7370 |
N/A | |||
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
Z. Julie Gao, Esq. Skadden, Arps, Slate, Meagher & Flom LLP c/o 42/F, Edinburgh Tower, The Landmark 15 Queen’s Road, Central Hong Kong +852-3740-4700 |
Haiping Li, Esq. Skadden, Arps, Slate, Meagher & Flom LLP Jing An Kerry Centre, Tower II, 46th Floor 1539 Nanjing West Road Shanghai 200040 People’s Republic of China +86-21-6193-8200 |
Peter X. Huang, Esq. Skadden, Arps, Slate, Meagher & Flom LLP 30/F, China World Office 2 No. 1, Jian Guo Men Wai Avenue Beijing 100004, China Tel: +86-10-6535-5500 | ||
Benjamin Su, Esq. Frank Sun, Esq. Latham & Watkins LLP 18th Floor, One Exchange Square 8 Connaught Place Central, Hong Kong Telephone: +852 2912-2500 |
Li He, Esq. Davis Polk & Wardwell LLP c/o 18th Floor, The Hong Kong Club Building 3A Chater Road Central, Hong Kong +852-2533-3300 |
Howard Zhang, Esq. Davis Polk & Wardwell LLP 2201 China World Office 2 No. 1 Jian Guo Men Wai Avenue Chaoyang District, Beijing, 100004 People’s Republic of China +86-10-8567-5000 |
† |
The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
Title of each class of securities to be registered (1) |
Amount to be registered (2) |
Proposed maximum offering price per unit |
Proposed maximum aggregate offering price (3) |
Amount of registration fee (4) | ||||
Class A Ordinary Shares, par value US$0.0.0001 per share |
243,564,120 |
N/A |
US$5,003,073,937.61 |
US$545,835.37 | ||||
(1) |
This registration statement relates to Class A ordinary shares, par value $0.0001 per share (the “Huya Class A shares”), of HUYA Inc. (“Huya”, or the “registrant”), an exempted company with limited liability incorporated under the laws of the Cayman Islands, to be issued to holders of ordinary shares, par value $0.0001 per share (the “DouYu shares”), of DouYu International Holdings Limited (“DouYu”), an exempted company with limited liability incorporated under the laws of the Cayman Islands, pursuant to the agreement and plan of merger, dated as of October 12, 2020, by and among Huya, Tiger Company Ltd., an exempted company with limited liability incorporated under the laws of the Cayman Islands and a wholly owned subsidiary of Huya, DouYu, and Nectarine Investment Limited (“Nectarine”), a business company with limited liability incorporated under the laws of the British Virgin Islands and a wholly owned subsidiary of Tencent Holdings Limited (“Tencent Holdings”). A separate registration statement on Form F-6 has previously been filed (Registration No. 333-224563) for the registration of the registrant’s American depositary shares, each representing one Huya Class A share (the “Huya ADSs”), to be delivered in connection with the proposed Merger (as defined below). |
(2) |
Represents the estimated maximum number of Huya Class A shares expected to be offered and sold in the U.S. registered offering and a portion of the Huya Class A shares that are to be offered and sold outside of the United States in the Regulation S offering that may be resold from time to time in the United States or to U.S. persons. |
(3) |
Estimated solely for the purpose of calculating the registration fee. The registration fee is required by Section 6(b) of the Securities Act of 1933, as amended (“the Securities Act”) and computed pursuant to Rules 457(f) and 457(c) under the Securities Act. Pursuant to Rule 457(f) under the Securities Act, the proposed maximum aggregate offering price of the Huya Class A shares is equal to US$5,003,073,937.61, the Aggregate DouYu Share Sum (as defined below), multiplied by ten (being the number of DouYu’s American depositary shares representing each DouYu share), and then multiplied by US$14.995, the average of the high and low prices of the DouYu ADSs trading on the NASDAQ Global Select Market on November 3, 2020. The “Aggregate DouYu Share Sum” means the estimated maximum number of DouYu shares which Huya will acquire from DouYu shareholders and DouYu ADS holders in exchange for Huya Class A shares and Huya ADSs, respectively, in the Merger, which includes (1) DouYu shares currently held by DouYu shareholders, (2) DouYu shares underlying outstanding DouYu ADS, and (3) DouYu shares underlying DouYu restricted share unit awards held by the applicable grantees directly which have become vested as of the effective time of the merger, and (4) DouYu ADSs to be issued to certain senior management of DouYu as a result of acceleration of vesting of their DouYu restricted share unit awards prior to the Effective Time. |
(4) |
Calculated at a rate equal to 0.00010910 multiplied by the proposed maximum aggregate offering price. |
• |
each outstanding DouYu share will be canceled in consideration of the right to receive 7.30 Huya Class A ordinary shares, par value $0.0001 per share (“Huya Class A share”); and |
• |
each outstanding DouYu ADS will be canceled in consideration of the right to receive 0.730 Huya American depositary share (“Huya ADS”). Each Huya ADS represents one Huya Class A share; |
• |
each DouYu share and each DouYu ADS issued and outstanding immediately prior to the effective time of the Merger that is (i) issued to and held by DouYu Employee Benefit Trust, or (ii) repurchased and held by DouYu in treasury either in the form of DouYu shares or DouYu ADSs (collectively, the “Excluded DouYu Shares”) shall automatically be canceled and shall cease to exist, and no consideration shall be delivered or deliverable in exchange therefor; and |
• |
if a DouYu Shareholder (such DouYu Shareholder, a “Purported Dissenting Shareholder”) provides any notice of objection, notice of dissent, written demand for appraisal or takes any other action that purports to exercise any dissenter rights pursuant to Section 238 of the Cayman Islands Companies Law (2020 Revision) (the “Cayman Companies Law”), such Purported Dissenting Shareholder shall not be entitled to receive the Per Share Merger Consideration with respect to DouYu Shares owned by such Purported Dissenting Shareholder (the “Purported Dissenters Shares”) unless and until either (i) such Purported Dissenting Shareholder shall have withdrawn such objection, dissent, demand or |
other action in such manner as would render such Purported Dissenting Shareholder to be deemed to have effectively withdrawn its dissent from the Merger if Section 238 of the Cayman Companies Law were to apply in such case, or (ii) a court of the Cayman Islands with competent jurisdiction either strikes out the petition for determination of fair value under Section 238 of the Cayman Companies Law on the grounds that Section 239 of the Cayman Companies Law applies to the Merger, or makes a declaration, or otherwise grants a final and non-appealable judgement confirming, that Section 239 of the Cayman Companies Law applies to the Merger. |
DouYu International Holdings Limited | ||
By: |
||
Name: Zhaoming Chen Title: Chairman of the Special Committee of the Board of Directors |
• |
“China” or “PRC” refers to the People’s Republic of China, excluding, for the purpose of this proxy statement/prospectus only, Taiwan, Hong Kong and Macau; |
• |
“Closing Date” refers to the closing date of the Merger; |
• |
“Effective Time” refers to the effective time of the Merger; |
• |
“Huya Class B shares” refers to Huya’s Class B ordinary shares, par value $0.0001 per share; |
• |
“Penguin” or “Penguin Business” refers to the game live streaming business operated by the Tencent group under the “Penguin e-Sports” brand; |
• |
“Reassignment” refers to the proposed reassignment of the Penguin Business by Nectarine to DouYu, whereby upon its completion DouYu will beneficially own and operate the Penguin Business; |
• |
“Reassignment Agreement” refers to agreement, dated October 12, 2020, by and between DouYu and Nectarine, which is attached as Annex B to this proxy statement/prospectus; and |
• |
all references to “RMB” or “Renminbi” are to the legal currency of China, and all references to “$,” “dollars,” “US$” and “U.S. dollars” are to the legal currency of the United States. |
• | as a special resolution: |
• | if necessary, as an ordinary resolution: |
• | each outstanding DouYu share will be canceled in consideration of the right to receive 7.30 Huya Class A ordinary shares, par value $0.0001 per share (“Huya Class A share”); and |
• | each outstanding DouYu ADS will be canceled in consideration of the right to receive 0.730 Huya American depositary share (“Huya ADS”). Each Huya ADS represents one Huya Class A share; |
• | each DouYu share and each DouYu ADS issued and outstanding immediately prior to the effective time of the Merger that is (i) issued to and held by DouYu Employee Benefit Trust, or (ii) repurchased and held by DouYu in treasury either in the form of DouYu shares or DouYu ADSs (collectively, the “Excluded DouYu Shares”) shall automatically be canceled and shall cease to exist, and no consideration shall be delivered or deliverable in exchange therefor; and |
• | if a DouYu Shareholder (such DouYu Shareholder, a “Purported Dissenting Shareholder”) provides any notice of objection, notice of dissent, written demand for appraisal or takes any other action that purports to exercise any dissenter rights pursuant to Section 238 of the Cayman Islands Companies Law (2020 Revision) (the “Cayman Companies Law”), such Purported Dissenting Shareholder shall not be entitled to receive the Per Share Merger Consideration with respect to DouYu Shares owned by such Purported Dissenting Shareholder (the “Purported Dissenters Shares”) unless and until either (i) such Purported Dissenting Shareholder shall have withdrawn such objection, dissent, demand or other action in such manner as would render such Purported Dissenting Shareholder to be deemed to have effectively withdrawn its dissent from the Merger if Section 238 of the Cayman Companies Law were to apply in such case, or (ii) a court of the Cayman Islands with competent jurisdiction either strikes out the petition for determination of fair value under Section 238 of the Cayman Companies Law on the grounds that Section 239 of the Cayman Companies Law applies to the Merger, or makes a declaration, or otherwise grants a final and non-appealable judgement confirming, that Section 239 of the Cayman Companies Law applies to the Merger. |
1. | In the case of joint holders the vote of the senior holder who tenders a vote whether in person or by proxy (or, if a corporation or other non-natural person, by its duly authorized representative or proxy), shall be accepted to the exclusion of the votes of the other joint holders and for this purpose seniority shall be determined by the order in which the names stand in the register of members of DouYu. |
2. | The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorized in writing or, if the appointor is a corporation, either under seal or under the hand of an officer or attorney duly authorized. |
3. | A proxy need not be a member (registered shareholder) of DouYu. |
4. | The chairman of the meeting may at his discretion direct that a proxy card shall be deemed to have been duly deposited. A proxy card that is not deposited in the manner permitted shall be invalid. |
BY ORDER OF THE BOARD OF DIRECTORS, |
Name: Zhaoming Chen Title: Director |
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H-1 |
• | The market price of the Huya ADSs may decline following the completion of the Merger or during the period of time between the EGM and the date on which DouYu shareholders and DouYu ADS holders actually receive Huya Class A shares and Huya ADSs pursuant to the Merger Agreement; |
• | Huya and DouYu may not achieve the expected benefits of the proposed Merger; |
• | Huya and DouYu will incur transaction and integration costs in connection with the Merger; |
• | Failure to complete the proposed Merger and Reassignment, in a timely manner or at all, could disrupt Huya’s and DouYu’s business plans and operations and have a material adverse effect on the trading price of each company’s ADSs; and |
• | The market price of the Huya ADSs may be affected by factors different from those affecting the price of DouYu ADSs. |
1. | to authorize, approve and adopt the Merger Agreement and the Plan of Merger and any and all transactions contemplated by the Merger Agreement and the Plan of Merger, including the Merger; and upon the Merger becoming effective, the amendment and restatement of the fourth amended and restated memorandum and articles of association of the DouYu (as the surviving company) in the form attached as Appendix II to the Plan of Merger and the amendment of the authorized share capital of the |
DouYu (as the surviving company) from US$100,000 divided into 500,000,000 ordinary shares of a par value of US$0.0001 per share and 500,000,000 shares of a par value of US$0.0001 per share as the board of directors may determine, to US$100,000 divided into 1,000,000,000 ordinary shares of a par value of US$0.0001 each as set forth in the Plan of Merger; and |
2. | in the event that there are insufficient proxies received at the time of the EGM to authorize, approve and adopt the Merger Agreement and the Plan of Merger, to approve a proposal that the chairman of the EGM be instructed to adjourn the EGM in order to allow DouYu to solicit additional proxies in favor of the approval of the Merger and the authorization, approval and adoption of the Merger Agreement and the Plan of Merger. |
• | the Required DouYu Vote shall have been obtained; |
• | the registration statement on Form F-4 (of which this proxy statement/prospectus is a part) having become effective under the Securities Act, and not having become the subject of any stop order, or any proceedings to seek a stop order, to suspend the effectiveness of the Form F-4; |
• | the Huya ADSs issuable as Merger Consideration pursuant to the Merger Agreement having been approved for listing on the NYSE, subject to official notice thereof; and |
• | no governmental entity of competent jurisdiction having enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, injunction or other order which (1) is in effect and (2) permanently enjoins or prohibits the consummation of the transaction contemplated by the Merger Agreement. |
• | the representations and warranties of DouYu in the Merger Agreement being true and correct in all respects save for de minimis inaccuracies as of the date of the Merger Agreement and as of the Closing Date, with certain other representations and warranties subject to a material adverse effect exception; |
• | (1) certain representations and warranties of DouYu in the Merger Agreement being true and correct in all respects save for de minimis inaccuracies as of the date of the Merger Agreement and as of the Closing Date as if made on and as of such date and time, and (2) subject to certain exceptions, certain representations and warranties of DouYu set forth in the Merger Agreement being true and correct interpreted without giving effect to certain materiality qualifiers; |
• | DouYu having performed or complied in all material respects with all covenants and agreements required to be performed or complied with by it under the Merger Agreement prior to or at the time of closing of the Merger; |
• | there having been no material adverse effect on DouYu and the DouYu Subsidiaries since the date of the Merger Agreement; |
• | The actions described under the section titled “The Merger Agreement and Plan of Merger—DouYu Corporate Structure Matters” having been completed; |
• | DouYu shareholders holding no more than 10% of DouYu shares shall have provided any notice of objection, written demand for appraisal or taken any other action that purports to exercise any rights pursuant to Section 238 of the Cayman Companies Law; |
• | DouYu shall have, within 20 days immediately following the date on which the Required DouYu Vote is obtained, given written notice thereof to each Purported Dissenting Shareholder, and the listing of DouYu shares on the NASDAQ Global Select Market shall have been maintained for a minimum of twenty (20) days after such notice date; |
• | all closing conditions under the Reassignment Agreement shall have been satisfied or waived as of the closing, which waiver shall be subject to prior written consent of Huya and the closing of the Reassignment (as defined in the Reassignment Agreement) shall have occurred in accordance with the Reassignment Agreement substantially concurrently with the closing of the transactions contemplated by the Merger Agreement; |
• | all PRC regulatory filings to be made or obtained in connection with the Merger and the other transactions contemplated by the Merger Agreement prior to closing shall have been duly made or obtained, or the statutory clearance or non-objection period in respect of any such regulatory filing or notification has expired and no objection has been raised with respect to the Merger, in each case in accordance with applicable PRC laws. |
• | the representations and warranties of Huya and Merger Sub in the Merger Agreement being true and correct in all respects save for de minimis inaccuracies as of the date of the Merger Agreement and as of the Closing Date, with certain other representations and warranties subject to a material adverse effect exception; |
• | Huya and Merger Sub having performed or complied in all material respects with all covenants and agreements required to be performed or complied with by it under the Merger Agreement prior to or at the time of closing of the Merger; and |
• | there having been no Huya Material Adverse Effect since the date of the Merger Agreement. |
• | the representations and warranties of Huya and Merger Sub shall not be true and correct or Huya or Merger Sub shall have breached or failed to perform any of its covenants or agreements contained in the Merger Agreement, or |
• | (1) all of the closing conditions to the completion of the Merger or to the obligations of Huya and Merger Sub to consummate the Merger have been satisfied, (2) DouYu and Nectarine have confirmed by notice to Huya that all conditions to their obligation to consummate the Merger have been satisfied or that they are willing to waive any such unsatisfied conditions, and (3) Huya fails to consummate the Merger within three business days following the date the closing should have occurred as set forth in the Merger. |
• | the representations and warranties of DouYu shall not be true and correct or DouYu shall have breached or failed to perform any of its covenants or agreements contained in the Merger Agreement, or |
• | (1) all of the closing conditions to the completion of the Merger or to the obligations of DouYu to consummate the Merger have been satisfied, (2) Huya and Nectarine have confirmed by notice to DouYu that all conditions to their obligation to consummate the Merger have been satisfied or that they are willing to waive any such unsatisfied conditions, and (3) DouYu fails to consummate the Merger within three business days following the date the closing should have occurred as set forth in the Merger. |
Huya ADSs (1) |
DouYu ADSs (2) |
|||||||||||||||
($) | ($) | |||||||||||||||
High | Low | High | Low | |||||||||||||
2018 |
||||||||||||||||
Second Quarter |
50.82 | 15.25 | — | — | ||||||||||||
Third Quarter |
40.60 | 23.02 | — | — | ||||||||||||
Fourth Quarter |
24.04 | 14.44 | — | — | ||||||||||||
2019 |
||||||||||||||||
First Quarter |
30.00 | 15.12 | — | — | ||||||||||||
Second Quarter |
29.45 | 19.48 | — | — | ||||||||||||
Third Quarter |
28.20 | 19.30 | 11.88 | 7.77 | ||||||||||||
Fourth Quarter |
25.90 | 16.40 | 8.60 | 7.01 | ||||||||||||
2020 |
||||||||||||||||
First Quarter |
21.73 | 11.78 | 9.50 | 6.11 | ||||||||||||
Second Quarter |
20.78 | 14.50 | 12.19 | 6.17 | ||||||||||||
Third Quarter |
30.62 | 18.81 | 17.85 | 10.88 | ||||||||||||
Fourth Quarter (through November 9, 2020) |
25.87 | 20.23 | 16.37 | 13.12 |
(1) | Each Huya ADS represents one Huya Class A share. |
(2) | 10 DouYu ADSs represent one DouYu share. |
• | the operational and financial synergies expected by Huya and DouYu across a number of areas, including leveraging live streaming content over a larger user base, and improving operation efficiencies are not achieved; |
• | the effect of the Merger on the financial results of Huya is not consistent with the expectations of financial analysts or investors; |
• | DouYu ADS holders sell a significant number of Huya ADSs after consummation of the Merger, or DouYu shareholders who receive Huya Class A shares under the Merger Agreement later sell a significant number of Huya ADSs in the open market; or |
• | adverse changes in laws, regulations, rules, policies or guidelines, or the general political, economic, industry or capital markets environment, or the impact of a pandemic including the continuing impact of COVID-19. |
• | potential disruption of, or reduced growth in, Huya’s core businesses, due to diversion of management attention and uncertainty with our current client relationships; |
• | consolidating and integrating corporate, information technology, finance and administrative infrastructures, and integrating and harmonizing business systems; |
• | coordinating efforts to effectively maintain and grow user base, as well as attract and retain key talent agencies or talented and popular broadcasters; |
• | difficulties in achieving anticipated operational and financial synergies, business opportunities and growth prospects from combining DouYu’s and Penguin’s business with Huya’s business; |
• | limitations prior to the completion of the Merger on the ability of management of Huya and DouYu to conduct planning regarding the integration of the two companies; |
• | the increased scale and complexity of operations resulting from the Merger; |
• | difficulties in anticipating and responding to actions that may be taken by competitors in response to the Merger; and |
• | potential adverse changes in laws, regulations, rules, policies or guidelines, or the general political, economic, industry or capital markets environment, or the impact of a pandemic including the continuing impact of COVID-19. |
Q: |
What is this document and why did I receive the proxy card? |
A: | You received a proxy card and were directed to this document because, as of the DouYu share record date or the DouYu ADS record date, you owned DouYu shares or DouYu ADSs, respectively. Merger Sub will be merged with and into DouYu, with DouYu continuing as the surviving company and as a wholly owned subsidiary of Huya, pursuant to the terms of a Merger Agreement and Plan of Merger that is described in this proxy statement/prospectus. A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A, and a copy of the Plan of Merger is attached as Exhibit A to the Merger Agreement. |
Q: |
What is the Merger? |
A: | The Merger is a stock-for-stock |
Q: |
What will I receive in the Merger if I own DouYu shares or DouYu ADSs (that are not Excluded DouYu Shares)? |
A: | As described in more detail under “The Merger Agreement and Plan of Merger and the Merger” below, at the Effective Time, (1) each outstanding DouYu share will be canceled in consideration of the right to |
receive 7.30 Huya Class A shares, and (2) each outstanding DouYu ADS will be canceled in consideration of the right to receive 0.730 Huya ADS; provided that the Excluded DouYu Shares shall automatically be canceled and shall cease to exist, and no consideration shall be delivered or deliverable in exchange therefor, and the Purported Dissenters Shares will be canceled for the Per Share Merger Consideration, without interest, or appraised value under the Cayman Companies Law. |
Q: |
Can the value of the Merger Consideration change between now and the time the Merger is completed? |
A: | The value of Huya Class A shares and Huya ADSs to be delivered to DouYu shareholders and DouYu ADS holders, respectively, under the Merger Agreement will fluctuate based on the trading price for Huya ADSs on the NYSE. Regardless of the trading price of Huya’s ADSs on the NYSE on the effective date of the Merger, DouYu shareholders will receive 7.30 Huya Class A share for each DouYu share that they own (“Per Share Merger Consideration”) and DouYu ADS holders will receive 0.730 Huya ADS for each DouYu ADS that they own (“Per ADS Merger Consideration,” together with the Per Share Merger Consideration, the “Merger Consideration”). The market value of the Huya Class A shares and Huya ADSs that DouYu shareholders and DouYu ADS holders will respectively receive in the Merger will increase or decrease as the trading price of Huya ADSs increases or decreases, and may be different at the time the Merger is completed than it was at the time the Merger Agreement was signed or will be at the time of DouYu’s EGM to approve the Merger. The market price of Huya ADSs could be lower at any time prior to the completion of the Merger or at any time thereafter than it was at the date of the Merger Agreement. Please see the section titled “Risk Factors” beginning on page 18 for more information on the risks involved in investing in Huya Class A shares and ADSs. |
Q |
What are the material tax consequences of the Merger to DouYu shareholders and DouYu ADS holders? |
A: | Please see “Special Factors—Tax Consequences of the Merger—U.S. Federal Income Tax Consequences of the Merger” beginning on page 97 for a summary of the U.S. federal income tax consequences of the Merger, “PRC Income Tax Consequences” beginning on page 99 for a summary of the PRC income tax consequences of the Merger, and “Cayman Islands Tax Consequences” on page 101 for a summary of the Cayman Islands tax consequences of the Merger. You should consult with your own tax advisor for a full understanding of how the Merger will affect your U.S. federal, state, local, foreign income and other taxes. |
Q: |
How will DouYu’s RSU awards be treated in the Merger? |
A: | Each award of restricted share units (“DouYu RSU Award”) granted pursuant to the Amended and Restated Restricted Share Unit Scheme of DouYu (the “DouYu Restricted Share Unit Scheme”) that is outstanding and unvested and held directly by the applicable grantee immediately prior to the Effective Time shall be assumed by Huya and converted into a restricted share unit award (an “Assumed RSU Award”) with respect to a number of Huya Class A shares equal to the product obtained by multiplying (i) the applicable number of DouYu shares subject to such DouYu RSU Award immediately prior to the Effective Time by (ii) 7.30, rounded to the nearest whole share. Each Assumed RSU Award shall continue to have, and shall be subject to, the same terms and conditions as applied to the corresponding DouYu RSU Award immediately prior to the Effective Time (taking into account any changes thereto by reason of the Merger Agreement or the Merger), except for changes made as appropriate to effectuate the administration of the Assumed RSU Awards and certain other changes agreed by DouYu. |
Q: |
What is an American depositary share (ADS) and American depositary receipt (ADR)? |
A: | An American depositary share (“ADS”) is an ownership interest in the securities of a non-U.S. company deposited at a custodian bank, as agent of the depositary. ADS holders hold their ADSs either directly or indirectly through a broker or other financial institution. If you hold ADSs directly, either represented by ADSs in book-entry form on the depositary’s direct registration system or represented by American depositary receipts (“ADRs”) that you hold in certificated form, you are an ADR holder. JPMorgan Chase Bank, N.A. is the depositary of DouYu’s ADS program and Deutsche Bank Trust Company Americas is the depositary of Huya’s ADS program. |
Q: |
If the Merger is completed, will the Huya ADSs to be delivered under the Merger Agreement be “listed” for trading? |
A: | Yes. Huya ADSs are listed on the NYSE under the symbol “HUYA.” It is a condition to the completion of the Merger that the Huya ADSs to be delivered to DouYu ADS holders in connection with the Merger be approved for listing on the NYSE, subject to official notice of issuance. |
Q: |
After the Merger is completed, how will I receive the Merger Consideration for my DouYu shares? |
A: | Within five business days after the Effective Time, an exchange agent appointed by Huya (subject to DouYu’s prior approval) will mail to each registered holder of the DouYu shares (other than holders of Excluded DouYu Shares or Purported Dissenters Shares) (1) a form of letter of transmittal specifying how the delivery of the Merger Consideration to registered holders of the DouYu shares will be effected and (2) instructions for effecting the surrender of share certificates in exchange for the applicable Merger Consideration for each DouYu share. DouYu shareholders will receive the Merger Consideration for their DouYu shares from the exchange agent after complying with these instructions. Do not send in your share certificates with your proxy card. |
Q: |
After the Merger is completed, how will I receive the Merger Consideration for my DouYu ADSs? |
A: | Within five business days after the Effective Time, the surviving company and the exchange agent will mail to the DouYu depositary (1) a form of letter of transmittal specifying how the delivery of the Merger Consideration to the DouYu depositary will be effected and (2) instructions for effecting the surrender of all certificates representing DouYu ADSs. The DouYu depositary will be entitled to receive the Per ADS Merger Consideration, without interest, for each DouYu share held by the DouYu depositary in respect of which a DouYu ADS has been issued (the “Aggregate ADS Payment”), provided that the DouYu depositary will be required to surrender such certificates it holds to the exchange agent, together with such letter of transmittal, duly executed and completed in accordance with the instructions thereto, and the certificates so surrendered will forthwith be canceled. |
Q: |
When will I receive the Merger Consideration? |
A: | Assuming the Merger is completed, registered holders of DouYu shares will receive the Per Share Merger Consideration as soon as practicable following their compliance with the instructions set forth in the letter of transmittal received from the exchange agent, including the surrender of share certificates. |
Q: |
Will I receive fractional interests in Huya Class A shares or Huya ADSs? |
A: | No fractional Huya Class A shares or Huya ADSs will be issued as Merger Consideration. The exchange agent will (1) receive all Huya ADSs not used for share exchange in the Merger because of the existence of fractional Huya Class A shares or Huya ADSs and (2) sell such Huya ADSs on behalf of the holders of fractional Huya Class A shares or Huya ADSs on the NYSE and pass on the proceeds to such holders of the DouYu shares and DouYu ADSs in cash. |
Q: |
Will I have to pay brokerage commissions or depositary fees? |
A: | You will not have to pay brokerage commissions as a result of the exchange of your DouYu shares for Huya Class A shares in the Merger if your DouYu shares are registered in your name in the DouYu share register. The DouYu Deposit Agreement provides that in the event of the cancellation of the DouYu ADSs the holder thereof will pay to the DouYu depositary a US$0.05 cancellation fee, and the registered holders of DouYu ADSs shall pay such US$0.05 ADS cancellation fee for each DouYu ADS that Huya acquires from him or her in the Merger. In addition, each DouYu ADS holder will be required to pay to the Huya depositary an ADS issuance fee of US$0.05 per Huya ADS to be issued, which equals to US$0.0365 per DouYu ADS, or US$36.50 for every 1,000 DouYu ADSs, surrendered to the DouYu depositary in exchange for Huya ADSs. If your DouYu ADSs are held through a bank, broker or a custodian linked to a stock exchange, you should consult with them as to whether or not they charge any brokerage commissions, transaction fees or service charges in connection with the Merger. |
Q: |
When and where will the EGM be held? |
A: | The EGM will take place on , 2021, beginning at local time at 7F, Building 2, Riverside International Plaza, 1062 Yangshupu Road, Yangpu District, Shanghai 200082, People’s Republic of China. |
Q: |
What matters will be voted on at the EGM? |
A: | You will be asked to consider and vote on the following resolutions: |
• | as a special resolution, to authorize, approve and adopt the Merger Agreement and the Plan of Merger and the transactions contemplated by the Merger Agreement and the Plan of Merger, including the Merger and upon the Merger becoming effective, the amendment and restatement of the fourth amended and restated memorandum and articles of association of DouYu (as the surviving company) in the form attached as Appendix II to the Plan of Merger and the amendment of the authorized share capital of DouYu (as the surviving company) from US$100,000 divided into 500,000,000 ordinary shares of a par value of US$0.0001 per share and 500,000,000 shares of a par value of US$0.0001 per share as the board of directors may determine, to US$100,000 divided into 1,000,000,000 ordinary shares of a par value of US$0.0001 each as set forth in the Plan of Merger; or |
• | as an ordinary resolution, to instruct the chairman of the EGM to adjourn the EGM in order to allow DouYu to solicit additional proxies in favor of the approval of the Merger and the authorization, approval and adoption of the Merger Agreement and the Plan of Merger in the event that there are insufficient proxies received to authorize, approve and adopt the Merger Agreement and the Plan of Merger. |
Q: |
What vote of DouYu shareholders is required to approve the Merger Agreement and the Plan of Merger? |
A: | In order for the Merger to be completed, the Merger Agreement must be approved by a special resolution of DouYu passed by an affirmative vote of shareholders representing two-thirds or more of the DouYu shares present and voting in person or by proxy as a single class at the EGM authorizing, approving and adopting the Merger Agreement and the Plan of Merger. If this vote is not obtained, the Merger will not be completed. |
Q: |
What vote of DouYu shareholders is required to approve the proposal to adjourn the EGM, if necessary, to solicit additional proxies? |
A: | The proposal to adjourn the EGM must be approved by an ordinary resolution of DouYu passed by a majority of the votes cast by such shareholders of DouYu as, being entitled to do so, vote in person or by proxy as a single class at the DouYu EGM. Each DouYu share is entitled to one vote. |
Q: |
Who is entitled to vote at the EGM? |
A: | The DouYu share record date is , 2021 (New York City time) and the DouYu ADS record date is the close of business on , 2021 (New York City time). Holders of DouYu shares on the DouYu share record date are entitled to attend and vote at the EGM, and holders of DouYu ADSs on the DouYu ADS record date are entitled to instruct the DouYu depositary how to vote the DouYu shares underlying their DouYu ADSs at the EGM. Holders of DouYu shares may appoint a proxy holder to vote on their behalf, and holders of DouYu ADSs may instruct the DouYu depositary how to vote the DouYu shares underlying their ADSs or may appoint a proxy holder to instruct the DouYu depositary how to vote on their behalf. Shareholders entered in the register of members of DouYu at the close of business on , 2021 (New York City time) will receive the proxy card directly from DouYu, and DouYu ADS holders of record at the close of business on , 2021 (New York City time) will receive the ADS voting instruction card from the DouYu depositary. |
Q: |
Who is entitled to participate in the EGM? |
A: | Only DouYu shareholders registered in the register of members of DouYu as of the DouYu share record date or their proxy holders are entitled to participate in the EGM or any adjournment thereof, unless they sell their DouYu shares before , 2021. DouYu ADS holders themselves may not participate in the EGM. DouYu ADS holders who wish to attend the EGM must cancel their DouYu ADSs and become registered as a DouYu shareholder in DouYu’s register of members prior to , 2021, the DouYu share record date. |
Q: |
What constitutes a quorum for the EGM? |
A: | The presence, in person or by proxy, of one or more shareholders holding shares which carry in aggregate not less than an aggregate of one-third of all votes attaching to all DouYu shares in issue and entitled to vote at the EGM, on the DouYu share record date, will constitute a quorum for the EGM. |
Q: |
When do you expect the Merger to be completed? |
A: | We are working toward completing the Merger as quickly as possible and currently expect the Merger to close in the first half of 2021. In order to complete the Merger, we must obtain shareholder approval of the Merger at the EGM and the other closing conditions under the Merger Agreement must be satisfied or waived in accordance with the Merger Agreement. |
Q: |
What happens if the Merger is not completed? |
A: | If the DouYu shareholders do not authorize, approve and adopt the Merger Agreement and the Plan of approve the transactions contemplated by the Merger Agreement and the Plan of Merger, including the |
Merger, or if the Merger is not completed for any other reason, the DouYu shareholders and DouYu ADS holders will not receive any payment for their respective DouYu shares and DouYu ADSs pursuant to the Merger Agreement and the holders of any DouYu RSU Awards will not receive any Huya restricted share units pursuant to the Merger Agreement. In addition, DouYu will remain a publicly traded company. The DouYu ADSs will continue to be listed and traded on NASDAQ, provided that DouYu continues to meet NASDAQ’s listing requirements. In addition, DouYu will remain subject to SEC reporting obligations. Therefore, DouYu shareholders and DouYu ADS holders will continue to be subject to similar risks and opportunities as they currently are with respect to their ownership of DouYu shares and DouYu ADSs. |
Q: |
Are there any risks in the Merger that I should consider? |
A: | Yes. There are risks associated with all business combinations, including the Merger. These risks are discussed in more detail in the section titled “Risk Factors” beginning on page 18. |
Q: |
How do I vote if my DouYu shares are registered in my name? |
A: | If DouYu shares are registered in your name (that is, you do not hold ADSs) as of the DouYu share record date, you should simply indicate on your proxy card how you want to vote, sign and date the proxy card, and mail the proxy card in the return envelope as soon as possible but in any event at least 48 hours before the time of the EGM so that your DouYu shares will be represented and may be voted at the EGM. |
Q: |
How do I vote if I hold DouYu ADSs? |
A: | If you own DouYu ADSs as of the close of business on , 2021 (New York City time) and have not cancelled your DouYu ADSs by the time and date as described in the paragraph below and elsewhere herein, you cannot attend or vote at the EGM directly because the DouYu shares underlying the DouYu ADSs are registered in the name of JPMorgan Chase Bank, N.A., as depositary for the benefit of holder of ADRs and not in your name, but you may instruct the DouYu depositary as depositary under the DouYu Deposit Agreement how to vote the shares underlying your ADSs by completing and signing the ADS voting instruction card and returning it in accordance with the instructions printed on it as soon as possible but, in any event, so as to be received by the DouYu depositary no later than 12:00 p.m. New York City time on , 2021. The DouYu depositary shall endeavor, insofar as practicable, to vote or cause to be voted the shares represented by your DouYu ADSs in accordance with your voting instructions. If the DouYu depositary timely receives voting instructions from an ADS holder which fails to specify the manner in which the DouYu depositary is to vote the shares represented by DouYu ADSs held by such ADS holder, |
no vote with respect to such ADS holder will be counted, unless such DouYu ADS holder indicates in their voting instructions that they are appointing a person designated by DouYu as his or her proxy, in which case the DouYu shares underlying the DouYu ADS represented by that DouYu ADS voting instruction card will be voted by the DouYu proxy FOR the authorization, approval and adoption of the Merger Agreement and the Plan of Merger and the other transactions contemplated thereby, including the Merger, and FOR the approval of the proposal to instruct the chairman of the EGM to adjourn the EGM in order to allow DouYu to solicit additional proxies in favor of the authorization, approval and adoption of the Merger Agreement and the Plan of Merger in the event that there are insufficient proxies received to authorize, approve and adopt the Merger Agreement and the Plan of Merger. |
Q: |
If my DouYu ADSs are held in a brokerage account, will my broker vote my DouYu ADSs on my behalf? |
A: | Your broker, bank or other nominee will only instruct the DouYu depositary to vote the DouYu shares underlying your DouYu ADSs on your behalf if you instruct it to do so. Therefore, it is important that you promptly follow the directions provided by your broker, bank or nominee regarding how to instruct it to instruct the Depositary to vote the DouYu shares underlying your DouYu ADSs. If you do not instruct your broker, bank or other nominee to instruct the Depositary how to vote the DouYu shares underlying your DouYu ADSs that it holds, those DouYu ADSs and the underlying DouYu shares may not be voted. |
Q: |
What will happen if I abstain from voting or fail to vote on the proposal to authorize and approve the Merger Agreement? |
A: | DouYu ADS holders and DouYu shareholders who abstain from voting will not have their votes counted, and DouYu shareholders who fail to cast their vote in person or by proxy will not have their votes counted. |
Q: |
May I change my vote? |
A: | If your DouYu shares are registered in your name, you may change your vote in one of three ways: |
Q: |
What should I do if I receive more than one set of voting materials? |
A: | You may receive more than one set of voting materials, including multiple proxy cards or ADS voting instruction cards. For example, if you hold your DouYu ADSs in more than one brokerage account, you will receive a separate ADS voting instruction card for each brokerage account in which you hold DouYu ADSs. If you are a DouYu shareholder of record and/or a DouYu ADS holder and your DouYu shares and/or DouYu ADSs, respectively, are registered in more than one name, you will receive more than one proxy card. Please submit each proxy card that you receive. |
Q: |
If I hold certificated DouYu shares, should I send in my share certificates now? |
A: | No. Promptly after the Merger is completed, each DouYu shareholder of record as of the time of the Merger will be sent written instructions for exchanging their share certificates for the Per Share Merger Consideration. Please do not send your share certificates now. |
Q: |
What happens if I sell my Shares or ADSs before the EGM? |
A: | The record date for the EGM is earlier than the date of the EGM and the Effective Time. If you transfer your shares or ADSs after the applicable record date, but before the date of the EGM, unless the transferee |
requests a proxy, you will retain your right to vote at such EGM, but will have transferred the right to receive the Merger Consideration in the Merger. In order to receive the Merger Consideration you must hold your shares through completion of the Merger. |
Q: |
Am I entitled to dissenters’ rights? |
A: | You will not be entitled to exercise dissenters’ rights under the Cayman Companies Law. Although dissenters’ rights are sometimes available in respect of statutory mergers effected under the Cayman Companies Law, such dissenters’ rights are specifically excluded (by the terms of Section 239 of the Cayman Companies Law) in respect of shares of any class where the following conditions are satisfied: |
(a) | an open market for such class of shares exists on a recognised stock exchange or recognised interdealer quotation system at the expiry date of the period allowed for written notice of an election to dissent under section 238(5) of the Cayman Companies Law; and |
(b) | the relevant shareholders are not required by the terms of the Plan of Merger to accept for such shares anything except: |
i. | shares of the surviving company, or depository receipts in respect thereof; |
ii. | shares of any other company, or depository receipts in respect thereof, which shares or depository receipts at the effective date of the merger, are either listed on a national securities exchange or designated as a national market system security on a recognised interdealer quotation system or held of record by more than two thousand holders; |
iii. | cash in lieu of fractional shares or fractional depository receipts described in sub-paragraphs (i) and (ii) above; or |
iv. | any combination of the shares, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in sub-paragraphs (i), (ii) and (iii) above. |
1. | an open market for the DouYu shares will continue to exist on a recognized stock exchange (namely NASDAQ) at the expiry of the period specified in sub-paragraph (a) above. That period is a maximum of 40 days following the date of the EGM, at which the vote of the DouYu shareholders giving authorization for the Merger is made. The DouYu ADSs will continue to be listed on NASDAQ until after the expiration of that period; and |
2. | under the terms of the Plan of Merger, each DouYu shareholder who holds DouYu shares will receive only Huya Class A shares, as the Per Share Merger Consideration, which at the Effective Time are listed on a national securities exchange (namely the NYSE). DouYu shareholders will not be required to accept anything other than Huya Class A shares. |
Q: |
Will any proxy solicitor be used in connection with the EGM? |
