effect, and the [E-House Entity] intends to accept such transfer.

(3)To the extent not in violation of the PRC Law, the Company intends to transfer its assets to the [E-House Entity] and/or any other entity or individual designated by the [E-House Entity] after the Equity Interest Transfer takes effect, and the [E-House Entity] intends to accept such transfer.

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(4)For the purpose of the foregoing equity interest and asset transfer, the Company Shareholders and the Company agree to grant to the [E-House Entity] the exclusive and irrevocable Equity Transfer Option (as defined below) and Asset Purchase Option (as defined below) respectively after the Equity Interest Transfer takes effect. Pursuant to such Equity Transfer Option and Asset Purchase Option, at the [E-House Entity]’s request, the Shareholders or the Company shall, to the extent permitted by the PRC Law, transfer the Option Equity (as defined below) or the Company Assets (as defined below) to the [E-House Entity] and/or any other entity or individual designated by the [E-House Entity] pursuant to the provisions of this Agreement.

(5)The Company agrees that the Company Shareholders grant the Equity Transfer Option to the [E-House Entity] pursuant to the provisions of this Agreement.

(6)The Company Shareholders agree that the Company grants the Asset Purchase Option to the [E-House Entity] pursuant to the provisions of this Agreement.

NOW, THEREFORE, the Parties, after consultations, hereby agree as follows:

Article 1 Definitions

1.1As used in this Agreement, the following terms shall be interpreted to have the following meanings, unless otherwise interpreted pursuant to the context:

“Equity Transfer Option” shall mean the option to purchase the equity interest in the Company as granted to the [E-House Entity] by the Company Shareholders pursuant to the terms and conditions of this Agreement.

“Asset Purchase Option” shall mean the option to purchase any Company Assets as granted to the [E-House Entity] by the Company pursuant to the terms and conditions of this Agreement.

“Option Equity” shall mean, in respect of each of the Company Shareholders, all the equity interest held by him in the Company Registered Capital respectively as of the effective date of this Agreement; in respect of all the Company Shareholders, the equity interest covering 100% of the Company Registered Capital as of the effective date of this Agreement.

“Company Registered Capital” shall mean the registered capital of the Company as of the effective date of this Agreement, i.e. RMB                                , which shall include any expanded registered capital as a result of any capital increase in any form within the term of this Agreement.

“Transferred Equity” shall mean the equity interest in the Company which the [E-House Entity] has the right to request either of the Company Shareholders to transfer to it or its designated entity or individual in accordance with Article 3 hereof when the [E-House Entity] exercises its Equity Transfer Option, the quantity of which may be all or part of the Option Equity and the specific amount of which shall be determined by the [E-House Entity] at its sole discretion in accordance with the then-effective PRC Law and based on its commercial consideration.

“Transferred Assets” shall mean the Company Assets which the [E-House Entity] has the right to require the Company to transfer to it or its designated entity or individual in accordance with Article 3 hereof when the [E-House Entity] exercises its Asset Purchase Option, the quantity of which may be all or part of the Company Assets and the details of which shall be determined by the [E-House Entity] at its sole discretion in accordance with the then-effective PRC Law and based on its commercial consideration.

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“Exercise of Option” shall mean the exercising of the Equity Transfer Option or the Asset Purchase Option by the [E-House Entity].

“Transfer Price” shall mean all the consideration that the [E-House Entity] or its designated entity or individual is required to pay to the Company Shareholders or the Company in order to obtain the Transferred Equity or the Transferred Assets upon each Exercise of Option.

“Business Permits” shall mean any approvals, permits, filings, registrations, etc. which the Company is required to have for legally and validly operating all its businesses, including without limitation, Business License of Corporate Legal Person, [Operation Permit of Value-added Telecommunication Service] and such other relevant permits and licenses as required by the then-effective PRC Law.

“Company Assets” shall mean all the tangible and intangible assets which the Company owns or has the right to dispose of during the valid term of this Agreement, including without limitation, any immoveable and moveable assets, intellectual property rights such as trademarks, copyrights, patents, know-how, domain names and software use rights, and any investment interest.

“Material Asset” shall mean any asset which has a book value of RMB100,000 or more or has a material effect on the business operations of any Party.

“Material Agreement” shall mean, in respect of the Company, any agreement to which the Company is a party and which has a material effect on the business or assets of the Company; in respect of a Subsidiary, any agreement to which such Subsidiary is a party and which has a material effect on the business or assets of such Subsidiary.

“PRC” shall mean the People’s Republic of China, which, for purpose of this Agreement only, excludes Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan.

“PRC Law” shall mean the then-effective laws, administrative regulations, administrative rules, local regulations, judicial interpretations and other binding regulatory documents of the PRC.

“Exercise Notice” shall have the meaning prescribed to such term in Article 3.7 hereof.

“Subsidiary” shall have the meaning prescribed to such term in Article 6.1.10 hereof.

“Confidential Information” shall have the meaning prescribed to such term in Article 8.1 hereof.

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“Disclosing Party” shall have the meaning prescribed to such term in Article 8.1 hereof.

“Receiving Party” shall have the meaning prescribed to such term in Article 8.1 hereof.

“Defaulting Party” shall have the meaning prescribed to such term in Article 11.1 hereof.

“Default” shall have the meaning prescribed to such term in Article 11.1 hereof.

“Available Rights” shall have the meaning prescribed to such term in Article 12.5 hereof.

1.2The references to any PRC Law herein shall be deemed:

(1)simultaneously to include the references to the amendments, changes, supplements and restatement of such PRC Law, irrespective of whether they take effect before or after the execution of this Agreement; and

(2)simultaneously to include the references to other decisions, notices and regulations enacted in accordance therewith or effective as a result thereof.

1.3Except as otherwise stated in the context herein, all references to an Article, clause, item or paragraph shall refer to the corresponding part of this Agreement.

Article 2 Grant of Equity Transfer Option and Asset Purchase Option

2.1The Company Shareholders hereby severally and jointly agree to grant, upon this Agreement taking effect, the [E-House Entity] an irrevocable, unconditional and exclusive Equity Transfer Option. Pursuant to such Equity Transfer Option, the [E-House Entity] is entitled to, to the extent permitted by the PRC Law, request the Company Shareholders to transfer the Option Equity to the [E-House Entity] or its designated entity or individual according to the terms and conditions hereunder. The [E-House Entity] also agrees to accept such Equity Transfer Option.

2.2The Company hereby agrees that the Company Shareholders grant such Equity Transfer Option to the [E-House Entity] according to Article 2.1 above and other provisions of this Agreement.

2.3The Company hereby agrees to grant, upon this Agreement taking effect, the [E-House Entity] an irrevocable, unconditional and exclusive Asset Purchase Option. Pursuant to such Asset Purchase Option, the [E-House Entity] is entitled to, to the extent permitted by the PRC Law, request the Company to transfer all or part of the Company Assets to the [E-House Entity] or its designated entity or individual according to the terms and conditions hereunder. The [E-House Entity] also agrees to accept such Asset Purchase Option.

2.4The Company Shareholders hereby severally and jointly agree that the Company grants such Asset Purchase Option to the [E-House Entity] according to Article 2.3 above and other provisions of this Agreement.

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Article 3 Method of Exercise of Option

3.1Subject to the terms and conditions of this Agreement, the [E-House Entity] shall have the absolute sole discretion to determine the specific time, method and times of its Exercise of Option to the extent permitted by the PRC Law.

3.2Subject to the terms and conditions of this Agreement and to the extent not in violation of the then-effective PRC Law, the [E-House Entity] shall have the right to, at any time, request to acquire the Transferred Equity from the Company Shareholders by itself or through any other entity or individual designated by it.

3.3Subject to the terms and conditions of this Agreement and to the extent not in violation of the then-effective PRC Law, the [E-House Entity] shall have the right to, at any time, request to acquire the Transferred Assets from the Company by itself or through any other entity or individual designated by it.

3.4With regard to the Equity Transfer Option, at each Exercise of Option, the [E-House Entity] shall have the right to arbitrarily determine the amount of the Transferred Equity to be transferred by the Company Shareholders to the [E-House Entity] and/or any other entity or individual designated by it. The Company Shareholders shall respectively transfer the Transferred Equity to the [E-House Entity] and/or any other entity or individual designated by it in the amount requested by the [E-House Entity]. The [E-House Entity] and/or any other entity or individual designated by it shall pay the Transfer Price with respect to the Transferred Equity acquired at each Exercise of Option to the Company Shareholder transferring such Transferred Equity.

3.5With regard to the Asset Purchase Option, at each Exercise of Option, the [E-House Entity] shall have the right to determine the specific Company Assets to be transferred by the Company to the [E-House Entity] and/or any other entity or individual designated by it. The Company shall transfer the Transferred Assets to the [E-House Entity] and/or any other entity or individual designated by it in accordance with the [E-House Entity]’s requirement. The [E-House Entity] and/or any other entity or individual designated by it shall pay the Transfer Price to the Company with respect to the Transferred Assets acquired at each Exercise of Option.

3.6At each Exercise of Option, the [E-House Entity] may acquire the Transferred Equity or Transferred Assets by itself or designate any third party to acquire all or part of the Transferred Equity or Transferred Assets.

3.7Having decided each Exercise of Option, the [E-House Entity] shall issue to the Company Shareholders or the Company a notice for exercising the Equity Transfer Option or a notice for exercising the Asset Purchase Option (the “Exercise Notice”, the form of which are set out in Annex 2 and Annex 3 hereto). The Company Shareholders or the Company shall, upon receipt of the Exercise Notice, forthwith transfer all the Transferred Equity or Transferred Assets in accordance with the Exercise Notice to the [E-House Entity] and/or any other entity or individual designated by the [E-House Entity] in such method as described in Article 3.4 or Article 3.5 hereof.

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Article 4 Transfer Price

4.1With regard to the Equity Transfer Option, the total Transfer Price to be paid by the [E-House Entity] or any other entity or individual designated by the [E-House Entity] to each Company Shareholder at each Exercise of Option by the [E-House Entity] shall be the capital contribution mirrored by the corresponding Transferred Equity in the Company Registered Capital. But if the lowest price permitted by the then-effective PRC Law is higher than the above capital contribution, the Transfer Price shall be the lowest price permitted by the PRC Law.

4.2With regard to the Asset Purchase Option, the Transfer Price to be paid by the [E-House Entity] or any other entity or individual designated by the [E-House Entity] to the Company at each Exercise of Option by the [E-House Entity] shall be the net book value of the relevant Transferred Assets. But if the lowest price permitted by the then-effective PRC Law is higher than the net book value of the Transferred Assets, the Transfer Price shall be the lowest price permitted by the PRC Law.

Article 5 Representations and Warranties

5.1The Company Shareholders hereby severally and jointly represent and warrant that:

5.1.1Each of the Company Shareholders is a Chinese citizen with full capacity. Each of them has the full and independent legal status and legal capacity to execute, deliver and perform this Agreement and may act independently as a party to lawsuit.

5.1.2The Company is a limited liability company duly registered and legitimately existing under the PRC Law with an independent legal personality. It has the full and independent legal status and legal capacity to execute, deliver and perform this Agreement and may act independently as a party to lawsuit.

5.1.3Upon this Agreement taking effect, each of them has the full power and authority to execute, deliver and perform this Agreement and all other documents relating to the transaction contemplated hereby and to be executed by him. Each of them has the full power and authority to consummate the transaction contemplated hereby.

5.1.4This Agreement is legally and duly executed and delivered by the Company Shareholders. After taking effect, this Agreement shall constitute their legal and binding obligations and shall be enforceable against them in accordance with the terms of this Agreement.

5.1.5The Company Shareholders are the legitimate owners of the Option Equity as of the effective date of this Agreement, and except for the rights created under the Equity Pledge Agreement and Shareholder Voting Rights Proxy Agreement executed by the Company, the [E-House Entity] and the Company Shareholders on the date hereof, the Option Equity is free from and clear of any lien, pledge, claim and other encumbrances and third party rights. Pursuant to this Agreement, the [E-House Entity] and/or any other entity or individual designated by it may, after the Exercise of Option, acquire a good title to the Transferred Equity, free from and clear of any lien, pledge, claim and other encumbrances or third party rights.

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5.1.6To the knowledge of the Company Shareholders, as of the effective date of this Agreement, the Company Assets are free from and clear of any lien, mortgage, claim and other encumbrances and third party rights. Pursuant to this Agreement, the [E-House Entity] and/or any other entity or individual designated by it may, after the Exercise of Option, acquire a good title to the Company Assets, free from and clear of any lien, mortgage, claim and other encumbrances or third party rights.

5.1.7The execution, delivery and performance by the Company Shareholders of this Agreement and the consummation by the Company Shareholders of the transaction contemplated hereby do not violate any PRC Law or any agreement, contract or other arrangement with any third party by which they are bound.

5.2The Company hereby represents and warrants that:

5.2.1The Company is a limited liability company duly registered and legitimately existing under the PRC Law with an independent legal personality. It has the full and independent legal status and legal capacity to execute, deliver and perform this Agreement and may act independently as a party to lawsuit.

5.2.2The Company has the full internal corporate power and authority to execute, deliver and perform this Agreement and all other documents relating to the transaction contemplated hereby and to be executed by it. It has the full power and authority to consummate the transaction contemplated hereby.

5.2.3This Agreement is legally and duly executed and delivered by the Company. After taking effect, this Agreement shall constitute the legal and binding obligation against it.

5.2.4The Company Assets are free from and clear of any lien, mortgage, claim and other encumbrances and third party rights. Pursuant to this Agreement, the [E-House Entity] and/or any other entity or individual designated by it may, after the Exercise of Option, acquire a good title to the Company Assets, free from and clear of any lien, mortgage, claim and other encumbrances or third party rights.

5.2.5The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transaction contemplated hereby do not violate any PRC Law or any agreement, contract or other arrangement with any third party by which it is bound.

5.3The [E-House Entity] hereby represents and warrants that:

5.3.1The [E-House Entity] is a                                                  enterprise duly registered and legitimately existing under the PRC Law with an independent legal personality. The [E-House Entity] has the full and independent legal status and legal capacity to execute, deliver and perform this Agreement and may act independently as a party to lawsuit.

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5.3.2The [E-House Entity] has the full internal corporate power and authority to execute, deliver and perform this Agreement and all other documents relating to the transaction contemplated hereby and to be executed by it. It has the full power and authority to consummate the transaction contemplated hereby.

5.3.3This Agreement is legally and duly executed and delivered by the [E-House Entity]. After taking effect, this Agreement shall constitute the legal and binding obligation against it.

Article 6 Undertakings by the Company Shareholders

Each of the Company Shareholders hereby severally undertakes that:

6.1Within the valid term of this Agreement, without the [E-House Entity]’s prior written consent:

6.1.1any Company Shareholder shall not transfer or otherwise dispose of any Option Equity or create any encumbrance or other third party rights on any Option Equity;

6.1.2he shall not increase or decrease the Company Registered Capital or cause or permit the Company to be divided or merged with any other entity;

6.1.3he shall not dispose of or cause the management of the Company to dispose of any Material Asset (other than in the ordinary course of business), or create any encumbrance or other third party rights on any Material Asset;

6.1.4he shall not terminate or cause the management of the Company to terminate any Material Agreement entered into by the Company, or enter into any other agreement in conflict with the existing Material Agreements;

6.1.5he shall not appoint or dismiss and replace any director or supervisor of the Company or any other management personnel of the Company who shall be appointed or dismissed by the Company Shareholders;

6.1.6he shall not cause the Company to declare the distribution of or in practice release any distributable profit, dividend, share profit or share interest;

6.1.7he shall ensure that the Company validly exists and is not terminated, liquidated or dissolved;

6.1.8he shall not amend the articles of association of the Company;

6.1.9he shall ensure that the Company will not lend or borrow any money, or provide any guaranty or engage in security activities in any other form, or bear any substantial obligations other than in the ordinary course of business; and

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6.1.10it shall not cause the Company or the management of the Company to approve any of the following acts of any of the Company’s subsidiaries or affiliates (collectively, the “Subsidiaries”):

(a)increase or decrease any Subsidiary’s registered capital or cause or permit any Subsidiary to be divided or merged with any other entity;

(b)dispose of or cause the management of the Subsidiaries to dispose of any Material Asset of any Subsidiary (other than in the ordinary course of business), or create any encumbrance or other third party rights on such assets;

(c)terminate or cause the management of the Subsidiaries to terminate any Material Agreement entered into by any Subsidiary, or enter into any other agreement in conflict with the existing Material Agreements;

(d)appoint or dismiss and replace any director or supervisor of any Subsidiary or any other management personnel of such Subsidiary who shall be appointed or dismissed by the Company;

(e)terminate, liquidate or dissolve any Subsidiary or act in any way that damages or is likely to damage the valid existence of any Subsidiary;

(f)amend the articles of association of any Subsidiary; and

(g)lend or borrow any money, or provide any guaranty or engage in security activities in any other form, or bear any substantial obligations other than in the ordinary course of business.

6.2Within the valid term of this Agreement, he shall use his best endeavor to develop the business of the Company and ensure that the Company’s operations are legal and in compliance with the regulations, and he will not engage in any act or omission which may damage the Company’s (including the Subsidiaries’) assets and goodwill or affect the validity of the Business Permits of the Company.

6.3Within the valid term of this Agreement, he shall timely notify the [E-House Entity] of any circumstances that may have a material adverse effect on the existence, business operations, financial conditions, assets or goodwill of the Company (including the Subsidiaries) and timely take all the measures approved by the [E-House Entity] to remove such adverse circumstances or take effective remedial measures with respect thereto.

6.4With the valid term of this Agreement, once the [E-House Entity] gives the Exercise Notice,

6.4.1he shall promptly convene a shareholders’ meeting, pass shareholders’ resolutions and take all other necessary actions to approve any Company Shareholder or the Company to transfer all the Transferred Equity or the Transferred Assets at the Transfer Price to the [E-House Entity] and/or any other entity or individual designated by the [E-House Entity], and waive any preemptive right to purchase enjoyed by him (if any);

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6.4.2he shall promptly enter into an equity transfer agreement with the [E-House Entity] and/or any other entity or individual designated by the [E-House Entity] to transfer all the Transferred Equity at the Transfer Price to the [E-House Entity] and/or any other entity or individual designated by the [E-House Entity] and provide necessary support to the [E-House Entity] (including provision and execution of all relevant legal documents, performing all government approval and registration procedures and assuming all relevant obligations) in accordance with the [E-House Entity]’s requirements and the PRC Law so that the [E-House Entity] and/or any other entity or individual designated by the [E-House Entity] may acquire all the Transferred Equity, free from and clear of any legal defect or any encumbrance, third party restriction or any other restrictions on the Transferred Equity.

6.5If the total Transfer Price obtained by any Company Shareholder with respect to the Transferred Equity held by him is higher than the capital contribution corresponded with such Transferred Equity in the Company Registered Capital, or he receives any form of profit distribution, share profit, share interest or dividend from the Company, then such Company Shareholder agrees to, to the extent no in violation of the PRC Law, waive the premium earnings and any profit distribution, share profit, share interest or dividend (after the deduction of relevant taxes) and the [E-House Entity] is entitled thereto. Otherwise, such Company Shareholder shall compensate the [E-House Entity] and/or any other entity or individual designated by the [E-House Entity] for any loss incurred as a result thereof.

Article 7 Undertakings by the Company

7.1The Company hereby undertakes that:

7.1.1If any consent, permit, waiver or authorization by any third party, or any approval, permit or exemption by any government authority, or any registration or filing formalities (if required by law) with any government authority needs to be obtained or handled with respect to the execution and performance of this Agreement and the grant of the Equity Transfer Option or Asset Purchase Option hereunder, the Company shall endeavor to assist in satisfying the above conditions.

7.1.2Without the [E-House Entity]’s prior written consent, the Company shall not assist or permit the Company Shareholders to transfer or otherwise dispose of any Option Equity or create any encumbrance or other third party rights on any Option Equity.

7.1.3Without the [E-House Entity]’s prior written consent, the Company shall not transfer or otherwise dispose of any Material Asset (other than in the ordinary course of business) or create any encumbrance or other third party rights on any Company Assets.

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7.1.4The Company shall not do or permit to be done any behavior or action that may adversely affect the interests of the [E-House Entity] under this Agreement, including without limitation, any behavior and action that is subject to Article 6.1.

7.2With the valid term of this Agreement, once the [E-House Entity] gives the Exercise Notice,

7.2.1it shall promptly cause the Company Shareholders to convene a shareholders’ meeting, pass shareholders’ resolutions and take all other necessary actions to approve the Company to transfer all the Transferred Assets at the Transfer Price to the [E-House Entity] and/or any other entity or individual designated by the [E-House Entity];

7.2.2it shall promptly enter into an asset transfer agreement with the [E-House Entity] and/or any other entity or individual designated by the [E-House Entity] to transfer all the Transferred Assets at the Transfer Price to the [E-House Entity] and/or any other entity or individual designated by the [E-House Entity], and cause the Company Shareholders to provide necessary support to the [E-House Entity] (including provision and execution of all relevant legal documents, performing all government approval and registration procedures and assuming all relevant obligations) in accordance with the [E-House Entity]’s requirements and the PRC Law so that the [E-House Entity] and/or any other entity or individual designated by the [E-House Entity] may acquire all the Transferred Assets, free from and clear of any legal defect or any encumbrance, third party restriction or any other restrictions on the Transferred Assets.

Article 8 Confidentiality Obligations

8.1Regardless of whether this Agreement is terminated or not, each Party shall keep strictly confidential all the business secrets, proprietary information, customer information and all other information of a confidential nature about the other Parties known by it during the execution and performance of this Agreement (collectively, the “Confidential Information”). Unless a prior written consent is obtained from the Party disclosing the Confidential Information (the “Disclosing Party”) or unless it is required to be disclosed to third parties according to the stipulation of relevant laws and regulations or the requirement of the place where its affiliate is listed on a stock exchange, the Party receiving the Confidential Information (the “Receiving Party”) shall not disclose to any third party any Confidential Information. The Receiving Party shall not use any Confidential Information other than for the purpose of performing this Agreement.

8.2The following information shall not be deemed part of the Confidential Information:

(1)any information that has been lawfully acquired by the receiving Party before as evidenced by written documents;

(2)any information entering the public domain not attributable to the fault of the Party receiving the information; or

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(3)any information lawfully acquired by the Party receiving the information through other sources after its receipt of such information.

8.3For purpose of performing this Agreement, the Receiving Party may disclose the Confidential Information to its relevant employees, agents or professionals retained by it. However, the Receiving Party shall ensure that the aforesaid persons shall comply with the relevant terms and conditions of this Article 8. In addition, the Receiving Party shall be responsible for any liability incurred as a result of such persons’ breach of the relevant terms and conditions of this Article 8.

8.4Notwithstanding any other provision herein, the effect of this Article 8 shall not be affected by the termination of this Agreement.

Article 9 Term of Agreement

After being duly executed by the Parties, this Agreement shall become effective immediately upon the Equity Interest Transfer taking effect. This Agreement shall terminate after all the Option Equity and the Company Assets are lawfully transferred to the [E-House Entity] and/or any other entity or individual designated by the [E-House Entity] pursuant to the provisions of this Agreement.

Article 10 Notices

10.1Any notice, request, demand and other correspondences required by this Agreement or made in accordance with this Agreement shall be delivered in writing to the relevant Party.

10.2If any of such notice or other correspondences is transmitted by facsimile or telex, it shall be treated as delivered immediately upon transmission; if delivered in person, it shall be treated as delivered at the time of delivery; if posted by mail, it shall be treated as delivered five (5) days after posting.

Article 11 Defaulting Liability

11.1The Parties agree and confirm that, if any of the Parties (the “Defaulting Party”) substantially violates any agreement herein or substantially fails to perform or delays performance of any of the obligations hereunder, such violation, failure or delay shall constitute a default under this Agreement (a “Default”). The non-defaulting Party shall have the right to request the Defaulting Party to rectify or take remedial actions within a reasonable period. If the Defaulting Party fails to rectify such Default or take remedial actions within such reasonable period or within ten (10) days after the non-defaulting Party notifies the Defaulting Party in writing requiring the Default to be rectified, then the non-defaulting Party is entitled to decide at its own discretion that:

11.1.1if any Company Shareholder or the Company is the Defaulting Party, the [E-House Entity] shall be entitled to terminate this Agreement and require the Defaulting Party to indemnify the damages;

11.1.2if the [E-House Entity] is the Defaulting Party, the non-defaulting Party shall be entitled to require the Defaulting Party to indemnify the damages, but unless otherwise provided for by the PRC Law, the non-defaulting Party has no right to terminate or cancel this Agreement in any circumstances.

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11.2Notwithstanding any other provision herein, the effect of this Article 11 shall not be affected by the termination of this Agreement.

Article 12 Miscellaneous

12.1This Agreement is written in Chinese and executed in four (4) originals, with one (1) original to be retained by each Party hereto.

12.2The execution, effectiveness, performance, revision, interpretation and termination of this Agreement shall be governed by the PRC Law.

12.3Any dispute arising out of and in connection with this Agreement shall be resolved through consultations among the Parties. In case the Parties fail to reach agreement within thirty (30) days after the dispute arises, such dispute shall be submitted to China International Economic and Trade Arbitration Commission Shanghai Commission for arbitration in Shanghai in accordance with such Commission’s arbitration rules in effect at the time of applying for arbitration, and the arbitration award shall be final and binding on the Parties.

12.4None of the rights, powers or remedies granted to any Party by any provision herein shall preclude any other rights, powers or remedies available to such Party at law and under the other provisions of this Agreement. In addition, the exercising by one Party of any of its rights, powers and remedies shall not exclude such Party from exercising any of its other rights, powers and remedies.

12.5No failure or delay by a Party in exercising any rights, powers and remedies available to it hereunder or at law (the “Available Rights”) shall result in a waiver thereof, nor shall the waiver of any single or partial exercise of the Available Rights shall exclude such Party from exercising such rights in any other way and exercising the other Available Rights.

12.6The headings of the provisions herein are for reference only, and in no event shall such headings be used for or affect the interpretation of the provisions hereof.

12.7Each provision contained herein shall be severable and independent from each of the other provisions. If any one or more provisions herein become(s) invalid, illegal or unenforceable at any time, the validity, legality and enforceability of the remaining provisions herein shall not be affected as a result thereof.

12.8This Agreement, when effective, shall supersede any prior other legal documents executed by and among the Parties with respect to the subject matter hereof. Any amendment or supplement hereto shall be made in writing and shall become effective only upon due execution by the Parties hereto.

12.9Without the [E-House Entity]’s prior written consent, each Company Shareholder or the Company shall not transfer any of its rights and/or obligations hereunder to any third party. The Company Shareholders and the Company hereby agree that the [E-House Entity] is entitled to transfer any of its rights and/or obligations hereunder to any third party upon written notice thereof to the Company Shareholders and the Company.

12.10This Agreement shall be binding on the legal assignees or successors of the Parties.

14

[The remainder of this page intentionally left blank]

15

[SIGNATURE PAGE]

IN WITNESS WHEREOF, the following Parties have executed this Exclusive Call Option Agreement as of the date first above written.

[Shareholder A]
By:	/s/
[Shareholder B]
By:	/s/
[E-House Entity]
(Seal)
/s/
[VIE]
(Seal)
/s/

16

Annex 1:

Company’s General Information

Company name:

Registered address:

Registered capital:       RMB

Legal Representative:

Shareholding structure:

Shareholder’s name	Contribution in registered capital	Percentage of contribution		Method of contribution
[Shareholder A]	RMB		%
[Shareholder B]	RMB		%
Total	RMB	100	%	/

17

Annex 2:

Form of Exercise Notice

To: [Name of the Company Shareholder]

WHEREAS, we, [VIE] (the “Company”), [name of the other Company Shareholder] and you entered into an Exclusive Call Option Agreement (the “Option Agreement”) on                                                       and reached an agreement that you shall transfer the equity interest you hold in the Company to us or any third party designated by us at our request to the extent permitted by the PRC laws and regulations.

Therefore, we hereby give this notice to you as follows:

We hereby request to exercise the Equity Transfer Option under the Option Agreement and we/[name of company/individual] designated by us will acquire the% of the equity interest you hold in the Company (the “Proposed Acquired Equity”). Upon your receipt of this notice, you shall immediately transfer all the Proposed Acquired Equity to us/[name of designated company/individual] pursuant to the provisions of the Option Agreement.

Regards,
	[E-House Entity]
	(Seal)
	Authorized representative:
	Date:

18

Annex 3:

Form of Exercise Notice

To: [VIE]

WHEREAS, we, [Shareholder A], [Shareholder B] and you entered into an Exclusive Call Option Agreement (the “Option Agreement”) on                                         and reached an agreement that you shall transfer your assets to us or any third party designated by us at our request to the extent permitted by the PRC laws and regulations.

Therefore, we hereby give this notice to you as follows:

We hereby require to exercise the Asset Purchase Option under the Option Agreement and we/[name of company/individual] designated by us will acquire the assets owned by you as stated in a separate list (the “Proposed Acquired Assets”). Upon your receipt of this notice, you shall immediately transfer all the Proposed Acquired Assets to us/[name of designated company/individual] pursuant to the provisions of the Option Agreement.

Regards,
	[E-House Entity]
	(Seal)
	Authorized representative:
	Date:

19

EX-4.54

Exhibit 4.54

[Shareholder A]

[Shareholder B]

AND

[E-House Entity]

Loan Agreement

[Date]

LOAN AGREEMENT

This LOAN AGREEMENT (“this Agreement”) is entered into on                                       by:

1.[Shareholder A]

Identity Card Number:

2.[Shareholder B]

Identity Card Number:

([Shareholder A] and [Shareholder B] are collectively referred to as the “Borrowers”)

3.[E-House Entity] (the “Lender”)

Registered Address:

(In this Agreement, the above parties are referred to individually as a “Party” and collectively the “Parties”.)

WHEREAS:

(1)[VIE] (the “Domestic Company”) is [proposed to be established as] a                                    duly incorporated and validly existing in                                      , China under the laws of the PRC, and the [proposed] registered capital is RMB                                  (in words:                                Yuan).

(2)The Lender intends to provide a loan to [Shareholder A] and [Shareholder B] respectively for [purpose].

In order to clarify the rights and obligations of the Lender and the Borrowers under the above loan arrangement, the Parties hereby agree as follows:

Article 1 Definitions

1.1Unless otherwise specified in this Agreement, the following terms used in this Agreement shall have the meanings prescribed thereto below.

“Loan” means the loan provided by the Lender to the Borrowers in the amount of RMB                               (in words:                                    Yuan) pursuant to Article 2.1, among which a loan in the amount of RMB                               (in words:                                     Yuan) is provided to [Shareholder A], and a loan in the amount of RMB                                    (in words:                               Yuan) is provided to [Shareholder B].

“Outstanding Amount” means the respective unpaid amount payable by the Borrowers under the Loan.

“PRC” means the People’s Republic of China, for the purpose of this Agreement, excluding Hong Kong, Macao, and Taiwan.

“Term” has the meaning prescribed in Article 4.1 hereof.

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“Repayment Notice” has the meaning prescribed in Article 5.2 hereof.

“Repayment Request” has the meaning prescribed in Article 5.3 hereof.

“Confidential Information” has the meaning prescribed in Article 7.1 hereof.

“Available Rights” has the meaning prescribed in Article 10.5 hereof.

1.2Any reference in this Agreement to the following terms shall be interpreted as the following meanings.

“Article” shall be interpreted as an article in this Agreement, unless otherwise specified in the context of this Agreement.

“Taxes” shall be interpreted to include any taxes, fees, duties, or other charges of the same nature (including but not limited to any penalties or interests related to any unpaid or overdue amount of such Taxes).

“Borrowers” or “Lender” shall be interpreted to include the successors and assignees of such Party.

1.3Unless otherwise specified, any reference in this Agreement to this Agreement or any other agreement or document shall, as the case may be, be interpreted as the reference to the amendments, modifications, replacements or supplements to this Agreement or such other agreement or document that are already made or may be made in the future from time to time.

Article 2 Loan

2.1Pursuant to the terms and conditions of this Agreement, the Lender agrees to provide the Loan to the Borrowers. The Parties confirm that the amount of the principal to be paid by the Lender to the Borrowers after the signing of this Agreement is RMB                                      (in words:                                        Yuan)

The Lender shall provide a loan in the amount of RMB                                        (in words:                                  Yuan) to [Shareholder A] and a loan in the amount of RMB                                    (in words:                                       Yuan) to [Shareholder B].

The Borrowers cannot use the Loan under this Agreement unless for the purpose of the establishment of the Domestic Company, and holding 100% equity interest of the Domestic Company. Without the prior written consent of the Lender, the Borrowers cannot use any part of the Loan for any other purpose.

2.2The Parties confirm that the Borrowers shall repay the Loan to the Lender in accordance with, and perform all of its other obligations under, this Agreement.

2.3The Borrowers shall enter into an equity interest pledge agreement with the Lender in accordance with the requirements of the Lender, to pledge, all of its equity interest in the Domestic Company, to secure the Borrowers’ performance of all of their obligations under this Agreement. The Borrowers shall also cooperate with the Lender to register the equity interest pledge agreement with the competent administration for industry and commerce.

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Article 3 Interest

The Lender confirms that there shall be no interest accruing on the Loan.

Article 4 Term

4.1The term of any part of the Loan under this Agreement shall commence on the date on which the Lender provides the Loan to the Borrowers and end on the earliest of (1) the twentieth (20th) anniversary of the effective date of this Agreement, (2) the expiration date of the business term of the Lender (including its business term as extended), and (3) the expiration date of the business term of the Domestic Company (including its business term as extended) (the “Term”).

Article 5 Repayment

5.1On the expiration date of the Term, unless the Parties unanimously agree to extend the Term to the extent permitted by the applicable laws and regulations, the Borrowers shall fully repay the Outstanding Amount on a one-off basis. Under such circumstance, to the extent not in violation of the applicable laws and regulations, the Lender has the right to purchase, itself or by any designated third party, all of the equity interest in the Domestic Company held by the Borrowers at that time, the purchase price for which shall be equal to the Outstanding Amount.

5.2During the Term, the Lender may, at any time, determine at its sole discretion to accelerate the repayment of the Loan and require any or both of the Borrowers to repay all or any part of the Outstanding Amount by a written notice to any of the Borrowers thirty (30) days in advance (the “Repayment Notice”).

If the Lender requires any of the Borrowers to repay any amount pursuant to the previous Paragraph, to the extent not in violation of the applicable laws and regulations, the Lender has the right to purchase, itself or by any designated third party, certain portion of the equity interest in the Domestic Company held by such Borrower, the purchase price for which shall be equal to that portion of the Outstanding Amount required to be repaid, and the percentage of the equity interest required to be sold against the equity interest in the Domestic Company held by such Borrower on the effective date of this Agreement shall be equal to the percentage of the Outstanding Amount required to be repaid against the total amount of the Loan borrowed by such Borrower under this Agreement.

5.3To the extent the applicable laws and regulations allow the Lender to hold the equity interest in the Domestic Company, any of the Borrowers may, at any time, give a repayment request to the Lender thirty (30) days in advance to request to prepay all or any part of the Outstanding Amount (the “Repayment Request”).

Under such circumstance, to the extent not in violation of the applicable laws and regulations, the Lender has the right to purchase, itself or by any designated third party, certain portion of the equity interest in the Domestic Company held by the Borrower proposing the repayment, the purchase price for which shall be equal to that portion of the Outstanding Amount proposed to be repaid, provided that the percentage of the equity interest required to be sold against the equity interest in the Domestic Company held by such Borrower on the effective date of this Agreement shall be equal to the percentage of the Outstanding Amount proposed to be repaid against the total amount of the Loan borrowed by such Borrower under this Agreement.

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5.4The Borrower required or proposing to repay any amount shall repay the relevant Outstanding Amount in cash or in such other manner as approved by the Lender in writing in advance and permitted by the applicable laws and regulations.

5.5When the Borrowers repay the Outstanding Amount pursuant to the above provisions of this Article 5, the Parties shall complete the equity interest transfer provided in this Article 5 at the same time to ensure that, at the same time when the Outstanding Amount is repaid, the Lender or any third party designated by the Lender has lawfully and fully accepted the relevant equity interest in the Domestic Company pursuant to the above provisions, and such equity interest is free and clear of any pledge or any other form of encumbrance. When the equity interest in the Domestic Company is to be transferred pursuant to the above provisions, the Borrowers shall provide all reasonable assistance and shall waive all of their rights of first refusal to purchase such equity interest.

5.6After the Borrowers transfer all of their equity interest in the Domestic Company to the Lender or any third party designated by the Lender and repay all of the Outstanding Amount pursuant to the above provisions of this Article 5, the Borrowers have no obligations of repayment under this Agreement.

Article 6 Taxes

The Lender shall assume all of the Taxes related to the Loan.

Article 7 Confidentiality

7.1Irrespective of the termination of this Agreement, the Borrowers are obligated to keep confidential the trade secrets, proprietary information, clients’ information and all other information of confidential nature related to the Lender that are known to or received by the Borrowers as a result of the execution or performance of this Agreement (collectively the “Confidential Information”). The Borrowers shall not use such Confidential Information for any purpose other than for the performance of its obligations under this Agreement. Unless otherwise approved by the Lender in writing in advance or required by the relevant laws or regulations, the Borrowers shall not disclose any of the Confidential Information to any third party.

7.2The Confidential Information does not include:

(1)the information that has been lawfully acquired by the Party receiving the information before as evidenced by certain written evidence;

(2)the information entering the public domain without attribution to any fault of the Party receiving the information; and

(3)the information lawfully acquired by the Party receiving the information from other sources after being received by the Party.

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7.3After the termination of this Agreement, the Borrowers shall, as requested by the Lender, return, destroy, or otherwise dispose of all of the documents, datum, or software provided by the Lender that contain any Confidential Information, and stop using the Confidential Information.

7.4Notwithstanding any other provision of this Agreement, the effect of this Article 7 shall not be affected by the suspension or termination of this Agreement.

Article 8 Notice

8.1Any notice, request, demand or other correspondence required under or in accordance with this Agreement shall be delivered to the related Party in writing.

8.2The above notice or other correspondence, shall be deemed to be delivered (i) upon being sent out if by facsimile or electric transmission, or (ii) upon handover in person if by hand delivery; or (iii) upon the fifth (5th) day of being posted if by mail.

Article 9 Default Liabilities

9.1The Borrowers undertake to indemnify the Lender against any actions, charges, claims, costs, damage, demands, expenses, liabilities, losses or procedures suffered or incurred by the Lender due to any breach by the Borrowers of any of their obligations under this Agreement.

9.2Notwithstanding any other provision of this Agreement, the effect of this Article shall not be affected by the suspension or termination of this Agreement.

Article 10 Miscellaneous

10.1This Agreement is written in Chinese in three (3) originals. Each of the Parties to this Agreement shall hold one (1) original.

10.2The execution, effectiveness, performance, modification, interpretation and termination of this Agreement shall be governed by the laws of the PRC.

10.3Any dispute arising out of or in connection with this Agreement shall be resolved by the Parties through consultation. In the event the Parties fail to agree with each other within thirty (30) days after the dispute arises, the dispute shall be submitted to China International Economic and Trade Arbitration Commission Shanghai Commission for arbitration in Shanghai in accordance with the arbitration rules thereof effective at the submission of the application for arbitration. The arbitration award shall be final and binding upon the Parties.

10.4Any right, power or remedy granted to each of the Parties by any provision of this Agreement shall not preclude any other rights, powers or remedies that such Party is entitled to under the laws and under any other provisions of this Agreement, and any Party’s exercise of any of its rights, powers or remedies shall not preclude its exercise of any other rights, powers or remedies that it is entitled to.

10.5A Party’s failure or delay in exercising any of its rights, powers or remedies that it is entitled to under this Agreement or under the laws (the “Available Rights”) shall not constitute its waiver of such rights, nor shall any single or partial waiver of any Available Rights by a Party preclude its exercise of those rights in another manner or its exercise of any other Available Rights.

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10.6The headings in this Agreement are written for the ease of reference only, and shall in no event be used for, or affect, the interpretation to this Agreement.

10.7Each provision of this Agreement is severable and independent from any of the other provisions. If at any time any one or more provisions of this Agreement become invalid, illegal or unenforceable, the validity, legality and enforceability of the other provisions of this Agreement shall not be affected thereby.

10.8This Agreement, upon taking effect, shall supersede any other legal documents executed by the Parties in respect of the subject of this Agreement. Any amendment or supplement to this Agreement shall not come into effect unless made in writing and duly executed by the Parties.

10.9Without the prior written consent of the Lender, the Borrowers shall not transfer any of their rights and/or obligations under this Agreement to any third party. The Lender has the right to transfer any of its rights under this Agreement to any third party upon the prior written notice to the other Parties.

[INTENTIONALLY LEFT BLANK BELOW]

7

[EXECUTION PAGE]

IN WITNESS WHEREOF, this LOAN AGREEMENT is executed by the following Parties on the date first written above.

[Shareholder A]
By:	/s/
[Shareholder B]
By:	/s/
[Lender]
(Seal)
/s/

8

EX-4.55

Exhibit 4.55

[Shareholder A]

[Shareholder B]

[E-House Entity]

AND

[VIE]

Shareholder Voting Right Proxy Agreement

In Respect Of [VIE]

[Date]

Shareholder Voting Right Proxy Agreement

This Shareholder Voting Right Proxy Agreement (this “Agreement”) is entered into as of                                              by and between the following Parties:

1.[Shareholder A]

Identity Card No.:

2.[Shareholder B]

Identity Card No.:

([Shareholder A] and [Shareholder B] are hereinafter referred to individually as a “Company Shareholder” and collectively as the “Company Shareholders”.)

3.[E-House Entity] (the “[E-House Entity]”)

Registered address:

4.[VIE] (the “Company”)

Registered address:

(In this Agreement, the above parties are hereinafter referred to individually as a “Party” and collectively as the “Parties”.)

WHEREAS:

(1)The Shareholders are shareholders of the Company, holding 100% equity interest of the Company.

(2)The Shareholders intend to severally entrust their voting rights in the Company to the individuals designated by the [E-House Entity] after the Equity Transfer takes effect, and the [E-House Entity] intends to designate the individuals to accept such entrust.

NOW, THEREFORE, the Parties, after friendly consultations, hereby mutually agree below:

Article 1 Voting Right Delegation

1.1The Shareholders hereby irrevocably undertake to respectively sign a power of attorney in substance and form as set forth in Annex 1 hereof after this Agreement takes effect, to respectively entrust the individuals then designated by the [E-House Entity] (hereinafter, the “Entrusted Persons”) to exercise, on behalf of each of the Shareholders, the following rights that the Shareholders are entitled to in the capacity of shareholders of the Company under the then effective articles of association of the Company (collectively, the “Entrusted Rights”):

(1)To propose to convene and attend Shareholders’ meetings of the Company as the representative of each of the Shareholders according to the articles of association of the Company;

2

(2)To exercise, on behalf of each of the Shareholders, their voting rights on all matters requiring discussion or resolutions of the Shareholders’ meetings of the Company, including without limitation, the appointment and election of the Company’s directors and other senior management to be appointed and removed by the Shareholders;

(3)To exercise other voting rights of the Shareholder as specified in the articles of association of the Company (including any other shareholder voting rights as specified in the amended articles of association).

The above authorization and entrustment are granted on the condition that the Entrusted Persons are PRC citizens and that the [E-House Entity] approves such authorization and entrustment. Upon and only upon written notice of dismissing and replacing the Entrusted Person(s) given by the [E-House Entity] to each of the Shareholders shall the Shareholder promptly entrust another PRC citizen then designated by the [E-House Entity] to exercise the above Entrusted Rights, and the new authorization and entrustment shall, upon the grant supersede the previous authorization and entrustment. The Shareholders shall not revoke the authorization and entrustment to the Entrusted Person(s) unless as provided in this Article.

1.2The Entrusted Persons shall perform their obligations in respect of the entrustment hereunder to the extent authorized hereunder with due care and diligence and in compliance with laws. The Shareholders acknowledge and shall assume liabilities for any legal consequences arising as a result of the Entrusted Persons’ exercise of the foregoing Entrusted Rights.

1.3The Shareholders hereby confirm that the Entrusted Persons are not required to seek opinions from the relevant Shareholder prior to their exercise of the foregoing Entrusted Rights. However, the Entrusted Persons shall inform the Shareholders in a timely manner of any resolution or proposal on convening an interim shareholders’ meeting after such resolution or proposal is made.

Article 2 Right to Information

2.1For the purpose of exercising the Entrusted Rights hereunder, the Entrusted Persons are entitled to know various relevant information of the Company such as those in respect of its operation, business, customers, finance and employees, and shall have access to the relevant documentations and materials of the Company. The Company shall fully cooperate with the Entrusted Persons in this regard.

Article 3 Exercise of the Entrusted Rights

3.1The Shareholders will provide sufficient assistances to the Entrusted Persons with regard to their exercise of the Entrusted Rights, including timely execution where necessary of resolutions of shareholders’ meetings adopted by the Entrusted Persons or other pertinent legal documents (e.g., where the same is required in order to submit documents for purpose of governmental approvals, registrations or filings.).

3.2If at any time within the term of this Agreement, the grant or exercise of the Entrusted Rights hereunder is unrealizable for whatever cause (except for default of any Shareholder or the Company), the Parties shall immediately seek the most similar alternative solution and, if necessary, enter into a supplementary agreement to amend or adjust the provisions herein, in order to ensure the realization of the purpose of this Agreement.

3

Article 4 Exemption and Compensation

4.1The Parties acknowledge that in no case shall the [E-House Entity] be required to be liable to or compensate (monetary or otherwise) the other Parties or any third party in respect of exercise of the Entrusted Rights hereunder by the individuals designated by it.

4.2The Shareholders and the Company agree to indemnify and hold the [E-House Entity] free from and harmless against all losses incurred or likely to be incurred due to exercise of the Entrusted Rights by the Entrusted Persons designated by the [E-House Entity], including without limitation, any loss resulted from any litigation, demand, arbitration or claim by any third party against it or from administrative investigation or penalty, PROVIDED, HOWEVER, THAT no indemnification is available for any losses caused by a willful default or gross negligence of the Entrusted Persons.

Article 5 Representations and Warranties

5.1Each Shareholder hereby represents and warrants severally that:

5.1.1It is a Chinese citizen with full capacity of action. It has the complete and independent legal status and legal capacity to execute, deliver and perform this Agreement. It may sue or be sued independently.

5.1.2When this Agreement takes effect, it has the full power and authority to execute and deliver this Agreement and all other documents relating to the transaction contemplated hereby that are to be executed by it; and the full power and authority to consummate the transaction contemplated hereby. This Agreement is duly executed and delivered by it. Upon the effectiveness, this Agreement shall constitute its legal and binding obligation and may be enforceable against it in accordance with the terms hereof.

5.1.3It is the registered legal shareholder of the Company as of the effective date of this Agreement. Except for those rights created under this Agreement, the Equity Pledge Agreement and the Exclusive Call Option Agreement entered into by and between the Shareholders, the Company and the [E-House Entity] on the date hereof, the Entrusted Rights are free of any third-party right. Pursuant to this Agreement, the Entrusted Persons may exercise the Entrusted Rights fully and completely in accordance with the then effective articles of association of the Company.

5.2Each of the [E-House Entity] and the Company hereby represents and warrants severally that:

5.2.1It is a limited liability company duly registered and validly existing under the laws where it is registered and has the independent legal person status. It has the full and independent legal status and legal capacity to execute, deliver and perform this Agreement and may sue or be sued independently.

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5.2.2It has the full corporate power and authority to execute and deliver this Agreement and all other documents relating to the transaction contemplated hereby that are to be executed by it. It has the full power and authority to consummate the transaction contemplated hereby.

5.3The Company further represents and warrants that:

5.3.1Each Shareholder is the registered legal shareholder of the Company as of the effective date of this Agreement. Except for the rights under this Agreement, the Equity Pledge Agreement and the Exclusive Call Option Agreement entered into by and between the Shareholders, the Company and the [E-House Entity] on the date hereof, the Entrusted Rights are free of any third-party right. Pursuant to this Agreement, the Entrusted Persons may exercise the Entrusted Rights fully and completely in accordance with the then effective articles of association of the Company.

Article 6 Term of this Agreement

6.1After being duly executed by the Parties, this Agreement will become effective immediately upon the Equity Transfer taking effect. Subject to the provisions of Articles 6.2 and 6.3 hereof, the term of this Agreement shall be twenty (20) years, unless it is early terminated by the Parties in writing or pursuant to Article 9.1 hereof. The term of this Agreement will not be extended upon expiration; provided, however, that the term of this Agreement will be automatically extended for one (1) year upon the expiration, if the [E-House Entity] gives the other Parties written notice thirty (30) days prior to the expiration, requiring the extension thereof, and the same mechanism will apply subsequently upon the expiration of each extended term.

6.2This Agreement shall terminate, if the Company or the [E-House Entity], upon expiry of its business term, fails to deal with the approval and registration for the extension thereof.

6.3If any Shareholder transfers all of the equity interest it holds in the Company to any person with the [E-House Entity]’s prior consent, the Shareholder will no longer be a Party hereto and the obligations and undertakings of any other Parties hereunder will not be adversely affected.

Article 7 Notices

7.1Any notice, request, demand and other correspondences required by this Agreement or made in accordance with this Agreement shall be delivered in writing to the relevant Party(ies).

7.2The above notices or other correspondence shall be deemed delivered (i) upon being sent out if by facsimile or electric transmission, or (ii) upon handover in person if by hand delivery; or (iii) upon the fifth (5th) day of being posted if by mail.

Article 8 Confidentiality

8.1Regardless of the termination of this Agreement, each Party is obligated to keep strictly confidential trade secrets, proprietary information, clients’ information and all other information of confidential nature related to the other Parties that are known tothe former Party during the course of its execution and performance of this Agreement (the “Confidential Information”). Unless as agreed to by the Party who disclosed the Confidential Information (the “Disclosing Party”) in writing in advance, or as required by the relevant laws, regulations or the requirements applicable where the publicly listed affiliated company of any Party is located, the receiving party of the Confidential Information (the “Receiving Party”) shall not disclose to any third party any of such Confidential Information. Except for the purpose of performing this Agreement, the Receiving Party shall not use any Confidential Information.

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8.2The Confidential Information does not include:

(1)the information that has been lawfully acquired by the Party receiving the information before as evidenced by certain written evidence;

(2)the information entering the public domain without attribution to any fault of the Party receiving the information; and

(3)the information lawfully acquired by the Party receiving the information from other sources after being received by the Party.

8.3The Receiving Party may, for the purpose of performing this Agreement, disclose Confidential Information to its relevant employees, agents or professionals engaged by it, provided, however, the Receiving Party shall ensure that such persons shall abide by the relevant terms and conditions of this Article 8, and shall assume any liability incurred as a result of the breach by any of such persons of the relevant terms and conditions of this Article 8.

8.4Notwithstanding any other provision of this Agreement, the effect of this Article 8 shall not be affected by the termination of this Agreement.

Article 9 Liabilities for Breach

9.1The Parties agree and confirm that, if any of the Parties (the “Breaching Party”) is materially in breach of any provision hereof, or materially fails or delays in performing any of the obligations hereunder, a breach hereof is constituted (a “Breach”), and any of the other Parties which does not commit any Breach (a “Non-breaching Party”) has the right to require that the Breaching Party rectify it or take a remedial action within a reasonable period. If the Breaching Party fails to rectify the Breach or take remedial actions within the reasonable period or within ten (10) days of the other Party’s written rectification notice, then:

9.1.1if any Shareholder or the Company is the Breaching Party, the [E-House Entity] is entitled to terminate this Agreement and require the Breaching Party to indemnify it against its damage;

9.1.2if the [E-House Entity] is the Breaching Party, each of the Non-defaulting Parties is entitled to require the Breaching Party to indemnify it against its damage; but unless otherwise provided for by law, in no case does it have the right to terminate or cancel this Agreement.