A: | No, DouYu has not retained a proxy solicitor. DouYu will ask banks, brokers and other custodians, nominees and fiduciaries to forward DouYu’s proxy solicitation materials to the beneficial owners of DouYu shares or DouYu ADSs held of record by such nominee holders. DouYu will reimburse these nominee holders for their customary clerical and mailing expenses incurred in forwarding the proxy solicitation materials to the beneficial owners and in obtaining voting instructions from those owners. In addition, proxies may be solicited by mail, in person, by telephone, by internet or by facsimile by certain of DouYu’s officers, directors and employees. These persons will receive no additional compensation for solicitation of proxies but may be reimbursed for reasonable out-of-pocket |
Q: |
Do any of DouYu’s directors or executive officers have interests in the Merger that may differ from those of other shareholders? |
A: | Yes. Some of DouYu’s directors or executive officers have interests in the Merger that may differ from those of other shareholders, including: (1) the beneficial ownership of equity interests in, and other relationships with, Tencent Holdings by Mr. Haiyang Yu and Ms. Song Zhou; (2) the potential grants of Huya share based awards to DouYu senior management and other employees after completion of the Merger; (3) treatment of DouYu RSU Awards and acceleration of vesting of DouYu RSU Awards held by certain senior management of DouYu; (4) continued indemnification rights and directors and officers liability insurance to be provided by DouYu to former directors and officers of DouYu; (5) the compensation of members of the DouYu Special Committee of the DouYu Board in exchange for their services in such capacity (the payment of which is not contingent upon the completion of the Merger or the DouYu Special Committee’s or the DouYu Board’s recommendation of the Merger); and (6) the continuation of service of the executive officers of DouYu in positions that are substantially similar to their current positions. Please see “Special Factors—Interests of DouYu’s Directors and Executive Officers in the Merger” beginning on page 93 for a more detailed discussion of how some of DouYu’s directors and executive officers have interests in the Merger that are different from, or in addition to, the interests of our shareholders generally. |
Q: |
How will DouYu’s directors and executive officers vote at the EGM on the proposal to adopt the Merger Agreement? |
A: | Each of Mr. Chen and Mr. Zhang has entered into the Voting Agreement with Huya, Nectarine and, solely for the limited purposes set forth therein, DouYu, pursuant to which each of Mr. Chen and Mr. Zhang has agreed to vote 4,800,629 DouYu shares and 651,239 DouYu shares, respectively, beneficially owned by them, representing in total 17.0% of the issued and outstanding DouYu shares, in favor of the adoption of the Merger Agreement and the transactions contemplated thereby, including the Merger. DouYu expects that all of the other directors and executive officers who beneficially own DouYu shares will vote all of their DouYu shares in favor of approval of the Merger and the authorization, approval and adoption of the Merger Agreement and the Plan of Merger. |
Q: |
How does the DouYu Board recommend that I vote on the proposals? |
A: | Based in part on the unanimous recommendation of the DouYu Special Committee, the DouYu Board determined that the Merger is fair (both substantively and procedurally) to, and in the best interests of, |
DouYu and the Unaffiliated Security Holders, and approved and adopted the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger. Accordingly, the DouYu Board recommends that you vote: |
• | FOR the special resolution to authorize, approve and adopt the Merger Agreement and the Plan of Merger and the transactions contemplated by the Merger Agreement and the Plan of Merger, including the Merger and upon the Merger becoming effective, the amendment and restatement of the fourth amended and restated memorandum and articles of association of DouYu (as the surviving company) in the form attached as Appendix II to the Plan of Merger and the amendment of the authorized share capital of DouYu (as the surviving company) from US$100,000 divided into 500,000,000 ordinary shares of a par value of US$0.0001 per share and 500,000,000 shares of a par value of US$0.0001 per share as the board of directors may determine, to US$100,000 divided into 1,000,000,000 ordinary shares of a par value of US$0.0001 each as set forth in the Plan of Merger; and |
• | FOR the ordinary resolution to instruct the chairman of the EGM to adjourn the EGM in order to allow DouYu to solicit additional proxies in favor of the authorization, approval and adoption of the Merger Agreement and the Plan of Merger in the event that there are insufficient proxies received to authorize, approve and adopt the Merger Agreement and the Plan of Merger. |
Q: |
What do I need to do now? |
A: | VOTING: You are urged to carefully read this proxy statement/prospectus, including its annexes, exhibits, attachments and the other documents referred to or incorporated by reference into this proxy statement/prospectus and to consider how the Merger affects you as a DouYu shareholder or ADS holder. You may also want to review the documents referenced under “Where You Can Find More Information” and “Incorporation of Certain Documents by Reference” on page 199 and page 200, respectively, and consult with your accounting, legal and tax advisors. Once you have considered all relevant information, you are encouraged to vote by proxy so that your DouYu shares and/or the DouYu shares underlying your ADSs are represented at the EGM of DouYu shareholders. You can vote your DouYu shares and/or the DouYu shares underlying your ADSs by marking your choices on the proxy card or the ADS voting instruction card, respectively, and then signing, dating and mailing it in the envelope which was included in the proxy solicitation materials which were mailed to you. |
Q: |
Who can help answer my questions? |
A: | If you have any further questions about the Merger or if you need additional copies of this proxy statement/prospectus, you may also contact the investor relation departments of Huya and DouYu as follows. |
Q: |
Where can I find more information about the companies involved in the Merger? |
A: | You can find more information about Huya, Merger Sub, DouYu and Nectarine in “Summary—The Parties Involved in the Merger” beginning on page 1 of this proxy statement/prospectus, and in the documents described under “Where You Can Find More Information” and “Incorporation of Certain Documents by Reference” on page 199 and page 200, respectively. |
• | belief that the combined company (which includes the Penguin Business) will have the reach and scale to bring its users high quality live streaming content; |
• | belief that trends in the live streaming industry favor consolidation, and, following the proposed Merger, the combined company would strengthen its market position in the industry; |
• | belief that the combined company would be in a better position to respond to competitive pressure from other online video services including short video platforms; |
• | the advice of Huya’s management, who carefully evaluated the transactions contemplated by the Merger Agreement and the Reassignment Agreement in several dimensions, such as strategic complementarity, value creation potential and synergy opportunities, among others; |
• | significant operational and financial synergies across a number of areas including leveraging live streaming content over a larger user base, and improving operation efficiency; |
• | belief that the Merger would deepen the integration of the management and professional team of Huya and DouYu, better coordinate its efforts to grow user base and cooperate with talent agencies to recruit, manage, train and support broadcasters; |
• | the financial presentation and opinion, dated October 12, 2020, of Citigroup to the Huya Special Committee that the 7.30x Share Exchange Ratio was fair, from a financial point of view, to Huya, as more fully described below under the heading “—Opinion of Citigroup Global Markets Inc. as Independent Financial Advisor to the Huya Special Committee”; |
• | belief that the terms of the Merger Agreement and other documents to be executed in connection with the consummation of the Merger were reasonable, including, among other things: |
• | the limited conditions to the parties’ obligations to complete the Merger and the probability that such conditions would be satisfied; |
• | the fact that the termination date under the Merger Agreement allows for time that is expected to be sufficient to complete the Merger; |
• | the ability of Huya to obtain a termination fee of US$44,000,000 or US$177,000,000, as applicable, from DouYu if the Merger is not consummated for certain reasons; and |
• | the fact that DouYu’s founders have agreed to enter into a lock-up undertaking and securities account monitoring agreement with respect to the Huya ADSs they receive upon completion of the Merger. |
• | the likelihood that the Merger would be completed based on, among other things: |
• | the voting support from Nectarine and DouYu founders; |
• | Huya’s ability to seek specific performance to prevent breaches of the Merger Agreement and to enforce specifically the terms of the Merger Agreement; and |
• | the business reputation and capabilities of DouYu and its management, which the Huya Special Committee believed supported the conclusion that a transaction with DouYu could be completed in an orderly manner. |
• | the information and advice previously provided to and reviewed by the Huya Special Committee. |
• | the risks and contingencies related to the announcement and pendency of the Merger, including the impact of the Merger on DouYu’s users, broadcasters, employees and relationships with other third parties; |
• | the risk of diverting Huya management focus, employee attention and resources from other strategic opportunities and from operational matters while working to complete the Merger; |
• | the challenges of combining the businesses, policies, processes, systems, operations and workforces of Huya and DouYu and realizing the anticipated operational and financial synergies, and the risk that potential benefits and synergies sought in the Merger may not be realized or may not be realized within the expected time period; |
• | the risk that the parties may incur significant costs and unexpected delays in consummating the Merger; |
• | the fact that there can be no assurance that all conditions to the parties’ obligations to complete the Merger (including the condition that the closing of the Reassignment shall have occurred and the condition that the required vote of DouYu shareholders be obtained to authorize and approve the Merger Agreement, the Plan of Merger and the Merger) will be satisfied and, as a result, the Merger may not be consummated, and the possible effects on Huya should the parties fail to complete the Merger; |
• | the fact that under the terms of the Merger Agreement, Huya must pay to DouYu a termination fee of US$177,000,000 if the Merger Agreement is terminated under certain circumstances; and |
• | the fact that, pursuant to the Merger Agreement, Huya must generally conduct its business in the ordinary course and is subject to a variety of other restrictions on the conduct of its business prior to the closing of the Merger or termination of the Merger Agreement, which may delay or prevent it from pursuing business opportunities that may arise or preclude actions that would be advisable if Huya were to not enter into the Merger Agreement. |
• | determine that the proposed Merger, on the terms and subject to the considerations set forth in the Merger Agreement, is in the best interests of DouYu and its shareholders, and declare it advisable to enter into the Merger Agreement; |
• | approve the execution, delivery and performance by DouYu of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Merger; |
• | recommend the approval and adoption of the Merger Agreement by the shareholders of DouYu; and |
• | direct that the Merger Agreement and the Plan of Merger be submitted to the shareholders of DouYu for their approval. |
• | the advice of Douyu’s management, who carefully evaluated the transactions contemplated by the Merger Agreement and the Reassignment Agreement in several dimensions, such as opportunities for achieving synergy and creating value; |
• | the current and historical market prices of the DouYu ADSs and Huya ADSs; |
• | the fact that, based on the Huya ADS closing trading price on the NYSE of $25.79 per Huya ADS ($25.79 per Huya Class A share) on October 9, 2020 (the last trading day before the Merger Agreement was signed), the Merger Consideration represents an implied value of $18.83 per DouYu ADS ($188.30 per DouYu share), which amounts to a premium of 34.5% over the closing trading price of DouYu ADSs on NASDAQ on October 9, 2020; |
• | the possibility that it could take a period of time before the trading price of DouYu shares and DouYu ADSs would reach and sustain the value of the consideration being offered in the Merger; |
• | the DouYu Board’s knowledge of DouYu’s business, financial condition, results of operations, prospects and competitive position and its belief that the Merger is more favorable to the Unaffiliated Security Holders than any other alternative reasonably available to DouYu and its shareholders and ADS holders; |
• | the DouYu Board’s knowledge of Huya’s business, financial condition, results of operations, prospects and competitive position; |
• | forecasts of DouYu’s future financial performance prepared by DouYu’s management and forecasts of Huya’s future financial performance prepared by Huya’s management, together with DouYu’s management’s view of its and Huya’s financial condition, results of operations, business, prospects and competitive position; |
• | global economic conditions and the potential effects on DouYu’s future financial condition; |
• | the belief of the DouYu Special Committee that the terms of the Merger Agreement, including the parties’ representations, warranties and covenants, and the conditions to their respective obligations, are reasonable; |
• | the DouYu Board’s belief that it was unlikely that any other transaction with a third party could be consummated in light of the Tencent Entities’ equity stake in DouYu; |
• | the increased costs of regulatory compliance for public companies; |
• | the likelihood that the proposed Merger would be completed based on, among other things (and not necessarily in order of relative importance), the likelihood and anticipated timing of completing the proposed Merger in light of the scope of the conditions to closing; |
• | following its formation, the DouYu Special Committee’s independent control of the sale process with the advice and assistance of Morgan Stanley and Davis Polk as its financial and legal advisors, respectively, reporting solely to the DouYu Special Committee, and the fact that and that no limitations were placed on the DouYu Special Committee’s authority; |
• | the ability of the DouYu Board to change recommendation to DouYu shareholders if the DouYu Board’s fiduciary duties otherwise require; |
• | that a fixed ratio for the Per Share Merger Consideration and Per ADS Merger Consideration provides the holders of DouYu shares and DouYu ADSs, respectively, the opportunity to benefit from any increase in the trading price of Huya Class A shares between the announcement of the Merger Agreement and the completion of the Merger; |
• | that the Merger Consideration would enable the holders of DouYu shares and DouYu ADSs to beneficially own approximately 50% of the total outstanding ordinary shares of Huya following the Merger, which will provide DouYu shareholders and DouYu ADS holders with the opportunity to participate in any future earnings or growth of Huya and future appreciation in the value of Huya Class A shares and Huya ADSs following the Merger, should such shareholders determine to retain the Huya Class A shares and Huya ADSs payable in the Merger; |
• | the financial analyses reviewed with the DouYu Special Committee by representatives of Morgan Stanley, and the oral and written opinion of Morgan Stanley, dated October 12, 2020, to the DouYu Special Committee as to the fairness, from a financial point of view as of the date of the opinion, of the Merger Consideration to be received by the holders of DouYu shares and DouYu ADSs (other than the Excluded Persons), as more fully described below in the section titled “—Opinion of Morgan Stanley Asia Limited as Independent Financial Advisor to DouYu Special Committee.” |
• | the DouYu Special Committee, consisting solely of independent and disinterested directors, acted to represent solely the interests of the Unaffiliated Security Holders, and the DouYu Special Committee had independent control of the extensive negotiations with Huya on behalf of such Unaffiliated Security Holders; |
• | all of the directors serving on the DouYu Special Committee during the entire process are free from any affiliation with Huya and the Tencent Entities. In addition, none of such directors is or ever was an employee of DouYu or any of its subsidiaries or affiliates; |
• | the fact that, other than their receipt of the DouYu Board and the DouYu Special Committee compensation (which are not contingent upon the consummation of the Merger or the DouYu Special Committee’s or DouYu Board’s recommendation of the Merger) and their indemnification and liability insurance rights under their respective Indemnification Agreement entered into with DouYu and the Merger Agreement, members of the DouYu Special Committee do not have interests in the Merger different from, or in addition to, those of the Unaffiliated Security Holders; |
• | The DouYu Special Committee retained its own legal counsel and independent financial advisor that are independent from Huya, Merger Sub and the Tencent Entities to assist the DouYu Special Committee in connection with the review and consideration of the Merger and Reassignment, and such legal counsel and independent financial advisor acted solely on behalf of the DouYu Special Committee for the purposes of negotiating the terms of the Merger and Reassignment and preparing the opinion concerning the fairness of the transactions contemplated under the Merger Agreement and Reassignment Agreement; |
• | the DouYu Special Committee was empowered to consider, attend to and take any and all actions in connection with the Non-Binding Proposal dated August 10, 2020 from Tencent Holdings and the transactions contemplated therein from the date the DouYu Special Committee was established, and no evaluation, negotiation, or response regarding the proposed Merger or any documentation in connection therewith from that date forward was considered by the DouYu Board for approval unless the DouYu Special Committee had recommended such action to the DouYu Board; |
• | the terms and conditions of the Merger Agreement were the product of extensive negotiations between the DouYu Special Committee and its advisors, on the one hand, and Huya, the Tencent Entities and their respective advisors, on the other hand; |
• | the DouYu Special Committee had the authority to reject the terms of any strategic transaction, including the Merger; |
• | the DouYu Special Committee met regularly to consider and review the proposed Merger; |
• | the ability of DouYu Board to change of recommendation to DouYu shareholders if DouYu Board’s fiduciary duties otherwise require; |
• | the approximately two-month period between the public announcement that DouYu had received the Non-Binding Proposal from Tencent Holdings and the signing of the Merger Agreement provided an opportunity for other potentially interested buyers to indicate their interest in acquiring DouYu, and the fact that no party other than Huya, Merger Sub and the Tencent Entities had contacted DouYu or the DouYu Special Committee expressing an interest in exploring an alternative transaction with DouYu; |
• | the Merger Agreement, Reassignment Agreement and the consummation of the transactions contemplated thereunder, including the Merger and Reassignment, have been approved by all of the directors who are neither employees of DouYu nor affiliated to Huya, Merger Sub or the Tencent Entities; and |
• | the fact that the Merger is subject to an affirmative vote of shareholders representing two-thirds or more of the DouYu shares present and voting in person or by proxy as a single class at the EGM. |
• | the risks and contingencies related to the announcement and pendency of the Merger, including the impact of the Merger on customers, employees, suppliers and relationships with other third parties, including the potential negative reaction of these parties to the fact that DouYu would be merging with another party or acquired by Huya; |
• | the risk of diverting management focus, employee attention and resources from other strategic opportunities and from operational matters while working to complete the Merger; |
• | the fact that, under the terms of the Merger Agreement, DouYu must pay to Huya a termination fee of US$44 million or US$177 million if the Merger Agreement is terminated under certain circumstances; |
• | the challenges of combining the businesses, policies, processes, systems, operations and workforces of DouYu and Huya and realizing the anticipated operational and financial synergies, and the risk that potential benefits and synergies sought in the Merger may not be realized or may not be realized within the expected time period; |
• | the fact that a fixed exchange ratio for the Per Share Merger Consideration and Per ADS Merger Consideration means that holders of DouYu shares and DouYu ADSs could be adversely affected by a decrease in the trading price of Huya ADSs between the time of the announcement and the completion of the Merger; |
• | the risk that the parties may incur significant costs and unexpected delays in consummating the Merger; and |
• | the fact that there can be no assurance that all conditions to the parties’ obligations to complete the Merger (including the condition that DouYu’s shareholders approve the Merger as required by the Cayman Companies Law and under the Merger Agreement) will be satisfied and, as a result, the Merger may not be consummated, and the possible effects on DouYu should the parties fail to complete the Merger. |
• | the current and historical market prices of the DouYu ADSs and Huya ADSs; |
• | the fact that, based on the Huya ADS closing trading price on the NYSE of $25.79 per Huya ADS ($25.79 per Huya Class A share) on October 9, 2020 (the last trading day before the Merger Agreement was signed), the Merger Consideration represents an implied value of $18.83 per DouYu ADS ($188.30 per DouYu share), which amounts to a premium of 34.5% over the closing trading price of DouYu ADSs on NASDAQ on October 9, 2020; |
• | notwithstanding that Huya and Merger Sub may not rely upon the opinion provided by Morgan Stanley to the DouYu Special Committee on October 12, 2020, the DouYu Special Committee received an opinion from Morgan Stanley stating that, as of the date of such opinion, and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken by Morgan Stanley in rendering its opinion, the Share Exchange Ratio and the ADS Exchange Ratio pursuant to the Merger Agreement (which, for the avoidance of doubt, contemplates consummation of the Reassignment substantially concurrently with the consummation of the Merger) are fair from a financial point of view to the holders of DouYu ordinary shares (other than Excluded DouYu Shares and Purported Dissenters Shares) and the holders of DouYu ADSs (other than DouYu ADSs representing Excluded DouYu Shares), respectively; |
• | the DouYu Special Committee and, upon the unanimous recommendation of the DouYu Special Committee, the DouYu Board determined that the Merger Agreement, the Plan of Merger and the transactions contemplated thereunder, including the Merger, are fair to and in the best interests of the Unaffiliated Security Holders; |
• | the likelihood that the proposed Merger would be completed based on, among other things (and not necessarily in order of relative importance), the likelihood and anticipated timing of completing the proposed Merger in light of the scope of the conditions to closing; |
• | following its formation, the DouYu Special Committee’s independent control of the sale process with the advice and assistance of Morgan Stanley and Davis Polk as its financial and legal |
advisors, respectively, reporting solely to the DouYu Special Committee, and the fact that and that no limitations were placed on the DouYu Special Committee’s authority; |
• | the ability of the DouYu Board to change recommendation to DouYu shareholders if the DouYu Board’s fiduciary duties otherwise require; |
• | that a fixed ratio for the Per Share Merger Consideration and Per ADS Merger Consideration provides the holders of DouYu shares and DouYu ADSs, respectively, the opportunity to benefit from any increase in the trading price of Huya Class A shares between the announcement of the Merger Agreement and the completion of the Merger; and |
• | that the Merger Consideration would enable the holders of DouYu shares and DouYu ADSs to beneficially own approximately 50% of the total outstanding ordinary shares of Huya following the Merger, which will provide DouYu shareholders and DouYu ADS holders with the opportunity to participate in any future earnings or growth of Huya and future appreciation in the value of Huya Class A shares and Huya ADSs following the Merger, should such shareholders determine to retain the Huya Class A shares and Huya ADSs payable in the Merger. |
• | the DouYu Special Committee, consisting solely of independent and disinterested directors, acted to represent solely the interests of the Unaffiliated Security Holders, and the DouYu Special Committee had independent control of the extensive negotiations with Huya on behalf of such Unaffiliated Security Holders; |
• | all of the directors serving on the DouYu Special Committee during the entire process are free from any affiliation with Huya and the Tencent Entities. In addition, none of such directors is or ever was an employee of DouYu or any of its subsidiaries or affiliates; |
• | the fact that, other than their receipt of the DouYu Board and the DouYu Special Committee compensation (which are not contingent upon the consummation of the Merger or the DouYu Special Committee’s or DouYu Board’s recommendation of the Merger) and their indemnification and liability insurance rights under their respective Indemnification Agreement entered into with DouYu and the Merger Agreement, members of the DouYu Special Committee do not have interests in the Merger different from, or in addition to, those of the Unaffiliated Security Holders; |
• | The DouYu Special Committee retained its own legal counsel and independent financial advisor that are independent from Huya, Merger Sub and the Tencent Entities to assist the DouYu Special Committee in connection with the review and consideration of the Merger and Reassignment, and such legal counsel and independent financial advisor acted solely on behalf of the DouYu Special Committee for the purposes of negotiating the terms of the Merger and Reassignment and preparing the opinion concerning the fairness of the transactions contemplated under the Merger Agreement and Reassignment Agreement; |
• | the DouYu Special Committee was empowered to consider, attend to and take any and all actions in connection with the Non-Binding Proposal from Tencent Holdings and the transactions contemplated therein from the date the DouYu Special Committee was established, and no evaluation, negotiation, or response regarding the proposed Merger or any documentation in connection therewith from that date forward was considered by the DouYu Board for approval unless the DouYu Special Committee had recommended such action to the DouYu Board; |
• | the terms and conditions of the Merger Agreement were the product of extensive negotiations between the DouYu Special Committee and its advisors, on the one hand, and Huya, the Tencent Entities and their respective advisors, on the other hand; |
• | the DouYu Special Committee had the authority to reject the terms of any strategic transaction, including the Merger; |
• | the DouYu Special Committee met regularly to consider and review the proposed Merger; |
• | the ability of DouYu Board to change of recommendation to DouYu shareholders if DouYu Board’s fiduciary duties otherwise require; |
• | the approximately two-month period between the public announcement that DouYu had received the Non-Binding Proposal from Tencent Holdings and the signing of the Merger Agreement provided an opportunity for other potentially interested buyers to indicate their interest in acquiring DouYu, and the fact that no party other than Huya, Merger Sub and the Tencent Entities had contacted DouYu or the DouYu Special Committee expressing an interest in exploring an alternative transaction with DouYu; |
• | the Merger Agreement, Reassignment Agreement and the consummation of the transactions contemplated thereunder, including the Merger and Reassignment, have been approved by all of the directors who are neither employees of DouYu nor affiliated to Huya, Merger Sub or the Tencent Entities; and |
• | the fact that the Merger is subject to an affirmative vote of shareholders representing two-thirds or more of the DouYu shares present and voting in person or by proxy as a single class at the EGM. |
• | the fact that based on the Huya ADS closing trading price on the NYSE of $25.79 per Huya ADS ($25.79 per Huya Class A share) on October 9, 2020 (the last trading day before the Merger Agreement was signed), the Merger Consideration represents an implied value of $18.83 per DouYu ADS ($188.30 per DouYu share), which amounts to a premium of 34.5% over the closing trading price of DouYu ADSs on the NASDAQ on October 9, 2020; |
• | notwithstanding that the fairness opinion of Morgan Stanley was delivered to the DouYu Special Committee only and no Tencent Entity was entitled to rely or relied on such opinion, the fact that the DouYu Special Committee received an opinion from Morgan Stanley to the effect that, as of the date of the opinion and based upon and subject to the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Morgan Stanley set forth in its written opinion, the Merger Consideration was fair, from a financial point of view, to the Unaffiliated Security Holders; |
• | that a fixed ratio for the Per Share Merger Consideration and Per ADS Merger Consideration provides the holders of DouYu shares and DouYu ADSs, respectively, the opportunity to benefit from any increase in the trading price of Huya Class A shares between the announcement of the Merger Agreement and the completion of the Merger; |
• | the fact that, other than their receipt of the DouYu Board and the DouYu Special Committee compensation (which are not contingent upon the consummation of the Merger or the DouYu Special Committee’s or DouYu Board’s recommendation of the Merger) and their indemnification and liability insurance rights under their respective Indemnification Agreement entered into with DouYu and the Merger Agreement, members of the DouYu Special Committee do not have interests in the Merger different from, or in addition to, those of the Unaffiliated Security Holders; |
• | in considering the Merger, the DouYu Special Committee acted solely to represent the interests of the Unaffiliated Security Holders, and the fact that, through approval by vote of all disinterested directors of the DouYu Board, the DouYu Special Committee was empowered to exercise the full power and authority of the DouYu Board in connection with considering the Merger and had independent control of the negotiations with the Tencent Entities and their advisors on behalf of the Unaffiliated Security Holders; |
• | following its formation, the DouYu Special Committee’s independent control of the sale process with the advice and assistance of Morgan Stanley and Davis Polk as its financial and legal advisors, respectively, reporting solely to the DouYu Special Committee, and the fact that no limitations were placed on the DouYu Special Committee’s authority; |
• | the DouYu Special Committee was empowered to consider, attend to and take any and all actions in connection with the Non-Binding Proposal from Tencent Holdings and the transactions contemplated therein from the date the DouYu Special Committee was established, and no evaluation, negotiation, or response regarding the proposed Merger or any documentation in connection therewith from that date forward was considered by the DouYu Board for approval unless the DouYu Special Committee had recommended such action to the DouYu Board; |
• | the terms and conditions of the Merger Agreement were the product of extensive negotiations between the DouYu Special Committee and its advisors, on the one hand, and Huya, the Tencent Entities and their respective advisors, on the other hand; |
• | the DouYu Special Committee had the authority to reject the terms of any strategic transaction, including the Merger, and the DouYu Special Committee was empowered to exercise any power or authority of the DouYu Board that the DouYu Special Committee determined was necessary or advisable in carrying out and fulfilling its duties and responsibilities; |
• | the DouYu Special Committee met regularly to consider and review the proposed Merger; |
• | the DouYu Special Committee and the DouYu Board had no obligation to recommend the approval and authorization of the Merger Agreement, the Plan of Merger and the Merger, or any other transaction, and under the delegation of authority by the DouYu Special Committee and the DouYu Board, the Merger Agreement, the Plan of Merger and the Merger require approval from the DouYu Special Committee; |
• | the DouYu Special Committee and the DouYu Board were fully informed about the extent to which the interests of certain shareholders of DouYu who are also members of the Tencent Entities in the Merger differed from those of the unaffiliated shareholders; |
• | the Merger was unanimously approved by the DouYu Special Committee; |
• | the DouYu Special Committee and, acting upon the unanimous recommendation of the DouYu Special Committee, the DouYu Board determined that the Merger Agreement and the Merger are fair to and in the best interests of the Unaffiliated Security Holders; |
• | under the terms of the Merger Agreement, in certain circumstances prior to obtaining the requisite shareholder approval of the Merger, DouYu is permitted to provide information to and participate in discussions or negotiations with persons making acquisition proposals; |
• | the DouYu Board’s ability, under certain circumstances, to change, withhold, withdraw, qualify or modify the recommendation of the DouYu Board that DouYu’s shareholders vote to authorize and approve the Merger Agreement, the Plan of Merger and the Merger; |
• | the Merger is not conditioned on any financing being obtained by Huya or Merger Sub, thus increasing the likelihood that the Merger will be consummated and the Merger Consideration will be paid to the Unaffiliated Security Holders; |
• | DouYu has the ability, under certain circumstances, to specifically enforce the terms of the Merger Agreement; and |
• | the fact that the Merger is subject to an affirmative vote of shareholders representing two-thirds or more of the DouYu shares present and voting in person or by proxy as a single class at the EGM. |
• | the fact that based on the Huya ADS closing trading price on the NYSE of $25.79 per Huya ADS ($25.79 per Huya Class A share) on October 9, 2020 (the last trading day before the Merger Agreement was signed), the Merger Consideration represents an implied value of $18.83 per DouYu ADS ($188.30 per DouYu share), which amounts to a premium of 34.5% over the closing trading price of DouYu ADSs on the NASDAQ on October 9, 2020; |
• | notwithstanding that the fairness opinion of Morgan Stanley was delivered to the DouYu Special Committee only and no Founder Filing Person was entitled to rely or relied on such opinion, the fact that the DouYu Special Committee received an opinion from Morgan Stanley to the effect that, as of the date of the opinion and based upon and subject to the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Morgan Stanley set forth in its written opinion, the Merger Consideration was fair, from a financial point of view, to the Unaffiliated Security Holders; |
• | that a fixed ratio for the Per Share Merger Consideration and Per ADS Merger Consideration provides the holders of DouYu shares and DouYu ADSs, respectively, the opportunity to benefit from any increase in the trading price of Huya Class A shares between the announcement of the Merger Agreement and the completion of the Merger; |
• | the DouYu Special Committee and, upon the unanimous recommendation of the DouYu Special Committee, the DouYu Board determined that the Merger Agreement, the Plan of Merger and the transaction contemplated thereby, including the Merger, are fair to and in the best interests of the Unaffiliated Security Holders. |
• | in considering the transactions, the DouYu Special Committee, consisting solely of independent and disinterested directors, acted to represent solely the interests of the Unaffiliated Security Holders, and the DouYu Special Committee had independent control of the extensive negotiations on behalf of the Unaffiliated Security Holders; |
• | all of the directors serving on the DouYu Special Committee during the entire process are free from any affiliation with Huya or the Tencent Entities; in addition, none of such directors is or ever was an employee of DouYu or any of its subsidiaries or affiliates and none of such directors has any financial interest in the Merger that is different from that of the Unaffiliated Security Holders other than the members’ receipt of DouYu Board compensation and DouYu Special Committee compensation (which are not contingent upon the completion of the Merger or the DouYu Special Committee’s or the DouYu Board’s recommendation and/or authorization and approval of the Merger) and their indemnification and liability insurance rights under their respective Indemnification Agreement entered into with DouYu and the Merger Agreement; |
• | the DouYu Special Committee retained its own legal counsel and independent financial advisor that are independent from Huya, Merger Sub and the Tencent Entities to assist the DouYu Special Committee in connection with the review and consideration of the Merger and Reassignment, and such legal counsel and independent financial advisor acted solely on behalf of the DouYu Special Committee for the purposes of negotiating the terms of the Merger and Reassignment and preparing the opinion concerning the fairness of the transactions contemplated under the Merger Agreement and Reassignment Agreement; |
• | the DouYu Special Committee was empowered to consider, attend to and take any and all actions in connection with the Non-Binding Proposal from the Tencent Entities and the transactions contemplated therein from the date the DouYu Special Committee was established, and no evaluation, negotiation or |
response regarding the proposed Merger or any documentation in connection therewith from that date forward was considered by the DouYu Board for approval unless the DouYu Special Committee had recommended such action to the DouYu Board; |
• | the DouYu Special Committee was empowered to exercise full power or authority of the DouYu Board in connection with the transactions contemplated under the Merger Agreement; |
• | the recognition by the DouYu Special Committee and the DouYu Board that it had no obligation to recommend the transactions contemplated under the Merger Agreement; and |
• | the Founder Filing Persons did not participate in or have any influence over the deliberative process of, or the conclusions reached by, the DouYu Special Committee or the negotiating positions of the DouYu Special Committee. |
Calendar year |
||||||||||||||||||||
2020E |
2021E |
2022E |
2023E |
2024E |
||||||||||||||||
(in RMB thousands) |
||||||||||||||||||||
Net revenue |
11,002,299 | 13,641,943 | 15,963,363 | 17,840,935 | 19,001,194 | |||||||||||||||
Growth |
31.4 |
% |
24.0 |
% |
17.0 |
% |
11.8 |
% |
6.5 |
% | ||||||||||
Gross profit |
2,023,208 | 2,753,180 | 3,423,334 | 4,008,933 | 4,399,179 | |||||||||||||||
Growth |
36.5 |
% |
36.1 |
% |
24.3 |
% |
17.1 |
% |
9.7 |
% | ||||||||||
Non-GAAP EBITDA(1) |
1,097,655 | 1,595,581 | 2,076,885 | 2,495,966 | 2,758,858 | |||||||||||||||
Growth |
81.2 |
% |
45.4 |
% |
30.2 |
% |
20.2 |
% |
10.5 |
% | ||||||||||
Non-GAAP net income/(loss)(2) |
1,128,213 | 1,511,861 | 1,975,216 | 2,392,868 | 2,677,384 | |||||||||||||||
Growth |
50.4 |
% |
34.0 |
% |
30.6 |
% |
21.1 |
% |
11.9 |
% | ||||||||||
Gross profit margin |
18.4 | % | 20.2 | % | 21.4 | % | 22.5 | % | 23.2 | % | ||||||||||
Non-GAAP EBITDA (1) margin |
10.0 | % | 11.7 | % | 13.0 | % | 14.0 | % | 14.5 | % | ||||||||||
Non-GAAP net income/(loss) (2) margin |
10.3 | % | 11.1 | % | 12.4 | % | 13.4 | % | 14.1 | % |
(1) | “Non-GAAP EBITDA” refers to net income/(loss) before income taxes, interest expenses, interest income, depreciation and amortization (excluding amortization of acquired content), and further adjustments for share-based compensation expenses, business combination related expenses and other non-operating items. |
(2) | “Non-GAAP net income/(loss)” is calculated by excluding share-based compensation expenses and business combination related expenses. |
Calendar year |
||||||||||||||||||||
2020E |
2021E |
2022E |
2023E |
2024E |
||||||||||||||||
(in RMB thousands) |
||||||||||||||||||||
Net revenue |
10,116,568 | 13,250,337 | 15,855,435 | 17,459,123 | 18,542,231 | |||||||||||||||
Growth |
38.9 |
% |
31.0 |
% |
19.7 |
% |
10.1 |
% |
6.2 |
% | ||||||||||
Gross profit |
1,821,366 | 2,690,553 | 3,364,125 | 3,754,835 | 4,051,898 | |||||||||||||||
Growth |
52.3 |
% |
47.7 |
% |
25.0 |
% |
11.6 |
% |
7.9 |
% | ||||||||||
Non-GAAP EBITDA(1) |
853,051 | 1,592,516 | 2,222,052 | 2,565,501 | 2,789,787 | |||||||||||||||
Growth |
242.3 |
% |
86.7 |
% |
39.5 |
% |
15.5 |
% |
8.7 |
% | ||||||||||
Non-GAAP net income/(loss) (2) |
863,622 | 1,514,451 | 1,876,184 | 2,175,353 | 2,390,316 | |||||||||||||||
Growth |
144.8 |
% |
75.4 |
% |
23.9 |
% |
15.9 |
% |
9.9 |
% | ||||||||||
Gross profit margin |
18.0 | % | 20.3 | % | 21.2 | % | 21.5 | % | 21.9 | % | ||||||||||
Non-GAAP EBITDA (1) margin |
8.4 | % | 12.0 | % | 14.0 | % | 14.7 | % | 15.0 | % | ||||||||||
Non-GAAP net income/(loss) (2) margin |
8.5 | % | 11.4 | % | 11.8 | % | 12.5 | % | 12.9 | % |
(1) | “Non-GAAP EBITDA” refers to net income/(loss) before income taxes, interest expenses, interest income, depreciation and amortization (excluding amortization of acquired content), and further adjustments for share-based compensation expenses, business combination related expenses and other non-operating items. |
(2) | “Non-GAAP net income/(loss)” is calculated by excluding share-based compensation expenses and business combination related expenses. |
Calendar year |
||||||||||||||||||||
2020E |
2021E |
2022E |
2023E |
2024E |
||||||||||||||||
(in RMB thousands) |
||||||||||||||||||||
Net revenue |
11,379,152 | 14,986,293 | 18,000,049 | 19,884,234 | 21,160,894 | |||||||||||||||
Growth |
34.2 |
% |
31.7 |
% |
20.1 |
% |
10.5 |
% |
6.4 |
% | ||||||||||
Gross profit |
1,623,017 | 2,628,991 | 3,570,560 | 4,134,914 | 4,557,872 | |||||||||||||||
Growth |
69.2 |
% |
62.0 |
% |
35.8 |
% |
15.8 |
% |
10.2 |
% | ||||||||||
Non-GAAP EBITDA(1) |
577,062 | 1,425,534 | 2,304,855 | 2,810,555 | 3,154,845 | |||||||||||||||
Growth |
147.0 |
% |
61.7 |
% |
21.9 |
% |
12.2 |
% | ||||||||||||
Non-GAAP net income/(loss) (2) |
586,370 | 1,345,734 | 1,956,842 | 2,395,872 | 2,698,390 | |||||||||||||||
Growth |
1283.5 |
% |
129.5 |
% |
45.4 |
% |
22.4 |
% |
12.6 |
% | ||||||||||
Gross profit margin |
14.3 | % | 17.5 | % | 19.8 | % | 20.8 | % | 21.5 | % | ||||||||||
Non-GAAP EBITDA (1) margin |
5.1 | % | 9.5 | % | 12.8 | % | 14.1 | % | 14.9 | % | ||||||||||
Non-GAAP net income/(loss) (2) margin |
5.2 | % | 9.0 | % | 10.9 | % | 12.0 | % | 12.8 | % |
(1) | “Non-GAAP EBITDA” refers to net income/(loss) before income taxes, interest expenses, interest income, depreciation and amortization (excluding amortization of acquired content), and further adjustments for share-based compensation expenses, business combination related expenses and other non-operating items. |
(2) | “Non-GAAP net income/(loss)” is calculated by excluding share-based compensation expenses and business combination related expenses. |
1. | reviewed certain publicly available financial statements and other business and financial information of DouYu and Huya, respectively; |
2. | reviewed certain internal financial statements and other financial and operating data concerning DouYu, Huya and Penguin, respectively; |
3. | reviewed certain financial projections prepared by the managements of DouYu, Huya and Penguin, respectively; |
4. | reviewed certain information relating to certain strategic, financial and operational benefits anticipated from the Merger and the Reassignment, prepared by the managements of DouYu, Huya and Penguin, respectively; |
5. | discussed the past and current operations and financial condition and the prospects of DouYu, including information relating to certain strategic, financial and operational benefits anticipated from the Merger and the Reassignment, with senior executives of DouYu and Huya; |
6. | discussed the past and current operations and financial condition and the prospects of Huya, including information relating to certain strategic, financial and operational benefits anticipated from the Merger and the Reassignment, with senior executives of DouYu and Huya; |