9.2Notwithstanding any other provision herein, the effect of this Article 9 shall not be affected by the suspension or termination of this Agreement.

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Article 10 Miscellaneous

10.1This Agreement is written in Chinese in four (4) originals. Each of the Parties to this Agreement shall hold one (1) original.

10.2The execution, effectiveness, performance, revision, interpretation and termination of this Agreement shall be governed by laws of People Republic of China.

10.3Any dispute arising out of or in connection with this Agreement shall be resolved by the Parties through consultation. In the event the Parties fail to agree with each other within thirty (30) days after the dispute arises, the dispute shall be submitted to China International Economic and Trade Arbitration Commission Shanghai Commission for arbitration in Shanghai in accordance with the arbitration rules thereof effective at the submission of the application for arbitration. The arbitration award shall be final and binding upon the Parties.

10.4None of the rights, powers or remedies granted to each of the Parties by any provision of this Agreement shall preclude any other rights, powers or remedies that such Party is entitled to under the laws and under any other provisions of this Agreement, and any Party’s exercise of any of its rights, powers or remedies shall not preclude its exercise of any other rights, powers or remedies that it is entitled to.

10.5A Party’s failure or delay in exercising any of its rights, powers or remedies that it is entitled to under this Agreement or under the laws (the “Available Rights”) shall not constitute its waiver of such rights, nor shall any single or partial waiver of any Available Rights by a Party preclude its exercise of those rights in another manner or its exercise of any other Available Rights.

10.6The headings in this Agreement are written for the ease of reference only, and in no event, shall be used for, or affect, the interpretation to this Agreement.

10.7Each provision herein is separable and independent from all other provisions herein. If any one provision or more provisions of this Agreement become invalid, illegal or unenforceable at any time, the validity, legality and enforceability of other provisions herein shall not be affected.

10.8This Agreement, after takes effect, shall supersede any other prior legal documents among the Parties with respect to the subject matter hereof. Any amendment or supplement hereto shall be made in writing and shall not become effective until its due execution by the Parties hereto.

10.9Without the [E-House Entity]’s prior written consent, none of the other Parties may transfer any of its rights and/or obligations hereunder to any third party. The Shareholders and the Company hereby agree that the [E-House Entity] is entitled to transfer any of its rights and/or obligations hereunder to any third party upon written notice thereof to the Shareholders and the Company.

10.10This Agreement shall be binding on the legal successors of the Parties.

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[SIGNATURE PAGE]

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

[Shareholder A]

By:/s/

[Shareholder B]

By:/s/

[E-House Entity]

(Seal)

/s/

[VIE]

(Seal)

/s/

8

EX-4.56

Exhibit 4.56

Power of Attorney

THIS POWER OF ATTORNEY (hereinafter, the “Power of Attorney”) is executed by               (ID card No.:                       ) as of             and issued to             (ID card No.:                 ) (hereinafter, the “Entrusted Person”).

I,, hereby entrust the Entrusted Person with full representative power to exercise the following rights owned by me in the capacity of a shareholder of [VIE] (hereinafter, the “Company”) on my behalf:

1.As my representative, to propose to convene and attend Shareholders’ meetings of the Company according to the articles of association of the Company;

2.As my representative, to exercise voting rights on all matters requiring discussion or resolutions of the Shareholders’ meetings of the Company, including without limitation, the appointment and election of the Company’s directors and other officers to be appointed and removed by the Shareholders;

3.As my representative, to exercise other voting rights of a shareholder as specified in the articles of association of the Company (including any other shareholder voting rights as specified in the amended articles of association).

I hereby irrevocably confirm that this Power of Attorney shall continue to be valid until the Shareholder Voting Right Proxy Agreement executed by and between [E-House Entity] (hereinafter, the “[E-House Entity]”), the Company and the Shareholders of the Company as of              expires or is early terminated, unless the [E-House Entity] gives me a direction to replace the Entrusted Person.

Authorization is hereby made.

Name:
Signature:	/s/
Date:

EX-4.57

Exhibit 4.57

[Shareholder A]

[Shareholder B]

[E-House Entity]

AND

[VIE]

Equity Pledge Agreement

In Respect Of [VIE]

[Date]

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EQUITY PLEDGE AGREEMENT

This EQUITY PLEDGE AGREEMENT (this “Agreement”) is entered into in Shanghai, the PRC, on                   by and among:

1.[Shareholder A]

Identity Card No.:

2.[Shareholder B]

Identity Card No.:

([Shareholder A] and [Shareholder B] are hereinafter referred to individually as a “Pledgor” and collectively as the “Pledgors”.)

3.[E-House Entity] (the “Pledgee”)

Registered address:

4.[VIE] (the “Company”)

Registered address:

(In this Agreement, the above parties are referred to individually as a “Party” and collectively as the “Parties”.)

WHEREAS:

(1)The Pledgors are shareholders of the Company, legally holding all the equity interest in the Company (the “Company Equity Interest”). Appendix 1 sets forth the capital contribution amount and the shareholding percentage of each Pledgor in the registered capital of the Company as of the signing date of this Agreement.

(2)The Parties to this Agreement entered into the Exclusive Call Option Agreement (the “Call Option Agreement”) on                                . Under the Call Option Agreement, the Pledgors shall, to the extent permitted by the PRC Law, transfer all or part of the equity interest they hold in the Company to the Pledgee and/or any other entity or individual designated by the Pledgee based on the Pledgee’s request.

(3)The Parties to this Agreement entered into the Shareholder Voting Rights Proxy Agreement (the “Proxy Agreement”) on                   . Under the Proxy Agreement, the Pledgors irrevocably delegated the individual then designated by the Pledgee with the full power to exercise on behalf of the Pledgors all their shareholder voting rights in the Company.

(4)[The Company and Pledgee entered into the Exclusive Technical Support Agreement (the “Service Agreement”) on                                . Under the Service Agreement, the Company engage the Pledgee as its exclusive technology service provider of relevant services such as technology transfer, technology license, technology service and provision of equipment, agrees to pay service fees to the Pledgee for such technology support.]

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(5)The Pledgors and Pledgee entered into a Loan Agreement on              (the “Loan Agreement”). The Pledgee has provided the Pledgors with a loan in the amount of RMB            (in words:                 Yuan), pursuant to the Loan Agreement,.

(6)As the Pledgors’ security for the performance of the Contractual Obligations (as defined below) and the discharge of the Secured Liabilities (as defined below), the Pledgors are willing to pledge all the Company Equity Interest they hold in favor of the Pledgee and grant the Pledgee the first pledge after the Equity Interest Transfer takes effect, and the Company agrees to such equity interest pledge arrangement.

THEREFORE, the Parties, through negotiation, agree as follows:

Article 1 Definitions

1.1Unless otherwise indicated in the context, in this Agreement, the following terms shall be interpreted as follows.

“Contractual Obligations” means all the contractual obligations of the Pledgors under the Call Option Agreement, the Proxy Agreement and the Loan Agreement, all the contractual obligations of the Company under the Call Option Agreement, the Proxy Agreement [and the Service Agreement], and all the contractual obligations of the Pledgors and the Company under this Agreement.

“Secured Liabilities” means all the direct, indirect and derivative losses and loss of foreseeable interest incurred by the Pledgee due to any Event of Default (as defined below) on the part of the Pledgors and/or the Company; the basis for determining the amount of such losses includes but not limited to the reasonable commercial plan and profit forecast of the Pledgee; and all the expenses incurred by the Pledgee to enforce the performance by the Pledgors and/or the Company of their Contractual Obligations.

“Transaction Documents” means the Call Option Agreement, the Proxy Agreement, [the Service Agreement] and the Loan Agreement.

“Event of Default” means any breach by any Pledgor of any of its Contractual Obligations under the Call Option Agreement, the Proxy Agreement, the Loan Agreement and/or this Agreement, and any breach by the Company of any of its Contractual Obligations under the Call Option Agreement, the Proxy Agreement, [the Service Agreement] and/or this Agreement.

“Pledged Equity Interest” means all the Company Equity Interest lawfully owned by the Pledgors after the Equity Interest Transfer takes effect and to be pledged to the Pledgee in accordance with this Agreement as the security for the performance of the Contractual Obligations by the Pledgors and the Company (see Appendix 1 for the specific Pledged Equity Interest of each Pledgor), and the increased capital contribution amount and the dividend as provided in Article 2.6 and Article 2.7 of this Agreement.

“PRC” means the People’s Republic of China, for the purpose of this Agreement, excluding Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan.

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“PRC Law” means the then-effective laws, administrative regulations, administrative rules, local regulations, judicial interpretations, and other binding regulatory documents of the PRC.

1.2Any reference to any PRC Law in this Agreement shall be deemed (1) to include references to the amendments, changes, supplements and restatement of such PRC Law, irrespective of whether they take effect before or after the execution of this Agreement, and (2) to include the references to other decisions, notices and regulations enacted in accordance therewith or effective as a result thereof.

1.3Unless otherwise specified in the context herein, any reference to an Article, clause, item or paragraph in this Agreement shall refer to the corresponding part of this Agreement.

Article 2 Pledge of Equity Interest

2.1The Pledgors hereby agree to pledge, after the Equity Interest Transfer takes effect, the Pledged Equity Interest, which they lawfully own and are entitled to dispose of, to the Pledgee in accordance with the provisions of this Agreement as the security for the performance of the Contractual Obligations and the discharge of the Secured Liabilities. The Company hereby agrees to the Pledgors’ pledge of the Pledged Equity Interest to the Pledgee in accordance with the provisions of this Agreement.

2.2The Pledgors undertake to be responsible for registering the equity interest pledge arrangement (the “Equity Pledge”) under this Agreement on the Company’s register of shareholders immediately after the Equity Interest Transfer takes effect.

The Parties shall use their best efforts to apply to the registration authority in charge of the Company for registration of the Equity Pledge under this Agreement immediately after this Agreement becomes effective.

2.3During the valid term of this Agreement, unless attributable to the Pledgee’s willful conduct or the Pledgee’s gross negligence with direct causation to the consequence, the Pledgee shall in no way be held liable to any reduction of the value of the Pledged Equity Interest, and the Pledgors have no right to claim any compensation or other request in any way against the Pledgee.

2.4Without breaching the provisions of Article 2.3 above, if there is any probability that the value of the Pledged Equity Interest will notably reduce which is sufficient to jeopardize the rights of the Pledgee, the Pledgee may at any time auction or sell the Pledged Equity Interest on behalf of the Pledgors, and may reach agreement with the Pledgors to use the proceeds from such auction or sales to prepay the Secured Liabilities or to deposit such proceeds with the notary office in the place where the Pledgee is domiciled (all expenses so incurred shall be assumed by the Pledgee). Further, if requested by the Pledgee, the Pledgors shall offer additional security interest over other property.

2.5Upon the occurrence of any Event of Default, the Pledgee has the right to dispose of the Pledged Equity Interest in accordance with Article 4 of this Agreement.

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2.6The Pledgors shall not increase the registered capital of the Company without the Pledgee’s prior consent. The increased capital contribution amount of the Pledgors in the registered capital of the Company as a result of such capital increase of the Company shall be a part of the Pledged Equity Interest.

2.7No dividend or capital bonus on the Pledged Equity Interest shall be distributed to the Pledgors without the Pledgee’s prior consent. The Pledgors agree that during the term of pledge, the Pledgee has the right to collect any dividend or capital bonus out of the Pledged Equity Interest. The Company shall pay such amount into the bank account designated by the Pledgee.

2.8The Pledgee has the right to dispose of any of the Pledged Equity Interest of any Pledgor in accordance with this Agreement after the occurrence of any Event of Default.

Article 3 Release of Pledge

3.1After the Pledgors and the Company fully and completely perform all of the Contractual Obligations and discharge all of the Secured Liabilities, the Pledgee shall, upon the Pledgors’ request, release the Equity Pledge under this Agreement and cooperate with the Pledgors to cancel the registration of the Equity Pledge on the Company’s register of shareholders and with the administration of industry and commerce in charge of the Company. The Pledgee shall assume the reasonable expenses arising out of the release of the Equity Pledge.

Article 4 Disposal of Pledged Equity Interest

4.1The Parties agree that if any Event of Default occurs, the Pledgee has the right to, by notifying the Pledgors in writing, exercise all the remedial rights and powers that it is entitled to under the PRC Law, the Transaction Documents and the provisions of this Agreement, including but not limited to being compensated in first priority with proceeds from auctions or sales of the Pledged Equity Interest. The Pledgee shall not be liable to any loss caused by its reasonable exercise of such rights and powers.

4.2The Pledgee has the right to delegate in writing its lawyers or other agents to exercise all or any part of its rights and powers above, and neither the Pledgors nor the Company may oppose thereto.

4.3The Pledgee has the right to deduct the reasonable expenses actually incurred from its exercise of all or any part of its rights and powers above from the proceeds gained from its exercise of such rights and powers.

4.4The proceeds gained from the Pledgee’s exercise of its rights and powers shall be settled in accordance with the following order:

(1)firstly, pay all expenses arising out of the disposal of the Pledged Equity Interest and the Pledgee’s exercise of its rights and powers (including the remuneration paid to its lawyers and agents);

(2)secondly, pay the taxes and charges payable for the disposal of the Pledged Equity Interest; and

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(3)thirdly, repay the Secured Liabilities to the Pledgee.

If there is any balance after the payment of the above amounts, the Pledgee shall return the balance to the Pledgors or any other person entitled to such amount pursuant to relevant laws and regulations, or deposit such amount with the notary office in the place where the Pledgee is domiciled (all expenses so incurred to be assumed by the Pledgee).

4.5The Pledgee has the discretion to, simultaneously or in certain sequence, exercise any remedies for defaults it is entitled to. The Pledgee may exercise its rights to auction or sell the Pledged Equity Interest under this Agreement without first exercising any other remedies for defaults.

Article 5 Costs and Expenses

5.1All actual expenses related to the creation of the Equity Pledge under this Agreement, including but not limited to the stamp duty, any other taxes and all legal fees and etc., shall be assumed by the Parties respectively.

Article 6 Continuity and No Waiver

6.1The Equity Pledge created under this Agreement is a continuing assurance, which shall be valid until the Contractual Obligations are fully performed or the Secured Liabilities are fully discharged. No waiver or grace period of any default of the Pledgors given by the Pledgee, nor the Pledgee’s late exercise of any of its rights under the Transaction Documents and this Agreement, shall affect the rights of the Pledgee under this Agreement, the Transaction Documents and the relevant PRC Law to require at any time thereafter the Pledgors to strictly implement the Transaction Documents and this Agreement, or the rights the Pledgee is entitled to with respect to the Pledgors’ subsequent breach of the Transaction Documents and/or this Agreement.

Article 7 Pledgors’ Representations and Warranties

Each of the Pledgors respectively represents and warrants to the Pledgee as follows:

7.1The Pledgors are PRC citizens with full legal capacity, having full civil rights and powers to execute this Agreement and assume the legal obligations in accordance with this Agreement.

7.2All the reports, documents and information related to the Pledgors and all the matters required under this Agreement that the Pledgors provided to the Pledgee prior to the effectiveness of this Agreement are true and accurate in all material respects as of the effectiveness of this Agreement.

7.3All the reports, documents and information related to the Pledgors and all the matters required under this Agreement to be provided by the Pledgors to the Pledgee after the effectiveness of this Agreement will be true and valid in all material respects upon provision.

7.4Upon the effectiveness of this Agreement, the Pledgors are the sole legal owners of the Pledged Equity Interest. There is no then pending disputes on the ownership of thePledged Equity Interest. Upon this Agreement taking effect, the Pledgors are entitled to dispose of the Pledged Equity Interest or any part thereof.

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7.5Upon this Agreement taking effect, except the security interest created over the Pledged Equity Interest under this Agreement and the rights created under the Transaction Documents, there are no other security interest or third party rights or any other encumbrance over the Pledged Equity Interest.

7.6After the Equity Interest Transfer takes effect, the Pledged Equity Interest can be legally pledged and transferred, and the Pledgors have full rights and powers to pledge the Pledged Equity Interest to the Pledgee in accordance with the provisions of this Agreement.

7.7This Agreement, upon due execution by the Pledgors, constitutes the lawful, valid and binding obligations of the Pledgors after this Agreement takes effect.

7.8Upon this Agreement taking effect, any third party approvals, permits, waivers and authorizations, any approvals, permits and waivers of any governmental authorities, or any registration or filing formalities with any government authorities (if legally required), which is required with respect to the execution and performance of this Agreement and the Equity Pledge under this Agreement, have been obtained or completed (subject to clause 2 of Article 2.2), and will be fully effective during the valid term of this Agreement.

7.9Each Pledgor’s execution and performance of this Agreement does not violate or conflict with any laws applicable thereto, any agreement to which it is a party or by which its assets is bound, any court adjudication, any arbitration award or any decision of administrative authorities.

7.10After this Agreement takes effect, the pledge under this Agreement constitutes the security interest over the Pledged Equity Interest with the first priority.

7.11Upon this Agreement taking effect, unless otherwise provided by Equity Interest Transfer Agreement, all taxes and expenses payable for obtainment of the Pledged Equity Interest have been paid by the Pledgors in full.

7.12Upon this Agreement taking effect, there is no pending or, to the knowledge of the Pledgors, threatened lawsuit, legal proceeding or claim at any court or arbitration tribunal against the Pledgors or their property or the Pledged Equity Interest, nor is there any pending or, to the knowledge of the Pledgors, threatened lawsuit, legal proceeding or claim at any government agency or administrative authority against the Pledgors or their property or the Pledged Equity Interest, which will have material or adverse effect on the financial conditions of the Pledgors or their abilities to perform their obligations and security liabilities under this Agreement.

7.13The Pledgors hereby undertake to the Pledgee that the above representations and warranties will all be true and accurate and be fully complied with under any circumstance and at any time before the Contractual Obligations are performed in full or the Secured Liabilities are discharged in full.

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Article 8 Company’s Representations and Warranties

The Company represents and warrants to the Pledgee as follows:

8.1The Company is a limited liability company duly registered and lawfully existing under the PRC Law with independent legal person status, having independent and full legal status and capacity to execute, deliver and perform this Agreement, and can be an independent party to a lawsuit.

8.2All the reports, documents and information related to the Pledged Equity Interest and all the matters required under this Agreement which the Company provided to the Pledgee prior to the effectiveness of this Agreement are true and accurate in all material respects as of the effectiveness of this Agreement.

8.3All the reports, documents and information related to the Pledged Equity Interest and all the matters required under this Agreement to be provided by the Company to the Pledgee after the effectiveness of this Agreement will be true and valid in all material respects upon provision.

8.4This Agreement, upon due execution by the Company, constitutes the lawful, valid and binding obligations of the Company after it takes effect.

8.5It has full internal corporate power and authorization to execute and deliver this Agreement and all other documents related to the transaction contemplated in this Agreement and to be executed by it. It has full power and authorization to complete the transaction contemplated in this Agreement.

8.6There is no pending or, to the knowledge of the Company, threatened lawsuit, legal proceeding or claim at any court or arbitration tribunal against the Pledged Equity Interest, the Company or its property, nor is there any pending or, to the knowledge of the Company, threatened lawsuit, legal proceeding or claim at any government agency or administrative authority against the Pledged Equity Interest, the Company or its property, which will have material or adverse effect on the financial conditions of the Company or the Pledgors’ abilities to perform their obligations and security liabilities under this Agreement.

8.7The Company hereby agrees to assume the joint and several liabilities to the Pledgee with respect to the representations and warranties made by each of the Pledgors under Article 7.4, Article 7.5, Article 7.6, Article 7.8 and Article 7.10 of this Agreement.

8.8The Company hereby undertakes to the Pledgee that the above representations and warranties will all be true and accurate and be fully complied with under any circumstance and at any time before the Contractual Obligations are performed in full and the Secured Liabilities are discharged in full.

Article 9 Pledgors’ Undertakings

Each Pledgor hereby respectively undertakes to the Pledgee as follows, after this Agreement takes effect:

9.1Without the prior written consent of the Pledgee, the Pledgors shall not create, or allow to be created, any new pledge or any other security interest over the PledgedEquity Interest. Any pledge or other security interest created over all or any part of the Pledged Equity Interest without the prior written consent of the Pledgee shall be invalid.

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9.2Without the prior written notice to and the prior written consent of the Pledgee, the Pledgors shall not transfer the Pledged Equity Interest and all activities of the Pledgors to transfer the Pledged Equity Interest shall be invalid. The proceeds obtained from the Pledgors’ transfer of the Pledged Equity Interest shall be used first to prepay the Secured Liabilities to the Pledgee or to be deposited with a third party as agreed with the Pledgee.

9.3In the event of occurrence of any lawsuit, arbitration or other claim which may have adverse effect on the interests of the Pledgors or the Pledgee under the Transaction Documents and this Agreement or on the Pledged Equity Interest, the Pledgors undertake to notify the Pledgee in writing as soon as possible and in a timely manner, and, as reasonably required by the Pledgee, to take all necessary measures to ensure the pledge interest of the Pledgee over the Pledged Equity Interest.

9.4The Pledgors undertake to complete the registration formalities to extend the business term of the Company three months before the expiration of the business term of the Company so as to continue the effect of this Agreement.

9.5The Pledgors shall not take, or allow to be taken, any activity or action which may have adverse effect on the Pledgee’s interest under the Transaction Documents and this Agreement or on the Pledged Equity Interest. The Pledgors waive the right of first refusal to purchase the Pledged Equity Interest when the Pledgee realizes its pledge rights.

9.6The Pledgors shall, after this Agreement takes effect, use their best efforts and take all necessary measures to register the Equity Pledge under this Agreement with the relevant administration of industry and commerce as soon as possible, and the Pledgors undertake to, as reasonably required by the Pledgee, take all necessary measures and execute all necessary documents (including but not limited to any agreement supplemental to this Agreement) to ensure the pledge interest of the Pledgee over the Pledged Equity Interest and the exercise and realization thereof.

9.7If the exercise of the right of pledge under this Agreement results in the transfer of any Pledged Equity Interest, the Pledgors undertake to take all measures to complete such transfer.

9.8The Pledgors shall ensure that the convening process, voting methods and resolutions of the shareholders meetings and board meetings of the Company convened for the purpose of the exercise of the right of pledge under this Agreement be not in conflict with the laws, administrative regulations or the articles of association of the Company.

Article 10 Company’s Undertakings

10.1If any third party approval, permit, waiver or authorization, or any approval, permit or waiver of any governmental authorities, or any registration or filing formalities with any government authorities (if legally required) is required to be obtained or completed for the execution and performance of this Agreement and for the EquityPledge under this Agreement, the Company shall endeavor to assist in obtaining it and keeping it fully effective during the valid term of this Agreement.

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10.2Without the prior written consent of the Pledgee, the Company shall not assist in or allow the Pledgors’ creation of any new pledge or other security interest over the Pledged Equity Interest.

10.3Without the prior written consent of the Pledgee, the Company shall not assist in or allow the Pledgors’ transfer of the Pledged Equity Interest.

10.4In the event of occurrence of any lawsuit, arbitration or other claim which may have adverse effect on the Company, the Pledged Equity Interest or the Pledgee’s interest under the Transaction Documents and this Agreement, the Company undertakes to notify the Pledgee in writing as soon as possible and in a timely manner, and, as reasonably required by the Pledgee, to take all necessary measures to ensure the pledge interest of the Pledgee over the Pledged Equity Interest.

10.5The Company undertakes to complete the registration formalities to extend its business term three months before the expiration of its business term so as to continue the effect of this Agreement.

10.6The Company shall not take, or allow to be taken, any activity or action which may have adverse effect on the Pledgee’s interest under the Transaction Documents and this Agreement or on the Pledged Equity Interest, including but not limited to any activity or action restricted under Article 9.

10.7The Company shall, in the first month of each calendar quarter, provide the Pledgee with the financial statements of the Company for the immediately preceding calendar quarter, including but not limited to the balance sheet, the profit and loss statements and the cash flow statements.

10.8The Company undertakes to, as reasonably required by the Pledgee, take all necessary measures and execute all necessary documents (including but not limited to any agreement supplemental to this Agreement) to ensure the pledge interest of the Pledgee over the Pledged Equity Interest and the exercise and realization thereof.

10.9If the exercise of the right of pledge under this Agreement results in the transfer of any Pledged Equity Interest, the Company undertakes to take all measures to complete such transfer.

Article 11 Change of Circumstances

11.1As supplement and not in conflict with the Transaction Documents and the other provisions of this Agreement, if at any time, due to the promulgation or change of any PRC Law, regulations or rules, or the change of interpretation or application of such laws, regulations or rules, or the change of relevant registration procedures, the Pledgee believes that it is illegal or in conflict with such laws, regulations and rules to keep this Agreement effective, to keep the right of pledge under this Agreement effective and/or to dispose of the Pledged Equity Interest in accordance with this Agreement, the Pledgors and the Company shall promptly take any action and/or execute any agreement or other document upon written instruction by the Pledgee and as reasonably required by the Pledgee, so as to:

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(1)keep this Agreement and the right of pledge under this Agreement effective;

(2)facilitate the disposal of the Pledged Equity Interest in accordance with this Agreement; and/or

(3)keep or realize the security created or intended by this Agreement.

Article 12 Effectiveness and Term of this Agreement

12.1This Agreement shall come into effect upon the satisfaction of all of the following conditions:

(1)this Agreement has been duly executed by the Parties;

(2)the Equity Pledge under this Agreement has been duly registered on the register of shareholders of the Company.

After this Agreement takes effect, the Pledgors shall provide the Pledgee with the evidence of the registration of the Equity Pledge on the register of shareholders in form to the satisfaction of the Pledgee, and shall, after the registration of the Equity Pledge is completed and as required by the Pledgee, provide the Pledgee with the pledge certificate issued by the administration of industry and commerce in form to the satisfaction of the Pledgee.

12.2The term of this Agreement shall end upon the full performance of the Contractual Obligations or the full discharge of the Secured Liabilities.

Article 13 Notices

13.1Any notice, request, demand and other correspondences required by this Agreement or made in accordance with this Agreement shall be delivered in writing to the relevant Party.

13.2If any of such notice or other correspondences is transmitted by facsimile or telex, it shall be treated as delivered immediately upon transmission; if delivered in person, it shall be treated as delivered at the time of delivery; if posted by mail, it shall be treated as delivered five (5) days after posting.

Article 14 Miscellaneous

14.1The Pledgors and the Company agree that the Pledgee may, upon notice to the Pledgors and the Company, assign the Pledgee’s rights and/or obligations hereunder to any third party. However, the Pledgors or the Company shall not, without the Pledgee’s prior written consent, assign their rights, obligations or liabilities hereunder to any third party. The successors or permitted assignees (if any) of the Pledgors and the Company shall continue to perform the respective obligations of the Pledgors and the Company under this Agreement.

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14.2When the Pledgee exercises its right of pledge to the Pledged Equity Interest pursuant to the provisions hereof, the amount of the Secured Liabilities determined by the Pledgee at its own discretion shall be regarded as the conclusive evidence of the Secured Liabilities hereunder.

14.3This Agreement is written in Chinese and executed in five (5) originals, with one (1) original to be retained by each Party hereto. One (1) original is to be used for the application to the administration of industry and commerce in charge of the Company for registration of the Equity Pledge under this Agreement.

14.4The execution, effectiveness, performance, revision, interpretation and termination of this Agreement shall be governed by the PRC Law.

14.5Any dispute arising out of and in connection with this Agreement shall be resolved through consultations among the Parties. In case the Parties fail to reach agreement within thirty (30) days after the dispute arises, such dispute shall be submitted to China International Economic and Trade Arbitration Commission Shanghai Commission for arbitration in Shanghai in accordance with such Commission’s arbitration rules in effect at the time of applying for arbitration, and the arbitration award shall be final and binding on the Parties.

14.6None of the rights, powers or remedies granted to any Party by any provision herein shall preclude any other rights, powers or remedies available to such Party at law and under the other provisions of this Agreement. In addition, the exercising by one Party of any of its rights, powers and remedies shall not exclude such Party from exercising any of its other rights, powers and remedies.

14.7No failure or delay by a Party in exercising any rights, powers and remedies available to it hereunder or at law (the “Available Rights”) shall result in a waiver thereof, nor shall the waiver of any single or partial exercise of the Available Rights shall exclude such Party from exercising such rights in any other way and exercising the other Available Rights.

14.8The headings of the provisions herein are for reference only, and in no event shall such headings be used for or affect the interpretation of the provisions hereof.

14.9Each provision contained herein shall be severable and independent from each of the other provisions. If any one or more provisions herein become(s) invalid, illegal or unenforceable at any time, the validity, legality and enforceability of the remaining provisions herein shall not be affected as a result thereof.

14.10Any amendments or supplements to this Agreement shall be made in writing. Except for assignment by the Pledgee of its rights hereunder according to Article 14.1, the amendments or supplements to this Agreement shall take effect only upon the due execution by the Parties to this Agreement. If any amendments or supplements to this Agreement legally require any approval of and/or any registration or filing with any government authority, the Parties shall obtain such approval and/or complete such registration or filing in accordance with law.

14.11This Agreement shall be binding on the legal successors of the Parties.

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14.12After this Agreement takes effect, upon a request of the Pledgee, each Pledgor shall respectively sign a power of attorney in a form as set forth in Appendix 2 hereof (the “Power of Attorney”) to authorize any person designated by the Pledgee to sign on the Pledgor’s behalf according to this Agreement any and all legal documents necessary for the exercise of the Pledgee’s rights hereunder. Such Power of Attorney shall be delivered to the Pledgee to keep in custody and, when necessary, the Pledgee may at any time submit the Power of Attorney to the relevant government authority.

[The remainder of this page intentionally left blank]

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[EXECUTION PAGE]

IN WITNESS WHEREOF, this EQUITY PLEDGE AGREEMENT is executed by the following Parties on the date first written above.

[Shareholder A]
By:	/s/
[Shareholder B]
By:	/s/
[E-House Entity]
(Seal)
/s/
[VIE]
(Seal)
/s/

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APPENDIX 1

COMPANY GENERAL INFORMATION

Company name:

Registered address:

Registered capital:RMB

Legal Representative:

Shareholding structure:

Shareholder’s name	Contribution in registered capital	Percentage of contribution		Method of contribution
[Shareholder A]	RMB		%
[Shareholder B]	RMB		%
Total	RMB	100	%	/

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APPENDIX 2

FORM OF POWER OF ATTORNEY

I, [*], hereby irrevocably delegate [*] (identity card number: [*]) to act as my authorized representative to execute all legal documents necessary or useful for [E-House Entity] to exercise its rights under the “Equity Pledge Agreement regarding [VIE]” entered into by [VIE], it and me.

Signature:

Date:

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EX-4.58

Exhibit 4.58

EXCLUSIVE TECHNICAL SUPPORT AGREEMENT

This Agreement is entered into in                     as of                                                by and between the following Parties:

Party A: [E-House Entity]
Address:

Party B: [VIE]
Address:

WHEREAS:

(1)Party A is a limited liability company established and duly existing in Shanghai, China, which mainly engages in the business of [business scope].

(2)Party B is a limited liability company registered in Shanghai, China, which mainly engages in the business of [business scope].

(3)Required for its business, Party B decides to engage Party A as its exclusive technology service provider, to provide Party B with the relevant services such as technology transfer, technology license, technology service and provision of equipment. Party A agrees to provide Party B with the Technology Service in accordance with this Agreement.

THEREFORE, through amicable consultations, the Parties have reached the following agreements on the detailed matters related to the provision of exclusive Technology Service by Party A to Party B.

Article 1                Definitions and Interpretation

1.1“Websites” shall mean all websites operated by Party B.

1.2“E-Commerce” shall mean the purchase and sale of products and services through electronic system (such as the Internet and other computer networks).

1.3“Internet Information Service” shall mean the business of providing the Internet users with various information services via the Internet, including without limitation, search engine, Internet publication, online games, email and development of websites.

1.4“Online Advertising Service” shall mean the publishing of online advertising for clients via the Internet.

1.5“Technology Service” shall mean all technological service provided by Party A to Party B in accordance with this Agreement, including without limitation, technology transfer, technology license, technology service and provision of equipment.

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Article 2                Exclusive Cooperation

2.1Party A is Party B’s exclusive technology service provider. Unless any event described in Article 2.2 or 2.3 of this Agreement occurs, all of the Technology Service (including without limitation, technology transfer, technology license, technology service and provision of equipment) required for any of the business operated by Party B (including without limitation, the E-Commerce, Internet Information Service and the Internet Advertising Service) shall be provided by Party A on an exclusive basis. Without Party A’s prior written consent, Party B shall not seek any third party other than Party A to provide any part of the Technology Service under this Agreement in any manner.

2.2Party B agrees that in case Party A objectively does not have the ability to provide Party B with certain part of the Technology Service, Party A may exclusively designate an appropriate third party to provide Party B with such part of the Technology Service in accordance with the terms and conditions provided in this Agreement. Party B further agrees that in any case, Party A is entitled to entrust, without any reason, any properly qualified third party to provide Party B with the Technology Service that should, pursuant to this Agreement, be provided by Party A to Party B. Party B agrees to accept the Technology Service provided by such appropriate third party entrusted by Party A.

2.3In case of any of the following circumstances, Party B is entitled to, at its own discretion, seek any third party to provide the Technology Service:

2.3.1Party A voluntarily abandons its right to act as an exclusive technology service provider and gives a written consent to the provision of the Technology Service by a third party to Party B;

2.3.2Party A is objectively unable to provide Party B with certain part of the Technology Service and fails to designate any appropriate third party to provide Party B with such part of the Technology Service; or

2.3.3Party A decides to neither provide Party B with certain part of the Technology Service nor designate any appropriate third party to provide Party B with such part of the Technology Service.

Article 3                Technology Transfer

3.1Unless any event described in Article 2.2 or 2.3 of this Agreement occurs, all of the technology required to be purchased for any of Party B’s business shall be provided by Party A on an exclusive basis. Party A will try its best to develop and transfer to Party B the technology that is required for Party B’s business and owned by Party A.

3.2The Parties shall negotiate with each other to enter into specific technology transfer contracts to expressly specify the detail matters such as the technology to be transferred, transfer fees and payment.

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Article 4                Technology License

4.1Unless any event described in Article 2.2 or 2.3 of this Agreement occurs, all of the technology required to be licensed for any of Party B’s business shall be provided by Party A on an exclusive basis.

Party A will try its best to license Party B to use the technology owned by Party A, or re-license Party B to use the technology as approved by the owner.

4.2The Parties shall negotiate with each other to enter into specific technology license contracts to expressly specify the detail matters such as the technology to be licensed, the method to license the technology, license fees and payment.

Article 5                Technology Service

5.1Unless any event described in Article 2.2 or 2.3 of this Agreement occurs, all of the technology service (including without limitation, technology support, technology training and technology consulting, see Appendix Ito this Agreement (List of Technology Service) for details) required for any of Party B’s business shall be provided by Party A on an exclusive basis. Party A will try its best to provide Party B with the technology service required for and related to Party B’s business.

5.2Party B shall provide all necessary assistance to Party A’s provision of technology service, including without limitation:

5.2.1Party B shall cause its employees to take an appropriately and reasonably prudent attitude when using and operating the system and equipment;

5.2.2Party B shall notify Party A immediately of any circumstance that may affect Party B’s business;

5.2.3Party B shall allow Party A and its authorized personnel to enter into, at any reasonable time, the premises owned or rent by Party B to place any system or equipment related to Party B’s business; and

5.2.4Any other necessary assistance.

5.3The Parties agree to enter into (if necessary) separate technology service agreements on the details of various technology services during the valid term of this Agreement to specify or adjust the technology services to be provided, the methods to provide such services and the technicians within the framework provided in this Agreement.

5.4With regard to the technology services provided by Party A to Party B, the Parties agree, based on the number of working hours of Party A’s engineers to provide the technology services to Party B (on an hourly basis), to calculate the fees for the technology services at the following rates:

5.4.1for the technology service provided by a Party A’s senior engineer to Party B, Party B shall calculate and pay to Party A the technology service fee at the rate of RMB4,000 per hour per capita;

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5.4.2for the technology service provided by a Party A’s mid-level engineer to Party B, Party B shall calculate and pay to Party A the technology service fee at the rate of RMB2,000 per hour per capita; and

5.4.3for the technology service provided by a Party A’s junior engineer to Party B, Party B shall calculate and pay to Party A the technology service fee at the price of RMB1,000 per hour per capita.

5.4.4Party B shall calculate and pay to Party A the technical support fee at the rate of RMB20,000/month;

5.4.5Party B shall calculate and pay to Party A the technical training fee at the rate of RMB10,000/month;

5.4.6Party B shall calculate and pay to Party A the technical consulting fee at the rate of RMB20,000/month;

5.4.7If the agreement is executed after its expiration date, such prices can be re-calculated each year.

5.4.8The workload of each project: both parties shall budget at the early stage of the project and determine the final settlement of account when the project is finished. The workload shall be calculated according to the final settlement of account.

5.4.9Time and method of settling accounts: both parties shall settle the account at December 20 each year according to actual situation and issue a sheet of settlement of account confirmed by both parties.

5.5.Party A shall, within the first five working days of each month, issue a bill to Party B of the working hours for the technology services provided by Party A to Party B during the last month at the rates agreed by the Parties. The bill shall indicate the level of Party A’s engineers who provided the technology services to Party B and their respective working hours, and Party B shall, within three working days after its receipt of the bill, pay to Party A the technology service fee in accordance with the amount in the bill.

Article 6                Provision of Equipment

6.1Unless any event described in Article 2.2 or 2.3 of this Agreement occurs, all of the equipment required for any of Party B’s business shall be provided by Party A on an exclusive basis or be provided by the equipment supplier designated by Party A. The specific way to provide such equipment (including without limitation, lease, sales and transfer) shall be decided by Party A unilaterally.

6.2The Parties shall negotiate with each other to enter into specific equipment transfer agreements or equipment lease agreements to expressly specify the detail matters such as the method to provide such equipment, price and term.

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Article 7                Payment

7.1For the Technology Service provided by Party A to Party B, Party B shall, based on actual circumstances, pay to Party A the technology transfer fee, technology license fee, technology service fee and equipment fee etc. in accordance with the relevant provisions in this Agreement.

7.2For the above fees paid by Party B, Party A shall issue corresponding invoices to Party B.

7.3If Party A designates a third party to provide Party B with the Technology Service in accordance with this Agreement, Party A may choose any of the following ways of payment for such third party’s fees and require Party B to implement:

7.3.1Party B pays the fees for the Technology Service to the third party directly; or

7.3.2Party B pays the fees for the Technology Service to Party A directly and Party A is responsible for settling with such third party.

7.4Where Party A designates a third party to provide Party B with the Technology Service in accordance with this Agreement, if Party A, for whatever reasons, assumes any joint and several liability to such third party due to Party B’s reasons, Party B shall compensate Party A for all economic losses incurred thereby.

Article 8                Ownership of Assets

8.1The Parties agree that the following assets originated from the Technology Service provided by Party A to Party B shall be owned by Party A:

8.1.1the words, images, layouts and any other graphic designs or information content created or made by Party A, except those whose copyrights belong to third parties;

8.1.2the database (including without limitation, the database storing contents and the database storing information of registered users) developed by Party A for Party B and all of the content contained therein; and

8.1.3any other tangible or intangible assets originated or derived from the Technology Service provided by Party A to Party B in accordance with this Agreement, except those owned by Party B on clear grounds.

8.2Party B recognizes Party A’s ownership of the assets above and undertakes not to make any claim on any assets above. Where necessary and requested by Party A, Party B shall provide all necessary assistance (including without limitation, issuing corresponding certificates) to make clear Party A’s ownership of the assets above.

8.3During the term of cooperation between the Parties, except as specifically provided in this Agreement or other relevant written agreements that the ownership shall be transferred from Party A to Party B, all assets provided to Party B such as equipment, technology and software shall still be owned by Party A, and Party B shall only have the right of use over the assets during the valid term of this Agreement.

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Article 9                Confidentiality

9.1Either Party shall keep confidential any confidential material and information of the other Party known or accessed due to the execution or performance of this Agreement (the “Confidential Information”). Without the other Party’s written consent, neither Party shall disclose, give or transfer such Confidential Information to any third parties.

9.2If requested by either Party, the other Party shall return, destroy, or otherwise dispose of all of the documents, materials, or software that contain any Confidential Information as requested, and stop using the Confidential Information.

9.3The Parties’ obligations under this Article shall survive the termination of this Agreement. Either Party shall still comply with the confidentiality terms of this Agreement and fulfill the confidentiality obligations as promised, until the other Party gives consent to the release of such obligations or as a matter of fact, violation of the confidentiality terms herein will not cause damage of any form to the other Party.

Article 10             Payment of Taxes

10.1The Parties shall respectively pay taxes to relevant tax authorities in accordance with relevant laws, regulations and State policies.

10.2In the event that either Party pays any tax for the other Party, the paying Party shall submit the tax certificate to the payable Party as soon as possible, and the payable Party shall compensate the equivalent amount to the paying Party within seven days after the receipt of such tax certificate.

Article 11             Representations, Covenants and Warranties

11.1Either of the Parties represents, covenants and warrants to the other Party as follows:

11.1.1It is a company lawfully established and duly existing;

11.1.2It is qualified to conduct the transaction hereunder and such transaction is in line with its business scope;

11.1.3It has full power to enter into this Agreement, and its authorized representative has obtained full authorization to execute this Agreement on behalf of it;

11.1.4It has the ability to perform its obligations hereunder, and such performance will not violate any restrictions of legal documents binding upon it;

11.1.5It is not subject to any liquidation, dissolution or bankruptcy procedures.

11.2Party B covenants that during the valid term of this Agreement, Party B shall notify Party A of any change in Party B’s shareholding structure thirty days in advance.

11.3Party B covenants that except as required for the works provided in this Agreement, Party B shall not use or copy the trademarks, signs or company names of Party A or its affiliates without Party A’s prior written consent.

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11.4Party B shall neither conduct, nor allow any third party to conduct any act or omission that is detrimental to Party A’s ownership of technology or any other intellectual property or any other rights of Party A.

Article 12             Liability for Breach of Contract

12.1Either Party’s direct or indirect violation of any provisions herein or failure in assuming or untimely or insufficient assumption of any of its obligations hereunder shall constitute a breach of contract. The non-breaching Party (the “Non-Breaching Party”) is entitled to send to the breaching Party (the “Breaching Party”) a written notice, requesting the Breaching Party to rectify its breach, take sufficient, effective and timely measures to eliminate the effects of breach, and compensate the Non-Breaching Party for any losses incurred by the breach.

12.2After the occurrence of breach, in case such breach has made it impossible or unfair for the Non-Breaching Party to perform its corresponding obligations hereunder based on the Non-Breaching Party’s reasonable and objective judgments, the Non-Breaching Party is entitled to send to the Breaching Party a written notice of its temporary suspension of performance of corresponding obligations hereunder, until the Breaching Party stops the breach, takes sufficient, effective and timely measures to eliminate the effects of breach, and compensate the Non-Breaching Party for any losses incurred by the breach.

12.3The losses of the Non-Breaching Party that should be compensated by the Breaching Party include direct economic losses and any foreseeable indirect losses and extra expenses incurred by the breach, including without limitation, the attorneys’ fee, litigation and arbitration fee, financial expense and travel charge.

Article 13             Force Majeure

13.1“Force Majeure” shall mean events beyond the reasonable control of the Parties that are unforeseeable or foreseeable but unavoidable, which cause obstruction in, impact on or delay in either Party’s performance of part or all of its obligations in accordance with this Agreement, including without limitation, government acts, natural disasters, wars, hacker attacks or any other similar events.

13.2The Party affected by Force Majeure may suspend the performance of relevant obligations hereunder that cannot be performed due to Force Majeure until the effects of Force Majeure are eliminated, without having to assume any liability for breach of contract, provided however that, such Party shall endeavor to overcome such events and reduce the negative effects to the best of its abilities.

13.3The Party affected by Force Majeure shall provide the other Party with valid certificate documents verifying the occurrence of Force Majeure events, which documents shall be issued by the notary office where the events occur (or other appropriate agencies). In case the Party affected by Force Majeure cannot provide such certificate documents, the other Party may request it to assume the liability for breach of contract in accordance with this Agreement.

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Article 14             Effectiveness, Amendment and Termination

14.1This Agreement takes effect as of the date when it is signed and stamped by the authorized representatives of the Parties, and shall be terminated on the date when Party B dissolves according to law.

14.2Unless provided otherwise herein, Party A is entitled to immediately early terminate this Agreement unilaterally by sending a written notice upon any of the followings happening to Party B:

14.2.1Party B breaches this Agreement, and within thirty (30) days after Party A sends out the written notice, fails to rectify its breach, take sufficient, effective and timely measures to eliminate the effects of breach, and compensate Party A for any losses incurred by the breach.

14.2.2Party B is bankrupt or is subject to any liquidation procedure and such procedure is not revoked within seven (7) days; and

14.2.3due to any event of Force Majeure, Party B’s failure to perform this Agreement lasts for over twenty (20) days.

14.3Except as provided in the immediate precedent clause, Party B agrees that Party A is entitled to early terminate this Agreement at any time by sending a written notice twenty days in advance without any reason. However, Party B is not entitled to early terminate this Agreement unless as provided herein.

14.4The early termination of this Agreement shall not affect the rights and obligations of the Parties arising out of this Agreement prior to the early termination date.

Article 15             Delivery of Notice

15.1Notices relevant to this Agreement sent by one Party to the other shall be made in written form and delivered in person, or by fax, telegram, telex or email, or by registered mail (postage paid) or express mail. As to those delivered in person or by fax, telegram, telex or email, the delivery date shall be the date when it is sent; as to those delivered by registered mail (postage paid) or express mail, the delivery date shall be the third day after it is sent.

Article 16             Dispute Resolution

16.1With regard to disputes arising out of the interpretation and performance of the terms hereunder, the Parties shall resolve the disputes through consultations in good faith.

16.2In case no resolution can be made, the dispute shall be submitted to China International Economic and Trade Arbitration Commission for arbitration in Beijing in accordance with its arbitration rules then effective. The arbitration shall be conducted in Chinese. The arbitration award shall be final and binding upon the Parties.

16.3The conclusion, effectiveness, implementation and interpretation of this Agreement and resolution of disputes shall all be governed by the PRC laws.

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Article 17             Miscellaneous

17.1This Agreement is written in two originals. Each of the Parties shall hold one original with each having the same legal effect.

17.2The headings in this Agreement are written for the ease of reference only, and in no event shall they affect the interpretation of any terms of this Agreement.

17.3The Parties may amend and supplement this Agreement in the way of a written agreement. Amendment agreements and supplement agreements executed by the Parties are both part of this Agreement, having the same legal effect as this Agreement.

17.4In case any term herein becomes all or partly invalid or unenforceable due to the violation of law or governmental regulations or other reasons, the affected part of such term shall be considered to have been removed, provided however that, the removal of the affected part of such term shall not affect the legal effect of the remaining part of such term or other terms herein. The Parties shall conclude new terms through consultations to replace such invalid or unenforceable terms.

17.5Unless provided otherwise, a Party’s failure or delay in exercising any of the rights, powers or privileges that it is entitled to under this Agreement shall not be considered its waiver of such rights, powers or privileges, nor shall any single or partial exercise of any rights, powers or privileges by a Party preclude its exercise of other rights, powers or privileges.

17.6This Agreement constitutes all agreements reached by the Parties on the subject matter of the cooperation project, and supersedes any previous or concurrent oral and written agreement, understanding and correspondence relevant to the subject matter of the cooperation project between the Parties. Unless specifically provided herein, there is no other explicit or implicit obligation or covenant between the Parties.

17.7Matters not covered in this Agreement shall be determined by the Parties separately through consultations.

[E-House Entity] /s/ (seal)

Authorized Representative:

[VIE] /s/ (seal)

Authorized Representative:

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Appendix I: List of Technology Service

The Parties agree that, the technology services described in this Agreement includes without limitation:

Article 1 Technology Support for E-Commerce

1.1Party A agrees to act as Party B’s technology service provider and provide Party B with the technology services required for the operation of E-Commerce in accordance with the conditions of this Agreement, with the specific content including without limitation, the following items in connection with E-Commerce.

1.1.1Development, update and upgrade of the client side software;

1.1.2Development, update and upgrade of the web server side software;

1.1.3Technology development and maintenance of the database;

1.1.4Technology development of the system;

1.1.5General design scheme of the system;

1.1.6Installation and debugging of the system;

1.1.7Trial run and testing of the system;

1.1.8Installation and debugging of the system’s expansion;

1.1.9Inspection and maintenance of the hardware equipment for operation;

1.1.10Daily maintenance of the system software;

1.1.11Improvement and upgrade of the system software.

Article 2 Technology Support for Internet Information Service

2.1Party A agrees to provide Party B with the technology services in connection with the Internet Information Service. The specific content of the technology services includes without limitation:

2.1.1Development, update and upgrade of the client side software;

2.1.2Development, update and upgrade of the web server side software;

2.1.3Technology development and maintenance of the database;

2.1.4Technology development of the system, general design, testing, installation and debugging, installation and debugging of the expansion, inspection and maintenance of the hardware equipment for operation, daily maintenance of the software, improvement and upgrade of the software in connection with the Internet Information Service.

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2.2Compilation, gathering statistics and integration as well as database programming and design of technical platform of various information required to be used by Party B in the operation of the Internet Information Service, including without limitation, news, finance and economics, science and technology, sports, entertainment, games, fashion, education, medical treatment, health, culture and resources of professionals, assisting in the determination of the framework and channel structural design of the same, and provision of content update services at the technical level.

2.3Providing Party B with design and technical support of web pages, and assisting Party B in providing end users with relaxing and friendly interfaces of various services such as news browsing, shopping, medical treatment, chatting, entertainment, search and registration.

2.4With regard to the system software required for the website operation that is provided by Party A to Party B, Party A shall provide Party B with materials and documents of the system such as user guide and manual of such system software for the website operation.

2.5In case that Party B needs to change the system environment of the website, including operating system environment, database environment and so forth, where Party A’s assistance is required, Party A shall provide corresponding solutions.

2.6Assisting Party B in resolving problems occurred during the process of installation and operation of the website operating equipment.

Article 3 Technology Support for Online Advertising Service

3.1Party A agrees to provide Party B with the technology services in connection with the Online Advertising Service. The specific content of the technology services includes without limitation:

3.1.1Development, update and upgrade of publishing software for online advertising;

3.1.2Installation and debugging of publishing software for online advertising;

3.1.3Technology maintenance of publishing software for online advertising;

3.1.4Design and produce online advertising.

Article 4 Technology Training

4.1Party A agrees to provide Party B and staff of Party B with the following training:

4.1.1Skills training in respect of the installation and operation of equipment and facilities;

4.1.2Training on providing appropriate customer services or techniques and other aspects;

4.1.3Training on using the on-line editing software.

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Article 5 Technology Consulting

5.1To provide consulting service for the purchase of relevant equipment and software and hardware system required for Party B’s operation of the Internet Information Service, including without limitation, to provide technical advice for the selection and installation and debugging of various tool software, application software and technical platform, and the purchase, types and performance of various matching hardware facilities and equipment.

5.2With regard to the technical projects designated by Party B, Party A agrees to provide Party B with technology consulting services such as technological demonstration, technological forecasting, special technological investigation and analysis and assessment report.

5.3To provide technology consulting services for the application of the Internet software, hardware, equipment and system on-line editing software installed or to be installed by Party B.

5.4To provide Party B with the following information: investigation, analysis and assessment report of the trend, technology, expense and income of domestic, foreign and Party B’s various Internet services (including special Internet services).

5.5Party B may conduct inquiries or function consulting on specific technical problems with Party A’s technical support department in the way of email, telephone and fax and etc. Party A’s engineers will reply to the questions and assist the clients in resolving the problem.

5.6In case of emergencies that Party B is unable to handle, Party A’s engineers, upon consent by Party B, may conduct remote login to check the system status and resolve the problem.

5.7Party A may, within its ability, satisfy the other technology consulting requirements raised by Party B.