7. | discussed the past and current operations and financial condition and the prospects of Penguin, including information relating to certain strategic, financial and operational benefits anticipated from the Merger and the Reassignment, with senior executives of Penguin; |
8. | reviewed the reported prices and trading activity for the DouYu ADSs and the Huya ADSs; |
9. | compared the financial performance of DouYu and Huya and the prices and trading activity of the DouYu ADSs and the Huya ADSs with that of certain other publicly-traded companies comparable with DouYu and Huya, respectively, and their securities; |
10. | participated in certain discussions and negotiations among representatives of DouYu and Huya and certain other parties and their financial and legal advisors; |
11. | reviewed the financial terms and conditions of the Merger Agreement, the Reassignment Agreement and certain related documents in the form of drafts dated October 12, 2020; and |
12. | performed such other analyses and considered such other factors as it has deemed appropriate. |
• | Historical trading ranges; |
• | Range of analyst target prices; |
• | Precedent transactions analysis; |
• | Comparable companies analysis; and |
• | Discounted cash flow analysis; |
Time Period |
Low |
High |
||||||
DouYu |
||||||||
October 9, 2020 |
US$14.00 | |||||||
One Week |
US$13.22 | US$14.00 | ||||||
One Month |
US$13.21 | US$16.36 | ||||||
Three Month |
US$11.48 | US$17.54 | ||||||
Six Month |
US$6.91 | US$17.54 | ||||||
Since DouYu Initial Public Offering (“IPO) |
US$6.24 | US$17.54 |
Huya |
||||||||
October 9, 2020 |
US$25.79 | |||||||
One Week |
US$24.36 | US$25.79 | ||||||
One Month |
US$23.70 | US$27.56 | ||||||
Three Month |
US$22.37 | US$29.58 | ||||||
Six Month |
US$14.70 | US$29.58 | ||||||
Since DouYu IPO |
US$12.36 | US$29.58 | ||||||
Implied ADS Exchange Ratio |
||||||||
October 9, 2020 |
0.54x | |||||||
One Week |
0.54x | 0.55x | ||||||
One Month |
0.54x | 0.61x | ||||||
Three Months |
0.50x | 0.61x | ||||||
Six Months |
0.41x | 0.63x | ||||||
Since DouYu IPO |
0.30x | 0.63x |
• | Tencent Music Entertainment Group; |
• | Bilibili, Inc.; |
• | JOYY, Inc.; and |
• | Momo, Inc. |
• | the ratio of aggregate value, defined as fully diluted market value plus total debt less cash and short term investments and adjusted for the value of third party minority interests (“Aggregate Value” or “AV”), to estimated calendar year 2020 adjusted EBITDA; |
• | the ratio of Aggregate Value to estimated calendar year 2021 adjusted EBITDA; |
• | the ratio of price to estimated non-GAAP earnings per ADS for calendar year 2020; and |
• | the ratio of price to estimated non-GAAP earnings per ADS for calendar year 2021. |
Implied Per ADS Value |
||||||||||||||||
Representative Range |
DouYu + Penguin Business |
Huya |
Implied Exchange Ratio |
|||||||||||||
Calendar Year Financial – Street Case |
||||||||||||||||
AV to Estimated 2020 Adjusted EBITDA |
20.7x – 29.7x | $10.88 - $14.66 |
$21.37 - $28.10 |
0.46x – 0.61x | ||||||||||||
AV to Estimated 2021 Adjusted EBITDA |
13.0x – 21.5x | $12.52 - $19.29 |
$20.72 - $30.42 |
0.54x – 0.80x | ||||||||||||
Price to Estimate 2020 Non-GAAP Earnings Per ADS |
23.0x – 37.3x | $9.34 - $15.14 | $18.15 - $29.43 |
0.45x – 0.70x | ||||||||||||
Price to Estimate 2021 Non-GAAP Earnings Per ADS |
14.9x – 27.8x | $10.83 - $20.20 |
$11.20 - $32.09 |
0.55x – 0.97x | ||||||||||||
Calendar Year Financial – Management Case |
||||||||||||||||
AV to Estimated 2020 Adjusted EBITDA |
20.7x – 29.7x | $7.52 - $9.85 | $19.80 - $25.85 |
0.34x – 0.45x | ||||||||||||
AV to Estimated 2021 Adjusted EBITDA |
13.0x – 21.5x | $10.47 - $15.90 |
$18.59 - $26.89 |
0.51x – 0.74x | ||||||||||||
Price to Estimated 2020 Non-GAAP Earnings Per ADS |
23.0x – 37.3x | $6.04 - $9.79 | $15.90 - $25.78 |
0.33x – 0.52x | ||||||||||||
Price to Estimated 2010 Non-GAAP Earnings Per ADS |
14.9x – 27.8x | $8.98 - $16.75 | $13.81 - $25.75 |
0.56x – 1.00x |
• | reviewed the Merger Agreement and the Reassignment Agreement; |
• | held discussions with certain senior officers, directors and other representatives and advisors of Huya and certain senior officers and other representatives and advisors of DouYu concerning the businesses, |
operations and prospects of Huya, DouYu and Penguin and the strategic rationale for, and the potential benefits of, the transactions contemplated by the Merger Agreement and the Reassignment Agreement; |
• | held discussions with certain senior officers and other representatives and advisors of Tencent Holdings concerning the businesses, operations and prospects of Penguin and the strategic rationale for, and the potential benefits of, the Reassignment; |
• | examined certain publicly available business and financial information relating to Huya and DouYu, including certain public filings made by Huya and DouYu; |
• | examined certain financial forecasts and other information and data relating to Huya and DouYu (including after taking into account the effects of the Reassignment) which were provided to or discussed with Citigroup by the managements of Huya and DouYu, including information relating to the potential strategic implications and operational benefits anticipated by the management of Huya to result from the transactions contemplated by the Merger Agreement and the Reassignment Agreement, as the Huya Special Committee has approved for use by Citigroup; |
• | reviewed the financial terms of the transactions contemplated by the Merger Agreement and the Reassignment Agreement as set forth in the Merger Agreement and the Reassignment Agreement in relation to, among other things: current and historical market prices of Huya ADSs and DouYu ADSs; the historical and projected earnings and other operating data of Huya, DouYu and Penguin; and the capitalization and financial condition of Huya, DouYu and Penguin; |
• | analyzed certain financial, stock market and other publicly available information relating to the businesses of other companies whose operations Citigroup considered relevant in evaluating those of Huya, DouYu and Penguin and the financial terms of the transactions contemplated by the Merger Agreement and the Reassignment Agreement; and |
• | conducted such other analyses and examinations and considered such other information and financial, economic and market criteria as Citigroup deemed appropriate in arriving at its opinion. |
Implied Exchange Ratio Reference Range |
Share Exchange Ratio |
ADS Exchange Ratio |
||||||
6.03x - 8.38x |
7.30x | 0.730x |
• | Tencent Music Entertainment Group |
• | BiliBili Inc. |
• | JOYY, Inc. |
• | Momo, Inc. |
Selected Companies | ||||||||||||
Low | Mean | High | ||||||||||
2021 Estimated Firm Value/Revenue Multiple |
0.9x | 3.3x | 7.3x | |||||||||
2022 Estimated Firm Value/Revenue Multiple |
0.7x | 2.6x | 5.5x | |||||||||
2021 Estimated Firm Value/Adjusted EBITDA Multiple |
4.6x | 11.1x | 21.0x | |||||||||
2022 Estimated Firm Value/Adjusted EBITDA Multiple |
4.0x | 8.7x | 15.7x | |||||||||
2021 Estimated Equity Value/Adjusted Net Income Multiple |
6.5x | 15.6x | 26.1x | |||||||||
2022 Estimated Equity Value/Adjusted Net Income Multiple |
5.3x | 12.0x | 20.2x |
Reference Ranges of Implied |
||||||||||||||||
Method Used |
HUYA Equity Values (Per Share) |
DouYu Equity Values (Per Share) |
Share Exchange Ratio (Number of Huya Shares for One DouYu Shares) |
|||||||||||||
FV/Revenue |
2021E |
$ | 30.8 - $36.3 |
$220.5 - $264.6 |
6.08 - 8.60 |
|||||||||||
Multiple |
2022E |
$ | 28.7 - $33.8 |
$208.7 - $250.2 | 6.18 - 8.71 | |||||||||||
FV/EBITDA |
2021E |
$ | 15.8 - $17.9 | $85.4 - $99.5 | 4.76 - 6.31 | |||||||||||
Multiple |
2022E |
$ | 16.0 - $18.2 | $102.7 - $120.6 | 5.63 - 7.54 | |||||||||||
P/E |
2021E |
$ | 12.1 - $15.0 | $82.3 - $100.9 | 5.47 - 8.31 | |||||||||||
Multiple |
2022E |
$ | 12.2 - $15.1 | $92.3 - $113.3 | 6.11 - 9.28 |
Implied Exchange Ratio Reference Range |
Share Exchange Ratio |
ADS Exchange Ratio |
||||||
4.76x - 9.28x |
7.30x | 0.730x |
• | Historical Share Price Performance 12-month period ended October 9, 2020. During that period, the range of closing prices of the Huya ADSs was $12.4 to $29.6, and the range of closing prices of the DouYu ADSs was $6.2 to $17.5. |
• | Illustrative Contribution Analysis. |
the effects of the Reassignment) shareholders and ADS holders based on the projected revenue, adjusted EBIT, adjusted EBITDA and adjusted net income of Huya and DouYu for the years ending December 31, 2021 through December 31, 2023, in each case based on financial projections prepared by Huya’s and DouYu’s management. Such implied equity ownership is calculated based on the respective implied equity values of Huya and DouYu, calculated in the following manner: based on the firm value estimated based on the closing price of the Huya ADSs as of October 9, 2020, Citigroup estimated the implied equity value of Huya by adding the cash and cash equivalents, short-term deposits, and short-term and long-term investments of Huya and subtracting the Huya Closing Dividend. Based on the firm value estimated based on the closing price of the DouYu ADSs as of October 9, 2020, Citigroup estimated the implied equity value of DouYu by adding the cash and cash equivalents and long-term investments of DouYu and subtracting non-controlling interests in companies consolidated by DouYu, the DouYu Closing Dividend and the consideration for the Reassignment. |
Contribution Analysis |
Implied Equity Ownership |
|||||||||||||||||||||||||||
(in US$ mm) |
HUYA |
DouYu+Penguin |
HUYA |
DouYu+Penguin |
HUYA |
DouYu+Penguin |
||||||||||||||||||||||
Revenue |
2021E |
2,038 | 2,239 | 47.7 | % | 52.3 | % | 51.6 | % | 48.4 | % | |||||||||||||||||
2022E |
2,384 | 2,689 | 47.0 | % | 53.0 | % | 51.1 | % | 48.9 | % | ||||||||||||||||||
2023E |
2,665 | 2,970 | 47.3 | % | 52.7 | % | 51.3 | % | 48.7 | % | ||||||||||||||||||
Adjusted EBIT |
2021E |
221 | 188 | 54.1 | % | 45.9 | % | 56.7 | % | 43.3 | % | |||||||||||||||||
2022E |
294 | 315 | 48.3 | % | 51.7 | % | 52.1 | % | 47.9 | % | ||||||||||||||||||
2023E |
357 | 387 | 48.0 | % | 52.0 | % | 51.9 | % | 48.1 | % | ||||||||||||||||||
Adjusted EBITDA |
2021E |
238 | 213 | 52.8 | % | 47.2 | % | 55.7 | % | 44.3 | % | |||||||||||||||||
2022E |
310 | 344 | 47.4 | % | 52.6 | % | 51.4 | % | 48.6 | % | ||||||||||||||||||
2023E |
373 | 420 | 47.0 | % | 53.0 | % | 51.1 | % | 48.9 | % | ||||||||||||||||||
Adjusted Net Income |
2021E |
226 | 200 | 53.0 | % | 47.0 | % | 53.0 | % | 47.0 | % | |||||||||||||||||
2022E |
295 | 292 | 50.3 | % | 49.7 | % | 50.3 | % | 49.7 | % | ||||||||||||||||||
2023E |
357 | 357 | 50.0 | % | 50.0 | % | 50.0 | % | 50.0 | % |
• | EPS Breakeven Analysis. |
• | Selected Analyst Price Targets |
Huya Ownership Prior to the Merger(1) |
Huya Ownership After the Merger(1) |
|||||||||||||||||||||||||||||||
Net Book Value |
Net Earnings (Loss) |
Net Book Value |
Net Earnings (Loss) |
|||||||||||||||||||||||||||||
(in thousands of $) |
% |
(in thousands of $) |
% |
(in thousands of $) |
% |
(in thousands of $) |
% |
|||||||||||||||||||||||||
Year ended December 31, 2019 |
1,035,239 | — | 5,683 | — | 1,035,239 | 100 | 5,683 | 100 | ||||||||||||||||||||||||
Six months ended June 30, 2020 |
1,056,710 | — | 84,289 | — | 1,056,710 | 100 | 84,289 | 100 |
Tencent Ownership Prior to the Merger (1) |
Tencent Ownership After the Merger (1) |
|||||||||||||||||||||||||||||||
Net Book Value |
Net Earnings (Loss) |
Net Book Value |
Net Earnings (Loss) |
|||||||||||||||||||||||||||||
(in thousands of $) |
% |
(in thousands of $) |
% |
(in thousands of $) |
% |
(in thousands of $) |
% |
|||||||||||||||||||||||||
Year ended December 31, 2019 |
393,391 | 37.5 | 2,160 | 37.5 | 698.786 | 67.5 | 3,836 | 67.5 | ||||||||||||||||||||||||
Six months ended June 30, 2020 |
268,193 | 37.5 | 31,693 | 37.5 | 713,279 | 67.5 | 56,895 | 67.5 |
• | financial institutions, broker dealers or insurance companies; |
• | regulated investment companies, real estate investment trusts or cooperatives; |
• | traders in securities who elect to apply a mark-to-market |
• | persons who are required to accelerate the recognition of any item of income as a result of such income being recognized on an applicable financial statement; |
• | persons that have a functional currency other than the U.S. dollar; |
• | expatriates or tax-exempt organizations; |
• | persons that are, or hold their DouYu shares or DouYu ADSs through, partnerships (or other entity or arrangement classified as a partnership for U.S. federal income tax purposes); |
• | persons who hold their DouYu shares or DouYu ADSs as part of a straddle, hedge, conversion, synthetic security, or constructive sale transaction for United States federal income tax purposes; |
• | persons subject to the alternative minimum tax; |
• | persons who received DouYu shares or DouYu ADSs, or who acquired Huya Class A shares or Huya ADSs, pursuant to the exercise of employee stock options or otherwise as compensation or in connection with the performance of services; or |
• | persons who owns directly, indirectly, or constructively five percent or more of DouYu’s shares (by vote or value) or will own five percent or more of Huya’s shares (by vote or value) pursuant to the Merger, including “five-percent transferee shareholders” (as defined below). |
• | the Merger may be treated as a taxable exchange even if such transaction qualifies as a “reorganization” for U.S. federal income tax purposes within the meaning of section 368(a) of the Code; |
• | any gain on the exchange of DouYu shares or DouYu ADSs will be allocated ratably over your holding period; |
• | the amount allocated to the current tax year and any year prior to the first year in which DouYu was a PFIC will be taxed as ordinary income; |
• | the amount allocated to each other tax year will be subject to tax at the highest rate of tax in effect applicable to you; and |
• | an interest charge applicable generally to underpayments of tax will be imposed on the tax attributable to each taxable year, other than the current taxable year or any year prior to the first year in which DouYu was a PFIC, for the period the tax was deferred. |
(a) | an open market for such class of shares exists on a recognised stock exchange or recognised interdealer quotation system at the expiry date of the period allowed for written notice of an election to dissent under section 238(5) of the Cayman Companies Law; and |
(b) | the relevant shareholders are not required by the terms of the plan of merger to accept for such shares anything except: |
i. | shares of the surviving company, or depository receipts in respect thereof; |
ii. | shares of any other company, or depository receipts in respect thereof, which shares or depository receipts at the effective date of the merger, are either listed on a national securities exchange or designated as a national market system security on a recognised interdealer quotation system or held of record by more than two thousand holders; |
iii. | cash in lieu of fractional shares or fractional depository receipts described in sub-paragraphs (i) and (ii) above; or |
iv. | any combination of the shares, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in sub-paragraphs (i), (ii) and (iii) above. |
(a) | an open market for the DouYu shares will continue to exist on a recognized stock exchange (namely NASDAQ) at the expiry of the period specified in sub-paragraph (a) above. That period is a maximum of 40 days following the date of the EGM, at which the vote of the DouYu shareholders giving authorization for the Merger is made. The DouYu ADSs will continue to be listed on NASDAQ until after the expiration of that period; and |
(b) | under the terms of the Plan of Merger, each DouYu shareholder who holds DouYu shares will receive only Huya Class A shares, as the Per Share Merger Consideration, which at the Effective Time are listed on a national securities exchange (namely the NYSE). Holders of DouYu shares will not be required to accept anything other than Huya Class A shares. |
Type of Fee or Expense |
Amount ($) |
|||
Legal |
||||
Financial advisory |
||||
Accounting |
||||
Special Committee |
||||
Printing, proxy solicitation and mailing |
||||
Filing |
||||
Miscellaneous |
||||
|
|
|||
Total |
||||
|
|
For the Years Ended December 31, |
For the Six Months Ended June 30, |
|||||||||||||||||||||||||||||||
2016 |
2017 |
2018 |
2019 |
2019 |
2020 (3) |
|||||||||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||||||||||||||||||||
(in thousands, except for share, ADS, per share and per ADS data) |
||||||||||||||||||||||||||||||||
Selected Consolidated Statement of Comprehensive (Loss) Income: |
||||||||||||||||||||||||||||||||
Net revenues: |
||||||||||||||||||||||||||||||||
Live streaming |
791,978 | 2,069,536 | 4,442,845 | 7,976,214 | 1,128,960 | 3,473,967 | 4,839,547 | 684,993 | ||||||||||||||||||||||||
Advertising and others |
4,926 | 115,280 | 220,595 | 398,287 | 56,374 | 167,972 | 269,645 | 38,166 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total net revenues |
796,904 | 2,184,816 | 4,663,440 | 8,374,501 | 1,185,334 | 3,641,939 | 5,109,192 | 723,159 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Cost of revenues (1) |
(1,094,644 | ) | (1,929,864 | ) | (3,933,647 | ) | (6,892,579 | ) | (975,581 | ) | (3,032,898 | ) | (4,059,364 | ) | (574,566 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Gross (loss) profit |
(297,740 | ) | 254,952 | 729,793 | 1,481,922 | 209,753 | 609,041 | 1,049,828 | 148,593 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||||||||||
Research and development expenses (1) |
(188,334 | ) | (170,160 | ) | (265,152 | ) | (508,714 | ) | (72,004 | ) | (195,455 | ) | (335,914 | ) | (47,546 | ) | ||||||||||||||||
Sales and marketing expenses (1) |
(68,746 | ) | (87,292 | ) | (189,207 | ) | (438,396 | ) | (62,051 | ) | (197,756 | ) | (221,056 | ) | (31,288 | ) | ||||||||||||||||
General and administrative expenses (1) |
(71,325 | ) | (101,995 | ) | (287,710 | ) | (352,824 | ) | (49,939 | ) | (160,139 | ) | (230,212 | ) | (32,584 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total operating expenses |
(328,405 | ) | (359,447 | ) | (742,069 | ) | (1,299,934 | ) | (183,994 | ) | (553,350 | ) | (787,182 | ) | (111,418 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Other income |
— | 9,629 | 38,938 | 79,390 | 11,237 | 40,196 | 52,037 | 7,365 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Operating (loss) income |
(626,145 | ) | (94,866 | ) | 26,662 | 261,378 | 36,996 | 95,887 | 314,683 | 44,540 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Interest and short-term investments income |
518 | 14,049 | 156,549 | 304,491 | 43,098 | 129,606 | 163,454 | 23,135 | ||||||||||||||||||||||||
Fair value loss on derivative liabilities |
— | — | (2,285,223 | ) | — | — | — | — | — | |||||||||||||||||||||||
Gain on fair value change of an investment |
— | — | — | — | — | — | 2,160 | 306 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Other non-operating expenses |
— | — | — | — | — | — | (10,010 | ) | (1,417 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Foreign currency exchange gains (losses), net |
— | — | 51 | 1,157 | 164 | 413 | (2,400 | ) | (340 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
(Loss) income before income tax benefits (expenses) |
(625,627 | ) | (80,817 | ) | (2,101,961 | ) | 567,026 | 80,258 | 225,906 | 467,887 | 66,224 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Income tax benefits (expenses) |
— | — | 50,943 | (96,078 | ) | (13,599 | ) | (40,600 | ) | (88,842 | ) | (12,575 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
(Loss) income before share of (loss) income in equity method investments, net of income taxes |
(625,627 | ) | (80,817 | ) | (2,051,018 | ) | 470,948 | 66,659 | 185,306 | 379,045 | 53,649 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Share of (loss) income in equity method investments, net of income taxes |
— | (151 | ) | 113,329 | (2,775 | ) | (393 | ) | (45 | ) | (1,061 | ) | (150 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net (loss) income attributable to HUYA Inc. |
(625,627 | ) | (80,968 | ) | (1,937,689 | ) | 468,173 | 66,266 | 185,261 | 377,984 | 53,499 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Accretion to preferred shares redemption value |
— | (19,842 | ) | (71,628 | ) | — | — | — | — | — | ||||||||||||||||||||||
Deemed dividend to series A preferred shareholders |
— | — | (496,995 | ) | — | — | — | — | — | |||||||||||||||||||||||
Net (loss) income attributable to ordinary shareholders |
(625,627 | ) | (100,810 | ) | (2,506,312 | ) | 468,173 | 66,266 | 185,261 | 377,984 | 53,499 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net (loss) income |
(625,627 | ) | (80,968 | ) | (1,937,689 | ) | 468,173 | 66,266 | 185,261 | 377,984 | 53,499 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Foreign currency translation adjustments, net of nil tax |
— | 308 | 366,259 | 157,568 | 22,302 | 53,979 | 103,471 | 14,645 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total comprehensive (loss) income attributable to HUYA Inc. |
(625,627 | ) | (80,660 | ) | (1,571,430 | ) | 625,741 | 88,568 | 239,240 | 481,455 | 68,144 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
For the Years Ended December 31, |
For the Six Months Ended June 30, |
|||||||||||||||||||||||||||||||
2016 |
2017 |
2018 |
2019 |
2019 |
2020 (3) |
|||||||||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||||||||||||||||||||
(in thousands, except for share, ADS, per share and per ADS data) |
||||||||||||||||||||||||||||||||
Net (loss) income per ADS (2) |
||||||||||||||||||||||||||||||||
Basic |
(6.26 | ) | (1.01 | ) | (15.02 | ) | 2.18 | 0.31 | 0.88 | 1.71 | 0.24 | |||||||||||||||||||||
Diluted |
(6.26 | ) | (1.01 | ) | (15.02 | ) | 2.02 | 0.29 | 0.81 | 1.60 | 0.23 | |||||||||||||||||||||
Weighted average number of ADSs used in calculating net (loss) income per ADS |
||||||||||||||||||||||||||||||||
Basic |
100,000,000 | 100,000,000 | 166,828,435 | 214,811,862 | 214,811,862 | 210,426,174 | 220,766,682 | 220,766,682 | ||||||||||||||||||||||||
Diluted |
100,000,000 | 100,000,000 | 166,828,435 | 232,024,961 | 232,024,961 | 227,772,954 | 236,183,381 | 236,183,381 | ||||||||||||||||||||||||
Net (loss) income per ordinary share |
||||||||||||||||||||||||||||||||
Basic |
(6.26 | ) | (1.01 | ) | (15.02 | ) | 2.18 | 0.31 | 0.88 | 1.71 | 0.24 | |||||||||||||||||||||
Diluted |
(6.26 | ) | (1.01 | ) | (15.02 | ) | 2.02 | 0.29 | 0.81 | 1.60 | 0.23 | |||||||||||||||||||||
Weighted average number of ordinary shares used in calculating net (loss) income per ordinary share |
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Basic |
100,000,000 | 100,000,000 | 166,828,435 | 214,811,862 | 214,811,862 | 210,426,174 | 220,766,682 | 220,766,682 | ||||||||||||||||||||||||
Diluted |
100,000,000 | 100,000,000 | 166,828,435 | 232,024,961 | 232,024,961 | 227,772,954 | 236,183,381 | 236,183,381 |
(1) | Share-based compensation expenses were allocated in cost of revenues and operating expenses as follows: |
For the year ended December 31, |
For the Six Months Ended June 30, |
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2016 |
2017 |
2018 |
2019 |
2019 |
2020 (3) |
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RMB |
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
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(in thousands) |
||||||||||||||||||||||||||||||||
Cost of revenues |
5,677 | 2,877 | 10,472 | 31,593 | 4,472 | 8,290 | 30,587 | 4,329 | ||||||||||||||||||||||||
Research and development expenses |
19,538 | 9,174 | 30,643 | 86,296 | 12,214 | 25,755 | 71,518 | 10,123 | ||||||||||||||||||||||||
Sales and marketing expenses |
326 | 791 | 1,832 | 5,919 | 838 | 1,811 | 5,118 | 724 | ||||||||||||||||||||||||
General and administrative expenses |
26,557 | 27,266 | 183,748 | 157,936 | 22,354 | 80,579 | 110,834 | 15,688 |
(2) | Each ADS represents one Huya Class A share |
As of December 31, |
As of June 30, |
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2016 |
2017 |
2018 |
2019 |
2020 (3) |
||||||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
US$ |
RMB |
US$ |
||||||||||||||||||||||
(in thousands, except for share, ADS, per share and per ADS data) |
||||||||||||||||||||||||||||
Selected Consolidated Balance Sheet Data: |
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Cash and cash equivalents |
6,187 | 442,532 | 709,019 | 1,113,193 | 157,562 | 2,062,524 | 291,931 | |||||||||||||||||||||
Restricted cash |
— | — | — | 1,392 | 197 | 6,175 | 874 | |||||||||||||||||||||
Short-term deposits |
95,000 | 593,241 | 4,983,825 | 6,743,445 | 954,473 | 6,284,593 | 889,526 | |||||||||||||||||||||
Short-term investments |
— | — | 300,162 | 2,219,531 | 314,154 | 2,398,004 | 339,415 | |||||||||||||||||||||
Total current assets |
156,101 | 1,250,307 | 6,595,187 | 10,591,820 | 1,499,175 | 11,275,686 | 1,595,969 | |||||||||||||||||||||
Investments |
— | 10,299 | 219,827 | 379,424 | 53,704 | 430,551 | 60,941 | |||||||||||||||||||||
Total assets |
167,234 | 1,300,541 | 7,106,187 | 11,366,550 | 1,608,831 | 12,177,656 | 1,723,635 | |||||||||||||||||||||
Total current liabilities |
319,928 | 685,650 | 1,380,446 | 2,446,677 | 346,305 | 2,512,103 | 355,565 | |||||||||||||||||||||
Total liabilities |
331,621 | 730,674 | 1,461,180 | 2,681,700 | 379,570 | 2,768,470 | 391,851 | |||||||||||||||||||||
Total mezzanine equity |
— | 509,668 | — | — | — | — | — | |||||||||||||||||||||
Class A ordinary shares |
— | 1 | 29 | 44 | 6 | 46 | 7 | |||||||||||||||||||||
Class B ordinary shares |
— | 66 | 104 | 100 | 14 | 100 | 14 | |||||||||||||||||||||
Total shareholders’ (deficit) equity |
(164,387 | ) | 60,199 | 5,645,007 | 8,684,850 | 1,229,261 | 9,409,186 | 1,331,784 | ||||||||||||||||||||
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(3) | On November 10, 2020, Huya issued its unaudited interim condensed consolidated financial statements for the six months ended June 30, 2020 and 2019. Based on Huya’s evaluation on subsequent events during the period from the date of Huya’s announcement of its unaudited financial results for the second quarter ended June 30, 2020, which was August 11, 2020, to November 10, 2020, Huya identified that there was a recognized subsequent event existing during the period, that provided additional evidence for Huya’s estimation on the financial impact incurred from one legal proceeding that was filed in August 2018 by a game publisher against Huya’s self-developed mobile game. Accordingly, pursuant to ASC 855-10-25-1, Huya recorded an estimated loss contingency of RMB20.0 million to reflect the recognized subsequent event in its unaudited interim condensed consolidated financial statements as of June 30, 2020 and for the six months ended June 30, 2020. |
For the Year Ended December 31, |
For the Six Months Ended June 30, |
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2016 |
2017 |
2018 |
2019 |
2019 |
2020 |
|||||||||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||||||||||||||||||||
(in millions) |
||||||||||||||||||||||||||||||||
Net revenues (1)(2) |
786.9 |
1,885.7 |
3,654.4 |
7,283.2 |
1,030.9 |
3,361.9 |
4,786.2 |
677.4 |
||||||||||||||||||||||||
Cost of revenues |
(1,155.1 | ) | (1,890.4 | ) | (3,503.4 | ) | (6,087.0 | ) | (861.6 | ) | (2,857.7 | ) | (3,777.5 | ) | (534.7 | ) | ||||||||||||||||
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Gross (loss)/profit |
(368.2 |
) |
(4.7 |
) |
151.0 |
1,196.2 |
169.3 |
504.2 |
1,008.7 |
142.7 |
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Operating expenses: |
||||||||||||||||||||||||||||||||
Sales and marketing expenses |
(223.5 | ) | (310.3 | ) | (538.9 | ) | (598.7 | ) | (84.7 | ) | (291.3 | ) | (249.4 | ) | (35.3 | ) | ||||||||||||||||
Research and development expenses |
(93.5 | ) | (212.1 | ) | (329.3 | ) | (383.9 | ) | (54.3 | ) | (163.8 | ) | (187.8 | ) | (26.6 | ) | ||||||||||||||||
General and administrative expenses (3) |
(95.0 | ) | (100.6 | ) | (196.8 | ) | (446.1 | ) | (63.1 | ) | (136.8 | ) | (164.0 | ) | (23.2 | ) | ||||||||||||||||
Other operating income, net |
3.8 | 9.3 | 54.9 | 100.8 | 14.3 | 29.4 | 49.0 | 6.9 | ||||||||||||||||||||||||
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Total operating expenses |
(408.2 |
) |
(613.7 |
) |
(1,010.1 |
) |
(1,327.9 |
) |
(187.8 |
) |
(562.5 |
) |
(552.2 |
) |
(78.2 |
) | ||||||||||||||||
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(Loss)/profit from operations |
(776.4 |
) |
(618.4 |
) |
(859.1 |
) |
(131.7 |
) |
(18.5 |
) |
(58.3 |
) |
456.5 |
64.5 |
||||||||||||||||||
Other expense, net |
0.0 | (0.3 | ) | (20.2 | ) | (22.8 | ) | (3.2 | ) | (3.9 | ) | (18.4 | ) | (2.6 | ) | |||||||||||||||||
Foreign exchange gain (loss), net |
— | — | (75.6 | ) | 32.0 | 4.5 | 32.0 | — | — | |||||||||||||||||||||||
Interest income |
3.9 | 6.9 | 85.8 | 159.1 | 22.5 | 69.1 | 95.2 | 13.5 | ||||||||||||||||||||||||
Gain on disposal of investment or subsidiaries |
— | — | — | — | — | — | 23.5 | 3.3 | ||||||||||||||||||||||||
Interest expenses |
(8.9 | ) | — | — | — | — | — | — | — | |||||||||||||||||||||||
Fair value changes of warranty liabilities |
0.7 | — | — | — | — | — | — | — | ||||||||||||||||||||||||
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Income (loss) before income taxes |
(780.7 |
) |
(611.8 |
) |
(869.1 |
) |
36.6 |
5.3 |
38.9 |
556.8 |
78.7 |
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Income tax expenses |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Share of income (loss) in equity method investments, net |
(2.2 | ) | (1.1 | ) | (7.2 | ) | (3.3 | ) | (0.5 | ) | 2.4 | 17.0 | 2.4 | |||||||||||||||||||
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Net income (loss) |
(782.9 |
) |
(612.9 |
) |
(876.3 |
) |
33.3 |
4.8 |
41.3 |
573.8 |
81.1 |
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Net loss attributable to non-controlling interest |
— | — | — | 6.5 | 0.9 | 1.5 | 22.7 | 3.1 | ||||||||||||||||||||||||
Deemed dividend |
(284.9 | ) | — | (6.7 | ) | — | — | — | — | — | ||||||||||||||||||||||
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Net income (loss) attributable to ordinary shareholders of the Company |
(1,067.8 |
) |
(612.9 |
) |
(883.0 |
) |
39.8 |
5.7 |
42.8 |
596.5 |
84.2 |
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Net income (loss) |
(782.9 |
) |
(612.9 |
) |
(876.3 |
) |
33.3 |
4.8 |
41.3 |
573.8 |
81.1 |
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Other comprehensive loss, net of tax of nil: |
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Foreign currency translation adjustments |
— | — | 325.6 | 109.5 | 15.5 | 6.2 | 56.8 | 8.0 | ||||||||||||||||||||||||
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Comprehensive income (loss) |
(782.9 |
) |
(612.9 |
) |
(550.7 |
) |
142.8 |
20.3 |
47.5 |
630.6 |
89.1 |
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Comprehensive income attributable to noncontrolling interests |
— | — | — | 6.3 | 0.9 | 1.5 | 22.7 | 3.1 | ||||||||||||||||||||||||
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Comprehensive income attributable to the Company |
(782.9 |
) |
(612.9 |
) |
(550.7 |
) |
149.1 |
21.2 |
49.0 |
653.3 |
92.2 |
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(1) | DouYu adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” and its amendments for the year ended December 31, 2019 with modified retrospective method, and thus the comparative financial information has not been restated. |
(2) | For the six months ended June 30, 2019 and 2020, net revenues include related party revenues of RMB96.0 million and RMB7.6 million, respectively. |
(3) | Includes share-based compensation of RMB17.6 million, RMB35.4 million and RMB290.8 million (US$41.5 million) in 2017, 2018 and 2019, respectively. |
As of December 31, |
As of June 30, |
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2016 |
2017 |
2018 |
2019 |
2020 |
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RMB |
RMB |
RMB |
RMB |
US$ |
RMB |
US$ |
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(in millions) |
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Summary Combined and Consolidated Balance Sheet Data: |
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Cash and Cash equivalents, short-term bank deposits, short-term investments and restricted cash (1) |
516.8 | 539.6 | 5,562.2 | 8,134.9 | 1,151.4 | 8,188.9 | 1,159.1 | |||||||||||||||||||||
Total current assets |
675.9 | 862.9 | 6,117.0 | 8,601.7 | 1,217.5 | 8,667.3 | 1,226.8 | |||||||||||||||||||||
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Total assets |
778.9 |
1,031.6 |
6,494.9 |
9,103.7 |
1,288.5 |
9,489.5 |
1,343.2 |
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Deferred revenue |
15.0 | 45.9 | 112.1 | 196.0 | 27.7 | 182.7 | 25.9 | |||||||||||||||||||||
Accrued expenses and other current liabilities |
120.7 | 208.2 | 313.5 | 392.3 | 55.5 | 297.5 | 42.1 | |||||||||||||||||||||
Total current liabilities |
523.9 | 871.9 | 2,863.9 | 1,794.2 | 254.0 | 1,880.4 | 266.2 | |||||||||||||||||||||
Total liabilities |
523.9 |
871.9 |
2,863.9 |
1,840.3 |
260.5 |
1,958.8 |
277.3 |
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Total liabilities, convertible redeemable preferred shares and shareholders’ deficit |
778.9 |
1,031.6 |
6,494.9 |
9,103.7 |
1,288.5 |
9,489.5 |
1,343.2 |
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(1) | Include reclassifications of RMB1.8 billion, consisting of time deposits of RMB1.7 billion and structured deposits of RMB100 million with maturity within 12 months, from cash and cash equivalents to short-term bank deposits and short-term investments as of June 30, 2020. |
For the Year Ended December 31, |
For the Six Months Ended June 30, |
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2017 |
2018 |
2019 |
2019 |
2020 |
2020 |
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RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
||||||||||||||||||||||
(in millions, excepts for shares, ADSs, per share and per ADS data) |
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Income (Loss) from operations |
(618.4 | ) | (859.1 | ) | (131.7 | ) | (18.5 | ) | (58.3 | ) | 456.5 | 64.5 | ||||||||||||||||
Add: |
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Share-based compensation expenses |
17.6 | 35.4 | 290.8 | 41.2 | 45.1 | 75.7 | 10.7 | |||||||||||||||||||||
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Adjusted operating income (loss) |
(600.8 |
) |
(823.7 |
) |
159.1 |
22.7 |
(13.2 |
) |
532.2 |
75.2 |
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Net income (loss) |
(612.9 |
) |
(876.3 |
) |
33.3 |
4.8 |
41.3 |
573.8 |
81.1 |
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Add: |
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Share-based compensation expenses |
17.6 | 35.4 | 290.8 | 41.2 | 45.1 | 75.7 | 10.7 | |||||||||||||||||||||
Share of income (loss) in equity method investments |
1.1 | 7.2 | 3.3 | 0.5 | (2.4 | ) | (17.0 | ) | (2.4 | ) | ||||||||||||||||||
Gain (loss) on disposal of investment or subsidiaries |
— | — | — | — | — | (23.5 | ) | (3.3 | ) | |||||||||||||||||||
Impairment loss of investment |
— | 15.2 | 19.0 | 2.7 | 3.9 | 10.8 | 1.5 | |||||||||||||||||||||
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Adjusted net income (loss) |
(594.2 |
) |
(818.5 |
) |
346.4 |
49.2 |
87.9 |
619.8 |
87.6 |
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Net income (loss) attributable to DouYu |
(612.9 |
) |
(883.0 |
) |
39.8 |
5.7 |
42.8 |
596.5 |
84.2 |
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Add: |
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Share-based compensation expenses |
17.6 | 35.4 | 290.8 | 41.2 | 45.1 | 75.7 | 10.7 | |||||||||||||||||||||
Gain (loss) on disposal of investment or subsidiaries |
— | — | — | — | — | (23.5 | ) | (3.3 | ) | |||||||||||||||||||
Share of income (loss) in equity method investments |
1.1 | 7.2 | 3.3 | 0.5 | (2.4 | ) | (17.0 | ) | (2.4 | ) | ||||||||||||||||||
Impairment loss of investment |
— | 15.2 | 19.0 | 2.7 | 3.9 | 10.8 | 1.5 | |||||||||||||||||||||
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Adjusted net income (loss) attributable to DouYu |
(594.2 |
) |
(825.2 |
) |
352.9 |
50.1 |
89.4 |
642.5 |
90.7 |
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Adjusted net income (loss) per ordinary share |
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Basic |
(72.6 | ) | (101.7 | ) | 17.58 | 2.49 | 7.31 | 20.18 | 2.85 | |||||||||||||||||||
Diluted |
(72.6 | ) | (101.7 | ) | 11.74 | 1.66 | 3.20 | 20.18 | 2.85 | |||||||||||||||||||
Adjusted net income (loss) per ADS |
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Basic |
— | — | 1.76 | 0.25 | — | 2.02 | 0.29 | |||||||||||||||||||||
Diluted |
— | — | 1.17 | 0.17 | — | 2.02 | 0.29 | |||||||||||||||||||||
Weighted average number of ordinary shares used in calculating adjusted net income (loss) per ordinary share |
||||||||||||||||||||||||||||
Basic |
8,188,790 | 8,115,160 | 19,254,661 | 19,254,661 | 8,063,790 | 31,838,618 | 31,838,618 | |||||||||||||||||||||
Diluted |
8,188,790 | 8,115,160 | 31,442,931 | 31,442,931 | 27,947,586 | 31,838,618 | 31,838,618 | |||||||||||||||||||||
Weighted average number of ordinary shares used in calculating adjusted net income (loss) per ADS |
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Basic |
— | — | 192,546,612 | 192,546,612 | — | 318,386,179 | 318,386,179 | |||||||||||||||||||||
Diluted |
— | — | 314,429,306 | 314,429,306 | — | 318,386,179 | 318,386,179 |
Year Ended December 31,2019 |
Six Months Ended June 30,2020 |
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Per Share |
Per ADS |
Per Share |
Per ADS |
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Basic income (loss) per share/ADS |
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Huya historical |
US$ | 0.31 | 0.31 | 0.24 | 0.24 | |||||||||||||||
DouYu historical |
US$ | 0.19 | 0.02 | 2.65 | 0.26 | |||||||||||||||
Pro forma combined |
US$ | (0.28 | ) | (0.28 | ) | 0.09 | 0.09 | |||||||||||||
Pro forma combined DouYu equivalent (1) |
US$ | (2.05 | ) | (0.20 | ) | 0.69 | 0.07 | |||||||||||||
Diluted income (loss) per share/ADS |
||||||||||||||||||||
Huya historical |
US$ | 0.29 | 0.29 | 0.23 | 0.23 | |||||||||||||||
DouYu historical |
US$ | 0.18 | 0.02 | 2.56 | 0.26 | |||||||||||||||
Pro forma combined |
US$ | (0.28 | ) | (0.28 | ) | 0.09 | 0.09 | |||||||||||||
Pro forma combined DouYu equivalent |
US$ | (2.05 | ) | (0.20 | ) | 0.66 | 0.07 | |||||||||||||
Cash Dividends per share/ADS |
||||||||||||||||||||
Huya historical |
US$ | — | — | |||||||||||||||||
DouYu historical |
US$ | — | — | |||||||||||||||||
Pro forma combined |
US$ | 0.57 | 0.57 | |||||||||||||||||
Pro forma combined DouYu equivalent |
US$ | 4.17 | 0.42 | |||||||||||||||||
Book value per share/ADS (2) |
||||||||||||||||||||
Huya historical |
US$ | 5.97 | 5.97 | |||||||||||||||||
DouYu historical |
US$ | 33.39 | 3.34 | |||||||||||||||||
Pro forma combined |
US$ | 13.02 | 13.02 | |||||||||||||||||
Pro forma combined DouYu equivalent |
US$ | 95.02 | 9.50 |
(1) | DouYu equivalent figures are calculated by multiplying the pro forma consolidated per share data by the Share Exchange Ratio of 7.30 and per ADS data by the ADS Exchange Ratio of 0.730 Huya ADS. |
(2) | Represents total shareholders’ equity divided by shares or ADSs, as applicable. |
For the Year Ended December 31, |
For the Six Months Ended June 30, |
|||||||||||||||||||
2019 |
2019 |
2020 |
||||||||||||||||||
RMB |
US$ |
RMB |
RMB |
US$ |
||||||||||||||||
(in thousands) |
||||||||||||||||||||
Selected Statement of Comprehensive Loss: |
||||||||||||||||||||
Revenues: |
||||||||||||||||||||
Live streaming (1) |
1,110,606 | 157,196 | 509,644 | 439,122 | 62,154 | |||||||||||||||
Online games distribution (1) |
51,763 | 7,327 | 32,756 | 14,786 | 2,093 | |||||||||||||||
Online advertising (1) |
31,216 | 4,418 | 12,926 | 7,975 | 1,129 | |||||||||||||||
Cost of revenues: |
||||||||||||||||||||
Cost of revenues (1) |
(1,430,524 | ) | (202,478 | ) | (661,244 | ) | (633,757 | ) | (89,702 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Gross loss |
(236,939 | ) | (33,537 | ) | (105,918 | ) | (171,874 | ) | (24,327 | ) | ||||||||||
Research and development expenses (1) |
(8,833 | ) | (1,250 | ) | (4,234 | ) | (4,840 | ) | (685 | ) | ||||||||||
Sales and marketing expenses (1) |
(45,006 | ) | (6,370 | ) | (18,523 | ) | (23,063 | ) | (3,264 | ) | ||||||||||
General and administrative expenses (1) |
(19,617 | ) | (2,777 | ) | (8,949 | ) | (10,977 | ) | (1,554 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss before income tax |
(310,395 | ) | (43,934 | ) | (137,624 | ) | (210,754 | ) | (29,830 | ) | ||||||||||
Income tax expenses |
— | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss |
(310,395 | ) | (43,934 | ) | (137,624 | ) | (210,754 | ) | (29,830 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss attributable to owner of Penguine Business |
(310,395 | ) | (43,934 | ) | (137,624 | ) | (210,754 | ) | (29,830 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other comprehensive loss, net of tax |
— | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total comprehensive loss |
(310,395 | ) | (43,934 | ) | (137,624 | ) | (210,754 | ) | (29,830 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
(4) | Included transnsactions with related parties in revenues, cost of revenues, research and development expenses, sales and marketing expenses and general and administrative expenses for the periods as follows: |
For the Year Ended December 31, |
For the Six Months Ended June 30, |
|||||||||||||||||||
2019 |
2019 |
2020 |
||||||||||||||||||
RMB |
US$ |
RMB |
RMB |
US$ |
||||||||||||||||
(in thousands) |
||||||||||||||||||||
Revenues: |
||||||||||||||||||||
Live streaming |
28,258 | 4,000 | — | 2,642 | 374 | |||||||||||||||
Online games distribution |
51,677 | 7,314 | 32,672 | 14,786 | 2,093 | |||||||||||||||
Online advertising |
8,742 | 1,237 | 2,030 | 1,114 | 158 | |||||||||||||||
Cost of revenues: |
||||||||||||||||||||
Cost of revenues |
(468,540 | ) | (66,318 | ) | (220,138 | ) | (233,139 | ) | (32,999 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Research and development expenses |
(179 | ) | (25 | ) | (161 | ) | (1 | ) | (0 | ) | ||||||||||
Sales and marketing expenses |
(11,739 | ) | (1,662 | ) | (1,190 | ) | (13,338 | ) | (1,888 | ) | ||||||||||
General and administrative expenses |
(17,122 | ) | (2,423 | ) | (7,956 | ) | (10,138 | ) | (1,435 | ) |
As of December 31, |
As of June 30, |
|||||||||||||||
2019 |
2020 |
|||||||||||||||
RMB |
US$ |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Selected Balance Sheet Data: |
||||||||||||||||
Assets |
||||||||||||||||
Current assets: |
||||||||||||||||
Accounts receivable, net |
2,380 | 337 | 1,852 | 262 | ||||||||||||
Prepayments |
1,389 | 197 | 830 | 117 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total current assets |
3,769 | 533 | 2,682 | 380 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Non-current assets: |
||||||||||||||||
Equipment, net |
1,253 | 177 | 1,269 | 180 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total non-current assets |
1,253 | 177 | 1,269 | 180 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets |
5,022 | 711 | 3,951 | 559 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities |
||||||||||||||||
Current liabilities: |
||||||||||||||||
Accounts payable |
122,645 | 17,359 | 136,794 | 19,362 | ||||||||||||
Accrued liabilities and other current liabilities |
35,879 | 5,078 | 20,243 | 2,865 | ||||||||||||
Amounts due to related parties |
61,022 | 8,637 | 111,364 | 15,763 | ||||||||||||
Contract liabilities |
27,690 | 3,919 | 23,836 | 3,374 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total current liabilities |
247,236 | 34,994 | 292,237 | 41,363 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities |
247,236 | 34,994 | 292,237 | 41,363 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Equity: |
||||||||||||||||
Invested capital |
(242,214 | ) | (34,283 | ) | (288,286 | ) | (40,804 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total equity |
(242,214 | ) | (34,283 | ) | (288,286 | ) | (40,804 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities and equity |
5,022 | 711 | 3,951 | 559 | ||||||||||||
|
|
|
|
|
|
|
|
For the six months ended June 30, 2020 |
||||||||||||||||||||||||||||
Historical Huya RMB (1) |
Historical DouYu RMB |
Historical Penguin RMB |
Pro Forma Adjustments RMB |
Note |
Pro Forma Combined RMB |
Pro Forma Combined US$ (2) |
||||||||||||||||||||||
(in thousands, except share and per share amounts) |
||||||||||||||||||||||||||||
Net revenues |
5,109,192 | 4,786,187 | 461,883 | 1,589 | (a | ) | 10,358,851 | 1,466,200 | ||||||||||||||||||||
Cost of revenues |
(4,059,364 | ) | (3,777,451 | ) | (633,757 | ) | (63,862 | ) | (b | ) | (8,534,434 | ) | (1,207,971 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Gross profit (loss) |
1,049,828 | 1,008,736 | (171,874 | ) | (62,273 | ) | 1,824,417 | 258,229 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Research and development expenses |
(335,914 | ) | (187,808 | ) | (4,840 | ) | (89,880 | ) | (c | ) | (618,442 | ) | (87,535 | ) | ||||||||||||||
Sales and marketing expenses |
(221,056 | ) | (249,414 | ) | (23,063 | ) | (196,773 | ) | (d | ) | (690,306 | ) | (97,706 | ) | ||||||||||||||
General and administrative expenses |
(230,212 | ) | (164,050 | ) | (10,977 | ) | (186,113 | ) | (e | ) | (591,352 | ) | (83,700 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total operating expenses |
(787,182 | ) | (601,272 | ) | (38,880 | ) | (472,766 | ) | (1,900,100 | ) | (268,941 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Other income |
52,037 | 49,032 | — | — | 101,069 | 14,305 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Operating income (loss) |
314,683 | 456,496 | (210,754 | ) | (535,039 | ) | 25,386 | 3,593 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Interest and short-term investments income |
163,454 | 95,150 | — | — | 258,604 | 36,603 | ||||||||||||||||||||||
Gain on fair value change of an investment |
2,160 | — | — | — | 2,160 | 306 | ||||||||||||||||||||||
Other non-operating expenses |
(10,010 | ) | (18,400 | ) | — | — | (28,410 | ) | (4,021 | ) | ||||||||||||||||||