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EX-4.59

Exhibit 4.59

EXCLUSIVE SUPPORT AGREEMENT

This Agreement is entered into in Shanghai as of May 14, 2014 by and between the following Parties:

Party A: Baoyi Investment Consultant (Shanghai) Co., Ltd
Address: Room 104, Building 94, 149 Yanchang Road, Shanghai

Party B: Shanghai E-Cheng Asset Management Co., Ltd.
Address: Room 221, Building 1, 195 Yonghe Zhilu, Zhabei District, Shanghai

WHEREAS:

(A)Party A is a limited liability company established and duly existing in Shanghai, China, which mainly engages in the business of investment consulting, marketing consulting, economic information consulting, management consulting ((subject to licensing requirement if applicable).

(B)Party B is a limited liability company registered in Shanghai, China, which mainly engages in the business of asset management, enterprise management, enterprise management consulting, industrial investment, investment consulting, business information consulting, enterprise image design and marketing planning (the business requiring approval shall be operated upon relevant administrative approval).

(C)Required for its business, Party B decides to engage Party A as its exclusive consulting service provider, to provide Party B with the relevant services such as investment consulting, marketing consulting, economic information consulting and management consulting. Party A agrees to provide Party B with the Consulting Service in accordance with this Agreement.

THEREFORE, through amicable consultations, the Parties have reached the following agreements on the detailed matters related to the provision of exclusive Consulting Service by Party A to Party B.

Article 1Definitions and Interpretation

1.1“IP Rights Licensing” shall mean according to needs from Party B’s business, Party A shall endeavor to license the IP rights owned by Party A to Party B or, subject to consent of the owner of the rights, transfer the relevant IP rights to Party B.

1.2“Consulting Service” shall mean all consulting service provided by Party A to Party B in accordance with this Agreement, including without limitation, investment consulting, marketing consulting, economic information consulting and management consulting.

Article 2Exclusive Cooperation

2.1Party A is Party B’s exclusive consulting service provider. Unless any event described in Article 2.2 or 2.3 of this Agreement occurs, all of the Consulting Service (including without limitation, investment consulting, marketing consulting, economic information consulting and management consulting) required for any of the business operated by Party B shall be provided by Party A on an exclusive basis. Without Party A’s prior written consent, Party B shall not seek any third party other than Party A to provide any part of the Consulting Service under this Agreement in any manner.

2.2Party B agrees that in case Party A objectively does not have the ability to provide Party B with certain part of the Consulting Service, Party A may exclusively designate an appropriate third party to provide Party B with such part of the Consulting Service in accordance with the terms and conditions provided in this Agreement. Party B further agrees that in any case, Party A is entitled to entrust, without any reason, any properly qualified third party to provide Party B with the Consulting Service that should, pursuant to this Agreement, be provided by Party A to Party B. Party B agrees to accept the Consulting Service provided by such appropriate third party entrusted by Party A.

2.3In case of any of the following circumstances, Party B is entitled to, at its own discretion, seek any third party to provide the Consulting Service:

2.3.1Party A voluntarily abandons its right to act as an exclusive consulting service provider and gives a written consent to the provision of the Consulting Service by a third party to Party B;

2.3.2Party A is objectively unable to provide Party B with certain part of the Consulting Service and fails to designate any appropriate third party to provide Party B with such part of the Consulting Service; or

2.3.3Party A decides to neither provide Party B with certain part of the Consulting Service nor designate any appropriate third party to provide Party B with such part of the Consulting Service.

Article 3Consulting Service

3.1Unless any event described in Article 2.2 or 2.3 of this Agreement occurs, all of the consulting service (including without limitation, investment consulting, marketing consulting, economic information consulting and management consulting) required for any of Party B’s business shall be provided by Party A on an exclusive basis. Party A will try its best to provide Party B with the consulting service required for and related to Party B’s business.

3.2Party B shall provide all necessary assistance to Party A’s provision of consulting service, including without limitation:

3.2.1Party B shall notify Party A immediately of any circumstance that may affect Party B’s business; and

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3.2.2Any other necessary assistance.

3.3The Parties agree to enter into (if necessary) separate consulting service agreements on the details of various consulting services during the valid term of this Agreement to specify or adjust the consulting services to be provided and the methods to provide such services within the framework provided in this Agreement.

3.4With regard to the consulting services provided by Party A to Party B, the Parties agree, based on the number of working hours of Party A to provide the consulting services to Party B (on an hourly basis), to calculate the fees for the consulting services at the following rates:

3.4.1Party B shall calculate and pay to Party A the consulting service fee at the rate of RMB4,000 per hour per capita;

3.4.2The workload of each project: both parties shall budget at the early stage of the project and determine the final settlement of account when the project is finished. The workload shall be calculated according to the final settlement of account.

3.5With regard to the day-to-day consulting service support, Party B agree to calculate and pay the following rates:

3.5.1Party B shall calculate and pay to Party A the consulting support fee at the rate of RMB20,000/month;

3.5.2Party B shall calculate and pay to Party A the training fee at the rate of RMB50,000/month.

3.6.The Parties shall choose any of the following time and methods of settlement based on actual circumstances:

3.6.1Monthly settlement. Party A shall, within the first five working days of each month, issue a bill to Party B of the working hours for the consulting services provided by Party A to Party B during the last month at the rates agreed by the Parties. The bill shall indicate the working hours of consulting service provided to Party B, and Party B shall, within thirty working days after its receipt of the bill, pay to Party A the consulting service fee in accordance with the amount in the bill.

3.6.2Annual settlement. Both parties shall settle the account at December 20 each year according to actual situation and issue a sheet of settlement of account confirmed by both parties. Party B shall, within three business days after confirmation of the settlement report, pay to Party A the consulting service fee at the amount provided in the bill.

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Article 4Payment

4.1For the Consulting Service provided by Party A to Party B, Party B shall, based on actual circumstances, pay to Party A the fees in accordance with the relevant provisions in this Agreement.

4.2For the above fees paid by Party B, Party A shall issue corresponding invoices to Party B.

4.3If Party A designates a third party to provide Party B with the Consulting Service in accordance with this Agreement, Party A may choose any of the following ways of payment for such third party’s fees and require Party B to implement:

4.3.1Party B pays the fees for the Consulting Service to the third party directly; or

4.3.2Party B pays the fees for the Consulting Service to Party A directly and Party A is responsible for settling with such third party.

4.4Where Party A designates a third party to provide Party B with the Consulting Service in accordance with this Agreement, if Party A, for whatever reasons, assumes any joint and several liability to such third party due to Party B’s reasons, Party B shall compensate Party A for all economic losses incurred thereby.

Article 5Ownership of Assets

5.1The Parties agree that the following assets originated from the Consulting Service provided by Party A to Party B shall be owned by Party A:

5.1.1the words, images, layouts and any other graphic designs or information content created or made by Party A, except those whose copyrights belong to third parties; and

5.1.2any other tangible or intangible assets originated or derived from the Consulting Service provided by Party A to Party B in accordance with this Agreement, except those owned by Party B on clear grounds.

5.2Party B recognizes Party A’s ownership of the assets above and undertakes not to make any claim on any assets above. Where necessary and requested by Party A, Party B shall provide all necessary assistance (including without limitation, issuing corresponding certificates) to make clear Party A’s ownership of the assets above.

5.3During the term of cooperation between the Parties, except as specifically provided in this Agreement or other relevant written agreements that the ownership shall be transferred from Party A to Party B, all assets provided to Party B such as equipment, technology and software shall still be owned by Party A, and Party B shall only have the right of use over the assets during the valid term of this Agreement.

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Article 6Confidentiality

6.1Either Party shall keep confidential any confidential material and information of the other Party known or accessed due to the execution or performance of this Agreement (the “Confidential Information”). Without the other Party’s written consent, neither Party shall disclose, give or transfer such Confidential Information to any third parties.

6.2If requested by either Party, the other Party shall return, destroy, or otherwise dispose of all of the documents, materials, or software that contain any Confidential Information as requested, and stop using the Confidential Information.

6.3The Parties’ obligations under this Article shall survive the termination of this Agreement. Either Party shall still comply with the confidentiality terms of this Agreement and fulfill the confidentiality obligations as promised, until the other Party gives consent to the release of such obligations or as a matter of fact, violation of the confidentiality terms herein will not cause damage of any form to the other Party.

Article 7Payment of Taxes

7.1The Parties shall respectively pay taxes to relevant tax authorities in accordance with relevant laws, regulations and State policies.

7.2In the event that either Party pays any tax for the other Party, the paying Party shall submit the tax certificate to the payable Party as soon as possible, and the payable Party shall compensate the equivalent amount to the paying Party within seven days after the receipt of such tax certificate.

Article 8Representations, Covenants and Warranties

8.1Either of the Parties represents, covenants and warrants to the other Party as follows:

8.1.1It is a company lawfully established and duly existing;

8.1.2It is qualified to conduct the transaction hereunder and such transaction is in line with its business scope;

8.1.3It has full power to enter into this Agreement, and its authorized representative has obtained full authorization to execute this Agreement on behalf of it;

8.1.4It has the ability to perform its obligations hereunder, and such performance will not violate any restrictions of legal documents binding upon it;

8.1.5It is not subject to any liquidation, dissolution or bankruptcy procedures.

8.2Party B covenants that during the valid term of this Agreement, Party B shall notify Party A of any change in Party B’s shareholding structure thirty days in advance.

5

8.3Party B covenants that except as required for the works provided in this Agreement, Party B shall not use or copy the trademarks, signs or company names of Party A or its affiliates without Party A’s prior written consent.

8.4Party B shall neither conduct, nor allow any third party to conduct any act or omission that is detrimental to Party A’s ownership of any intellectual property or any other rights of Party A.

Article 9Liability for Breach of Contract

9.1Either Party’s direct or indirect violation of any provisions herein or failure in assuming or untimely or insufficient assumption of any of its obligations hereunder shall constitute a breach of contract. The non-breaching Party (the “Non-Breaching Party”) is entitled to send to the breaching Party (the “Breaching Party”) a written notice, requesting the Breaching Party to rectify its breach, take sufficient, effective and timely measures to eliminate the effects of breach, and compensate the Non-Breaching Party for any losses incurred by the breach.

9.2After the occurrence of breach, in case such breach has made it impossible or unfair for the Non-Breaching Party to perform its corresponding obligations hereunder based on the Non-Breaching Party’s reasonable and objective judgments, the Non-Breaching Party is entitled to send to the Breaching Party a written notice of its temporary suspension of performance of corresponding obligations hereunder, until the Breaching Party stops the breach, takes sufficient, effective and timely measures to eliminate the effects of breach, and compensate the Non-Breaching Party for any losses incurred by the breach.

9.3The losses of the Non-Breaching Party that should be compensated by the Breaching Party include direct economic losses and any foreseeable indirect losses and extra expenses incurred by the breach, including without limitation, the attorneys’ fee, litigation and arbitration fee, financial expense and travel charge.

Article 10Force Majeure

10.1“Force Majeure” shall mean events beyond the reasonable control of the Parties that are unforeseeable or foreseeable but unavoidable, which cause obstruction in, impact on or delay in either Party’s performance of part or all of its obligations in accordance with this Agreement, including without limitation, government acts, natural disasters, wars, hacker attacks or any other similar events.

10.2The Party affected by Force Majeure may suspend the performance of relevant obligations hereunder that cannot be performed due to Force Majeure until the effects of Force Majeure are eliminated, without having to assume any liability for breach of contract, provided however that, such Party shall endeavor to overcome such events and reduce the negative effects to the best of its abilities.

10.3The Party affected by Force Majeure shall provide the other Party with valid certificate documents verifying the occurrence of Force Majeure events, which documents shall be issued by the notary office where the events occur (or other appropriate agencies). In case

6

the Party affected by Force Majeure cannot provide such certificate documents, the other Party may request it to assume the liability for breach of contract in accordance with this Agreement.

Article 11Effectiveness, Amendment and Termination

11.1This Agreement takes effect as of the date when it is signed and stamped by the authorized representatives of the Parties, and shall be terminated on the date when Party B dissolves according to law.

11.2Unless provided otherwise herein, Party A is entitled to immediately early terminate this Agreement unilaterally by sending a written notice upon any of the followings happening to Party B:

11.2.1Party B breaches this Agreement, and within thirty (30) days after Party A sends out the written notice, fails to rectify its breach, take sufficient, effective and timely measures to eliminate the effects of breach, and compensate Party A for any losses incurred by the breach.

11.2.2Party B is bankrupt or is subject to any liquidation procedure and such procedure is not revoked within seven (7) days; and

11.2.3due to any event of Force Majeure, Party B’s failure to perform this Agreement lasts for over twenty (20) days.

11.3Except as provided in the immediate precedent clause, Party B agrees that Party A is entitled to early terminate this Agreement at any time by sending a written notice twenty days in advance without any reason. However, Party B is not entitled to early terminate this Agreement unless as provided herein.

11.4The early termination of this Agreement shall not affect the rights and obligations of the Parties arising out of this Agreement prior to the early termination date.

Article 12Delivery of Notice

12.1Notices relevant to this Agreement sent by one Party to the other shall be made in written form and delivered in person, or by fax, telegram, telex or email, or by registered mail (postage paid) or express mail. As to those delivered in person or by fax, telegram, telex or email, the delivery date shall be the date when it is sent; as to those delivered by registered mail (postage paid) or express mail, the delivery date shall be the third day after it is sent.

Article 13Dispute Resolution

13.1With regard to disputes arising out of the interpretation and performance of the terms hereunder, the Parties shall resolve the disputes through consultations in good faith.

7

13.2The conclusion, effectiveness, implementation and interpretation of this Agreement and resolution of disputes shall all be governed by the PRC laws.

Article 14Miscellaneous

14.1This Agreement is written in two originals. Each of the Parties shall hold one original with each having the same legal effect.

14.2The headings in this Agreement are written for the ease of reference only, and in no event shall they affect the interpretation of any terms of this Agreement.

14.3The Parties may amend and supplement this Agreement in the way of a written agreement. Amendment agreements and supplement agreements executed by the Parties are both part of this Agreement, having the same legal effect as this Agreement.

14.4In case any term herein becomes all or partly invalid or unenforceable due to the violation of law or governmental regulations or other reasons, the affected part of such term shall be considered to have been removed, provided however that, the removal of the affected part of such term shall not affect the legal effect of the remaining part of such term or other terms herein. The Parties shall conclude new terms through consultations to replace such invalid or unenforceable terms.

14.5Unless provided otherwise, a Party’s failure or delay in exercising any of the rights, powers or privileges that it is entitled to under this Agreement shall not be considered its waiver of such rights, powers or privileges, nor shall any single or partial exercise of any rights, powers or privileges by a Party preclude its exercise of other rights, powers or privileges.

14.6This Agreement constitutes all agreements reached by the Parties on the subject matter of the cooperation project, and supersedes any previous or concurrent oral and written agreement, understanding and correspondence relevant to the subject matter of the cooperation project between the Parties. Unless specifically provided herein, there is no other explicit or implicit obligation or covenant between the Parties.

14.7Matters not covered in this Agreement shall be determined by the Parties separately through consultations.

8

(Signature Page for Exclusive Support Agreement)

Baoyi Investment Consultant (Shanghai) Co., Ltd

Authorized Representative: /seal/ Baoyi Investment Consultant (Shanghai) Co., Ltd

Shanghai E-Cheng Asset Management Co., Ltd.

Authorized Representative: /seal/ Shanghai E-Cheng Asset Management Co., Ltd.

9

EX-4.60

Exhibit 4.60

Material Terms of Contractual Arrangements for Each of Shanghai Fangjia Information Technology Co., Ltd., Shanghai Weihui Business Information Consulting Co., Ltd. and Shanghai E-Cheng Assets management Co., Ltd.

The following sets forth the material differences of the contractual arrangements for each of Shanghai Fangjia Information technology Co., Ltd., Shanghai Weihui Business Information Consulting Co., Ltd. and Shanghai E-Cheng Assets Management Co., Ltd. (the “three VIEs”) from the executed form of contractual arrangements filed as Exhibits 4.53 to Exhibit 4.58 to this annual report on Form 20-F. Other than the information set forth below, there is no material difference between the contractual arrangement for each of the three VIEs and the above-mentioned executed forms filed as exhibits to this annual report on Form 20-F.

	Parties to the agreements
VIE	Shanghai E-Cheng Asset Management Co., Ltd., or Shanghai E-Cheng	Shanghai Fangjia Information Technology Co., Ltd., or Shanghai Fangjia	Shanghai Weihui Business Information Consulting Co., Ltd., or Shanghai Weihui
Shareholder A	Zuyu Ding	Zuyu Ding	Xudong Zhu
Shareholder B	Weijie Ma	Yan Zhang	Xi Yang
E-House Entity	Shanghai Baoyi Investment Consultancy Co., Ltd	Shanghai CRIC Information Technology Co., Ltd.	Shanghai Weidian Information & Technology, Ltd.
Agreement	Shanghai E-Cheng	Shanghai Fangjia	Shanghai Weihui	Note
Exclusive Call Option Agreement	Entered into as of May 14, 2014 1.1: “Business Permits shall mean any approvals, permits, filings, registrations, etc. which the Company is required to have for legally	Entered into as of October 29, 2014 1.1: “Business Permits shall mean any approvals, permits, filings, registrations, etc. which the Company is required to have for legally	Entered into as of October 23, 2014 1.1: “Business Permits shall mean any approvals, permits, filings, registrations, etc. which the	Shanghai E-Cheng and Shanghai Fangjia were to be newly established, whereas Shanghai Weihui was already established before the variable interest entity

Agreement	Shanghai E-Cheng	Shanghai Fangjia	Shanghai Weihui	Note
	and validly operating all its businesses, including without limitation, Business License of Corporate Legal Person, Operation Permit of Value-added Telecommunication Service and such other relevant permits and licenses as required by the then-effective PRC Law.”	and validly operating all its businesses, including without limitation, Business License of Corporate Legal Person, Operation Permit of Value-added Telecommunication Service and such other relevant permits and licenses as required by the then-effective PRC Law.”	Company is required to have for legally and validly operating all its businesses, including without limitation, Business License of Corporate Legal Person and licenses as required by the then-effective PRC Law.”	arrangement. An affiliate of Shanghai Weihui had already obtained the Operation Permit of Value-added Telecommunication Service, which will be transferred to Shanghai Weihui for its operation of community value-added service. Therefore, the permit is not specifically listed in this section
Loan Agreement	Entered into as of April 28, 2014	Entered into as of September 16, 2014	Entered into as of October 8, 2014
	“The Lender intends to provide a loan to [the shareholders] for their establishment of the Domestic Company, and holding 100% equity interest of the Domestic Company.”	“The Lender intends to provide a loan to [the shareholders] for their establishment of the Domestic Company, and holding 100% equity interest of the Domestic Company.”	“The Lender intends to provide a loan to [the shareholders] for acquisition of equity interest of the Domestic Company.”	Lender refers to the E-House Entity. Domestic Company refers to the VIE. Shanghai E-Cheng and Shanghai Fangjia were to be newly established, whereas Shanghai Weihui was already established before the variable interest entity arrangement. Therefore, the loan to the two shareholders of

2

Agreement	Shanghai E-Cheng	Shanghai Fangjia	Shanghai Weihui	Note
				Shanghai Weihui was for the purpose of acquiring equity interest of the VIE, instead of establishing the VIE.
	Loan amount: RMB0.5 million to Zuyu Ding; RMB0.5 million to Weijie Ma	Loan amount: RMB5 million to Zuyu Ding;RMB5 million to Yan Zhang	Loan amount: RMB1.6 million to Xudong Zhu;RMB0.4 million to Xi Yang
Shareholder Voting Right Proxy Agreement	Entered into as of May 14, 2014	Entered into as of October 29, 2014	Entered into as of October 23, 2014
Power of Attorney by Shareholder A	Executed on May 14, 2014	Executed on October 29, 2014	Executed on October 23, 2014
Power of Attorney by Shareholder B	Executed on May 14, 2014	Executed on October 29, 2014	Executed on October 23, 2014
Equity Pledge Agreement	Entered into as of May 14, 2014 Definition and scope of contractual obligations and transaction documents does not include the Exclusive Support Agreement	Entered into as of October 29, 2014 Definition and scope of contractual obligations and transaction documents does not include the Exclusive Technical Support Agreement	Entered into as of October 23, 2014 Definition and scope of contractual obligations and transaction documents does include the Exclusive Technical Support Agreement
Exclusive	Not applicable	Entered into as of	Entered into as of	Shanghai E-Cheng receives
Technical Support Agreement		October 29, 2014	October 23, 2014	consulting service from Baoyi Investment Consulting (Shanghai) Co., Ltd. under the Exclusive Support Agreement dated May 14, 2014 (filed hereto as Exhibit 4.59).

3

EX-8.1

Exhibit 8.1

PRINCIPAL SUBSIDIARIES AND CONSOLIDATED VARIABLE INTEREST ENTITIES

	Name of Entity	PLACE OF INCORPORATION
	Subsidiaries
1.	E-House Real Estate Ltd.	British Virgin Islands
2.	E-House China (Beijing) Holdings Ltd.	British Virgin Islands
3.	E-House & Cityrehouse Real Estate Development Limited	British Virgin Islands
4.	Shanghai City Rehouse Real Estate Agency Ltd.	PRC
5.	Shanghai Real Estate Sales (Group) Co., Ltd.	PRC
6.	Leju Holdings Limited	Cayman Islands
7.	Branco Overseas Ltd	British Virgin Islands
8.	E-House China (Tianjin) Holdings Ltd.	British Virgin Islands
9.	E-House Property Consultancy Ltd.	British Virgin Islands
10.	E-House International Property Consultancy Ltd.	Hong Kong
11.	E-House City Rehouse Real Estate Broker (Shanghai) Co., Ltd.	PRC
12.	China E-Real Estate Holdings Ltd.	British Virgin Islands
13.	China E-Real Estate Group Ltd.	Hong Kong
14.	Shanghai Yi Yue Information Technology Co., Ltd.	PRC
15.	China Online Housing Technology Corporation	Cayman Islands
16.	China Online Housing (Hong Kong) Co., Limited	Hong Kong
17.	Shanghai SINA Leju Information Technology Co., Ltd.	PRC
18.	Omnigold Holdings Ltd.	British Virgin Islands
19.	China Commercial Real Estate Group Ltd.	British Virgin Islands
20.	China Real Estate Business Group Ltd.	Hong Kong
21.	Beijing Maiteng Fengshun Science and Technology Co., Ltd.	PRC
22.	China Real Estate Information Corporation	Cayman Islands
23.	CRIC (China) Information Technology Co., Ltd.	British Virgin Islands
24.	Shanghai CRIC Information Technology Co., Ltd.	PRC
25.	Status Company Ltd.	British Virgin Islands
26.	Status Holdings Ltd.	Hong Kong
27.	Shanghai Yifang Software Co., Ltd.	PRC
28.	Shanghai Weidian Information Technology Co., Ltd.	PRC

1

29.	Shanghai Dehu PR Consulting Co., Ltd.	PRC
30.	E-House Financial Holdings	British Virgin Islands
31.	E-House (China) Capital Investment Management Ltd.	British Virgin Islands
32.	Scepter Pacific Limited	British Virgin Islands
33.	Scepter Holdings Limited	Hong Kong
34.	Baoyi Investment Consultant (Shanghai) Co., Ltd.	PRC
	Consolidated Variable Interest Entities
35.	Shanghai Yi Xin E-Commerce Co., Ltd.	PRC
36.	Beijing Yisheng Leju Information Services Co., Ltd.	PRC
37.	Beijing Jiajujiu E-Commerce Co., Ltd.	PRC
38.	Shanghai Fangjia Information Technology Co., Ltd.	PRC
39.	Shanghai Weihui Business Information Consulting Co., Ltd.	PRC
40.	Shanghai Kushuo Information Technology Co., Ltd.	PRC
41.	Shanghai E-Cheng Asset Management Co., Ltd.	PRC

2

EX-12.1

Exhibit 12.1

Certification by the Principal Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Xin Zhou, certify that:

1.I have reviewed this annual report on Form 20-F of E-House (China) Holdings Limited;

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 company’s other certifying officer 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 company’s 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 company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5.The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s 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 company’s 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 company’s internal control over financial reporting.

Date: April 21, 2015
By:	/s/ Xin Zhou
	Name:	Xin Zhou
	Title:	Chief Executive Officer

1

EX-12.2

Exhibit 12.2

Certification by the Principal Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Bin Laurence, certify that:

1.I have reviewed this annual report on Form 20-F of E-House (China) Holdings Limited;

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 company’s other certifying officer 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 Rule 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 company’s 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 company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5.The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent function):

(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 company’s 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 company’s internal control over financial reporting.

Date: April 21, 2015
By:	/s/ Bin Laurence
	Name:	Bin Laurence
	Title:	Chief Financial Officer

1

EX-13.1

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 E-House (China) Holdings Limited (the “Company”) on Form 20-F for the year ended December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Xin Zhou, Chief Executive 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 21, 2015
By:	/s/ Xin Zhou
	Name:	Xin Zhou
	Title:	Chief Executive Officer

1

EX-13.2

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 E-House (China) Holdings Limited (the “Company”) on Form 20-F for the year ended December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Bin Laurence, 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 21, 2015
By:	/s/ Bin Laurence
	Name:	Bin Laurence
	Title:	Chief Financial Officer

1

EX-15.1

Exhibit 15.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statements No. 333-148058, No. 333-170447, No. 333-181508 and No. 333-190812 on Form S-8 of our report dated April 21, 2015, relating to the financial statements of E-House (China) Holdings Limited, and the effectiveness of E-House (China) Holdings Limited’s internal control over financial reporting, appearing in this Annual Report on Form 20-F of E-House (China) Holdings Limited for the year ended December 31, 2014.

/s/ Deloitte Touche Tohmatsu Certified Public Accountants LLP

Shanghai, China

April 21, 2015

1

EX-15.2

Exhibit 15.2

[Letterhead of Fangda Partners]

April 21, 2015

E-House (China) Holdings Limited
Qiushi Building, 11/F

383 Guangyan Road, Zhabei District

Shanghai 200072

People’s Republic of China

Dear Sirs,

We consent to the reference to our firm under “Item 4. Information on the Company—B. Business Overview—Regulation” in E-House (China) Holdings Limited’s Annual Report on Form 20-F for the year ended December 31, 2014, which will be filed with the Securities and Exchange Commission (the “SEC”) in the month of April 2015, and further consent to the incorporation by reference into the Registration Statements on Form S-8 (No. 333-148058, No. 333-170447, No. 333-181508 and No. 333-190812). We also consent to the filing with the SEC of this consent letter as an exhibit to the Annual Report on Form 20-F for the year ended December 31, 2014.

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/ Fangda Partners

Fangda Partners

1

XML

Commitments and Contingencies (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Operating lease commitments
Rental expenses	$ 28,223,879	$ 23,033,850	$ 24,418,965
Future minimum lease payments under non-cancelable operating lease agreements
2015	23,164,631
2016	19,986,357
2017	13,792,164
2018	7,556,084
2019	4,646,363
Then thereafter	30,277,284
Total	$ 99,422,883
Minimum
Operating lease commitments
Remaining lease terms	6 months
Maximum
Operating lease commitments
Remaining lease terms	240 months

XML

Share-Based Compensation (Details 2) (USD $)	12 Months Ended			1 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Apr. 30, 2012	Aug. 31, 2014	Dec. 02, 2013
Number of Options
Exercised (in shares)	3,446,585	4,596,761	194,721
Weighted average remaining contractual term
Outstanding at the end of the period	5 years 6 months 29 days
Aggregate Intrinsic value of options
Exercised	$ 23,679,729
Outstanding at the end of the period	25,776,635
E-House Plan | Share Options:
Number of Options
Outstanding at the beginning of the period (in shares)	12,949,951
Exercised (in shares)	(3,446,585)
Forfeited (in shares)	(26,662)
Outstanding at the end of the period (in shares)	9,476,704	12,949,951
Vested and expected to vest at the end of the period (in shares)	9,476,704
Exercisable at the end of the period (in shares)	9,476,704
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 4.25
Exercised (in dollars per share)	$ 3.49
Forfeited (in dollars per share)	$ 4.94
Outstanding at the end of the period (in dollars per share)	$ 4.52	4.25
Vested and expected to vest at the end of the period (in dollars per share)	$ 4.52
Exercisable at the end of the period (in dollars per share)	$ 4.52
Weighted average remaining contractual term
Vested and expected to vest at the end of the period	5 years 6 months 29 days
Exercisable at the end of the period	5 years 6 months 29 days
Aggregate Intrinsic value of options
Exercised	23,679,729	25,248,554	436,259
Outstanding at the end of the period		140,247,969
Vested and expected to vest at the end of the period	25,776,635
Exercisable at the end of the period	25,776,635
Additional disclosure
Compensation expense	5,950,940	12,817,935	17,157,015
E-House Plan | Restricted Shares:
Additional disclosure
Total fair value of restricted shares vested	6,094,602	5,612,379	9,127,103
Compensation expense	6,174,583	5,668,460	9,348,941
Total unrecognized compensation expense	20,310,709
Weighted-average period over which cost is expected to be recognized	2 years 5 months 5 days
Leju Plan | Share Options:
Number of Options
Outstanding at the beginning of the period (in shares)	6,592,000
Replaced by Restricted Share	(60,000)
Exercised (in shares)	(266,201)
Forfeited (in shares)	(132,000)
Outstanding at the end of the period (in shares)	6,133,799	6,592,000
Vested and expected to vest at the end of the period (in shares)	5,943,719
Exercisable at the end of the period (in shares)	1,867,132
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 4.60
Replaced by Restricted Share (in dollars per share)	$ 4.60
Exercised (in dollars per share)	$ 4.60
Forfeited (in dollars per share)	$ 4.60
Outstanding at the end of the period (in dollars per share)	$ 4.60	4.60
Vested and expected to vest at the end of the period (in dollars per share)	$ 4.60
Exercisable at the end of the period (in dollars per share)	$ 4.60
Weighted average remaining contractual term
Outstanding at the end of the period	8 years 11 months 1 day
Vested and expected to vest at the end of the period	8 years 11 months 1 day
Exercisable at the end of the period	8 years 11 months 1 day
Aggregate Intrinsic value of options
Exercised	1,668,693
Outstanding at the end of the period	37,784,202
Vested and expected to vest at the end of the period	36,613,309
Exercisable at the end of the period	11,501,535
Additional disclosure
Weighted-average grant-date fair value of options granted (in dollars per share)						$ 2.21
Compensation expense	4,525,552	381,874
Total unrecognized compensation expense	8,676,222
Weighted-average period over which cost is expected to be recognized	1 year 11 months 1 day
Leju Plan | Restricted Shares:
Additional disclosure
Total fair value of restricted shares vested	486,200	0	0
Compensation expense	4,923,226	34,758
Total unrecognized compensation expense	9,699,247
Weighted-average period over which cost is expected to be recognized	1 year 10 months 17 days
CRIC Plan | Share Options:
Aggregate Intrinsic value of options
Exercised			750,115
Additional disclosure
Compensation expense			8,532,772	0
CRIC Plan | Restricted Shares:
Additional disclosure
Total fair value of restricted shares vested			130,000
Compensation expense			54,688
Scepter Plan | Share Options:
Number of Options
Granted (in shares)	455,000
Forfeited (in shares)	(5,000)
Outstanding at the end of the period (in shares)	450,000
Vested and expected to vest at the end of the period (in shares)	449,526
Weighted Average Exercise Price
Granted (in dollars per share)	$ 3.30				$ 3.30
Outstanding at the end of the period (in dollars per share)	$ 3.30
Vested and expected to vest at the end of the period (in dollars per share)	$ 3.30
Exercisable at the end of the period (in dollars per share)	$ 3.30
Weighted average remaining contractual term
Granted	10 years
Outstanding at the end of the period	9 years 7 months 6 days
Vested and expected to vest at the end of the period	9 years 7 months 6 days
Exercisable at the end of the period	9 years 7 months 6 days
Additional disclosure
Compensation expense	66,820
Total unrecognized compensation expense	$ 439,892
Weighted-average period over which cost is expected to be recognized	2 years 7 months 6 days

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Employee Benefit Plans (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Employee Benefit Plans
Contribution to employee benefit plans	$ 58,365,171	$ 45,924,681	$ 40,724,902

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Goodwill

12 Months Ended

Dec. 31, 2014

Goodwill

Goodwill

9. Goodwill

Changes in the carrying amount of goodwill by segment for the years ended December 31, 2012, 2013 and 2014 are as follows:

					Real Estate
	Real Estate		Real Estate		Information
	Online		Brokerage		and Consulting
	Services		Services		Services	Total
	$		$		$	$
Balance as of January 1, 2012	40,152,022		3,509,326		5,667,004	49,328,352
Exchange rate translation	63,965		8,422		—	72,387
Balance as of December 31, 2012	40,215,987		3,517,748		5,667,004	49,400,739
Goodwill recognized upon acquisition	—		—		1,698,098	1,698,098
Exchange rate translation	394,633		106,569		—	501,202
Balance as of December 31, 2013	40,610,620		3,624,317		7,365,102	51,600,039
Exchange rate translation	(47,545	)	(12,840	)	—	(60,385	)
Balance as of December 31, 2014	40,563,075		3,611,477		7,365,102	51,539,654
As of December 31, 2012
Goodwill, gross	458,038,291		3,517,748		5,667,004	467,223,043
Accumulated impairment charge	(417,822,304	)	—		—	(417,822,304	)
Goodwill, net	40,215,987		3,517,748		5,667,004	49,400,739
As of December 31, 2013
Goodwill, gross	458,432,924		3,624,317		7,365,102	469,422,343
Accumulated impairment charge	(417,822,304	)	—		—	(417,822,304	)
Goodwill, net	40,610,620		3,624,317		7,365,102	51,600,039
As of December 31, 2014
Goodwill, gross	458,385,379		3,611,477		7,365,102	469,361,958
Accumulated impairment charge	(417,822,304	)	—		—	(417,822,304	)
Goodwill, net	40,563,075		3,611,477		7,365,102	51,539,654

The Group utilized the income approach valuation method (Level 3) to compute the fair value of its reporting units. The key assumptions used in the income approach, which requires significant management judgment, include business assumptions, terminal value, and discount rate. Significant increases in discount rate or decrease in terminal value in isolation would result in a significantly lower fair value measurement.

Based on the impairment tests performed, the Group did not record a goodwill impairment charge for the years ended December 31, 2012, 2013 and 2014.

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Summary of Principal Accounting Policies (Details 6) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Revenue recognition
Total revenues	$ 904,498,793	$ 731,078,833	$ 462,439,368
Real estate consulting services
Revenue recognition
Total revenues	0
Real estate consulting services | Minimum
Revenue recognition
Contract period	1 month
Real estate consulting services | Maximum
Revenue recognition
Contract period	12 months
Subscriptions | Minimum
Revenue recognition
Contract period	6 months
Subscriptions | Maximum
Revenue recognition
Contract period	12 months
Data integration services | Minimum | CRIC
Revenue recognition
Contract period	3 months
Data integration services | Maximum | CRIC
Revenue recognition
Contract period	12 months
Multiple element arrangements
Revenue recognition
Total revenues	74,189,077	71,908,552	74,042,253
Other Services
Revenue recognition
Total revenues	$ 0

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STATEMENTS OF OPERATIONS (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
STATEMENTS OF OPERATIONS
Total revenues	$ 904,498,793	$ 731,078,833	$ 462,439,368
Cost of revenues	(306,133,210)	(274,035,806)	(203,170,685)
Selling, general and administrative expenses	(545,491,718)	(400,947,001)	(336,873,524)
Other operating income	8,786,891	4,917,642	6,475,023
Income (loss) from operations	61,660,756	61,013,668	(71,129,818)
Interest expense	(5,325,474)	(192,566)
Interest income	3,210,328	2,179,547	1,606,462
Other income (loss), net	3,857,539	(1,051,215)	(732,870)
Income (loss) before taxes and equity in affiliates	63,403,149	61,949,434	(70,256,226)
Income tax expense	(14,900,793)	(13,676,994)	(1,168,654)
Income (loss) before equity in affiliates	48,502,356	48,272,440	(71,424,880)
Income from equity in affiliates	3,834,802	2,813,849	375,509
Net income (loss)	52,337,158	51,086,289	(71,049,371)
Less: Net income (loss) attributable to non-controlling interest	12,335,673	(871,136)	(14,077,967)
Net income (loss) attributable to E-House shareholders	$ 40,001,485	$ 51,957,425	$ (56,971,404)
Earnings (loss) per share:
Basic (in dollars per share)	$ 0.29	$ 0.40	$ (0.54)
Diluted (in dollars per share)	$ 0.26	$ 0.38	$ (0.54)
Shares used in computation:
Basic (in shares)	139,211,442	130,163,165	106,159,388
Diluted (in shares)	146,687,835	135,779,997	106,159,388

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Summary of Principal Accounting Policies

12 Months Ended

Dec. 31, 2014

Summary of Principal Accounting Policies

Summary of Principal Accounting Policies

2. Summary of Principal Accounting Policies

(a) Basis of presentation

The consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

(b) Basis of consolidation

The consolidated financial statements include the financial statements of E-House, its majority owned subsidiaries and its VIEs, Beijing Leju, Shanghai Yi Xin, Beijing Jiajujiu, Shanghai Kushuo, Shanghai E-Cheng, Shanghai Fangjia and Shanghai Weihui. All inter-company transactions and balances have been eliminated in consolidation.

In 2012, the contractual arrangements among the shareholders of Shanghai Tian Zhuo Advertising Co., Ltd. (“Tian Zhuo”), Tian Zhuo and Shanghai CRIC Information Technology Co., Ltd. (“Shanghai CRIC”) were terminated. Upon the termination, the shareholders of Tian Zhuo transferred all of their equity interests in Tian Zhuo to Beijing Leju to make Tian Zhuo a wholly owned subsidiary of Beijing Leju. In December 2013, Beijing Leju transferred all of its equity interest in Tian Zhuo to Shanghai Kushuo to make Tian Zhuo a wholly owned subsidiary of Shanghai Kushuo.

The Group evaluates each of its interests in private companies to determine whether or not the investee is a VIE and, if so, whether the Group is the primary beneficiary of such VIE. In determining whether the Group is the primary beneficiary, the Group considers if the Group (1) has power to direct the activities that most significantly affects the economic performance of the VIE, and (2) receives the economic benefits of the VIE that could be significant to the VIE. If deemed the primary beneficiary, the Group consolidates the VIE.

The VIE arrangements

PRC regulations currently prohibit or restrict foreign ownership of companies that provide Internet content and advertising services. To comply with these regulations, the Group provides such activities relating to Internet content and advertising services through its VIEs and their subsidiaries.

To provide the Group effective control over and the ability to receive substantially all of the economic benefits of its VIEs and their subsidiaries, the Company’s subsidiaries Shanghai Yifang Software Co., Ltd. (“Shanghai Yifang”), Shanghai SINA Leju Information Technology Co., Ltd. (“Shanghai SINA Leju”) and Shanghai Yi Yue Information Technology Co. Ltd. (“Shanghai Yi Yue”), Beijing Maiteng Fengshun Science and Technology Co., Ltd., (“Beijing Maiteng”), Baoyi Investment Consultant (Shanghai) Co., Ltd (“Shanghai Baoyi”), Shanghai CRIC, and Shanghai Weidian (collectively, the “Foreign Owned Subsidiaries”) entered into a series of contractual arrangements with Shanghai Kushuo, Beijing Leju, Shanghai Yi Xin, Beijing Jiajujiu, Shanghai E-Cheng, Shanghai Fangjia and Shanghai Weihui (collectively the “VIEs”) and their respective shareholders, respectively, as summarized below:

Name of Foreign Owned	Foreign Owned Subsidiaries’ Economic Ownership
Subsidiaries	of VIEs		Name of VIEs	Activities of VIEs
Shanghai Yifang	100	%	Shanghai Kushuo	Operate the real estate offline advertising business
Shanghai SINA Leju	100	%	Beijing Leju	Operate the online advertising and listing business
Shanghai Yi Yue	100	%	Shanghai Yi Xin	Operate the e-commerce business
Beijing Maiteng	100	%	Beijing Jiajujiu	Operate the online home furnishing business
Shanghai Baoyi	100	%	Shanghai E-Cheng	Operate the real estate fund management business
Shanghai CRIC	100	%	Shanghai Fangjia	Operate the information and consulting business
Shanghai Weidian	100	%	Shanghai Weihui	Operate the community value-added business

The VIEs hold the requisite licenses and permits necessary to conduct Internet content and advertising services activities relating to real estate projects from which foreign ownership of companies are prohibited or restricted. Foreign-invested enterprises incorporated in the PRC are not expressly prohibited from providing asset management services in PRC. However, according to local business practice, as a general partner of a fund, the Group must invest as a limited partner before the fund is established. Some investments of the fund managed by the Group are in the foreign-invested enterprise prohibited, or not encouraged industries, which requires all investors not to be foreign-invested enterprises. Therefore the Group provides asset management services through its VIE entities. In addition, the VIEs hold leases and other assets necessary to operate such business and generate substantial of the Group’s online and advertising revenues.

Agreements that Transfer Economic Benefits of the VIEs to the Group

Exclusive Consultancy Services/Technical Support Agreement. Pursuant to an exclusive Consultancy services/technical support agreement between the Foreign Owned Subsidiaries and the respective VIEs, the Foreign Owned Subsidiaries provide the respective VIEs with a series of Consultancy services/technical support services and are entitled to receive related fees. The term of this exclusive technical support agreement will expire upon dissolution of the VIEs. Unless expressly provided by this agreement, without prior written consent of the Foreign Owned Subsidiaries, the VIEs may not engage any third party to provide the services offered by the Foreign Owned Subsidiaries under this agreement.

Agreements that Provide Effective Control over VIEs

Exclusive Call Option Agreement. Each of shareholders of the VIEs has entered into an exclusive call option agreement with the respective Foreign Owned Subsidiaries. Pursuant to these agreements, each of the shareholders of the VIEs has granted an irrevocable and unconditional option to the respective Foreign Owned Subsidiaries or their designees to acquire all or part of such shareholder’s equity interests in VIEs at its sole discretion, to the extent as permitted by PRC laws and regulations then in effect. The consideration for such acquisition of all equity interests in VIEs will be equal to the registered capital of the VIEs, and if PRC law requires the consideration to be greater than the registered capital, the consideration will be the minimum amount as permitted by PRC law. In addition, the VIEs irrevocably and unconditionally granted respective Foreign Owned Subsidiaries an exclusive option to purchase, to the extent permitted under the PRC law, all or part of the assets of the VIEs. The exercise price for purchasing the assets of the VIEs will be equal to their respective book values, and if PRC law requires the price to be greater than the book value, the price will be the minimum amount as permitted by PRC law. The call option may be exercised by respective Foreign Owned Subsidiaries or their designees.

Loan Agreement. Under the loan agreement among shareholders of the VIEs and the respective Foreign Owned Subsidiaries, the respective Foreign Owned Subsidiaries granted an interest-free loan to the shareholders of VIE, solely for their purchase of equity interest of the VIEs, investing or operating activities conducted in the VIEs. Each loan agreement has a term of twenty years.

Shareholder Voting Right Proxy Agreement. Each of shareholders of the VIEs irrevocably grant any person designated by the respective Foreign Owned Subsidiaries the power to exercise all voting rights to which he will be entitled to as shareholder of the VIEs at that time, including the right to declare dividends, appoint and elect board members and senior management members and other voting rights.

Each shareholder voting right proxy agreement has a term of twenty years, unless it is early terminated by all parties in writing or pursuant to provision of this agreement. The term of the agreement will be automatically extended for one year upon the expiration, if the Foreign Owned Subsidiary gives the other Parties written notice requiring the extension thereof and the same mechanism will apply subsequently upon the expiration of each extended term.

Equity Pledge Agreement. Each of shareholders of the VIEs has also entered into an equity pledge agreement with the respective Foreign Owned Subsidiaries. Pursuant to which these shareholders pledged their respective equity interest in the VIEs to guarantee the performance of the obligations of the VIEs. The Foreign Owned Subsidiaries, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. Pursuant to the equity pledge agreement, each shareholder of the VIEs cannot transfer, sell, pledge, dispose of or otherwise create any new encumbrance on their respective equity interest in the VIEs without the prior written consent of the respective Foreign Owned Subsidiaries. The equity pledge right enjoyed by the Foreign Owned Subsidiaries will expire when shareholders of the VIEs have fully performed their respective obligations under the above agreements. The equity pledges of the VIEs have been registered with the relevant local branch of the State Administration for Industry and Commerce, or SAIC.

Risks in relation to the VIE structure

The Company believes that the Foreign Owned Subsidiaries’ contractual arrangements with the VIEs are in compliance with PRC law and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements and the interests of the shareholders of the VIEs may diverge from that of the Company and that may potentially increase the risk that they would seek to act contrary to the contractual terms, for example by influencing the VIEs not to pay the service fees when required to do so.

The Company’s ability to control the VIEs also depends on the power of attorney the Foreign Owned Subsidiaries have to vote on all matters requiring shareholder approval in the VIEs. As noted above, the Company believes this power of attorney is legally enforceable but may not be as effective as direct equity ownership.

In addition, if the legal structure and contractual arrangements were found to be in violation of any existing PRC laws and regulations, the Company may be subject to fines or other actions. The Company does not believe such actions would result in the liquidation or dissolution of the Company, the Foreign Owned Subsidiaries or the VIEs.

The Group, through its subsidiaries and through the contractual arrangements, has (1) the power to direct the activities of the VIEs that most significantly affect the entity’s economic performance and (2) the right to receive benefits from the VIEs. Accordingly, the Group is the primary beneficiary of the VIEs and has consolidated the financial results of the VIEs.

The following financial statement amounts and balances of the Group’s VIEs were included in the accompanying consolidated financial statements:

	As of December 31,
	2013	2014
	$	$
Cash and cash equivalents	71,095,466	99,718,317
Accounts receivable, net of allowance for doubtful accounts	87,835,551	118,223,577
Other current assets	29,693,275	34,132,543
Amounts due from related parties	—	424,864
Total current assets	188,624,292	252,499,301
Total non-current assets	49,517,785	55,033,244
Total assets	238,142,077	307,532,545
Accounts payable	1,505,942	600,735
Accrued payroll and welfare expenses	29,309,329	44,321,824
Income tax payable	28,793,459	28,337,431
Other tax payable	11,188,055	16,032,365
Amounts due to related parties	2,383,293	4,175,247
Advance from customers and deferred revenue	7,150,344	5,073,492
Liability for exclusive rights, current	8,967,972	—
Other current liabilities	9,917,349	36,291,161
Total current liabilities	99,215,743	134,832,255
Deferred tax liabilities, non-current	655,563	469,579
Total liabilities	99,871,306	135,301,834

	Years Ended December 31,
	2012		2013		2014
	$		$		$
Total revenues	172,402,066		321,004,846		492,253,803
Cost of revenues	(54,276,512	)	(59,920,429	)	(43,760,890	)
Net income (loss)	(3,212,138	)	1,503,897		(8,699,386	)
Net cash provided by operating activities	16,020,624		72,877,862		55,495,458
Net cash used in investing activities	(17,544,270	)	(18,042,241	)	(17,245,460	)
Net cash provided by (used in) financing activities	26,686,813		(40,248,296	)	(17,043,942	)

There are no consolidated VIEs’ assets that are collateral for the VIEs’ obligations or are restricted solely to settle the VIEs’ obligations. The Company has not provided any financial support that it was not previously contractually required to provide to the VIEs.

(c) Use of estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from such estimates. Significant accounting estimates reflected in the Group’s financial statements include useful lives and valuation of long-lived assets, valuation of goodwill, allowance for doubtful accounts, assumptions related to share-based compensation arrangements, assumptions related to the consolidation of entities in which the Group holds variable interests, fair value of equity investments in funds invested by the Company, valuation allowance on deferred tax assets and estimated selling prices in multiple-deliverable revenue arrangements, valuation of fair value of investment in preferred shares of a private entity, and assumptions related to the valuation of fair value of Leju and Scepter’s ordinary shares.

(d) Fair value of financial instruments

The Group records certain of its financial assets and liabilities at fair value on a recurring basis. Fair value reflects the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability.

The Group applies a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. There are three levels of inputs that may be used to measure fair value:

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

(e) Business combinations

Business combinations are recorded using the purchase method of accounting and, accordingly, the acquired assets and liabilities are recorded at their fair market value at the date of acquisition. Any excess of acquisition cost over the fair value of the acquired assets and liabilities, including identifiable intangible assets, is recorded as goodwill.

(f) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and demand deposits, which are unrestricted as to withdrawal and use, and which have original maturities of three months or less.

(g) Restricted cash

The Group is required to maintain certain bank deposits as collateral for the bank loans to the Group (see Note 11). These balancers are subject to withdrawal restrictions and totaled nil and $38,290,478 as of December 31, 2013 and 2014, respectively.

The Group provides brokerage service for secondary properties. Upon consent of the property buyers and sellers, the sales proceeds can be paid through the Group’s accounts, which are put into the custody of the designated bank and can only be used as consideration to the property sellers when the transactions are completed. The Group records the proceeds relating to these transactions as restricted cash and other current liabilities. These restricted cash accounts totaled $2,146,098 and $1,947,961 as of December 31, 2013 and 2014, respectively. In connection with certain primary real estate agency agreements, the Group is required by the developers to maintain certain bank deposits under both parties’ custody through the contract periods or until the presale permits are obtained for the underlying projects. These restricted cash accounts were $164,018 and $163,425 as of December 31, 2013 and 2014, respectively.

(h) Investment in debt and equity securities

The Group invests in debt securities and equity securities with readily determinable fair values, and accounts for the investments based on the nature of the products invested, and the Group’s intent and ability to hold the investments to maturity.

The Group’s investments in debt securities that have a stated maturity and normally pay a prospective fixed rate of return. The Group classifies the investments in debt securities as held-to-maturity when it has both the positive intent and ability to hold them until maturity. Held-to-maturity investments are recorded at amortized cost and are classified as long-term or short-term according to their contractual maturity. Long-term investments are reclassified as short-term when their contractual maturity date is less than one year. Investments that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value with changes in fair value recognized in earnings. Investments that do not meet the criteria of held-to-maturity or trading securities are classified as available-for-sale, and are reported at fair value with changes in fair value included in other comprehensive income.

The Group reviews its investments, except for those classified as trading securities, for other-than-temporary impairment based on the specific identification method and considers available quantitative and qualitative evidence in evaluating potential impairment. If the cost of an investment exceeds the investment’s fair value, the Group considers, among other factors, general market conditions, government economic plans, the duration and the extent to which the fair value of the investment is less than cost and the Group’s intent and ability to hold the investment to determine whether another-than-temporary impairment has occurred.

The Group recognizes other-than-temporary impairment in earnings if it has the intent to sell the debt security or if it is more-likely-than-not that it will be required to sell the debt security before recovery of its amortized cost basis. Additionally, the Group evaluates expected cash flows to be received and determines if credit-related losses on debt securities exist, which are considered to be other-than-temporary, should be recognized in earnings.

If the investment’s fair value is less than the cost of an investment and the Group determines the impairment to be other-than-temporary, the Group recognizes an impairment loss based on the fair value of the investment.

(i) Customer deposits

The Group provides sales agency services for primary real estate development projects, some of which require the Group to pay an upfront and refundable deposit as demonstration of the Group’s financial strength and commitment to provide high quality service. These deposits are refunded to the Group subject to certain pre-determined criteria at a date specified in the agency contracts. The pre-determined criteria are based on sales progress on a project, which may take into account factors such as gross floor area of properties sold and transaction value. Certain of the Group’s contracts provide that if the group breaches the contract, any corresponding penalties may be deducted from the deposit. Customer deposits are recorded as either current or non-current assets based on the Group’s estimate of the date of refund.