Gain on disposal of investment or subsidiaries |
— | 23,526 | — | — | 23,526 | 3,330 | ||||||||||||||||||||||
Foreign currency exchange losses, net |
(2,400 | ) | — | — | — | (2,400 | ) | (340 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Income (Loss) before income tax (expenses) benefits |
467,887 | 556,772 | (210,754 | ) | (535,039 | ) | 278,866 | 39,471 | ||||||||||||||||||||
Income tax (expenses) benefits |
(88,842 | ) | — | — | 75,519 | (f | ) | (13,323 | ) | (1,886 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Income (Loss) before share of (loss) income in equity method investments, net of income taxes |
379,045 | 556,772 | (210,754 | ) | (459,520 | ) | 265,543 | 37,585 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Share of (loss) income in equity method investments, net of income taxes |
(1,061 | ) | 17,024 | — | — | 15,963 | 2,259 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net income (loss) |
377,984 | 573,796 | (210,754 | ) | (459,520 | ) | 281,506 | 39,844 |
For the six months ended June 30, 2020 |
||||||||||||||||||||||||||||
Historical Huya RMB (1) |
Historical DouYu RMB |
Historical Penguin RMB |
Pro Forma Adjustments RMB |
Note |
Pro Forma Combined RMB |
Pro Forma Combined US$ (2) |
||||||||||||||||||||||
(in thousands, except share and per share amounts) |
||||||||||||||||||||||||||||
Net income (loss) |
377,984 | 573,796 | (210,754 | ) | (459,520 | ) | 281,506 | 39,844 | ||||||||||||||||||||
Less: Net loss attributable to noncontrolling interest |
— | (22,699 | ) | — | — | (22,699 | ) | (3,213 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net income (loss) attributable to ordinary shareholders |
377,984 | 596,495 | (210,754 | ) | (459,520 | ) | 304,205 | 43,057 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net income per ordinary share |
||||||||||||||||||||||||||||
—Basic |
1.71 | 18.73 | — | — | 0.67 | 0.09 | ||||||||||||||||||||||
—Diluted |
1.60 | 18.12 | — | — | 0.64 | 0.09 | ||||||||||||||||||||||
Net income per ADS |
||||||||||||||||||||||||||||
—Basic |
1.71 | 1.87 | — | — | 0.67 | 0.09 | ||||||||||||||||||||||
—Diluted |
1.60 | 1.81 | — | — | 0.64 | 0.09 | ||||||||||||||||||||||
Weighted average number of ordinary shares used in calculating net income per ordinary share |
||||||||||||||||||||||||||||
—Basic |
220,766,682 | 31,838,618 | — | 201,187,506 | (g | ) | 453,792,806 | 453,792,806 | ||||||||||||||||||||
—Diluted |
236,183,381 | 32,920,090 | — | — | 475,852,272 | 475,852,272 | ||||||||||||||||||||||
Weighted average number of ADS used in calculating net income per ADS |
||||||||||||||||||||||||||||
—Basic |
220,766,682 | 318,386,179 | — | — | 453,792,806 | 453,792,806 | ||||||||||||||||||||||
—Diluted |
236,183,381 | 329,200,897 | — | — | 475,852,272 | 475,852,272 |
(1) | On November 10, 2020, Huya issued its unaudited interim condensed consolidated financial statements for the six months ended June 30, 2020 and 2019. Based on Huya’s evaluation on subsequent events during the period from the date of Huya’s announcement of its unaudited financial results for the second quarter ended June 30, 2020, which was August 11, 2020, to November 10, 2020, Huya identified that there was a recognized subsequent event existing during the period, that provided additional evidence for Huya’s estimation on the financial impact incurred from one legal proceeding that was filed in August 2018 by a game publisher against Huya’s self-developed mobile game. Accordingly, pursuant to ASC 855-10-25-1, Huya recorded an estimated loss contingency of RMB20.0 million to reflect the recognized subsequent event in its unaudited interim condensed consolidated financial statements as of June 30, 2020 and for the six months ended June 30, 2020. |
(2) | The reporting currency of the combined company is Renminbi, but for the convenience of the reader, the amounts presented throughout the Statements are in US dollars. Unless otherwise noted, all conversions from RMB to US$ are made at a rate of RMB7.0651 to US$1.00 on June 30, 2020 as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate. |
For the Year Ended December 31, 2019 |
||||||||||||||||||||||||||||
Historical Huya RMB |
Historical DouYu RMB |
Historical Penguin RMB |
Pro Forma Adjustments RMB |
Note |
Pro Forma Combined RMB |
Pro Forma Combined US$ (3) |
||||||||||||||||||||||
(in thousands, except share and per share amounts) |
||||||||||||||||||||||||||||
Net revenues |
8,374,501 | 7,283,230 | 1,193,585 | 9,063 | (a | ) | 16,860,379 | 2,386,432 | ||||||||||||||||||||
Cost of revenues |
(6,892,579 | ) | (6,087,073 | ) | (1,430,524 | ) | (133,609 | ) | (b | ) | (14,543,785 | ) | (2,058,539 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Gross profit (loss) |
1,481,922 | 1,196,157 | (236,939 | ) | (124,546 | ) | 2,316,594 | 327,893 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Research and development expenses |
(508,714 | ) | (383,887 | ) | (8,833 | ) | (205,121 | ) | (c | ) | (1,106,555 | ) | (156,623 | ) | ||||||||||||||
Sales and marketing expenses |
(438,396 | ) | (598,695 | ) | (45,006 | ) | (426,715 | ) | (d | ) | (1,508,812 | ) | (213,558 | ) | ||||||||||||||
General and administrative expenses |
(352,824 | ) | (446,143 | ) | (19,617 | ) | (480,098 | ) | (e | ) | (1,298,682 | ) | (183,817 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total operating expenses |
(1,299,934 | ) | (1,428,725 | ) | (73,456 | ) | (1,111,934 | ) | (3,914,049 | ) | (553,998 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Other income |
79,390 | 100,898 | — | — | 180,288 | 25,518 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Operating income (loss) |
261,378 | (131,670 | ) | (310,395 | ) | (1,236,480 | ) | (1,417,167 | ) | (200,587 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Interest and short-term investments income |
304,491 | 159,097 | — | — | 463,588 | 65,617 | ||||||||||||||||||||||
Other non-operating expenses |
— | (22,882 | ) | — | — | (22,882 | ) | (3,239 | ) | |||||||||||||||||||
Foreign currency exchange gains, net |
1,157 | 32,045 | — | — | 33,202 | 4,699 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Income (Loss) before income tax (expenses) benefits |
567,026 | 36,590 | (310,395 | ) | (1,236,480 | ) | (943,259 | ) | (133,510 | ) | ||||||||||||||||||
Income tax (expenses) benefits |
(96,078 | ) | — | — | 151,037 | (f | ) | 54,959 | 7,779 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Income (Loss) before share of loss in equity method investments, net of income taxes |
470,948 | 36,590 | (310,395 | ) | (1,085,443 | ) | (888,300 | ) | (125,731 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Share of loss in equity method investments, net of income taxes |
(2,775 | ) | (3,242 | ) | — | — | (6,017 | ) | (852 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net income (loss) |
468,173 | 33,348 | (310,395 | ) | (1,085,443 | ) | (894,317 | ) | (126,583 | ) |
For the Year Ended December 31, 2019 |
||||||||||||||||||||||||||||
Historical Huya RMB |
Historical DouYu RMB |
Historical Penguin RMB |
Pro Forma Adjustments RMB |
Note |
Pro Forma Combined RMB |
Pro Forma Combined US$ (3) |
||||||||||||||||||||||
(in thousands, except share and per share amounts) |
||||||||||||||||||||||||||||
Net income (loss) |
468,173 | 33,348 | (310,395 | ) | (1,085,443 | ) | (894,317 | ) | (126,583 | ) | ||||||||||||||||||
Less: Net loss attributable to noncontrolling interest |
— | (6,405 | ) | — | — | (6,405 | ) | (907 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net income (loss) attributable to ordinary shareholders |
468,173 | 39,753 | (310,395 | ) | (1,085,443 | ) | (887,912 | ) | (125,676 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net income (loss) per ordinary share |
||||||||||||||||||||||||||||
—Basic |
2.18 | 1.32 | — | — | (1.98 | ) | (0.28 | ) | ||||||||||||||||||||
—Diluted |
2.02 | 1.26 | — | — | (1.98 | ) | (0.28 | ) | ||||||||||||||||||||
Net income (loss) per ADS |
||||||||||||||||||||||||||||
—Basic |
2.18 | 0.13 | — | — | (1.98 | ) | (0.28 | ) | ||||||||||||||||||||
—Diluted |
2.02 | 0.13 | — | — | (1.98 | ) | (0.28 | ) | ||||||||||||||||||||
Weighted average number of ordinary shares used in calculating net income (loss) per ordinary share |
||||||||||||||||||||||||||||
—Basic |
214,811,862 | 19,254,661 | — | 213,771,463 | (g | ) | 447,837,986 | 447,837,986 | ||||||||||||||||||||
—Diluted |
232,024,961 | 31,442,931 | — | — | 447,837,986 | 447,837,986 | ||||||||||||||||||||||
Weighted average number of ADS used in calculating net income (loss) per ADS |
||||||||||||||||||||||||||||
—Basic |
214,811,862 | 192,546,612 | — | — | 447,837,986 | 447,837,986 | ||||||||||||||||||||||
—Diluted |
232,024,961 | 314,429,306 | — | — | 447,837,986 | 447,837,986 |
(3) | Translations of amounts from RMB into US$ for the convenience of the reader were calculated at the noon buying rate of US$1.00 = RMB7.0651 on June 30, 2020 as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate. |
As of June 30, 2020 |
||||||||||||||||||||||||||||
Historical Huya RMB (1) |
Historical DouYu RMB |
Historical Penguin RMB |
Pro Forma Adjustments RMB |
Note |
Pro Forma Combined RMB |
Pro Forma Combined US$ (2) |
||||||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||
Current assets |
||||||||||||||||||||||||||||
Cash and cash equivalents, short-term deposits and short-term investments |
10,745,121 | 8,178,190 | — | (5,450,480 | ) | (h | ) | 13,472,831 | 1,906,955 | |||||||||||||||||||
Restricted cash |
6,175 | 10,703 | — | — | 16,878 | 2,389 | ||||||||||||||||||||||
Accounts receivable, prepayments and other current assets |
471,975 | 437,878 | 2,682 | — | 912,535 | 129,161 | ||||||||||||||||||||||
Amounts due from related parties |
52,415 | 40,533 | — | — | 92,948 | 13,156 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total current assets |
11,275,686 | 8,667,304 | 2,682 | (5,450,480 | ) | 14,495,192 | 2,051,661 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Non-current assets |
||||||||||||||||||||||||||||
Deferred tax assets |
99,182 | — | — | — | 99,182 | 14,038 | ||||||||||||||||||||||
Investments |
430,551 | 481,671 | — | — | 912,222 | 129,117 | ||||||||||||||||||||||
Goodwill |
— | 14,032 | — | 28,337,268 | (j | ) | 28,351,300 | 4,012,866 | ||||||||||||||||||||
Right-of-use |
90,919 | 85,516 | — | — | 176,435 | 24,973 | ||||||||||||||||||||||
Property and equipment, Intangible assets and other non-current assets |
281,318 | 240,945 | 1,269 | 3,195,000 | (i | ) | 3,718,532 | 526,324 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total non-current assets |
901,970 | 822,164 | 1,269 | 31,532,268 | 33,257,671 | 4,707,318 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total assets |
12,177,656 | 9,489,468 | 3,951 | 26,081,788 | 47,752,863 | 6,758,979 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Liabilities and shareholders’ equity |
||||||||||||||||||||||||||||
Current liabilities |
||||||||||||||||||||||||||||
Advances from customers and deferred revenue |
560,789 | 195,933 | 23,836 | — | 780,558 | 110,481 | ||||||||||||||||||||||
Income taxes payable |
83,223 | — | — | — | 83,223 | 11,780 | ||||||||||||||||||||||
Accounts payable, Accrued liabilities and other current liabilities |
1,597,635 | 1,376,038 | 157,037 | — | 3,130,710 | 443,123 | ||||||||||||||||||||||
Amounts due to related parties |
238,495 | 263,966 | 111,364 | — | 613,825 | 86,881 | ||||||||||||||||||||||
Lease liabilities due within one year |
31,961 | 44,485 | — | — | 76,446 | 10,820 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total current liabilities |
2,512,103 | 1,880,422 | 292,237 | — | 4,684,762 | 663,085 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2020 |
||||||||||||||||||||||||||||
Historical Huya RMB (1) |
Historical DouYu RMB |
Historical Penguin RMB |
Pro Forma Adjustments RMB |
Note |
Pro Forma Combined RMB |
Pro Forma Combined US$ (2) |
||||||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||||||
Non-current liabilities |
||||||||||||||||||||||||||||
Lease liabilities |
58,837 | 38,276 | — | — | 97,113 | 13,746 | ||||||||||||||||||||||
Deferred tax liabilities |
540 | — | — | 798,750 | (k | ) | 799,290 | 113,132 | ||||||||||||||||||||
Deferred revenue |
196,990 | 40,074 | — | — | 237,064 | 33,554 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total non-current liabilities |
256,367 | 78,350 | — | 798,750 | 1,133,467 | 160,432 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total liabilities |
2,768,470 | 1,958,772 | 292,237 | 798,750 | 5,818,229 | 823,517 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total shareholders’ equity (deficit) |
9,409,186 | 7,530,696 | (288,286 | ) | 25,283,038 | (l | ) | 41,934,634 | 5,935,462 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total liabilities and shareholders’ equity |
12,177,656 | 9,489,468 | 3,951 | 26,081,788 | 47,752,863 | 6,758,979 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | On November 10, 2020, Huya issued its unaudited interim condensed consolidated financial statements for the six months ended June 30, 2020 and 2019. Based on Huya’s evaluation on subsequent events during the period from the date of Huya’s announcement of its unaudited financial results for the second quarter ended June 30, 2020, which was August 11, 2020, to November 10, 2020, Huya identified that there was a recognized subsequent event existing during the period, that provided additional evidence for Huya’s estimation on the financial impact incurred from one legal proceeding that was filed in August 2018 by a game publisher against Huya’s self-developed mobile game. Accordingly, pursuant to ASC 855-10-25-1, Huya recorded an estimated loss contingency of RMB20.0 million to reflect the recognized subsequent event in its unaudited interim condensed consolidated financial statements as of June 30, 2020 and for the six months ended June 30, 2020. |
(2) | The reporting currency of the combined company is Renminbi, but for the convenience of the reader, the amounts presented throughout the Statements are in US dollars. Unless otherwise noted, all conversions from RMB to US$ are made at a rate of RMB7.0651 to US$1.00 on June 30, 2020 as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate. |
(i) | The acquisition of DouYu by Huya is accounted for using the acquisition method. Details of the estimated purchase consideration and purchase price allocation are discussed in Note 3. |
(ii) | With respect to the assignment of Penguin Business from Tencent group to DouYu, given that Huya becomes a consolidated subsidiary of Tencent in April 2020 and Tencent will remain as the parent company of Huya after the closing of the Merger, the assets and liabilities of Penguin assigned to Huya through its assignment to DouYu will be accounted for at historical cost in accordance with the guidance in Transactions Between Entities Under Common Control Subsections of ASC 805-50. |
RMB |
||||
(In thousands) |
||||
To DouYu shareholders* |
36,953,469 | |||
To holders of outstanding DouYu restricted share units** |
844,367 | |||
|
|
|||
Total estimated purchase consideration for acquisition of DouYu |
37,797,836 | |||
|
|
* | The estimated fair value of Huya shares issued to DouYu shareholders is based on the closing price of US$22.40 of Huya ADS on the NYSE on October 30, 2020. |
** | As part of the merger, Huya will issue replacement restricted share units (“RSU”) to the pre-existing RSU holders of DouYu. These RSU have a preliminarily estimated fair value of RMB2,409.2 million, RMB844.4 million of which is attributable to pre-combination services and included as a component of the consideration to be transferred in the Merger. |
RMB |
||||
(In thousands) |
||||
Total Estimated fair value of consideration transferred for acquisition of DouYu by issuance of Huya’s ordinary shares |
37,797,836 | |||
|
|
|||
Recognized amounts of identifiable assets acquired and liabilities assumed: |
||||
Cash and cash equivalents, short-term deposits and short-term investments (1) |
7,711,812 | |||
Investments |
481,671 | |||
Accounts payable, accrued liabilities and other current liabilities |
(1,376,038 | ) | ||
Newly identifiable intangible assets acquired |
3,195,000 | |||
- Trademark |
1,600,000 | |||
- Technology |
460,000 | |||
- User base |
450,000 | |||
- Contracts with streamers |
685,000 | |||
Deferred tax liabilities |
(798,750 | ) | ||
Other net assets |
246,873 | |||
|
|
|||
Total identifiable net assets |
5,920,818 | |||
|
|
|||
Goodwill |
28,337,268 | |||
|
|
(1) | Cash and cash equivalents, short-term deposits and short-term investments acquired from DouYu in the above table include the unaudited pro forma adjustments reflecting (i) a cash dividend in an aggregate amount of US$60.0 million (equivalent to RMB424.8 million translated at exchange rate as of June 30, 2020) to be paid by DouYu to its then shareholders on or around the date of the closing of the Merger and (ii) estimated merger transaction costs amounted to RMB41.6 million to be paid by DouYu for the Merger, but exclude the pro forma adjustment reflecting a cash consideration of US$500.0 million (equivalent to RMB3,539.8 million translated at exchange rate as of June 30, 2020) to be paid by DouYu to Nectarine in order to integrate Penguin with the business of the combined Huya and DouYu upon the Merger. |
For the six months ended June 30, 2020 |
For the year ended December 31, 2019 |
|||||||
(In RMB thousands) |
||||||||
To adjust amortization expense for newly identified intangible assets (1) |
62,273 | 124,546 | ||||||
To reclassify other taxes and surcharges to cost of revenues (Note 4(a)) |
1,589 | 9,063 | ||||||
|
|
|
|
|||||
63,862 | 133,609 | |||||||
|
|
|
|
(1) | Amortization of the newly identified intangible assets as detailed in Note 3 is computed using the straight-line method over their estimated useful lives, which are as follows: |
Estimated useful lives |
||||
Trademark | 10.5 years | |||
Technology | 4.5 years | |||
User base | 2 years | |||
Contracts with streamers | 5.5 years |
For the six months ended June 30, 2020 |
For the year ended December 31, 2019 |
|||||||
(In RMB thousands) |
||||||||
To adjust amortization expense for newly identified intangible assets (Note 4(b)(1)) |
51,111 | 102,222 | ||||||
To adjust share-based compensation expense of assumed DouYu restricted share units (1) |
38,769 | 102,899 | ||||||
|
|
|
|
|||||
89,880 | 205,121 | |||||||
|
|
|
|
(1) | Pursuant to the Merger Agreement, Huya’s replacement awards have the same terms and conditions as DouYu’s restricted share units awards, which is to vest by equal installment for 36 months upon DouYu’s IPO completed on July 17, 2019, accordingly in accordance with ASC 805-30-55-10, |
DouYu’s employee’s requisite service period completed prior to January 1, 2019 to the original requisite service period of the DouYu’s restricted share units awards. |
For the six months ended June 30, 2020 |
For the year ended December 31, 2019 |
|||||||
(In RMB thousands) |
||||||||
To adjust amortization expense for newly identified intangible assets (Note 4(b)(1)) |
188,690 | 377,381 | ||||||
To adjust share-based compensation expense of assumed DouYu restricted share units (Note 4(c)(1)) |
8,083 | 49,334 | ||||||
|
|
|
|
|||||
196,773 | 426,715 | |||||||
|
|
|
|
As of June 30, 2020 |
||||
(In RMB thousands) |
||||
Estimated merger transaction costs to be paid by the combined company |
70,060 | |||
Cash dividend to be paid by Huya in the Merger amounted to US$200.0 million (equivalent to RMB1,415.9 million translated at exchange rate as of June 30, 2020) |
1,415,900 | |||
Cash dividend to be paid by DouYu in the Merger amounted to US$60.0 million (equivalent to RMB424.8 million translated at exchange rate as of June 30, 2020) |
424,770 | |||
Cash consideration to be paid by DouYu in order to integrate Penguin with the business of the combined Huya and DouYu |
3,539,750 | |||
|
|
|||
5,450,480 | ||||
|
|
(k) Deferred | tax liabilities |
(l) Shareholders’ | equity |
As of June 30, 2020 |
||||
(In RMB thousands) |
||||
Estimated purchase consideration for acquisition of DouYu with elimination of DouYu’s pro forma shareholders’ equity as of June 30, 2020 |
30,733,518 | |||
Estimated merger transaction costs to be paid by the combined company |
(70,060 | ) | ||
Cash dividend to be paid by Huya in the Merger |
(1,415,900 | ) | ||
Cash dividend to be paid by DouYu in the Merger |
(424,770 | ) | ||
Cash consideration to be paid by DouYu in order to integrate Penguin with the business of the combined Huya and DouYu |
(3,539,750 | ) | ||
|
|
|||
25,283,038 | ||||
|
|
1. | to authorize, approve and adopt the Merger Agreement and the Plan of Merger and any and all transactions contemplated by the Merger Agreement and the Plan of Merger, including the Merger; and |
2. | in the event that there are insufficient proxies received at the time of the EGM to authorize, approve and adopt the Merger Agreement and the Plan of Merger, to approve a proposal to instruct the chairman of the EGM to adjourn the EGM in order to allow DouYu to solicit additional proxies in favor of the authorization, approval and adoption of the Merger Agreement and the Plan of Merger. |
• | first, a registered DouYu shareholder may revoke a proxy by written notice of revocation given to the chairman of the EGM before the EGM commences. Any written notice revoking a proxy should be sent to the registered office of DouYu International Holdings Limited, being the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands; |
• | second, a registered DouYu shareholder may complete, date and submit a new proxy card bearing a later date than the proxy card sought to be revoked to DouYu no less than 48 hours prior to the EGM; or |
• | third, a registered DouYu shareholder may attend the EGM and vote in person. Attendance, by itself, will not revoke a proxy. It will only be revoked if the shareholder actually votes at the EGM. |
• | first, a holder of DouYu ADSs can revoke its voting instructions by written notice of revocation timely delivered to the DouYu depositary; or |
• | second, a holder of DouYu ADSs can complete, date and submit a new ADS voting instruction card to the DouYu depositary bearing a later date than the ADS voting instruction card sought to be revoked. |
• | due incorporation, valid existence and, where applicable, good standing of DouYu and the DouYu Subsidiaries; power and authority of DouYu and each of the DouYu Subsidiaries to carry on its businesses; |
• | DouYu’s capitalization, information on DouYu RSU Awards and DouYu Restricted Share Unit Scheme, the absence of undisclosed options, warrants, preemptive or other similar rights or any debt securities that give its holders the right to vote with DouYu shareholders and the absence of encumbrances on DouYu’s ownership of equity interests in the DouYu Subsidiaries; |
• | DouYu’s corporate power and authority to execute and deliver, to perform its obligations and to consummate the transactions under the Merger Agreement, and the enforceability of the Merger Agreement against DouYu; |
• | upon unanimous recommendation of the DouYu Special Committee, the declaration of advisability, the authorization and approval, and the recommendation to the DouYu shareholders of the Merger Agreement, the Plan of Merger and the transactions contemplated thereby, including the Merger, by the DouYu Board; and the required vote of DouYu shareholders to authorize and approve the Merger Agreement, the Plan of Merger and the transactions contemplated thereby, including the Merger; |
• | filings with the SEC and compliance with applicable law concerning disclosure controls and procedures and internal control over financial reporting; |
• | absence of certain undisclosed liabilities; |
• | the absence of a “DouYu Material Adverse Effect” (as defined below), the operation of DouYu and the DouYu Subsidiaries in the ordinary course of business and the absence of certain other material changes or events since June 30, 2020; |
• | governmental consents and approvals required for the execution and delivery by DouYu of the Merger Agreement or the consummation by DouYu of the transactions contemplated by the Merger Agreement; |
• | the absence of violations of, default under, or breach of, the governing documents of DouYu and the DouYu Subsidiaries, applicable law regarding DouYu and the DouYu Subsidiaries and certain agreements of DouYu and the DouYu Subsidiaries as a result of DouYu entering into and performing under the Merger Agreement and consummating the transactions contemplated by the Merger Agreement, including the Merger; |
• | real property owned or leased by DouYu and the DouYu Subsidiaries and the absence of secured creditors; |
• | the absence of material legal proceedings and governmental orders against DouYu or the DouYu Subsidiaries; |
• | compliance with licenses and permits and compliance with applicable laws, including but not limited to laws relating to anti-bribery matters, foreign exchange matters and data protection matters; |
• | employee benefit plans and labor matters; |
• | tax matters; |
• | material contracts and the absence of any breach or default under any material contract; |
• | insurance matters; |
• | intellectual property; |
• | DouYu Subsidiaries which are PRC subsidiaries; |
• | interested party transactions; |
• | the receipt of opinion from Morgan Stanley; |
• | the absence of any undisclosed broker’s or finder’s fees; and |
• | the absence of any other representations and warranties made by DouYu to Huya, Merger Sub and Nectarine (and each of Huya, Merger Sub and Nectarine acknowledges such absence of any other representations and warranties made by DouYu to Huya, Merger Sub and Nectarine). |
• | due incorporation, valid existence and, where applicable, good standing of Huya, Merger Sub and the Huya Subsidiaries; power and authority of Huya and each of the Huya Subsidiaries to carry on its businesses; |
• | Huya’s capitalization, information on Huya options and Huya restricted share unit awards and share incentive plan, the absence of undisclosed options, warrants, preemptive or other similar rights or any debt securities that give its holders the right to vote with Huya shareholders and the absence of encumbrances on Huya’s ownership of equity interests in the Huya Subsidiaries; |
• | Huya’s corporate power and authority to execute and deliver, to perform its obligations and to consummate the transactions under the Merger Agreement, and the enforceability of the Merger Agreement against Huya; |
• | upon unanimous recommendation of the Huya Special Committee, the declaration of advisability, the authorization and approval of the Merger Agreement, the Plan of Merger and the transactions contemplated thereby, including the Merger, by the Huya Board; |
• | filings with the SEC and compliance with applicable law concerning disclosure controls and procedures and internal control over financial reporting; |
• | absence of certain undisclosed liabilities; |
• | the absence of a “Huya Material Adverse Effect” (as defined below), the operation of Huya and the Huya Subsidiaries in the ordinary course of business and the absence of certain other material changes or events since June 30, 2020; |
• | governmental consents and approvals required for the execution and delivery by Huya of the Merger Agreement or the consummation by Huya of the transactions contemplated by the Merger Agreement; |
• | the absence of violations of, default under, or breach of, the governing documents of Huya and the Huya Subsidiaries, applicable law regarding Huya and the Huya Subsidiaries and certain agreements of Huya and the Huya Subsidiaries as a result of Huya entering into and performing under the Merger Agreement and consummating the transactions contemplated by the Merger Agreement, including the Merger; |
• | real property owned or leased by Huya and the Huya Subsidiaries and the absence of secured creditors; |
• | the absence of material legal proceedings and governmental orders against Huya or the Huya Subsidiaries; |
• | compliance with licenses and permits and compliance with applicable laws, including but not limited to laws relating to anti-bribery matters, foreign exchange matters and data protection matters; |
• | employee benefit plans and labor matters; |
• | tax matters; |
• | material contracts and the absence of any breach or default under any material contract; |
• | insurance matters; |
• | intellectual property; |
• | Huya Subsidiaries which are PRC subsidiaries; |
• | interested party transactions; |
• | the receipt of opinion from Citi; |
• | the absence of any undisclosed broker’s or finder’s fees; and |
• | the absence of any other representations and warranties made by Huya and Merger Sub to DouYu and Nectarine (and each of DouYu and Nectarine acknowledges such absence of any other representations and warranties made by Huya and Merger Sub to DouYu and Nectarine). |
• | due incorporation of Nectarine; |
• | Nectarine’s corporate power and authority to execute and deliver, to perform its obligations and to consummate the transactions under the Merger Agreement, and the enforceability of the Merger Agreement against Nectarine; |
• | Nectarine and its affiliates’ ownership of Huya Class B shares and Douyu shares; |
• | governmental consents and approvals required for the execution and delivery by Nectarine of the Merger Agreement or the consummation by Nectarine of the transactions contemplated by the Merger Agreement; |
• | the absence of violations of, default under, or breach of, the governing documents of Nectarine, applicable law regarding Nectarine and certain agreements of Nectarine as a result of Nectarine entering into and performing under the Merger Agreement and consummating the transactions contemplated by the Merger Agreement, including the Merger; and |
• | the absence of any other representations and warranties made by Nectarine to Huya, Merger Sub and DouYu (and each of Huya, Merger Sub and DouYu acknowledges such absence of any other representations and warranties made by Nectarine to Huya, Merger Sub and DouYu). |
• | amend the DouYu memorandum and articles of association or any of DouYu’s variable interest entity agreements (the “DouYu VIE Contracts”); |
• | authorize for issuance, issue, sell, pledge, transfer or otherwise dispose of any share capital or any securities convertible into or exchangeable for any share capital or any equity equivalents, subject to certain exceptions; |
• | (1) split, combine, subdivide or reclassify any of its share capital, (2) declare, set aside, or pay any dividend or other distribution in respect of its share capital, other than the DouYu Closing Dividend (as defined below), (3) enter into any agreement with respect to the voting of its share capital, (4) make any other actual, constructive or deemed distribution in respect of its share capital or otherwise make any payments to shareholders in their capacity as such, or (5) redeem, repurchase or otherwise acquire any of its share capital or any share capital of any of the DouYu Subsidiaries; |
• | place DouYu or any of the DouYu Subsidiaries into liquidation, dissolution, scheme of arrangement, merger, consolidation, restructuring, recapitalization, redomiciliation or other reorganization (other than the Merger); |
• | alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of the DouYu Subsidiaries, other than as a result of any internal restructuring; |
• | except pursuant to an agreement existing on the date of the Merger Agreement (i) incur, modify, renew or assume any long-term or short-term debt or issue any debt securities in an amount exceeding RMB5,000,000 in the aggregate, except for borrowings under existing lines of credit in the ordinary and usual course of business consistent with past practice; (ii) prepay any debt, borrowings or obligations in excess of RMB5,000,000 in the aggregate prior to their stated maturity; (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary and usual course of business consistent with past practice and in amounts not material to DouYu and the DouYu Subsidiaries, taken as a whole, except for guarantees of obligations of wholly-owned DouYu Subsidiaries, (iv) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly-owned DouYu subsidiaries, DouYu Subsidiaries that are variable interest entities (“DouYu VIE”) in accordance with the applicable variable interest entity agreements and for advances for travel and other expenses to officers, directors and employees made in the ordinary course of business consistent with past practice); (v) pledge or otherwise encumber shares of capital stock of DouYu or the DouYu Subsidiaries; or (vi) mortgage or pledge any of DouYu’s material assets, tangible or intangible, or create or suffer to exist any liens thereupon, other than permitted liens; |
• | except as may be required as a result of a change in law or in generally accepted accounting principles or for the purpose of execution of the Merger Agreement and consummation of the transactions contemplated hereby, change any of the accounting principles used by it; |
• | (1) abandon, permit to lapse, dispose of, license, sublicense, assign, transfer, create or incur any lien (other than permitted lien) on or grant to any person any rights to any of DouYu’s intellectual property, (ii) make any material change in the ownership or right to register any of DouYu’s intellectual property, or (iii) enter into any contract with respect to or otherwise binding upon any of DouYu’s intellectual property, in each case any of the foregoing in (i) to (iii), other than consistent with past practice in the ordinary course of business; |
• | waive the benefits of, reduce the restriction periods or agree to modify in a manner adverse to DouYu or any of the DouYu Subsidiaries any non-competition, confidentiality, standstill or similar agreement to which DouYu or any of the DouYu Subsidiaries is a party; |
• | acquire, sell, lease, transfer or otherwise dispose of any assets in an amount exceeding RMB5,000,000 in the aggregate (including but not limited to domain names, trademarks and content licenses), except in the ordinary course of business consistent with past practice; |
• | (i) acquire (by merger, consolidation, or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any equity interest therein that, taken together, have an acquisition or investment amount exceeding RMB50,000,000 or (ii) authorize any new capital expenditures, except that, in the aggregate, would not exceed RMB50,000,000 during each fiscal quarter or except as specifically budgeted in DouYu’s current plan approved by the DouYu Board prior to the date of the Merger Agreement that was made available to Huya; |
• | pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) in an amount exceeding RMB5,000,000 in the aggregate, other than the payment, discharge or satisfaction in the ordinary course of business consistent with past practice or as required by governmental entities; provided that DouYu or the applicable DouYu Subsidiary shall notify Huya promptly after such payment, discharge or satisfaction as required by governmental entities; |
• | settle or compromise any pending or threatened suit, action or claim in an amount exceeding RMB5,000,000 (other than responding to takedown notices or other notices or accusations of potential infringement in a manner consistent with past practice in the ordinary course of business); |
• | (i) cancel, materially modify, terminate or grant a waiver of any rights under any of DouYu’s material contract in a manner adverse to DouYu or any of the DouYu Subsidiaries, (ii) enter into a new contract that (A) would be a DouYu material contract if in existence as of the date of the Merger Agreement or (B) contains, unless required by applicable law, a change of control provision in favor of the other party or parties thereto or would otherwise require a payment to or give rise to any rights to such other party or parties in connection with the transactions contemplated by the Merger Agreement or (iii) waive, release, cancel, convey or otherwise assign any material rights or claims under any such material contract or new contract of DouYu; |
• | enter into any new lines of business that has any significant effects on the financial position of DouYu and the DouYu Subsidiaries, taken as a whole; or |
• | take, propose to take, or agree in writing or otherwise to take any of the foregoing actions. |
• | amend the Huya memorandum and articles of association or any of Huya’s variable interest entity agreements; |
• | authorize for issuance, issue, sell, pledge, transfer or otherwise dispose of any share capital or any securities convertible into or exchangeable for any share capital or any equity equivalents, subject to certain exceptions; |
• | (1) split, combine, subdivide or reclassify any of its share capital, (2) declare, set aside, or pay any dividend or other distribution in respect of its share capital, other than the Huya Closing Dividend (as defined below), (3) enter into any agreement with respect to the voting of its share capital, (4) make any other actual, constructive or deemed distribution in respect of its share capital or otherwise make any payments to shareholders in their capacity as such, or (5) redeem, repurchase or otherwise acquire any of its share capital or any share capital of any of the Huya Subsidiaries; |
• | place Huya or any of the Huya Subsidiaries into liquidation, dissolution, scheme of arrangement, merger, consolidation, restructuring, recapitalization, redomiciliation or other reorganization (other than the Merger); |
• | alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of the Huya Subsidiaries, other than as a result of any internal restructuring; |
• | except pursuant to an agreement existing on the date of the Merger Agreement (i) incur, modify, renew or assume any long-term or short-term debt or issue any debt securities in an amount exceeding RMB5,000,000 in the aggregate, except for borrowings under existing lines of credit in the ordinary and usual course of business consistent with past practice; (ii) prepay any debt, borrowings or obligations in excess of RMB5,000,000 in the aggregate prior to their stated maturity; (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary and usual course of business consistent with past practice and in amounts not material to Huya and the Huya Subsidiaries, taken as a whole, except for guarantees of obligations of wholly-owned Huya Subsidiaries, (iv) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly-owned Huya subsidiaries, Huya Subsidiaries that are variable interest entities in accordance with the applicable variable interest entity agreements and for advances for travel and other expenses to officers, directors and employees made in the ordinary course of business consistent with past practice); (v) pledge or otherwise encumber |
shares of capital stock of Huya or the Huya Subsidiaries; or (vi) mortgage or pledge any of Huya’s material assets, tangible or intangible, or create or suffer to exist any liens thereupon, other than permitted liens; |
• | except as may be required as a result of a change in law or in generally accepted accounting principles or for the purpose of execution of the Merger Agreement and consummation of the transactions contemplated hereby, change any of the accounting principles used by it; |
• | (1) abandon, permit to lapse, dispose of, license, sublicense, assign, transfer, create or incur any lien (other than permitted lien) on or grant to any person any rights to any of Huya’s intellectual property, (ii) make any material change in the ownership or right to register any of Huya’s intellectual property, or (iii) enter into any contract with respect to or otherwise binding upon any of Huya’s intellectual property, in each case any of the foregoing in (i) to (iii), other than consistent with past practice in the ordinary course of business; |
• | waive the benefits of, reduce the restriction periods or agree to modify in a manner adverse to Huya or any of the Huya Subsidiaries any non-competition, confidentiality, standstill or similar agreement to which Huya or any of the Huya Subsidiaries is a party; |
• | acquire, sell, lease, transfer or otherwise dispose of any assets in an amount exceeding RMB5,000,000 in the aggregate (including but not limited to domain names, trademarks and content licenses), except in the ordinary course of business consistent with past practice; |
• | (i) acquire (by merger, consolidation, or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any equity interest therein that, taken together, have an acquisition or investment amount exceeding RMB50,000,000 or (ii) authorize any new capital expenditures, except that, in the aggregate, would not exceed RMB50,000,000 during each fiscal quarter or except as specifically budgeted in Huya’s current plan approved by the Huya Board prior to the date of the Merger Agreement that was made available to DouYu; |
• | pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) in an amount exceeding RMB5,000,000 in the aggregate, other than the payment, discharge or satisfaction in the ordinary course of business consistent with past practice or as required by governmental entities; provided that Huya or the applicable Huya Subsidiary shall notify DouYu promptly after such payment, discharge or satisfaction as required by gvernmental entities; |
• | settle or compromise any pending or threatened suit, action or claim in an amount exceeding RMB5,000,000 (other than responding to takedown notices or other notices or accusations of potential infringement in a manner consistent with past practice in the ordinary course of business); |
• | (i) cancel, materially modify, terminate or grant a waiver of any rights under any of Huya’s material contract in a manner adverse to Huya or any of the Huya Subsidiaries, (ii) enter into a new contract that (A) would be a Huya material contract if in existence as of the date of the Merger Agreement or (B) contains, unless required by applicable law, a change of control provision in favor of the other party or parties thereto or would otherwise require a payment to or give rise to any rights to such other party or parties in connection with the transactions contemplated by the Merger Agreement or (iii) waive, release, cancel, convey or otherwise assign any material rights or claims under any such material contract or new contract of Huya; |
• | enter into any new lines of business that has any significant effects on the financial position of Huya and the Huya Subsidiaries, taken as a whole; or |
• | take, propose to take, or agree in writing or otherwise to take any of the foregoing actions. |
• | (A) to be delivered to Huya and Nectarine duly signed resignations of each legal representative and director of each DouYu VIE, (B) to be appointed as legal representatives and directors of each DouYu VIE persons designated by Nectarine and (C) to be completed the registration of such resignation and appointment as described in the foregoing clauses (A) and (B) with the relevant governmental entities; |
• | each shareholder of Wuhan Ouyue Online TV Co., Ltd. (“Wuhan Ouyue”) to execute and deliver to Huya and Nectarine (A) all documents necessary for such shareholder to transfer, free of any third-party rights, claims or liens (except for permitted liens and as provided in the DouYu VIE Contracts (to the extent applicable to Wuhan Ouyue)), all such shareholder’s equity interests in Wuhan Ouyue to qualified person(s) designated by Huya and Nectarine for a nominal consideration of RMB 1 and (B) all documents as may be required to effect the registration of such transfer with the relevant governmental entities; |
• | each shareholder of Wuhan DouYu Internet Technology Co., Ltd. (“Wuhan DouYu”) (other than those set forth in the disclosure schedule DouYu delivered in connection with the Merger Agreement) to (A) execute and deliver to Huya and Nectarine all documents necessary for such shareholder to transfer, free of any third-party rights, claims or liens (except for permitted liens and as provided in the DouYu VIE Contracts (to the extent applicable to Wuhan DouYu)), all such shareholder’s equity interests in Wuhan DouYu to person(s) designated by Huya and Nectarine for a nominal consideration of RMB 1 and all documents as may be required to effect the registration of such transfer with the relevant governmental entities (the “Registration Documents”) and (B) execute such other documents and take such other actions in connection with the transfer described in the foregoing clause (A); |
• | to be submitted to the relevant governmental entities the Registration Documents; and |
• | each shareholder of Wuhan DouYu set forth in the disclosure schedule DouYu delivered in connection with the Merger Agreement to execute and deliver to Huya and Nectarine an undertaking to cooperate with Huya and Nectarine and use best efforts to transfer all equity interests in Wuhan DouYu held by such nominee shareholder to qualified person(s) designated by Huya and Nectarine, based on a transfer plan mutually agreed by such shareholder, Huya and Nectarine, free of any third-party rights, claims or liens (except for permitted liens and as provided under the DouYu VIE Contracts), as soon as practicable and in any event within one (1) year after the Closing Date. |
• | the Required DouYu Vote shall have been obtained; |
• | the registration statement on Form F-4 (of which this proxy statement/prospectus is a part) having become effective under the Securities Act, and not having become the subject of any stop order, or any proceedings to seek a stop order, to suspend the effectiveness of the Form F-4; |
• | the Huya ADSs issuable as Merger Consideration pursuant to the Merger Agreement having been approved for listing on the NYSE, subject to official notice of; and |
• | no governmental entity of competent jurisdiction having enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, injunction or other order which (1) is in effect and (2) permanently enjoins or prohibits the consummation of the transaction contemplated by the Merger Agreement. |
• | (1) certain representations and warranties of DouYu in the Merger Agreement being true and correct in all respects save for de minimis inaccuracies as of the date of the Merger Agreement and as of the Closing Date as if made on and as of such date and time, and (2) certain representations and warranties of DouYu set forth in the Merger Agreement being true and correct interpreted without giving effect to the words “materially” or “material” or to any qualifications based on such terms or based on the defined term “DouYu Material Adverse Effect,” except where the failure of such representations and warranties to be true and correct, in the aggregate, would not constitute a DouYu Material Adverse Effect; |
• | DouYu having performed or complied in all material respects with all covenants and agreements required to be performed or complied with by it under the Merger Agreement prior to or at the time of closing of the Merger; |
• | there having been no DouYu Material Adverse Effect since the date of the Merger Agreement; |
• | The actions described under the sub-section titled “DouYu Corporate Structure Matters” having been completed; |
• | DouYu shareholders holding no more than 10% of DouYu shares shall have provided any notice of objection, written demand for appraisal or taken any other action that purports to exercise any rights pursuant to Section 238 of the Cayman Companies Law; |
• | DouYu shall have, within 20 days immediately following the date on which the Required DouYu Vote is obtained, given written notice thereof to each Purported Dissenting Shareholder, and the listing of DouYu shares on the NASDAQ Global Select Market shall have been maintained for a minimum of twenty (20) days after such notice date; |
• | all closing conditions under the Reassignment Agreement shall have been satisfied or waived as of the closing, which waiver shall be subject to prior written consent of Huya and the closing of the Reassignment (as defined in the Reassignment Agreement) shall have occurred in accordance with the Reassignment Agreement substantially concurrently with the closing of the transactions contemplated by the Merger Agreement; |
• | all PRC regulatory filings to be made or obtained in connection with the Merger and the other transactions contemplated by the Merger Agreement prior to closing shall have been duly made or obtained, or the statutory clearance or non-objection period in respect of any such regulatory filing or notification has expired and no objection has been raised with respect to the Merger, in each case in accordance with applicable PRC laws. |
• | (1) certain representations and warranties of Huya and Merger Sub in the Merger Agreement being true and correct in all respects save for de minimis inaccuracies as of the date of the Merger Agreement and as of the Closing Date as if made on and as of such date and time, and (2) certain representations and warranties of Huya and Merger Sub set forth in the Merger Agreement being true and correct interpreted without giving effect to the words “materially” or “material” or to any qualifications based on such terms or based on the defined term “Huya Material Adverse Effect,” except where the failure of such representations and warranties to be true and correct, in the aggregate, would not constitute a Huya Material Adverse Effect; |
• | Huya and Merger Sub having performed or complied in all material respects with all covenants and agreements required to be performed or complied with by it under the Merger Agreement prior to or at the time of closing of the Merger; and |
• | there having been no Huya Material Adverse Effect since the date of the Merger Agreement. |
(1) | by mutual written consent of Huya and DouYu; |
(2) | by any of Huya, DouYu or Nectarine, if: |
• | the Merger is not completed by July 12, 2021; provided that if by July 12, 2021, all of the conditions set forth in the sub-section titled “—Conditions to the Completion of the Merger” |
having been satisfied but for the condition set forth in the last bullet point of the second paragraph thereof, then such date shall automatically be extended for three (3) months; provided further that this termination right is not available to a party if the failure of the Merger to have been completed on or before such date was primarily due to the breach or failure of such party to perform in a material respect any of its obligations under the Merger Agreement; |
• | any order, judgment, writ, injunction, decree, decision, ruling, verdict having the effect of permanently enjoining or prohibiting the consummation of the transaction contemplated by the Merger Agreement becomes final and non-appealable; provided, that this termination right is not available to a party if the issuance of such final, non-appealable order, judgment, writ, injunction, decree, decision, ruling, verdict was primarily due to the breach or failure of such party to perform in a material respect any of its obligations under Merger Agreement; or |
• | the Required DouYu Vote is not obtained; provided that DouYu shall not be permitted to terminate the Merger Agreement if DouYu has not paid the No Vote Termination Fee (as defined below). |
(3) | by Huya or Nectarine, if |
• | the representations and warranties of DouYu shall not be true and correct or DouYu shall have breached or failed to perform any of its covenants or agreements contained in the Merger Agreement, such that the corresponding condition to closing would not be satisfied and such breach or inaccuracy cannot be cured by DouYu by July 12, 2021, or if curable, is not cured within thirty days after receipt by DouYu of written notice from Huya or Nectarine of such breach and stating Huya or Nectarine’s intention to terminate the Merger Agreement; provided, that this termination right is not available to Huya if it is then in material breach of any of its representations, warranties, covenants or other agreements under the Merger Agreement, such that any condition to Huya’s obligation to close would not be satisfied; or |
• | (1) all of the closing conditions to the obligations of Huya and Merger Sub to consummate the Merger (including those conditions that are conditions to all parties’ obligations) are otherwise satisfied, (2) Huya and Nectarine have confirmed by notice to DouYu that all conditions to their obligation to consummate the Merger have been satisfied or that they will waive any such unsatisfied conditions, and (3) Douyu fails to consummate the Merger within three business days following the date the closing should have occurred pursuant to the Merger Agreement. |
(4) | by DouYu or Nectarine, if: |
• | the representations and warranties of Huya and Merger Sub shall not be true and correct or Huya or Merger Sub shall have breached or failed to perform any of its covenants or agreements contained in the Merger Agreement, such that the corresponding condition to closing would not be satisfied and such breach or inaccuracy cannot be cured by Huya and Merger Sub by July 12, 2021, or if curable, is not cured within thirty days after receipt by Huya and Merger Sub of written notice from DouYu or Nectarine of such breach and stating DouYu or Nectarine’s intention to terminate the Merger Agreement; provided, that this termination right is not available to DouYu if it is then in material breach of any of its representations, warranties, covenants or other agreements under the Merger Agreement, such that any condition to DouYu’s obligation to close would not be satisfied; or |
• | (1) all of the closing conditions to the obligations of DouYu to consummate the Merger (including those conditions that are conditions to all parties’ obligations) are otherwise satisfied, (2) DouYu and Nectarine have confirmed by notice to Huya that all conditions to their obligation to consummate the Merger have been satisfied or that they will waive any such unsatisfied conditions, and (3) Huya fails to consummate the Merger within three business days following the date the closing should have occurred pursuant to the Merger Agreement. |
• | the representations and warranties of Huya and Merger Sub shall not be true and correct or Huya or Merger Sub shall have breached or failed to perform any of its covenants or agreements contained in the Merger Agreement, as set forth in more detail in clause (4) the sub-section titled “—Termination of the Merger Agreement,” or |
• | (1) all of the closing conditions to the completion of the Merger or to the obligations of Huya and Merger Sub to consummate the Merger have been satisfied, (2) DouYu and Nectarine have confirmed by notice to Huya that all conditions to their obligation to consummate the Merger have been satisfied or that they are willing to waive any such unsatisfied conditions, and (3) Huya fails to consummate the Merger within three business days following the date the closing should have occurred as set forth in the Merger. |
• | the representations and warranties of DouYu shall not be true and correct or DouYu shall have breached or failed to perform any of its covenants or agreements contained in the Merger Agreement, as set forth in more detail in clause (3) of the sub-section titled “—Termination of the Merger Agreement,” or |
• | (1) all of the closing conditions to the completion of the Merger or to the obligations of DouYu to consummate the Merger have been satisfied, (2) Huya and Nectarine have confirmed by notice to DouYu that all conditions to their obligation to consummate the Merger have been satisfied or that they are willing to waive any such unsatisfied conditions, and (3) DouYu fails to consummate the Merger within three business days following the date the closing should have occurred as set forth in the Merger. |
• | use their respective reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable law promptly to consummate the Reassignment and the other transactions contemplated by the Reassignment Agreement; |
• | furnish, and cause their affiliates to furnish, to each other all information required for any application or other filing under the rules and regulations of any applicable law in connection with the Reassignment and the other transactions contemplated by the Reassignment Agreement; |
• | (i) give each other prompt notice of the making or commencement of any request, inquiry, investigation, action or other proceeding by or before any governmental entity with respect to the Reassignment or any other transaction contemplated by the Reassignment Agreement, (ii) keep each other informed as to the status of any such request, inquiry, investigation, action or other proceeding; and (iii) promptly inform each other of any communication to or from any governmental entity regarding the Reassignment and the other transactions contemplated by the Reassignment Agreement; |
• | take, and cause certain of their affiliates to take, all necessary actions and execute all necessary documents to facilitate the completion of certain restructuring transactions in connection with the Reassignment as set forth on the applicable schedule to the Reassignment Agreement; |
• | use their commercially reasonable efforts to negotiate and enter into, or cause to be negotiated and entered into, at the Reassignment Closing a transition services agreement in accordance with the terms set forth on the applicable exhibit to the Reassignment Agreement; |
• | Take any action that would reasonably be expected to have a material adverse effect on the business, assets, condition (financial or otherwise) or results of operations of the Penguin Business or prevent or impede Nectarine’s or Chuanghai Digital’s ability to consummate the transactions contemplated by the Reassignment Agreement, including the Reassignment; |
• | declare, set aside or pay any dividend or other distribution with respect to any share capital of Chuanghai Digital or redeem, repurchase or otherwise acquire any share capital of Chuanghai Digital; |
• | materially change any method of accounting or accounting practice by Chuanghai Digital; |
• | make or revoke any material tax election, any settlement or compromise of any tax liability or any change (or request to any taxing authority to change) any material aspect of the method of accounting of Chuanghai Digital for tax purposes; |
• | amend Chuanghai Digital’s Articles of Association; |
• | incur material indebtedness for borrowed money or guarantee such indebtedness for another person or issue or sell debt securities, warrants or other rights to acquire any debt security of Chuanghai Digital, in each case by Chuanghai Digital; |
• | adopt, resolve to approve or petition for (including similar proceedings or orders in relation to) a plan of complete or partial liquidation, dissolution, scheme of arrangement, merger, consolidation, restructuring, recapitalization or reorganization of Chuanghai Digital; or |
• | appoint any receiver, trustee, administrator or other similar person in relation to the affairs of Chuanghai Digital or its property or any part thereof. |
• | the closing of the Merger will have occurred in accordance with the terms of the Merger Agreement substantially concurrently with the Reassignment Closing; and |
• | No governmental entity of competent jurisdiction will have enacted, issued, promulgated, enforced or entered any final and non-appealable order, judgment, writ, injunction, decree, decision, ruling, verdict that (i) is in effect and (ii) permanently enjoins or prohibits the consummation of the transactions contemplated by the Reassignment Agreement, or requires, or is construed to require, DouYu, Nectarine, any of their respective affiliates or Chuanghai Digital to proffer to, or agree to, sell, divest, lease, license, transfer, dispose of or otherwise encumber or hold separate, before or after the Reassignment Closing Date, any of the assets, licenses, operations, rights, products or businesses held by any of them prior to the Reassignment Closing Date, or any interest therein, or to agree to any material change (including through a licensing arrangement) or restriction on, or other impairment of DouYu’s or any of its affiliates’ ability to enjoy the full economic interest in and control over Chuanghai Digital as otherwise contemplated by the Exclusive Share Option Agreement, the Proxy Agreement, the Equity Pledge Agreement and the Exclusive Business Cooperation Agreement. |
• | the completion of certain restructuring transactions contemplated by the Reassignment Agreement in accordance with the applicable schedule to the Reassignment Agreement and applicable laws, except for any such failure that primarily results from a breach by DouYu of its covenant with respect to the completion of such restructuring transactions and, after taking into account substitute arrangements offered by Nectarine and consented to by DouYu (which consent will not be unreasonably withheld, conditioned or delayed), as would not materially impact the conduct of the Penguin Business; and |
• | certain of the representations and warranties of Nectarine pertaining to organization and qualification, subsidiaries, capitalization, authority and brokers will be true and correct in all material respects as of the Reassignment Closing Date as if made on and as of such date and time (except for representations and warranties made as of a specified date, only as of the specified date). |
• | certain of the representations and warranties of Nectarine pertaining to organization and qualification, subsidiaries, capitalization, authority and brokers will be true and correct in all material respects as of the Reassignment Closing Date as if made on and as of such date and time (except for representations and warranties made as of a specified date, only as of the specified date). |
• | by the mutual written consent of DouYu and Nectarine; |
• | by either of DouYu or Nectarine if: |
o | the Reassignment has not been consummated on or before the Outside Date (as defined in the Merger Agreement), unless the failure of the Reassignment to have been consummated on or before such date was primarily due to the breach or failure of such party to perform in a material respect any of its obligations under the Reassignment Agreement or the Merger Agreement; or |
o | any order, judgment, writ, injunction, decree, decision, ruling, verdict shall be in effect and shall have become final and nonappealable that permanently enjoins or prohibits the consummation of the transactions contemplated by the Reassignment Agreement, or requires, or is construed to require, DouYu, Nectarine, any of their respective affiliates or Chuanghai Digital to proffer to, or agree to, sell, divest, lease, license, transfer, dispose of or otherwise encumber or hold separate, before or after the Reassignment Closing Date, any of the assets, licenses, operations, rights, products or businesses held by any of them prior to the Reassignment Closing Date, or any interest therein, or to agree to any material change (including through a licensing arrangement) or restriction on, or other impairment of DouYu’s or any of its affiliates’ ability to enjoy the full economic interest in and control over Chuanghai Digital as otherwise contemplated by the Exclusive Share Option Agreement, the Proxy Agreement, the Equity Pledge Agreement and the Exclusive Business Cooperation Agreement, unless the issuance of such order, judgment, writ, injunction, decree, decision, ruling, verdict was primarily due to the breach or failure of such party to perform in a material respect any of its obligations under the Reassignment Agreement. |
• | exercise effective control over Guangzhou Huya and its subsidiaries; |
• | receive substantially all of the economic benefits of Guangzhou Huya and its subsidiaries; and |
• | have an exclusive option to purchase all or part of the equity interests in Guangzhou Huya when and to the extent permitted by PRC law. |
• | the ownership structures of Huya Technology and Guangzhou Huya are in compliance with PRC laws or regulations currently in effect; and |
• | the contractual arrangements among Huya Technology, Guangzhou Huya and Linzhi Tencent, governed by PRC law, are valid, binding and enforceable under PRC law, and do not and will not result in any violation of applicable PRC laws or regulations currently in effect. |
Period |
Total Number of ADSs Purchased |
Average Price Paid Per ADS (1) |
Total Number of ADSs Purchased as Part of the Publicly Announced Plan |
Approximate Dollar Value of ADSs that May Yet Be Purchased Under the Plan |
||||||||||||
(RMB in Thousands) |
||||||||||||||||
December |
2,912,070 | $ | 8.24 | 2,912,070 | $ | 75,949.4 | ||||||||||
January |
8,131,061 | $ | 8.61 | 8,131,061 | $ | 6,028.5 | ||||||||||
February |
731,860 | $ | 8.24 | 731,860 | — | |||||||||||
March |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
11,774,991 |
$ |
8.49 |
11,774,991 |
— | |||||||||||
|
|
|
|
|
|
|
|
(1) | Every 10 DouYu ADSs represent one DouYu ordinary share. Average price paid per DouYu ADS is calculated using the execution price for each repurchase excluding commissions paid to the broker. |
• | each of DouYu’s directors and executive officers; |
• | DouYu’s directors and executive officers as a group; |
• | each person known to DouYu to beneficially own more than 5.0% of the total issued and outstanding DouYu shares; and |
• | each filing person, as applicable. |
Ordinary Shares |
||||||||||||
Directors and Executive Officers |
Number |
Percentage of total ordinary shares** |
Percentage of aggregate voting power *** |
|||||||||
Shaojie Chen (1) |
4,919,822 | 15.3 | 15.3 | |||||||||
Wenming Zhang (2) |
677,342 | 2.1 | 2.1 | |||||||||
Chao Cheng |
* | * | * | |||||||||
Mingming Su |
* | * | * | |||||||||
Hao Cao |
* | * | * | |||||||||
Song Zhou |
— | — | — | |||||||||
Haiyang Yu |
— | — | — | |||||||||
Xi Cao |
— | — | — | |||||||||
Zhaoming Chen |
— | — | — | |||||||||
Xuehai Wang |
— | — | — | |||||||||
Zhi Yan |
— | — | — | |||||||||
All Directors and Executive Officers as a Group |
5,668,377 | 17.6 | 17.6 | |||||||||
Principal Shareholders: |
||||||||||||
Nectarine Investment Limited (3) |
12,068,104 | 37.5 | 37.5 | |||||||||
Warrior Ace Holding Limited (4) |
4,840,360 | 15.1 | 15.1 | |||||||||
Investment funds affiliated with Sequoia Capital China and other group members (5) |
2,940,792 | 9.1 | 9.1 |
* | Less than 1% of DouYu’s total outstanding shares. |
** | For each person and group included in this column, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of (i) 32,152,393, being the number of ordinary shares outstanding as of October 31, 2020, excluding DouYu’s shares which have been issued and held by DouYu RSU Trust that has waived its rights associated with such ordinary shares, including voting |
rights and dividend rights, before the corresponding RSUs vest pursuant to the vesting schedule, or repurchased and held by DouYu in treasury either in the form of DouYu shares or DouYu ADSs, and (ii) the number of ordinary shares underlying share options held by such person or group that are exercisable or DouYu RSUs that will become vested within 60 days after the date of this proxy statement/prospectus. |
*** | For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of DouYu ordinary shares as a single class. |
(1) | The number of ordinary shares beneficially owned represents (i) 4,840,360 ordinary shares held by Mr. Chen through Warrior Ace Holding Limited, or Warrior Ace; and (ii) 79,462 ordinary shares underlying the RSUs DouYu granted to Mr. Chen under DouYu Restricted Share Unit Scheme, which will vest within 60 days after the date of this proxy statement/prospectus. Warrior Ace is an exempted company incorporated with limited liability under the laws of the British Virgin Islands wholly-owned by Mr. Chen. The registered address of Warrior Ace is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands. Warrior Ace is beneficially owned and controlled by Mr. Chen. |
(2) | The number of ordinary shares beneficially owned represents (i) 659,940 ordinary shares held by Mr. Zhang through Starry Zone Investments Limited, or Starry Zone; and (ii) 17,402 ordinary shares underlying the RSUs DouYu granted to Mr. Zhang under DouYu Restricted Share Unit Scheme, which will vest within 60 days after the date of this proxy statement/prospectus. Starry Zone is an exempted company incorporated with limited liability under the laws of the British Virgin Islands wholly-owned by Mr. Zhang. The registered address of Starry Zone is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands. Starry Zone is beneficially owned and controlled by Mr. Zhang. |
(3) | Represents 12,068,104 ordinary shares held by Nectarine, a company organized under the laws of the British Virgin Islands and a wholly-owned subsidiary of Tencent. The registered address of Nectarine is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola VG1110, British Virgin Islands. Nectarine is beneficially owned and controlled by Tencent, a Cayman Islands exempted company listed on the Main Board of the Stock Exchange of Hong Kong. |
(4) | Represents 4,840,360 ordinary shares beneficially owned by Mr. Chen, DouYu’s chief executive officer and director, as set forth in note (1) above. |
(5) | Represents (i) 1,301,766 ordinary shares held by SCC Growth IV 2018-D, L.P., an exempted limited partnership formed under the laws of the Cayman Islands, (ii) 968,780 ordinary shares held by SCC Growth IV 2018-F, L.P., an exempted limited partnership formed under the laws of the Cayman Islands (SCC Growth IV 2018-D, L.P. and SCC Growth IV 2018-F, L.P. are collectively referred to as “SCC Growth IV”), (iii) 662,069 ordinary shares held by Sequoia Capital Global Growth Fund II, L.P., an exempted limited partnership formed under the laws of the Cayman Islands, and (iv) 8,177 ordinary shares held by Sequoia Capital Global Growth II Principals Fund, L.P., an exempted limited partnership formed under the laws of the Cayman Islands (Sequoia Capital Global Growth Fund II, L.P. and Sequoia Capital Global Growth II Principals Fund, L.P. are collectively referred to as “SC GGFII”). The general partner of SCC Growth IV is SC China Growth IV Management, L.P., whose general partner is SC China Holding Limited. SC China Holding Limited is wholly owned by SNP China Enterprises Limited, which in turn is wholly owned by Neil Nanpeng Shen (Mr. Shen, together with SCC Growth IV, SC China Growth IV Management, L.P., SC China Holding Limited and SNP China Enterprises Limited are collectively referred to as “Sequoia Capital China”). The general partner of SC GGFII is SC Global Growth II Management, L.P., whose general partner is SC US (TTGP), Ltd. The directors and stockholders of SC US (TTGP), Ltd. who exercise voting and investment discretion with respect to the shares held by SC GGFII are Roelof Botha and Douglas Leone (Messrs. Botha and Leone, together with SC GGFII, SC Global Growth II Management, L.P. and SC US (TTGP), Ltd. are collectively referred to as “Sequoia Capital Global Growth”). Sequoia Capital China and Sequoia Capital Global Growth may be deemed to be a group within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, with respect to their ownership of DouYu shares. The registered address of Sequoia Capital China is Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, and the address of Sequoia Capital Global Growth is 2800 Sand Hill Road, Suite 101, Menlo Park, CA 94025. |
(Amounts expressed in thousands) |
Year ended December 31, |
Six months ended June 30, |
||||||||||||||||||
2019 |
2019 (Unaudited) |
2020 (Unaudited) |
||||||||||||||||||
RMB |
US$ |
RMB |
RMB |
US$ |
||||||||||||||||
Revenues |
||||||||||||||||||||
Live streaming (including transactions with related parties of Penguin of RMB28,258 for the year ended December 31, 2019 and nil and RMB2,642 for the six months ended June 30, 2019 and 2020, respectively) |
1,110,606 | 157,196 | 509,644 | 439,122 | 62,154 | |||||||||||||||
Online games distribution (including transactions with related parties of Penguin of RMB51,677 for the year ended December 31, 2019 and RMB32,672 and RMB14,786 for the six months ended June 30, 2019 and 2020, respectively) |
51,763 | 7,327 | 32,756 | 14,786 | 2,093 | |||||||||||||||
Online advertising (including transactions with related parties of Penguin of RMB8,742 for the year ended December 31, 2019 and RMB2,030 and RMB1,114 for the six months ended June 30, 2019 and 2020, respectively) |
31,216 | 4,418 | 12,926 | 7,975 | 1,129 | |||||||||||||||
Cost of revenues |
||||||||||||||||||||
Cost of services (including transactions with related parties of Penguin of RMB468,540 for the year ended December 31, 2019 and RMB220,138 and RMB233,139 for the six months ended June 30, 2019 and 2020, respectively) |
(1,430,524 | ) | (202,478 | ) | (661,244 | ) | (633,757 | ) | (89,702 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Gross loss |
(236,939 | ) | (33,537 | ) | (105,918 | ) | (171,874 | ) | (24,327 | ) | ||||||||||
Research and development expenses (including transactions with related parties of Penguin of RMB179 for the year ended December 31, 2019 and RMB161 and RMB1 for the six months ended June 30, 2019 and 2020, respectively) |
(8,833 | ) | (1,250 | ) | (4,234 | ) | (4,840 | ) | (685 | ) | ||||||||||
Sales and marketing expenses (including transactions with related parties of Penguin of RMB11,739 for the year ended December 31, 2019 and RMB1,190 and RMB13,338 for the six months ended June 30, 2019 and 2020, respectively) |
(45,006 | ) | (6,370 | ) | (18,523 | ) | (23,063 | ) | (3,264 | ) | ||||||||||
General and administrative expenses (including transactions with related parties of Penguin of RMB17,122 for the year ended December 31, 2019 and RMB7,956 and RMB10,138 for the six months ended June 30, 2019 and 2020, respectively) |
(19,617 | ) | (2,777 | ) | (8,949 | ) | (10,977 | ) | (1,554 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss before income tax |
(310,395 |
) |
(43,934 |
) |
(137,624 |
) |
(210,754 |
) |
(29,830 |
) | ||||||||||
Income tax expense |
— | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss |
(310,395 |
) |
(43,934 |
) |
(137,624 |
) |
(210,754 |
) |
(29,830 |
) | ||||||||||
|
|
|
|
|
|
|
|
|
|
(Amounts expressed in thousands) |
Year ended December 31, |
Six months ended June 30, |
||||||||||||||||||
2019 |
2019 |
2020 |
||||||||||||||||||
RMB |
US$ |
RMB |
RMB |
US$ |
||||||||||||||||
Net cash used in operating activities |
(289,059 | ) | (40,914 | ) | (125,033 | ) | (164,304 | ) | (23,256 | ) | ||||||||||
Net cash (used in)/generated from investing activities |
(413 | ) | (58 | ) | 1 | (378 | ) | (54 | ) | |||||||||||
Net cash generated from financing activities |
289,472 | 40,972 | 125,032 | 164,682 | 23,309 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net change in cash, cash equivalents |
— | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash, cash equivalents at beginning of the year |
— | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash and cash equivalents at end of the year |
— | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
Payment Due by Years Ending |
||||||||||||||||||||
Total |
Less than 1 year |
1–3 years |
3–5 years |
More than 5 years |
||||||||||||||||
(RMB in millions) |
||||||||||||||||||||
Purchase Commitment (1) |
14.2 | 14.2 | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Purchase commitment relates to Penguin’s purchase of game broadcasting copyrights. |
Provisions Applicable to Holders of Huya Ordinary Shares |
Provisions Applicable to Holders of DouYu Ordinary Shares | |
Voting Rights | ||
In respect of all matters subject to a shareholders’ vote, each holder of Class A ordinary shares is entitled to one vote per share and each holder of Class B ordinary shares is entitled to ten votes per share on all matters subject to vote at Huya’s general meetings of shareholders (including any annual general meetings and any extraordinary general meetings). Huya’s Class A ordinary shares and Class B ordinary shares vote together as a single class on all matters submitted to a vote of its shareholders, except as may otherwise be required by law. Voting at any shareholders’ meeting is by way of a poll and not on a show of hands. A quorum required for a meeting of shareholders consists of one or more shareholders present in person or represented by proxy and holding shares which carry, in aggregate, not less than one-third of all votes attaching to all shares in issue and entitled to vote at |
In respect of all matters subject to a shareholders’ vote, each shareholder shall have one vote (if voting by a show of hands) and on a poll each holder of shares is entitled to one vote per share. Voting at any general meeting of shareholders (including any annual general meeting and any extraordinary general meeting). is on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded by the chairman of the meeting or any shareholder present in person or by proxy. A quorum required for a meeting of shareholders consists of one or more shareholders present in person or represented by proxy and holding shares which carry, in aggregate, not less than one-third of all votes attaching to all shares in issue and entitled to vote at general meetings. Shareholders may be present in person or by proxy or, if the shareholder is |
Provisions Applicable to Holders of Huya Ordinary Shares |
Provisions Applicable to Holders of DouYu Ordinary Shares | |
general meetings. Shareholders may be present in person or by proxy or, if the shareholder is a legal entity, by its duly authorized representative. Shareholders’ meetings may be convened by the Huya Board on its own initiative or upon a request to the directors by shareholders holding, at the date of deposit of the requisition, shares which represent, in aggregate, no less than one-third of the votes attaching to all Huya’s issued and outstanding shares, in which case the directors are obliged to call such meeting and to put the resolutions so requisitioned to a vote at such meeting; however, Huya’s amended and restated memorandum and articles of association do not provide its shareholders with any right to put any proposals before annual general meetings or extraordinary general meetings not called by such shareholders. Advance notice of at least ten (10) calendar days is required for the convening of Huya’s annual general shareholders’ meeting and any other general shareholders’ meeting.An ordinary resolution to be passed at a meeting by the shareholders requires the affirmative vote of a simple majority of the votes attaching to the ordinary shares cast by those shareholders entitled to vote who are present in person or by proxy at a general meeting, while a special resolution requires the affirmative vote of no less than two-thirds of the votes attaching to the ordinary shares cast by those shareholders entitled to vote who are present in person or by proxy at a general meeting. Both ordinary resolutions and special resolutions may also be passed by a unanimous written resolution signed by all the shareholders of Huya, as permitted by the Cayman Companies Law and its amended and restated memorandum and articles of association. A special resolution will be required for important matters such as a change of Huya’s name or making changes to its memorandum and articles of association. Holders of the ordinary shares may, among other things, determine the remuneration of the directors and declare dividends by ordinary resolution. |
a legal entity, by its duly authorized representative. Shareholders’ meetings may be convened by DouYu’s chairman or a simple majority of its directors or shall be convened upon a requisition of shareholders holding no less than one-third of the votes attaching to all DouYu’s issued and outstanding shares; however, DouYu’s fourth amended and restated memorandum and articles of association do not provide its shareholders with any right to put any proposals before annual general meetings or extraordinary general meetings not called by such shareholders. Advance notice of at least ten (10) calendar days is required for the convening of DouYu’s annual general shareholders’ meeting and any other general shareholders’ meeting.An ordinary resolution to be passed at a meeting by the shareholders requires the affirmative vote of a simple majority of the votes attaching to the ordinary shares cast by those shareholders entitled to vote who are present in person or by proxy at a general meeting, while a special resolution requires the affirmative vote of no less than two-thirds of the votes attaching to the ordinary shares cast by those shareholders entitled to vote who are present in person or by proxy at a general meeting. Both ordinary resolutions and special resolutions may also be passed by a unanimous written resolution signed by all the shareholders of DouYu, as permitted by the Cayman Companies Law and its fourth amended and restated memorandum and articles of association. A special resolution will be required for important matters such as a change of DouYu’s name or making changes to the memorandum and articles of association. Holders of the ordinary shares may, among other things, determine the remuneration of the directors. | |
Conversion Rights | ||
Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Upon any sale, transfer, assignment or disposition of Class B ordinary shares by a holder thereof to any person other than holders of Class B ordinary shares or their affiliates, or | Not applicable |
Provisions Applicable to Holders of Huya Ordinary Shares |
Provisions Applicable to Holders of DouYu Ordinary Shares | |
upon a change of ultimate beneficial ownership of any Class B ordinary shares to any person or entity who is not an affiliate of the holder of such Class B ordinary shares, such Class B ordinary shares shall be automatically and immediately converted into the same number of Class A ordinary shares. | ||
Issue of Shares | ||
Subject to the provisions, if any, in Huya’s amended and restated memorandum and articles of association, the directors may, in their absolute discretion and without approval of the existing Huya shareholders, issue shares, grant rights over existing shares or other securities to be issued in one or more classes or series as they deem necessary or appropriate and determine the designations, powers, preferences, privileges and other rights attached to such shares or securities, including dividend rights, voting rights, conversion rights, terms of redemption and liquidation preferences, any or all of which may be greater than the powers and rights associated with the shares held by existing Huya shareholders, at such times and on such other terms as they think proper, and grant options with respect to shares and issue warrants or similar instruments with respect thereto. Subject to the approval rights of Linen Investment Limited, the Tencent Holdings affiliate (“Linen”), and JOYY Inc. (“JOYY”) under Huya’s amended and restated memorandum and articles of association, the directors may authorise the division of shares into any number of classes and the different classes shall be authorised, established and designated (or re-designated as the case may be) and the variations in the relative rights (including, without limitation, voting, dividend and redemption rights), restrictions, preferences, privileges and payment obligations as between the different classes (if any) may be fixed and determined by the directors or by a special resolution. Subject to the approval rights of Linen and JOYY, the directors may issue shares with such preferred or other rights, all or any of which may be greater than the rights of ordinary shares, at such time and on such terms as they may think appropriate. Subject to the approval rights of Linen and JOYY, the directors may issue from time to time, out of the authorised share capital of Huya, series of preferred shares in their absolute discretion and without approval of the shareholders; provided, however, before any preferred shares of any such series are issued, the directors shall by resolution of directors determine, with |
Subject to the provisions, if any, in DouYu’s amended and restated memorandum and articles of association, the directors may, in their absolute discretion and without approval of the existing DouYu shareholders, issue shares, grant rights over existing shares or other securities to be issued in one or more classes or series as they deem necessary or appropriate and determine the designations, powers, preferences, privileges and other rights attached to such shares or securities, including dividend rights, voting rights, conversion rights, terms of redemption and liquidation preferences, any or all of which may be greater than the powers and rights associated with the shares held by existing DouYu shareholders, at such times and on such other terms as they think proper, and grant options with respect to shares and issue warrants or similar instruments with respect thereto. The directors may authorise the division of shares into any number of classes and the different classes shall be authorised, established and designated (or re-designated as the case may be) and the variations in the relative rights (including, without limitation, voting, dividend and redemption rights), restrictions, preferences, privileges and payment obligations as between the different classes (if any) may be fixed and determined by the directors. The directors may issue shares with such preferred or other rights, all or any of which may be greater than the rights of ordinary shares, at such time and on such terms as they may think appropriate. The directors may issue from time to time, out of the authorised share capital of DouYu, series of preferred shares in their absolute discretion and without approval of the shareholders; provided, however, before any preferred shares of any such series are issued, the directors shall by resolution of directors determine, with respect to any series of preferred shares, the terms and rights of that series. |
Provisions Applicable to Holders of Huya Ordinary Shares |
Provisions Applicable to Holders of DouYu Ordinary Shares | |
respect to any series of preferred shares, the terms and rights of that series. Huya may not take, permit to occur, approve, authorize, or agree or commit to do any of the following matters, whether in a single transaction or a series of related transactions, whether directly or indirectly, whether through approval or action on the part of the shareholders or the Huya Board, and whether or not by amendment of its amended and restated memorandum and articles of association, or otherwise, unless (i) for so long as JOYY and its affiliates collectively hold no less than 20% of the voting power in Huya on a fully diluted basis, prior written consent or affirmative vote of JOYY is obtained, and (ii) for so long as Linen and its affiliates collectively hold no less than 20% of the voting power in Huya on a fully diluted basis, prior written consent or affirmative vote of Linen is obtained; provided that where any of the following acts or matters requires the approval of the shareholders of Huya in accordance with the Cayman Companies Law, if the shareholders vote in favour of such act or matter but the affirmative vote of JOYY or Linen, as the case may be, has not been obtained, then the holders of all classes of shares of Huya then in existence who vote against such act or matter shall, collectively, have such number of votes as are equal to the aggregate number of votes cast in favour of such act or matter plus one (1) vote: (a) creation or authorization of the creation of, or issuance of or creation of an obligation of Huya to issue (i) additional Class B ordinary shares, (ii) any class of shares that carry more than one vote per share (in each case of (i) and (ii), other than the new Class B share issuance under Huya’s amended and restated memorandum and articles of association), or (iii) shares of any class or series on such terms that in effect give any investor (other than Linen and JOYY) a new veto right over actions of similar nature as to which JOYY has veto rights under Huya’s amended and restated memorandum and articles of association; (b) any related party transaction, the amount of which in any fiscal year equals to or exceeds 30% of the total assets of Huya and its subsidiaries as reflected on the audited consolidated financial statements of Huya for the immediately preceding fiscal year, whether in a single or a series of transactions, other than transactions entered into in the ordinary course of business consistent with past practice; |
Provisions Applicable to Holders of Huya Ordinary Shares |
Provisions Applicable to Holders of DouYu Ordinary Shares | |
(c) any sale, transfer, assignment or disposal by Huya or any of its subsidiary, whether directly or indirectly, of the property, assets or business of Huya or any of its subsidiary, the amount of which in any fiscal year equals to or exceeds 40% of the total assets of Huya and its subsidiaries as reflected on the audited consolidated financial statements of Huya for the immediately preceding fiscal year, whether in a single or a series of transactions; and (d) amendment, alteration or repeal of the articles in Huya’s amended and restated memorandum and articles of association providing for the above approval rights of JOYY and Linen and the approval rights of JOYY and Linen in the immediately following paragraph. The Huya Board may by resolution issue additional Class B ordinary shares to holders of Class B ordinary shares, at the same price and upon the same terms and conditions determined by the Huya Board, to mitigate the dilutive effect on the voting powers of holders of Class B ordinary shares as a result of any increase in the number of shares reserved for issuance pursuant to Huya’s share incentive scheme or employee benefit scheme, such that each holder of Class B ordinary shares may maintain the same percentage of voting power in Huya as such holder had immediately prior to the increase in the number of shares reserved for such purposes. |
||
Transfer of Shares | ||
Subject to the restrictions in Huya’s amended and restated memorandum and articles of association as set out below, any of Huya’s shareholders may transfer all or any of his or her ordinary shares by an instrument of transfer in the usual or common form or any other form approved by the Huya Board. The Huya Board may, in its absolute discretion, decline to register any transfer of any ordinary share which is not fully paid up or on which Huya has a lien. The Huya Board may also decline to register any transfer of any ordinary share unless: • the instrument of transfer is lodged with Huya, accompanied by the certificate for the ordinary shares to which it relates and such other evidence as the Huya Board may reasonably require to show the right of the transferor to make the transfer; |
Any of DouYu’s shareholders may transfer all or any of his or her shares by an instrument of transfer in the usual or common form or in any other form approved by the DouYu Board. The DouYu Board may, in its absolute discretion, decline to register any transfer of any share if a restriction on transfer imposed thereby or by applicable laws or regulations still subsists. The DouYu Board may also decline to register any transfer of any ordinary share unless: • the instrument of transfer is lodged with DouYu, accompanied by such other evidence as the DouYu Board may reasonably require to show the right of the transferor to make the transfer; • the instrument of transfer is in respect of only one class of shares; |
Provisions Applicable to Holders of Huya Ordinary Shares |
Provisions Applicable to Holders of DouYu Ordinary Shares | |