The Group did not experience any material non-payment in history. In the event that any customer deposit becomes due but is not duly paid by the real estate developers, the Group requires collateral or other security from such developers, including existing properties or a right to properties under construction. In the event of non-payment, the Group would then resell the properties or the right to properties under construction for cash. The collection of these secured customer deposits is dependent on the resale price of the underlying properties, which is subject to the then market conditions.

(j) Accounts receivable

Accounts receivable, net of allowance for doubtful accounts of $60,232,453 and $44,002,810 at December 31, 2013 and 2014, respectively, consists of following:

	As of December 31,
	2013	2014
	$	$
Unbilled accounts receivable	268,589,167	306,282,419
Billed accounts receivable	88,852,935	108,867,589
Total	357,442,102	415,150,008

Unbilled accounts receivable represents amounts recognized in revenue prior to issuing official tax receipts to customers. The Group regularly reviews the collectability of unbilled accounts receivable in the same method as billed accounts receivable disclosed in Note 2 (y).

(k) Properties held for sale

Properties held for sale are stated at the lower of cost or net realizable value. Cost comprises the cost of purchase and, where applicable, direct costs associated with the purchase. Properties held for sale obtained through taking possession of collateral to settle the accounts receivable, are recorded at value of the receivables that are settled. The Group also recognizes acquired properties as properties held for sale when the Group has intent and ability to sell them within one year. The Group evaluates its properties held for sale for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. No impairment was provided for properties held for sale for the years ended December 31, 2012, 2013 and 2014.

(l) Investment in affiliates

Affiliated companies are entities over which the Group has significant influence, but which it does not control. The Group generally considers an ownership interest of 20% or higher to represent significant influence. And the Group considers an equity interest of 3% or higher to represent more than minor influence for investments in investment funds.

Investment funds are subject to Investment Company accounting, and need to apply the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 946, Financial Services - Investment Companies. Accordingly, all investments held by these investment funds are measured at fair value. The difference between fair value and initial cost of investments is reflected as unrealized appreciation/depreciation on investments in the income statement. Investment funds determine the fair value of the investments based on relevant comparable market data such as comparisons of multiples of peer companies, evaluation of financial and operating data, company specific developments, market valuations of comparable companies, and latest transaction price factors (Level 3 inputs).

Investments in affiliates are accounted for by the equity method of accounting. Under this method, the Group’s share of the post-acquisition profits or losses of affiliated companies is recognized in the income statement and its shares of post-acquisition movements in other comprehensive income are recognized in other comprehensive income. Unrealized gains on transactions between the Group and its affiliated companies are eliminated to the extent of the Group’s interest in the affiliated companies; unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. When the Group’s share of losses in an affiliated company equals or exceeds its interest in the affiliated company, the Group does not recognize further losses, unless the Group has incurred obligations or made payments on behalf of the affiliated company. The Group records its income (loss) from the investment funds one quarter in arrears to enable it to have more time to collect and analyze the investments’ result.

The Group is required to perform an impairment assessment of its investments whenever events or changes in business circumstances indicate that the carrying value of the investment may not be fully recoverable. An impairment loss is recorded when there has been a loss in value of the investment that is other than temporary. The Group has not recorded any impairment losses in any of the periods reported. As of December 31, 2013 and 2014, the Group determined that no such events were present.

(m) Property and equipment, net

Property and equipment is recorded at cost less accumulated depreciation. Depreciation is computed on a straight-line basis over the following estimated useful lives:

Leasehold improvements	Over the shorter of the lease term or their estimated useful lives
Buildings	30 years
Furniture, fixtures and equipment	3 - 5 years
Motor vehicles	5 years

Gains and losses from the disposal of property and equipment are included in income from operations.

(n) Intangible assets, net

Acquired intangible assets mainly consist of license agreements with SINA, a real estate advertising agency agreement with SINA, database license agreement, exclusive rights with Baidu, Inc. (“Baidu”), favorable lease terms, customer relationships, non-compete agreements and trademarks from business combinations and are recorded at fair value on the acquisition date. All intangible assets, with the exception of customer relationships, are amortized ratably over the contract period. Intangible assets resulting out of acquired customer relationships are amortized based on the timing of the revenue expected to be derived from the respective customer.

(o) Impairment of long-lived assets

The Group evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When these events occur, the Group measures impairment by comparing the carrying amount of the assets to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Group would recognize an impairment loss equal to the excess of the carrying amount over the fair value of the assets.

(p) Impairment of goodwill and indefinite lived intangible assets

The Group performs an annual goodwill impairment test comprised of two steps. The first step compares the fair value of each reporting unit to its carrying amount, including goodwill and indefinite lived intangible assets. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill and indefinite lived intangible assets to the carrying value of a reporting unit’s goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. This allocation process is only performed for purposes of evaluating goodwill impairment and does not result in an entry to adjust the value of any assets or liabilities. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill.

Management performs a goodwill impairment test for each of its reporting units as of December 31 of each year or when there is a triggering event causing management to believe it is more likely than not that the carrying amount of goodwill may be impaired.

Intangible assets with an indefinite life are tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test consists of a comparison of the fair value of the intangible asset to its carrying amount. If the carrying amount exceeds the fair value, an impairment loss is recognized equal in amount to that excess.

(q) Income taxes

Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities, and their reported amounts in the financial statements, net operating loss carry forwards and credits by applying enacted statutory tax rates applicable to future years when the reported amounts of the asset or liability are expected to be recovered or settled, respectively. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on the classification of the related assets and liabilities for financial reporting purposes.

The Group only recognizes tax benefits related to uncertain tax positions when such positions are more likely than not of being sustained upon examination. For such positions, the amount of tax benefit that the Group recognizes is the largest amount of tax benefit that is more than fifty percent likely of being sustained upon the ultimate settlement of such uncertain position. The Group records interest and penalties as a component of income tax expense.

(r) Debt issuance costs and debt discounts

Debt issuance costs and debt discounts are amortized as interest expense, using the effective interest method, through the earlier of the maturity date of the Convertible Senior Notes or the date of conversion, if any. Debt issuance costs are recorded as deferred assets, and debt discounts are recorded as a direct deduction from the face amount of Convertible Senior Notes.

(s) Share-based compensation

Share-based compensation cost is measured on the grant date, based on the fair value of the award, and recognized as an expense over the requisite service period. Management has made an estimate of expected forfeitures and recognizes compensation cost only for those equity awards expected to vest.

(t) Revenue recognition

The Group recognizes revenue when there is persuasive evidence of an arrangement, service has been rendered, the sales price is fixed or determinable and collectability is reasonably assured. Revenues are recorded, net of sales related taxes.

Real estate online services

The Group generates real estate online revenues principally from e-commerce, online advertising, and listing services.

The Group e-commerce services primarily include discount coupon advertising and online property auctions. The Group also provides property viewing and pre-sale customer support free of charge in connection with the sale of discount coupons and online property auctions. E-commerce revenues are principally generated from selling discount coupons to potential property buyers. Those discount coupons allow buyers to purchase specified properties from real estate developers at discounts greater than the face value of the fees charged by the Group. The discount coupons are refundable to the buyers at any time before they are used to purchase the specified properties. The Group recognizes such e-commerce revenues upon obtaining confirmation letters that prove the use of coupons by property buyers, and when collections are reasonably assured. Revenues are recognized based on the net proceeds received as the Group acts as a marketing agent of the property developer in the transaction.

Revenue from online advertising services is generated principally from online advertising arrangements, sponsorship arrangements, and to a lesser extent, outsourcing arrangements, and keyword advertising arrangements. Online advertising arrangements allow advertisers to place advertisements on particular areas of the Group’s websites, in particular formats and over particular periods of time. Advertising revenues from online advertising arrangements are recognized ratably over the contract period of display when collectability is reasonably assured. Sponsorship arrangements allow advertisers to sponsor a particular area on the Group’s websites in exchange for a fixed payment over the contract period. Advertising revenues from sponsorship arrangements are recognized ratably over the contract period. The Group also generates online advertising revenues from outsourcing certain regional sites for a fixed period of time to local outsourcing partners, who are responsible for both website operation and related advertising sales. Advertising revenues from hosted websites are recognized ratably over the term of the contract. Keyword advertising revenues are recognized ratably over the contract period when collectability is reasonably assured.

The Group also provides listing services to real estate brokers. Listing services entitle real estate brokers to post and make changes to information for properties in a particular area on the website for a specified period of time, in exchange for a fixed fee. Listing revenues are recognized ratably over the contract period of display when collectability is reasonably assured.

Real estate brokerage services

The Group provides marketing and sales agency services to primary real estate developers. The Group recognizes the commission revenue when a successful sale of property has occurred and upon completing the services required to execute a successful sale without further contingency. A successful sale is defined in each agency contract and is usually achieved after the property buyer has executed the purchase contract, made the required down payment, and the purchase contract has been registered with the relevant government authorities. The Group may also be entitled to earn additional revenue on the agency services if certain sales and other performance targets are achieved, such as average sale price over a pre-determined period. These additional agency service revenues are recognized when the Group has accomplished the required targets.

The Group provides brokerage service for secondary real estate sale and rental transactions. For secondary real estate brokerage service, the Group recognizes revenue upon execution of a transaction agreement between the buyer/lessee and the seller/lessor for which the Group acts as the broker.

Real estate information and consulting services

The Group sells subscriptions to its proprietary CRIC system for which revenues are recognized ratably over the subscription period, which is usually six to 12 months. The Group also provides data integration services periodically, such as periodic market updates and research analysis that suit the specific needs and requirements of individual clients in addition to access to the CRIC system. The contractual period for such arrangements is usually between three to 12 months with revenue being recognized ratably over such period.

The Group provides real estate consulting services to customers in relation to land acquisition and project consulting services. Land acquisition consulting services involve advising customers in relation to land acquisition and facilitating the transfer of land development rights. Payment is usually contingent upon the delivery of a final product, such as closing a land acquisition transaction. The Group recognizes revenue under such arrangements upon delivery of the final product, assuming customer acceptance has occurred and the fee is no longer contingent. Project consulting services involve providing consulting services, including project feasibility studies, analysis of the real estate transaction history of nearby development projects, marketing and advertising consulting, and development of comprehensive plans for their development projects. Such arrangements include periodic consulting services arrangements and delivery based consulting services arrangements. Periodic consulting services involve providing consulting services which are tailored to meet the needs of real estate developer clients at various stages of the project development and sales process for a specified period, such as monthly market studies. The contractual period for such arrangements is usually between one and 12 months with revenue being recognized ratably over such period. Delivery based consulting services involve providing consulting services which are tailored to meet the specific need of real estate developer. Payment is usually contingent upon the delivery of a final product, such as providing a market study report. The Group recognizes revenue under such arrangements upon delivery of the final product, assuming customer acceptance has occurred and the fee is no longer contingent.

Community value-added services

The Group launched community value-added services in 2014. No revenue was generated from these services yet in the year ended December 31, 2014.

Other services

The Group provides promotional events services, and recognizes revenue when such services are rendered, assuming all other revenue recognition criterion have been met. The Group also generates revenues from advertising sales services by acquiring advertising space and subsequently reselling such space. Revenues under such arrangements are recognized when the related advertisement is placed. The Group recognizes advertising sales revenues on a gross basis because it acts as principal and is the primary obligator in the arrangement.

The Group also generates revenues from real estate fund management fees, performance fees and allocations. Real estate fund management fees are based upon investment advisory and related agreements and are recognized as earned over the specified contract period. Performance fees and allocations represent the preferential allocations of profits (“carried interest”) that are a component of the Group’s general partnership interests in the real estate funds. The Group is entitled to an additional return from the investment fund in the event investors in the fund achieve cumulative investment returns in excess of a specified amount. The Group records the additional return from these carried interests as revenue at the end of the contract year.

The Group launched real estate financial services in 2014. No material revenue was generated from these services yet in the year ended December 31, 2014.

Multiple element arrangements

The Group has multiple element arrangements that may include provision of primary real estate services, online advertising, promotional events services, consulting services and/or information services. The Group has determined that each of the deliverables listed above is considered a separate unit of account as each has value to the customer on a standalone basis and has been sold separately on a standalone basis, there is no general right of return on delivered items and the delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Group.

The Group allocates arrangement consideration in multiple-deliverable revenue arrangements at the inception of an arrangement to all deliverables based on the relative selling price in accordance with the selling price hierarchy, which includes: (i) vendor-specific objective evidence (“VSOE”) if available; (ii) third-party evidence (“TPE”) if VSOE is not available; and (iii) best estimate of selling price (“BESP”) if neither VSOE nor TPE is available.

VSOE . The Group determines VSOE based on its historical pricing and discounting practices for the specific service when sold separately. In determining VSOE, the Group requires that a substantial majority of the selling prices for these services fall within a reasonably narrow pricing range. The Group has historically priced its commission rate for the primary real estate services, periodic consulting services, subscription for the CRIC system and online advertising within a narrow range. As a result, the Group has used VSOE to allocate the selling price for these services when elements of a multiple element arrangement. The Group has not historically priced delivery based consulting service and promotional event services within a narrow range, therefore, the Group considers TPE and BESP as discussed below.

TPE . When VSOE cannot be established for deliverables in multiple element arrangements, the Group applies judgment with respect to whether it can establish a selling price based on TPE. TPE is determined based on competitor prices for similar deliverables when sold separately. Generally, the Group’s marketing strategy differs from that of its peers and its offerings contain a significant level of differentiation such that the comparable pricing of services with similar functionality cannot be obtained. Furthermore, the Group is unable to reliably determine what similar competitor services’ selling prices are on a stand-alone basis. As a result, the Group has not been able to establish selling price based on TPE.

BESP . When it is unable to establish selling price using VSOE or TPE, the Group uses BESP in its allocation of arrangement consideration. The objective of BESP is to determine the price at which the Group would transact a sale if the service were sold on a stand-alone basis. The Group determines BESP for deliverables by considering multiple factors including, but not limited to, prices it charged for similar offerings, market conditions, specification of the services rendered and pricing practices. The Group has used BESP to allocate the selling price of project-based consulting service and promotional event services under these multiple element arrangement. The process for determining BESP involves management judgment. The Group’s process considers multiple factors that may vary depending upon the unique facts and circumstances related to each deliverable. If the facts and circumstances underlying the factors the Group considers change, or should subsequent facts and circumstances lead the Group to consider additional factors, the Group’s BESP could change in future periods. The Group regularly reviews the evidence of selling price for its services and maintains internal controls over the establishment and updates of these estimates. There were no material changes in estimated selling price for its services during the years ended December 31, 2012, 2013 and 2014, nor does the Group expect a material changes in BESP in the foreseeable future.

The total amounts of revenue earned by the Group related to agreements that have been accounted for as multiple element arrangements were $74,042,253, $71,908,552, and $74,189,077 in 2012, 2013 and 2014, respectively.

Deferred revenues are recognized when payments are received in advance of revenue recognition.

(u) Cost of revenue

Cost of revenue for the real estate online services segment consists of costs associated with the production of websites, which includes fees paid to third parties for Internet connection, content and services, editorial personnel related costs, amortization of intangible assets, depreciation associated with website production equipment and fees paid to SINA for advertising inventory on non-real estate channels. Cost of revenue for the real estate brokerage services segment includes costs directly related to providing services, which include costs incurred for marketing and sale of primary real estate projects for which the Group acts as the agent, and rental expenses incurred for properties leased by the Group as brokerage stores and sales commission. Cost of revenue of real estate information and consulting services segment primarily consists of sales commission, the service fee for purchase some consulting reports and costs incurred for developing, maintaining and updating the CRIC database system, which includes cost of data purchased or licensed from third-party sources, technical personnel related costs and associated equipment depreciation. Cost of revenue for real estate promotional events and advertising services consists of fees paid to third parties to acquire advertising space for resale, and salaries of sales and support staff and fees paid to third parties for the services directly related to promotional event services. Cost of revenue for the real estate fund management services consists of cost associated with investing department.

(v) Marketing and advertising expenses

Marketing and advertising expenses consists primarily of targeted online and offline marketing costs for promoting the Group’s e-commerce projects, increasing visibility and building brand, such as Leju property visit, sponsored marketing campaigns, online or print advertising, public relations and sponsored events. The Company expenses all marketing advertising costs as incurred and record these costs within “Selling, general and administrative expenses” on the consolidated statements of operations when incurred. The nature of the Company’s direct marketing activities is such that they are intended to attract subscribers for the online advertising and potential property buyers to purchase the discount coupons. The Group incurred advertising expenses amounting to $51,936,863, $100,457,370 and $208,667,609 for the years ended December 31, 2012, 2013 and 2014, respectively.

(w) Foreign currency translation

The functional currency of the Company is the United States dollar (“U.S. dollar”) and is used as the reporting currency of the Group. Monetary assets and liabilities denominated in currencies other than the U.S. dollar are translated into U.S. dollar at the rates of exchange ruling at the balance sheet date. Equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses are translated using the average rate for the year. Translation adjustments are reported as foreign currency translation adjustment and are shown as a separate component of other comprehensive income in the consolidated statements of changes in equity and comprehensive income.

The financial records of certain of the Company’s subsidiaries are maintained in local currencies other than the U.S. dollar, such as Renminbi (“RMB”) and Hong Kong dollar (“HKD”), which are their functional currencies. Transactions in other currencies are recorded at the rates of exchange prevailing when the transactions occur.

The Group recorded an exchange loss of $379,530, $862,383 and exchange gain $613,227 for the years ended December 31, 2012, 2013 and 2014, respectively, as a component of other income (loss), net.

(x) Government subsidies

Government subsidies include cash subsidies received by the Company’s subsidiaries in the PRC from local governments. These subsidies are generally provided as incentives for conducting business in certain local districts. Cash subsidies of $6,475,023, $4,917,642 and $8,786,891 were included in other operating income for the years ended December 31, 2012, 2013 and 2014, respectively. Subsidies are recognized when cash is received and when all the conditions for their receipt have been satisfied.

(y) Concentration of credit risk

Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and customer deposits. The Group places its cash and cash equivalents with reputable financial institutions.

The Group regularly reviews the creditworthiness of its customers, and requires collateral or other security from its customers in certain circumstances when accounts receivables become long overdue. The Group establishes an allowance for doubtful accounts and customer deposits primarily based upon factors surrounding the credit risk of specific customers, including creditworthiness of the clients, aging of the receivables and other specific circumstances related to the accounts.

Movement of the allowance for doubtful accounts for accounts receivable and customer deposits is as follows:

	2012		2013		2014
	$		$		$
Balance as of January 1	14,811,322		36,537,817		60,818,408
Provisions for doubtful accounts	27,297,288		29,099,216		26,363,611
Write offs	(5,633,500	)	(6,298,025	)	(42,404,691	)
Changes due to foreign exchange	62,707		1,479,400		(190,682	)
Balance as of December 31	36,537,817		60,818,408		44,586,646

The allowance for other receivables was immaterial for all periods presented.

(z) Earnings per share

Basic earnings per share are computed by dividing income attributable to holders of ordinary shares by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per ordinary share reflects the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares.

The following table sets forth the computation of basic and diluted income per share for the periods indicated:

	Years Ended December 31,
	2012			2013		2014
Net income (loss) attributable to E-House ordinary shareholders — basic	$	(56,971,404	)	$	51,957,425	$	40,001,485
Decrease of income from Leju*	—			—		(2,208,892		)
Interest of Convertible Senior Notes (including stated interest and amortization of discount and issuance costs)	—			192,566		—
Net income (loss) attributable to E-House ordinary shareholders — diluted	$	(56,971,404	)	$	52,149,991	$	37,792,593
Weighted average ordinary shares outstanding— basic	106,159,388			130,163,165		139,211,442
Convertible senior notes	—			334,821		—
Share options and restricted shares	—			5,282,011		7,476,393
Weighted average number of ordinary shares outstanding — diluted	106,159,388			135,779,997		146,687,835
Basic earnings (loss) per share	$	(0.54	)	$	0.40	$	0.29
Diluted earnings (loss) per share	$	(0.54	)	$	0.38	$	0.26

* In calculating diluted earnings (loss) per share, the amount of Leju’s net income included in net income (loss) attributable to E-House’s ordinary shareholders is calculated by multiplying Leju’s diluted EPS by the weighted average number of Leju shares held by E-House’s during the period, which may result in net income (loss) attributable to E-House ordinary shareholders, for purposes of computing diluted earnings (loss) per share, being different from that actually recorded in the consolidated statements of operations. This difference is presented as increase (decrease) of income (loss) from Leju.

Diluted earnings (loss) per share do not include the following instruments as their inclusion would have been anti-dilutive:

	Years Ended December 31,
	2012	2013	2014
Share options and restricted shares	14,660,788	—	—
Convertible senior notes	—	—	8,959,127

(aa) Non-controlling interest

As of December 31, 2014, the majority of the Group’s non-controlling interest is attributable to Leju. As of December 31, 2014, E-House retained a 69.9% equity interest in Leju. Non-controlling interest in Leju included in the Company’s consolidated balance sheets was $124,892,590 as of December 31, 2014. For the year ended December 31, 2014, $50,702,835 of the Group’s consolidated net income was attributable to Leju.

Before the merger of the Company with CRIC, the majority of the Group’s non-controlling interest is attributable to CRIC, which mainly operates the Company’s real estate information and consulting and real estate online services segments. In April 2012, CRIC became a wholly-owned subsidiary of the Company after the Merger. For the year ended December 31, 2012, $13,547,386 of the Group’s consolidated net loss was attributable to CRIC.

The following schedule shows the effects of changes in E-House’s ownership interest in CRIC and Leju and other significantly less than wholly owned subsidiaries on equity attributable to E-House:

	Years Ended December 31,
	2012		2013	2014
Net income (loss) attributable to E-House	(56,971,404	)	51,957,425	40,001,485
Transfers to the non-controlling interest:
Decrease in E-House’s additional paid-in capital for purchase of 64,642,647 CRIC common shares for the years ended December 31 2012	(149,461,182	)	—	—
Decrease in E-House’s additional paid-in capital for the exercise of CRIC’s options and the vesting of CRIC’s restricted shares	(332,951	)	—	—
Increase in E-House’s equity by partial disposal of subsidiaries	—		—	138,477,580
Increase in E-House’s additional paid-in capital for issuing Leju’s shares to public	—		—	70,068,096
Decrease in E-House’s additional paid-in capital for Leju share distribution to E-House’s shareholders	—		—	(21,569,028	)
Decrease in E-House’s additional paid-in capital for acquisition of non-controlling interest	—		—	(30,720,088	)
Increase in E-House’s additional paid-in capital for the exercise of Leju’s options and the vesting of Leju’s restricted shares				58,340
Net transfers from (to) non-controlling interest	(149,794,133	)	—	156,314,900
Change from net income attributable to E-House and transfers (to) from non-controlling interest	(206,765,537	)	51,957,425	196,316,385

(ab) Comprehensive income

Comprehensive income includes all changes in equity except those resulting from investments by owners and distributions to owners. For the years presented, total comprehensive income included net income, foreign currency translation adjustments and the unrealized gain/loss due to the changes in fair value of the available-for-sale investment.

(ac) Recently issued accounting pronouncements

In May 2014, the Federal Accounting Standard Board (“FASB”) issued, Accounting Standards Update (“ASU”) 2014-09, ‘‘Revenue from Contracts with Customers (Topic 606)’’. The guidance substantially converges final standards on revenue recognition between the FASB and the International Accounting Standards Board providing a framework on addressing revenue recognition issues and, upon its effective date, replaces almost all exiting revenue recognition guidance, including industry specific guidance, in current U.S. generally accepted accounting principles. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps:

Step 1: Identify the contract(s) with a customer.

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction price.

Step 4: Allocate the transaction price to the performance obligations in the contract.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Group is in the process of evaluating the impact of adoption of this guidance on the Group’s consolidated financial statements.

In June 2014, the FASB issued a new pronouncement which requires that a performance target that affects vesting and that could be achieved after the requisite service period is treated as a performance condition. A reporting entity should apply existing guidance in Topic 718, Compensation-Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The Group does not expect the adoption of this guidance will have a significant effect on the Group’s consolidated financial statements.

In August 2014, the FASB issued a new pronouncement which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date of issuance of the entity’s financial statements. Further, an entity must provide certain disclosures if there is ‘‘substantial doubt about the entity’s ability to continue as a going concern.’’ The new standard is effective for fiscal years ending after December 15, 2016. The Group does not expect the adoption of this guidance will have a significant effect on the Group’s consolidated financial statements.

In November 2014, the FASB issued a new pronouncement which provides guidance an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. An acquired entity may elect the option to apply pushdown accounting in the reporting period in which the change- in-control event occurs. An acquired entity should determine whether to elect to apply pushdown accounting for each individual change-in-control event in which an acquirer obtains control of the acquired entity. If pushdown accounting is not applied in the reporting period in which the change- in-control event occurs, an acquired entity will have the option to elect to apply pushdown accounting in a subsequent reporting period to the acquired entity’s most recent change-in-control event. An election to apply pushdown accounting in a reporting period after the reporting period in which the change-in-control event occurred should be considered a change in accounting principle in accordance with Topic 250, Accounting Changes and Error Corrections. If pushdown accounting is applied to an individual change- in-control event, that election is irrevocable. The amendments in this Update are effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change- in-control events or to its most recent change-in-control event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle. The Group does not expect the adoption of this guidance will have a significant effect on the Group’s consolidated financial statements.

In February 2015, the FASB issued, ASU 2015-02, ‘‘Amendments to the Consolidation Analysis’’, regarding consolidation of legal entities such as limited partnerships, limited liability corporations, and securitization structures. The guidance eliminates the deferral issued by the FASB in February 2010 of the accounting guidance for VIEs for certain investment funds, including mutual funds, private equity funds and hedge funds. In addition, the guidance amends the evaluation of fees paid to a decision maker or a service provider, and exempts certain money market funds from consolidation. The guidance will be effective for accounting periods beginning after December 15, 2015 with early adoption permitted. The Group is currently evaluating the potential impact on the Group’s consolidated financial statements.

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Income Tax

12 Months Ended

Dec. 31, 2014

Income Tax

Income Tax

16. Income Tax

The following table summarizes income (loss) before income taxes incurred in the PRC and outside of the PRC:

	Years Ended December 31,
	2012		2013		2014
	$		$		$
Income (loss) before income taxes:
The PRC	(32,340,085	)	125,404,634		107,163,481
Outside of the PRC	(37,916,141	)	(63,455,200	)	(43,760,332	)
Total	(70,256,226	)	61,949,434		63,403,149

The expense (benefit) for income taxes is comprised of:

	Years Ended December 31,
	2012		2013		2014
	$		$		$
Current Tax
The PRC	16,813,520		44,386,281		26,698,260
Outside of the PRC	—		35,774		69,645
	16,813,520		44,422,055		26,767,905
Deferred Tax
The PRC	(15,644,866	)	(30,745,061	)	(11,867,112	)
Outside of the PRC	—		—		—
	(15,644,866	)	(30,745,061	)	(11,867,112	)
Income tax expense	1,168,654		13,676,994		14,900,793

The Company is incorporated in the Cayman Islands, which is exempted from tax.

On January 1, 2008, a new Enterprise Income Tax Law in China took effect. The new law applies a statutory 25% enterprise income tax rate to both foreign invested enterprises and domestic enterprises.

Shanghai CRIC was approved as a high and new technology enterprise and is therefore subject to a 15% preferential income tax rate for the years from 2011 through 2014. In May 2010, Shanghai CRIC was granted software enterprise status, which exempted it from income taxes for 2009 and provided a 50% reduction in its income tax rate, or a rate of 12.5%, from 2010 through 2012. In 2013, Shanghai CRIC was approved as key software enterprise and is subject to a 10% preferential income tax rate for the years from 2013 through 2014. In March 2015, Shanghai CRIC was approved as a high and new technology enterprise and was therefore entitled to a 15% preferential income tax rate for the years from 2015 through 2016.

In February 2009, Shanghai SINA Leju, the Group’s subsidiary in China, was granted software enterprise status, which qualified the subsidiary to be exempted from income taxes for 2009, followed by a 50% reduction in its income tax rate, or a rate of 12.5%, from 2010 through 2012. Shanghai SINA Leju was also granted status as a high and new technology enterprise and was entitled to enjoy a favorable statutory tax rate of 15% from 2013 through 2014. Shanghai SINA Leju is in the process of applying to receive the preferential treatment of 15% income tax for 2015.

In February 2012, Shanghai Fangxin information technology Co., Ltd., the Group’s subsidiary in China, was granted software enterprise status, which exempted it from income taxes for 2012 and 2013 and provided a 50% reduction in its income tax rate, or a rate of 12.5%, from 2014 through 2016.

Chongqing E-House Western Real Estate Investment Consultant Co., Ltd. was established in the western region of China and was deemed to be engaged in an industry category encouraged by the government. In August, 2012 Chongqing E-House Western Real Estate Investment Consultant Co., Ltd was approved to enjoy a preferential income tax rate of 15% for 2012 to 2014.

The Group’s subsidiaries in Hong Kong are subject to a profit tax at the rate of 16.5% on assessable profit determined under relevant Hong Kong tax regulations.

The Group’s subsidiary in Macau is subject to the complementary tax at a progressive tax rate of 0% to 12% on Macau sourced profits.

The Company’s subsidiaries incorporated in the BVI are not subject to taxation.

The Group does not have uncertain tax positions in accordance with ASC740-10, nor does it anticipate any significant increase to its liability for unrecognized tax benefit within next 12 months. The Group will classify interest and penalties related to income tax matters, if any, in income tax expense.

According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to tax authority’s mistake or due to computational errors made by the taxpayer. The statute of limitations will be extended to five years under special circumstances, which are not clearly defined, but an underpayment of tax liability exceeding RMB100,000 ($16,343) is specifically listed as a special circumstance. In the case of a transfer pricing related adjustment, the statute of limitations is 10 years. There is no statute of limitations in the case of tax evasion.

The principal components of the deferred income tax assets/ liabilities are as follows:

	As of December 31,
	2013		2014
	$		$
Deferred tax assets:
Accrued salary expenses	24,396,931		28,416,464
Bad debt provision	19,233,885		11,378,650
Net operating loss carry forwards	23,846,831		37,530,099
Advertising expenses temporarily non-deductible	19,970,491		21,707,365
Other	71,177		463,286
Gross deferred tax assets	87,519,315		99,495,864
Valuation allowance	(11,237,880	)	(13,336,847	)
Total deferred tax assets	76,281,435		86,159,017
Analysis as:
Current	66,331,906		64,804,392
Non-current	9,949,529		21,354,625
Deferred tax liabilities:
Amortization of intangible and other assets	29,900,565		28,203,218
Total deferred tax liabilities	29,900,565		28,203,218
Analysis as:
Current	—		—
Non-current	29,900,565		28,203,218

Movement of the valuation allowance is as follows:

	Years Ended December 31,
	2012	2013	2014
	$	$	$
Balance as of January 1,	689,076	7,324,717	11,237,880
Additions	6,625,864	3,631,241	2,646,753
Write off	—	—	(302,750	)
Changes due to foreign exchange	9,777	281,922	(245,036	)
Balance as of December 31,	7,324,717	11,237,880	13,336,847

The Group has recognized a valuation allowance against deferred tax assets on tax loss carry forwards of $6,625,864, $3,631,241 and $2,646,753 for the years ended December 31, 2012, 2013 and 2014, respectively.

The Group assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three years period ended December 31, 2014. Such objective evidence limits the Group’s ability to consider other subjective evidence such as our projections for future growth and our tax planning strategies.

On the basis of this evaluation, as of December 31, 2014, a valuation allowance of $13,336,847 was recorded to reflect only the portion of the deferred tax assets that is not more likely than not to be realized. The amount of the deferred tax assets considered realizable, however, could be adjusted if estimates of future taxable income during the carry forwards period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth.

Reconciliation between the provision for income tax computed by applying the statutory tax rate to income before income taxes and the actual provision for income taxes is as follows:

	Years Ended December 31,
	2012		2013		2014
	$		$		$
PRC income tax rate	25.00	%	25.00	%	25.00	%
Expenses not deductible for tax purposes	(14.86	)%	13.60	%	10.92	%
Effect of tax preference	(1.91	)%	(17.16	)%	(20.31	)%
Effect of different tax rate of subsidiary operation in other jurisdiction	(2.14	)%	(1.47	)%	2.45	%
Valuation allowance movement	(9.48	)%	5.86	%	4.17	%
Effect of different tax rate of DTA and DTL applied	0.55	%	(3.22	)%	2.99	%
Others	1.18	%	(0.53	)%	(1.72	)%
	(1.66	)%	22.08	%	23.50	%

The aggregate amount and per share effect of the tax holiday are as follows:

	Years Ended December 31,
	2012		2013	2014
	$		$	$
The aggregate dollar effect	(1,336,133	)	10,628,117	12,875,656
Per share effect — basic	(0.01	)	0.08	0.09
Per share effect — diluted	(0.01	)	0.08	0.09

As of December 31, 2013 and 2014, the Group had tax losses carry forward of $93,844,512 and $150,106,326, respectively. These tax losses are available for offset against future profits that may be carried forward until calendar year 2018 and 2019, respectively.

Undistributed earnings of the Company’s PRC subsidiaries of approximately $435.2 million at December 31, 2014 are considered to be indefinitely reinvested and, accordingly, no provision for PRC dividend withholding tax has been provided thereon. Upon distribution of those earnings generated after January 1, 2008, in the form of dividends or otherwise, the Group would be subject to the then applicable PRC tax laws and regulations. Distributions of earnings generated before January 1, 2008 are exempt from PRC dividend withholding tax. The amounts of unrecognized deferred tax liabilities for these earnings are in the range of $19.0 million to $38.0 million, as the withholding tax rate of the profit distribution will be 5% or 10% depending on whether the immediate offshore companies can enjoy the preferential withholding tax rate of 5%.

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Repurchase of Shares (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Repurchase of shares	$ 17,772,586	$ 1,569,815
ADS
Repurchase of shares	3,582,133	371,141
Repurchase of shares	17,772,586	1,569,815
Excess of purchase price over par value	17,769,004	1,569,444
Additional Paid-in Capital
Repurchase of shares	15,942,072	1,569,444
Retained Earnings (Accumulated Deficit).
Repurchase of shares	$ 1,826,932	$ 0

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Properties Held for Sale (Details) (USD $)	12 Months Ended
	Dec. 31, 2014 property	Dec. 31, 2013 property	Dec. 31, 2012 property
Properties Held for Sale
Number of properties obtained in settlement of accounts receivable	30	14	6
Properties held for sale obtained in settlement of accounts receivable	$ 7,122,155	$ 6,678,302	$ 970,625
Number of properties transferred for settlement of customer deposit	0	36	0
Properties held for sale transferred in settlement of customer deposit	0	9,928,558	0
Gain (loss) from sale of properties held for sale	0	118,559	45,936
Carrying amount of properties held for sale	34,841,895	15,304,927
Properties held for sale transferred to property and equipment	0	0	1,281,008
Number of properties acquired		237
Advance payment for properties to be held for sale	$ 51,983,436	$ 60,076,026
Commercial properties
Properties Held for Sale
Number of properties obtained in settlement of accounts receivable	5
Number of properties held for sale	5
Number of properties title transfer in process	55	52
Car parking space properties
Properties Held for Sale
Number of properties obtained in settlement of accounts receivable	5	5
Number of properties held for sale	9	5
Number of properties title transfer in process		5
Residential properties
Properties Held for Sale
Number of properties obtained in settlement of accounts receivable	20
Number of properties held for sale	147	44
Number of properties transferred to held for sale	101
Number of properties title transfer in process	113	140

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Investment in preferred shares of a private entity

12 Months Ended

Dec. 31, 2014

Investment in preferred shares of a private entity

Investment in preferred shares of a private entity

10. Investment in preferred shares of a private entity

In May 2014, the Group and Jupai Holdings Limited (“Jupai”), a third-party wealth management service provider in China, entered into a Series B Convertible Redeemable Preferred Shares (“Series B Preferred Shares”) Purchase Agreement that included (a) the issuance and sale by Jupai of 12,918,340 shares of Series B Preferred Shares of Jupai to the Group at an aggregate consideration of RMB48,000,000 ($7,801,728); (b) the sale and transfer by a shareholder of Jupai of 12,918,340 shares of ordinary shares of Jupai to the Group at an aggregate consideration of RMB48,000,000 ($7,801,728) and these ordinary shares were re-designated into 12,918,340 Series B preferred shares at the closing of the transaction. In August 2014, the group further acquired 12,918,340 ordinary shares Jupai from a shareholder of Jupai for $10,116,352. These ordinary shares were re-designated into 12,918,340 Series B Preferred Shares in December, 2014. Given the redemption right exercisable by the Group, the investment was accounted for as available-for-sale investment measured at fair value, with changes in fair value recognized in accumulated other comprehensive income. As of December 31, 2014, the fair value of the Series B Preferred Shares was $39,484,906, and the Group recognized $13,765,098 of unrealized gains in accumulated other comprehensive income for the year ended December 31, 2014.

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Commitments and Contingencies (Details 2) (USD $)	12 Months Ended
	Dec. 31, 2014
Properties commitment
Properties payment commitments
Payment commitment for properties to be held for sales	$ 57,287,504
Period within which the remaining commitment is payable	1 year
Two floors of office building
Properties payment commitments
Period within which the remaining commitment is payable	1 year
Payment commitment	$ 2,044,054
Number of an office building used as offices	2

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Summary of Principal Accounting Policies (Details)	12 Months Ended
	Dec. 31, 2014
Foreign Owned Subsidiaries
Term of loan agreement among shareholders of VIEs	20 years
Shareholder voting right proxy agreement term	20 years
Shareholder voting right proxy agreement extension period	1 year
Shanghai Yifang
Foreign Owned Subsidiaries
Ownership percentage	100.00%
Shanghai SINA Leju
Foreign Owned Subsidiaries
Ownership percentage	100.00%
Shanghai Yi Yue
Foreign Owned Subsidiaries
Ownership percentage	100.00%
Beijing Maiteng
Foreign Owned Subsidiaries
Ownership percentage	100.00%
Shanghai Baoyi
Foreign Owned Subsidiaries
Ownership percentage	100.00%
Shanghai CRIC
Foreign Owned Subsidiaries
Ownership percentage	100.00%
Shanghai Weidian Information Technology Co Ltd
Foreign Owned Subsidiaries
Ownership percentage	100.00%

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Fair Value Measurement (Details) (Recurring, USD $)	Dec. 31, 2014
Fair value measurement
Fair value	$ 39,484,906
Significant Unobservable Inputs (Level 3)
Fair value measurement
Fair value	$ 39,484,906

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Investment in Affiliates (Details)	12 Months Ended																			1 Months Ended	12 Months Ended				1 Months Ended
	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2014 Star Capital USD ($)	Dec. 31, 2014 Star Capital CNY	Dec. 31, 2013 Star Capital USD ($)	Dec. 31, 2013 Star Capital CNY	Dec. 31, 2011 Star Capital USD ($)	Dec. 31, 2011 Star Capital CNY	Dec. 31, 2014 Wuling Center USD ($)	Dec. 31, 2014 Wuling Center CNY	Dec. 31, 2013 Wuling Center USD ($)	Dec. 31, 2013 Wuling Center CNY	Dec. 31, 2012 Wuling Center USD ($)	Dec. 31, 2012 Wuling Center CNY	Jul. 31, 2012 Wuling Center	Dec. 31, 2014 Wuling Center Xin Zhou	Dec. 31, 2014 Shengyuan Center	Dec. 31, 2014 Shouxin Center Shenquan Xenter	Aug. 31, 2014 Shouxin Center USD ($) item	Dec. 31, 2013 Shouxin Center USD ($)	Dec. 31, 2013 Shouxin Center CNY	Dec. 31, 2013 Muxin Center USD ($)	Dec. 31, 2013 Muxin Center CNY	Dec. 31, 2014 Hangzhou Kuyue USD ($)	Dec. 31, 2014 Hangzhou Kuyue CNY	Nov. 30, 2014 Hangzhou Kuyue USD ($)	Nov. 30, 2014 Hangzhou Kuyue CNY	Jan. 31, 2014 Hangzhou Kuyue USD ($)	Jan. 31, 2014 Hangzhou Kuyue CNY
Investment in affiliates
Investment made	$ 8,890,449	$ 5,766,873	$ 2,161,001					$ 15,735,900	100,000,000	$ 2,946,996	18,000,000	$ 4,428,486	27,000,000	$ 2,386,440	15,000,000						$ 2,437,920	15,000,000	$ 4,085,625	25,000,000			$ 15,607,088	95,500,000	$ 4,085,625	25,000,000
Prepayment for investment	7,766,948	15,745,728																							5,066,175	31,000,000
Amount received as a return of capital				2,455,830	15,000,000	5,740,630	35,000,000
Ownership interest held (as a percent)								3.80%	3.80%	6.50%	6.50%	6.50%	6.50%	6.50%	6.50%		4.90%	41.60%	28.00%	0.90%	13.00%	13.00%	23.40%	23.40%			79.00%	79.00%	21.00%	21.00%
Purchase price allocation
Percentage of vote of limited partners vote required to remove general partner without cause																50.00%
Equity Method Investment, Realized Gain (Loss) on Disposal [Abstract]
Net proceeds from equity method investment after deducting commissions and related expenses																				2,287,950
Ownership percentage disposed																				12.20%
Equity interest held by third parties (as a percent)																				4.80%
Equity interest held by employees (as percentage)																				7.40%
Number of employees having equity method investment ownership interest																				2
Gain (loss) recognized from disposal																				$ 0

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Intangible Assets, Net (Tables)

12 Months Ended

Dec. 31, 2014

Intangible Assets, Net

Schedule of intangible assets, net

					Weighted
					Average
	As of December 31,				Amortization
	2013		2014		Periods
	$		$		In years
Intangible assets not subject to amortization are comprised of the following:
Trademark	782,607		781,085
Intangible assets subject to amortization are comprised of the following:
Advertising agency agreement with SINA	106,790,000		106,790,000		9.75
License agreements with SINA	80,660,000		80,660,000		9.75
Exclusive rights with Baidu	45,315,329		45,151,494		0.25
Customer relationship	12,100,847		12,084,676		5.13
Database license	8,300,000		8,300,000		3.25
Favorable lease term	9,541,891		9,541,891		16.95
Computer software licenses	5,708,188		9,534,433		4.88
Non-compete agreements	3,420,712		3,415,152		0.75
Customer contracts	1,057,842		1,054,964		4.94
Domain name	214,611		229,709		4.68
	273,109,420		276,762,319		9.55
Less: Accumulated amortization
Advertising agency agreement	(44,495,832	)	(51,286,533	)
License agreements with SINA	(34,280,500	)	(39,377,764	)
Exclusive rights with Baidu	(34,693,471	)	(43,034,803	)
Customer relationship	(6,464,705	)	(8,086,039	)
Database license	(4,150,001	)	(5,126,472	)
Favorable lease term	(637,435	)	(1,167,905	)
Computer software licenses	(3,963,457	)	(4,784,950	)
Non-compete agreements	(3,097,470	)	(3,349,230	)
Customer contracts	(832,950	)	(871,174	)
Domain name	(44,456	)	(77,863	)
Intangible assets subject to amortization, net	140,449,143		119,599,586
Total intangible assets, net	141,231,750		120,380,671

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Distribution of Profits

12 Months Ended

Dec. 31, 2014

Distribution of Profits

Distribution of Profits

19. Distribution of Profits

Relevant PRC statutory laws and regulations permit payment of dividends by the Group’s PRC subsidiaries and VIEs only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under PRC law, each of the Group’s PRC subsidiaries and VIEs is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Each of the Group’s subsidiaries with foreign investment is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund at the discretion of the board. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends, loans or advances except in the event of liquidation of these subsidiaries.

The amount of the reserve fund for the Group as of December 31, 2013 and 2014 was $35,633,687 and $40,478,568, respectively.

As a result of these PRC laws and regulations, the Group’s PRC subsidiaries and VIEs are restricted in their ability to transfer a portion of their net assets, including general reserve and registered capital, either in the form of dividends, loans or advances. Such restricted portion amounted to $174,046,356 and $183,740,692, of which $9,977,982 and $12,076,642 was attributed to general reserve and registered capital of the VIEs, as of December 31, 2013 and 2014, respectively.

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Employee Benefit Plans

12 Months Ended

Dec. 31, 2014

Employee Benefit Plans

Employee Benefit Plans

18. Employee Benefit Plans

The Group’s PRC subsidiaries and VIEs are required by law to contribute a certain percentages of applicable salaries for retirement benefits, medical insurance benefits, housing funds, unemployment and other statutory benefits. The PRC government is directly responsible for the payments of such benefits. The Group contributed $40,724,902, $45,924,681 and $58,365,171, for the years ended December 31, 2012, 2013 and 2014, respectively, for such benefits.

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies

Schedule of future minimum lease payments under non-cancelable operating lease agreements

Future minimum lease payments under non-cancelable operating lease agreements at December 31, 2014 were as follows:

	Amount
Year Ended December 31	$
2015	23,164,631
2016	19,986,357
2017	13,792,164
2018	7,556,084
2019	4,646,363
Then thereafter	30,277,284
Total	99,422,883

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Organization and Principal Activities (Tables)

12 Months Ended

Dec. 31, 2014

Organization and Principal Activities

Schedule of major subsidiaries and the consolidated VIEs

The following table lists major subsidiaries and the consolidated VIEs of the Company as of December 31, 2014:

	Date of	Place of	Percentage of
	incorporation	incorporation	Ownership
Shanghai Real Estate Sales (Group) Co., Ltd.	15-Aug-00	PRC	100	%
Shanghai City Rehouse Real Estate Agency Ltd.	17-May-02	PRC	85	%
Scepter	8-Jan-08	BVI	51	%
Shanghai CRIC Information Technology Co., Ltd. (“Shanghai CRIC”)	03-Jul-06	PRC	100	%
Leju Holdings Ltd.	20-Nov-13	Cayman	70	%
Shanghai Xinju Finance Information Services Co., Ltd.(“Shanghai Xinju”)	22-May-14	PRC	56	%
Shanghai Weidian Information Technology Co., Ltd. (“Shanghai Weidian”)	20-Aug-14	PRC	55	%
Beijing Yisheng Leju Information Services Co., Ltd. (“Beijing Leju”)	13-Feb-08	PRC	VIE
Shanghai Yi Xin E-Commerce Co., Ltd. (“Shanghai Yi Xin”)	05-Dec-11	PRC	VIE
Beijing Jiajujiu E-Commerce Co., Ltd. (“Beijing Jiajujiu”)	22-Mar-12	PRC	VIE
Shanghai Kushuo Information Technology Co., Ltd. (“Shanghai Kushuo”)	31-Dec-13	PRC	VIE
Shanghai E-Cheng	14-May-14	PRC	VIE
Shanghai Fangjia Information Technology Co., Ltd. (“Shanghai Fangjia”)	29-Oct-14	PRC	VIE
Shanghai Weihui Business Information Consulting Co., Ltd. (“Shanghai Weihui”)	11-Sep-14	PRC	VIE

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Other Income (Loss), Net (Tables)

12 Months Ended

Dec. 31, 2014

Other Income (Loss), Net

Schedule of other income

	Years Ended December 31,
	2012		2013		2014
	$		$		$
Gains on marketable securities, realized portion	734,904		234,338		2,903,786
Gains on marketable securities, unrealized portion	804,621		—		—
Foreign exchange gain (loss)	(379,530	)	(862,383	)	613,227
Amortized discounts related to liability for exclusive rights with Baidu	(1,882,804	)	(935,177	)	(52,922	)
Others	(10,061	)	512,007		393,448
Total other income (loss)	(732,870	)	(1,051,215	)	3,857,539

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Summary of Principal Accounting Policies (Details 2) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Financial statement balances included in the consolidated financial statements
Cash and cash equivalents	$ 630,616,635	$ 413,319,174	$ 210,841,368	$ 392,005,353
Accounts receivable, net of allowance for doubtful accounts	415,150,008	357,442,102
Other current assets	39,339,526	44,234,499
Amounts due from related parties	6,094,260	1,263,416
Total current assets	1,376,028,730	1,029,163,781
TOTAL ASSETS	1,776,923,241	1,355,520,098
Accounts payable	8,260,681	11,264,939
Accrued payroll and welfare expenses	116,577,317	102,632,157
Income tax payable	117,593,159	98,685,965
Other tax payable	49,390,175	40,000,505
Amounts due to related parties	7,356,186	5,535,512
Advance from customers and deferred revenue	19,013,041	24,617,144
Liability for exclusive rights, current		8,967,972
Other current liabilities	85,836,572	62,466,610
Total current liabilities	455,144,506	356,624,276
Deferred tax liabilities, non-current	28,203,218	29,900,565
Total liabilities	616,757,621	519,649,069
Financial statement amounts included in the consolidated financial statements
Total revenues	904,498,793	731,078,833	462,439,368
Cost of revenues	(306,133,210)	(274,035,806)	(203,170,685)
Net income/(loss)	52,337,158	51,086,289	(71,049,371)
Net cash provided by operating activities	23,982,431	113,892,140	(22,183,296)
Net cash used in investing activities	(112,759,658)	(53,093,289)	(33,425,540)
Net cash provided by (used in) financing activities	307,159,706	135,756,603	(125,773,431)
Consolidated VIE's assets that are collateral for the VIEs' obligations	0
Group's VIEs
Financial statement balances included in the consolidated financial statements
Cash and cash equivalents	99,718,317	71,095,466
Accounts receivable, net of allowance for doubtful accounts	118,223,577	87,835,551
Other current assets	34,132,543	29,693,275
Amounts due from related parties	424,864
Total current assets	252,499,301	188,624,292
Total non-current assets	55,033,244	49,517,785
TOTAL ASSETS	307,532,545	238,142,077
Accounts payable	600,735	1,505,942
Accrued payroll and welfare expenses	44,321,824	29,309,329
Income tax payable	28,337,431	28,793,459
Other tax payable	16,032,365	11,188,055
Amounts due to related parties	4,175,247	2,383,293
Advance from customers and deferred revenue	5,073,492	7,150,344
Liability for exclusive rights, current		8,967,972
Other current liabilities	36,291,161	9,917,349
Total current liabilities	134,832,255	99,215,743
Deferred tax liabilities, non-current	469,579	655,563
Total liabilities	135,301,834	99,871,306
Financial statement amounts included in the consolidated financial statements
Total revenues	492,253,803	321,004,846	172,402,066
Cost of revenues	(43,760,890)	(59,920,429)	(54,276,512)
Net income/(loss)	(8,699,386)	1,503,897	(3,212,138)
Net cash provided by operating activities	55,495,458	72,877,862	16,020,624
Net cash used in investing activities	(17,245,460)	(18,042,241)	(17,544,270)
Net cash provided by (used in) financing activities	$ (17,043,942)	$ (40,248,296)	$ 26,686,813

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies

Commitments and Contingencies

23. Commitments and Contingencies

(a) Operating lease commitments

The Group has operating lease agreements principally for its office properties in the PRC. Such leases have remaining terms ranging from six to 240 months and are renewable upon negotiation. Rental expenses were $24,418,965, $23,033,850, and $28,223,879 for the years ended December 31, 2012, 2013 and 2014, respectively. Future minimum lease payments under non-cancelable operating lease agreements at December 31, 2014 were as follows:

	Amount
Year Ended December 31	$
2015	23,164,631
2016	19,986,357
2017	13,792,164
2018	7,556,084
2019	4,646,363
Then thereafter	30,277,284
Total	99,422,883

(b) Properties payment commitments

As of December 31, 2014, the Group had a commitment of $57,287,504 for properties to be held for sales within one year.

As of December 31, 2014, the Group had a commitment of $2,044,054 for two floors of an office building which will be used as offices by a subsidiary of the Group and is payable within one year.

(c) Contingencies

The Group is subject to claims and legal proceedings that arise in the ordinary course of its business. Each of these matters is subject to various uncertainties, and it is possible that some of these matters may be decided unfavorably to the Group. The Group does not believe that any of these matters will have a material adverse effect on its business, assets or operations. The Group also assessed all currently pending matters and concluded that the possibility of an asset had been impaired or a liability had been incurred at the date of the financial statements was remote.

The Group has a clawback obligation to the Fund for which the Group acts as the general partner. Carried interest is subject to clawback to the extent that the limited partners have not received a certain level of aggregate distributions or the carried interest exceeds a certain level based on cumulative results. The Group recognize carried interest income of nil, nil and $5,386,412 for the years ended December 31, 2012, 2013 and 2014, respectively. The Group did not have any clawback obligations as of December 31, 2013 and 2014.

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Investment in preferred shares of a private entity (Details) (Jupai)				1 Months Ended
	Dec. 31, 2014 Convertible Redeemable Preferred Shares USD ($)	May 31, 2014 Convertible Redeemable Preferred Shares USD ($)	May 31, 2014 Convertible Redeemable Preferred Shares CNY	Dec. 31, 2014 Convertible Redeemable Preferred Shares Shareholder of Jupai	May 31, 2014 Convertible Redeemable Preferred Shares Shareholder of Jupai	Aug. 31, 2014 Ordinary Shares Shareholder of Jupai USD ($)	May 31, 2014 Ordinary Shares Shareholder of Jupai USD ($)	May 31, 2014 Ordinary Shares Shareholder of Jupai CNY
Investment in preferred shares of a private entity
Number of shares acquired		12,918,340	12,918,340			12,918,340	12,918,340	12,918,340
Consideration for shares acquired		$ 7,801,728	48,000,000			$ 10,116,352	$ 7,801,728	48,000,000
Number of preferred shares issued upon re-designation of ordinary shares				12,918,340	12,918,340
Fair value	39,484,906
Unrealized gains in accumulated other comprehensive income	$ 13,765,098

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Income Tax (Details 3)	12 Months Ended
	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)
Income Tax
Period of statute of limitation years if the underpayment of taxes is due to computational errors	3 years	3 years
Period of statute of limitation extended under special circumstances	5 years	5 years
Minimum amount of underpayment of tax liability considered for special circumstances	$ 16,343	100,000
Period of statute of limitation in case of transfer pricing related adjustment	10 years	10 years
Deferred tax assets:
Accrued salary expenses	28,416,464		24,396,931
Bad debt provision	11,378,650		19,233,885
Net operating loss carry forwards	37,530,099		23,846,831
Advertising expenses temporarily non-deductible	21,707,365		19,970,491
Other	463,286		71,177
Gross deferred tax assets	99,495,864		87,519,315
Valuation allowance	(13,336,847)		(11,237,880)	(7,324,717)
Total deferred tax assets	86,159,017		76,281,435
Analysis as:
Current	64,804,392		66,331,906
Non-current	21,354,625		9,949,529
Deferred tax liabilities:
Amortization of intangible and other assets	28,203,218		29,900,565
Total deferred tax liabilities	28,203,218		29,900,565
Analysis as:
Non-current	28,203,218		29,900,565
Movement of the valuation allowance
Balance at the beginning of the period	11,237,880		7,324,717	689,076
Additions	2,646,753		3,631,241	6,625,864
Write off	(302,750)
Changes due to foreign exchange	(245,036)		281,922	9,777
Balance at the end of the period	$ 13,336,847		$ 11,237,880	$ 7,324,717

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Goodwill (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Goodwill
Balance at the beginning of the period	$ 51,600,039	$ 49,400,739	$ 49,328,352
Goodwill recognized upon acquisition		1,698,098
Exchange rate translation	(60,385)	501,202	72,387
Balance at the end of the period	51,539,654	51,600,039	49,400,739
Goodwill, gross	469,361,958	469,422,343	467,223,043
Accumulated impairment charge	(417,822,304)	(417,822,304)	(417,822,304)
Goodwill, net	51,539,654	51,600,039	49,400,739
Real Estate Online Services
Goodwill
Balance at the beginning of the period	40,610,620	40,215,987	40,152,022
Exchange rate translation	(47,545)	394,633	63,965
Balance at the end of the period	40,563,075	40,610,620	40,215,987
Goodwill, gross	458,385,379	458,432,924	458,038,291
Accumulated impairment charge	(417,822,304)	(417,822,304)	(417,822,304)
Goodwill, net	40,563,075	40,610,620	40,215,987
Real Estate Brokerage Services
Goodwill
Balance at the beginning of the period	3,624,317	3,517,748	3,509,326
Exchange rate translation	(12,840)	106,569	8,422
Balance at the end of the period	3,611,477	3,624,317	3,517,748
Goodwill, gross	3,611,477	3,624,317	3,517,748
Goodwill, net	3,611,477	3,624,317	3,517,748
Real Estate Information and Consulting Services
Goodwill
Balance at the beginning of the period		5,667,004		5,667,004
Goodwill recognized upon acquisition		1,698,098
Balance at the end of the period	7,365,102	7,365,102		5,667,004
Goodwill, gross	7,365,102	7,365,102	5,667,004
Goodwill, net	$ 7,365,102	$ 7,365,102		$ 5,667,004

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Fair Value Measurement (Tables)

12 Months Ended

Dec. 31, 2014

Fair Value Measurement

Schedule of information about assets and liabilities that are measured at fair value on a recurring basis

			Fair Value Measurements at Reporting Date Using
Description	Year Ended December 31, 2014		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Investment in preferred shares of a private entity	$	39,484,906	—	—	$	39,484,906

Summary of quantitative inputs and assumptions used

The following table summarizes the quantitative inputs and assumptions used for investment in preferred shares of a private entity categorized in Level 3 of the fair value hierarchy as of December 31, 2014:

Financial Assets	Fair Value		Valuation Techniques	Unobservable Inputs	Rate
Investment in preferred shares of a private entity	$	39,484,906	Discounted cash flow & option pricing method	Discount Rate	21.5	%
				Discount for Lack of Marketability (“DLOM”)	9.0	%
				Terminal growth rate	3.0	%

Summary of changes in financial assets measured at fair value using Level 3 inputs

	Level 3 Financial Assets at Fair Value Year Ended 31,
	2013	2014
	$	$
Balance as of January 1,	—	—
Purchased	—	25,719,808
Changes in Gains Included in Other Comprehensive Income	—	13,765,098
Balance as of December 31	—	39,484,906
Unrealized Gains	—	13,765,098

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Other Income (Loss), Net (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Other Income (Loss), Net
Gains on marketable securities, realized portion	$ 2,903,786	$ 234,338	$ 734,904
Gains (loss) on marketable securities, unrealized portion			804,621
Foreign exchange gain (loss)	613,227	(862,383)	(379,530)
Amortized discounts related to liability for exclusive rights with Baidu	(52,922)	(935,177)	(1,882,804)
Others	393,448	512,007	(10,061)
Total other income (loss)	$ 3,857,539	$ (1,051,215)	$ (732,870)

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Share-Based Compensation

12 Months Ended

Dec. 31, 2014

Share-Based Compensation

Share-Based Compensation

17. Share-Based Compensation

E-House’s Share Incentive Plan (the “E-House Plan”)

In 2006, the Company adopted the E-House Plan, which allows the Company to offer a variety of share-based incentive awards to employees, officers, directors and individual consultants who render services to the Company. Under the E-House Plan, the Company authorized 3,636,364 ordinary shares, or 5% of the then total shares outstanding, to grant as options or restricted shares over a three-year period. In October 2010, the Company authorized an increase of 4,013,619 ordinary shares to the award pool. In November 2012, the Company further authorized an increase of 1,273,000 ordinary shares to the award pool. In August, 2013, E-House Holdings authorized an increase of 6,644,659 ordinary shares to the award pool. Options have a ten-year life. Share options granted under the E-House Plan can be settled by the employee either by cash or net settled by shares.

Share Options:

In connection with its merger with CRIC in 2012, the Company exchanged 15,107,745 of its options (“E-House Replacement Options”) at an exercise prices from $0.72 to $8.99 under E-House plan for 16,975,028 of options granted under CRIC plan at an exercise prices from $0.64 to $8.00 (“CRIC Replaced Options”), with other terms unchanged. As a result, CRIC’s Share Incentive Plan (the “CRIC Plan”) merged into the E-House Plan and ceased to exist on its own. The incremental compensation cost of $289,930 was measured as the excess of the fair value of the E-House Replacement Options over the fair value of the CRIC Replaced Options at the exchange date.

The Company used the binomial model to estimate the fair value of both the E-House Replacement Options and CRIC Replaced Options using the following assumptions:

	E-House	CRIC
	Replacement	Replaced
	Options	Options
Average risk-free rate of return	2.62%	2.62%
Contractual life of option	7.53 years	7.53 years
Average estimated volatility rate	50.42%	54.21%
Average dividend yield	2.03%	—

On May 9, 2012, 396,050 outstanding options granted from September 24, 2009 to October 10, 2011 held by 3 directors of CRIC were modified to be fully vested on the modification date, with other terms unchanged. The unrecognized compensation cost from the initial grant date was immediately expensed.

On May 29, 2012, the exercise price of 4,211,879 outstanding options, previously granted from July 15, 2009 to March 10, 2011, held by 394 employees was reduced from between $6.75 and $8.99 to $5.34, with other terms unchanged. In connection with the above modifications, incremental compensation cost was measured as the excess of the fair value of the modified options over the fair value of the original options immediately before their terms were modified, measured based on the share price and other pertinent factors at the modification date. Total incremental compensation cost was $1,811,935.

The Company used the binomial model to estimate the fair value of the modified options using the following assumptions:

	2012
Average risk-free rate of return	2.78%
Contractual life of option	8.02 years
Average estimated volatility rate	62.23%
Average dividend yield	2.45%

The Company recorded compensation expense of $17,157,015, $12,817,935 and $5,950,940 for the years ended December 31, 2012, 2013 and 2014, respectively. During the years ended December 31, 2012, 2013 and 2014, 194,721, 4,596,761 and 3,446,585 options were exercised having a total intrinsic value of $436,259, $25,248,554and $23,679,729, respectively.

A summary of option activity under the E-House Plan during the year ended December 31, 2014 is presented below:

	Number of Options		Weighted Average Exercise Price	Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value of Options
			$		$
Outstanding, as of January 1, 2014	12,949,951		4.25		140,247,969
Exercised	(3,446,585	)	3.49		23,679,729
Forfeited	(26,662	)	4.94
Outstanding, as of December 31, 2014	9,476,704		4.52	5.58	25,776,635
Vested and expected to vest as of December 31, 2014	9,476,704		4.52	5.58	25,776,635
Exercisable as of December 31, 2014	9,476,704		4.52	5.58	25,776,635

As of December 31, 2014, there is no unrecognized compensation expense related to unvested share options granted under the E-House Plan.

Restricted Shares:

The Company granted 1,273,000, 1,303,000 and 1,439,000 restricted shares to certain employees, directors and officers in 2012, 2013 and 2014 respectively. Under the terms of each restricted shares, restricted shares vest over three years.

In connection with its merger with CRIC, the Company exchanged 77,875 of its restricted shares (“E-House Replacement Restricted Shares”) at an exercise prices from $3.38 to $6.75 under E-House plan for 87,500 of restricted shares granted under CRIC plan at an exercise prices from $3.00 to $6.00 (“CRIC Replaced Restricted Shares”), with other terms unchanged. No incremental compensation cost was recognized from the exchange.

	E-House	CRIC
	Replacement	Replacement
	Restricted	Restricted
	Shares	Shares
Average risk-free rate of return	2.43%	2.43%
Contractual life of option	0.85 years	0.85 years
Average estimated volatility rate	50.42%	54.21%
Average dividend yield	2.03%	—

A summary of restricted share activity under the E-House Plan during the year ended December 31, 2014 is presented below:

	Number of Restricted Shares		Weighted Average Grant-date Fair Value
			$
Unvested as of January 1, 2014	2,151,684		7.77
Granted	1,439,000		8.72
Vested	(860,301	)	7.08
Forfeited	(33,334	)	7.78
Unvested as of December 31, 2014	2,697,049		8.50

The total fair value of restricted shares vested in 2012, 2013 and 2014 was $9,127,103, $5,612,379 and $6,094,602, respectively.

As of December 31, 2014, there was $20,310,709 of total unrecognized compensation expense related to restricted shares granted under the E-House Plan. That cost is expected to be recognized over a weighted-average period of 2.43 years.

The Company recorded compensation expense of $9,348,941, $5,668,460 and $6,174,583, for the years ended December 31, 2012 and 2013 and 2014, respectively, related to restricted shares.

Leju Plan

In November 2013, Leju adopted a share incentive plan (“Leju Plan”), which allows Leju to offer a variety of share-based incentive awards to employees, officers, directors and individual consultants who render services to Leju. Under the Leju Plan, the maximum number of shares that may be issued shall be 8% of the then total shares outstanding, to grant as options or restricted shares over a three-year period. Options have a ten-year life.

Share Options:

On December 1, 2013, Leju granted 7,192,000 options to purchase its ordinary shares to certain of Leju’s employees and E-House’s employees at an exercise price of $4.60 per share. The options expire ten years from the date of grant and vest ratably at each grant date anniversary over a period of three years.

On December 16, 2013, Leju granted 600,000 restricted shares to a director of Leju and an E-House employee to replace the same number of options previously granted under the Leju plan, with all other terms unchanged. The purchase price of the restricted shares is $4.60 per share, which was the exercise prices of the options that were replaced. The modification did not result in any incremental compensation expense. Cash received from the advance payment of the restricted shares are recorded as an amount due to related parties as of December 31, 2013.

In January, 2014, Leju granted 60,000 restricted shares to an E-House employee to replace the same number of options previously granted under the Leju plan, with all other terms unchanged. The purchase price of the restricted shares is $4.60 per share, which were the exercise prices of the options that were replaced. The modification did not result in any incremental compensation expense. Cash received from the advance payment of the restricted shares are recorded as an amount due to related parties as of December 31, 2014.

Leju has used the binomial model to estimate the fair value of the options granted under the Leju Plan. The fair value per option was estimated at the date of grant using the following assumptions:

	2013
Average risk-free rate of return	2.98%
Contractual life of option	10 years
Average estimated volatility rate	56.74%
Average dividend yield	0.00%

A summary of option activity under the Leju Plan during the year ended December 31, 2014 is presented below:

	Number of Options		Exercise Price	Remaining Contractual Term	Aggregate Intrinsic Value of Options
			$
Outstanding, as of January 1, 2014	6,592,000		4.60		—
Granted	—
Replaced by Restricted Share	(60,000	)	4.60
Exercised	(266,201	)	4.60		1,668,693
Forfeited	(132,000	)	4.60
Outstanding, as of December 31, 2014	6,133,799		4.60	8.92	37,784,202
Vested and expected to vest as of December 31, 2014	5,943,719		4.60	8.92	36,613,309
Exercisable as of December 31, 2014	1,867,132		4.60	8.92	11,501,535

The grant-date fair value of the options granted in December 2013 was $2.21 per share. For the year ended December 31, 2013 and 2014, the Group recorded compensation expenses of $381,874 and $4,525,552, respectively.

As of December 31, 2014, there was $8,676,222 of total unrecognized compensation expense related to unvested share options granted under the Leju Plan. That cost is expected to be recognized over a weighted-average period of 1.92 years.

Restricted Shares:

On March 18, 2014, Leju granted 866,000 restricted shares to certain employees, directors and officers, under the terms of each restricted shares, restricted shares vest over three years. On August 21, 2014, Leju granted 229,400 restricted shares to certain employees and officers, under the terms of each restricted shares, restricted shares vest over eight months.

A summary of restricted share activity under the Leju Plan during the year ended December 31, 2014 is presented below:

	Number of Restricted Shares		Weighted Average Grant-date Fair Value
Unvested as of January 1, 2014	600,000		2.21
Converted from option	60,000		2.21
Granted	1,095,400		12.37
Vested	(220,000	)	2.21
Forfeited	(8,800	)	16.25
Unvested as of December 31, 2014	1,526,600		9.42

The total fair value of restricted shares vested in 2012, 2013 and 2014 was nil, nil and $486,200, respectively.

For the year ended December 31, 2013 and 2014, the Group recorded compensation expenses of $34,758 and $4,923,226, respectively, for the restricted shares granted to the Group’s employees.

As of December 31, 2014, there was $9,699,247 of total unrecognized compensation expense related to unvested restricted shares granted under the Leju Plan. That cost is expected to be recognized over a weighted-average period of 1.88 years.

Scepter Plan

In August 2014, Scepter adopted a share incentive plan (“Scepter Plan”), which authorized Scepter to offer a variety of share-based incentive awards to employees, officers, directors and E-House’s employees. Under the Scepter Plan, the maximum number of shares that may be issued shall be 750,000 to grant as options or restricted shares over a three-year period. Options have a ten-year life.

Share Options:

On August 8, 2014, Scepter granted 455,000 options to purchase ordinary shares of Scepter to certain of the Scepter’s employees and E-House’s employees for their services of next three years at an exercise price of $3.3 per share. The options expire ten years from the date of grant and vest ratably at each grant date anniversary over a period of three years.

	2014
Average risk-free rate of return	4.3%
Contractual life of option	10 years
Average estimated volatility rate	50.0%
Average dividend yield	1.7%

A summary of option activity under the Scepter Plan during the year ended December 31, 2014 is presented below:

	Number of Options		Exercise Price	Remaining Contractual Term	Aggregate Intrinsic Value of Options
			$
Outstanding, as of January 1, 2014	—
Granted	455,000		3.30	10.00
Forfeited	(5,000	)
Outstanding, as of December 31, 2014	450,000		3.30	9.60	—
Vested and expected to vest as of December 31, 2014	449,526		3.30	9.60	—
Exercisable as of December 31, 2014	—		3.30	9.60	—

The grant-date fair value of the options granted in August was $1.12 per share. For the year ended December 31, 2014, the Group recorded compensation expenses of $66,820 for the share options granted to the Group’s employees.

As of December 31, 2014 there was $439,892 of total unrecognized compensation expense related to unvested share options granted under the Scepter Plan. That cost is expected to be recognized over a weighted-average period of 2.60 years.

CRIC Plan

On September 9, 2008, CRIC adopted the CRIC Plan to provide additional incentives to employees, directors and consultants who render services to CRIC. Under the CRIC Plan, the maximum number of shares that may be issued shall be 15% of the total outstanding shares of CRIC on an as-converted basis assuming all options outstanding were converted into shares as of the effective date of the CRIC Plan, plus an additional number of shares to be added on each of the third, sixth and ninth anniversary of the effective date of the CRIC Plan.

In April 2012, all the options and restricted shares granted under the CRIC Plan were replaced by E-House’s options and restricted shares under E-House plan. After that, there was no compensation cost of the options and restricted shares under CRIC Plan.

Share Options:

CRIC recorded compensation expense of $8,532,772 for the year ended 2012.

The total intrinsic value of options under CRIC Plan exercised was $750,115, during the year ended December 31, 2012.

Restricted Shares:

The Group recorded compensation expense of $54,688 for CRIC restricted shares granted to the E-House’s employee for the year ended December 31, 2012.

The total fair value of restricted shares vested was $130,000 during the year ended December 31, 2012.

Other Equity Compensation:

In September 2014, the Group acquired noncontrolling interests from certain employee shareholders. The price premium paid over the fair value of the ordinary shares amounting $4,276,810 was recorded as share-based compensation costs and to be amortized over the required two-year service period (See Note 6). $534,601 stock compensation expense was recognized for the year ended December 31, 2014. As of December 31, 2014, there was $3,742,209 of total unrecognized compensation expense related to this compensation agreement.

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (USD $)	Leju Holdings Ltd. Equity (Deficit) Attributable to E-House	Leju Holdings Ltd. Additional Paid-in Capital	Leju Holdings Ltd. Non-controlling Interest	Leju Holdings Ltd.	Equity (Deficit) Attributable to E-House	Ordinary Shares	Additional Paid-in Capital	Retained Earnings (Accumulated Deficit).	Accumulated Other Comprehensive Income	Subscription Receivables	Non-controlling Interest	Total
Balance at Dec. 31, 2011					$ 633,361,768	$ 79,066	$ 688,093,431	$ (101,063,764)	$ 46,253,035		$ 271,006,234	$ 904,368,002
Balance (in shares) at Dec. 31, 2011						79,065,624
Increase (Decrease) in Stockholders' Equity
Net income (loss)					(56,971,404)			(56,971,404)			(14,077,967)	(71,049,371)
Foreign currency translation adjustments					1,875,712				1,875,712		(46,995)	1,828,717
Dividends (note 14)					(11,866,670)		(11,866,670)					(11,866,670)
Dividends declared by subsidiaries											(856,121)	(856,121)
Share-based compensation					31,900,606		31,900,606				3,755,919	35,656,525
Exercise of share options					248,118	195	259,721			(11,798)	567,404	815,522
Exercise of share options (in shares)						194,721						(194,721)
Vesting of restricted shares					39,322	567	38,755				223,272	262,594
Vesting of restricted shares (in shares)						567,489
Capital injection from non-controlling interest											291,839	291,839
Shares issued in connection with the merger of CRIC					252,106,323	38,786	252,067,537					252,106,323
Shares issued in connection with the merger of CRIC (in shares)						38,785,588
Replacement of CRIC share options and restricted shares					31,897,646		31,897,646					31,897,646
Reversal of ASC 740 uncertain tax position					200,000			200,000				200,000
Changes in equity ownership on partial disposal of subsidiaries					175,735		175,735				(18,376)	157,359
Repurchase of shares					(1,569,815)	(371)	(1,569,444)	0				(1,569,815)
Repurchase of shares (in shares)						(371,141)
Movement arising from merger of CRIC					(142,471,974)		(149,461,182)		6,989,208		(254,656,627)	(397,128,601)
Balance at Dec. 31, 2012					738,925,367	118,243	841,536,135	(157,835,168)	55,117,955	(11,798)	6,188,582	745,113,949
Balance (in shares) at Dec. 31, 2012						118,242,281
Increase (Decrease) in Stockholders' Equity
Net income (loss)					51,957,425			51,957,425			(871,136)	51,086,289
Foreign currency translation adjustments					17,066,639				17,066,639		466,328	17,532,967
Dividends (note 14)					(19,946,745)		(19,946,745)					(19,946,745)
Dividends declared by subsidiaries											(338,941)	(338,941)
Share-based compensation					18,903,027		18,903,027					18,903,027
Exercise of share options					15,329,388	4,596	17,460,926			(2,136,134)		15,329,388
Exercise of share options (in shares)						4,596,761						(4,596,761)
Vesting of restricted shares					263,106	770	262,336					263,106
Vesting of restricted shares (in shares)						769,448
Capital injection from non-controlling interest											8,079,333	8,079,333
Call option in connection with issuance of convertible senior notes					(44,999,998)		(44,999,998)					(44,999,998)
Changes in equity ownership on acquisition of non-controlling interest					(409,110)		(409,110)				409,110
New shares issued to management					62,621,240	17,790	62,603,450					62,621,240
New shares issued to management (in shares)						17,790,125
Repurchase of shares					(17,772,586)	(3,582)	(15,942,072)	(1,826,932)				(17,772,586)
Repurchase of shares (in shares)						(3,582,133)
Balance at Dec. 31, 2013					821,937,753	137,817	859,467,949	(107,704,675)	72,184,594	(2,147,932)	13,933,276	835,871,029
Balance (in shares) at Dec. 31, 2013						137,816,482
Increase (Decrease) in Stockholders' Equity
Net income (loss)					40,001,485			40,001,485			12,335,673	52,337,158
Foreign currency translation adjustments					(2,053,679)				(2,053,679)		(66,005)	(2,119,684)
Dividends (note 14)					(77,582,930)		(77,582,930)				21,569,028	(56,013,902)
Dividends declared by subsidiaries											(2,508,620)	(2,508,620)
Share-based compensation					19,843,733		19,843,733				1,797,388	21,641,121
Exercise of share options	(202,093)	(202,093)	737,628	535,535	13,994,117	3,447	12,039,145			1,951,525		13,994,117
Exercise of share options (in shares)						3,446,585						(3,446,585)
Vesting of restricted shares	260,433	260,433	751,567	1,012,000		860	(860)
Vesting of restricted shares (in shares)						860,301
Capital injection from non-controlling interest											19,925,043	19,925,043
Changes in equity ownership on partial disposal of subsidiaries					138,477,580		138,472,457		5,123		38,226,837	176,704,417
Changes in equity ownership on acquisition of non-controlling interest					(30,720,088)		(30,720,088)				(4,515,188)	(35,235,276)
Recognition of change in E-House's economic interests in Leju in connection with Leju's IPO					70,068,096		70,068,096				50,189,488	120,257,584
Unrealized gains for investment in preferred shares of a private entity					13,765,098				13,765,098			13,765,098
Balance at Dec. 31, 2014					$ 1,007,789,505	$ 142,124	$ 991,645,842	$ (67,703,190)	$ 83,901,136	$ (196,407)	$ 152,376,115	$ 1,160,165,620
Balance (in shares) at Dec. 31, 2014						142,123,368

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $)	12 Months Ended
	Dec. 31, 2014
CONSOLIDATED STATEMENTS OF CASH FLOWS
Payments of Stock Issuance Costs	$ 15,036,616

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Properties Held for Sale

12 Months Ended

Dec. 31, 2014

Properties Held for Sale

Properties Held for Sale

3. Properties Held for Sale

In 2012, 2013 and 2014, customers transferred legal ownership of six, 14 properties including five car-parking spaces and 30 properties including 20 residential properties, five car-parking spaces, and five commercial properties, to the Group to settle $970,625, $6,678,302 and $7,122,155 in accounts receivable, respectively. Customers also transferred legal ownership of nil, 36 and nil properties to the Group to settle nil, $9,928,558 and nil in customer deposit.

Properties with values of $1,281,008, nil and nil were transferred to property and equipment for the years ended December 31, 2012, 2013 and 2014, respectively, due to the change of management’s intention with respect to these properties.

In 2013, the Group acquired 237 properties that the Group has intent and ability to sell within one year. As of December 31, 2013, title transfers of 140 residential properties, five car-parking places and 52 commercial properties were still in process, and the associated consideration of $60,076,026 was recorded as advance payment for properties to be held for sale in the consolidated balance sheet. 101 residential properties were transferred to properties held for sale in 2014. As of December 31, 2014, title transfers of 113 residential properties and 55 commercial properties were still in process, and the associated consideration of $51,983,436 was recorded as advance payment for properties to be held for sale in the consolidated balance sheet.

The Group recorded gains of $45,936, $118,559 and nil from selling of the properties held for sale for the years ended December 31, 2012, 2013 and 2014, respectively. As of December 31, 2014, the Group held 147 residential properties, five commercial properties and nine car-parking spaces with a total carrying value of $34,841,895. As of December 31, 2013, the Group held 44 residential properties and five car-parking spaces with a total carrying value of $15,304,927.

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Income Tax (Details 4) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Reconciliation between the provision for income tax computed by applying the statutory tax rate to income before income taxes and the actual provision for income taxes
PRC income tax rate (as a percent)	25.00%	25.00%	25.00%
Expenses not deductible for tax purposes (as a percent)	10.92%	13.60%	(14.86%)
Effect of tax preference (as a percent)	(20.31%)	(17.16%)	(1.91%)
Effect of different tax rate of subsidiary operation in other jurisdiction (as a percent)	2.45%	(1.47%)	(2.14%)
Valuation allowance movement (as a percent)	4.17%	5.86%	(9.48%)
Effect of different tax rate of DTA and DTL applied (as a percent)	2.99%	(3.22%)	0.55%
Other (as a percent)	(1.72%)	(0.53%)	1.18%
Effective income tax rate (as a percent)	23.50%	22.08%	(1.66%)
Aggregate amount and per share effect of the tax holiday
The aggregate dollar effect	$ 12,875,656	$ 10,628,117	$ (1,336,133)
Per share effect basic	$ 0.09	$ 0.08	$ (0.01)
Per share effect diluted	$ 0.09	$ 0.08	$ (0.01)
Tax losses carry forward	150,106,326	93,844,512
Undistributed earnings of PRC subsidiaries	435,200,000
Provision for PRC dividend withholding tax	$ 0

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Organization and Principal Activities

12 Months Ended

Dec. 31, 2014

Organization and Principal Activities

Organization and Principal Activities

1. Organization and Principal Activities

E-House (China) Holdings Limited (the “Company” or “E-House”) was incorporated on August 27, 2004 in the Cayman Islands as an exempted company with limited liability under the Companies Law of the Cayman Islands. The Company, through its subsidiaries and consolidated variable interest entities (“VIEs”), offers a wide range of services to the real estate industry, including online services, primary agency, secondary brokerage, information and consulting, promotional events, real estate advertising, real estate fund management services, community value-added services and real estate financial services in the People’s Republic of China (“PRC”). The Company, its subsidiaries and consolidated VIEs are collectively referred to as the “Group”.

The Group commenced operations in 2000 through an operating subsidiary, Shanghai Real Estate Sales (Group) Co., Ltd. (“E-House Shanghai”), a company established in the PRC, and its subsidiaries and affiliates.

In October 2009, China Real Estate Information Corporation (‘‘CRIC’’), a subsidiary of E-House, acquired SINA Corporation’s (“SINA”) 66% interest in China Online Housing Technology Corporation (“COHT”) and COHT became a wholly-owned subsidiary of CRIC. In April 2012, E-House Holdings acquired all the outstanding shares of CRIC that it did not already own (the ‘‘Merger’’). As a result, CRIC became a wholly-owned subsidiary of E-House Holdings. E-House retained the controlling interest in CRIC before and after the Merger.

The Company’s subsidiary, Leju Holdings Limited (‘‘Leju’’) is principally engaged in providing online advertising, e-commerce services and listing services in the PRC. In March 2014, the Company sold a 15% equity interest in Leju on a fully diluted basis, including all options and restricted shares and any other rights to acquire Leju’s shares, to Tencent Holdings Limited, a provider of comprehensive internet services in PRC, and $176.4 million net proceeds after deducting commissions and related expenses were received. In April 2014, Leju completed its initial public offering (‘‘IPO’’) and became listed on New York Stock Exchange (NYSE:LEJU). Leju raised from this initial public offering approximately $101.4 million in net proceeds after deducting underwriting commissions and the offering expenses payable by Leju. Concurrently with the initial public offering, Leju also raised from Tencent in a private placement $18.9 million in net proceeds after deducting estimated fees and expenses payable by Leju. In December 2014, E-House was approved and announced a partial spin-off of Leju by distributing in the form of a dividend of 0.05 ordinary shares, par value $0.001, of Leju, for each of E-House ordinary shares outstanding as of December 3, 2014, or 0.05 ADSs of Leju, for each of E-House ADSs outstanding as of December 3, 2014. As of December 31, 2014, E-House held a 69.9% equity interest in Leju. The Spin-off of Leju was completed in January 2015.

In June 2014, the Company reorganized its fund management services segment. It’s 51% owned subsidiary, Scepter Pacific Limited (“Scepter”), became the holding company of the segment through the 100% acquisition of subsidiaries operating fund management services in PRC through its new established VIE, Shanghai E-Cheng Asset Management Co. Ltd. (“Shanghai E-Cheng”).

The following table lists major subsidiaries and the consolidated VIEs of the Company as of December 31, 2014:

	Date of	Place of	Percentage of
	incorporation	incorporation	Ownership
Shanghai Real Estate Sales (Group) Co., Ltd.	15-Aug-00	PRC	100	%
Shanghai City Rehouse Real Estate Agency Ltd.	17-May-02	PRC	85	%
Scepter	8-Jan-08	BVI	51	%
Shanghai CRIC Information Technology Co., Ltd. (“Shanghai CRIC”)	03-Jul-06	PRC	100	%
Leju Holdings Ltd.	20-Nov-13	Cayman	70	%
Shanghai Xinju Finance Information Services Co., Ltd.(“Shanghai Xinju”)	22-May-14	PRC	56	%
Shanghai Weidian Information Technology Co., Ltd. (“Shanghai Weidian”)	20-Aug-14	PRC	55	%
Beijing Yisheng Leju Information Services Co., Ltd. (“Beijing Leju”)	13-Feb-08	PRC	VIE
Shanghai Yi Xin E-Commerce Co., Ltd. (“Shanghai Yi Xin”)	05-Dec-11	PRC	VIE
Beijing Jiajujiu E-Commerce Co., Ltd. (“Beijing Jiajujiu”)	22-Mar-12	PRC	VIE
Shanghai Kushuo Information Technology Co., Ltd. (“Shanghai Kushuo”)	31-Dec-13	PRC	VIE
Shanghai E-Cheng	14-May-14	PRC	VIE
Shanghai Fangjia Information Technology Co., Ltd. (“Shanghai Fangjia”)	29-Oct-14	PRC	VIE
Shanghai Weihui Business Information Consulting Co., Ltd. (“Shanghai Weihui”)	11-Sep-14	PRC	VIE

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Income Tax (Tables)

12 Months Ended

Dec. 31, 2014

Income Tax

Schedule of income (loss) before income taxes

	Years Ended December 31,
	2012		2013		2014
	$		$		$
Income (loss) before income taxes:
The PRC	(32,340,085	)	125,404,634		107,163,481
Outside of the PRC	(37,916,141	)	(63,455,200	)	(43,760,332	)
Total	(70,256,226	)	61,949,434		63,403,149

Schedule of expense (benefit) for income taxes

	Years Ended December 31,
	2012		2013		2014
	$		$		$
Current Tax
The PRC	16,813,520		44,386,281		26,698,260
Outside of the PRC	—		35,774		69,645
	16,813,520		44,422,055		26,767,905
Deferred Tax
The PRC	(15,644,866	)	(30,745,061	)	(11,867,112	)
Outside of the PRC	—		—		—
	(15,644,866	)	(30,745,061	)	(11,867,112	)
Income tax expense	1,168,654		13,676,994		14,900,793

Schedule of principal components of the deferred income tax assets/ liabilities

	As of December 31,
	2013		2014
	$		$
Deferred tax assets:
Accrued salary expenses	24,396,931		28,416,464
Bad debt provision	19,233,885		11,378,650
Net operating loss carry forwards	23,846,831		37,530,099
Advertising expenses temporarily non-deductible	19,970,491		21,707,365
Other	71,177		463,286
Gross deferred tax assets	87,519,315		99,495,864
Valuation allowance	(11,237,880	)	(13,336,847	)
Total deferred tax assets	76,281,435		86,159,017
Analysis as:
Current	66,331,906		64,804,392
Non-current	9,949,529		21,354,625
Deferred tax liabilities:
Amortization of intangible and other assets	29,900,565		28,203,218
Total deferred tax liabilities	29,900,565		28,203,218
Analysis as:
Current	—		—
Non-current	29,900,565		28,203,218

Schedule of movement of the valuation allowance

	Years Ended December 31,
	2012	2013	2014
	$	$	$
Balance as of January 1,	689,076	7,324,717	11,237,880
Additions	6,625,864	3,631,241	2,646,753
Write off	—	—	(302,750	)
Changes due to foreign exchange	9,777	281,922	(245,036	)
Balance as of December 31,	7,324,717	11,237,880	13,336,847

Schedule of reconciliation between the provision for income tax computed by applying the statutory tax rate to income before income taxes and the actual provision for income taxes

	Years Ended December 31,
	2012		2013		2014
	$		$		$
PRC income tax rate	25.00	%	25.00	%	25.00	%
Expenses not deductible for tax purposes	(14.86	)%	13.60	%	10.92	%
Effect of tax preference	(1.91	)%	(17.16	)%	(20.31	)%
Effect of different tax rate of subsidiary operation in other jurisdiction	(2.14	)%	(1.47	)%	2.45	%
Valuation allowance movement	(9.48	)%	5.86	%	4.17	%
Effect of different tax rate of DTA and DTL applied	0.55	%	(3.22	)%	2.99	%
Others	1.18	%	(0.53	)%	(1.72	)%
	(1.66	)%	22.08	%	23.50	%

Summary of aggregate amount and per share effect of the tax holiday

	Years Ended December 31,
	2012		2013	2014
	$		$	$
The aggregate dollar effect	(1,336,133	)	10,628,117	12,875,656
Per share effect — basic	(0.01	)	0.08	0.09
Per share effect — diluted	(0.01	)	0.08	0.09

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Fair Value Measurement

12 Months Ended

Dec. 31, 2014

Fair Value Measurement

Fair Value Measurement

20. Fair Value Measurement

As of December 31, 2013 and 2014, information about inputs into the fair value measurements of the Company’s assets and liabilities that are measured at fair value on a recurring basis in periods subsequent to their initial recognition is as follows:

			Fair Value Measurements at Reporting Date Using
Description	Year Ended December 31, 2014		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Investment in preferred shares of a private entity	$	39,484,906	—	—	$	39,484,906

The following table summarizes the quantitative inputs and assumptions used for investment in preferred shares of a private entity categorized in Level 3 of the fair value hierarchy as of December 31, 2014:

Financial Assets	Fair Value		Valuation Techniques	Unobservable Inputs	Rate
Investment in preferred shares of a private entity	$	39,484,906	Discounted cash flow & option pricing method	Discount Rate	21.5	%
				Discount for Lack of Marketability (“DLOM”)	9.0	%
				Terminal growth rate	3.0	%

The following tables summarize the changes in financial assets measured at fair value for which the Group has used Level 3 inputs to determine fair value. Total realized and unrealized gains and losses recorded for Level 3 investments are reported in accumulated other comprehensive income.

	Level 3 Financial Assets at Fair Value Year Ended 31,
	2013	2014
	$	$
Balance as of January 1,	—	—
Purchased	—	25,719,808
Changes in Gains Included in Other Comprehensive Income	—	13,765,098
Balance as of December 31	—	39,484,906
Unrealized Gains	—	13,765,098

There have been no fair value transfers within Level 1, Level 2 and Level 3 in 2013 or 2014.

There was no asset or liability measured at fair value on a nonrecurring basis in 2012, 2013 or 2014.

The Group’s financial instruments that are not recorded at fair value in the consolidated balance sheets include cash and cash equivalents, restricted cash, accounts receivable, advance from customers, short-term investment of held-to-maturity investment, customer deposits, other receivables, short-term borrowing, accounts payable, other payables, liabilities for exclusive rights, amounts due from/to related parties and convertible senior notes. For financial instruments other than the non-current portion of customer deposit and convertible senior notes, the carrying value approximates the fair value due to their short-term nature. The fair value of the non-current portion of customer deposits was $614,507 and $751,909 as of December 31, 2013 and 2014, respectively. The fair value was estimated using discounted cash flows method by discounting the estimated future collections or payment using the Company’s incremental borrowing rate for an instrument with similar terms on the measurement date. As the future cash flows from collections or payments were management’s best estimates based on information available on the valuation date, which were not observable or cannot be corroborated with market information, the fair value measurements were classified as level 3 measurements. Any change in the estimated timing of cash inflow or outflow would result in a change in the fair value measurement in the same direction. It is not practicable to estimate the fair value of convertible senior notes, as a quoted market price is not available and valuation would involve complex models with excessive costs by engaging an independent valuer.

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Subsequent Events

12 Months Ended

Dec. 31, 2014

Subsequent Events

Subsequent Events

24. Subsequent Events

In January 2015, the Group entered a property purchase agreement with a total amount of RMB 168,930,000. The property will be used as offices by the Group. The commitment is payable within one year.

In March 2015, the Group and Baidu agreed to extend the strategic cooperation agreement for the exclusive rights for another nine months through December 2015 for consideration of RMB 75,000,000.

On March 18, 2015, the Company announced that its board of directors had authorized and approved the Company’s payment of a cash dividend of $0.15 per ordinary share ($0.15 per ADS). The cash dividend will be payable on or about May 15, 2015 to shareholders of record as of the close of business on April 10, 2015.

On March 18, 2015, Leju also announced that its board of directors has authorized and approved Leju’s payment of a cash dividend of $0.20 per ordinary share ($0.20 per ADS). The cash dividend will be payable on or about May 15, 2015 to Leju’s shareholders of record as of the close of business on April 10, 2015.

In April 2015, the Group entered into a binding agreement with Jupai to sell its real estate fund management services to Jupai (“Transaction”). The real estate fund management services are held by Scepter, a consolidated subsidiary 51% by the Group, with the remaining 49% owned by Reckon Capital Limited, a company incorporated in the British Virgin Islands (“Reckon Capital”) and majority owned and controlled by Mr. Xin Zhou. Pursuant to the agreement, the Group and Reckon Capital will transfer all of their respective equity interests in Scepter in exchange for Jupai’s issuance of ordinary shares equal to 20% of Jupai’s total post-issuance equity interest on a fully diluted basis upon completion of a proposed initial public offering of Jupai (“Proposed IPO”), without giving effect to shares issued in the Proposed IPO. In addition, the Series B Preferred Shares of Jupai currently held by the Group will be converted to ordinary shares upon the Proposed IPO. Immediately upon the closing of the Transaction and the conversion of Series B Preferred Shares, E-House will become the largest shareholder of Jupai with an approximately 37% equity interest in Jupai (without giving effect to the shares issued in the Proposed IPO).

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Income Tax (Details 2)	12 Months Ended			24 Months Ended	1 Months Ended	48 Months Ended	36 Months Ended	24 Months Ended	36 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2016	Jan. 31, 2008	Dec. 31, 2014	Dec. 31, 2012	Dec. 31, 2014	Dec. 31, 2016
Income Tax
Income tax rate (as a percent)	25.00%	25.00%	25.00%
Preferential income tax rate (as a percent)	5.00%
Shanghai CRIC | High and new technology enterprise
Income Tax
Preferential income tax rate (as a percent)				15.00%
Shanghai CRIC | Key software enterprises
Income Tax
Preferential income tax rate (as a percent)	10.00%	10.00%
The PRC
Income Tax
Income tax rate (as a percent)					25.00%
The PRC | Shanghai CRIC | High and new technology enterprise
Income Tax
Preferential income tax rate (as a percent)						15.00%
The PRC | Shanghai CRIC | Software enterprise
Income Tax
Preferential income tax rate (as a percent)							12.50%
Percentage of tax reduction							50.00%
The PRC | Shanghai SINA Leju | High and new technology enterprise
Income Tax
Preferential income tax rate (as a percent)								15.00%
The PRC | Shanghai SINA Leju | Software enterprise
Income Tax
Preferential income tax rate (as a percent)							12.50%
Percentage of tax reduction							50.00%
The PRC | Shanghai Fangxin information technology Co., Ltd. | Software enterprise
Income Tax
Preferential income tax rate (as a percent)									12.50%
Percentage of tax reduction									50.00%
The PRC | Chongqing E-House Western Real Estate Investment Consultant Co., Ltd.
Income Tax
Preferential income tax rate (as a percent)	15.00%	15.00%	15.00%
Hong Kong
Income Tax
Income tax rate (as a percent)	16.50%
Macau | Minimum
Income Tax
Progressive tax rate (as a percent)	0.00%
Macau | Maximum
Income Tax
Progressive tax rate (as a percent)	12.00%

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Property and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2014

Property and Equipment, Net

Schedule of property and equipment, net

	As of December 31,
	2013		2014
	$		$
Leasehold improvements	29,942,721		33,760,211
Buildings	21,787,018		18,348,855
Furniture, fixtures and equipment	26,076,914		30,424,438
Motor vehicles	7,072,583		7,427,714
Total	84,879,236		89,961,218
Accumulated depreciation	(34,802,311	)	(40,851,751	)
Property and equipment, net	50,076,925		49,109,467

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Income Tax (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Income (loss) Before Income Taxes:
Income (loss) before income taxes	$ 63,403,149	$ 61,949,434	$ (70,256,226)
Current Tax
Current Tax	26,767,905	44,422,055	16,813,520
Deferred Tax
Deferred taxes	(11,867,112)	(30,745,061)	(15,644,866)
Income tax expense (benefit)	14,900,793	13,676,994	1,168,654
The PRC
Income (loss) Before Income Taxes:
Income (loss) before income taxes	107,163,481	125,404,634	(32,340,085)
Current Tax
Current Tax	26,698,260	44,386,281	16,813,520
Deferred Tax
Deferred taxes	(11,867,112)	(30,745,061)	(15,644,866)
Outside of the PRC
Income (loss) Before Income Taxes:
Income (loss) before income taxes	(43,760,332)	(63,455,200)	(37,916,141)
Current Tax
Current Tax	$ 69,645	$ 35,774

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Summary of Principal Accounting Policies (Details 8) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Earnings per share
Net income (loss) attributable to E-House ordinary shareholders - basic	$ 40,001,485	$ 51,957,425	$ (56,971,404)
Increase (Decrease) of income from Leju	(2,208,892)
Interest of Convertible Senior Notes (including stated interest and amortization of discount and issuance costs)		192,566
Net income (loss) attributable to E-House ordinary shareholders diluted	37,792,593	52,149,991	(56,971,404)
Weighted average ordinary shares outstanding - basic	139,211,442	130,163,165	106,159,388
Convertible senior notes		334,821
Share options and restricted shares	7,476,393	5,282,011
Weighted average number of ordinary shares outstanding diluted	146,687,835	135,779,997	106,159,388
Basic earnings (loss) per share	$ 0.29	$ 0.40	$ (0.54)
Diluted earnings (loss) per share	$ 0.26	$ 0.38	$ (0.54)
Diluted earnings (loss) per share that does not include instruments whose inclusion would be anti-dilutive
Net income (loss) allocated	12,335,673	(871,136)	(14,077,967)
Non-controlling interest	152,376,115	13,933,276
Effects of changes in E-House's ownership interest in CRIC, Leju and other significantly less than wholly owned subsidiaries on equity attributable to E-House
Net income (loss) attributable to E-House	40,001,485	51,957,425	(56,971,404)
Transfers to the non-controlling interest:
Increase in E-house Equity by partial disposal of subsidiaries	138,477,580
Increase in E-House's additional paid-in capital for issuing Leju's shares to Public	70,068,096
Decrease in E-House's additional paid-in capital for acquisition of non-controlling interest	(30,720,088)
Net transfers from (to) non-controlling interest	156,314,900
Change from net income attributable to E-House and transfers (to) from non-controlling interest	196,316,385
Share options and restricted shares
Diluted earnings (loss) per share that does not include instruments whose inclusion would be anti-dilutive
Instruments excluded from computation of diluted earnings (loss) per share as their inclusion would have been anti-dilutive (in shares)			14,660,788
Convertible senior notes
Diluted earnings (loss) per share that does not include instruments whose inclusion would be anti-dilutive
Instruments excluded from computation of diluted earnings (loss) per share as their inclusion would have been anti-dilutive (in shares)	8,959,127
CRIC
Diluted earnings (loss) per share that does not include instruments whose inclusion would be anti-dilutive
Net income (loss) allocated			(13,547,386)
Effects of changes in E-House's ownership interest in CRIC, Leju and other significantly less than wholly owned subsidiaries on equity attributable to E-House
Net income (loss) attributable to E-House		51,957,425	(56,971,404)
Transfers to the non-controlling interest:
Decrease in E-House's additional paid-in capital for purchase of 64,642,647 CRIC common shares for the years ended December 31, 2012 respectively			(149,461,182)
Purchase of common shares to effect changes in E-house's ownership interest (in shares)			64,642,647
Increase (Decrease) in E-House's additional paid-in capital for the exercise of Online's options and the vesting of Online's restricted shares			(332,951)
Net transfers from (to) non-controlling interest			(149,794,133)
Change from net income attributable to E-House and transfers (to) from non-controlling interest		51,957,425	(206,765,537)
Leju Holdings Ltd.
Diluted earnings (loss) per share that does not include instruments whose inclusion would be anti-dilutive
Net income (loss) allocated	50,702,835
Ownership interest (as a percent)	69.90%
Non-controlling interest	124,892,590
Transfers to the non-controlling interest:
Decrease in E-House additional paid-in capital for Leju share distribution to E-house shareholders	(21,569,028)
Increase (Decrease) in E-House's additional paid-in capital for the exercise of Online's options and the vesting of Online's restricted shares	$ 58,340

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Summary of Principal Accounting Policies (Detail 3) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Restricted cash
Bank deposits as collateral	$ 38,290,478	$ 0
Restricted cash accounts	40,401,864	2,310,116
Secondary real estate brokerage services
Restricted cash
Restricted cash accounts	1,947,961	2,146,098
Primary real estate agency services
Restricted cash
Restricted cash accounts	$ 163,425	$ 164,018

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Related Party Balances and Transactions (Tables)

12 Months Ended

Dec. 31, 2014

Related Party Balances and Transactions

Schedule of amounts due from related parties

	As of December 31,
	2013	2014
	$	$
Customer and supplier	981,648	684
Other	281,768	6,093,576
Total amounts due from related parties	1,263,416	6,094,260

Schedule of amounts due to related parties

	As of December 31,
	2013	2014
	$	$
Management	2,760,000	2,024,000
Customer and supplier	1,745,263	4,831,288
Other	1,030,249	500,898
Total amounts due to related parties	5,535,512	7,356,186

Schedule of revenue from customers who are related parties

	Years Ended December 31,
	2012	2013	2014
	$	$	$
Beijing China Real Estate Research Association Technology Ltd (“CRERAT”)	52,120	1,084,047	136,708
SINA Corporation (“SINA”)	1,855	—	445,733

Schedule of selling, general and administrative expenses recorded by the group

	Years Ended December 31,
	2012	2013	2014
	$	$	$
CRERAT	476,706	—	—
SINA	—	—	4,911,660
Shanghai Guanfu Treasure-house Assets Management Co., Ltd (“Guanfu Treasure-house”)	—	—	409,305

Schedule of cost of revenue recorded by the group

	Years Ended December 31,
	2012	2013	2014
	$	$	$
SINA	5,145,039	6,033,036	6,643,317

Schedule of intangible assets purchased by the group

	Years Ended December 31,
	2012	2013	2014
	$	$	$
SINA	—	—	1,473,498
Hangzhou Kuyue	—	—	1,778,188

Schedule of accounts receivable from related parties

	As of December 31,
	2013		2014
	$		$
CRERAT	981,648		684
CRERAT	(3,892	)	—
SINA	(1,741,371	)	(3,616,957	)
Guanfu Treasure-house	—		(326,850	)
Hangzhou Kuyue	—		(887,481	)

Schedule of amounts due from (to) affiliates

	As of December 31,
	2013		2014
	$		$
Shanghai Yueshun Real Estate Development Co., Ltd. (1)	281,768		280,750
Shanghai Jin Yue Real Estate Development Co., Ltd. (2)	(392,219	)	(390,801	)
Suzhou Hehui Xuyuechang Equity Investment Center (“Xuyuechang Center”) (3)	(103,331	)	285,272
Suzhou Hehui Xuyuerong Equity Investment Center (“Xuyuerong Center”) (3)	(480,081	)	23,461
Suzhou Hehui Xuyuezhen Equity Investment Center (“Xuyuezhen Center”) (3)	(54,618	)	115,447
E-House (China) Real Estate Investment Fund 1 L.P. (the “Fund”)(4)	—		5,388,646
Muxin Center(5)	—		(110,097	)

Notes:

(1) Xin Zhou is a director of the entity. The amount receivable (payable) is the rental cost paid (rental income received) by the Group on behalf of the entity.

(2) Xin Zhou is a director of the entity. The amount payable is rental expense paid by the entity on behalf of E-Commercial (Shanghai) Real Estate Advisory Co, Ltd.

(3) The Group holds 0.6%, 0.5% and 0.5% equity interest of Xuyuechang Center, Xuyuerong Center and Xuyuezhen Center, respectively. The Group also acts as a non-acting general partner and provides investment advice to the entities. The amount payable of December 31, 2013 is the advance management fee received by the Group while the amount receivable of December 31, 2014 is the management fee receivable from the entities.

(4) In January 2008, the Group formed the Fund, which seeks to invest in China’s real estate sector through diversified investment strategies at all levels of the real estate value chain. The Group’s 51% owned subsidiary, E-House Real Estate Asset Management Limited, acts as the Fund’s general partner. The general partner receives annual management fee and carried interest on a success basis. Major investors of the Fund include institutions and high net worth individuals. Mr. Xin Zhou, the Company’s co-chairman and chief executive officer, and Mr. Neil Nanpeng Shen, director of the Company, invested a total of $28 million in the Fund. They are also among the minority shareholders of the general partner. The Group has no investment in the Fund. The amount receivable is the carried interest receivable from the Fund.