• the instrument of transfer is in respect of only one class of shares; • the instrument of transfer is properly stamped, if required; • in the case of a transfer to joint holders, the number of joint holders to whom the ordinary share is to be transferred does not exceed four; and • a fee of such maximum sum as the NYSE may determine to be payable or such lesser sum as Huya’s directors may from time to time require is paid to Huya in respect thereof. If Huya’s directors refuse to register a transfer, they shall, within three months after the date on which the instrument of transfer was lodged, send to each of the transferor and the transferee notice of such refusal. The registration of transfers may, after compliance with any notice required of the NYSE, be suspended and the register closed at such times and for such periods as the Huya Board may from time to time determine, provided, however, that the registration of transfers shall not be suspended nor the register closed for more than 30 days in any year as the Huya Board may determine. |
• the instrument of transfer is properly stamped, if required; • in the case of a transfer to joint holders, the number of joint holders to whom the share is to be transferred does not exceed four; and • a fee of such maximum sum as NASDAQ may determine to be payable or such lesser sum as the DouYu Board may from time to time require, is paid to DouYu in respect thereof. If DouYu’s directors refuse to register a transfer, they shall, within one month after the date on which the instrument of transfer was lodged, send to each of the transferor and the transferee notice of such refusal. The registration of transfers may, after compliance with any notice required of NASDAQ, be suspended and the register closed at such times and for such periods as the DouYu Board may from time to time determine, provided, however, that the registration of transfers shall not be suspended nor the register closed for more than 30 calendar days in any year as the DouYu Board may determine. | |
Variation of Rights Attached to Shares | ||
If at any time, Huya’s share capital is divided into different classes of shares, all or any of the rights attached to any such class may (subject to any rights or restrictions for the time being attached to any class of share) only be materially adversely varied with the consent in writing of the holders of two-thirds of the issued shares of that class or with the sanction of a special resolution passed at a separate meeting of the holders of the shares of that class. The rights conferred upon the holders of the shares of any class issued with preferred or other rights will not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be materially adversely varied by the creation or issue of further shares ranking pari passu with or subsequent to such existing class of shares or the redemption or purchase of any shares of any class by Huya. The rights of the holders of shares shall not be deemed to be materially adversely varied by the creation or issue of shares with preferred or other rights including, without limitation, the creation of shares with enhanced or weighted voting rights. |
If at any time, DouYu’s share capital is divided into different classes of shares, all or any of the rights attached to any such class may (subject to any rights or restrictions for the time being attached to any class of share) only be materially adversely varied with the consent in writing of the holders of not less than two-thirds of the issued shares of that class or with the sanction of a special resolution passed at a separate meeting of the holders of the shares of that class. The rights conferred upon the holders of the shares of any class issued with preferred or other rights will not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be materially adversely varied by the creation or issue of further shares ranking pari passu with or subsequent to such existing class of shares or the redemption or purchase of any shares of any class by DouYu. The rights of the holders of shares shall not be deemed to be materially adversely varied by the creation or issue of shares with preferred or other rights including, without limitation, the creation of shares with enhanced or weighted voting rights. |
Provisions Applicable to Holders of Huya Ordinary Shares |
Provisions Applicable to Holders of DouYu Ordinary Shares | |
Convening Extraordinary General Meetings of Shareholders | ||
The company is not required to convene annual general meetings of shareholders. The chairman of the board of directors, or a majority of the directors, may call general meetings, and they shall on a shareholders’ requisition forthwith proceed to convene an extraordinary general meeting of Huya. A shareholders’ requisition is a requisition of shareholders holding at the date of deposit of the requisition Huya shares which carry in aggregate not less than one-third (1/3) of all votes attaching to all issued and outstanding shares of Huya that as at the date of the deposit carry the right to vote at general meetings of Huya.At least ten (10) calendar days’ notice shall be given for any general meeting. |
The company is not required to convene annual general meetings of shareholders. The chairman of the board of directors, or a majority of the directors, may call general meetings, and they shall on a shareholders’ requisition forthwith proceed to convene an extraordinary general meeting of DouYu. A shareholders’ requisition is a requisition of shareholders holding at the date of deposit of the requisition DouYu shares which carry in aggregate not less than one-third (1/3) of all votes attaching to all issued and outstanding shares of DouYu that as at the date of the deposit carry the right to vote at general meetings of DouYu.At least ten (10) calendar days’ notice shall be given for any general meeting. | |
Quorum for General Meetings | ||
One or more Huya shareholders holding shares which carry in aggregate (or representing by proxy) not less than one-third of all votes attaching to all Huya shares in issue and entitled to vote at such general meeting, present in person or by proxy or, if a corporation or other non-natural person, by its duly authorised representative, shall be a quorum for all purposes |
One or more DouYu shareholders holding shares which carry in aggregate (or representing by proxy) not less than one-third of all votes attaching to all DouYu shares in issue and entitled to vote at such general meeting, present in person or by proxy or, if a corporation or other non-natural person, by its duly authorised representative, shall be a quorum for all purposes. | |
Directors | ||
Unless otherwise determined by Huya in a general meeting, the number of directors shall not be less than five (5), including no less than two (2) independent directors. The Huya Board has the right to expand its size and determine the exact number of directors on it. Notwithstanding the foregoing, any holder of a majority of the voting power in Huya shall have the right to appoint up to the lowest number of directors that (x) constitutes a majority of the directors and (y) is no less than proportionate to its voting power in Huya, the exact number of directors to be determined from time to time by the board. For as long as JOYY and its affiliates collectively hold no less than 15% of the voting power in Huya on a fully diluted basis, JOYY shall be entitled to appoint, remove and replace one (1) director by delivering a written notice to Huya, and such appointment, removal or |
Unless otherwise determined by DouYu in a general meeting, the number of directors shall not be less than three (3) directors. The exact number of directors shall be determined from time to time by the DouYu Board. The entities that hold shares on behalf of and are controlled by either of Mr. Shaojie Chen or Mr. Wenming Zhang shall be exclusively entitled to designate, appoint, remove, replace and reappoint at any time or from time to time up to four (4) directors to the DouYu Board; Nectarine Investment Limited (“Nectarine”) shall be exclusively entitled to designate, appoint, remove, replace and reappoint at any time or from time to time up to two (2) directors to the DouYu Board; provided that, the rights of Nectarine to appoint |
Provisions Applicable to Holders of Huya Ordinary Shares |
Provisions Applicable to Holders of DouYu Ordinary Shares | |
replacement as specified therein shall be valid and effective automatically and forthwith upon delivery of such written notice to Huya (without the requirement for any further approval or action on the part of the shareholders or the Huya Board), and JOYY’s such right shall not be amended, altered or repealed unless prior written consent or affirmative vote of JOYY is obtained. For as long as Linen and its affiliates collectively hold no less than 20% of the issued share capital of Huya on a fully diluted basis, Linen shall be entitled to appoint, remove and replace at least one (1) director by delivering a written notice to Huya, and such appointment, removal or replacement as specified therein shall be valid and effective automatically and forthwith upon delivery of such written notice to Huya (without the requirement for any further approval or action on the part of the shareholders or the Huya Board), and Linen’s such right shall not be amended, altered or repealed unless prior written consent or affirmative vote of Linen is obtained. For so long as Linen and its affiliates collectively hold no less than 50% of the voting power in Huya, Linen shall be entitled to appoint, remove and replace up to the lowest number of directors that (x) constitutes a majority of the directors and (y) is no less than proportionate to its voting power in Huya, by delivering a written notice to Huya, and such appointment, removal or replacement as specified therein shall be valid and effective automatically and forthwith upon delivery of such written notice to Huya (without the requirement for any further approval or action on the part of the shareholders or the Huya Board). The Huya Board may, by the affirmative vote of a simple majority of the remaining directors present and voting at a board meeting, appoint any person as a director, to fill a vacancy on the board arising from the office of any director being vacated in any of the circumstances described in the amended and restated memorandum and articles of association or as an addition to the existing board. |
directors shall terminate if Nectarine ceases to beneficially own at least 33% of the shares it beneficially owns immediately prior to the completion of the DouYu’s initial public offering (as adjusted for any stock split, stock dividend, recapitalization, reclassification or similar transaction of DouYu) at any time; The DouYu Board shall be exclusively entitled to designate, appoint, remove, replace and reappoint at any time or from time to time up to four (4) independent directors by an affirmative of a simple majority of the directors then entitled to vote; and Subject to the foregoing clauses, the DouYu Board shall be exclusively entitled to designate, appoint, remove, replace and reappoint at any time or from time to time any additional directors by an affirmative of a simple majority of the directors then entitled to vote. | |
Dividend Rights | ||
The holders of Huya’s ordinary shares are entitled to such dividends as may be declared by the Huya Board subject to its amended and restated memorandum and articles of association. In addition, Huya’s shareholders may by an ordinary resolution declare a dividend, but no | The holders of DouYu’s shares are entitled to such dividends as may be declared by the DouYu Board subject to its fourth amended and restated memorandum and articles of association. |
Provisions Applicable to Holders of Huya Ordinary Shares |
Provisions Applicable to Holders of DouYu Ordinary Shares | |
dividend may exceed the amount recommended by its directors. | ||
Capitalization of Reserves | ||
The Huya Board has authority, without any further sanction or approval required of Huya’s shareholders, to capitalize any amounts standing to the credit of Huya’s reserves (including a share premium account, capital redemption reserve and profit and loss account) which is available for distribution, and to apply such sums in order to pay up the amounts (if any) for the time being unpaid on shares held by shareholders, or to pay up in full unissued shares to be allotted to shareholders credited as fully paid. | The DouYu Board has authority, without any further sanction or approval required of DouYu’s shareholders, to capitalize an amount standing to the credit of reserves (including a share premium account, capital redemption reserve and profit and loss account) which is available for distribution, and to apply such sums in order to pay up the amounts (if any) for the time being unpaid on shares held by shareholders, or to pay up in full unissued shares to be allotted to shareholders credited as fully paid. |
Provisions Applicable to Holders of Huya ADSs |
Provisions Applicable to Holders of DouYu ADSs | |
General | ||
The Huya ADS depositary is Deutsche Bank Trust Company Americas pursuant to the Huya Deposit Agreement. Each Huya ADS represents ownership of one Class A ordinary share of Huya, deposited with Deutsche Bank AG, Hong Kong Branch, as custodian for the depositary. Each ADS also represents ownership of any other securities, cash or other property which may be held by the depositary. Holders of Huya ADSs are not treated as shareholders of Huya and do not have the same rights as Huya Class A shareholders. Rather, such holders have rights as holders of Huya ADSs, which are set forth in the Huya Deposit Agreement. The Huya ADS depositary will actually be |
The DouYu ADS depositary is JPMorgan Chase Bank, N.A., pursuant to DouYu Deposit Agreement. Every 10 American depositary shares represent one ordinary share, deposited with the custodian, as agent of the depositary. Each ADS also represents ownership of any other securities, cash or property from time to time held by the depositary in respect or in lieu of the deposited shares. Holders of DouYu ADSs are not treated as shareholders of DouYu and do not have the same rights as holders of DouYu ADSs, which are set forth in the DouYu Deposit Agreement. The DouYu ADS depositary will actually be the holders of the DouYu ordinary shares underlying the registered DouYu |
Provisions Applicable to Holders of Huya ADSs |
Provisions Applicable to Holders of DouYu ADSs | |
the holder of the Huya Class A shares underlying the registered Huya ADSs, so holders of Huya ADSs must rely on it to exercise the rights of a shareholder of Huya on their behalf. An investor may hold the Huya ADSs either directly or indirectly through its broker, dealer, commercial bank, trust company or other nominee. If an investor holds Huya ADSs directly, it is a Huya ADR holder and the Huya ADSs will be registered in its name on the books of the Huya ADS depositary. |
ADSs, so holders of DouYu ADSs must rely on it to exercise the rights of a shareholder of DouYu on their behalf. An investor may hold DouYu ADSs either directly or indirectly through its broker or other financial institutions. If an investor holds DouYu ADSs directly, it is an DouYu ADS holder and the DouYu ADSs will be registered in its name on the books of the DouYu ADS depositary. | |
Dividend and Other Distributions | ||
The depositary has agreed to pay to Huya ADS holders the cash dividends or other distributions it or the custodian receives on ordinary shares or other deposited securities, after deducting its fees and expenses. A Huya ADS holder will receive these distributions in proportion to the number of ordinary shares his ADSs represent as of the record date (which will be as close as practicable to the record date for Huya’s ordinary shares) set by the depositary with respect to the ADSs. Before making a distribution, any taxes or other governmental charges, together with fees and expenses of the depositary, that must be paid, will be deducted. |
The depositary has agreed to pay to DouYu ADS holders the cash dividends or other distributions it or the custodian receives on shares or other deposited securities, after converting any cash received into U.S. dollars and deducting its fees and expenses. A DouYu ADS holder will receive these distributions in proportion to the number of underlying securities his ADSs represent as of the record date (which, to the extent applicable, shall be as near as practicable to any corresponding record date set for DouYu’s ordinary shares) set by the depositary with respect to the ADSs. Before making a distribution, any taxes or other governmental charges, together with fees and expenses of the depositary, that must be paid, will be deducted. | |
Distributions of Cash The depositary will convert or cause to be converted any cash dividend or other cash distribution Huya pays on the ordinary shares or any net proceeds from the sale of any ordinary shares, rights, securities or other entitlements under the terms of the Huya Deposit Agreement into U.S. dollars if it can do so on a practicable basis, and can transfer the U.S. dollars to the United States and will distribute promptly the amount thus received. If the depositary shall determine in its judgment that such conversions or transfers are not practical or lawful or if any government approval or license is needed and cannot be obtained at a reasonable cost within a reasonable period or otherwise sought, the Huya Deposit Agreement allows the depositary to distribute the foreign currency only to those ADS holders to whom it is possible to do so. It will hold or cause the custodian to hold the foreign currency it cannot convert for the account of the ADS holders who |
Distributions of Cash The depositary will distribute any U.S. dollars available to it resulting from a cash dividend or other cash distribution or the net proceeds of sales of any other distribution or portion thereof (to the extent applicable), on an averaged or other practicable basis, subject to (i) appropriate adjustments for taxes withheld, (ii) such distribution being impermissible or impracticable with respect to certain registered DouYu ADS holders, and (iii) deduction of the depositary’s and/or its agents’ expenses in (1) converting any foreign currency to U.S. dollars to the extent that it determines that such conversion may be made on a reasonable basis, (2) transferring foreign currency or U.S. dollars to the United States by such means as the depositary may determine to the extent that it determines that such transfer may be made on a reasonable basis, (3) obtaining any approval or license of any governmental authority |
Provisions Applicable to Holders of Huya ADSs |
Provisions Applicable to Holders of DouYu ADSs | |
have not been paid and such funds will be held for the respective accounts of the ADS holders. It will not invest the foreign currency and it will not be liable for any interest for the respective accounts of the ADS holders. | required for such conversion or transfer, which is obtainable at a reasonable cost and within a reasonable time and (4) making any sale by public or private means in any commercially reasonable manner. | |
Distributions of Shares For any ordinary shares Huya distributes as a dividend or free distribution, either (1) the depositary will distribute additional ADSs representing such ordinary shares or (2) existing ADSs as of the applicable record date will represent rights and interests in the additional ordinary shares distributed, to the extent reasonably practicable and permissible under law, in either case, net of applicable fees, charges and expenses incurred by the depositary and taxes and/or other governmental charges. The depositary will only distribute whole ADSs. It will try to sell ordinary shares which would require it to deliver a fractional ADS and distribute the net proceeds in the same way as it does with cash. The depositary may sell a portion of the distributed ordinary shares sufficient to pay its fees and expenses, and any taxes and governmental charges, in connection with that distribution. |
Distributions of Shares In the case of a distribution in shares, the depositary will issue additional DouYu ADRs to evidence the number of DouYu ADSs representing such shares. Only whole DouYu ADSs will be issued. Any DouYu shares which would result in fractional DouYu ADSs will be sold and the net proceeds will be distributed in the same manner as cash to the DouYu holders entitled thereto. Rights to Receive Additional Shares In the case of a distribution of rights to subscribe for additional shares or other rights, if DouYu timely provides evidence satisfactory to the depositary that it may lawfully distribute such rights, the depositary will distribute warrants or other instruments in the discretion of the depositary representing such rights. However, if DouYu does not timely furnish such evidence, the depositary may: (i) sell such rights if practicable and distribute the net proceeds in the same manner as cash to the DouYu ADS holders entitled thereto; or (ii) if it is not practicable to sell such rights by reason of the non-transferability of the rights, limited markets therefor, their short duration or otherwise, do nothing and allow such rights to lapse, in which case DouYu ADS holders will receive nothing and the rights may lapse. | |
Elective Distributions in Cash or Shares If Huya offers holders of its ordinary shares the option to receive dividends in either cash or shares, the depositary, after consultation with Huya and having received timely notice as described in the Huya Deposit Agreement of such elective distribution by Huya, has discretion to determine to what extent such elective distribution will be made available to a holder of the ADSs. Huya must timely first instruct the depositary to make such elective distribution available to Huya ADS holders and furnish it with satisfactory evidence that it is legal to do so. The depositary could decide it is not legal or reasonably practicable to make such elective distribution available to Huya ADS holders. In such |
Other Distributions In the case of a distribution of securities or property other than those described above, the depositary may either (i) distribute such securities or property in any manner it deems equitable and practicable or (ii) to the extent the depositary deems distribution of such securities or property not to be equitable and practicable, sell such securities or property and distribute any net proceeds in the same way it distributes cash. If the depositary determines in its discretion that any distribution described above is not practicable with respect to any specific registered DouYu ADS holder, the depositary may choose any method of |
Provisions Applicable to Holders of Huya ADSs |
Provisions Applicable to Holders of DouYu ADSs | |
case, the depositary shall, on the basis of the same determination as is made in respect of the ordinary shares for which no election is made, distribute either cash in the same way as it does in a cash distribution, or additional ADSs representing ordinary shares in the same way as it does in a share distribution. The depositary is not obligated to make available to Huya ADS holders a method to receive the elective dividend in shares rather than in ADSs. There can be no assurance that a Huya ADS holder will be given the opportunity to receive elective distributions on the same terms and conditions as the holders of ordinary shares. | distribution that it deems practicable for such DouYu ADS holder, including the distribution of foreign currency, securities or property, or it may retain such items, without paying interest on or investing them, on behalf of the DouYu ADS holder as deposited securities, in which case the DouYu ADSs will also represent the retained items. | |
Distribution of Rights to Receive Additional Shares If Huya offers holders of its ordinary shares any rights to subscribe for additional shares, the depositary shall having received timely notice as described in the Huya Deposit Agreement of such distribution by Huya, consult with Huya, and Huya must determine whether it is lawful and reasonably practicable to make these rights available to Huya ADS holders. Huya must first instruct the depositary to make such rights available to Huya ADS holders and furnish the depositary with satisfactory evidence that it is legal to do so. If the depositary decides it is not legal or reasonably practicable to make the rights available but that it is lawful and reasonably practicable to sell the rights, the depositary will endeavor to sell the rights and in a riskless principal capacity or otherwise, at such place and upon such terms (including public or private sale) as it may deem proper distribute the net proceeds in the same way as it does with cash. The depositary will allow rights that are not distributed or sold to lapse. In that case, the Huya ADS holders will receive no value for them. If the depositary makes rights available to Huya ADS holders, it will establish procedures to distribute such rights and enable such holders to exercise the rights upon payment of applicable fees, charges and expenses incurred by the depositary and taxes and/or other governmental charges. The depositary shall not be obliged to make available a method to exercise such rights to subscribe for ordinary shares (rather than ADSs). |
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Other Distributions Subject to receipt of timely notice, as described in the Huya Deposit Agreement, from Huya with the request to make any such distribution available to Huya ADS holders, and provided the depositary has determined |
Provisions Applicable to Holders of Huya ADSs |
Provisions Applicable to Holders of DouYu ADSs | |
such distribution is lawful and reasonably practicable and feasible and in accordance with the terms of the Huya Deposit Agreement, the depositary will distribute to Huya ADS holders anything else Huya distributes on deposited securities by any means it may deem practicable, upon payment of applicable fees, charges and expenses incurred by the depositary and taxes and/or other governmental charges. If any of the conditions above are not met, the depositary will endeavor to sell, or cause to be sold, what Huya distributed and distribute the net proceeds in the same way as it does with cash; or, if it is unable to sell such property, the depositary may dispose of such property in any way it deems reasonably practicable under the circumstances for nominal or no consideration, such that Huya ADS holders may have no rights to or arising from such property. | ||
Voting Rights | ||
Holders of Huya ADSs may instruct the depositary to vote the ordinary shares or other deposited securities underlying their ADSs at any meeting at which they are entitled to vote pursuant to any applicable law, the provisions of Huya’s amended and restated memorandum and articles of association, and the provisions of or governing the deposited securities. Otherwise, holders of Huya ADSs could exercise their right to vote directly if they withdraw the ordinary shares. However, they may not know about the meeting sufficiently enough in advance to withdraw the ordinary shares. If Huya asks for Huya ADS holders’ instructions and upon timely notice from Huya by regular, ordinary mail delivery, or by electronic transmission, as described in the Huya Deposit Agreement, the depositary will notify the Huya ADS holders of the upcoming meeting at which they are entitled to vote pursuant to any applicable law, the provisions of Huya’s amended and restated memorandum and articles of association, and the provisions of or governing the deposited securities, and arrange to deliver the voting materials to the holders. Voting instructions may be given only in respect of a number of ADSs representing an integral number of ordinary shares or other deposited securities. For instructions to be valid, the depositary must receive them in writing on or before the date specified. The depositary will try, as far as practical, subject to applicable law and the provisions of Huya’s amended and restated memorandum and articles of association, to |
Holders of DouYu ADSs may instruct the depositary to vote the ordinary shares or other deposited securities underlying their ADSs at any meeting at which they are entitled to vote pursuant to any applicable law, the provisions of DouYu’s amended and restated memorandum and articles of association, and the provisions of or governing the deposited securities. Otherwise, holders of DouYu ADSs could exercise their right to vote directly if they withdraw the ordinary shares. However, they may not know about the meeting sufficiently enough in advance to withdraw the ordinary shares. If DouYu asks for DouYu ADS holders’ instructions and upon timely notice from DouYu by regular, ordinary mail delivery, or by electronic transmission, as described in the DouYu Deposit Agreement, the depositary will notify the DouYu ADS holders of the upcoming meeting at which they are entitled to vote pursuant to any applicable law, the provisions of DouYu’s amended and restated memorandum and articles of association, and the provisions of or governing the deposited securities, and arrange to deliver the voting materials to the holders. Voting instructions may be given only in respect of a number of ADSs representing an integral number of ordinary shares or other deposited securities. For instructions to be valid, the depositary must receive them in writing on or before the date specified. The depositary will try, as far as practical, subject to applicable law and the provisions of DouYu’s |
Provisions Applicable to Holders of Huya ADSs |
Provisions Applicable to Holders of DouYu ADSs | |
vote or to have its agents vote the ordinary shares or other deposited securities (in person or by proxy) as the Huya ADS holders instruct. The depositary will only vote or attempt to vote as instructed. If Huya timely requested the depositary to solicit the Huya ADS holders’ instructions but no instructions are received by the depositary from an owner with respect to any of the deposited securities represented by the ADSs of that owner on or before the date established by the depositary for such purpose, the depositary shall deem that owner to have instructed the depositary to give a discretionary proxy to a person designated by Huya with respect to such deposited securities, and the depositary shall give a discretionary proxy to a person designated by Huya to vote such deposited securities. However, no such instruction shall be deemed given and no such discretionary proxy shall be given with respect to any matter if Huya informs the depositary it does not wish such proxy given, substantial opposition exists or the matter materially and adversely affects the rights of holders of the ordinary shares. | amended and restated memorandum and articles of association, to vote or to have its agents vote the ordinary shares or other deposited securities (in person or by proxy) as the DouYu ADS holders instruct. The depositary will only vote or attempt to vote as instructed. If DouYu timely requested the depositary to solicit the DouYu ADS holders’ instructions but no instructions are received by the depositary from an owner with respect to any of the deposited securities represented by the ADSs of that owner on or before the date established by the depositary for such purpose, the depositary shall deem that owner to have instructed the depositary to give a discretionary proxy to a person designated by DouYu with respect to such deposited securities, and the depositary shall give a discretionary proxy to a person designated by DouYu to vote such deposited securities. However, no such instruction shall be deemed given and no such discretionary proxy shall be given with respect to any matter unless (1) DouYu informs the depositary in writing that (a) it wishes such proxy to be given with respect to such agenda item(s), (b) there is no substantial opposition existing with respect to such agenda item(s) and (c) such agenda item(s), if approved, would not materially or adversely affect the rights of holders of shares, and (2) the depositary has obtained an opinion of counsel, in form and substance satisfactory to the depositary, confirming that (i) the granting of such discretionary proxy does not subject the depositary to any reporting obligations in the Cayman Islands, (ii) the granting of such proxy will not result in a violation of the laws, rules, regulations or permits of the Cayman Islands, (iii) the voting arrangement and deemed instruction as contemplated herein will be given effect under the laws, rules and regulations of the Cayman Islands, and (iv) the granting of such discretionary proxy will not under any circumstances result in the shares represented by the DouYu ADSs being treated as assets of the depositary under the laws, rules or regulations of the Cayman Islands. |
Provisions Applicable to Holders of Huya ADSs |
Provisions Applicable to Holders of DouYu ADSs | |
Fees | ||
The depositary reserves the right to charge the following fees for the services performed under the terms of the Huya Deposit Agreement, provided, however, that no fees shall be payable upon distribution of cash dividends so long as the charging of such fee is prohibited by the exchange, if any, upon which the Huya ADSs are listed: (i) to any person to whom Huya ADSs are issued or to any person to whom a distribution is made in respect of Huya ADS distributions pursuant to stock dividends or other free distributions of stock, bonus distributions, stock splits or other distributions (except where converted to cash), a fee not in excess of U.S. $ 5.00 per 100 Huya ADSs (or fraction thereof) so issued under the terms of the Huya Deposit Agreement to be determined by the depositary; (ii) to any person surrendering Huya ADSs for withdrawal of deposited securities or whose Huya ADSs are canceled or reduced for any other reason including, inter alia, cash distributions made pursuant to a cancellation or withdrawal, a fee not in excess of U.S. $ 5.00 per 100 Huya ADSs reduced, canceled or surrendered (as the case may be); (iii) to any holder of Huya ADSs, a fee not in excess of U.S. $ 5.00 per 100 Huya ADSs held for the distribution of cash dividends; (iv) to any holder of Huya ADSs, a fee not in excess of U.S. $ 5.00 per 100 ADSs held for the distribution of cash entitlements (other than cash dividends) and/or cash proceeds, including proceeds from the sale of rights, securities and other entitlements; (v) to any holder of Huya ADSs, a fee not in excess of U.S. $ 5.00 per 100 ADSs (or portion thereof) issued upon the exercise of rights; and (vi) for the operation and maintenance costs in administering the Huya ADSs an annual fee of U.S. $ 5.00 per 100 Huya ADSs. |
The depositary reserves the right to charge the following fees for the services performed under the terms of the DouYu Deposit Agreement, provided, however, that no fees shall be payable upon distribution of cash dividends so long as the charging of such fee is prohibited by the exchange, if any, upon which the DouYu ADSs are listed: (i) to any person to whom DouYu ADSs are issued, including without limitation, issuance against deposits of shares, issuance in respect of share distributions, right and other distribution as defined in DouYu Deposit Agreement, issuance pursuant to stock dividend or stock split declared by DouYu, or issuance pursuant to a merger, exchange of securities or any other transaction event affecting the DouYu ADSs or the deposited securities, U.S. $ 5.00 per 100 DouYu ADSs (or portion thereof) so issued or upon which a share distribution or elective distribution is made or offered (as the case may be); (ii) to any person surrendering DouYu ADSs for withdrawal of deposited securities or whose DouYu ADSs are canceled or reduced for any other reason, U.S. $ 5.00 per 100 DouYu ADSs (or portion therefore) so reduced, canceled or surrendered (as the case may be); (iii) to any holder of DouYu ADSs, a fee not in excess of U.S. $ 5.00 per 100 DouYu ADSs held for any cash distribution made, of for any elective cash/stock dividend offered, pursuant to the DouYu Deposit Agreement; (iv) to any holder of DouYu ADSs, a fee for the distribution or sale of securities pursuant to DouYu Deposit Agreement, such fee being in an amount equal to the fee for the execution and delivery of DouYu ADSs, which would have been charged as a result of the deposit of such securities but which securities or the net cash proceeds from the sale thereof are instead distributed by the depositary to DouYu ADS holders entitled thereto; (v) to any holder of DouYu ADSs, for the operation and maintenance costs in administering the DouYu ADSs an annual fee of US$0.05 or less per ADS (or portion thereof); and (vi) to any holder of DouYu ADSs, a fee for the reimbursement of such fees, charges and expenses as are incurred by the depositary and/or any of its agents, pursuant to the DouYu Deposit Agreement. |
Provisions Applicable to Holders of Huya ADSs |
Provisions Applicable to Holders of DouYu ADSs | |
Changes Affecting Deposited Securities | ||
Upon any change in par value, split-up, subdivision, cancellation, consolidation or any other reclassification of deposited securities, or upon any recapitalization, reorganization, merger, amalgamation or consolidation or sale of assets affecting Huya or to which it otherwise is a party, any securities which shall be received by the depositary or a custodian in exchange for, or in conversion of or replacement or otherwise in respect of, such deposited securities shall, to the extent permitted by law, be treated as new deposited securities under the Huya Deposit Agreement, and the receipts shall, subject to the provisions of the Huya Deposit Agreement and applicable law, evidence ADSs representing the right to receive such additional securities. Alternatively, the depositary may, with Huya’s approval, and shall, if Huya shall so request, subject to the terms of the Huya Deposit Agreement and receipt of satisfactory documentation contemplated by the Huya Deposit Agreement, execute and deliver additional receipts as in the case of a stock dividend on the shares, or call for the surrender of outstanding receipts to be exchanged for new receipts, in either case, as well as in the event of newly deposited shares, with necessary modifications to this form of receipt specifically describing such new deposited securities and/or corporate change. Notwithstanding the foregoing, in the event that any security so received may not be lawfully distributed to some or all Huya ADS holders, the depositary may, with Huya’s approval, and shall if Huya requests, subject to receipt of satisfactory legal documentation contemplated in the Huya Deposit Agreement, sell such securities at public or private sale, at such place or places and upon such terms as it may deem proper and may allocate the net proceeds of such sales (net of fees and charges of, and expenses incurred by, the depositary and/or a division or affiliate(s) of the depositary and taxes and/or governmental charges) for the account of the holders otherwise entitled to such securities and distribute the net proceeds so allocated to the extent practicable as in the case of a distribution received in cash pursuant to the Huya Deposit Agreement. The depositary shall not be responsible for (i) any failure to determine that it may be lawful or feasible to make such securities available to holders in general or any holder in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale, or (iii) any liability to the purchaser of such securities. |
Subject to DouYu Deposit Agreement, the depositary may, in its discretion, and shall if reasonably split-up, consolidation, cancellation or other reclassification of deposited securities,To the extent the depositary does not so amend this ADR or make a distribution to DouYu ADS holders to reflect any of the foregoing, or the net proceeds thereof, whatever cash, securities or property results from any of the foregoing shall constitute deposited securities and each ADS evidenced by the ADR shall automatically represent its pro rata interest in the deposited securities as then constituted. Promptly upon the occurrence of any of the aforementioned changes affecting deposited securities, DouYu shall notify the depositary in writing of such occurrence and as soon as practicable after receipt of such notice from DouYu, may instruct the Depositary to give notice thereof, at DouYu’s expense, to DouYu ADS holders in accordance with the DouYu Deposit Agreement. Upon receipt of such instruction, the depositary shall give notice to the Douyu ADS holders in accordance with the DouYu Deposit Agreement, as soon as reasonably practicable. |
Investor Relations HUYA Inc. Building A3, E-Park 280 Hanxi Road Panyu District, Guangzhou 511446 People’s Republic of China Phone: +86 20 2290-7829 E-mail: ir@huya.com |
Investor Relations DouYu International Holdings Limited 7F, Building 2, Riverside International Plaza 1062 Yangshupu Road Yangpu District, Shanghai 200082 People’s Republic of China Phone: +86 21 5882-2595 E-mail: ir@douyu.tv |
• | Huya’s annual report on Form 20–F for the year ended December 31, 2019, filed with the SEC on April 27, 2020 (SEC file number is 001-38482); and |
• | The description of Huya ADSs contained in Huya’s Form 424(b)(4) final prospectus for its follow-on public offering, filed with the SEC on April 10, 2019 (SEC file number 333-230706). |
• | DouYu’s annual report on Form 20–F for the year ended December 31, 2019, filed with the SEC on April 28, 2020 (SEC file number is 001-38967); and |
• | The description of the DouYu shares and DouYu ADSs contained in DouYu’s Form 424(b)(4) final prospectus for its initial public offering, filed with the SEC on July 18, 2019 (SEC file number 333-230976). |
• | political and economic stability; |
• | an effective judicial system; |
• | a favorable tax system; |
• | the absence of exchange control or currency restrictions; and |
• | the availability of professional and support services. |
• | the Cayman Islands has a less developed body of securities laws as compared to the United States and these securities laws provide significantly less protection to investors; and |
• | Cayman Islands companies may not have standing to sue before the federal courts of the United States. |
• | recognize or enforce judgments of United States courts obtained against Huya or its directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States; or |
• | entertain original actions brought in each respective jurisdiction against Huya or its directors or officers predicated upon the securities laws of the United States or any state in the United States. |
Contents |
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F-8 |
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F-10 |
As of December 31, |
As of June 30, |
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2019 |
2020 |
2020 |
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RMB |
RMB |
US$ |
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Assets |
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Current assets |
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Cash and cash equivalents |
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Restricted cash |
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Short-term deposits |
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Short-term investments |
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Accounts receivable, net |
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Amounts due from related parties |
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Prepayments and other current assets |
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Total current assets |
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Non-current assets |
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Deferred tax assets |
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Investments |
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Property and equipment, net |
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Intangible assets, net |
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Right-of-use |
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Current liabilities |
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Accounts payable |
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Advances from customers and deferred revenue |
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Income taxes payable |
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Accrued liabilities and other current liabilities |
||||||||||||
Amounts due to related parties |
||||||||||||
Lease liabilities due within one year |
||||||||||||
|
|
|
|
|
|
|||||||
Total current liabilities |
||||||||||||
|
|
|
|
|
|
|||||||
Non-current liabilities |
||||||||||||
Lease liabilities |
||||||||||||
Deferred tax liabilities |
||||||||||||
Deferred revenue |
||||||||||||
|
|
|
|
|
|
|||||||
Total non-current liabilities |
||||||||||||
|
|
|
|
|
|
|||||||
Total liabilities |
||||||||||||
|
|
|
|
|
|
As of December 31, |
As of June 30, |
|||||||||||
2019 |
2020 |
2020 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
Shareholders’ equity |
||||||||||||
Class A ordinary shares (US$ |
||||||||||||
Class B ordinary shares (US$ |
||||||||||||
Additional paid-in capital |
||||||||||||
Statutory reserves |
||||||||||||
Accumulated deficit |
( |
) | ( |
) | ( |
) | ||||||
Accumulated other comprehensive income |
||||||||||||
|
|
|
|
|
|
|||||||
Total shareholders’ equity |
||||||||||||
|
|
|
|
|
|
|||||||
Total liabilities and shareholders’ equity |
||||||||||||
|
|
|
|
|
|
For the six months ended June 30, |
||||||||||||
2019 |
2020 |
2020 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
Net revenues |
||||||||||||
Live streaming |
||||||||||||
Advertising and others (including transactions with related parties of RMB |
||||||||||||
|
|
|
|
|
|
|||||||
Total net revenues |
||||||||||||
|
|
|
|
|
|
|||||||
Cost of revenues (1) (including transactions with related parties of RMB |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Gross profit |