(5) The Group holds 23.4% equity interest of Muxin Center. The Group also acts as general partner and provides investment advice to the entities. The amount payable is the advance management fee received by the Group.

Schedule of management fees from funds

	Years Ended December 31,
	2012	2013	2014
	$	$	$
E-House (China) Real Estate Investment Fund 1 L.P. (the “Fund”)	202,198	63,567	5,386,412
E-House Shengyuan Equity Investment Center (“Shengyuan Center”)	1,580,360	1,549,416	1,410,790
E-House Shengquan Equity Investment Center (“Shengquan Center”)	619,857	611,205	559,100
Wuling Center (Note 4)	—	3,804,667	3,012,485
Shouxin Center (Note 4)	—	—	120,858
Muxin Center (Note 4)	—	—	191,770
Others(1)	—	305,343	1,061,829
Total management fee or carried interest earned	2,402,415	6,334,198	11,743,244

Notes:

(1) Others represent Xuyuechang Center, Xuyuerong Center and Xuyuezhen Center. The amount represents the management fee recognized from these entities during the periods.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Customer deposits, allowance for doubtful accounts	$ 583,836	$ 585,955
Accounts receivable, allowance for doubtful accounts	44,002,810	60,232,453
Accounts payable	8,260,681	11,264,939
Accrued payroll and welfare expenses	116,577,317	102,632,157
Income tax payable	117,593,159	98,685,965
Other tax payable	49,390,175	40,000,505
Amounts due to related parties	7,356,186	5,535,512
Advance from customers and deferred revenue	19,013,041	24,617,144
Liability for exclusive rights, current		8,967,972
Other current liabilities	85,836,572	62,466,610
Deferred tax liabilities, non-current	28,203,218	29,900,565
Ordinary shares, par value (in dollars per share)	$ 0.001	$ 0.001
Ordinary shares, shares authorized (in shares)	1,000,000,000	1,000,000,000
Ordinary shares, shares issued (in shares)	142,123,368	137,816,482
Ordinary shares, shares outstanding (in shares)	142,123,368	137,816,482
Consolidated VIEs without recourse
Accounts payable	600,735	1,505,942
Accrued payroll and welfare expenses	44,321,824	29,309,329
Income tax payable	28,337,431	28,793,459
Other tax payable	16,032,365	11,188,055
Amounts due to related parties	4,175,247	2,383,293
Advance from customers and deferred revenue	5,073,492	7,150,344
Liability for exclusive rights, current	0	8,967,972
Other current liabilities	36,291,161	9,917,349
Deferred tax liabilities, non-current	$ 469,579	$ 655,563

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Acquisition of Non-controlling Interests

12 Months Ended

Dec. 31, 2014

Acquisition of Non-controlling Interests

Acquisition of Non-controlling Interests

6. Acquisition of Non-controlling Interests

There were 3 major acquisitions of non-controlling interests completed in 2014.

In January 2014, the Group entered into an equity transfer agreement with two individual shareholders of Beijing Lotta Times Advertising Co., Ltd (“Beijing Lotta”), a subsidiary of Beijing Leju, to purchase the remaining 40% shares of Beijing Lotta that it did not already own with a total consideration of $16,254,600 (RMB100,000,000). After the acquisition, Beijing Lotta became a wholly-owned subsidiary of the Group. As the Group retains the controlling interest in Beijing Lotta before and after the acquisition, the acquisition was accounted for as an equity transaction. The carrying amount of the non-controlling interest in the subsidiary was adjusted to reflect the change in Group’s ownership interest in Beijing Lotta. Any difference between the fair value of the consideration paid and the amount by which the non-controlling interest was adjusted was recognized in equity. As a result of the transaction, $15,112,828 additional paid capital and $1,141,772 non-controlling interest were derecognized. As of December 31, 2014, $7,190,700 (RMB44,000,000) was unpaid and was due at December 31, 2015.

In September 2014, the Group entered into an equity transfer agreement with six individual shareholders (five of them are employees of the Group) of Beijing Yisheng Leju Advertising Co., Ltd (“Beijing Leju Advertisement”) and Yisheng Leju (Shanghai) Information Service Co., Ltd.( “Yisheng Shanghai”), two subsidiaries of Beijing Leju, to purchase the remaining 24.5% shares of Beijing Leju Advertisement and Yisheng Shanghai that it did not own with a total consideration of $19,074,412 (RMB117,355,000). Considerations to the five employees shareholders are $16,054,493 (RMB98,775,000) for 19.5% equity interest, equivalent to $823,307 per 1% equity interest, while the consideration for the rest 5.0% to the non-employee shareholder is $3,019,919 (RMB18,580,000), equivalent to $603,984 per 1% of equity interest. In connection with the equity transfer, the five employees are also required to serve for the Group for two years from the closing date of the transaction. The Group considers the purchase price to the nonemployee shareholder to represent fair value of the equity interest on the date of transfer. The consideration premium of $4,276,810 paid to the employee shareholders was treated as share-based compensation to be amortized over the 2-year service period. After the acquisition, Beijing Leju Advertisement and Yisheng Shanghai became wholly-owned subsidiaries of the Group. As the Group retains the controlling interest in Beijing Leju Advertisement and Yisheng Shanghai before and after the acquisition, the acquisition was accounted for as an equity transaction. The carrying amount of the non-controlling interest in two subsidiaries were adjusted to reflect the change in Group’s ownership interest in them. Any difference between the fair value of the consideration paid and the amount by which the non-controlling interest was adjusted was recognized in equity. As a result of the equity transaction, $12,906,772 additional paid capital and $1,890,830 non-controlling interest were derecognized. As of December 31, 2014, $15,534,635 was unpaid and was due at December 31, 2015.

In September 2014, the Group entered into an equity transfer agreement with an individual shareholder of Tianjin Yisheng Leju Advertising Co., Ltd (“Tianjin Leju”), a subsidiary of Beijing Leju, to purchase the remaining 30% shares of Tianjin Leju that it did not own with a total consideration of $4,685,913 (RMB28,830,000). After the acquisition, Tianjn Leju becomes a wholly-owned subsidiary of the Group. As the Group retains the controlling interest in Tianin Leju before and after the acquisition, the acquisition was accounted for as an equity transaction. The carrying amount of the non-controlling interest in the subsidiary was adjusted to reflect the change in Group’s ownership interest in Tianjin Leju. Any difference between the fair value of the consideration paid and the amount by which the non-controlling interest was adjusted was recognized in equity. As a result of the transaction, $4,449,469 additional paid capital and $236,444 non-controlling interest were derecognized. As of December 31, 2014, $2,871,268 was unpaid and was due at December 31, 2015.

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STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Net income (loss)	$ 52,337,158	$ 51,086,289	$ (71,049,371)
Other comprehensive income, net of tax of nil:
Unrealized gains for investment in preferred shares of a private entity	13,765,098
Foreign currency translation adjustment	(2,119,684)	17,532,967	1,828,717
Comprehensive income (loss)	63,982,572	68,619,256	(69,220,654)
Less: Comprehensive income (loss) attributable to non-controlling interests	12,269,668	(404,808)	(14,124,962)
Comprehensive income (loss) attributable to E-House shareholders	$ 51,712,904	$ 69,024,064	$ (55,095,692)

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Acquisitions of Subsidiaries (Details) (USD $)	0 Months Ended	12 Months Ended
	Apr. 20, 2012	Dec. 31, 2014	Apr. 20, 2012
Purchase price was allocated as follows:
Number of significant acquisitions of non-controlling interests		3
CRIC
Purchase price was allocated as follows:
Number of ADS shares to be issued for each share of acquiree	0.6		0.6
Cash paid for each share of acquiree	$ 1.75		$ 1.75
Consideration in cash	$ 113,124,632
Consideration in shares	38,785,588
Total consideration
Cash	113,124,632
Fair value of E-House ordinary shares issued	252,106,323
Replacement of CRIC share options	31,897,646
Total consideration	397,128,601
E-House replacement share options and restricted shares issued in connection with the Merger	54,787,620		54,787,620
Purchase price allocation
Non-controlling interest	254,656,627		254,656,627
Accumulated other comprehensive income	(6,989,208)		(6,989,208)
Additional paid-in capital	149,461,182		149,461,182
Total consideration	397,128,601
Gain or loss recognized in consolidated net income		$ 0

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CONSOLIDATED BALANCE SHEETS(USD ($))	Dec. 31, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 630,616,635	$ 413,319,174
Restricted cash	40,401,864	2,310,116
Customer deposits, net of allowance for doubtful accounts of $585,955 and $583,836 at December 31, 2013 and 2014, respectively	92,796,714	67,602,275
Accounts receivable, net of allowance for doubtful accounts of $60,232,453 and $ 44,002,810 at December 31, 2013 and 2014, respectively	415,150,008	357,442,102
Advance payment for properties to be held for sale, current	51,983,436	60,076,026
Properties held for sale	34,841,895	15,304,927
Short-term Investment		1,279,340
Deferred tax assets	64,804,392	66,331,906
Prepaid expenses and other current assets	39,339,526	44,234,499
Amounts due from related parties	6,094,260	1,263,416
Total current assets	1,376,028,730	1,029,163,781
Property and equipment, net	49,109,467	50,076,925
Intangible assets, net	120,380,671	141,231,750
Investment in affiliates	51,681,339	39,051,743
Goodwill	51,539,654	51,600,039
Customer deposits, non-current	797,024	652,300
Investment in preferred shares of private entity	39,484,906
Other non-current assets	87,901,450	43,743,560
TOTAL ASSETS	1,776,923,241	1,355,520,098
Current liabilities:
Accounts payable (including accounts payable of the consolidated VIEs without recourse to E-House of $1,505,942 and $600,735 as of December 31, 2013 and 2014, respectively)	8,260,681	11,264,939
Accrued payroll and welfare expenses (including accrued payroll and welfare expenses of the consolidated VIEs without recourse to E-House of $29,309,329 and $44,321,824 as of December 31, 2013 and 2014, respectively)	116,577,317	102,632,157
Income tax payable (including income tax payable of the consolidated VIEs without recourse to E-House of $28,793,459 and $28,337,431 as of December 31, 2013 and 2014, respectively)	117,593,159	98,685,965
Other tax payable (including other tax payable of the consolidated VIEs without recourse to E-House of $11,188,055 and $16,032,365 as of December 31, 2013 and 2014, respectively)	49,390,175	40,000,505
Amounts due to related parties (including amounts due to related parties of the consolidated VIEs without recourse to E-House of $2,383,293 and $4,175,247 as of December 31, 2013 and 2014, respectively)	7,356,186	5,535,512
Advance from property buyers	2,261,387	2,453,472
Short-term borrowings	35,953,500
Dividends payable	12,902,488
Advance from customers and deferred revenue(including advance from customers and deferred revenue of the consolidated VIEs without recourse to E-House of $7,150,344 and $5,073,492 as of December 31, 2013 and 2014, respectively)	19,013,041	24,617,144
Liability for exclusive rights, current (including exclusive rights, current of the consolidated VIEs without recourse to E-House of $8,967,972 and nil as of December 31, 2013 and 2014, respectively)		8,967,972
Other current liabilities (including other current liabilities of the consolidated VIEs without recourse to E-House of $9,917,349 and $36,291,161 as of December 31, 2013 and 2014, respectively)	85,836,572	62,466,610
Total current liabilities	455,144,506	356,624,276
Deferred tax liabilities (including deferred tax liabilities, non-current of the consolidated VIEs without recourse to E-House of $655,563 and $469,579 as of December 31, 2013 and 2014, respectively)	28,203,218	29,900,565
Convertible senior notes	132,751,540	131,650,949
Other non-current liabilities	658,357	1,473,279
Total liabilities	616,757,621	519,649,069
Commitments and contingencies (Note 23)
Equity:
Ordinary shares ($0.001 par value): 1,000,000,000 shares authorized, 137,816,482 and 142,123,368 shares issued and outstanding, as of December 31, 2013 and 2014, respectively	142,124	137,817
Additional paid-in capital	991,645,842	859,467,949
Accumulated deficit	(67,703,190)	(107,704,675)
Accumulated other comprehensive income	83,901,136	72,184,594
Subscription receivables	(196,407)	(2,147,932)
Total E-House equity	1,007,789,505	821,937,753
Non-controlling interest	152,376,115	13,933,276
Total equity	1,160,165,620	835,871,029
TOTAL LIABILITIES AND EQUITY	$ 1,776,923,241	$ 1,355,520,098

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Summary of Principal Accounting Policies (Details 4) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Accounts receivable
Allowance for doubtful accounts	$ 44,002,810	$ 60,232,453
Unbilled accounts receivable	306,282,419	268,589,167
Billed accounts receivable	108,867,589	88,852,935
Total	415,150,008	357,442,102
Properties held for sale
Impairment of properties held for sale	$ 0	$ 0	$ 0
Minimum
Investment in affiliates
Ownership interest to represent significant influence (as a percent)	20.00%
Ownership interest to represent more than minor influence for investments in investment funds (as a percent)	3.00%

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Distribution of Profits (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Distribution of Profits
Minimum percentage of after-tax profits of PRC subsidiaries and VIEs set aside to fund a statutory reserve	10.00%
Statutory reserve as a percentage of registered capital up to which after-tax profit of PRC subsidiaries and VIEs shall be transferred to statutory reserve	50.00%
Statutory reserve fund	$ 40,478,568	$ 35,633,687
Restricted portion of net assets, including general reserve and registered capital of PRC subsidiaries and VIEs	183,740,692	174,046,356
Restricted portion of net assets attributed to general reserve and registered capital of the VIEs	$ 12,076,642	$ 9,977,982

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Share-Based Compensation (Details) (USD $)	12 Months Ended	1 Months Ended				12 Months Ended	0 Months Ended	12 Months Ended		0 Months Ended			1 Months Ended	0 Months Ended			1 Months Ended
	Dec. 31, 2014	Nov. 30, 2013	Aug. 31, 2013	Nov. 30, 2012	Oct. 31, 2010	Dec. 31, 2006	May 29, 2012	Dec. 31, 2013	Dec. 31, 2012	May 09, 2012 item	Apr. 20, 2012	Dec. 02, 2013	Jan. 31, 2014	Dec. 16, 2013	Aug. 21, 2014	Mar. 18, 2014	Sep. 30, 2008	Apr. 30, 2012	Aug. 31, 2014
Additional disclosure
Total intrinsic value of options exercised	$ 23,679,729
E-House Plan
Share-Based Compensation
Number of shares authorized						3,636,364
Number of shares that may be issued as a percentage of total outstanding shares						5.00%
Award vesting period						3 years
Additional number of shares authorized			6,644,659	1,273,000	4,013,619
Expiration period		10 years
E-House Plan | Share Options:
Share-Based Compensation
Compensation expense	5,950,940							12,817,935	17,157,015
Assumptions used in the binomial model
Average risk-free rate of return (as a percent)							2.78%
Contractual life of option							8 years 7 days
Average estimated volatility rate (as a percent)							62.23%
Average dividend yield (as a percent)							2.45%
Additional disclosure
Compensation expense	5,950,940							12,817,935	17,157,015
Total intrinsic value of options exercised	23,679,729							25,248,554	436,259
E-House Plan | Share Options: | Directors
Share-Based Compensation
Number of employees holding options for which exercise price is reduced										3
Additional disclosure
Total number of options previously granted subject to modification (in shares)										396,050
E-House Plan | Share Options: | Employees
Share-Based Compensation
Exercise price of shares granted after reduction (in dollars per share)							5.34
Exercise price of shares granted, low end of the range (in dollars per share)							6.75
Exercise price of shares granted, high end of the range (in dollars per share)							8.99
Incremental compensation cost of the vested options replaced							1,811,935
Number of employees holding options for which exercise price is reduced							394
Additional disclosure
Total number of options previously granted subject to modification (in shares)							4,211,879
E-House Plan | E-House Replacement Options
Share-Based Compensation
Exercise price of shares granted, low end of the range (in dollars per share)									$ 0.72
Exercise price of shares granted, high end of the range (in dollars per share)									$ 8.99
Incremental compensation cost of the vested options replaced									289,930
Number of replacement options exchanged with replaced options granted (in shares)									15,107,745
Assumptions used in the binomial model
Average risk-free rate of return (as a percent)											2.62%
Contractual life of option											7 years 6 months 11 days
Average estimated volatility rate (as a percent)											50.42%
Average dividend yield (as a percent)											2.03%
E-House Plan | Restricted Shares:
Share-Based Compensation
Compensation expense	6,174,583							5,668,460	9,348,941
Award vesting period	3 years
Granted (in shares)	1,439,000							1,303,000	1,273,000
Forfeited (in shares)	(33,334)
Fair value of restricted share at the date of grant	$ 8.72
Additional disclosure
Compensation expense	6,174,583							5,668,460	9,348,941
E-House Plan | E-House Replacement Restricted Shares
Share-Based Compensation
Granted (in shares)											77,875
Exercise price of shares granted, low end of the range (in dollars per share)											3.38
Exercise price of shares granted, high end of the range (in dollars per share)											6.75
Incremental compensation cost of the vested options replaced											0
Assumptions used in the binomial model
Average risk-free rate of return (as a percent)											2.43%
Contractual life of option											10 months 6 days
Average estimated volatility rate (as a percent)											50.42%
Average dividend yield (as a percent)											2.03%
Leju Plan
Share-Based Compensation
Award vesting period		3 years
Expiration period		10 years
Leju Plan | Maximum
Share-Based Compensation
Number of shares that may be issued as a percentage of total outstanding shares		8.00%
Leju Plan | Share Options:
Share-Based Compensation
Compensation expense	4,525,552							381,874
Assumptions used in the binomial model
Average risk-free rate of return (as a percent)								2.98%
Contractual life of option								10 years
Average estimated volatility rate (as a percent)								56.74%
Average dividend yield (as a percent)								0.00%
Additional disclosure
Weighted-average grant-date fair value of options granted (in dollars per share)												$ 2.21
Compensation expense	4,525,552							381,874
Total intrinsic value of options exercised	1,668,693
Leju Plan | Share Options: | Employees
Share-Based Compensation
Award vesting period												3 years
Options granted for purchase of shares												7,192,000
Granted (in shares)													60,000
Exercise price of shares granted (in dollars per share)												$ 4.6
Leju Plan | Share Options: | Directors and employees
Share-Based Compensation
Granted (in shares)														600,000
Leju Plan | Restricted Shares:
Share-Based Compensation
Compensation expense	4,923,226							34,758
Award vesting period															8 months	3 years
Granted (in shares)	1,095,400														229,400	866,000
Forfeited (in shares)	(8,800)
Fair value of restricted share at the date of grant	$ 12.37
Additional disclosure
Compensation expense	4,923,226							34,758
Leju Plan | Restricted Shares: | Employees
Share-Based Compensation
Exercise price of shares granted (in dollars per share)													4.60
Leju Plan | Restricted Shares: | Directors and employees
Share-Based Compensation
Exercise price of shares granted (in dollars per share)														4.60
CRIC Plan | Maximum
Share-Based Compensation
Number of shares that may be issued as a percentage of total outstanding shares																	15.00%
CRIC Plan | Share Options:
Share-Based Compensation
Compensation expense									8,532,772									0
Additional disclosure
Compensation expense									8,532,772									0
Total intrinsic value of options exercised									750,115
CRIC Plan | CRIC Replaced Options
Share-Based Compensation
Number of replacement awards exchanged with replaced awards (in shares)											16,975,028
Exercise price of shares granted, low end of the range (in dollars per share)									$ 0.64
Exercise price of shares granted, high end of the range (in dollars per share)									$ 8.00
Assumptions used in the binomial model
Average risk-free rate of return (as a percent)											2.62%
Contractual life of option											7 years 6 months 11 days
Average estimated volatility rate (as a percent)											54.21%
CRIC Plan | Restricted Shares:
Share-Based Compensation
Compensation expense									54,688
Additional disclosure
Compensation expense									54,688
CRIC Plan | CRIC Replaced Restricted Shares
Share-Based Compensation
Exercise price of shares granted, low end of the range (in dollars per share)											3.00
Exercise price of shares granted, high end of the range (in dollars per share)											6.00
Converted (in shares)									87,500		87,500
Assumptions used in the binomial model
Average risk-free rate of return (as a percent)											2.43%
Contractual life of option											10 months 6 days
Average estimated volatility rate (as a percent)											54.21%
Scepter Plan
Share-Based Compensation
Award vesting period																			3 years
Expiration period																			10 years
Additional disclosure
Weighted-average grant-date fair value of options granted (in dollars per share)																			$ 1.12
Scepter Plan | Share Options:
Share-Based Compensation
Number of shares authorized																			750,000
Compensation expense	66,820
Exercise price of shares granted (in dollars per share)	$ 3.30																		$ 3.30
Assumptions used in the binomial model
Average risk-free rate of return (as a percent)	4.30%
Contractual life of option	10 years
Average estimated volatility rate (as a percent)	50.00%
Average dividend yield (as a percent)	1.70%
Additional disclosure
Compensation expense	$ 66,820

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Segment Information

12 Months Ended

Dec. 31, 2014

Segment Information

Segment Information

21. Segment Information

The Group uses the management approach to determine operating segments. The management approach considers the internal organization and reporting used by the Group’s chief operating decision maker (“CODM”) for making decisions, allocating resources and assessing performance. The Group’s CODM has been identified as the co-chairman and chief executive officer, who reviews consolidated and segment results when making decisions about allocating resources and assessing performance of the Group.

In 2012 and 2013, the Group had five operating segments: 1) real estate online services; 2) real estate brokerage services; 3) real estate information and consulting services; 4) real estate promotional events and advertising services; and 5) real estate fund management services.

In 2014, the Group established two new operating segments: community value-added services and real estate finance services.

In addition, the real estate promotional events and advertising services, real estate fund management services and real estate finance services did not meet the significance threshold for separate disclosure in any of the three years of 2012, 2013 and 2014, and have been combined in the other services segment for segment reporting purposes.

The Group’s CODM reviewed net revenue, cost of sales, operating expenses, income from operations and net income and did not review balance sheet information. Corporate expenses of certain holding companies were not allocated among segments and were recorded as non-allocated items.

The following tables summarize the selected revenue and expense information for each operating segment:

For the years ended December 31,

					Real Estate
	Real Estate		Real Estate		Information
	Online		Brokerage		and Consulting		Other
2012	Services		Services		Services		Services		Non-allocated		Total
	$		$		$		$		$		$
Revenues	169,755,893		208,284,503		54,517,612		29,881,360		—		462,439,368
Cost of revenues	(54,117,692	)	(114,667,241	)	(10,783,472	)	(23,602,280	)	—		(203,170,685	)
Selling, general and administrative expenses	(146,997,279	)	(92,291,838	)	(53,977,975	)	(10,544,345	)	(33,062,087	)	(336,873,524	)
Other operating income	153,340		2,982,861		2,481,255		857,567		—		6,475,023
Income (loss) from operations	(31,205,738	)	4,308,285		(7,762,580	)	(3,407,698	)	(33,062,087	)	(71,129,818	)
Interest income	257,204		425,714		624,817		55,895		242,832		1,606,462
Other income (expense), net	(1,979,450	)	84,937		(59,136	)	(446	)	1,221,225		(732,870	)
Income (loss) before taxes and equity in affiliates	(32,927,984	)	4,818,936		(7,196,899	)	(3,352,249	)	(31,598,030	)	(70,256,226	)
Income tax benefit (expense)	2,329,338		(4,589,892	)	623,227		468,673		—		(1,168,654	)
Income (loss) before equity in affiliates	(30,598,646	)	229,044		(6,573,672	)	(2,883,576	)	(31,598,030	)	(71,424,880	)
Income (loss) from equity in affiliates	(881	)	195,874		(14,933	)	195,449		—		375,509
Net income (loss)	(30,599,527	)	424,918		(6,588,605	)	(2,688,127	)	(31,598,030	)	(71,049,371	)

					Real Estate
	Real Estate		Real Estate		Information
	Online		Brokerage		and Consulting		Other
2013	Services		Services		Services		Services		Non-allocated		Total
	$		$		$		$		$		$
Revenues	335,410,902		280,776,816		76,683,188		38,207,927		—		731,078,833
Cost of revenues	(63,990,693	)	(168,624,507	)	(14,526,318	)	(26,894,288	)	—		(274,035,806	)
Selling, general and administrative expenses	(210,576,230	)	(74,728,461	)	(58,026,755	)	(12,404,049	)	(45,211,506	)	(400,947,001	)
Other operating income	599,894		1,647,257		1,950,223		720,268		—		4,917,642
Income (loss) from operations	61,443,873		39,071,105		6,080,338		(370,142	)	(45,211,506	)	61,013,668
Interest expenses	—		—		—		—		(192,566	)	(192,566	)
Interest income	1,082,287		819,925		222,898		51,944		2,493		2,179,547
Other income (expense), net	(1,185,121	)	87,270		(479,313	)	(11,837	)	537,786		(1,051,215	)
Income (loss) before taxes and equity in affiliates	61,341,039		39,978,300		5,823,923		(330,035	)	(44,863,793	)	61,949,434
Income tax benefit (expense)	(5,447,524	)	(10,000,257	)	(3,606,417	)	(588,344	)	5,965,548		(13,676,994	)
Income (loss) before equity in affiliates	55,893,515		29,978,043		2,217,506		(918,379	)	(38,898,245	)	48,272,440
Income (loss) from equity in affiliates	(69,194	)	343,561		312,119		(9,320	)	2,236,683		2,813,849
Net income (loss)	55,824,321		30,321,604		2,529,625		(927,699	)	(36,661,562	)	51,086,289

					Real Estate
	Real Estate		Real Estate		Information		Community
	Online		Brokerage		and Consulting		Value-added		Other
2014	Services		Services		Services		Services		Services		Non-allocated		Total
	$		$		$		$		$		$		$
Revenues	495,862,635		283,367,930		82,679,298		—		42,588,930		—		904,498,793
Cost of revenues	(51,129,730	)	(204,101,162	)	(25,153,090	)	—		(25,749,228	)	—		(306,133,210	)
Selling, general and administrative expenses	(365,150,431	)	(64,337,955	)	(59,703,161	)	(15,828,009	)	(14,662,201	)	(25,809,961	)	(545,491,718	)
Other operating income	2,525,496		2,223,460		3,301,932		—		736,003		—		8,786,891
Income (loss) from operations	82,107,970		17,152,273		1,124,979		(15,828,009	)	2,913,504		(25,809,961	)	61,660,756
Interest expenses	—		—		—		—		—		(5,325,474	)	(5,325,474	)
Interest income	1,316,203		1,099,825		691,003		6,124		78,608		18,565		3,210,328
Other income (expense), net	35,799		(68,069	)	657,952		—		(8,987	)	3,240,844		3,857,539
Income (loss) before taxes and equity in affiliates	83,459,972		18,184,029		2,473,934		(15,821,885	)	2,983,125		(27,876,026	)	63,403,149
Income tax benefit (expense)	(15,545,964	)	(5,083,029	)	(236,440	)	3,932,057		(169,368	)	2,201,951		(14,900,793	)
Income (loss) before equity in affiliates	67,914,008		13,101,000		2,237,494		(11,889,828	)	2,813,757		(25,674,075	)	48,502,356
Income (loss) from equity in affiliates	(223,389	)	118,651		1,761,582		—		(367,621	)	2,545,579		3,834,802
Net income (loss)	67,690,619		13,219,651		3,999,076		(11,889,828	)	2,446,136		(23,128,496	)	52,337,158

Geographic

Substantially all of the Group’s revenues from external customers and long-lived assets are located in the PRC.

Major customers

Details of the revenues for customers accounting for 10% or more of total net revenues are as follows:

	Years Ended December 31,
	2012	2013	2014
	$	$	$
Customer A	55,924,621	*	*

* indicates the revenue from the customer was less than 10% of total revenue in the year.

Revenue generated from Customer A for real estate online services, real estate brokerage services, real estate information and consulting services, and other services were $6,871,686, $42,483,101, $6,356,080, and $213,754 respectively, for 2012.

Details of the accounts receivable from customers accounting for 10% or more of total net accounts receivable are as follows:

	As of December 31,
	2013	2014
	$	$
Customer A	43,318,976	53,534,294

Details of the customer deposits from customers accounting for 10% or more of total net customer deposits are as follows:

	As of December 31,
	2013	2014
	$	$
Customer B	56,000,000	33,540,800
Customer C	—	24,513,750
Customer D	—	23,206,350
Customer E	8,200,900	*

* indicates the balance of customer deposit of the customer was less than 10% of total customer deposits as of 31 December, 2014.

XML

Other Income (Loss), Net

12 Months Ended

Dec. 31, 2014

Other Income (Loss), Net

Other Income (Loss), Net

15. Other Income (Loss), Net

	Years Ended December 31,
	2012		2013		2014
	$		$		$
Gains on marketable securities, realized portion	734,904		234,338		2,903,786
Gains on marketable securities, unrealized portion	804,621		—		—
Foreign exchange gain (loss)	(379,530	)	(862,383	)	613,227
Amortized discounts related to liability for exclusive rights with Baidu	(1,882,804	)	(935,177	)	(52,922	)
Others	(10,061	)	512,007		393,448
Total other income (loss)	(732,870	)	(1,051,215	)	3,857,539

XML

Segment Information (Tables)

12 Months Ended

Dec. 31, 2014

Segment Information

Summary of selected revenue and expense information for each operating segment

					Real Estate
	Real Estate		Real Estate		Information
	Online		Brokerage		and Consulting		Other
2012	Services		Services		Services		Services		Non-allocated		Total
	$		$		$		$		$		$
Revenues	169,755,893		208,284,503		54,517,612		29,881,360		—		462,439,368
Cost of revenues	(54,117,692	)	(114,667,241	)	(10,783,472	)	(23,602,280	)	—		(203,170,685	)
Selling, general and administrative expenses	(146,997,279	)	(92,291,838	)	(53,977,975	)	(10,544,345	)	(33,062,087	)	(336,873,524	)
Other operating income	153,340		2,982,861		2,481,255		857,567		—		6,475,023
Income (loss) from operations	(31,205,738	)	4,308,285		(7,762,580	)	(3,407,698	)	(33,062,087	)	(71,129,818	)
Interest income	257,204		425,714		624,817		55,895		242,832		1,606,462
Other income (expense), net	(1,979,450	)	84,937		(59,136	)	(446	)	1,221,225		(732,870	)
Income (loss) before taxes and equity in affiliates	(32,927,984	)	4,818,936		(7,196,899	)	(3,352,249	)	(31,598,030	)	(70,256,226	)
Income tax benefit (expense)	2,329,338		(4,589,892	)	623,227		468,673		—		(1,168,654	)
Income (loss) before equity in affiliates	(30,598,646	)	229,044		(6,573,672	)	(2,883,576	)	(31,598,030	)	(71,424,880	)
Income (loss) from equity in affiliates	(881	)	195,874		(14,933	)	195,449		—		375,509
Net income (loss)	(30,599,527	)	424,918		(6,588,605	)	(2,688,127	)	(31,598,030	)	(71,049,371	)

					Real Estate
	Real Estate		Real Estate		Information
	Online		Brokerage		and Consulting		Other
2013	Services		Services		Services		Services		Non-allocated		Total
	$		$		$		$		$		$
Revenues	335,410,902		280,776,816		76,683,188		38,207,927		—		731,078,833
Cost of revenues	(63,990,693	)	(168,624,507	)	(14,526,318	)	(26,894,288	)	—		(274,035,806	)
Selling, general and administrative expenses	(210,576,230	)	(74,728,461	)	(58,026,755	)	(12,404,049	)	(45,211,506	)	(400,947,001	)
Other operating income	599,894		1,647,257		1,950,223		720,268		—		4,917,642
Income (loss) from operations	61,443,873		39,071,105		6,080,338		(370,142	)	(45,211,506	)	61,013,668
Interest expenses	—		—		—		—		(192,566	)	(192,566	)
Interest income	1,082,287		819,925		222,898		51,944		2,493		2,179,547
Other income (expense), net	(1,185,121	)	87,270		(479,313	)	(11,837	)	537,786		(1,051,215	)
Income (loss) before taxes and equity in affiliates	61,341,039		39,978,300		5,823,923		(330,035	)	(44,863,793	)	61,949,434
Income tax benefit (expense)	(5,447,524	)	(10,000,257	)	(3,606,417	)	(588,344	)	5,965,548		(13,676,994	)
Income (loss) before equity in affiliates	55,893,515		29,978,043		2,217,506		(918,379	)	(38,898,245	)	48,272,440
Income (loss) from equity in affiliates	(69,194	)	343,561		312,119		(9,320	)	2,236,683		2,813,849
Net income (loss)	55,824,321		30,321,604		2,529,625		(927,699	)	(36,661,562	)	51,086,289

					Real Estate
	Real Estate		Real Estate		Information		Community
	Online		Brokerage		and Consulting		Value-added		Other
2014	Services		Services		Services		Services		Services		Non-allocated		Total
	$		$		$		$		$		$		$
Revenues	495,862,635		283,367,930		82,679,298		—		42,588,930		—		904,498,793
Cost of revenues	(51,129,730	)	(204,101,162	)	(25,153,090	)	—		(25,749,228	)	—		(306,133,210	)
Selling, general and administrative expenses	(365,150,431	)	(64,337,955	)	(59,703,161	)	(15,828,009	)	(14,662,201	)	(25,809,961	)	(545,491,718	)
Other operating income	2,525,496		2,223,460		3,301,932		—		736,003		—		8,786,891
Income (loss) from operations	82,107,970		17,152,273		1,124,979		(15,828,009	)	2,913,504		(25,809,961	)	61,660,756
Interest expenses	—		—		—		—		—		(5,325,474	)	(5,325,474	)
Interest income	1,316,203		1,099,825		691,003		6,124		78,608		18,565		3,210,328
Other income (expense), net	35,799		(68,069	)	657,952		—		(8,987	)	3,240,844		3,857,539
Income (loss) before taxes and equity in affiliates	83,459,972		18,184,029		2,473,934		(15,821,885	)	2,983,125		(27,876,026	)	63,403,149
Income tax benefit (expense)	(15,545,964	)	(5,083,029	)	(236,440	)	3,932,057		(169,368	)	2,201,951		(14,900,793	)
Income (loss) before equity in affiliates	67,914,008		13,101,000		2,237,494		(11,889,828	)	2,813,757		(25,674,075	)	48,502,356
Income (loss) from equity in affiliates	(223,389	)	118,651		1,761,582		—		(367,621	)	2,545,579		3,834,802
Net income (loss)	67,690,619		13,219,651		3,999,076		(11,889,828	)	2,446,136		(23,128,496	)	52,337,158

Revenues

Major customers

Schedule of major customers

	Years Ended December 31,
	2012	2013	2014
	$	$	$
Customer A	55,924,621	*	*

* indicates the revenue from the customer was less than 10% of total revenue in the year.

Accounts receivable

Major customers

Schedule of major customers

	As of December 31,
	2013	2014
	$	$
Customer A	43,318,976	53,534,294

Customer deposits

Major customers

Schedule of major customers

	As of December 31,
	2013	2014
	$	$
Customer B	56,000,000	33,540,800
Customer C	—	24,513,750
Customer D	—	23,206,350
Customer E	8,200,900	*

* indicates the balance of customer deposit of the customer was less than 10% of total customer deposits as of 31 December, 2014.

XML

Share-Based Compensation (Details 3) (USD $)	1 Months Ended	12 Months Ended				0 Months Ended	1 Months Ended	0 Months Ended		1 Months Ended
	Sep. 30, 2014	Dec. 31, 2014	Dec. 31, 2006	Dec. 31, 2013	Dec. 31, 2012	Apr. 20, 2012	Nov. 30, 2013	Aug. 21, 2014	Mar. 18, 2014	Aug. 31, 2014
Additional disclosure
Additional paid-in capital		$ 991,645,842		$ 859,467,949
Group of five employees
Additional disclosure
Weighted-average period over which cost is expected to be recognized	2 years
Additional paid-in capital	4,276,810
Recognition period of stock based compensation expense	2 years
Beijing Leju Advertisement and Yisheng Shanghai
Additional disclosure
Total unrecognized compensation expense		3,742,209
Compensation expense		534,601
Beijing Leju Advertisement and Yisheng Shanghai | Group of five employees
Additional disclosure
Number of years should serve by five employee individual shareholders after acquisition	2 years
E-House Plan
Summary of restricted share activity
Award vesting period			3 years
E-House Plan | Restricted Shares:
Summary of restricted share activity
Award vesting period		3 years
Unvested at the beginning of the period (in shares)		2,151,684
Granted (in shares)		1,439,000		1,303,000	1,273,000
Vested (in shares)		(860,301)
Forfeited (in shares)		(33,334)
Unvested at the end of the period (in shares)		2,697,049		2,151,684
Weighted average grant-date fair value
Unvested at the beginning of the period (in dollars per share)		$ 7.77
Granted (in dollars per share)		$ 8.72
Vested (in dollars per share)		$ 7.08
Forfeited (in dollars per share)		$ 7.78
Unvested at the end of the period (in dollars per share)		$ 8.50		$ 7.77
Additional disclosure
Total fair value of restricted shares vested		6,094,602		5,612,379	9,127,103
Total unrecognized compensation expense		20,310,709
Weighted-average period over which cost is expected to be recognized		2 years 5 months 5 days
Compensation expense		6,174,583		5,668,460	9,348,941
E-House Plan | E-House Replacement Restricted Shares
Summary of restricted share activity
Granted (in shares)						77,875
CRIC Plan | Restricted Shares:
Additional disclosure
Total fair value of restricted shares vested					130,000
Compensation expense					54,688
Leju Plan
Summary of restricted share activity
Award vesting period							3 years
Leju Plan | Restricted Shares:
Summary of restricted share activity
Award vesting period								8 months	3 years
Unvested at the beginning of the period (in shares)		600,000
Granted (in shares)		1,095,400						229,400	866,000
Converted from option (in shares)		60,000
Vested (in shares)		(220,000)
Forfeited (in shares)		(8,800)
Unvested at the end of the period (in shares)		1,526,600		600,000
Weighted average grant-date fair value
Unvested at the beginning of the period (in dollars per share)		$ 2.21
Granted (in dollars per share)		$ 12.37
Converted from option (in dollars per share)		$ 2.21
Vested (in dollars per share)		$ 2.21
Forfeited (in dollars per share)		$ 16.25
Unvested at the end of the period (in dollars per share)		$ 9.42		$ 2.21
Additional disclosure
Total fair value of restricted shares vested		486,200		0	0
Total unrecognized compensation expense		9,699,247
Weighted-average period over which cost is expected to be recognized		1 year 10 months 17 days
Compensation expense		$ 4,923,226		$ 34,758
Scepter Plan
Summary of restricted share activity
Award vesting period										3 years

XML

Summary of Principal Accounting Policies (Details 7) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Advertising expenses
Advertising expenses	$ 208,667,609	$ 100,457,370	$ 51,936,863
Foreign currency translation
Exchange loss	(613,227)	862,383	379,530
Government subsidies
Cash subsidies	8,786,891	4,917,642	6,475,023
Allowance for doubtful accounts for accounts receivable and customer deposits
Movement of the allowance for doubtful accounts for accounts receivable and customer deposits
Balance at the beginning of the period	60,818,408	36,537,817	14,811,322
Provisions for doubtful accounts	26,363,611	29,099,216	27,297,288
Write offs	(42,404,691)	(6,298,025)	(5,633,500)
Changes due to foreign exchange	(190,682)	1,479,400	62,707
Balance at the end of the period	$ 44,586,646	$ 60,818,408	$ 36,537,817

XML

Short Term Borrowings (Details)	12 Months Ended
	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY	Dec. 31, 2013 USD ($)	Dec. 31, 2014 PRC Commercial Bank USD ($)	Dec. 31, 2014 PRC Commercial Bank CNY
Short-term loan balance	$ 35,953,500	220,000,000
Bank deposits as collateral	38,290,478		0	38,290,478	234,300,000
Term of the loan	12 months
Interest rate (as a percent)	6.50%
Interest expense accrued	$ 6,416

XML

Goodwill (Tables)

12 Months Ended

Dec. 31, 2014

Goodwill

Schedule of changes in the carrying amount of goodwill by segment

					Real Estate
	Real Estate		Real Estate		Information
	Online		Brokerage		and Consulting
	Services		Services		Services	Total
	$		$		$	$
Balance as of January 1, 2012	40,152,022		3,509,326		5,667,004	49,328,352
Exchange rate translation	63,965		8,422		—	72,387
Balance as of December 31, 2012	40,215,987		3,517,748		5,667,004	49,400,739
Goodwill recognized upon acquisition	—		—		1,698,098	1,698,098
Exchange rate translation	394,633		106,569		—	501,202
Balance as of December 31, 2013	40,610,620		3,624,317		7,365,102	51,600,039
Exchange rate translation	(47,545	)	(12,840	)	—	(60,385	)
Balance as of December 31, 2014	40,563,075		3,611,477		7,365,102	51,539,654
As of December 31, 2012
Goodwill, gross	458,038,291		3,517,748		5,667,004	467,223,043
Accumulated impairment charge	(417,822,304	)	—		—	(417,822,304	)
Goodwill, net	40,215,987		3,517,748		5,667,004	49,400,739
As of December 31, 2013
Goodwill, gross	458,432,924		3,624,317		7,365,102	469,422,343
Accumulated impairment charge	(417,822,304	)	—		—	(417,822,304	)
Goodwill, net	40,610,620		3,624,317		7,365,102	51,600,039
As of December 31, 2014
Goodwill, gross	458,385,379		3,611,477		7,365,102	469,361,958
Accumulated impairment charge	(417,822,304	)	—		—	(417,822,304	)
Goodwill, net	40,563,075		3,611,477		7,365,102	51,539,654

XML

Summary of Principal Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2014

Summary of Principal Accounting Policies

Schedule of ownership interest in foreign owned subsidiaries

Name of Foreign Owned	Foreign Owned Subsidiaries’ Economic Ownership
Subsidiaries	of VIEs		Name of VIEs	Activities of VIEs
Shanghai Yifang	100	%	Shanghai Kushuo	Operate the real estate offline advertising business
Shanghai SINA Leju	100	%	Beijing Leju	Operate the online advertising and listing business
Shanghai Yi Yue	100	%	Shanghai Yi Xin	Operate the e-commerce business
Beijing Maiteng	100	%	Beijing Jiajujiu	Operate the online home furnishing business
Shanghai Baoyi	100	%	Shanghai E-Cheng	Operate the real estate fund management business
Shanghai CRIC	100	%	Shanghai Fangjia	Operate the information and consulting business
Shanghai Weidian	100	%	Shanghai Weihui	Operate the community value-added business

Schedule of financial statement balances included in the consolidated financial statements

	As of December 31,
	2013	2014
	$	$
Cash and cash equivalents	71,095,466	99,718,317
Accounts receivable, net of allowance for doubtful accounts	87,835,551	118,223,577
Other current assets	29,693,275	34,132,543
Amounts due from related parties	—	424,864
Total current assets	188,624,292	252,499,301
Total non-current assets	49,517,785	55,033,244
Total assets	238,142,077	307,532,545
Accounts payable	1,505,942	600,735
Accrued payroll and welfare expenses	29,309,329	44,321,824
Income tax payable	28,793,459	28,337,431
Other tax payable	11,188,055	16,032,365
Amounts due to related parties	2,383,293	4,175,247
Advance from customers and deferred revenue	7,150,344	5,073,492
Liability for exclusive rights, current	8,967,972	—
Other current liabilities	9,917,349	36,291,161
Total current liabilities	99,215,743	134,832,255
Deferred tax liabilities, non-current	655,563	469,579
Total liabilities	99,871,306	135,301,834

Schedule of financial statement amounts included in the consolidated financial statements

	Years Ended December 31,
	2012		2013		2014
	$		$		$
Total revenues	172,402,066		321,004,846		492,253,803
Cost of revenues	(54,276,512	)	(59,920,429	)	(43,760,890	)
Net income (loss)	(3,212,138	)	1,503,897		(8,699,386	)
Net cash provided by operating activities	16,020,624		72,877,862		55,495,458
Net cash used in investing activities	(17,544,270	)	(18,042,241	)	(17,245,460	)
Net cash provided by (used in) financing activities	26,686,813		(40,248,296	)	(17,043,942	)

Schedule of accounts receivable

	As of December 31,
	2013	2014
	$	$
Unbilled accounts receivable	268,589,167	306,282,419
Billed accounts receivable	88,852,935	108,867,589
Total	357,442,102	415,150,008

Schedule of expected useful lives of property and equipment

Leasehold improvements	Over the shorter of the lease term or their estimated useful lives
Buildings	30 years
Furniture, fixtures and equipment	3 - 5 years
Motor vehicles	5 years

Schedule of movement of the allowance for doubtful accounts for accounts receivable and customer deposits

	2012		2013		2014
	$		$		$
Balance as of January 1	14,811,322		36,537,817		60,818,408
Provisions for doubtful accounts	27,297,288		29,099,216		26,363,611
Write offs	(5,633,500	)	(6,298,025	)	(42,404,691	)
Changes due to foreign exchange	62,707		1,479,400		(190,682	)
Balance as of December 31	36,537,817		60,818,408		44,586,646

Schedule of computation of basic and diluted income per share

	Years Ended December 31,
	2012			2013		2014
Net income (loss) attributable to E-House ordinary shareholders — basic	$	(56,971,404	)	$	51,957,425	$	40,001,485
Decrease of income from Leju*	—			—		(2,208,892		)
Interest of Convertible Senior Notes (including stated interest and amortization of discount and issuance costs)	—			192,566		—
Net income (loss) attributable to E-House ordinary shareholders — diluted	$	(56,971,404	)	$	52,149,991	$	37,792,593
Weighted average ordinary shares outstanding— basic	106,159,388			130,163,165		139,211,442
Convertible senior notes	—			334,821		—
Share options and restricted shares	—			5,282,011		7,476,393
Weighted average number of ordinary shares outstanding — diluted	106,159,388			135,779,997		146,687,835
Basic earnings (loss) per share	$	(0.54	)	$	0.40	$	0.29
Diluted earnings (loss) per share	$	(0.54	)	$	0.38	$	0.26

* In calculating diluted earnings (loss) per share, the amount of Leju’s net income included in net income (loss) attributable to E-House’s ordinary shareholders is calculated by multiplying Leju’s diluted EPS by the weighted average number of Leju shares held by E-House’s during the period, which may result in net income (loss) attributable to E-House ordinary shareholders, for purposes of computing diluted earnings (loss) per share, being different from that actually recorded in the consolidated statements of operations. This difference is presented as increase (decrease) of income (loss) from Leju.

Schedule of instruments not included in the computation of duluted earnings (loss) per share

	Years Ended December 31,
	2012	2013	2014
Share options and restricted shares	14,660,788	—	—
Convertible senior notes	—	—	8,959,127

Effects of changes in E-House's ownership interest in CRIC, Leju and other significantly less than wholly owned subsidiaries on equity attributable to E-House

	Years Ended December 31,
	2012		2013	2014
Net income (loss) attributable to E-House	(56,971,404	)	51,957,425	40,001,485
Transfers to the non-controlling interest:
Decrease in E-House’s additional paid-in capital for purchase of 64,642,647 CRIC common shares for the years ended December 31 2012	(149,461,182	)	—	—
Decrease in E-House’s additional paid-in capital for the exercise of CRIC’s options and the vesting of CRIC’s restricted shares	(332,951	)	—	—
Increase in E-House’s equity by partial disposal of subsidiaries	—		—	138,477,580
Increase in E-House’s additional paid-in capital for issuing Leju’s shares to public	—		—	70,068,096
Decrease in E-House’s additional paid-in capital for Leju share distribution to E-House’s shareholders	—		—	(21,569,028	)
Decrease in E-House’s additional paid-in capital for acquisition of non-controlling interest	—		—	(30,720,088	)
Increase in E-House’s additional paid-in capital for the exercise of Leju’s options and the vesting of Leju’s restricted shares				58,340
Net transfers from (to) non-controlling interest	(149,794,133	)	—	156,314,900
Change from net income attributable to E-House and transfers (to) from non-controlling interest	(206,765,537	)	51,957,425	196,316,385

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Acquisitions of Subsidiaries (Tables)

12 Months Ended

Dec. 31, 2014

CRIC

Purchase price was allocated as follows:

Schedule of consideration transferred

	Amount
	$
Cash	113,124,632
Fair value of E-House ordinary shares issued *	252,106,323
Replacement of CRIC share options **	31,897,646
Total consideration	397,128,601

*The fair value of E-House ordinary shares is based on the closing price of E-House shares as of April 20, 2012

** As disclosed in Note 17, E-House issued the E-House replacement share options and restricted shares in connection with the Merger. The total fair value of the replacement awards was $54,787,620, of which $31,897,646 was attributable to pre-Merger services and included as a component of the consideration transferred in the Merger with the remainder allocated to post-Merger services and included in the Company’s compensation cost after the Merger. The amount attributable to the pre-Merger services was determined based on the fair value of the replacement awards on the date of Merger and a ratio of the pre-Merger services to the greater of the total service period or the original service period of the replacement awards.

Schedule of purchase price allocation

	Amount
	$
Non-controlling interest	254,656,627
Accumulated other comprehensive income	(6,989,208	)
Additional paid-in capital	149,461,182
Total consideration	397,128,601

Samas

Purchase price was allocated as follows:

Schedule of purchase price allocation

	Allocated		Amortization
	Value		Period
	$
Cash	1,061,330
Total tangible assets acquired	5,192,503
Liabilities assumed	(3,085,972	)
Favorable lease term	1,379,556		17.3 years
Customer relationship	184,987		17.3 years
Outstanding contracts	261,863		6.4 years
Goodwill	1,462,335
Deferred tax liabilities	(456,602	)
Total	6,000,000

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Acquisitions of Subsidiaries

12 Months Ended

Dec. 31, 2014

Acquisitions of Subsidiaries

Acquisitions of Subsidiaries

5. Acquisitions of Subsidiaries

Acquisition of CRIC

On April 20, 2012, the Group acquired all the outstanding shares of CRIC that it did not already own, and CRIC became a wholly-owned subsidiary of E-House. E-House paid 0.6 of E-House ADSs and $1.75 in cash in exchange for each CRIC share. In total, E-House paid $113,124,632 in cash and issued 38,785,588 ordinary shares for the Merger. The total consideration consists of the following:

	Amount
	$
Cash	113,124,632
Fair value of E-House ordinary shares issued *	252,106,323
Replacement of CRIC share options **	31,897,646
Total consideration	397,128,601

*The fair value of E-House ordinary shares is based on the closing price of E-House shares as of April 20, 2012

** As disclosed in Note 17, E-House issued the E-House replacement share options and restricted shares in connection with the Merger. The total fair value of the replacement awards was $54,787,620, of which $31,897,646 was attributable to pre-Merger services and included as a component of the consideration transferred in the Merger with the remainder allocated to post-Merger services and included in the Company’s compensation cost after the Merger. The amount attributable to the pre-Merger services was determined based on the fair value of the replacement awards on the date of Merger and a ratio of the pre-Merger services to the greater of the total service period or the original service period of the replacement awards.

As E-House retains the controlling interest in CRIC before and after the Merger, the Merger was accounted for as an equity transaction. Therefore, no gain or loss was recognized in consolidated net income or comprehensive income. The carrying amount of the non-controlling interest in CRIC was adjusted to reflect the change in E-House’s ownership interest in CRIC. Any difference between the fair value of the consideration paid and the amount by which the non-controlling interest was adjusted was recognized in equity.