||||||||||||
|
|
|
|
|
|
|||||||
Operating expenses (1) |
||||||||||||
Research and development expenses (including transactions with related parties of RMB |
( |
) | ( |
) | ( |
) | ||||||
Sales and marketing expenses (including transactions with related parties of RMB |
( |
) | ( |
) | ( |
) | ||||||
General and administrative expenses (including transactions with related parties of RMB |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Other income |
||||||||||||
|
|
|
|
|
|
|||||||
Operating income |
||||||||||||
|
|
|
|
|
|
|||||||
Interest and short-term investments income |
||||||||||||
Gain on fair value change of an investment |
||||||||||||
Other non-operating expenses |
( |
) | ( |
) | ||||||||
Foreign currency exchange gains (losses), net |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Income before income tax expenses |
||||||||||||
|
|
|
|
|
|
|||||||
Income tax expenses |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Income before share of loss in equity method investments, net of income taxes |
||||||||||||
|
|
|
|
|
|
|||||||
Share of loss in equity method investments, net of income taxes |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Net income attributable to HUYA Inc. |
185,261 | 377,984 | 53,499 | |||||||||
|
|
|
|
|
|
|||||||
Net income attributable to ordinary shareholders |
||||||||||||
|
|
|
|
|
|
|||||||
Net income |
||||||||||||
|
|
|
|
|
|
|||||||
Other comprehensive income: |
||||||||||||
Foreign currency translation adjustment, net of nil tax |
||||||||||||
|
|
|
|
|
|
|||||||
Total comprehensive income attributable to HUYA Inc. |
||||||||||||
|
|
|
|
|
|
For the six months ended June 30, |
||||||||||||
2019 |
2020 |
2020 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
Net income per ADS* |
||||||||||||
—Basic |
||||||||||||
—Diluted |
||||||||||||
Net loss per ordinary share |
||||||||||||
—Basic |
||||||||||||
—Diluted |
* | Each ADS represents one Class A ordinary share. |
(1) | Share-based compensation was allocated to cost of revenues and operating expenses as follows: |
For the six months ended June 30, |
||||||||||||
2019 |
2020 |
2020 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
Cost of revenues |
||||||||||||
Research and development expenses |
||||||||||||
Sales and marketing expenses |
||||||||||||
General and administrative expenses |
Class A ordinary shares |
Class B ordinary shares |
Additional paid-in capital |
Statutory reserves |
Accumulated deficit |
Accumulated other comprehensive income |
Total shareholders’ equity |
||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
||||||||||||||||||||||||||||||
Balance at December 31, 2018 |
( |
) | ||||||||||||||||||||||||||||||||||
Share-based compensation related to Huya Share-based Awards |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Share-based compensation related to JOYY Inc. (“JOYY”)’s Share-based Awards |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Class B ordinary shares converted to Class A ordinary shares |
( |
) | ( |
) | — | — | — | — | — | |||||||||||||||||||||||||||
Issuance of Class A ordinary shares upon the completion of the follow-on public offering |
— | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of ordinary shares for exercised share options |
— | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of ordinary shares for vested restricted share units |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Deemed distribution to JOYY |
— | — | — | — | ( |
) | — | — | — | ( |
) | |||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Foreign currency translation adjustment, net of nil tax |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Balance at June 30, 2019 |
( |
) |
||||||||||||||||||||||||||||||||||
Class A ordinary shares |
Class B ordinary shares |
Additional paid-in capital |
Statutory reserves |
Accumulated deficit |
Accumulated other comprehensive income |
Total shareholders’ equity |
||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
||||||||||||||||||||||||||||||
Balance at December 31, 2019 |
( |
) | ||||||||||||||||||||||||||||||||||
Cumulative effect of initial adoption of ASC 326 |
— | — | — | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||
Balance at January 1, 2020 |
( |
) | ||||||||||||||||||||||||||||||||||
Share-based compensation related to Huya Share-based Awards |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Issuance of ordinary shares for exercised share options |
— | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of ordinary shares for vested restricted share units |
— | — | ( |
) | — | — | — | — | ||||||||||||||||||||||||||||
Deemed distribution to JOYY |
— | — | — | — | ( |
) | — | — | — | ( |
) | |||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Foreign currency translation adjustment, net of nil tax |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Balance at June 30, 2020 |
( |
) |
||||||||||||||||||||||||||||||||||
For the six months ended June 30, |
||||||||||||
2019 |
2020 |
2020 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
Cash flows from operating activities |
||||||||||||
Net income attributable to HUYA Inc. |
||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities |
||||||||||||
Depreciation of property and equipment |
||||||||||||
Amortization of acquired intangible assets |
||||||||||||
Amortization of right-of-use |
||||||||||||
Expected credit loss expenses |
— | |||||||||||
Losses on disposal of property and equipment and intangible assets |
||||||||||||
Share-based compensation |
||||||||||||
Share of loss in equity method investments, net of income taxes |
||||||||||||
Other non-cash income |
( |
) | ( |
) | ( |
) | ||||||
Deferred income taxes |
( |
) | ( |
) | ||||||||
Gain on fair value changes of an investment |
— | ( |
) | ( |
) | |||||||
Short-term investment income |
( |
) | ( |
) | ( |
) | ||||||
Foreign currency exchange (losses) gains |
( |
) | ||||||||||
Changes in operating assets and liabilities: |
||||||||||||
Accounts receivable, net |
( |
) | ( |
) | ( |
) | ||||||
Prepayments and other assets |
( |
) | ||||||||||
Amounts due from related parties |
( |
) | ( |
) | ||||||||
Amounts due to related parties |
||||||||||||
Accounts payable |
( |
) | ( |
) | ||||||||
Deferred revenue |
( |
) | ( |
) | ||||||||
Lease liabilities |
( |
) | ( |
) | ( |
) | ||||||
Advances from customers |
( |
) | ( |
) | ( |
) | ||||||
Accrued liabilities and other current liabilities |
||||||||||||
Income tax payable |
||||||||||||
Net cash provided by operating activities |
||||||||||||
Cash flows from investing activities |
||||||||||||
Placements of short-term deposits |
( |
) | ( |
) | ( |
) | ||||||
Maturities of short-term deposits |
||||||||||||
Placements of short-term investments |
( |
) | ( |
) | ( |
) | ||||||
Maturities of short-term investments |
||||||||||||
Purchase of property and equipment |
( |
) | ( |
) | ( |
) | ||||||
Purchase of intangible assets |
( |
) | ( |
) | ( |
) | ||||||
Cash paid for long-term investments |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from disposal of property and equipment |
||||||||||||
Net cash (used in) provided by investing activities |
( |
) | ||||||||||
For the six months ended June 30, |
||||||||||||
2019 |
2020 |
2020 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
Cash flows from financing activities |
||||||||||||
Net proceeds from issuance of ordinary shares upon follow-on public offering |
— | — | ||||||||||
Proceeds from exercise of vested share options |
||||||||||||
Net cash provided by financing activities |
||||||||||||
Net increase in cash and cash equivalents and restricted cash |
||||||||||||
Cash and cash equivalents and restricted cash at the beginning of the period |
||||||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash |
||||||||||||
Cash and cash equivalents at the end of the period |
||||||||||||
For the six months ended June 30, |
||||||||||||
2019 |
2020 |
2020 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
Supplemental disclosure of cash flows information: |
||||||||||||
—Income tax paid |
||||||||||||
—Acquisition of property and equipment in form of accounts payable |
( |
) | ( |
) | ( |
) |
1. |
Organization and principal activities |
(a) |
Organization and principal activities |
(b) |
Public Offering |
1. |
Organization and principal activities (continued) |
(c) |
Principal subsidiaries and VIEs |
Name |
Place of incorporation |
Date of incorporation |
% of direct or indirect economic ownership |
Principal activities |
||||||||||||
Wholly foreign-owned enterprise (“WFOE”) |
||||||||||||||||
Huya Limited |
% | |||||||||||||||
Guangzhou Huya Technology Co., Ltd. (“Huya Technology”) |
% | |||||||||||||||
HUYA PTE. LTD. |
% | services |
| |||||||||||||
Hainan Huya Entertainment Information Technology Co., Ltd. (“Hainan Huya”) |
% | services |
| |||||||||||||
VIE |
||||||||||||||||
Guangzhou Huya Information Technology Co., Ltd. (“Guangzhou Huya”) |
% | services |
|
2. |
Summary of significant accounting policies |
(a) |
Basis of presentation |
2. |
Summary of significant accounting policies (continued) |
(a) |
Basis of presentation (continued) |
(b) |
Consolidation |
(c) |
Use of estimates |
(d) |
Foreign currency translation |
2. |
Summary of significant accounting policies (continued) |
(d) |
Foreign currency translation (continued) |
(e) |
Convenience translation |
(f) |
Statutory reserves |
(g) |
Segment reporting |
2. |
Summary of significant accounting policies (continued) |
(h) |
Revenue |
For the six months ended June 30, |
||||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Live streaming |
||||||||
Advertising and others |
||||||||
Total |
||||||||
(i) |
Live streaming |
2. |
Summary of significant accounting policies (continued) |
(h) |
Revenue (continued) |
(i) |
Live streaming (continued) |
2. |
Summary of significant accounting policies (continued) |
(h) |
Revenue (continued) |
(ii) |
Advertising |
(iii) |
Online game revenues |
2. |
Summary of significant accounting policies (continued) |
(h) |
Revenue (continued) |
(iii) |
Online game revenues (continued) |
2. |
Summary of significant accounting policies (continued) |
(h) |
Revenue (continued) |
(i) |
Investment |
2. |
Summary of significant accounting policies (continued) |
(i) |
Investment (continued) |
(j) |
Share-based compensation |
2. |
Summary of significant accounting policies (continued) |
(k) |
Leases |
(l) |
Recently issued accounting pronouncements |
3. |
Cash and cash equivalents |
December 31, 2019 |
June 30, 2020 |
|||||||||||||||
Amount |
RMB equivalent |
Amount |
RMB equivalent |
|||||||||||||
RMB |
||||||||||||||||
US$ |
||||||||||||||||
SGD |
||||||||||||||||
Others (i) |
||||||||||||||||
Total |
||||||||||||||||
(i) | As of June 30, 2020, the other currencies consist of Hong Kong dollar, Brazilian real and Thai Baht. |
4. |
Restricted cash |
5. |
Short-term deposits |
December 31, 2019 |
June 30, 2020 |
|||||||||||||||
Amount |
RMB equivalent |
Amount |
RMB equivalent |
|||||||||||||
RMB |
||||||||||||||||
US$ |
||||||||||||||||
Total |
||||||||||||||||
6. |
Short-term investments |
December 31, 2019 |
June 30, 2020 |
|||||||||||||||
Amount |
RMB equivalent |
Amount |
RMB equivalent |
|||||||||||||
RMB |
||||||||||||||||
US$ |
||||||||||||||||
Total |
||||||||||||||||
7. |
Accounts receivable, net |
December 31, |
June 30, |
|||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Accounts receivable, gross |
||||||||
Less: expected credit loss provision |
( |
) | ( |
) | ||||
Accounts receivable, net |
||||||||
For the six months ended June 30, |
||||
2020 |
||||
RMB |
||||
Balance as at December 31, 2019 |
||||
Adoption of ASC Topic 326 |
||||
Balance as at January 1, 2020 |
||||
Current period provision |
||||
Current period reversal |
( |
) | ||
Balance as at June 30, 2020 |
||||
8. |
Prepayments and other current assets |
December 31, |
June 30, |
|||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Prepayments to vendors and content providers |
||||||||
Input value-added tax to be deducted |
||||||||
Interests receivable |
||||||||
Receivables from exercise of vested share options |
||||||||
Prepayments to third-party payment platform |
||||||||
Loan to a third party |
||||||||
Others |
||||||||
Less: expected credit loss provision |
( |
) | ||||||
Total |
||||||||
8. |
Prepayments and other current assets (continued) |
For the six months ended June 30, |
||||
2020 |
||||
RMB |
||||
Balance as at December 31, 2019 |
||||
Adoption of ASC Topic 326 |
||||
Balance as at January 1, 2020 |
||||
Current period provision |
||||
Current period reversal |
( |
) | ||
Balance as at June 30, 2020 |
||||
9. |
Investments |
December 31, |
June 30, |
|||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Equity method investments |
||||||||
Equity investments without readily determinable fair values (i) |
||||||||
(i) | During the six months ended June 30, 2020, the Company acquired equity interests of |
10. |
Property and equipment, net |
December 31, |
June 30, |
|||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Gross carrying amount |
||||||||
Servers, computers and equipment |
||||||||
Leasehold improvements |
||||||||
Others |
||||||||
Total |
||||||||
Less: accumulated depreciation |
( |
) | ( |
) | ||||
Property and equipment, net |
||||||||
11. |
Intangible assets, net |
December 31, |
June 30, |
|||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Gross carrying amount |
||||||||
Copyrights of video content |
||||||||
License |
||||||||
Software |
||||||||
Domain names |
||||||||
Trademark |
||||||||
Total of gross carrying amount |
||||||||
Less: accumulated amortization |
||||||||
Copyrights of video content |
( |
) | ( |
) | ||||
License |
( |
) | ( |
) | ||||
Software |
( |
) | ( |
) | ||||
Domain names |
( |
) | ( |
) | ||||
Trademark |
( |
) | ( |
) | ||||
Total of accumulated amortization |
( |
) | ( |
) | ||||
Intangible assets, net |
||||||||
Twelve months ended June 30 |
Amortization expense of intangible assets |
|||
RMB |
||||
2021 |
||||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
December 31, |
June 30, |
|||||||
2019 |
2020 |
|||||||
Copyrights of video content |
||||||||
License |
||||||||
Software |
||||||||
Domain names |
||||||||
Trademark |
12. |
Advances from customers and deferred revenue |
December 31, |
June 30, |
|||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Advances from customers |
||||||||
Deferred revenue, current |
||||||||
Total current advances from customers and deferred revenue |
||||||||
Deferred revenue, non-current |
||||||||
Total non-current deferred revenue |
||||||||
13. |
Accrued liabilities and other current liabilities |
December 31, |
June 30, |
|||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Revenue sharing fees |
||||||||
Bandwidth costs |
||||||||
Salaries and welfare |
||||||||
Marketing and promotion expenses |
||||||||
Deposits from content providers, suppliers and advertising customers |
||||||||
Other taxes payable |
||||||||
License fees |
||||||||
Others |
||||||||
Total |
||||||||
14. |
Cost of revenues |
For the six months ended June 30, |
||||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Revenue sharing fees and content costs |
||||||||
Bandwidth costs |
||||||||
Salaries and welfare |
||||||||
Payment handling costs |
||||||||
Share-based compensation |
||||||||
Depreciation and amortization |
||||||||
Other taxes and surcharges |
||||||||
Others |
||||||||
Total |
||||||||
15. |
Other income |
15. |
Other income (continued) |
16. |
Taxation |
(a) |
PRC value-added tax and related surcharges |
(b) |
Income taxes |
(iv) | PRC |
16. |
Taxation (continued) |
(b) |
Income taxes (continued) |
(iv) | PRC (continued) |
• | Huya Technology was qualified as a Software Enterprise, and enjoyed the zero preferential tax rate starting from 2017 and 12.5 % preferential tax rate starting from 2019. In 2019, Huya Technology is qualified as a KNSE and applied the income tax rate of 10 % for the year of 2019 pursuant to SAT Public Notice [2018] No.23 (“Circular 23”). |
• | Guangzhou Huya applied for the HNTE qualification and obtained approval in November 2018. It entitled to enjoy the preferential tax rate of 15 % as an HNTE for three years starting from 2018, and should apply for HNTE qualification renewal in 2021. |
• | Hainan Huya was qualified as an EIE in Hainan free trade port, and enjoyed the preferential tax rate of 15 % for five years starting from 2020. |
• | The remaining PRC subsidiaries and VIEs were subject to 25 |
16. |
Taxation (continued) |
(b) |
Income taxes (continued) |
(iv) | PRC (continued) |
For the six months ended June 30, |
||||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Current income tax expenses |
||||||||
Deferred income tax expenses (benefits) (i) |
( |
) | ||||||
Total income tax expenses |
||||||||
(i) | The deferred income tax benefits for the six months ended June 30, 2020 represented mainly the deferred tax related to unrealized losses arisen from intercompany transactions. |
17. |
Ordinary shares |
18. |
Share-based compensation |
For the six months ended June 30, |
||||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Share-based compensation expenses |
||||||||
—Related to JOYY’s Share-based Awards |
||||||||
—Related to Huya Share-based Awards |
||||||||
Total |
||||||||
(a) |
JOYY’s Share-based Awards |
(b) |
Huya Share-based Awards |
18. |
Share-based compensation (continued) |
(b) |
Huya Share-based Awards (continued) |
Number of options |
Weighted average exercise price (US$) |
Weighted average remaining contractual life (years) |
||||||||||
As at December 31, 2018 |
||||||||||||
Forfeited |
( |
) | 2.5500 | |||||||||
Exercised |
( |
) | ||||||||||
As at June 30, 2019 |
||||||||||||
As at December 31, 2019 |
||||||||||||
Forfeited |
( |
) | 2.5500 | |||||||||
Exercised |
( |
) | ||||||||||
As at June 30, 2020 |
||||||||||||
Expected to vest at June 30, 2020 |
— | |||||||||||
Exercisable as at June 30, 2020 |
18. |
Share-based compensation (continued) |
(b) |
Huya Share-based Awards (continued) |
Number of restricted shares |
Weighted average grant-date fair value (US$) |
|||||||
Outstanding, December 31, 2018 |
||||||||
Granted |
||||||||
Forfeited |
( |
) | ||||||
Vested |
( |
) | ||||||
Outstanding, June 30, 2019 |
||||||||
Outstanding, December 31, 2019 |
||||||||
Granted |
||||||||
Forfeited |
( |
) | ||||||
Vested |
( |
) | ||||||
Outstanding, June 30, 2020 |
||||||||
Expected to vest at June 30, 2020 |
19. |
Net income per share |
For the six months ended June 30, |
||||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Numerator: |
||||||||
Net income |
||||||||
Numerator for basic and diluted net income per share |
||||||||
Denominator: |
||||||||
Denominator for basic calculation—weighted average number of Class A and Class B ordinary shares outstanding |
||||||||
—Diluted effect of share options |
||||||||
—Diluted effect of restricted share units |
||||||||
Denominator for diluted calculation |
||||||||
Net income per ADS* |
||||||||
—Basic |
||||||||
—Diluted |
||||||||
Net income per ordinary share |
||||||||
—Basic |
||||||||
—Diluted |
||||||||
* | Each ADS represents one Class A ordinary share. |
20. |
Related party transactions |
For the six months ended June 30, |
||||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Purchase of services by JOYY on behalf of Huya |
||||||||
Operation support services provided by JOYY (i) |
||||||||
Deemed distribution to JOYY |
||||||||
Cash collected by JOYY as a payment platform for Huya |
||||||||
Share-based compensation expenses related to JOYY’s Share-based Awards (Note 18(a)) |
||||||||
Others |
20. |
Related party transactions (continued) |
For the six months ended June 30, |
||||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Operation support services provided by Tencent (ii) |
||||||||
Purchase of copyrights for live streaming from Tencent |
||||||||
Payment on behalf of Tencent |
||||||||
Advertising revenue from Tencent |
||||||||
Market promotion expenses charged by Tencent |
||||||||
Cash collected by Tencent as a game operator for Huya |
— | |||||||
Others |
(i) | Purchases of services from JOYY mainly consist of office rental, payment handling services and bandwidth services which are charged at market price. |
(ii) | Operation support services from Tencent mainly consist of bandwidth and payment handling services which are charged at market price. |
For the six months ended June 30, |
||||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Purchase of operating rights for live streaming from Tencent’s related parties |
— | |||||||
Bandwidth service provided by Tencent’s related parties |
— | |||||||
Content production costs charged by Tencent’s related parties |
— | |||||||
Market promotion expenses charged by Tencent’s related parties |
— | |||||||
Others |
— |
December 31, |
June 30, |
|||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Amounts due from related parties |
||||||||
Tencent and its related parties |
||||||||
JOYY |
||||||||
Total |
||||||||
Amounts due to related parties |
||||||||
Tencent |
||||||||
Tencent’s related parties |
||||||||
JOYY |
||||||||
Total |
||||||||
21. |
Fair value measurements |
As of December 31, 2019 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Assets |
||||||||||||||||
Short-term investments (i) |
||||||||||||||||
|
|
|
|
|
|
|
|
As of June 30, 2020 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Assets |
||||||||||||||||
Short-term investments (i) |
||||||||||||||||
|
|
|
|
|
|
|
|
21. |
Fair value measurements (continued) |
(i) |
Short-term investments represented the investments issued by commercial banks and financial institution with a variable interest rate indexed to the performance of underlying assets within one year. For the instruments whose fair value is provided by banks at the end of each period, the Company classifies the valuation techniques that use these inputs as Level 1 of fair value measurements. For the instruments whose fair value is estimated based on quoted prices of similar products provided by banks at the end of each period, the Company classifies the valuation techniques that use these inputs as Level 2 of fair value measurements. |
22. |
Lease |
As of December 31, 2019 |
As of June 30, 2020 |
|||||||
RMB |
RMB |
|||||||
Right-of-use |
||||||||
Current portion of operating lease liabilities |
||||||||
Non-current operating lease liabilities |
||||||||
|
|
|
|
|||||
Total operating lease liabilities |
||||||||
|
|
|
|
23. |
Commitments and contingencies |
Twelve months ended December 31 |
Operating commitments |
|||
RMB |
||||
2020 |
||||
2021 |
||||
2022 |
||||
2023 and thereafter |
||||
|
|
|||
|
|
23. |
Commitments and contingencies (continued) |
Twelve months ended June 30, 2020 |
Operating commitments |
|||
RMB |
||||
2021 |
||||
2022 |
||||
2023 |
||||
2024 and thereafter |
||||
|
|
|||
|
|
24. |
VIEs |
December 31, |
June 30, |
|||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Total current assets |
||||||||
Total non-current assets |
||||||||
Total assets |
||||||||
Total current liabilities |
||||||||
Total non-current liabilities |
||||||||
Total liabilities |
For the six months ended June 30, |
||||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Net revenues |
||||||||
Net income |
24. |
VIEs (continued) |
For the six months ended June 30, |
||||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Net cash provided by operating activities |
||||||||
Net cash (used in) provided by investing activities |
( |
) |
25. |
Subsequent events |
Page |
||||
F-39 |
||||
F-40 |
||||
F-41 |
||||
F-43 |
||||
F-45 |
As of December 31, 2019 |
As of June 30, 2020 |
|||||||||||
RMB |
RMB |
US$ (Note 2) |
||||||||||
ASSETS |
||||||||||||
Current assets: |
||||||||||||
Cash and cash equivalents |
||||||||||||
Restricted cash |
||||||||||||
Short-term bank deposits |
||||||||||||
Short-term investments |
||||||||||||
Accounts receivable, net of allowance of RMB |
||||||||||||
Prepayments |
||||||||||||
Amount due from related parties |
||||||||||||
Other current assets |
||||||||||||
Total current assets |
||||||||||||
Property and equipment, net |
||||||||||||
Intangible assets, net |
||||||||||||
Investments |
||||||||||||
Goodwill |
||||||||||||
Right-of-use |
||||||||||||
Other non-current assets |
||||||||||||
TOTAL ASSETS |
||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||
Current liabilities: |
||||||||||||
Accounts payable |
||||||||||||
Advances from customers |
||||||||||||
Deferred revenue |
||||||||||||
Accrued expenses and other current liabilities |
||||||||||||
Amounts due to related parties |
||||||||||||
Lease liabilities due within one year |
||||||||||||
Total current liabilities |
||||||||||||
Lease liabilities |
||||||||||||
Deferred revenue |
||||||||||||
TOTAL LIABILITIES |
||||||||||||
Commitments and contingencies (Note 12) |
||||||||||||
Shareholders’ equity |
||||||||||||
Ordinary shares (US$ |
||||||||||||
Treasury shares ( |
( |
) | ( |
) | ( |
) | ||||||
Additional paid-in capital |
||||||||||||
Accumulated deficit |
( |
) | ( |
) | ( |
) | ||||||
Accumulated other comprehensive income |
||||||||||||
Total DouYu Shareholder’s Equity |
||||||||||||
Noncontrolling interests |
||||||||||||
Total Shareholders’ Equity |
||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||
Six months ended June 30, |
||||||||||||
2019 |
2020 |
|||||||||||
RMB |
RMB |
US$ (Note 2) |
||||||||||
Net revenues (including related party revenues of RMB |
||||||||||||
Cost of revenues |
( |
) | ( |
) | ( |
) | ||||||
Gross profit |
||||||||||||
Operating expenses: |
||||||||||||
Sales and marketing expenses |
( |
) | ( |
) | ( |
) | ||||||
General and administrative expenses |
( |
) | ( |
) | ( |
) | ||||||
Research and development expenses |
( |
) | ( |
) | ( |
) | ||||||
Other operating income, net |
||||||||||||
Total operating expenses |
( |
) | ( |
) | ( |
) | ||||||
Income (loss) from operations |
( |
) | ||||||||||
Other expenses, net |
( |
) | ( |
) | ( |
) | ||||||
Foreign exchange gain |
||||||||||||
Interest income |
||||||||||||
Gain on disposal of subsidiary |
||||||||||||
Income before income taxes |
||||||||||||
Income tax expense |
— | — | — | |||||||||
Share of income in equity method investments |
||||||||||||
Net income |
||||||||||||
Net loss attributable to noncontrolling interests |
||||||||||||
Net income attributable to ordinary shareholders of the Company |
||||||||||||
Net income per share |
||||||||||||
Basic |
||||||||||||
Diluted |
||||||||||||
Weighted average shares used in calculating net income per share |
||||||||||||
Basic |
||||||||||||
Diluted |
||||||||||||
Net income |
||||||||||||
Other comprehensive income, net of tax of nil: |
||||||||||||
Foreign currency translation adjustments |
||||||||||||
Comprehensive income |
||||||||||||
Comprehensive loss attributable to noncontrolling interests |
||||||||||||
Comprehensive income attributable to the ordinary shareholders |
||||||||||||
Ordinary shares |
Treasury shares |
Additional paid-in capital |
Accumulated deficit |
Accumulated other comprehensive income |
Total shareholders’ equity (deficit) attributable to DouYu |
Noncontrolling interests |
Total shareholders’ equity (deficit) |
|||||||||||||||||||||||||||||||||
Number of shares |
RMB |
Number of shares |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
|||||||||||||||||||||||||||||||
Balance at January 1, 2019 |
— | — | ( |
) | ( |
) | — | ( |
) | |||||||||||||||||||||||||||||||
Noncontrolling interest arising from business acquisition |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | ( |
) | ||||||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Foreign currency translation adjustments |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Balance at June 30, 2019 |
— | — | ( |
) |
( |
) |
( |
) | ||||||||||||||||||||||||||||||||
Ordinary shares |
Treasury shares |
Additional paid-in capital |
Accumulated deficit |
Accumulated other comprehensive income |
Total shareholders’ equity attributable to DouYu |
Noncontrolling interests |
Total shareholders’ equity |
|||||||||||||||||||||||||||||||||
Number of shares |
RMB |
Number of shares |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
|||||||||||||||||||||||||||||||
Balance at January 1, 2020 |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||
Repurchase of ordinary shares |
— | — | ( |
) | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||
Acquisitions of noncontrolling interests |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Contribution from shareholder in connection with an acquisition of an equity method investment (Note 4) |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Capital contribution from noncontrolling interest shareholder |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | ( |
) | ||||||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Vesting of restricted share units |
— | — | ( |
) | — | — | — | — | — | |||||||||||||||||||||||||||||||
Foreign currency translation adjustments |
— | — | — | — | — | — | ( |
) | ||||||||||||||||||||||||||||||||
Balance at June 30, 2020 |
( |
) |
( |
) |
||||||||||||||||||||||||||||||||||||
Six months ended June 30, |
||||||||||||
2019 |
2020 |
|||||||||||
RMB |
RMB |
US$ (Note 2) |
||||||||||
Cash flows from operating activities: |
||||||||||||
Net income |
||||||||||||
Adjustments to reconcile net income to net cash used in operating activities: |
||||||||||||
Depreciation of property and equipment |
||||||||||||
Loss from the disposal of intangible assets |
||||||||||||
Amortization of intangible assets |
||||||||||||
Non-cash operating lease expenses |
||||||||||||
Loss on the disposal of property and equipment |
||||||||||||
Provision (reversal) for allowance for doubtful accounts |
( |
) | ( |
) | ||||||||
Share of income in equity method investments |
( |
) | ( |
) | ( |
) | ||||||
Gain on disposal of a subsidiary |
( |
) | ( |
) | ||||||||
Impairment loss of investments |
||||||||||||
Unrealized gain from investment in equity investee |
( |
) | ( |
) | ||||||||
Share-based compensation |
||||||||||||
Foreign exchange gain |
( |
) | ||||||||||
Changes in operating assets and liabilities: |
||||||||||||
Accounts receivable |
( |
) | ||||||||||
Prepayments |
( |
) | ( |
) | ||||||||
Other current assets |
( |
) | ||||||||||
Other non-current assets |
( |
) | ( |
) | ||||||||
Amounts due from related parties |
( |
) | ||||||||||
Accounts payable |
||||||||||||
Advances from customers |
( |
) | ( |
) | ||||||||
Accrued expenses and other current liabilities |
( |
) | ( |
) | ( |
) | ||||||
Amounts due to related parties |
( |
) | ( |
) | ||||||||
Deferred revenue |
( |
) | ( |
) | ||||||||
Lease liabilities |
( |
) | ( |
) | ||||||||
Net cash provided by operating activities |
||||||||||||
Cash flows from investing activities: |
||||||||||||
Proceeds on disposal of property and equipment |
||||||||||||
Purchases of property and equipment |
( |
) | ( |
) | ( |
) | ||||||
Purchases of intangible assets |
( |
) | ( |
) | ( |
) | ||||||
Payment for short-term bank deposits |
( |
) | ( |
) | ||||||||
Purchases of short-term investments |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from disposal of short-term investments |
||||||||||||
Proceeds from disposal of intangible assets |
||||||||||||
Proceeds from disposal of a subsidiary |
||||||||||||
Payment for business acquisition, net of cash acquired |
( |
) | ||||||||||
Payment for investments |
( |
) | ( |
) | ( |
) | ||||||
Loans to related parties |
( |
) | ( |
) | ( |
) | ||||||
Repayment of loan to related parties |
||||||||||||
Cash used in investing activities |
( |
) | ( |
) | ( |
) | ||||||
Six months ended June 30, |
||||||||||||
2019 |
2020 |
|||||||||||
RMB |
RMB |
US$ (Note 2) |
||||||||||
Cash flows from financing activities |
||||||||||||
Payment of IPO offering costs |
( |
) | ||||||||||
Acquisition of noncontrolling interest |
( |
) | ( |
) | ||||||||
Proceeds from capital contribution from noncontrolling interest shareholder |
||||||||||||
Repurchase of ordinary shares |
( |
) | ( |
) | ||||||||
Settlement of redemption liability to a preferred shareholder in connection with 2018 Restructuring (1) |
( |
) | ||||||||||
Repayment of advance from related party |
( |
) | ||||||||||
Cash used in financing activities |
( |
) | ( |
) | ( |
) | ||||||
Effect of foreign exchange rate changes on cash and cash equivalents |
||||||||||||
Net increase in cash, cash equivalents and restricted cash |
( |
) | ( |
) | ( |
) | ||||||
Cash, cash equivalent and restricted cash at the beginning of the period |
||||||||||||
Cash, cash equivalent and restricted cash at the end of the period |
||||||||||||
Supplemental disclosure on non-cash investing and financing activities: |
||||||||||||
Deferred offering costs payable |
||||||||||||
Payable for purchases of property and equipment |
As of June 30, |
||||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Cash and cash equivalents |
||||||||
Restricted cash |
||||||||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows |
||||||||
(1) | In May 2018, as an integrated step of the 2018 Restructuring, in order to comply with certain PRC foreign currency control rules and regulations, Beijing Sequoia has to redeem its investment in Series A Preferred Equity in Wuhan Douyu for US$ |
1. |
Organization and principal activities |
2. |
Summary of significant accounting policies |
2.1 |
Basis of Presentation |
2.2 |
Basis of Consolidation |
2. |
Summary of significant accounting policies (continued) |
2.2 |
Basis of Consolidation (continued) |
As of December 31, 2019 |
As of June 30, 2020 |
|||||||
RMB |
RMB |
|||||||
ASSETS |
||||||||
Cash and cash equivalents |
||||||||
Restricted cash |
||||||||
Short-term bank deposits |
||||||||
Short-term investments |
||||||||
Accounts receivable, net |
||||||||
Prepayments |
||||||||
Amount due from related parties |
||||||||
Other current assets |
||||||||
Property and equipment, net |
||||||||
Intangible assets, net |
||||||||
Right-of-use |
||||||||
Investments |
||||||||
Other non-current assets |
||||||||
Total Assets |
||||||||
LIABILITIES |
||||||||
Accounts payable |
||||||||
Advances from customers |
||||||||
Deferred revenue |
||||||||
Accrued expenses and other current liabilities |
||||||||
Amounts due to related parties |
||||||||
Lease liabilities |
||||||||
Total Liabilities |
||||||||
Six Months ended June 30, |
||||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Net revenue |
||||||||
Net income |
Six Months ended June 30, |
||||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Net cash provided by operating activities |
||||||||
Net cash used in investing activities |
( |
) | ( |
) | ||||
Net cash used in provided by financing activities |
( |
) |
2. |
Summary of significant accounting policies (continued) |
2.2 |
Basis of Consolidation (continued) |
2.3 |
Use of Estimates |
2.4 |
Foreign currency translation |
2.5 |
Fair value measurements |
2. |
Summary of significant accounting policies (continued) |
2.5 |
Fair value measurements (continued) |
2. |
Summary of significant accounting policies (continued) |
2.5 |
Fair value measurements (continued) |
2.6 |
Convenience Translation into United States Dollars |
2.7 |
Accounts receivable and allowance for doubtful accounts |
2.8 |
Goodwill |
2. |
Summary of significant accounting policies (continued) |
2.8 |
Goodwill (continued) |
2.9 |
Revenue recognition |
Six Months ended June 30, |
||||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Live streaming |
||||||||
Advertisement |
||||||||
Other |
||||||||
Total |
||||||||
2. |
Summary of significant accounting policies (continued) |
2.9 |
Revenue recognition (continued) |
2. |
Summary of significant accounting policies (continued) |
2.9 |
Revenue recognition (continued) |
Accounts receivable |
Advances from customers |
Deferred revenue |
||||||||||
RMB |
RMB |
RMB |
||||||||||
Opening Balance as of January 1, 2020 |
||||||||||||
Net change |
( |
) | ( |
) | ( |
) | ||||||
Ending Balance as of June 30, 2020 |
||||||||||||
2.10 |
Operating leases as lessee |
3. |
Other current assets |
As of December 31, 2019 |
As of June 30, 2020 |
|||||||
RMB |
RMB |
|||||||
Interest receivable |
||||||||
Value-added tax recoverable |
||||||||
Funds receivable from third party payment service provider (1) |
||||||||
Content rights |
||||||||
Others |
||||||||
Total |
||||||||
(1) | The Group opened accounts with external online payment service providers to collect funding from users. |
4. |
Investments |
As of December 31, 2019 |
As of June 30, 2020 |
|||||||
RMB |
RMB |
|||||||
Hangzhou Aijidi Culture Creation Co., Ltd. |
||||||||
Chongqing Yuwan Network Media Co., Ltd. |
||||||||
Hunan Yuyou Starfire Culture Media Co., Ltd. |
||||||||
Wuhan Shayu Network Technology Co., Ltd.(“Shayu”) (1) |
||||||||
Others (2) |
||||||||
(1) | In 2016, the Group invested RMB |
• | The Group acquired |
• | The Company injected cash of RMB |
4. |
Investments (continued) |
(2) | In 2018, the Group made investments in four talent agencies with aggregate cash consideration of RMB |
As of December 31, 2019 |
As of June 30, 2020 |
|||||||
RMB |
RMB |
|||||||
Content producers |
||||||||
Technology and software companies |
||||||||
Others |
||||||||
|
|
|
|
|||||
|
|
|
|
5. |
Accrued expenses and other current liabilities |
As of December 31, 2019 |
As of June 30, 2020 |
|||||||
RMB |
RMB |
|||||||
Accrued payroll and welfare |
||||||||
Marketing cost |
||||||||
Payable for repurchase of ordinary shares |
||||||||
Deposits |
||||||||
Other tax payable |
||||||||
Others |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
6. |
Cost of revenues |
Six months ended June 30, |
||||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Bandwidth costs |
||||||||
Revenue sharing fees and content costs |
||||||||
Others |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
7. |
Share-based compensation |
Number of shares |
Weighted average grant-date fair value |
|||||||
Outstanding as of December 31, 2019 |
||||||||
Vested |
( |
) | ||||||
Forfeited (1) |
( |
) | ||||||
Cancellation (2) |
( |
) | ||||||
|
|
|
|
|||||
Outstanding as of June 30, 2020 |
||||||||
|
|
|
|
(1) | In February 2020, the Group repurchased |
(2) | In February 2020, the Group canceled |
7. |
Share-based compensation (continued) |
Number of restricted shares |
Weighted average grant-date fair value |
Weighted average remaining contractual life |
||||||||||
RMB |
Years |
|||||||||||
Outstanding as of December 31, 2019 |
||||||||||||
Vested |
( |
) | ||||||||||
Forfeited |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Outstanding as of June 30, 2020 |
||||||||||||
|
|
|
|
|
|
8. |
Segment Information |
9. |
Net income per share and net income attributable to ordinary shareholders |
9. |
Net income per share and net income attributable to ordinary shareholders (continued) |
Six months ended June 30, |
||||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Basic net income per share calculation |
||||||||
Numerator: |
||||||||
Net income attributable to DouYu Holdings Limited shareholders |
||||||||
Amounts allocated to convertible redeemable preferred shares for participating rights to dividends |
( |
) | ||||||
|
|
|
|
|||||
Net income attributable to ordinary shareholders for computing basic net income per share |
||||||||
|
|
|
|
|||||
Denominator: |
||||||||
Weighted average number of ordinary shares used in computing basic income per ordinary share |
||||||||
|
|
|
|
|||||
Basic net income per ordinary share |
||||||||
|
|
|
|
|||||
Diluted net income per share calculation |
||||||||
Numerator: |
||||||||
Net income attributable to ordinary shareholders of DouYu Holdings Limited |
||||||||
Add: undistributed earnings allocated to participating securities |
||||||||
|
|
|
|
|||||
Net income attributable to ordinary shareholders for computing diluted net income per ordinary share |
||||||||
|
|
|
|
|||||
Denominator: |
||||||||
Weighted average number of ordinary shares used in computing basic income per ordinary share |
||||||||
Add: conversion of convertible redeemable preferred shares into ordinary shares |
||||||||
Restricted Share Units |
||||||||
|
|
|
|
|||||
Weighted average ordinary shares used in computing diluted income per ordinary share |
||||||||
|
|
|
|
|||||
Diluted net income per ordinary share |
||||||||
|
|
|
|
10. |
Related party transactions |
Company Name |
Relationship with the Group | |
Tencent Holdings Limited (“Tencent Group”) |
Six months ended June 30, |
||||||||
2019 |
2020 |
|||||||
RMB |
RMB |
|||||||
Live streaming revenue derived from |
||||||||
Equity method investees—talent agencies |
||||||||
Advertisement revenue derived from |
||||||||
Tencent Group |
||||||||
Other revenue derived from |
||||||||
Tencent Group |
||||||||
Revenue sharing fees and content cost paid to |
||||||||
Tencent Group |
||||||||
Equity method investees—talent agencies |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
|||||
Bandwidth fees paid to |
||||||||
Tencent Group |
||||||||
Payment handling fees paid to |
||||||||
Tencent Group |
||||||||
Content rights purchased from |
||||||||
Tencent Group |
As of December 31, 2019 |
As of June 30, 2020 |
|||||||
RMB |
RMB |
|||||||
Amount due from related parties |
||||||||
Tencent Group |
||||||||
Equity method investees—talent agencies |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
|||||
Amount due to related parties |
||||||||
Tencent Group |
||||||||
Equity method investees—talent agencies |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
11. |
Leases |
Six months ended June 30, 2020 |
||||
RMB |
||||
Operating lease expense |
||||
Short-term lease expense |
||||
|
|
|||
Total lease expense |
||||
|
|
As of June 30, 2020 |
||||
RMB |
||||
Operating lease: |
||||
Operating leases right-of-use |
||||
Current portion of lease liabilities |
||||
Non-current portion of lease liabilities |
||||
Total operating lease liabilities |
||||
Weighted-average remaining lease term (in years)—operating leases |
||||
Weighted-average discount rate—operating leases |
% |
Six months ended June 30, 2020 |
||||
RMB |
||||
Cash paid for operating leases |
||||
Lease liabilities arising from obtaining right-of-use |
Years ending |
RMB |
|||
2020 (July-December) |
||||
2021 |
||||
2022 |
||||
2023 |
||||
2024 and thereafter |
||||
|
|
|||
Total undiscounted cash flows |
||||
Less: imputed interest |
||||
|
|
|||
Total |
||||
|
|
|||
Lease liabilities due within one year |
||||
Lease liabilities due after one year |
12. |
Commitments and contingencies |
13. |
Subsequent events |
Page |
||||
F-62 | ||||
F-63 | ||||
F-64 | ||||
F-65 | ||||
F-66 | ||||
F-67 |
(Amounts expressed in thousands of RMB) |
Note |
Year ended December 31, 2019 |
||||||
Revenues |
5 | |||||||
Live streaming (including transactions with related parties of Penguin Business of RMB28,258 for the year ended December 31, 2019) |
1,110,606 | |||||||
Online games distribution (including transactions with related parties of Penguin Business of RMB51,677 for the year ended December 31, 2019) |
51,763 | |||||||
Online advertising (including transactions with related parties of Penguin Business of RMB8,742 for the year ended December 31, 2019) |
31,216 | |||||||
Cost of revenues |
10 | |||||||
Cost of services (including transactions with related parties of Penguin Business of RMB468,540 for the year ended December 31, 2019) |
(1,430,524 | ) | ||||||
|
|
|||||||
Gross loss |
(236,939 | ) | ||||||
Research and development expenses (including transactions with related parties of Penguin Business of RMB179 for the year ended December 31, 2019) |
(8,833 | ) | ||||||
Sales and marketing expenses (including transactions with related parties of Penguin Business of RMB11,739 for the year ended December 31, 2019) |
(45,006 | ) | ||||||
General and administrative expenses (including transactions with related parties of Penguin Business of RMB17,122 for the year ended December 31, 2019) |
(19,617 | ) | ||||||
|
|
|||||||
Loss before income tax |
(310,395 | ) | ||||||
Income tax expense |
6 | — | ||||||
|
|
|||||||
Net loss |
(310,395 | ) | ||||||
Net loss attributable to owner of Penguin Business |
(310,395 | ) | ||||||
|
|
|||||||
Other comprehensive loss, net of tax |
— | |||||||
|
|
|||||||
Total comprehensive loss |
(310,395 |
) | ||||||
|
|
(Amounts expressed in thousands of RMB) |
Note |
As of December 31, 2019 |
||||||
Assets |
||||||||
Current assets: |
||||||||
Accounts receivable, net |
2,380 | |||||||
Prepayments |
1,389 | |||||||
|
|
|||||||
Total current assets |
3,769 | |||||||
|
|
|||||||
Non-current assets: |
||||||||
Equipment, net |
8 | 1,253 | ||||||
|
|
|||||||
Total non-current assets |
1,253 | |||||||
|
|
|||||||
Total assets |
5,022 | |||||||
|
|
|||||||
Liabilities |
||||||||
Current liabilities: |
||||||||
Accounts payable |
9 | 122,645 | ||||||
Accrued liabilities and other current liabilities |
9 | 35,879 | ||||||
Amounts due to related parties |
11 | 61,022 | ||||||
Contract liabilities |
27,690 | |||||||
|
|
|||||||
Total current liabilities |
247,236 | |||||||
|
|
|||||||
Total liabilities |
247,236 | |||||||
|
|
|||||||
Equity: |
||||||||
Invested capital |
(242,214 | ) | ||||||
|
|
|||||||
Total Equity |
(242,214 | ) | ||||||
|
|
|||||||
Total liabilities and equity |
5,022 | |||||||
|
|
Year ended December 31, 2019 |
||||
(Amounts expressed in thousands of RMB) |
Invested capital |
|||
Balance as of January 1, 2019 |
(221,291 |
) | ||
|
|
|||
Loss and total comprehensive loss for the year |
(310,395 | ) | ||
Contributions from owner of Penguin Business |
289,472 | |||
|
|
|||
Balance as of December 31, 2019 |
(242,214 |
) | ||
|
|
(Amounts expressed in thousands of RMB) |
Year ended December 31, 2019 |
|||
Cash flows from operating activities: |
||||
Net loss |
(310,395 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||
Depreciation on equipment |
635 | |||
Changes in operating assets and liabilities: |
||||
Accounts receivable |
4,173 | |||
Prepayments |
(603 | ) | ||
Accounts payable, accrued liabilities, and other current liabilities |
6,158 | |||
Amounts due to related parties |
5,621 | |||
Contract liabilities |