The consideration has been allocated as follows:

	Amount
	$
Non-controlling interest	254,656,627
Accumulated other comprehensive income	(6,989,208	)
Additional paid-in capital	149,461,182
Total consideration	397,128,601

Other Acquisitions

In July 2013, the Group acquired Samas Asia Limited (“Samas”) for $6,000,000. Samas owned leasing contracts of four commercial buildings in Shanghai and was developing such buildings for subsequent sub-lease. The Group acquired Samas to develop its real estate asset management business. The goodwill mainly reflected the competitive advantages the Company expected to realize from Samas in the asset management industry, including synergies related to properties management and customer development. The purchase price was allocated as follows:

	Allocated		Amortization
	Value		Period
	$
Cash	1,061,330
Total tangible assets acquired	5,192,503
Liabilities assumed	(3,085,972	)
Favorable lease term	1,379,556		17.3 years
Customer relationship	184,987		17.3 years
Outstanding contracts	261,863		6.4 years
Goodwill	1,462,335
Deferred tax liabilities	(456,602	)
Total	6,000,000

The goodwill was allocated to the real estate information and consulting services segment and is not deductible for tax purposes.

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Intangible Assets, Net (Details) (USD $)	12 Months Ended				1 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Mar. 31, 2014
Intangible Assets, Net
Intangible assets subject to amortization, gross	$ 276,762,319	$ 273,109,420
Intangible assets subject to amortization, net	119,599,586	140,449,143
Total intangible assets, net	120,380,671	141,231,750
Weighted Average Amortization Periods	9 years 6 months 18 days
Amortization amount	52,922	935,177	1,882,804
Amortization expense	24,677,508	37,009,330	38,701,651
Amortization expense expected to be recorded
2015	16,648,450
2016	14,183,003
2017	13,932,242
2018	12,813,362
2019	11,936,725
Advertising agency agreement with SINA
Intangible Assets, Net
Intangible assets subject to amortization, gross	106,790,000	106,790,000
Less: Accumulated amortization	(51,286,533)	(44,495,832)
Weighted Average Amortization Periods	9 years 9 months
License agreements with SINA
Intangible Assets, Net
Intangible assets subject to amortization, gross	80,660,000	80,660,000
Less: Accumulated amortization	(39,377,764)	(34,280,500)
Weighted Average Amortization Periods	9 years 9 months
Exclusive rights with Baidu
Intangible Assets, Net
Intangible assets subject to amortization, gross	45,151,494	45,315,329
Less: Accumulated amortization	(43,034,803)	(34,693,471)
Weighted Average Amortization Periods	3 months
Purchase price of intangible assets				47,612,100
Fair value of intangible assets				43,847,992
Difference between fair value and principal amount				3,764,108
Payment to acquire exclusive rights	9,004,710	15,347,915	14,249,180
Amortization amount	52,922	935,177	1,882,804
Customer relationship
Intangible Assets, Net
Intangible assets subject to amortization, gross	12,084,676	12,100,847
Less: Accumulated amortization	(8,086,039)	(6,464,705)
Weighted Average Amortization Periods	5 years 1 month 17 days
Database Rights [Member]
Intangible Assets, Net
Intangible assets subject to amortization, gross	8,300,000	8,300,000
Less: Accumulated amortization	(5,126,472)	(4,150,001)
Weighted Average Amortization Periods	3 years 3 months
Favorable lease term
Intangible Assets, Net
Intangible assets subject to amortization, gross	9,541,891	9,541,891
Less: Accumulated amortization	(1,167,905)	(637,435)
Weighted Average Amortization Periods	16 years 11 months 12 days
Computer software licenses
Intangible Assets, Net
Intangible assets subject to amortization, gross	9,534,433	5,708,188
Less: Accumulated amortization	(4,784,950)	(3,963,457)
Weighted Average Amortization Periods	4 years 10 months 17 days
Non-compete agreements
Intangible Assets, Net
Intangible assets subject to amortization, gross	3,415,152	3,420,712
Less: Accumulated amortization	(3,349,230)	(3,097,470)
Weighted Average Amortization Periods	9 months
Customer contracts
Intangible Assets, Net
Intangible assets subject to amortization, gross	1,054,964	1,057,842
Less: Accumulated amortization	(871,174)	(832,950)
Weighted Average Amortization Periods	4 years 11 months 9 days
Domain name
Intangible Assets, Net
Intangible assets subject to amortization, gross	229,709	214,611
Less: Accumulated amortization	(77,863)	(44,456)
Weighted Average Amortization Periods	4 years 8 months 5 days
SINA | Advertising agency agreement and license agreements
Intangible Assets, Net
Additional extension of agreement period					5 years
Percentage of revenue fee on sales					15.00%
Trademark
Intangible Assets, Net
Intangible assets not subject to amortization	$ 781,085	$ 782,607

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Related Party Balances and Transactions

12 Months Ended

Dec. 31, 2014

Related Party Balances and Transactions

Related Party Balances and Transactions

22. Related Party Balances and Transactions

Amounts due from related parties are comprised of the following:

	As of December 31,
	2013	2014
	$	$
Customer and supplier	981,648	684
Other	281,768	6,093,576
Total amounts due from related parties	1,263,416	6,094,260

Amounts due to related parties are comprised of the following:

	As of December 31,
	2013	2014
	$	$
Management	2,760,000	2,024,000
Customer and supplier	1,745,263	4,831,288
Other	1,030,249	500,898
Total amounts due to related parties	5,535,512	7,356,186

(a) Customer and supplier

Transactions with customers and suppliers who are related parties are as follows:

Revenue recognized by the Group:

	Years Ended December 31,
	2012	2013	2014
	$	$	$
Beijing China Real Estate Research Association Technology Ltd (“CRERAT”)	52,120	1,084,047	136,708
SINA Corporation (“SINA”)	1,855	—	445,733

Selling, general and administrative expenses recorded by the Group:

	Years Ended December 31,
	2012	2013	2014
	$	$	$
CRERAT	476,706	—	—
SINA	—	—	4,911,660
Shanghai Guanfu Treasure-house Assets Management Co., Ltd (“Guanfu Treasure-house”)	—	—	409,305

Cost of revenue recorded by the Group:

	Years Ended December 31,
	2012	2013	2014
	$	$	$
SINA	5,145,039	6,033,036	6,643,317

Intangible assets purchased by the Group:

	Years Ended December 31,
	2012	2013	2014
	$	$	$
SINA	—	—	1,473,498
Hangzhou Kuyue	—	—	1,778,188

Amount due from (to) customers and suppliers who are related parties are as follows:

Amount due from (to) related parties

	As of December 31,
	2013		2014
	$		$
CRERAT	981,648		684
CRERAT	(3,892	)	—
SINA	(1,741,371	)	(3,616,957	)
Guanfu Treasure-house	—		(326,850	)
Hangzhou Kuyue	—		(887,481	)

CRERAT is a joint venture formed by the Group with China Real Estate Research Association and China Real Estate Association, with the Group owning 51% equity interest of the entity.

Mr. Charles Chao, SINA’s chairman and chief executive officer, has served as a co-chairman of the Company’s board of directors after the Merger on April 2012 (related party since April, 2012), and SINA has been a major shareholder of the Company since then.

Guanfu Treasure-house, an entity controlled by Mr. Xinzhou, co-chairman and chief executive officer of the Group, controls Guanfu Treasure-house. The amount due to Guanfu Treasure-house represents payables for the services provided by the entity.

The group acquired 21% equity interest of Hangzhou Kuyue in 2014, and the group can exercise significant influence over the entity.

(b) Affiliates

Amounts due from (to) affiliates are comprised as the following:

	As of December 31,
	2013		2014
	$		$
Shanghai Yueshun Real Estate Development Co., Ltd. (1)	281,768		280,750
Shanghai Jin Yue Real Estate Development Co., Ltd. (2)	(392,219	)	(390,801	)
Suzhou Hehui Xuyuechang Equity Investment Center (“Xuyuechang Center”) (3)	(103,331	)	285,272
Suzhou Hehui Xuyuerong Equity Investment Center (“Xuyuerong Center”) (3)	(480,081	)	23,461
Suzhou Hehui Xuyuezhen Equity Investment Center (“Xuyuezhen Center”) (3)	(54,618	)	115,447
E-House (China) Real Estate Investment Fund 1 L.P. (the “Fund”)(4)	—		5,388,646
Muxin Center(5)	—		(110,097	)

Notes:

(1) Xin Zhou is a director of the entity. The amount receivable (payable) is the rental cost paid (rental income received) by the Group on behalf of the entity.

(2) Xin Zhou is a director of the entity. The amount payable is rental expense paid by the entity on behalf of E-Commercial (Shanghai) Real Estate Advisory Co, Ltd.

(3) The Group holds 0.6%, 0.5% and 0.5% equity interest of Xuyuechang Center, Xuyuerong Center and Xuyuezhen Center, respectively. The Group also acts as a non-acting general partner and provides investment advice to the entities. The amount payable of December 31, 2013 is the advance management fee received by the Group while the amount receivable of December 31, 2014 is the management fee receivable from the entities.

(4) In January 2008, the Group formed the Fund, which seeks to invest in China’s real estate sector through diversified investment strategies at all levels of the real estate value chain. The Group’s 51% owned subsidiary, E-House Real Estate Asset Management Limited, acts as the Fund’s general partner. The general partner receives annual management fee and carried interest on a success basis. Major investors of the Fund include institutions and high net worth individuals. Mr. Xin Zhou, the Company’s co-chairman and chief executive officer, and Mr. Neil Nanpeng Shen, director of the Company, invested a total of $28 million in the Fund. They are also among the minority shareholders of the general partner. The Group has no investment in the Fund. The amount receivable is the carried interest receivable from the Fund.

(5) The Group holds 23.4% equity interest of Muxin Center. The Group also acts as general partner and provides investment advice to the entities. The amount payable is the advance management fee received by the Group.

(c) Management

The amount due to management represents consideration paid by management for unvested restricted shares under Leju Plan.

On March 25, 2013, E-House (China) Holdings Limited issued an aggregate of 17,790,125 ordinary shares of the Company to Kanrich Holdings Limited (“Kanrich”), a British Virgin Islands company owned by certain key members of the Company’s management, including Mr. Xin Zhou, co-chairman of the Company’s board of directors and chief executive officer, for an aggregate purchase price of $62,621,240.

(d) Real Estate Investment Fund Management

Management fees or carried interest from funds are comprised of the following:

	Years Ended December 31,
	2012	2013	2014
	$	$	$
E-House (China) Real Estate Investment Fund 1 L.P. (the “Fund”)	202,198	63,567	5,386,412
E-House Shengyuan Equity Investment Center (“Shengyuan Center”)	1,580,360	1,549,416	1,410,790
E-House Shengquan Equity Investment Center (“Shengquan Center”)	619,857	611,205	559,100
Wuling Center (Note 4)	—	3,804,667	3,012,485
Shouxin Center (Note 4)	—	—	120,858
Muxin Center (Note 4)	—	—	191,770
Others(1)	—	305,343	1,061,829
Total management fee or carried interest earned	2,402,415	6,334,198	11,743,244

The amount presented in the table is the revenue without net of sales tax.

Notes:

(1) Others represent Xuyuechang Center, Xuyuerong Center and Xuyuezhen Center. The amount represents the management fee recognized from these entities during the periods.

In January 2010, the Group formed a limited partnership, Shengyuan Center in Shanghai, for the purpose of making equity investments in areas deemed suitable by the general partner. The Group’s 51% owned subsidiary, Shanghai Yidezeng Equity Investment Center, acts as Shengyuan Center’s general partner. The general partner receives annual management fees and carried interest on a success basis. The Group invested $10,065,348 (RMB65,000,000) into the Shengyuan Center for a 13% equity interest. Mr. Xin Zhou, the Company’s co-chairman and chief executive officer, owns an 8% equity interest in the Shengyuan Center and is a limited partner. In 2013 and 2014, the Group received $461,463 (RMB2,813,487) and $1,781,581 (RMB10,881,747 ) capital return from Shengyuan Center, respectively.

In April 2010, the Group formed Shengquan Center, which seeks to invest in China’s real estate sector through diversified investment strategies at all levels of the real estate value chain. The Group’s 51% owned subsidiary, Shanghai Yidexin Equity Investment Center, acts as Shengquan Center’s general partner. The general partner receives annual management fee and carried interest on a success basis. Mr. Xin Zhou, the Company’s co-chairman and chief executive officer, holds a 2.4% equity interest in the Shengquan Center.

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Share-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2014

E-House Replacement Options and CRIC Replaced Options

Share-Based Compensation

Schedule of assumptions used to estimate the fair value of share options granted

	E-House	CRIC
	Replacement	Replaced
	Options	Options
Average risk-free rate of return	2.62%	2.62%
Contractual life of option	7.53 years	7.53 years
Average estimated volatility rate	50.42%	54.21%
Average dividend yield	2.03%	—

E-House Replacement Restricted Shares and CRIC Replaced Restricted Shares

Share-Based Compensation

Schedule of assumptions used to estimate the fair value of restricted shares granted

	E-House	CRIC
	Replacement	Replacement
	Restricted	Restricted
	Shares	Shares
Average risk-free rate of return	2.43%	2.43%
Contractual life of option	0.85 years	0.85 years
Average estimated volatility rate	50.42%	54.21%
Average dividend yield	2.03%	—

E-House Plan

Share-Based Compensation

Schedule of assumptions used to estimate the fair value of share options granted

	2012
Average risk-free rate of return	2.78%
Contractual life of option	8.02 years
Average estimated volatility rate	62.23%
Average dividend yield	2.45%

Summary of share option activity

	Number of Options		Weighted Average Exercise Price	Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value of Options
			$		$
Outstanding, as of January 1, 2014	12,949,951		4.25		140,247,969
Exercised	(3,446,585	)	3.49		23,679,729
Forfeited	(26,662	)	4.94
Outstanding, as of December 31, 2014	9,476,704		4.52	5.58	25,776,635
Vested and expected to vest as of December 31, 2014	9,476,704		4.52	5.58	25,776,635
Exercisable as of December 31, 2014	9,476,704		4.52	5.58	25,776,635

Summary of restricted share activity

	Number of Restricted Shares		Weighted Average Grant-date Fair Value
			$
Unvested as of January 1, 2014	2,151,684		7.77
Granted	1,439,000		8.72
Vested	(860,301	)	7.08
Forfeited	(33,334	)	7.78
Unvested as of December 31, 2014	2,697,049		8.50

Leju Plan

Share-Based Compensation

Schedule of assumptions used to estimate the fair value of share options granted

	2013
Average risk-free rate of return	2.98%
Contractual life of option	10 years
Average estimated volatility rate	56.74%
Average dividend yield	0.00%

Summary of share option activity

	Number of Options		Exercise Price	Remaining Contractual Term	Aggregate Intrinsic Value of Options
			$
Outstanding, as of January 1, 2014	6,592,000		4.60		—
Granted	—
Replaced by Restricted Share	(60,000	)	4.60
Exercised	(266,201	)	4.60		1,668,693
Forfeited	(132,000	)	4.60
Outstanding, as of December 31, 2014	6,133,799		4.60	8.92	37,784,202
Vested and expected to vest as of December 31, 2014	5,943,719		4.60	8.92	36,613,309
Exercisable as of December 31, 2014	1,867,132		4.60	8.92	11,501,535

Summary of restricted share activity

	Number of Restricted Shares		Weighted Average Grant-date Fair Value
Unvested as of January 1, 2014	600,000		2.21
Converted from option	60,000		2.21
Granted	1,095,400		12.37
Vested	(220,000	)	2.21
Forfeited	(8,800	)	16.25
Unvested as of December 31, 2014	1,526,600		9.42

Scepter Plan

Share-Based Compensation

Schedule of assumptions used to estimate the fair value of share options granted

	2014
Average risk-free rate of return	4.3%
Contractual life of option	10 years
Average estimated volatility rate	50.0%
Average dividend yield	1.7%

Summary of share option activity

	Number of Options		Exercise Price	Remaining Contractual Term	Aggregate Intrinsic Value of Options
			$
Outstanding, as of January 1, 2014	—
Granted	455,000		3.30	10.00
Forfeited	(5,000	)
Outstanding, as of December 31, 2014	450,000		3.30	9.60	—
Vested and expected to vest as of December 31, 2014	449,526		3.30	9.60	—
Exercisable as of December 31, 2014	—		3.30	9.60	—

XML

Intangible Assets, Net

12 Months Ended

Dec. 31, 2014

Intangible Assets, Net

Intangible Assets, Net

8. Intangible Assets, Net

					Weighted
					Average
	As of December 31,				Amortization
	2013		2014		Periods
	$		$		In years
Intangible assets not subject to amortization are comprised of the following:
Trademark	782,607		781,085
Intangible assets subject to amortization are comprised of the following:
Advertising agency agreement with SINA	106,790,000		106,790,000		9.75
License agreements with SINA	80,660,000		80,660,000		9.75
Exclusive rights with Baidu	45,315,329		45,151,494		0.25
Customer relationship	12,100,847		12,084,676		5.13
Database license	8,300,000		8,300,000		3.25
Favorable lease term	9,541,891		9,541,891		16.95
Computer software licenses	5,708,188		9,534,433		4.88
Non-compete agreements	3,420,712		3,415,152		0.75
Customer contracts	1,057,842		1,054,964		4.94
Domain name	214,611		229,709		4.68
	273,109,420		276,762,319		9.55
Less: Accumulated amortization
Advertising agency agreement	(44,495,832	)	(51,286,533	)
License agreements with SINA	(34,280,500	)	(39,377,764	)
Exclusive rights with Baidu	(34,693,471	)	(43,034,803	)
Customer relationship	(6,464,705	)	(8,086,039	)
Database license	(4,150,001	)	(5,126,472	)
Favorable lease term	(637,435	)	(1,167,905	)
Computer software licenses	(3,963,457	)	(4,784,950	)
Non-compete agreements	(3,097,470	)	(3,349,230	)
Customer contracts	(832,950	)	(871,174	)
Domain name	(44,456	)	(77,863	)
Intangible assets subject to amortization, net	140,449,143		119,599,586
Total intangible assets, net	141,231,750		120,380,671

In 2011, the Group purchased exclusive rights from Baidu, Inc (‘‘Baidu’’) which allow it to sell Baidu’s real estate related Brand Link product, which is a form of keyword advertising, and to use and operate Baidu’s exclusive real estate-related web channel for $47,612,100 through August 2014. In October 2013, the Group extended these rights with Baidu to March 2015, without paying additional consideration. The payment schedule of the remaining liability for exclusive rights was also deferred through the extension period. The fair value of $43,847,992 was recognized in 2011 and calculated by discounting the future cash payments to be made from 2012 to 2014. The difference between the fair value and the principal amount of $3,764,108 is being amortized using the effective interest method over the term of the exclusive rights and amounted to $1,882,804, $935,177 and $52,922 for the years ended December 31, 2012, 2013 and 2014, respectively.

The advertising agency agreement and license agreements with SINA were recognized in connection with the Group’s acquisition of COHT in 2009, which allows the Group to operate SINA’s existing real estate and home furnishing related channels and have the exclusive right to sell advertising relating to real estate, home furnishing and construction materials on these channels as well as SINA’s other websites through 2019. If the Group sells advertising on SINA’s websites other than above channels, it will pay SINA fees of approximately 15% of the revenues generated from these sales. The acquisition cost was recognized as an intangible asset and amortized over the term of the agreement. In March 2014, the advertising agency agreement and license agreements originally signed between the Group and SINA in 2009 were extended an additional five years to March 2024 for no additional consideration. All other terms of the agreements remain the same.

The Group paid $14,249,180, $15,347,915 and $9,004,710 in connection with the exclusive rights in 2012, 2013 and 2014, respectively.

Amortization expense was $38,701,651, $37,009,330 and $24,677,508 for the years ended December 31, 2012, 2013 and 2014, respectively. The Group expects to record amortization expenses of $16,648,450, $14,183,003, $13,932,242, $12,813,362 and $11,936,725 for the years ending December 31, 2015, 2016, 2017, 2018 and 2019, respectively.

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Income Tax (Details 5) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014
Income Tax
Preferential income tax rate (as a percent)	5.00%
Minimum
Income Tax
Amount of Unrecognized deferred tax liabilities	19.0
Withholding tax rate of profit distribution	5.00%
Maximum
Income Tax
Amount of Unrecognized deferred tax liabilities	38.0
Withholding tax rate of profit distribution	10.00%

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Investment in Affiliates

12 Months Ended

Dec. 31, 2014

Investment in Affiliates

Investment in Affiliates

4. Investment in Affiliates

In 2011, the Group paid RMB100,000,000 ($15,735,900) for a 3.8% equity interest in Shanghai Star Capital Equity Investment Center (“Star Capital”) as a limited partner. The Group’s interest in Star Capital is more than minor and thus is subject to the equity method. In 2013 and 2014, the Group received RMB35,000,000 ($5,740,630) and RMB15,000,000 ($2,455,830) capital return from Star Capital, respectively.

In May 2012, the Group formed a limited partnership, Shanghai Wuling Investment Center (“Wuling Center”) in Shanghai, for the purpose of making equity investments in areas deemed suitable by the general partner. Shanghai Yidezhen Equity Investment Center, a subsidiary of Shanghai E-cheng, acts as Wuling Center’s general partner. The general partner receives annual management fees and carried interest on a success basis. The Group invested RMB15,000,000 ($2,386,440), RMB27,000,000 ($4,428,486) and RMB18,000,000 ($2,946,996) into Wuling Center in 2012, 2013 and 2014 for a total of 6.5% equity interest, respectively. An entity controlled by Mr. Xin Zhou, the Company’s co-chairman and chief executive officer, owned 4.9% equity interest in Wuling Center and is a limited partner. The Wuling Center is not consolidated by the Group as the Group does not control the Wuling Center given the unrelated limited partners have substantive kick-out rights that allow them to remove the general partner without cause with a vote of 50% of the limited partners. The Group’s investments in Wuling Center are accounted for using the equity method as its role as a general partner provides it with significant influence over their operating and financial policies of the investee.

In 2014, the Group formed a limited partnership, Shanghai Shouxin Equity Investment Center (“Shouxin Center”) in Shanghai, for the purpose of making equity investments in areas deemed suitable by the general partner and Shanghai Yidezhao Equity Investment Center, a subsidiary of Shanghai E-cheng, acts as Shouxin Center’s general partner. The general partner will receive annual management fee and carried interest on a success basis. The Group prepaid $2,437,920 (RMB15,000,000) in 2013 into Shouxin Center for a 13.0% equity interest. Shouxin Center did not finalize its registration until 2014. Yidezhao’s related parties, E-House Shengyuan Equity Investment Center (“Shengyuan Center”) and E-House Shengquan Equity Investment Center (“Shenquan Center”) own 41.6% and 28.0% equity interest in Shouxin Center respectively, as limited partners. Shenyuan Center is the deemed the primary beneficiary of Shouxin Center given the substantive participating rights held by Shenyuan Center in certain financial and operating decisions of the limited partnership in the ordinary course of business, and the biggest equity holding in the limited partnership in the related party group. As such, the Group does not consolidate Shouxin Center. The Group’s investments in Shouxin Center are accounted for using the equity method as its role as a general partner provides it with significant influence over the operating and financial policies of the investees. The Group records its income (loss) from this investment one quarter in arrears to enable it to have more time to collect and analyze the investments’ results. In August 2014, the Group disposed of 12.2% equity interest for a total consideration of $2,287,950, of which 4.8% was transferred to an unrelated third party investor, and 7.4% was transferred to two employees of the Group. The unit price transferred to each individual was the same. The equity interests were transferred at book value, which approximated fair value at the time as the entity was just established with no material change in fair value. Therefore, no gain or loss was recognized from the disposal. The Group continues to account for the remaining 0.9% equity interest using equity method of accounting.

In 2014, the Group formed a limited partnership, Shanghai Muxin Equity Investment Center (“Muxin Center”) in Shanghai, for the purpose of making equity investments in areas deemed suitable by the general partner and Shanghai Yidezhao Equity Investment Center, a subsidiary of Shanghai E-Cheng, acts as Muxin Center’s general partner. The general partner will receive annual management fee and carried interest on a success basis. The Group prepaid $4,085,625 (RMB25,000,000) in 2013 into Muxin Center for a 23.4% equity interest. Muxin Center did not finalize its registration until 2014. The Group was not the deemed the primary beneficiary of Muxin Center. As such, the Group does not consolidate Muxin Center. The Group’s investments in Muxin Center are accounted for using the equity method as its role as a general partner provides it with significant influence over the operating and financial policies of the investees.

In January 2014, the Group paid $4,085,625 (RMB25,000,000) for a 21.0% equity interest in Hangzhou Kuyue Technology Limited (“Hangzhou Kuyue”), for the purpose of obtaining the mobile platform to operate the community value-added business. The Group’s interest in Hangzhou Kuyue is accounted for using equity method of accounting as the group can exercise significant influence over the operating and financial policies of the investee. In November 2014, the Group signed the agreement to acquire Hangzhou Kuyue as a wholly-owned subsidiary to integrate the internet resources in order to create leading Community Integration Information Service Platform. The consideration for the further 79.0% equity interest was $15,607,088 (RMB 95,500,000), of which $5,066,175 (RMB31,000,000) was paid in December 2014. The prepayment was recorded as other non-current assets in the consolidated balance sheet. The transaction was still in process as of December 31, 2014.

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Operating activities:
Net income (loss)	$ 52,337,158	$ 51,086,289	$ (71,049,371)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	33,336,600	45,215,493	47,386,277
Unrealized loss on marketable securities			(804,621)
Realized gain on marketable securities	(2,903,786)	(234,338)	(734,904)
Income from equity in affiliates	(3,834,802)	(2,813,849)	(375,509)
Allowance for doubtful accounts	26,381,555	29,146,892	27,958,218
Share-based compensation	22,175,722	18,903,027	35,656,525
Amortization of discounts related to liability for exclusive rights	52,922	935,177	1,882,804
Amortization of debt discount and issuance cost	1,627,183	37,879
Others	(1,031,539)	(172,944)	1,155,317
Changes in operating assets and liabilities:
Restricted cash	198,730	438,860	(167,175)
Customer deposits	(25,477,768)	14,848,744	(10,479,863)
Accounts receivable	(91,288,124)	(80,108,256)	(88,257,121)
Marketable securities	2,897,049	3,916,706	5,826,280
Amounts due from related parties	(4,830,844)	(944,036)	1,181,561
Properties held for sale and advance payment for properties to be held for sale	(3,499,706)	(55,657,811)	980,571
Prepaid expenses and other current assets	(5,190,461)	(1,573,079)	4,908,018
Other non-current assets	550,250	(14,399,728)	(4,889,458)
Accounts payable	(3,007,370)	3,688,255	1,726,897
Accrued payroll and welfare expenses	13,930,717	34,489,244	18,570,558
Income tax payable	18,887,611	43,664,036	10,449,070
Other tax payable	9,379,946	15,485,548	5,612,517
Amounts due to related parties	1,669,193	(1,243,912)	2,769,138
Other current liabilities	(5,695,764)	40,174,923	3,952,552
Other non-current liabilities	(814,929)	(245,919)	203,288
Deferred taxes	(11,867,112)	(30,745,061)	(15,644,865)
Net cash provided by (used in) operating activities	23,982,431	113,892,140	(22,183,296)
Investing activities:
Deposit for and purchase of property and equipment and intangible assets	(45,244,388)	(32,971,714)	(31,847,330)
Purchase of subsidiaries, net of cash acquired		(5,259,451)
Prepayment for investment	(7,766,948)	(15,745,728)
Restricted cash for collateral of bank loans	(38,290,478)
Proceeds from disposal of subsidiaries			157,359
Investment in affiliates	(8,890,449)	(5,766,873)	(2,161,001)
Capital return of investment in affiliates	6,525,361	6,202,093
Proceeds from disposal of property and equipment	5,350,020	1,727,724	425,432
Investment in preferred shares of a private entity	(25,719,808)
Purchase of short-term investment		(1,279,340)
Proceeds from short-term investment	1,277,032
Net cash used in investing activities	(112,759,658)	(53,093,289)	(33,425,540)
Financing activities:
Purchases of non-controlling interest	(14,613,056)
Proceeds from issuance of ordinary shares of Leju upon initial public offering, net of paid issuance costs of $15,036,616	120,257,584
Short-term borrowing	35,953,500
Purchases of shares of CRIC from public			(113,124,632)
New shares issued to management		62,621,240
Contribution from non-controlling interest	19,925,043	8,030,815	291,839
Proceeds from exercise of options	14,529,652	15,329,388	815,522
Advance from related parties	276,000	2,760,000
Repayment of loans from non-controlling interests	(253,400)
Proceeds from issuance of convertible senior notes, net of discount of $3,375,000		131,625,000
Proceeds from partially disposal of subsidiaries	176,704,417
Debt issuance costs		(1,551,570)
Payment of call option		(44,999,998)
Repurchase of shares		(17,772,586)	(1,569,815)
Dividends	(43,111,414)	(19,946,745)	(11,866,670)
Dividends to non-controlling interests shareholders	(2,508,620)	(338,941)	(319,675)
Net cash provided by (used in) financing activities	307,159,706	135,756,603	(125,773,431)
Effect of exchange rate changes on cash and cash equivalents	(1,085,018)	5,922,352	218,282
Net increase (decrease) in cash and cash equivalents	217,297,461	202,477,806	(181,163,985)
Cash and cash equivalents at the beginning of the year	413,319,174	210,841,368	392,005,353
Cash and cash equivalents at the end of the year	630,616,635	413,319,174	210,841,368
Supplemental disclosure of cash flow information:
Income taxes paid	7,175,015	4,986,562	6,568,082
Interest paid	3,691,875
Non-cash investing and financing activities:
Decrease in amount due to related party due to vesting of restricted shares	(1,012,000)	(263,106)	(262,594)
Ordinary shares issued in connection with the merger of CRIC			38,786
Additional paid-in capital recognized in connection with the merger of CRIC			102,606,355
Non-controlling interest recognized in connection with business acquisition		48,518
Non-controlling interest derecognized in connection with the merger of CRIC			254,656,627
Consideration payable for amount recognized in purchase of exclusive rights		8,967,972	22,892,042
Dividend payable to non-controlling interest	536,446	536,446	536,446
Dividends payable to E-House shareholders	12,902,488
Non-controlling interest recognized in connection with the distribution of Leju ordinary shares to E-House shareholders as dividends	21,569,028
Payable for acquisition of non-controlling interest	25,645,630
Waive the payable to non-controlling interest in connection with the acquisition of non-controlling interest	746,600
Unrealized gains for investment in preferred shares of a private entity	$ 13,765,098

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Summary of Principal Accounting Policies (Details 5)	12 Months Ended
	Dec. 31, 2014
Buildings
Property and equipment, net
Estimated useful life	30 years
Motor vehicles
Property and equipment, net
Estimated useful life	5 years
Minimum | Furniture, fixtures and equipment
Property and equipment, net
Estimated useful life	3 years
Maximum | Furniture, fixtures and equipment
Property and equipment, net
Estimated useful life	5 years

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Organization and Principal Activities (Details) (USD $)	12 Months Ended	1 Months Ended
	Dec. 31, 2014	Apr. 30, 2015	Oct. 31, 2009	Mar. 31, 2014	Apr. 30, 2014	Dec. 31, 2014	Dec. 31, 2013
Organization and Principal Activities
Net proceeds from equity method investment after deducting commissions and related expenses	$ 176,704,417
Ordinary shares, par value (in dollars per share)	$ 0.001					0.001	$ 0.001
Partial spin-off
Organization and Principal Activities
Ordinary shares, par value (in dollars per share)	$ 0.001					0.001
Shanghai Real Estate Sales (Group) Co., Ltd..
Organization and Principal Activities
Ownership interest (as a percent)	100.00%
Shanghai City Rehouse Real Estate Agency Ltd.
Organization and Principal Activities
Ownership interest (as a percent)	85.00%
Scepter
Organization and Principal Activities
Ownership interest (as a percent)	51.00%	51.00%
Shanghai CRIC Information Technology Co., Ltd
Organization and Principal Activities
Ownership interest (as a percent)	100.00%
Shanghai Xinju Finance Information Services Co Ltd
Organization and Principal Activities
Ownership interest (as a percent)	56.00%
Shanghai Weidian Information Technology Co Ltd
Organization and Principal Activities
Ownership interest (as a percent)	55.00%
Leju Holdings Ltd.
Organization and Principal Activities
Ownership interest (as a percent)	69.90%
COHT | CRIC
Organization and Principal Activities
SINA's equity interest acquired (as a percent)			66.00%
Tencent | Leju Holdings Ltd.
Organization and Principal Activities
Percentage of equity interest sold				15.00%
Net proceeds from equity method investment after deducting commissions and related expenses				176,400,000
Initial public offering | Leju Holdings Ltd.
Organization and Principal Activities
Proceeds from issuance of ordinary shares of Leju upon initial public offering, net of paid issuance costs of $15,036,616					101,400,000
Private placement | Tencent | Leju Holdings Ltd.
Organization and Principal Activities
Proceeds from issuance of private placement					$ 18,900,000
Ordinary Shares | Partial spin-off
Organization and Principal Activities
Dividend Conversion Ratio						0.05
ADSs | Partial spin-off
Organization and Principal Activities
Dividend Conversion Ratio						0.05

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Fair Value Measurement (Details 3) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Changes in fair value for assets using Level 3 inputs
Fair value asset transfers from Level 1 to Level 2	$ 0	$ 0
Fair value asset transfers from Level 2 to Level 1	0	0
Fair value asset transfers into/out of Level 3	0	0
Assets measured at fair value on nonrecurring basis	0	0	0
Liabilities measured at fair value on nonrecurring basis	0	0	0
Fair value of non-current portion of customer deposits	751,909	614,507
Preferred shares
Changes in fair value for assets using Level 3 inputs
Purchased	25,719,808
Changes in Gains Included in Other Comprehensive Income	13,765,098
Balance as of December 31	39,484,906
Unrealized Gains	$ 13,765,098

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Summary of Principal Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2014

Summary of Principal Accounting Policies

Basis of presentation

(a) Basis of presentation

The consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

Basis of consolidation

(b) Basis of consolidation

The consolidated financial statements include the financial statements of E-House, its majority owned subsidiaries and its VIEs, Beijing Leju, Shanghai Yi Xin, Beijing Jiajujiu, Shanghai Kushuo, Shanghai E-Cheng, Shanghai Fangjia and Shanghai Weihui. All inter-company transactions and balances have been eliminated in consolidation.

In 2012, the contractual arrangements among the shareholders of Shanghai Tian Zhuo Advertising Co., Ltd. (“Tian Zhuo”), Tian Zhuo and Shanghai CRIC Information Technology Co., Ltd. (“Shanghai CRIC”) were terminated. Upon the termination, the shareholders of Tian Zhuo transferred all of their equity interests in Tian Zhuo to Beijing Leju to make Tian Zhuo a wholly owned subsidiary of Beijing Leju. In December 2013, Beijing Leju transferred all of its equity interest in Tian Zhuo to Shanghai Kushuo to make Tian Zhuo a wholly owned subsidiary of Shanghai Kushuo.

The Group evaluates each of its interests in private companies to determine whether or not the investee is a VIE and, if so, whether the Group is the primary beneficiary of such VIE. In determining whether the Group is the primary beneficiary, the Group considers if the Group (1) has power to direct the activities that most significantly affects the economic performance of the VIE, and (2) receives the economic benefits of the VIE that could be significant to the VIE. If deemed the primary beneficiary, the Group consolidates the VIE.

The VIE arrangements

PRC regulations currently prohibit or restrict foreign ownership of companies that provide Internet content and advertising services. To comply with these regulations, the Group provides such activities relating to Internet content and advertising services through its VIEs and their subsidiaries.

To provide the Group effective control over and the ability to receive substantially all of the economic benefits of its VIEs and their subsidiaries, the Company’s subsidiaries Shanghai Yifang Software Co., Ltd. (“Shanghai Yifang”), Shanghai SINA Leju Information Technology Co., Ltd. (“Shanghai SINA Leju”) and Shanghai Yi Yue Information Technology Co. Ltd. (“Shanghai Yi Yue”), Beijing Maiteng Fengshun Science and Technology Co., Ltd., (“Beijing Maiteng”), Baoyi Investment Consultant (Shanghai) Co., Ltd (“Shanghai Baoyi”), Shanghai CRIC, and Shanghai Weidian (collectively, the “Foreign Owned Subsidiaries”) entered into a series of contractual arrangements with Shanghai Kushuo, Beijing Leju, Shanghai Yi Xin, Beijing Jiajujiu, Shanghai E-Cheng, Shanghai Fangjia and Shanghai Weihui (collectively the “VIEs”) and their respective shareholders, respectively, as summarized below:

Name of Foreign Owned	Foreign Owned Subsidiaries’ Economic Ownership
Subsidiaries	of VIEs		Name of VIEs	Activities of VIEs
Shanghai Yifang	100	%	Shanghai Kushuo	Operate the real estate offline advertising business
Shanghai SINA Leju	100	%	Beijing Leju	Operate the online advertising and listing business
Shanghai Yi Yue	100	%	Shanghai Yi Xin	Operate the e-commerce business
Beijing Maiteng	100	%	Beijing Jiajujiu	Operate the online home furnishing business
Shanghai Baoyi	100	%	Shanghai E-Cheng	Operate the real estate fund management business
Shanghai CRIC	100	%	Shanghai Fangjia	Operate the information and consulting business
Shanghai Weidian	100	%	Shanghai Weihui	Operate the community value-added business

The VIEs hold the requisite licenses and permits necessary to conduct Internet content and advertising services activities relating to real estate projects from which foreign ownership of companies are prohibited or restricted. Foreign-invested enterprises incorporated in the PRC are not expressly prohibited from providing asset management services in PRC. However, according to local business practice, as a general partner of a fund, the Group must invest as a limited partner before the fund is established. Some investments of the fund managed by the Group are in the foreign-invested enterprise prohibited, or not encouraged industries, which requires all investors not to be foreign-invested enterprises. Therefore the Group provides asset management services through its VIE entities. In addition, the VIEs hold leases and other assets necessary to operate such business and generate substantial of the Group’s online and advertising revenues.

Agreements that Transfer Economic Benefits of the VIEs to the Group

Exclusive Consultancy Services/Technical Support Agreement. Pursuant to an exclusive Consultancy services/technical support agreement between the Foreign Owned Subsidiaries and the respective VIEs, the Foreign Owned Subsidiaries provide the respective VIEs with a series of Consultancy services/technical support services and are entitled to receive related fees. The term of this exclusive technical support agreement will expire upon dissolution of the VIEs. Unless expressly provided by this agreement, without prior written consent of the Foreign Owned Subsidiaries, the VIEs may not engage any third party to provide the services offered by the Foreign Owned Subsidiaries under this agreement.

Agreements that Provide Effective Control over VIEs

Exclusive Call Option Agreement. Each of shareholders of the VIEs has entered into an exclusive call option agreement with the respective Foreign Owned Subsidiaries. Pursuant to these agreements, each of the shareholders of the VIEs has granted an irrevocable and unconditional option to the respective Foreign Owned Subsidiaries or their designees to acquire all or part of such shareholder’s equity interests in VIEs at its sole discretion, to the extent as permitted by PRC laws and regulations then in effect. The consideration for such acquisition of all equity interests in VIEs will be equal to the registered capital of the VIEs, and if PRC law requires the consideration to be greater than the registered capital, the consideration will be the minimum amount as permitted by PRC law. In addition, the VIEs irrevocably and unconditionally granted respective Foreign Owned Subsidiaries an exclusive option to purchase, to the extent permitted under the PRC law, all or part of the assets of the VIEs. The exercise price for purchasing the assets of the VIEs will be equal to their respective book values, and if PRC law requires the price to be greater than the book value, the price will be the minimum amount as permitted by PRC law. The call option may be exercised by respective Foreign Owned Subsidiaries or their designees.

Loan Agreement. Under the loan agreement among shareholders of the VIEs and the respective Foreign Owned Subsidiaries, the respective Foreign Owned Subsidiaries granted an interest-free loan to the shareholders of VIE, solely for their purchase of equity interest of the VIEs, investing or operating activities conducted in the VIEs. Each loan agreement has a term of twenty years.

Shareholder Voting Right Proxy Agreement. Each of shareholders of the VIEs irrevocably grant any person designated by the respective Foreign Owned Subsidiaries the power to exercise all voting rights to which he will be entitled to as shareholder of the VIEs at that time, including the right to declare dividends, appoint and elect board members and senior management members and other voting rights.

Each shareholder voting right proxy agreement has a term of twenty years, unless it is early terminated by all parties in writing or pursuant to provision of this agreement. The term of the agreement will be automatically extended for one year upon the expiration, if the Foreign Owned Subsidiary gives the other Parties written notice requiring the extension thereof and the same mechanism will apply subsequently upon the expiration of each extended term.

Equity Pledge Agreement. Each of shareholders of the VIEs has also entered into an equity pledge agreement with the respective Foreign Owned Subsidiaries. Pursuant to which these shareholders pledged their respective equity interest in the VIEs to guarantee the performance of the obligations of the VIEs. The Foreign Owned Subsidiaries, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. Pursuant to the equity pledge agreement, each shareholder of the VIEs cannot transfer, sell, pledge, dispose of or otherwise create any new encumbrance on their respective equity interest in the VIEs without the prior written consent of the respective Foreign Owned Subsidiaries. The equity pledge right enjoyed by the Foreign Owned Subsidiaries will expire when shareholders of the VIEs have fully performed their respective obligations under the above agreements. The equity pledges of the VIEs have been registered with the relevant local branch of the State Administration for Industry and Commerce, or SAIC.

Risks in relation to the VIE structure

The Company believes that the Foreign Owned Subsidiaries’ contractual arrangements with the VIEs are in compliance with PRC law and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements and the interests of the shareholders of the VIEs may diverge from that of the Company and that may potentially increase the risk that they would seek to act contrary to the contractual terms, for example by influencing the VIEs not to pay the service fees when required to do so.

The Company’s ability to control the VIEs also depends on the power of attorney the Foreign Owned Subsidiaries have to vote on all matters requiring shareholder approval in the VIEs. As noted above, the Company believes this power of attorney is legally enforceable but may not be as effective as direct equity ownership.

In addition, if the legal structure and contractual arrangements were found to be in violation of any existing PRC laws and regulations, the Company may be subject to fines or other actions. The Company does not believe such actions would result in the liquidation or dissolution of the Company, the Foreign Owned Subsidiaries or the VIEs.

The Group, through its subsidiaries and through the contractual arrangements, has (1) the power to direct the activities of the VIEs that most significantly affect the entity’s economic performance and (2) the right to receive benefits from the VIEs. Accordingly, the Group is the primary beneficiary of the VIEs and has consolidated the financial results of the VIEs.

The following financial statement amounts and balances of the Group’s VIEs were included in the accompanying consolidated financial statements:

	As of December 31,
	2013	2014
	$	$
Cash and cash equivalents	71,095,466	99,718,317
Accounts receivable, net of allowance for doubtful accounts	87,835,551	118,223,577
Other current assets	29,693,275	34,132,543
Amounts due from related parties	—	424,864
Total current assets	188,624,292	252,499,301
Total non-current assets	49,517,785	55,033,244
Total assets	238,142,077	307,532,545
Accounts payable	1,505,942	600,735
Accrued payroll and welfare expenses	29,309,329	44,321,824
Income tax payable	28,793,459	28,337,431
Other tax payable	11,188,055	16,032,365
Amounts due to related parties	2,383,293	4,175,247
Advance from customers and deferred revenue	7,150,344	5,073,492
Liability for exclusive rights, current	8,967,972	—
Other current liabilities	9,917,349	36,291,161
Total current liabilities	99,215,743	134,832,255
Deferred tax liabilities, non-current	655,563	469,579
Total liabilities	99,871,306	135,301,834

	Years Ended December 31,
	2012		2013		2014
	$		$		$
Total revenues	172,402,066		321,004,846		492,253,803
Cost of revenues	(54,276,512	)	(59,920,429	)	(43,760,890	)
Net income (loss)	(3,212,138	)	1,503,897		(8,699,386	)
Net cash provided by operating activities	16,020,624		72,877,862		55,495,458
Net cash used in investing activities	(17,544,270	)	(18,042,241	)	(17,245,460	)
Net cash provided by (used in) financing activities	26,686,813		(40,248,296	)	(17,043,942	)

There are no consolidated VIEs’ assets that are collateral for the VIEs’ obligations or are restricted solely to settle the VIEs’ obligations. The Company has not provided any financial support that it was not previously contractually required to provide to the VIEs.

Use of estimates

(c) Use of estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from such estimates. Significant accounting estimates reflected in the Group’s financial statements include useful lives and valuation of long-lived assets, valuation of goodwill, allowance for doubtful accounts, assumptions related to share-based compensation arrangements, assumptions related to the consolidation of entities in which the Group holds variable interests, fair value of equity investments in funds invested by the Company, valuation allowance on deferred tax assets and estimated selling prices in multiple-deliverable revenue arrangements, valuation of fair value of investment in preferred shares of a private entity, and assumptions related to the valuation of fair value of Leju and Scepter’s ordinary shares.

Fair value of financial instruments

(d) Fair value of financial instruments

The Group records certain of its financial assets and liabilities at fair value on a recurring basis. Fair value reflects the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability.

The Group applies a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. There are three levels of inputs that may be used to measure fair value:

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Business combinations

(e) Business combinations

Business combinations are recorded using the purchase method of accounting and, accordingly, the acquired assets and liabilities are recorded at their fair market value at the date of acquisition. Any excess of acquisition cost over the fair value of the acquired assets and liabilities, including identifiable intangible assets, is recorded as goodwill.

Cash and cash equivalents

(f) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and demand deposits, which are unrestricted as to withdrawal and use, and which have original maturities of three months or less.

Restricted cash

(g) Restricted cash

The Group is required to maintain certain bank deposits as collateral for the bank loans to the Group (see Note 11). These balancers are subject to withdrawal restrictions and totaled nil and $38,290,478 as of December 31, 2013 and 2014, respectively.

The Group provides brokerage service for secondary properties. Upon consent of the property buyers and sellers, the sales proceeds can be paid through the Group’s accounts, which are put into the custody of the designated bank and can only be used as consideration to the property sellers when the transactions are completed. The Group records the proceeds relating to these transactions as restricted cash and other current liabilities. These restricted cash accounts totaled $2,146,098 and $1,947,961 as of December 31, 2013 and 2014, respectively. In connection with certain primary real estate agency agreements, the Group is required by the developers to maintain certain bank deposits under both parties’ custody through the contract periods or until the presale permits are obtained for the underlying projects. These restricted cash accounts were $164,018 and $163,425 as of December 31, 2013 and 2014, respectively.

Investment in debt and equity securities

(h) Investment in debt and equity securities

The Group invests in debt securities and equity securities with readily determinable fair values, and accounts for the investments based on the nature of the products invested, and the Group’s intent and ability to hold the investments to maturity.

The Group’s investments in debt securities that have a stated maturity and normally pay a prospective fixed rate of return. The Group classifies the investments in debt securities as held-to-maturity when it has both the positive intent and ability to hold them until maturity. Held-to-maturity investments are recorded at amortized cost and are classified as long-term or short-term according to their contractual maturity. Long-term investments are reclassified as short-term when their contractual maturity date is less than one year. Investments that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value with changes in fair value recognized in earnings. Investments that do not meet the criteria of held-to-maturity or trading securities are classified as available-for-sale, and are reported at fair value with changes in fair value included in other comprehensive income.

The Group reviews its investments, except for those classified as trading securities, for other-than-temporary impairment based on the specific identification method and considers available quantitative and qualitative evidence in evaluating potential impairment. If the cost of an investment exceeds the investment’s fair value, the Group considers, among other factors, general market conditions, government economic plans, the duration and the extent to which the fair value of the investment is less than cost and the Group’s intent and ability to hold the investment to determine whether another-than-temporary impairment has occurred.

The Group recognizes other-than-temporary impairment in earnings if it has the intent to sell the debt security or if it is more-likely-than-not that it will be required to sell the debt security before recovery of its amortized cost basis. Additionally, the Group evaluates expected cash flows to be received and determines if credit-related losses on debt securities exist, which are considered to be other-than-temporary, should be recognized in earnings.

If the investment’s fair value is less than the cost of an investment and the Group determines the impairment to be other-than-temporary, the Group recognizes an impairment loss based on the fair value of the investment.

Customer deposits

(i) Customer deposits

The Group provides sales agency services for primary real estate development projects, some of which require the Group to pay an upfront and refundable deposit as demonstration of the Group’s financial strength and commitment to provide high quality service. These deposits are refunded to the Group subject to certain pre-determined criteria at a date specified in the agency contracts. The pre-determined criteria are based on sales progress on a project, which may take into account factors such as gross floor area of properties sold and transaction value. Certain of the Group’s contracts provide that if the group breaches the contract, any corresponding penalties may be deducted from the deposit. Customer deposits are recorded as either current or non-current assets based on the Group’s estimate of the date of refund.

The Group did not experience any material non-payment in history. In the event that any customer deposit becomes due but is not duly paid by the real estate developers, the Group requires collateral or other security from such developers, including existing properties or a right to properties under construction. In the event of non-payment, the Group would then resell the properties or the right to properties under construction for cash. The collection of these secured customer deposits is dependent on the resale price of the underlying properties, which is subject to the then market conditions.

Accounts receivable

(j) Accounts receivable

Accounts receivable, net of allowance for doubtful accounts of $60,232,453 and $44,002,810 at December 31, 2013 and 2014, respectively, consists of following:

	As of December 31,
	2013	2014
	$	$
Unbilled accounts receivable	268,589,167	306,282,419
Billed accounts receivable	88,852,935	108,867,589
Total	357,442,102	415,150,008

Unbilled accounts receivable represents amounts recognized in revenue prior to issuing official tax receipts to customers. The Group regularly reviews the collectability of unbilled accounts receivable in the same method as billed accounts receivable disclosed in Note 2 (y).

Properties held for sale

(k) Properties held for sale

Properties held for sale are stated at the lower of cost or net realizable value. Cost comprises the cost of purchase and, where applicable, direct costs associated with the purchase. Properties held for sale obtained through taking possession of collateral to settle the accounts receivable, are recorded at value of the receivables that are settled. The Group also recognizes acquired properties as properties held for sale when the Group has intent and ability to sell them within one year. The Group evaluates its properties held for sale for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. No impairment was provided for properties held for sale for the years ended December 31, 2012, 2013 and 2014.

Investment in affiliates

(l) Investment in affiliates

Affiliated companies are entities over which the Group has significant influence, but which it does not control. The Group generally considers an ownership interest of 20% or higher to represent significant influence. And the Group considers an equity interest of 3% or higher to represent more than minor influence for investments in investment funds.

Investment funds are subject to Investment Company accounting, and need to apply the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 946, Financial Services - Investment Companies. Accordingly, all investments held by these investment funds are measured at fair value. The difference between fair value and initial cost of investments is reflected as unrealized appreciation/depreciation on investments in the income statement. Investment funds determine the fair value of the investments based on relevant comparable market data such as comparisons of multiples of peer companies, evaluation of financial and operating data, company specific developments, market valuations of comparable companies, and latest transaction price factors (Level 3 inputs).

Investments in affiliates are accounted for by the equity method of accounting. Under this method, the Group’s share of the post-acquisition profits or losses of affiliated companies is recognized in the income statement and its shares of post-acquisition movements in other comprehensive income are recognized in other comprehensive income. Unrealized gains on transactions between the Group and its affiliated companies are eliminated to the extent of the Group’s interest in the affiliated companies; unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. When the Group’s share of losses in an affiliated company equals or exceeds its interest in the affiliated company, the Group does not recognize further losses, unless the Group has incurred obligations or made payments on behalf of the affiliated company. The Group records its income (loss) from the investment funds one quarter in arrears to enable it to have more time to collect and analyze the investments’ result.

The Group is required to perform an impairment assessment of its investments whenever events or changes in business circumstances indicate that the carrying value of the investment may not be fully recoverable. An impairment loss is recorded when there has been a loss in value of the investment that is other than temporary. The Group has not recorded any impairment losses in any of the periods reported. As of December 31, 2013 and 2014, the Group determined that no such events were present.

Property and equipment, net

(m) Property and equipment, net

Property and equipment is recorded at cost less accumulated depreciation. Depreciation is computed on a straight-line basis over the following estimated useful lives:

Leasehold improvements	Over the shorter of the lease term or their estimated useful lives
Buildings	30 years
Furniture, fixtures and equipment	3 - 5 years
Motor vehicles	5 years

Gains and losses from the disposal of property and equipment are included in income from operations.

Intangible assets, net

(n) Intangible assets, net

Acquired intangible assets mainly consist of license agreements with SINA, a real estate advertising agency agreement with SINA, database license agreement, exclusive rights with Baidu, Inc. (“Baidu”), favorable lease terms, customer relationships, non-compete agreements and trademarks from business combinations and are recorded at fair value on the acquisition date. All intangible assets, with the exception of customer relationships, are amortized ratably over the contract period. Intangible assets resulting out of acquired customer relationships are amortized based on the timing of the revenue expected to be derived from the respective customer.

Impairment of long-lived assets

(o) Impairment of long-lived assets

The Group evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When these events occur, the Group measures impairment by comparing the carrying amount of the assets to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Group would recognize an impairment loss equal to the excess of the carrying amount over the fair value of the assets.

Impairment of goodwill and indefinite lived intangible assets

(p) Impairment of goodwill and indefinite lived intangible assets

The Group performs an annual goodwill impairment test comprised of two steps. The first step compares the fair value of each reporting unit to its carrying amount, including goodwill and indefinite lived intangible assets. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill and indefinite lived intangible assets to the carrying value of a reporting unit’s goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. This allocation process is only performed for purposes of evaluating goodwill impairment and does not result in an entry to adjust the value of any assets or liabilities. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill.

Management performs a goodwill impairment test for each of its reporting units as of December 31 of each year or when there is a triggering event causing management to believe it is more likely than not that the carrying amount of goodwill may be impaired.

Intangible assets with an indefinite life are tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test consists of a comparison of the fair value of the intangible asset to its carrying amount. If the carrying amount exceeds the fair value, an impairment loss is recognized equal in amount to that excess.

Income taxes

(q) Income taxes

Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities, and their reported amounts in the financial statements, net operating loss carry forwards and credits by applying enacted statutory tax rates applicable to future years when the reported amounts of the asset or liability are expected to be recovered or settled, respectively. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on the classification of the related assets and liabilities for financial reporting purposes.

The Group only recognizes tax benefits related to uncertain tax positions when such positions are more likely than not of being sustained upon examination. For such positions, the amount of tax benefit that the Group recognizes is the largest amount of tax benefit that is more than fifty percent likely of being sustained upon the ultimate settlement of such uncertain position. The Group records interest and penalties as a component of income tax expense.

Debt issuance costs and debt discounts

(r) Debt issuance costs and debt discounts

Debt issuance costs and debt discounts are amortized as interest expense, using the effective interest method, through the earlier of the maturity date of the Convertible Senior Notes or the date of conversion, if any. Debt issuance costs are recorded as deferred assets, and debt discounts are recorded as a direct deduction from the face amount of Convertible Senior Notes.

Share-based compensation

(s) Share-based compensation

Share-based compensation cost is measured on the grant date, based on the fair value of the award, and recognized as an expense over the requisite service period. Management has made an estimate of expected forfeitures and recognizes compensation cost only for those equity awards expected to vest.

Revenue recognition

(t) Revenue recognition

The Group recognizes revenue when there is persuasive evidence of an arrangement, service has been rendered, the sales price is fixed or determinable and collectability is reasonably assured. Revenues are recorded, net of sales related taxes.

Real estate online services

The Group generates real estate online revenues principally from e-commerce, online advertising, and listing services.

The Group e-commerce services primarily include discount coupon advertising and online property auctions. The Group also provides property viewing and pre-sale customer support free of charge in connection with the sale of discount coupons and online property auctions. E-commerce revenues are principally generated from selling discount coupons to potential property buyers. Those discount coupons allow buyers to purchase specified properties from real estate developers at discounts greater than the face value of the fees charged by the Group. The discount coupons are refundable to the buyers at any time before they are used to purchase the specified properties. The Group recognizes such e-commerce revenues upon obtaining confirmation letters that prove the use of coupons by property buyers, and when collections are reasonably assured. Revenues are recognized based on the net proceeds received as the Group acts as a marketing agent of the property developer in the transaction.

Revenue from online advertising services is generated principally from online advertising arrangements, sponsorship arrangements, and to a lesser extent, outsourcing arrangements, and keyword advertising arrangements. Online advertising arrangements allow advertisers to place advertisements on particular areas of the Group’s websites, in particular formats and over particular periods of time. Advertising revenues from online advertising arrangements are recognized ratably over the contract period of display when collectability is reasonably assured. Sponsorship arrangements allow advertisers to sponsor a particular area on the Group’s websites in exchange for a fixed payment over the contract period. Advertising revenues from sponsorship arrangements are recognized ratably over the contract period. The Group also generates online advertising revenues from outsourcing certain regional sites for a fixed period of time to local outsourcing partners, who are responsible for both website operation and related advertising sales. Advertising revenues from hosted websites are recognized ratably over the term of the contract. Keyword advertising revenues are recognized ratably over the contract period when collectability is reasonably assured.

The Group also provides listing services to real estate brokers. Listing services entitle real estate brokers to post and make changes to information for properties in a particular area on the website for a specified period of time, in exchange for a fixed fee. Listing revenues are recognized ratably over the contract period of display when collectability is reasonably assured.

Real estate brokerage services

The Group provides marketing and sales agency services to primary real estate developers. The Group recognizes the commission revenue when a successful sale of property has occurred and upon completing the services required to execute a successful sale without further contingency. A successful sale is defined in each agency contract and is usually achieved after the property buyer has executed the purchase contract, made the required down payment, and the purchase contract has been registered with the relevant government authorities. The Group may also be entitled to earn additional revenue on the agency services if certain sales and other performance targets are achieved, such as average sale price over a pre-determined period. These additional agency service revenues are recognized when the Group has accomplished the required targets.

The Group provides brokerage service for secondary real estate sale and rental transactions. For secondary real estate brokerage service, the Group recognizes revenue upon execution of a transaction agreement between the buyer/lessee and the seller/lessor for which the Group acts as the broker.

Real estate information and consulting services

The Group sells subscriptions to its proprietary CRIC system for which revenues are recognized ratably over the subscription period, which is usually six to 12 months. The Group also provides data integration services periodically, such as periodic market updates and research analysis that suit the specific needs and requirements of individual clients in addition to access to the CRIC system. The contractual period for such arrangements is usually between three to 12 months with revenue being recognized ratably over such period.

The Group provides real estate consulting services to customers in relation to land acquisition and project consulting services. Land acquisition consulting services involve advising customers in relation to land acquisition and facilitating the transfer of land development rights. Payment is usually contingent upon the delivery of a final product, such as closing a land acquisition transaction. The Group recognizes revenue under such arrangements upon delivery of the final product, assuming customer acceptance has occurred and the fee is no longer contingent. Project consulting services involve providing consulting services, including project feasibility studies, analysis of the real estate transaction history of nearby development projects, marketing and advertising consulting, and development of comprehensive plans for their development projects. Such arrangements include periodic consulting services arrangements and delivery based consulting services arrangements. Periodic consulting services involve providing consulting services which are tailored to meet the needs of real estate developer clients at various stages of the project development and sales process for a specified period, such as monthly market studies. The contractual period for such arrangements is usually between one and 12 months with revenue being recognized ratably over such period. Delivery based consulting services involve providing consulting services which are tailored to meet the specific need of real estate developer. Payment is usually contingent upon the delivery of a final product, such as providing a market study report. The Group recognizes revenue under such arrangements upon delivery of the final product, assuming customer acceptance has occurred and the fee is no longer contingent.

Community value-added services

The Group launched community value-added services in 2014. No revenue was generated from these services yet in the year ended December 31, 2014.

Other services

The Group provides promotional events services, and recognizes revenue when such services are rendered, assuming all other revenue recognition criterion have been met. The Group also generates revenues from advertising sales services by acquiring advertising space and subsequently reselling such space. Revenues under such arrangements are recognized when the related advertisement is placed. The Group recognizes advertising sales revenues on a gross basis because it acts as principal and is the primary obligator in the arrangement.

The Group also generates revenues from real estate fund management fees, performance fees and allocations. Real estate fund management fees are based upon investment advisory and related agreements and are recognized as earned over the specified contract period. Performance fees and allocations represent the preferential allocations of profits (“carried interest”) that are a component of the Group’s general partnership interests in the real estate funds. The Group is entitled to an additional return from the investment fund in the event investors in the fund achieve cumulative investment returns in excess of a specified amount. The Group records the additional return from these carried interests as revenue at the end of the contract year.

The Group launched real estate financial services in 2014. No material revenue was generated from these services yet in the year ended December 31, 2014.

Multiple element arrangements

The Group has multiple element arrangements that may include provision of primary real estate services, online advertising, promotional events services, consulting services and/or information services. The Group has determined that each of the deliverables listed above is considered a separate unit of account as each has value to the customer on a standalone basis and has been sold separately on a standalone basis, there is no general right of return on delivered items and the delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Group.

The Group allocates arrangement consideration in multiple-deliverable revenue arrangements at the inception of an arrangement to all deliverables based on the relative selling price in accordance with the selling price hierarchy, which includes: (i) vendor-specific objective evidence (“VSOE”) if available; (ii) third-party evidence (“TPE”) if VSOE is not available; and (iii) best estimate of selling price (“BESP”) if neither VSOE nor TPE is available.

VSOE . The Group determines VSOE based on its historical pricing and discounting practices for the specific service when sold separately. In determining VSOE, the Group requires that a substantial majority of the selling prices for these services fall within a reasonably narrow pricing range. The Group has historically priced its commission rate for the primary real estate services, periodic consulting services, subscription for the CRIC system and online advertising within a narrow range. As a result, the Group has used VSOE to allocate the selling price for these services when elements of a multiple element arrangement. The Group has not historically priced delivery based consulting service and promotional event services within a narrow range, therefore, the Group considers TPE and BESP as discussed below.

TPE . When VSOE cannot be established for deliverables in multiple element arrangements, the Group applies judgment with respect to whether it can establish a selling price based on TPE. TPE is determined based on competitor prices for similar deliverables when sold separately. Generally, the Group’s marketing strategy differs from that of its peers and its offerings contain a significant level of differentiation such that the comparable pricing of services with similar functionality cannot be obtained. Furthermore, the Group is unable to reliably determine what similar competitor services’ selling prices are on a stand-alone basis. As a result, the Group has not been able to establish selling price based on TPE.

BESP . When it is unable to establish selling price using VSOE or TPE, the Group uses BESP in its allocation of arrangement consideration. The objective of BESP is to determine the price at which the Group would transact a sale if the service were sold on a stand-alone basis. The Group determines BESP for deliverables by considering multiple factors including, but not limited to, prices it charged for similar offerings, market conditions, specification of the services rendered and pricing practices. The Group has used BESP to allocate the selling price of project-based consulting service and promotional event services under these multiple element arrangement. The process for determining BESP involves management judgment. The Group’s process considers multiple factors that may vary depending upon the unique facts and circumstances related to each deliverable. If the facts and circumstances underlying the factors the Group considers change, or should subsequent facts and circumstances lead the Group to consider additional factors, the Group’s BESP could change in future periods. The Group regularly reviews the evidence of selling price for its services and maintains internal controls over the establishment and updates of these estimates. There were no material changes in estimated selling price for its services during the years ended December 31, 2012, 2013 and 2014, nor does the Group expect a material changes in BESP in the foreseeable future.

The total amounts of revenue earned by the Group related to agreements that have been accounted for as multiple element arrangements were $74,042,253, $71,908,552, and $74,189,077 in 2012, 2013 and 2014, respectively.

Deferred revenues are recognized when payments are received in advance of revenue recognition.

Cost of revenue

(u) Cost of revenue

Cost of revenue for the real estate online services segment consists of costs associated with the production of websites, which includes fees paid to third parties for Internet connection, content and services, editorial personnel related costs, amortization of intangible assets, depreciation associated with website production equipment and fees paid to SINA for advertising inventory on non-real estate channels. Cost of revenue for the real estate brokerage services segment includes costs directly related to providing services, which include costs incurred for marketing and sale of primary real estate projects for which the Group acts as the agent, and rental expenses incurred for properties leased by the Group as brokerage stores and sales commission. Cost of revenue of real estate information and consulting services segment primarily consists of sales commission, the service fee for purchase some consulting reports and costs incurred for developing, maintaining and updating the CRIC database system, which includes cost of data purchased or licensed from third-party sources, technical personnel related costs and associated equipment depreciation. Cost of revenue for real estate promotional events and advertising services consists of fees paid to third parties to acquire advertising space for resale, and salaries of sales and support staff and fees paid to third parties for the services directly related to promotional event services. Cost of revenue for the real estate fund management services consists of cost associated with investing department.

Marketing and Advertising expenses

(v) Marketing and advertising expenses

Marketing and advertising expenses consists primarily of targeted online and offline marketing costs for promoting the Group’s e-commerce projects, increasing visibility and building brand, such as Leju property visit, sponsored marketing campaigns, online or print advertising, public relations and sponsored events. The Company expenses all marketing advertising costs as incurred and record these costs within “Selling, general and administrative expenses” on the consolidated statements of operations when incurred. The nature of the Company’s direct marketing activities is such that they are intended to attract subscribers for the online advertising and potential property buyers to purchase the discount coupons. The Group incurred advertising expenses amounting to $51,936,863, $100,457,370 and $208,667,609 for the years ended December 31, 2012, 2013 and 2014, respectively.

Foreign currency translation

(w) Foreign currency translation

The functional currency of the Company is the United States dollar (“U.S. dollar”) and is used as the reporting currency of the Group. Monetary assets and liabilities denominated in currencies other than the U.S. dollar are translated into U.S. dollar at the rates of exchange ruling at the balance sheet date. Equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses are translated using the average rate for the year. Translation adjustments are reported as foreign currency translation adjustment and are shown as a separate component of other comprehensive income in the consolidated statements of changes in equity and comprehensive income.

The financial records of certain of the Company’s subsidiaries are maintained in local currencies other than the U.S. dollar, such as Renminbi (“RMB”) and Hong Kong dollar (“HKD”), which are their functional currencies. Transactions in other currencies are recorded at the rates of exchange prevailing when the transactions occur.

The Group recorded an exchange loss of $379,530, $862,383 and exchange gain $613,227 for the years ended December 31, 2012, 2013 and 2014, respectively, as a component of other income (loss), net.

Government subsidies

(x) Government subsidies

Government subsidies include cash subsidies received by the Company’s subsidiaries in the PRC from local governments. These subsidies are generally provided as incentives for conducting business in certain local districts. Cash subsidies of $6,475,023, $4,917,642 and $8,786,891 were included in other operating income for the years ended December 31, 2012, 2013 and 2014, respectively. Subsidies are recognized when cash is received and when all the conditions for their receipt have been satisfied.

Concentration of credit risk

(y) Concentration of credit risk

Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and customer deposits. The Group places its cash and cash equivalents with reputable financial institutions.

The Group regularly reviews the creditworthiness of its customers, and requires collateral or other security from its customers in certain circumstances when accounts receivables become long overdue. The Group establishes an allowance for doubtful accounts and customer deposits primarily based upon factors surrounding the credit risk of specific customers, including creditworthiness of the clients, aging of the receivables and other specific circumstances related to the accounts.

Movement of the allowance for doubtful accounts for accounts receivable and customer deposits is as follows:

	2012		2013		2014
	$		$		$
Balance as of January 1	14,811,322		36,537,817		60,818,408
Provisions for doubtful accounts	27,297,288		29,099,216		26,363,611
Write offs	(5,633,500	)	(6,298,025	)	(42,404,691	)
Changes due to foreign exchange	62,707		1,479,400		(190,682	)
Balance as of December 31	36,537,817		60,818,408		44,586,646

The allowance for other receivables was immaterial for all periods presented.

Earnings per share

(z) Earnings per share

Basic earnings per share are computed by dividing income attributable to holders of ordinary shares by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per ordinary share reflects the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares.

The following table sets forth the computation of basic and diluted income per share for the periods indicated:

	Years Ended December 31,
	2012			2013		2014
Net income (loss) attributable to E-House ordinary shareholders — basic	$	(56,971,404	)	$	51,957,425	$	40,001,485
Decrease of income from Leju*	—			—		(2,208,892		)
Interest of Convertible Senior Notes (including stated interest and amortization of discount and issuance costs)	—			192,566		—
Net income (loss) attributable to E-House ordinary shareholders — diluted	$	(56,971,404	)	$	52,149,991	$	37,792,593
Weighted average ordinary shares outstanding— basic	106,159,388			130,163,165		139,211,442
Convertible senior notes	—			334,821		—
Share options and restricted shares	—			5,282,011		7,476,393
Weighted average number of ordinary shares outstanding — diluted	106,159,388			135,779,997		146,687,835
Basic earnings (loss) per share	$	(0.54	)	$	0.40	$	0.29
Diluted earnings (loss) per share	$	(0.54	)	$	0.38	$	0.26

* In calculating diluted earnings (loss) per share, the amount of Leju’s net income included in net income (loss) attributable to E-House’s ordinary shareholders is calculated by multiplying Leju’s diluted EPS by the weighted average number of Leju shares held by E-House’s during the period, which may result in net income (loss) attributable to E-House ordinary shareholders, for purposes of computing diluted earnings (loss) per share, being different from that actually recorded in the consolidated statements of operations. This difference is presented as increase (decrease) of income (loss) from Leju.

Diluted earnings (loss) per share do not include the following instruments as their inclusion would have been anti-dilutive:

	Years Ended December 31,
	2012	2013	2014
Share options and restricted shares	14,660,788	—	—
Convertible senior notes	—	—	8,959,127

Non-controlling interest

(aa) Non-controlling interest

As of December 31, 2014, the majority of the Group’s non-controlling interest is attributable to Leju. As of December 31, 2014, E-House retained a 69.9% equity interest in Leju. Non-controlling interest in Leju included in the Company’s consolidated balance sheets was $124,892,590 as of December 31, 2014. For the year ended December 31, 2014, $50,702,835 of the Group’s consolidated net income was attributable to Leju.

Before the merger of the Company with CRIC, the majority of the Group’s non-controlling interest is attributable to CRIC, which mainly operates the Company’s real estate information and consulting and real estate online services segments. In April 2012, CRIC became a wholly-owned subsidiary of the Company after the Merger. For the year ended December 31, 2012, $13,547,386 of the Group’s consolidated net loss was attributable to CRIC.

The following schedule shows the effects of changes in E-House’s ownership interest in CRIC and Leju and other significantly less than wholly owned subsidiaries on equity attributable to E-House:

	Years Ended December 31,
	2012		2013	2014
Net income (loss) attributable to E-House	(56,971,404	)	51,957,425	40,001,485
Transfers to the non-controlling interest:
Decrease in E-House’s additional paid-in capital for purchase of 64,642,647 CRIC common shares for the years ended December 31 2012	(149,461,182	)	—	—
Decrease in E-House’s additional paid-in capital for the exercise of CRIC’s options and the vesting of CRIC’s restricted shares	(332,951	)	—	—
Increase in E-House’s equity by partial disposal of subsidiaries	—		—	138,477,580
Increase in E-House’s additional paid-in capital for issuing Leju’s shares to public	—		—	70,068,096
Decrease in E-House’s additional paid-in capital for Leju share distribution to E-House’s shareholders	—		—	(21,569,028	)
Decrease in E-House’s additional paid-in capital for acquisition of non-controlling interest	—		—	(30,720,088	)
Increase in E-House’s additional paid-in capital for the exercise of Leju’s options and the vesting of Leju’s restricted shares				58,340
Net transfers from (to) non-controlling interest	(149,794,133	)	—	156,314,900
Change from net income attributable to E-House and transfers (to) from non-controlling interest	(206,765,537	)	51,957,425	196,316,385

Comprehensive income

(ab) Comprehensive income

Comprehensive income includes all changes in equity except those resulting from investments by owners and distributions to owners. For the years presented, total comprehensive income included net income, foreign currency translation adjustments and the unrealized gain/loss due to the changes in fair value of the available-for-sale investment.

Recently issued accounting pronouncements

(ac) Recently issued accounting pronouncements

In May 2014, the Federal Accounting Standard Board (“FASB”) issued, Accounting Standards Update (“ASU”) 2014-09, ‘‘Revenue from Contracts with Customers (Topic 606)’’. The guidance substantially converges final standards on revenue recognition between the FASB and the International Accounting Standards Board providing a framework on addressing revenue recognition issues and, upon its effective date, replaces almost all exiting revenue recognition guidance, including industry specific guidance, in current U.S. generally accepted accounting principles. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps:

Step 1: Identify the contract(s) with a customer.

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction price.

Step 4: Allocate the transaction price to the performance obligations in the contract.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Group is in the process of evaluating the impact of adoption of this guidance on the Group’s consolidated financial statements.

In June 2014, the FASB issued a new pronouncement which requires that a performance target that affects vesting and that could be achieved after the requisite service period is treated as a performance condition. A reporting entity should apply existing guidance in Topic 718, Compensation-Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The Group does not expect the adoption of this guidance will have a significant effect on the Group’s consolidated financial statements.

In August 2014, the FASB issued a new pronouncement which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date of issuance of the entity’s financial statements. Further, an entity must provide certain disclosures if there is ‘‘substantial doubt about the entity’s ability to continue as a going concern.’’ The new standard is effective for fiscal years ending after December 15, 2016. The Group does not expect the adoption of this guidance will have a significant effect on the Group’s consolidated financial statements.

In November 2014, the FASB issued a new pronouncement which provides guidance an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. An acquired entity may elect the option to apply pushdown accounting in the reporting period in which the change- in-control event occurs. An acquired entity should determine whether to elect to apply pushdown accounting for each individual change-in-control event in which an acquirer obtains control of the acquired entity. If pushdown accounting is not applied in the reporting period in which the change- in-control event occurs, an acquired entity will have the option to elect to apply pushdown accounting in a subsequent reporting period to the acquired entity’s most recent change-in-control event. An election to apply pushdown accounting in a reporting period after the reporting period in which the change-in-control event occurred should be considered a change in accounting principle in accordance with Topic 250, Accounting Changes and Error Corrections. If pushdown accounting is applied to an individual change- in-control event, that election is irrevocable. The amendments in this Update are effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change- in-control events or to its most recent change-in-control event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle. The Group does not expect the adoption of this guidance will have a significant effect on the Group’s consolidated financial statements.

In February 2015, the FASB issued, ASU 2015-02, ‘‘Amendments to the Consolidation Analysis’’, regarding consolidation of legal entities such as limited partnerships, limited liability corporations, and securitization structures. The guidance eliminates the deferral issued by the FASB in February 2010 of the accounting guidance for VIEs for certain investment funds, including mutual funds, private equity funds and hedge funds. In addition, the guidance amends the evaluation of fees paid to a decision maker or a service provider, and exempts certain money market funds from consolidation. The guidance will be effective for accounting periods beginning after December 15, 2015 with early adoption permitted. The Group is currently evaluating the potential impact on the Group’s consolidated financial statements.

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Fair Value Measurement (Details 2) (Preferred shares, USD $)	12 Months Ended
	Dec. 31, 2014
Quantitative inputs and assumptions
Assets at fair value	39,484,906
Discounted cash flow and option pricing method | Significant Unobservable Inputs (Level 3)
Unobservable Inputs
Discount Rate	21.50%
Discount for Lack of Marketability ("DLOM")	9.00%
Terminal growth rate	3.00%

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Subsequent Events (Details)	1 Months Ended		12 Months Ended		1 Months Ended		12 Months Ended			1 Months Ended	12 Months Ended		1 Months Ended	0 Months Ended				1 Months Ended
	Nov. 30, 2014 Ordinary Shares. USD ($)	Mar. 31, 2014 Ordinary Shares. USD ($)	Dec. 31, 2013 Ordinary Shares. USD ($)	Dec. 31, 2012 Ordinary Shares. USD ($)	Nov. 30, 2014 ADS USD ($)	Mar. 31, 2014 ADS USD ($)	Dec. 31, 2013 ADS USD ($)	Dec. 31, 2012 ADS USD ($)	Dec. 31, 2014 Leju Holdings Ltd.	Apr. 30, 2015 Scepter	Dec. 31, 2014 Scepter	Dec. 31, 2014 Properties commitment	Apr. 30, 2015 Subsequent event Jupai Forecast	Mar. 18, 2015 Subsequent event Ordinary Shares. USD ($)	Mar. 18, 2015 Subsequent event ADS USD ($)	Mar. 18, 2015 Subsequent event Leju Holdings Ltd. Ordinary Shares. USD ($)	Mar. 18, 2015 Subsequent event Leju Holdings Ltd. ADS USD ($)	Mar. 31, 2015 Subsequent event Exclusive rights with Baidu CNY	Jan. 31, 2015 Subsequent event Properties commitment CNY
Subsequent Events
Payment commitment																			168,930,000
Term of purchase commitment												1 year							1 year
Extension period																		9 months
Consideration for extension of agreement																		75,000,000
Cash dividend approved by the board of directors (in dollars per share)	$ 0.20	$ 0.20	$ 0.15	$ 0.15	$ 0.2	$ 0.20	$ 0.15	$ 0.15						$ 0.15	$ 0.15	$ 0.20	$ 0.2
Ownership interest (as a percent)									69.90%	51.00%	51.00%
Percentage of ownership held by noncontrolling owners										49.00%
Percentage of equity interest acquired													20.00%
Percentage of equity interest owned													37.00%

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Convertible Senior Notes (Details) (USD $)	12 Months Ended
	Dec. 31, 2014 item	Dec. 31, 2013 item	Dec. 31, 2012
Convertible senior notes
Interest rate (as a percent)	6.50%
Ordinary shares, par value (in dollars per share)	$ 0.001	$ 0.001
Discounts to the initial purchaser		$ 3,375,000
Interest expense	5,325,474	192,566
Convertible senior notes
Convertible senior notes
Aggregate principal amount issued		135,000,000
Interest rate (as a percent)		2.75%
Number of shares receivable upon conversion		1
Ordinary shares, par value (in dollars per share)		$ 0.001
Initial conversion rate		0.0595380
Price per ADS on conversion (in dollars per share)		$ 16.8
Repurchase price as a percentage of principal amount of the notes		100.00%
Net proceeds from the offering	130,073,430
Discounts to the initial purchaser	3,375,000
Debt issuance costs	1,551,570
Interest expense	5,319,058	192,566	0
Portion of net proceeds used to purchase a call option	44,999,998
Number of ADS covered by portion of net proceeds used to purchase a call option	3,482,972
Notes converted	$ 0

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Acquisitions of Subsidiaries (Details 2) (USD $)	1 Months Ended
	Jul. 31, 2013 item	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Allocated Value
Goodwill		$ 51,539,654	$ 51,600,039	$ 49,400,739	$ 49,328,352
Samas
Purchase price was allocated as follows:
Number of owned leased commercial buildings	4
Allocated Value
Cash	1,061,330
Total tangible assets acquired	5,192,503
Liabilities assumed	(3,085,972)
Goodwill	1,462,335
Deferred tax liabilities	(456,602)
Total consideration	6,000,000
Samas | Favorable lease term
Allocated Value
Intangible assets acquired:	1,379,556
Amortization Period	17 years 3 months 18 days
Samas | Customer relationship
Allocated Value
Intangible assets acquired:	184,987
Amortization Period	17 years 3 months 18 days
Samas | Exclusive rights with Baidu
Allocated Value
Intangible assets acquired:	$ 261,863
Amortization Period	6 years 4 months 24 days

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Segment Information (Details) (USD $)	12 Months Ended
	Dec. 31, 2014 segment	Dec. 31, 2013 segment	Dec. 31, 2012 segment
Segment Information
Number of operating segments	2	5	5
Segment Information
Revenues	$ 904,498,793	$ 731,078,833	$ 462,439,368
Cost of revenues	(306,133,210)	(274,035,806)	(203,170,685)
Selling, general and administrative expenses	(545,491,718)	(400,947,001)	(336,873,524)
Other operating income	8,786,891	4,917,642	6,475,023
Income (loss) from operations	61,660,756	61,013,668	(71,129,818)
Interest expense	(5,325,474)	(192,566)
Interest income	3,210,328	2,179,547	1,606,462
Other income (expense), net	3,857,539	(1,051,215)	(732,870)
Income (loss) before taxes and equity in affiliates	63,403,149	61,949,434	(70,256,226)
Income tax benefit (expense)	(14,900,793)	(13,676,994)	(1,168,654)
Income (loss) before equity in affiliates	48,502,356	48,272,440	(71,424,880)
Income from equity in affiliates	3,834,802	2,813,849	375,509
Net income (loss)	52,337,158	51,086,289	(71,049,371)
Operating Segment | Real Estate Online Services
Segment Information
Revenues	495,862,635	335,410,902	169,755,893
Cost of revenues	(51,129,730)	(63,990,693)	(54,117,692)
Selling, general and administrative expenses	(365,150,431)	(210,576,230)	(146,997,279)
Other operating income	2,525,496	599,894	153,340
Income (loss) from operations	82,107,970	61,443,873	(31,205,738)
Interest income	1,316,203	1,082,287	257,204
Other income (expense), net	35,799	(1,185,121)	(1,979,450)
Income (loss) before taxes and equity in affiliates	83,459,972	61,341,039	(32,927,984)
Income tax benefit (expense)	(15,545,964)	(5,447,524)	2,329,338
Income (loss) before equity in affiliates	67,914,008	55,893,515	(30,598,646)
Income from equity in affiliates	(223,389)	(69,194)	(881)
Net income (loss)	67,690,619	55,824,321	(30,599,527)
Operating Segment | Real Estate Brokerage Services
Segment Information
Revenues	283,367,930	280,776,816	208,284,503
Cost of revenues	(204,101,162)	(168,624,507)	(114,667,241)
Selling, general and administrative expenses	(64,337,955)	(74,728,461)	(92,291,838)
Other operating income	2,223,460	1,647,257	2,982,861
Income (loss) from operations	17,152,273	39,071,105	4,308,285
Interest income	1,099,825	819,925	425,714
Other income (expense), net	(68,069)	87,270	84,937
Income (loss) before taxes and equity in affiliates	18,184,029	39,978,300	4,818,936
Income tax benefit (expense)	(5,083,029)	(10,000,257)	(4,589,892)
Income (loss) before equity in affiliates	13,101,000	29,978,043	229,044
Income from equity in affiliates	118,651	343,561	195,874
Net income (loss)	13,219,651	30,321,604	424,918
Operating Segment | Real Estate Information and Consulting Services
Segment Information
Revenues	82,679,298	76,683,188	54,517,612
Cost of revenues	(25,153,090)	(14,526,318)	(10,783,472)
Selling, general and administrative expenses	(59,703,161)	(58,026,755)	(53,977,975)
Other operating income	3,301,932	1,950,223	2,481,255
Income (loss) from operations	1,124,979	6,080,338	(7,762,580)
Interest income	691,003	222,898	624,817
Other income (expense), net	657,952	(479,313)	(59,136)
Income (loss) before taxes and equity in affiliates	2,473,934	5,823,923	(7,196,899)
Income tax benefit (expense)	(236,440)	(3,606,417)	623,227
Income (loss) before equity in affiliates	2,237,494	2,217,506	(6,573,672)
Income from equity in affiliates	1,761,582	312,119	(14,933)
Net income (loss)	3,999,076	2,529,625	(6,588,605)
Operating Segment | Community Value-added Services
Segment Information
Selling, general and administrative expenses	(15,828,009)
Income (loss) from operations	(15,828,009)
Interest income	6,124
Income (loss) before taxes and equity in affiliates	(15,821,885)
Income tax benefit (expense)	3,932,057
Income (loss) before equity in affiliates	(11,889,828)
Net income (loss)	(11,889,828)
Operating Segment | Other Services
Segment Information
Revenues	42,588,930	38,207,927	29,881,360
Cost of revenues	(25,749,228)	(26,894,288)	(23,602,280)
Selling, general and administrative expenses	(14,662,201)	(12,404,049)	(10,544,345)
Other operating income	736,003	720,268	857,567
Income (loss) from operations	2,913,504	(370,142)	(3,407,698)
Interest income	78,608	51,944	55,895
Other income (expense), net	(8,987)	(11,837)	(446)
Income (loss) before taxes and equity in affiliates	2,983,125	(330,035)	(3,352,249)
Income tax benefit (expense)	(169,368)	(588,344)	468,673
Income (loss) before equity in affiliates	2,813,757	(918,379)	(2,883,576)
Income from equity in affiliates	(367,621)	(9,320)	195,449
Net income (loss)	2,446,136	(927,699)	(2,688,127)
Non-allocated
Segment Information
Selling, general and administrative expenses	(25,809,961)	(45,211,506)	(33,062,087)
Income (loss) from operations	(25,809,961)	(45,211,506)	(33,062,087)
Interest expense	(5,325,474)	(192,566)
Interest income	18,565	2,493	242,832
Other income (expense), net	3,240,844	537,786	1,221,225
Income (loss) before taxes and equity in affiliates	(27,876,026)	(44,863,793)	(31,598,030)
Income tax benefit (expense)	2,201,951	5,965,548
Income (loss) before equity in affiliates	(25,674,075)	(38,898,245)	(31,598,030)
Income from equity in affiliates	2,545,579	2,236,683
Net income (loss)	$ (23,128,496)	$ (36,661,562)	$ (31,598,030)

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Short-Term Borrwings

12 Months Ended

Dec. 31, 2014

Short-term Debt.

Short-term borrowing

11. Short-Term Borrowings

Short-term borrowing is the short-term bank loan borrowed from a PRC commercial bank and is guaranteed by CRIC Commercial Consultancy Holdings Limited, a subsidiary of the Group registered in BVI by RMB234,300,000 ($38,290,478). The term of the loan is 12 months from the date the Group received the loan with an annual interest rate of 6.5%. As of December 31, 2014, the balance of the short-term loan was $35,953,500 (RMB 220,000,000) denominated in RMB. For the year ended 31 December, 2014, $6,416 interest expense was accrued for the short-term loan.

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Property and Equipment, Net

12 Months Ended

Dec. 31, 2014

Property and Equipment, Net

Property and Equipment, Net

7. Property and Equipment, Net

Property and equipment, net consists of the following:

	As of December 31,
	2013		2014
	$		$
Leasehold improvements	29,942,721		33,760,211
Buildings	21,787,018		18,348,855
Furniture, fixtures and equipment	26,076,914		30,424,438
Motor vehicles	7,072,583		7,427,714
Total	84,879,236		89,961,218
Accumulated depreciation	(34,802,311	)	(40,851,751	)
Property and equipment, net	50,076,925		49,109,467

Depreciation expense was $8,684,626, $8,206,163 and $8,659,092 for the years ended December 31, 2012, 2013 and 2014, respectively.

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Dividends (Details) (USD $)	1 Months Ended			12 Months Ended
	Dec. 31, 2014	Nov. 30, 2014	Mar. 31, 2014	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Dividends
Cash dividend		$ 28,415,784	$ 27,598,118		$ 19,946,745	$ 11,866,670
Dividends	15,513,296			43,111,414	19,946,745	11,866,670
Dividends				56,013,902	19,946,745	11,866,670
Distribution to non-controlling interest recognized				(21,569,028)
Ordinary Shares.
Dividends
Cash dividend approved by the board of directors (in dollars per share)		$ 0.20	$ 0.20		$ 0.15	$ 0.15
ADS
Dividends
Cash dividend approved by the board of directors (in dollars per share)		$ 0.2	$ 0.20		$ 0.15	$ 0.15
E-House | Ordinary Shares.
Dividends
Dividend conversion ratio		0.05
E-House | ADS
Dividends
Dividend conversion ratio		0.05
Leju Holdings Ltd.
Dividends
Dividends		77,582,930
Distribution to non-controlling interest recognized		$ 21,569,028

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Dividends

12 Months Ended

Dec. 31, 2014

Dividends

Dividends

14. Dividends

In 2012, the Company’s board of directors approved the payment of a cash dividend of $0.15 per ordinary share ($0.15 per ADS) directly from the additional paid-in capital account, for a total of $11,866,670, which was paid in April 2012 to shareholders of record as of the close of business on April 10, 2012.

In 2013, the Company’s board of directors approved the payment of a cash dividend of $0.15 per ordinary share ($0.15 per ADS) directly from the additional paid-in capital account, for a total of $19,946,745, which was paid in May 2013 to shareholders of record as of the close of business on April 10, 2013.

In March 2014, the Company’s board of directors approved the payment of a cash dividend of $0.20 per ordinary share ($0.20 per ADS) directly from the additional paid-in capital account, for a total of $27,598,118, which was paid in May 2014 to shareholders of record as of the close of business on May 2, 2014.

In November 2014, the Company’s board of directors approved the payment of a cash dividend of $0.20 per ordinary share ($0.20 per ADS) directly from the additional paid-in capital account, for a total of $28,415,784, of which $15,513,296 was paid in December 2014 to shareholders of record as of the close of business on December 3, 2014. The Company’s board of directors also approved the Company’s distribution of 0.05 Leju ordinary shares to the holder of each E-House ordinary share (or 0.05 Leju ADSs for each E-House ADS), to holders of E-House’s ordinary shares and ADSs. As a result of the distribution of Leju ordinary shares, $21,569,028 non-controlling interest was recognized. The additional paid-in capital was reduced by $77,582,930.

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Convertible Senior Notes

12 Months Ended

Dec. 31, 2014

Convertible Senior Notes

Convertible Senior Notes

12. Convertible Senior Notes

In December 2013, the Company issued $135,000,000 in aggregate principal amount of 2.75% Convertible Senior Notes due 2018 (the “Notes”). The Notes can be converted into the Company’s American Depositary Shares (“ADSs”), each representing one ordinary share of E-House, par value $0.001 per share (the “ordinary shares”), at the option of the holders, based on an initial conversion rate of 59.5380 of the Company’s ADSs per $1,000 principal amount of Notes ($16.80 per ADS). Holders of the Notes will have the right to require the Company to repurchase for cash all or part of their Notes on December 15, 2016 or upon the occurrence of certain fundamental changes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date. The Notes will bear interest at a rate of 2.75% per year, payable semiannually in arrears on June 15 and December 15 of each year, beginning on June 15, 2014. The Notes will mature on December 15, 2018, unless previously repurchased or converted in accordance with their terms prior to such date.

The net proceeds from the Notes offering were $130,073,430, after deducting discounts to the initial purchaser of $3,375,000 and debt issuance costs of $1,551,570. Debt issuance costs are recorded as deferred assets and debt discounts are recorded as a direct deduction from the face amount of Convertible Senior Notes, and they are amortized as interest expenses, using the effective interest method, to the first put date of the Notes (December 15, 2016). The interest expense was nil, $192,566, and $5,319,058 for the years ended December 31, 2012, 2013 and 2014, respectively.

In connection with the offering, the Company also used $44,999,998 of the net proceeds from the offering to enter into a zero-strike call option (the “Call Option”), covering 3,482,972 ADSs, with an affiliate of the initial purchaser (the “option counterparty”). The Call Option is in substance a prepaid forward contract and is intended to facilitate privately negotiated transactions by which investors in the Notes will hedge their investment in the Notes. The Call Option expires on the maturity date of the Notes and requires physical settlement. However, at expiration or when the Call Option is unwound, the Company has the right to choose cash settlement.

The Company recorded the Notes as a liability in their entirety, and the conversion feature or any other feature does not need to be bifurcated and accounted for separately. The Call Option was deemed as a prepaid forward to purchase the Company’s own shares and was classified in permanent equity at its fair value at inception, recorded as a reduction to equity in the consolidated balance sheet. The shares underlying the Call Option are included in the basic and diluted EPS calculation given that it is uncertain whether the Call Option will be physically settled and the shares will ultimately be repurchased back.

As of December 31, 2014, none of the Notes had been converted.

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Document and Entity Information	12 Months Ended
	Dec. 31, 2014
Document and Entity Information
Entity Registrant Name	E-HOUSE (CHINA) HOLDINGS LTD
Entity Central Index Key	0001405658
Document Type	20-F
Document Period End Date	Dec. 31, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding	148,243,164
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY

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Segment Information (Details 2) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Major customers
Revenues from major customer	$ 904,498,793	$ 731,078,833	$ 462,439,368
Accounts receivable from major customer	415,150,008	357,442,102
Customer A | Real Estate Online Services
Major customers
Revenues from major customer			6,871,686
Customer A | Real Estate Brokerage Services
Major customers
Revenues from major customer			42,483,101
Customer A | Real Estate Information and Consulting Services
Major customers
Revenues from major customer			6,356,080
Customer A | Other Services
Major customers
Revenues from major customer			213,754
Revenues | Customer accounting risk | Customer A
Major customers
Revenues from major customer			55,924,621
Accounts receivable | Credit risk | Customer A
Major customers
Accounts receivable from major customer	53,534,294	43,318,976
Customer deposits | Customer deposits | Customer B
Major customers
Customer deposits from major customer	33,540,800	56,000,000
Customer deposits | Customer deposits | Customer C
Major customers
Customer deposits from major customer	24,513,750
Customer deposits | Customer deposits | Customer D
Major customers
Customer deposits from major customer	23,206,350
Customer deposits | Customer deposits | Customer E
Major customers
Customer deposits from major customer		$ 8,200,900

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Repurchase of Shares

12 Months Ended

Dec. 31, 2014

Repurchase of Shares

Repurchase of Shares

13. Repurchase of Shares

In 2012, the Company’s board of directors approved a share repurchase program. Under the program, the Company was authorized, but not obligated, to use up to all of the expected proceeds from the share issuance to management to repurchase the Company’s ADSs on the open market in compliance with applicable law. As of December 31, 2012, the Company has repurchased a total of 371,141 ADSs for $1,569,815. The excess of $1,569,444 of purchase price over par value was allocated between additional paid in capital and retained earnings of $1,569,444 and nil, respectively.

In 2013, The Company repurchased a total of 3,582,133 ADSs for $17,772,586. The excess of $17,769,004 of purchase price over par value was allocated between additional paid in capital and retained earnings of $15,942,072 and $1,826,932, respectively.

The portion of the excess allocated to additional paid-in capital was limited to the pro rata portion of capital surplus from stock issuance. All the repurchased shares were retired.

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Property and Equipment, Net (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Property and Equipment, Net
Property and equipment, gross	$ 89,961,218	$ 84,879,236
Accumulated depreciation	(40,851,751)	(34,802,311)
Property and equipment, net	49,109,467	50,076,925
Depreciation expense	8,659,092	8,206,163	8,684,626
Leasehold improvements
Property and Equipment, Net
Property and equipment, gross	33,760,211	29,942,721
Buildings
Property and Equipment, Net
Property and equipment, gross	18,348,855	21,787,018
Furniture, fixtures and equipment
Property and Equipment, Net
Property and equipment, gross	30,424,438	26,076,914
Motor vehicles
Property and Equipment, Net
Property and equipment, gross	$ 7,427,714	$ 7,072,583

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Acqusitions of Non-controlling Interests (Details)	1 Months Ended			1 Months Ended					1 Months Ended						1 Months Ended
	Sep. 30, 2014 item	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Sep. 30, 2014 Group of five employees USD ($)	Jan. 31, 2014 Beijing Lotta USD ($) item	Jan. 31, 2014 Beijing Lotta CNY	Dec. 31, 2014 Beijing Lotta USD ($)	Dec. 31, 2014 Beijing Lotta CNY	Sep. 30, 2014 Tianjin Leju USD ($)	Sep. 30, 2014 Tianjin Leju CNY	Sep. 30, 2014 E-House item	Sep. 30, 2014 Beijing Leju Advertisement and Yisheng Shanghai USD ($)	Sep. 30, 2014 Beijing Leju Advertisement and Yisheng Shanghai CNY	Dec. 31, 2014 Beijing Leju Advertisement and Yisheng Shanghai USD ($)	Sep. 30, 2014 Beijing Leju Advertisement and Yisheng Shanghai Group of five employees USD ($)	Sep. 30, 2014 Beijing Leju Advertisement and Yisheng Shanghai Group of five employees CNY	Sep. 30, 2014 Beijing Leju Advertisement and Yisheng Shanghai Individual share holder USD ($)	Sep. 30, 2014 Beijing Leju Advertisement and Yisheng Shanghai Individual share holder CNY	Sep. 30, 2014 Beijing Leju item
Acquisition of Non-controlling Interests
Number of individual shareholders entered into equity transfer agreement					2	2
Business Acquisition, Percentage of Voting Interests Acquired					40.00%	40.00%			30.00%	30.00%		24.50%	24.50%
Total consideration					$ 16,254,600	100,000,000			$ 4,685,913	28,830,000		$ 19,074,412	117,355,000		$ 16,054,493	98,775,000	$ 3,019,919	18,580,000
Total consideration for 1% equity interest															823,307		603,984
Additional paid-in capital derecognized					15,112,828				4,449,469			12,906,772
Non-controlling interest derecognized					1,141,772				236,444			1,890,830
Other current liabilities		85,836,572	62,466,610				7,190,700	44,000,000	2,871,268					15,534,635
Number of employee individual shareholders entered into equity transfer agreement	6										5
Number of subsidiaries to purchase remaining percentage																			2
Percentage of five employee owned															19.50%	19.50%
Percentage of other individual shareholders owned																	5.00%	5.00%
Number of years should serve by five employee individual shareholders after acquisition															2 years	2 years
Additional paid-in capital		$ 991,645,842	$ 859,467,949	$ 4,276,810
Recognition period of stock based compensation expense				2 years

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Related Party Balances and Transactions (Details)	0 Months Ended	12 Months Ended			0 Months Ended	12 Months Ended											12 Months Ended				12 Months Ended							12 Months Ended									12 Months Ended			12 Months Ended	1 Months Ended		12 Months Ended				1 Months Ended			12 Months Ended												12 Months Ended
	Mar. 25, 2013 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Mar. 25, 2013 Ordinary Shares	Dec. 31, 2013 Ordinary Shares USD ($)	Dec. 31, 2014 Wuling Center USD ($)	Dec. 31, 2014 Wuling Center CNY	Dec. 31, 2013 Wuling Center USD ($)	Dec. 31, 2013 Wuling Center CNY	Dec. 31, 2012 Wuling Center USD ($)	Dec. 31, 2012 Wuling Center CNY	Dec. 31, 2014 Management USD ($)	Dec. 31, 2013 Management USD ($)	Dec. 31, 2014 Customer and supplier USD ($)	Dec. 31, 2013 Customer and supplier USD ($)	Dec. 31, 2014 Other USD ($)	Dec. 31, 2013 Other USD ($)	Dec. 31, 2014 Shanghai Yueshun Real Estate Development Co., Ltd USD ($)	Dec. 31, 2013 Shanghai Yueshun Real Estate Development Co., Ltd USD ($)	Dec. 31, 2014 CRERAT USD ($)	Dec. 31, 2013 CRERAT USD ($)	Dec. 31, 2012 CRERAT USD ($)	Dec. 31, 2012 CRERAT Selling, general and administrative expenses USD ($)	Dec. 31, 2014 SINA USD ($)	Dec. 31, 2012 SINA USD ($)	Dec. 31, 2013 SINA USD ($)	Dec. 31, 2014 SINA Selling, general and administrative expenses USD ($)	Dec. 31, 2014 SINA Cost of revenue USD ($)	Dec. 31, 2013 SINA Cost of revenue USD ($)	Dec. 31, 2012 SINA Cost of revenue USD ($)	Dec. 31, 2014 E-House China Real Estate Investment Fund I, L.P. USD ($)	Dec. 31, 2013 E-House China Real Estate Investment Fund I, L.P. USD ($)	Dec. 31, 2012 E-House China Real Estate Investment Fund I, L.P. USD ($)	Jan. 31, 2008 E-House China Real Estate Investment Fund I, L.P. USD ($)	Dec. 31, 2014 Shanghai Guanfu Treasure-house Assets Management Co., Ltd USD ($)	Dec. 31, 2014 Shanghai Guanfu Treasure-house Assets Management Co., Ltd Selling, general and administrative expenses USD ($)	Dec. 31, 2014 Shanghai Jin Yue Real Estate Development Co., Ltd USD ($)	Dec. 31, 2013 Shanghai Jin Yue Real Estate Development Co., Ltd USD ($)	Dec. 31, 2014 Shouxin Center USD ($)	Jan. 31, 2008 E-House Real Estate Asset Management Co., Ltd.	Jan. 31, 2010 Shanghai Yidezeng Equity Investment Center	Dec. 31, 2014 Shengyuan Center USD ($)	Dec. 31, 2013 Shengyuan Center USD ($)	Dec. 31, 2012 Shengyuan Center USD ($)	Jan. 31, 2010 Shengyuan Center Xin Zhou	Apr. 30, 2010 Shanghai Yidexin Equity Investment Center	Jan. 31, 2010 Shengquan Center USD ($)	Jan. 31, 2010 Shengquan Center CNY	Dec. 31, 2014 Shengquan Center USD ($)	Dec. 31, 2014 Shengquan Center CNY	Dec. 31, 2013 Shengquan Center USD ($)	Dec. 31, 2013 Shengquan Center CNY	Dec. 31, 2012 Shengquan Center USD ($)	Apr. 30, 2010 Shengquan Center Xin Zhou	Dec. 31, 2014 Xuyuechang Center USD ($)	Dec. 31, 2013 Xuyuechang Center USD ($)	Dec. 31, 2014 Xuyuerong Center USD ($)	Dec. 31, 2013 Xuyuerong Center USD ($)	Dec. 31, 2014 Xuyuezhen Center USD ($)	Dec. 31, 2013 Xuyuezhen Center USD ($)	Dec. 31, 2014 Hangzhou Kuyue USD ($)	Dec. 31, 2014 Muxin Center USD ($)
Amounts due from related parties
Total amounts due from related parties		$ 6,094,260	$ 1,263,416												$ 684	$ 981,648	$ 6,093,576	$ 281,768
Amounts due to related parties		7,356,186	5,535,512										2,024,000	2,760,000	4,831,288	1,745,263	500,898	1,030,249
Customer and supplier
Revenue																					136,708	1,084,047	52,120		445,733	1,855
Selling, general and administrative expenses recorded by the group																								476,706				4,911,660									409,305
Cost of revenue recorded by the group																													6,643,317	6,033,036	5,145,039
Intangible assets purchased																									1,473,498																																					1,778,188
Balances with customers, suppliers and affiliates who are related parties
Amount due from related parties																			280,750	281,768	684	981,648										5,388,646
Amount due to related parties																						(3,892)			(3,616,957)		(1,741,371)									(326,850)		(390,801)	(392,219)																	285,272	(103,331)	23,461	(480,081)	115,447	(54,618)	(887,481)	(110,097)
Percentage of ownership interest in subsidiary																																									51.00%	51.00%					51.00%
Amount invested by Mr. Xin Zhou, the Company's co-chairman and CEO, and Mr. Neil Nanpeng Shen, director of the company																																			28,000,000
Cash contribution made		8,890,449	5,766,873	2,161,001			2,946,996	18,000,000	4,428,486	27,000,000	2,386,440	15,000,000																																				10,065,348	65,000,000
Equity interest (as a percent)							6.50%	6.50%	6.50%	6.50%	6.50%	6.50%									51.00%																									8.00%		13.00%	13.00%						2.40%	0.60%		0.50%		0.50%		21.00%	23.40%
Amount received as a return of capital																																																		1,781,581	10,881,747	461,463	2,813,487
Ordinary shares issued to Kanrich					17,790,125	17,790,125
Aggregate price of shares issued to Kanrich	62,621,240		62,621,240			17,790
Management fees		$ 11,743,244	$ 6,334,198	$ 2,402,415			$ 3,012,485		$ 3,804,667								$ 1,061,829	$ 305,343														$ 5,386,412	$ 63,567	$ 202,198						$ 120,858			$ 1,410,790	$ 1,549,416	$ 1,580,360					$ 559,100		$ 611,205		$ 619,857									$ 191,770