5,352 | |||
Net cash used in operating activities |
(289,059 |
) | ||
Cash flows from investing activities: |
||||
Purchase of equipment |
(940 | ) | ||
Disposal of equipment |
527 | |||
Net cash used in investing activities |
(413 |
) | ||
Cash flows from financing activities: |
||||
Contributions from owner of Penguin Business |
289,472 | |||
Net cash generated from financing activities |
289,472 |
|||
Net change in cash, cash equivalents |
— |
|||
Cash, cash equivalents at beginning of the year |
— | |||
Cash and cash equivalents at end of the year |
— |
|||
1. |
General information |
2. |
Summary of significant accounting policies |
2.1 |
Basis of preparation and presentation |
2. |
Summary of significant accounting policies (continued) |
2.1 |
Basis of preparation and presentation (continued) |
(a) | The assets and liabilities have been stated at historical carrying amounts. Only those assets and liabilities that are specifically identifiable to Penguin Business are included. |
(b) | Revenues, most costs and selling expenses generated or incurred solely by Penguin Business are carved out directly from the consolidated financial statements of Tencent Holdings, and other indirect costs and selling expenses incurred in operation are allocated to the Business as principles described in (e) below. These financial statements reflect all the costs of doing business. |
(c) | Any funding received from/paid to Tencent Holdings and its group entities/operations other than Penguin Business (“Tencent Group Entities”) in the period covered by these financial statements are treated as deemed capital contributions or return of capital within invested equity. |
(d) | Accounts receivable and other current assets, and accounts payable and other current liabilities received or settled by Tencent Group Entities are also treated as deemed capital contributions or return of capital within invested equity. |
(e) | Certain common operating and most of the administrative expenses incurred by Penguin Business in conjunction with other operations of Tencent Group including financial, human resources, office administration and other support functions are allocated to the financial statements primarily based on the methodology which management believes as reasonable: |
i) | Salaries and welfare of corporate level key management personnel and employees of certain shared functions, including corporate level key managements, research and development, operational support and administrative departments, the allocation was based on the proportion of number of staff in each business line. |
ii) | Rental expenses of shared areas were allocated based on the occupied space of each business line. |
(f) | All intercompany transactions, mainly referring to revenue sharing, corporate administrative and management fee, between Penguin Business with Tencent Group Entities, been eliminated in the consolidated financial statements of Tencent Holdings but reinstated for the purpose of these financial statements, are disclosed as related party transactions (Note 11). |
2.2 |
Use of estimates |
2. |
Summary of significant accounting policies (continued) |
2.2 |
Use of estimates (continued) |
2.3 |
Going concern |
2.4 |
Revenue recognition |
(i) | Live streaming |
2. |
Summary of significant accounting policies (continued) |
2.4 |
Revenue recognition (continued) |
(i) | Live streaming (continued) |
2. |
Summary of significant accounting policies (continued) |
2.4 |
Revenue recognition (continued) |
(ii) | Online advertising |
(iii) | Online game distribution revenue |
(iv) | Principal agent consideration |
2. |
Summary of significant accounting policies (continued) |
2.4 |
Revenue recognition (continued) |
(v) | Contract balance |
2.5 |
Cost of revenues |
2.6 |
Research and development expenses |
2.7 |
Sales and marketing expenses |
2. |
Summary of significant accounting policies (continued) |
2.8 |
General and administrative expenses |
2.9 |
Share-based compensation |
2.10 |
Other employee benefits |
2.11 |
Leases |
2. |
Summary of significant accounting policies (continued) |
2.11 |
Leases (continued) |
2.12 |
Income taxes |
2.13 |
Accounts receivable, net |
2. |
Summary of significant accounting policies (continued) |
2.13 |
Accounts receivable, net (continued) |
2.14 |
Impairment of long-lived assets |
2.15 |
Equipment |
Computers | 3 years |
2.16 |
Intangible assets |
2.17 |
Fair value measurements |
2. |
Summary of significant accounting policies (continued) |
2.17 |
Fair value measurements (continued) |
3. |
Recent accounting pronouncements |
3. |
Recent accounting pronouncements (continued) |
3. |
Recent accounting pronouncements (continued) |
3. |
Recent accounting pronouncements (continued) |
4. |
Concentration and Risks |
(a) |
Foreign exchange risk |
(b) |
Credit risk |
(c) |
Liquidity risk |
(d) |
Capital risk management |
5. |
Revenues |
Year ended December 31, |
||||
(In thousands) |
2019 |
|||
Revenues from live streaming platforms |
1,110,606 | |||
Revenues from online games distribution |
51,763 | |||
Revenues from online advertising |
31,216 | |||
|
|
|||
Total |
1,193,585 |
|||
|
|
6. |
Income taxes |
7. |
Share-based compensation |
(a) | Restricted Shares Units |
7. |
Share-based compensation (continued) |
(a) | Restricted Shares Units (continued) |
Number of restricted shares units |
Number of restricted shares units |
Weighted average grant-date fair value (HKD) |
||||||
At January 1, 2019 |
105,745 |
292.92 |
||||||
|
|
|
|
|||||
Granted |
63,610 | 351.00 | ||||||
Transferred (Note) |
(70,655 | ) | 301.44 | |||||
Vested |
(17,420 | ) | 250.47 | |||||
|
|
|
|
|||||
At December 31, 2019 |
81,280 |
340.07 |
||||||
|
|
|
|
|||||
Expected to vest at December 31, 2019 |
71,555 |
350.91 |
||||||
|
|
|
|
(b) | Share options |
Number of share options |
Weighted average exercise price |
Weighted average remaining contractual life |
Aggregate intrinsic value |
|||||||||||||
(HKD) |
(years) |
(HKD) |
||||||||||||||
Outstanding as of January 1, 2019 |
22,960 |
331.05 |
6.04 |
— |
||||||||||||
Outstanding as of December 31, 2019 |
22,960 |
331.05 |
5.04 |
995,378 |
||||||||||||
Expected to vest as of December 31, 2019 |
13,857 | 341.99 | 5.13 | 449,097 | ||||||||||||
Exercisable as of December 31, 2019 |
8,531 | 311.85 | 4.87 | 533,609 |
7. |
Share-based compensation (continued) |
(b) | Share options (continued) |
8. |
Equipment, net |
(In thousands) |
December 31, 2019 |
|||
Computers - total original costs |
2,179 | |||
Less: accumulated depreciation |
(926 | ) | ||
|
|
|||
Net book value |
1,253 |
|||
|
|
9. |
Accounts payable, accrued liabilities and other current liabilities |
(In thousands) |
December 31, 2019 |
|||
Accounts payable to suppliers |
122,645 | |||
Accrued marketing expenses |
17,356 | |||
Salaries payables |
18,330 | |||
Accrued professional fees |
60 | |||
Others |
133 | |||
|
|
|||
Total |
158,524 |
|||
|
|
10. |
Costs of revenues |
(In thousands) |
Year ended December 31, 2019 |
|||
Revenue sharing fees and content costs |
1,149,549 | |||
Bandwidth costs |
175,662 | |||
Salaries and welfare |
60,371 | |||
Payment handling costs |
10,505 | |||
Others |
34,437 | |||
|
|
|||
Total |
1,430,524 |
|||
|
|
11. |
Related party transactions |
(In thousands) |
Year ended December 31, 2019 |
|||
- Revenue sharing fees and content costs |
190,830 | |||
- Purchase of intelligent property copyright of online games |
83,972 | |||
- Bandwidth and server custody costs |
175,662 | |||
- Advertising and promotion expenses |
11,346 | |||
Allocation of expenses (Note 2.1(e), Note b): |
||||
- Employee benefits expenses |
3,001 | |||
- Other expenses (Note c) |
32,769 | |||
(In thousands) |
December 31, 2019 |
|||
- Accounts payable |
55,303 | |||
- Accrued liabilities and other current liabilities |
5,719 |
(a) | The payables to related parties are unsecured, interest-free and payable on demand. |
(b) | The allocated portion for the year ended December 31, 2019 is included in cost of revenues, research and development expenses, selling expenses and general and administrative expenses. |
(c) | Other expenses mainly represented shared expenses primarily related to workplace resources and certain corporate functions that attributable to Penguin Business and are mainly made on a basis reasonably considering proportion of headcount, infrastructure usage metrics and active degree of each business segment. |
12. |
Commitments and contingencies |
13. |
Subsequent events |
13. |
Subsequent events (continued) |
Page |
||||
F-86 | ||||
F-87 | ||||
F-88 | ||||
F-89 | ||||
F-90 |
For the six months ended June 30, |
||||||||||||
(Amounts expressed in thousands of RMB) |
Note |
2019 |
2020 |
|||||||||
Revenues |
4 | |||||||||||
Live streaming (including transactions with related parties of Penguin Business of nil and RMB2,642 for the six months ended June 30, 2019 and 2020, respectively) |
509,644 | 439,122 | ||||||||||
Online games distribution (including transactions with related parties of Penguin Business of RMB32,672 and RMB14,786 for the six months ended June 30, 2019 and 2020, respectively) |
32,756 | 14,786 | ||||||||||
Online advertising (including transactions with related parties of Penguin Business of RMB2,030 and RMB1,114 for the six months ended June 30, 2019 and 2020, respectively) |
12,926 | 7,975 | ||||||||||
Cost of revenues |
9 | |||||||||||
Cost of services (including transactions with related parties of Penguin Business of RMB220,138 and RMB233,139 for the six months ended June 30, 2019 and 2020, respectively) |
(661,244 | ) | (633,757 | ) | ||||||||
|
|
|
|
|||||||||
Gross loss |
(105,918 | ) | (171,874 | ) | ||||||||
Research and development expenses (including transactions with related parties of Penguin Business of RMB161 and RMB1 for the six months ended June 30, 2019 and 2020, respectively) |
(4,234 | ) | (4,840 | ) | ||||||||
Sales and marketing expenses (including transactions with related parties of Penguin Business of RMB1,190 and RMB13,338 for the six months ended June 30, 2019 and 2020, respectively) |
(18,523 | ) | (23,063 | ) | ||||||||
General and administrative expenses (including transactions with related parties of Penguin Business of RMB7,956 and RMB10,138 for the six months ended June 30, 2019 and 2020, respectively) |
(8,949 | ) | (10,977 | ) | ||||||||
|
|
|
|
|||||||||
Loss before income tax |
(137,624 | ) | (210,754 | ) | ||||||||
Income tax expense |
5 | — | — | |||||||||
|
|
|
|
|||||||||
Net loss |
(137,624 | ) | (210,754 | ) | ||||||||
Net loss attributable to owner of the Penguin Business |
(137,624 | ) | (210,754 | ) | ||||||||
|
|
|
|
|||||||||
Other comprehensive loss, net of tax |
— | — | ||||||||||
|
|
|
|
|||||||||
Total comprehensive loss |
(137,624 | ) | (210,754 | ) | ||||||||
|
|
|
|
As of December 31, |
As of June 30, |
|||||||||||
(Amounts expressed in thousands of RMB) |
Note |
2019 |
2020 |
|||||||||
Assets |
||||||||||||
Current assets: |
||||||||||||
Accounts receivable, net |
2,380 | 1,852 | ||||||||||
Prepayments |
1,389 | 830 | ||||||||||
|
|
|
|
|||||||||
Total current assets |
3,769 | 2,682 | ||||||||||
|
|
|
|
|||||||||
Non-current assets: |
||||||||||||
Equipment, net |
7 | 1,253 | 1,269 | |||||||||
|
|
|
|
|||||||||
Total non-current assets |
1,253 | 1,269 | ||||||||||
|
|
|
|
|||||||||
Total assets |
5,022 | 3,951 | ||||||||||
|
|
|
|
|||||||||
Liabilities |
||||||||||||
Current liabilities: |
||||||||||||
Accounts payable |
8 | 122,645 | 136,794 | |||||||||
Accrued liabilities and other current liabilities |
8 | 35,879 | 20,243 | |||||||||
Amounts due to related parties |
10 | 61,022 | 111,364 | |||||||||
Contract liabilities |
27,690 | 23,836 | ||||||||||
|
|
|
|
|||||||||
Total current liabilities |
247,236 | 292,237 | ||||||||||
|
|
|
|
|||||||||
Total liabilities |
247,236 | 292,237 | ||||||||||
|
|
|
|
|||||||||
Equity: |
||||||||||||
Invested capital |
(242,214 | ) | (288,286 | ) | ||||||||
|
|
|
|
|||||||||
Total equity |
(242,214 | ) | (288,286 | ) | ||||||||
|
|
|
|
|||||||||
Total liabilities and equity |
5,022 | 3,951 | ||||||||||
|
|
|
|
(Amounts expressed in thousands of RMB) |
Invested capital |
|||
Balance as of January 1, 2019 |
(221,291 |
) | ||
Loss and total comprehensive loss for the period |
(137,624 | ) | ||
Contributions from owner of the Penguin Business |
125,032 | |||
|
|
|||
Balance as of June 30, 2019 |
(233,883 |
) | ||
|
|
|||
Balance as of January 1, 2020 |
(242,214 |
) | ||
Loss and total comprehensive loss for the period |
(210,754 | ) | ||
Contributions from owner of the Penguin Business |
164,682 | |||
|
|
|||
Balance as of June 30, 2020 |
(288,286 |
) | ||
|
|
For the six months ended June 30, |
||||||||
(Amounts expressed in thousands of RMB) |
2019 |
2020 |
||||||
Cash flows from operating activities: |
||||||||
Net loss |
(137,624 |
) |
(210,754 |
) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation on equipment |
294 | 362 | ||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
3,491 | 528 | ||||||
Prepayments |
(1,492 | ) | 559 | |||||
Accounts payable, accrued liabilities, and other current liabilities |
14,640 | (1,487 | ) | |||||
Amounts due to related parties |
(7,153 | ) | 50,342 | |||||
Contract liabilities |
2,811 | (3,854 | ) | |||||
|
|
|
|
|||||
Net cash used in operating activities |
(125,033 |
) |
(164,304 |
) | ||||
|
|
|
|
|||||
Cash flows from investing activities: |
||||||||
Purchase of equipment |
(525 | ) | (461 | ) | ||||
Disposal of equipment |
526 | 83 | ||||||
|
|
|
|
|||||
Net cash generated from/(used in) investing activities |
1 |
(378 |
) | |||||
|
|
|
|
|||||
Cash flows from financing activities: |
||||||||
Contributions from owner of the Penguin Business |
125,032 | 164,682 | ||||||
|
|
|
|
|||||
Net cash generated from financing activities |
125,032 |
164,682 |
||||||
|
|
|
|
|||||
Net change in cash, cash equivalents |
— |
— |
||||||
Cash, cash equivalents at beginning of period |
— |
— |
||||||
|
|
|
|
|||||
Cash and cash equivalents at end of the period |
— | — | ||||||
|
|
|
|
1. |
General information |
2. |
Summary of significant accounting policies |
2.1 |
Basis of preparation and presentation |
2. |
Summary of significant accounting policies (continued) |
2.1 |
Basis of preparation and presentation (continued) |
(a) | The assets and liabilities have been stated at historical carrying amounts. Only those assets and liabilities that are specifically identifiable to the Penguin Business are included. |
(b) | Revenues, most costs and selling expenses generated or incurred solely by the Penguin Business are carved out directly from the financial statements of Tencent Holdings, and other indirect costs and selling expenses incurred in operation are allocated to the Business as principles described in (e) below. |
(c) | Any funding received from/paid to Tencent Holdings and its group entities/operations other than the Penguin Business (“Tencent Group Entities”) in the period covered by these financial statements are treated as capital contributions or return of capital within invested equity. |
(d) | Accounts receivable and other current assets, and accounts payable and other current liabilities received or settled by Tencent Group Entities are also treated as deemed capital contributions or return of capital within invested equity. |
(e) | Certain common operating and most of the administrative expenses incurred by the Penguin Business in conjunction with other operations of Tencent Group including financial, human resources, office administration and other support functions are allocated to the financial statements primarily based on the methodology which management believes as reasonable: |
i) | Salaries and welfare of corporate level key management personnel and employees of certain shared functions, including corporate level key managements, research and development, operational support and administrative departments, the allocation was based on the proportion of number of staff in each business line. |
ii) | Rental expenses of shared areas were allocated based on the occupied space of each business line. |
(f) | All intercompany transactions, mainly referring to revenue sharing, corporate administrative and management fee, between the Penguin Business with Tencent Holdings Group entities, been eliminated in the financial statements of Tencent Holdings but reinstated for the purpose of these financial statements, are disclosed as related party transactions (Note 10). |
2. |
Summary of significant accounting policies (continued) |
2.1 |
Basis of preparation and presentation (continued) |
2.2 |
Use of estimates |
2.3 |
Going concern |
2.4 |
Revenue recognition |
(i) | Live streaming |
2. |
Summary of significant accounting policies (continued) |
2.4 |
Revenue recognition (continued) |
(i) | Live streaming (continued) |
2. |
Summary of significant accounting policies (continued) |
2.4 |
Revenue recognition (continued) |
(i) | Live streaming (continued) |
(ii) | Online advertising |
(iii) | Online games distribution revenue |
2. |
Summary of significant accounting policies (continued) |
2.4 |
Revenue recognition (continued) |
(iv) | Principal agent consideration |
(v) | Contract balance |
2.5 |
Impairment of long-lived assets |
2. |
Summary of significant accounting policies (continued) |
2.5 |
Impairment of long-lived assets (continued) |
2.6 |
Intangible assets |
2.7 |
Fair value measurements |
2. |
Summary of significant accounting policies (continued) |
2.7 |
Fair value measurements (continued) |
3. |
Recent accounting pronouncements |
3. |
Recent accounting pronouncements (continued) |
3. |
Recent accounting pronouncements (continued) |
4. |
Revenues |
Six months ended June 30, |
||||||||
(In thousands) |
2019 |
2020 |
||||||
Revenue from live streaming |
509,644 | 439,122 | ||||||
Revenue from online games distribution |
32,756 | 14,786 | ||||||
Revenue from online advertising |
12,926 | 7,975 | ||||||
|
|
|
|
|||||
Total |
555,326 |
461,883 |
||||||
|
|
|
|
5. |
Income taxes |
6. |
Share-based awards |
6. |
Share-based awards (continued) |
(a) | Restricted Shares Units |
Number of restricted shares units |
Number of restricted shares units |
Weighted average grant-date fair value (HKD) |
||||||
At January 1, 2019 |
105,745 |
292.92 |
||||||
Transferred (Note) |
(43,380 | ) | 294.83 | |||||
|
|
|
|
|||||
At June 30, 2019 |
62,365 |
291.60 |
||||||
|
|
|
|
|||||
At January 1, 2020 |
81,280 |
340.07 |
||||||
Transferred (Note) |
(9,853 | ) | 346.27 | |||||
Lapsed/forfeited |
(1,195 | ) | 357.70 | |||||
Vested |
(540 | ) | 354.40 | |||||
|
|
|
|
|||||
At June 30, 2020 |
69,692 |
338.78 |
||||||
|
|
|
|
|||||
Expected to vest at June 30, 2020 |
61,866 |
350.48 |
||||||
|
|
|
|
(b) | Share options |
6. |
Share-based awards (continued) |
(b) | Share options (continued) |
Number of share options |
Weighted average exercise price |
Weighted average remaining contractual life |
Aggregate intrinsic value |
|||||||||||||
(HKD) |
(years) |
(HKD) |
||||||||||||||
Outstanding as of January 1, 2019 |
22,960 | 331.05 | 6.04 | — | ||||||||||||
Outstanding as of June 30, 2019 |
22,960 | 331.05 | 5.54 | 467,298 | ||||||||||||
Outstanding as of January 1, 2020 |
22,960 | 331.05 | 5.04 | 995,378 | ||||||||||||
Outstanding as of June 30, 2020 |
22,960 | 331.05 | 4.54 | 3,847,010 | ||||||||||||
Expected to vest as of June 30, 2020 |
14,070 | 341.99 | 4.63 | 2,203,475 | ||||||||||||
Exercisable as of June 30, 2020 |
8,531 | 311.85 | 4.37 | 1,593,160 |
7. |
Equipment, net |
(In thousands) |
December 31, 2019 |
June 30, 2020 |
||||||
Computer-total original costs |
2,179 | 2,170 | ||||||
Less: accumulated depreciation |
(926 | ) | (901 | ) | ||||
|
|
|
|
|||||
Net book value |
1,253 |
1,269 |
||||||
|
|
|
|
8. |
Accounts payable, accrued liabilities and other current liabilities |
(In thousands) |
December 31, 2019 |
June 30, 2020 |
||||||
Accounts payable to suppliers |
122,645 | 136,794 | ||||||
Accrued marketing expenses |
17,356 | 8,669 | ||||||
Salaries payables |
18,330 | 11,528 | ||||||
Accrued professional fees |
60 | — | ||||||
Others |
133 | 46 | ||||||
|
|
|
|
|||||
Total |
158,524 |
157,037 |
||||||
|
|
|
|
9. |
Costs of revenues |
Six months ended June 30, |
||||||||
(In thousands) |
2019 |
2020 |
||||||
Revenue sharing fees and content costs |
518,621 | 488,056 | ||||||
Bandwidth costs |
96,934 | 87,214 | ||||||
Salaries and welfare |
26,946 | 41,741 | ||||||
Payment handling costs |
6,716 | 2,770 | ||||||
Others |
12,027 | 13,976 | ||||||
|
|
|
|
|||||
Total |
661,244 |
633,757 |
||||||
|
|
|
|
10. |
Related party transactions |
Six months ended June 30, |
||||||||
(In thousands) |
2019 |
2020 |
||||||
- Revenue sharing fees and content costs |
74,734 | 79,057 | ||||||
- Purchase of intelligent property copyright of online games |
40,000 | 59,874 | ||||||
- Bandwidth and server custody costs |
96,934 | 87,214 | ||||||
- Advertising and promotion expenses |
780 | 13,337 | ||||||
Allocation of expenses (Note 2.1(e), Note b) : |
||||||||
- Employee benefits expenses |
1,182 | 1,764 | ||||||
- Other expenses (note c) |
15,815 | 15,370 | ||||||
(In thousands) |
December 31, 2019 |
June 30, 2020 |
||||||
- Accounts payable |
55,303 | 107,158 | ||||||
- Accrued liabilities and other current liabilities |
5,719 | 4,206 |
(a) | The payables to related parties are unsecured, interest-free and payable on demand. |
(b) | The allocated portion for the six months ended June 30, 2019 and 2020 are included in cost of revenue, research and development expenses, selling expenses and general and administrative expenses. |
(c) | Other expenses mainly represented shared expenses primarily related to workplace resources and certain corporate functions that attributable to Penguin Business and are mainly made on a basis reasonably considering proportion of headcount, infrastructure usage metrics and active degree of each business segment. |
11. |
Commitments and contingencies |
12. |
Subsequent events |
EXHIBITS |
||
EXHIBIT A – |
Plan of Merger | |
EXHIBIT B – |
Principles of Lockup Undertaking and Securities Account Monitoring Agreement |
Accelerating RSU Holders |
A-51 | |||
Accelerating RSUs |
A-51 | |||
Acquisition Proposal |
A-42 | |||
Additional Huya Shares |
A-23 | |||
Affiliate |
A-60 | |||
Aggregate ADS Payment |
A-6 | |||
Agreement |
A-1, A-A-1 | |||
Articles of Association |
A-2 | |||
Assumed RSU Award |
A-4 | |||
Bankruptcy and Equity Exception |
||||
Business Day |
A-60 | |||
Cayman Companies Law |
A-2 | |||
Certificates |
A-5 | |||
Claim |
A-45 | |||
Closing |
A-2 | |||
Closing Date |
A-2 | |||
Code |
A-60 | |||
Contract |
A-14 | |||
COVID-19 Measures |
A-60 | |||
Data Protection Laws |
A-15, A-28 | |||
Dissenters Shares |
||||
DouYu |
A-1, A-A-1 | |||
DouYu ADSs |
A-3, A-A-2 | |||
DouYu Affiliate |
A-15 | |||
DouYu Agreements |
A-14 | |||
DouYu Benefit Plan |
A-16 | |||
DouYu Board |
A-1 | |||
DouYu Board Recommendation |
A-42 | |||
DouYu Change of Recommendation |
A-42 | |||
DouYu Closing Dividend |
A-49 | |||
DouYu Deposit Agreement |
A-5 | |||
DouYu Depositary |
A-5 | |||
DouYu Disclosure Schedule |
A-9 | |||
DouYu Dividend Record Date |
A-49 | |||
DouYu Employees |
A-60 | |||
DouYu Financial Advisor |
A-21 | |||
DouYu Intellectual Property |
A-60 | |||
DouYu IP Agreements |
A-61 | |||
DouYu IT Systems |
A-20 | |||
DouYu Licensed Intellectual Property |
A-61 | |||
DouYu Material Adverse Effect |
A-61 | |||
DouYu Material Contract |
A-19 | |||
DouYu Memorandum and Articles of Association |
A-9 | |||
DouYu Owned Intellectual Property |
A-61 | |||
DouYu Permits |
A-14 | |||
DouYu PRC Subsidiaries |
A-20 | |||
DouYu Record ADS Holders |
A-43 | |||
DouYu Related Party |
A-61 | |||
DouYu Restricted Share Unit Scheme |
A-61 |
DouYu RSU Awards |
A-61 | |||
DouYu RSU Trustee |
||||
DouYu SEC Reports |
A-11 | |||
DouYu Share |
A-A-1 | |||
DouYu Share Incentive Plan |
A-61 | |||
DouYu Shareholders |
A-1 | |||
DouYu Shareholders Meeting |
A-61 | |||
DouYu Shares |
A-A-1 | |||
DouYu Software |
A-61 | |||
DouYu Special Committee |
A-61 | |||
DouYu VIE Contracts |
A-61 | |||
DouYu VIEs |
A-61 | |||
DouYu Voting Agreement |
A-1 | |||
DouYu Voting Agreements |
A-1 | |||
DouYu Voting Shareholders |
A-1 | |||
Effective Time |
A-2 | |||
ERISA |
A-53 | |||
Exchange Act |
A-11 | |||
Exchange Agent |
A-5 | |||
Exchange Fund |
A-5 | |||
Exchange Ratio |
A-3 | |||
Excluded Shares |
A-4 | |||
Expenses |
A-47 | |||
FCPA |
A-15 | |||
Form F-4 |
A-41 | |||
GAAP |
A-12 | |||
Government Official |
A-15 | |||
Governmental Entity |
A-14 | |||
HKIAC |
A-58 | |||
HKIAC Rules |
A-59 | |||
Huya |
A-A-1 | |||
Huya ADSs |
A-A-2 | |||
Huya Agreements |
A-27 | |||
Huya Benefit Plan |
A-29 | |||
Huya Board |
A-1 | |||
Huya Class A Shares |
A-3 | |||
Huya Class B Shares |
A-23 | |||
Huya Closing Dividend |
A-49 | |||
Huya Deposit Agreement |
A-5 | |||
Huya Depositary |
A-5 | |||
Huya Disclosure Schedule |
A-22 | |||
Huya Dividend Record Date |
A-49 | |||
Huya Employees |
A-61 | |||
Huya Financial Advisor |
A-34 | |||
Huya Financial Information |
A-25 | |||
Huya Intellectual Property |
||||
Huya IP Agreements |
A-62 | |||
Huya IT Systems |
A-33 | |||
Huya Licensed Intellectual Property |
A-62 | |||
Huya Material Adverse Effect |
A-62 | |||
Huya Material Contract |
A-31 |
Huya Memorandum and Articles of Association |
A-22 | |||
Huya Option |
A-62 | |||
Huya Owned Intellectual Property |
A-62 | |||
Huya Permits |
A-27 | |||
Huya PRC Subsidiaries |
A-33 | |||
Huya Related Party |
A-62 | |||
Huya RSU Awards |
A-62 | |||
Huya SEC Reports |
A-24 | |||
Huya Share Incentive Plan |
A-62 | |||
Huya Shareholders |
A-23 | |||
Huya Shares |
A-23 | |||
Huya Software |
A-62 | |||
Huya Special Committee |
A-62 | |||
Huya VIE Contracts |
A-62 | |||
Huya VIEs |
A-62 | |||
Indemnified Parties |
A-45 | |||
Intellectual Property |
A-62 | |||
IT Assets |
A-63 | |||
Judgment |
A-14 | |||
know |
A-63 | |||
knowledge |
A-63 | |||
Law |
A-63 | |||
Lien |
A-63 | |||
Material Adverse Effect |
A-63 | |||
Merger |
A-1, A-A-1 | |||
Merger Consideration |
A-3, A-A-2 | |||
Merger Sub |
A-1, A-A-1 | |||
No Vote Termination Fee |
A-64 | |||
Non-Required Remedy |
A-45 | |||
Notice Date |
A-50 | |||
Off-the-Shelf |
A-64 | |||
Outside Date |
A-54 | |||
Parties |
A-1 | |||
Per ADS Merger Consideration |
A-3, A-A-2 | |||
Per Share Merger Consideration |
A-3, A-A-2 | |||
Permitted Liens |
A-64 | |||
Person |
A-64 | |||
Plan of Merger |
A-2 | |||
PRC |
A-64 | |||
PRC Anti-Bribery Laws |
A-15 | |||
PRC Regulatory Filings |
A-64 | |||
Proceedings |
A-14 | |||
Proxy Mailing Date |
A-41 | |||
Proxy Statement |
A-41 | |||
Public Software |
A-64 | |||
Purported Dissenting Shareholder |
A-7 | |||
Reassignment Agreement |
A-1 | |||
Record Date |
A-43 | |||
Registered |
A-64 | |||
Representative |
A-42 | |||
Required DouYu Vote |
A-11 | |||
Review Date |
A-12 |
SAFE |
A-15 | |||
SAFE Circular 37 |
A-64 | |||
SAFE Circular 7 |
A-65 | |||
Schedule 13E-3 |
A-41 | |||
SEC |
A-65 | |||
Section 238 |
A-7 | |||
Section 239 |
A-7 | |||
Securities Act |
A-11 | |||
Share Issuance |
A-41 | |||
Software |
A-65 | |||
Specified Provisions |
A-1 | |||
Statutory DouYu Benefit Plan |
A-16 | |||
Statutory Huya Benefit Plan |
A-29 | |||
Subsidiary |
A-65 | |||
Surviving Corporation |
A-A-1 | |||
Takeover Statute |
A-47 | |||
Tax |
A-65 | |||
Tax Group |
A-17 | |||
Tax Returns |
A-65 | |||
Taxes |
A-65 | |||
Taxing Authority |
A-65 | |||
Tencent |
A-1 | |||
Tencent Indemnitees |
A-50 | |||
Termination Fee |
A-65 | |||
Transaction Agreements |
A-65 | |||
UGC Agreements |
A-65 | |||
Uncertificated Shares |
A-5 | |||
US$ |
A-65 | |||
Vesting Acceleration |
A-B-1 | |||
Wholly Owned DouYu Subsidiaries |
||||
Wholly Owned Huya Subsidiaries |
||||
Wuhan DouYu |
A-65 | |||
Wuhan Ouyue |
A-65 |
Huya Inc. | ||
By: | /s/ Hongqiang Zhao | |
Name: Hongqiang Zhao | ||
Title: Director | ||
Tiger Company Ltd. | ||
By: | /s/ Rongjie Dong | |
Name: Rongjie Dong | ||
Title: Director |
DouYu International Holdings Limited | ||
By: | /s/ Zhaoming Chen | |
Name: Zhaoming Chen | ||
Title: Chairman of Special Committee |
Nectarine Investment Limited, solely for purposes of the Specified Provisions | ||
By: | /s/ Ma Huateng | |
Name: Ma Huateng | ||
Title: Director |
(1) | Tiger Company Ltd., an exempted company incorporated under the laws of the Cayman Islands on September 11, 2020, with its registered office situated at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands (“Merger Sub |
(2) | DouYu International Holdings Limited, an exempted company with limited liability incorporated under the laws of the Cayman Islands on January 5, 2018, with its registered office situated at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands (“DouYu Surviving Corporation Constituent Companies |
(a) | Merger Sub and DouYu have agreed to merge (the “ Merger Agreement Huya Sections 1.3 , 6.1 , 6.2 , 6.3 , 7.1 , 7.3 , 7.4 , 7.7 , 7.11 , 7.12 , 7.13 , 7.14 , 7.17 , 7.18 , 7.19 , 7.20 , 7.22 and Articles III , IV , V , VIII , IX and X thereto, Nectarine Investment Limited, a copy of which is attached as Appendix I to this Plan of Merger and under the provisions of Part XVI of the Companies Law (2020 Revision) of the Cayman Islands (the “Companies Law |
(b) | This Plan of Merger is made in accordance with section 233 of the Companies Law. |
(c) | Terms used in this Plan of Merger and not otherwise defined in this Plan of Merger shall have the meanings given to them under the Agreement. |
1. | The Constituent Companies to the Merger are Merger Sub and DouYu. |
2. | The name of the Surviving Corporation shall be DouYu International Holdings Limited. |
3. | The Surviving Corporation shall have its registered office at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY 1-1104, Cayman Islands. |
4. | Immediately prior to the Effective Date (as defined below), the authorized share capital of Merger Sub was US$100,000 divided into 1,000,000,000 ordinary shares of US$0.0001 par value per share, of which 1 share has been issued. |
5. | Immediately prior to the Effective Date, the authorized share capital of DouYu was US$100,000 divided into (A) 500,000,000 ordinary shares of a nominal or par value of US$0.0001 each (“ DouYu Shares |
(B) 500,000,000 shares of a nominal or par value of US$0.0001 each as the board of directors of DouYu may determine in accordance with the Fourth Amended and Restated Memorandum and Articles of Association of DouYu, of which [ ● ] DouYu Shares are issued and outstanding. No other shares of DouYu were issued and outstanding immediately prior to the Effective Date. |
6. | On the Effective Date (as defined below), the authorized share capital of the Surviving Corporation shall be US$100,000 divided into 1,000,000,000 ordinary shares of US$0.0001 par value per share. |
7. | On the Effective Date (as defined below), and in accordance with the terms and conditions of the Agreement: |
(a) | Each DouYu Share issued and outstanding immediately prior to the Effective Date, other than (i) the DouYu Shares represented by DouYu ADSs, (ii) the Excluded Shares, and (iii) any Purported Dissenters Shares (as defined in the Agreement), shall be canceled in exchange for the right of the holder of the relevant DouYu Share to receive 7.30 validly issued, fully paid, non-assessable Class A ordinary shares, par value US$0.0001 per share, of Huya (the “Per Share Merger Consideration |
(b) | Each American depositary share of DouYu, each of which represents one-tenth (1/10) of a DouYu Share (the “DouYu ADSs Huya ADSs Per ADS Merger Consideration Merger Consideration |
(c) | Each of the Excluded Shares shall, by virtue of the Merger and without any action on the part of its holder, automatically be canceled, shall no longer be issued or outstanding and shall cease to exist and no consideration shall be delivered or deliverable in exchange therefor. |
(d) | Each of the Purported Dissenters Shares shall be canceled in exchange for the right to receive the applicable consideration due and owing as provided in Section 2.6 of the Agreement. |
(e) | Each ordinary share of Merger Sub issued and outstanding immediately prior to the Effective Date, shall be converted into one validly issued, fully paid and non-assessable ordinary share with a par value of US$0.0001 each of the Surviving Corporation. |
8. | On the Effective Date, the ordinary shares of the Surviving Corporation shall: |
(a) | be entitled to one vote per share; |
(b) | be entitled to such dividends as the board of directors of the Surviving Corporation may from time to time declare; |
(c) | in the event of a winding-up or dissolution of the Surviving Corporation, whether voluntary or involuntary or for the purpose of a reorganization or otherwise or upon any distribution of capital, be entitled to the surplus assets; and |
(d) | generally be entitled to enjoy all of the rights and restrictions attaching to ordinary shares; |
9. | In accordance with section 233(13) of the Companies Law, the Merger shall be effective on the date that this Plan of Merger is registered by the Registrar of Companies of the Cayman Islands (the “ Effective Date |
10. | On the Effective Date, the rights, property of every description including choses in action, and the business, undertaking, goodwill, benefits, immunities and privileges of each of the Constituent Companies shall immediately vest in the Surviving Corporation which shall be liable for and subject, in the same manner as the Constituent Companies, to all mortgages, charges, or security interests and all contracts, obligations, claims, debts and liabilities of each of the Constituent Companies. |
11. | The memorandum of association and articles of association of the Merger Sub shall be the memorandum of association and articles of association of the Surviving Corporation, amended and restated in the form attached as Appendix II to this Plan of Merger on the Effective Date (the “Amended and Restated Memorandum and Articles |
12. | There are no amounts or benefits payable to the directors of the Constituent Companies on the Merger becoming effective. |
13. | The names and addresses of the directors of the Surviving Corporation are as follows: |
NAME | ADDRESS | |
[ ● ] | [ ● ] | |
[ ● ] | [ ● ] |
14. | (a) | Merger Sub has no secured creditors and has granted no fixed or floating security interests that are outstanding as at the date of this Plan of Merger; and |
(b) | DouYu has no secured creditors and has granted no fixed or floating security interests that are outstanding as at the date of this Plan of Merger. |
15. | This Plan of Merger may be terminated by the board of directors of both the Surviving Corporation and Merger Sub pursuant to the terms and conditions of the Agreement. |
16. | This Plan of Merger has been approved by the board of directors of each of DouYu and Merger Sub pursuant to section 233(3) of the Companies Law. |
17. | This Plan of Merger has been authorised by the shareholders of each of DouYu and Merger Sub pursuant to section 233(6) of the Companies Law. |
18. | This Plan of Merger may be executed by facsimile and in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. |
19. | This Plan of Merger shall be governed by and construed in accordance with the laws of the Cayman Islands. |
For and on behalf of Tiger Company Ltd.: |
|
[Name] |
Director |
For and on behalf of DouYu International Holdings Limited: |
|
[Name] |
Director |
A. | in the event such Accelerating RSU Holder’s employment or service with Henry or any of its Affiliates is terminated without the occurrence of any triggering event as mutually agreed by and among Tom, Henry and such Accelerating RSU Holder (each, a “ Triggering Event |
1. | if such employment or service is terminated by such holder, including by reason of resignation or non-renewal of employment or service agreement upon its expiration as elected by such holder, each Unvested Restricted Henry ADS held by such Accelerating RSU Holder as of the date of such termination shall be repurchased and canceled by Henry for no consideration, provided that this Clause (B)(a)(i) of this paragraph 2 shall not apply in any of the following events (the “Good Leaver Events |
2. | if such employment or service is terminated other than by such holder or terminated by such holder in any of the Good Leaver Events, the lockup restriction described in Clause (A) of this paragraph 2 shall continue to apply until the end of the Post-Closing Lockup Period but Henry shall not be entitled to repurchase any of such holder’s Restricted Henry ADSs as a result of such termination; |
B. | in the event such Accelerating RSU Holder’s employment or service with Henry or any of its Affiliates is terminated upon occurrence of a Triggering Event, each Unvested Restricted Henry ADS held by such Accelerating RSU Holder as of the date of such termination shall be repurchased and canceled by Henry for no consideration without prejudice to any other rights and remedies Henry or any of its Affiliates may have. |
B-15 |
||||||
Section 7.1 |
Survival | B-15 |
||||
Section 7.2 |
Indemnification by Tencent | B-15 |
||||
Section 7.3 |
Limitations | B-15 |
||||
Section 7.4 |
Indemnification Procedures | B-15 |
||||
Section 7.5 |
No Duplication of Recovery | B-16 |
||||
Section 7.6 |
Duty to Mitigate | B-16 |
||||
Section 7.7 |
Access | B-16 |
||||
Section 7.8 |
Exclusivity of Indemnity | B-16 |
||||
Section 7.9 |
Tax Treatment of Indemnity Payments | B-17 |
||||
B-17 |
||||||
Section 8.1 |
Conditions to Each Party’s Obligations to Effect the Reassignment | B-17 |
||||
Section 8.2 |
Conditions to the Obligations of DouYu | B-17 |
||||
Section 8.3 |
Conditions to the Obligations of Tencent | B-17 |
||||
B-17 |
||||||
Section 9.1 |
Termination by Mutual Agreement | B-17 |
||||
Section 9.2 |
Termination by Either Tencent or DouYu | B-18 |
||||
Section 9.3 |
Effect of Termination and Abandonment | B-18 |
||||
B-18 |
||||||
Section 10.1 |
Entire Agreement; Assignment | B-18 |
||||
Section 10.2 |
Notices | B-18 |
||||
Section 10.3 |
Governing Law | B-19 |
||||
Section 10.4 |
Arbitration | B-19 |
||||
Section 10.5 |
Descriptive Headings | B-20 |
||||
Section 10.6 |
Third Party Beneficiaries | B-20 |
||||
Section 10.7 |
Severability | B-20 |
||||
Section 10.8 |
Specific Performance | B-20 |
||||
Section 10.9 |
Consequential, Punitive and Certain Other Damages | B-20 |
||||
Section 10.10 |
Amendment | B-20 |
||||
Section 10.11 |
Extension; Waiver | B-20 |
||||
Section 10.12 |
Interpretation | B-20 |
||||
Section 10.13 |
Certain Definitions | B-21 |
||||
Section 10.14 |
Counterparts | B-25 |
||||
EXHIBITS |
||||||
EXHIBIT A – Form of Equity Pledge Agreement |
||||||
EXHIBIT B – Form of Exclusive Business Cooperation Agreement |
||||||
EXHIBIT C – Key Terms of Transition Services Agreement |
||||||
EXHIBIT D – Restructuring Schedule |
Acquired Assets |
10.13(a) | |||
Acquired Business |
10.13(b) | |||
Affiliate |
10.13(c) | |||
Assignment Agreement |
10.13(d) | |||
Audited Financial Statements |
3.4(a)(i) | |||
Bankruptcy and Equity Exception |
3.3 | |||
BCA |
Recitals | |||
Business Day |
10.13(e) | |||
Claim |
10.13(f) | |||
Closing |
2.1 | |||
Closing Date |
2.1 | |||
Company |
Recitals | |||
Company Articles of Association |
3.1(a) | |||
Company Financial Statements |
3.4(a)(ii) | |||
Company Intellectual Property |
10.13(g) | |||
Company IP Agreements |
10.13(h) | |||
Company IT Assets |
10.13(i) | |||
Company Licensed Intellectual Property |
10.13(j) | |||
Company Material Adverse Effect |
10.13(k) | |||
Company Material Contracts |
3.12 | |||
Company Owned Intellectual Property |
10.13(l) | |||
Company Permits |
6.2(c) | |||
Company Software |
10.13(m) | |||
Consideration |
1.2 | |||
Contract |
3.8(b) | |||
COVID-19 Measures |
10.13(n) | |||
Damages |
7.2 | |||
Direct Claim |
7.4(d) | |||
DouYu Indemnified Parties |
6.8(c) | |||
DouYu Memorandum and Articles of Association |
4.2 | |||
DouYu WFOE |
10.13(p) | |||
Equity Pledge Agreement |
10.13(q) | |||
Exchange Act |
10.13(r) | |||
Exclusive Business Cooperation Agreement |
10.13(s) | |||
Exclusive Share Option Agreement |
Recitals | |||
Expenses |
6.6 | |||
GAAP |
3.4(b) | |||
Governmental Entity |
3.8(a) | |||
HKIAC |
10.4 | |||
HKIAC Rules |
10.4 | |||
Hong Kong |
10.13(t) | |||
HUYA |
Recitals | |||
Intellectual Property |
10.13(u) | |||
Judgment |
3.11 | |||
know |
10.13(u) | |||
knowledge |
10.13(u) | |||
Latest Balance Sheet Date |
3.4(a)(ii) | |||
Law |
10.13(w) | |||
Lien |
10.13(x) | |||
Loan |
6.8(a) |
Long Stop Date |
10.13(y) | |||
Losses |
6.8(c) | |||
Merger |
Recitals | |||
Merger Agreement |
Recitals | |||
Merger Consideration |
10.13(z) | |||
Merger Sub |
Recitals | |||
Non-Required Remedy |
6.1(c) | |||
Overdue Liabilities |
10.13(aa) | |||
Permitted Liens |
10.13(bb) | |||
Person |
10.13(cc) | |||
PRC |
10.13(dd) | |||
PRC Regulatory Filings |
10.13(ee) | |||
Pre-Closing Restructuring |
6.2(a) | |||
Proceedings |
3.11 | |||
Proxy Agreement |
Recitals | |||
Reassignment |
1.1 | |||
Registered |
10.13(ff) | |||
Registered Capital |
6.8(a) | |||
Representative |
10.13(gg) | |||
Restructuring |
10.13(hh) | |||
Restructuring Contracts |
10.13(hh) | |||
Restructuring Schedule |
10.13(hh) | |||
RMB |
10.13(kk) | |||
SEC |
10.13(ll) | |||
Securities Act |
10.13(mm) | |||
Software |
10.13(nn) | |||
Subsidiary |
10.13(oo) | |||
Tax |
10.13(pp) | |||
Taxes |
10.13(pp) | |||
Tencent Disclosure Schedule |
Article III | |||
Tencent Financial Advisor |
10.13(qq) | |||
Tencent Group Company |
10.13(rr) | |||
Tencent Holdco |
Recitals | |||
Tencent Indemnified Parties |
7.2 | |||
Tencent OPCO |
Recitals | |||
Tencent Related Party |
10.13(ss) | |||
Tencent WFOE |
Recitals | |||
Third Party Claim |
7.4(a) | |||
Third Party Claim Notice |
7.4(a) | |||
Transaction Agreements |
10.13(tt) | |||
Transition Services |
3.9(b) | |||
Transition Services Agreement |
6.3 | |||
Unaudited Financial Statements |
3.4(a)(ii) | |||
US$ |
10.13(uu) |
(i) | a counterpart to the Deed of Novation, duly executed by DouYu; |
(ii) | a counterpart to the Assignment Agreement, duly executed by DouYu; |
(iii) | a counterpart to the Equity Pledge Agreement, duly executed by DouYu WFOE; and |
(iv) | a counter part to the Exclusive Business Cooperation Agreement, duly executed by DouYu WFOE. |
Nectarine Investment Limited | ||
By: | /s/ Ma Huateng | |
Name: Ma Huateng | ||
Title: Director |
DouYu International Holdings Limited | ||
By: |
/s/ Zhaoming Chen | |
Zhaoming Chen | ||
Chairman of Special Committee |
HUYA INC. | ||
By: | /s/ Rongjie Dong | |
Name: Rongjie Dong | ||
Title: Director |
Nectarine Investment Limited | ||
By: | /s/ Ma Huateng | |
Name: Ma Huateng | ||
Title: Director |
/s/ Shaojie Chen |
Name: Shaojie Chen |
Solely for purposes of Section 4(b), | ||
DOUYU INTERNATIONAL HOLDINGS LIMITED | ||
By: | /s/ Zhaoming Chen | |
Name: Zhaoming Chen | ||
Title: Chairman of Special Committee |
Name and Contact Information for Shareholder |
Number of Ordinary Shares Beneficially Owned |
|||
Attention: Shaojie Chen Address: 20/F, Building A, New Development International Center, No. 473 Guanshan Avenue, Hongshan District, Wuhan, Hubei Province, People’s Republic of China Email: |
4,800,629 |
HUYA INC. | ||
By: | /s/ Rongjie Dong | |
Name: | Rongjie Dong | |
Title: | Director |
Nectarine Investment Limited | ||
By: | /s/ Ma Huateng | |
Name: | Ma Huateng | |
Title: | Director |
/s/ Wenming Zhang |
Name: Wenming Zhang |
Solely for purposes of Section 4(b), | ||
DOUYU INTERNATIONAL HOLDINGS LIMITED | ||
By: | /s/ Zhaoming Chen | |
Name: | Zhaoming Chen | |
Title: | Chairman of Special Committee |
Name and Contact Information for Shareholder |
Number of Ordinary Shares Beneficially Owned | |
Attention: Wenming Zhang Address: 19F, Building F3, Guanggu Software Park, Wuhan, Hubei Province, People’s Republic of China ( 湖北省武汉市光谷软件园 F3栋 19楼 ) Email: |
651,239 |
1) | reviewed certain publicly available financial statements and other business and financial information of DouYu and Huya, respectively; |
2) | reviewed certain internal financial statements and other financial and operating data concerning DouYu, Huya and the Acquired Business, respectively; |
3) | reviewed certain financial projections prepared by the managements of DouYu, Huya and the Acquired Business, respectively; |
4) | reviewed certain information relating to certain strategic, financial and operational benefits anticipated from the Merger and the Reassignment, prepared by the managements of DouYu, Huya and the Acquired Business, respectively; |
5) | discussed the past and current operations and financial condition and the prospects of DouYu, including information relating to certain strategic, financial and operational benefits anticipated from the Merger and the Reassignment, with senior executives of DouYu and Huya; |
6) | discussed the past and current operations and financial condition and the prospects of Huya, including information relating to certain strategic, financial and operational benefits anticipated from the Merger and the Reassignment, with senior executives of DouYu and Huya; |
7) | discussed the past and current operations and financial condition and the prospects of the Acquired Business, including information relating to certain strategic, financial and operational benefits anticipated from the Merger and the Reassignment, with senior executives of the Acquired Business; |
8) | reviewed the reported prices and trading activity for the DouYu ADSs and the Huya ADSs; |
9) | compared the financial performance of DouYu and Huya and the prices and trading activity of the DouYu ADSs and the Huya ADSs with that of certain other publicly-traded companies comparable with DouYu and Huya, respectively, and their securities; |
10) | participated in certain discussions and negotiations among representatives of DouYu and Huya and certain other parties and their financial and legal advisors; |
11) | reviewed the financial terms and conditions of the Merger Agreement, the Reassignment Agreement and certain related documents in the form of drafts dated October 12, 2020; and |
12) | performed such other analyses and considered such other factors as we have deemed appropriate. |
Very truly yours, | ||
MORGAN STANLEY ASIA LIMITED | ||
By: | /s/ Richard J. Wong | |
Richard J. Wong Managing Director |
239. |
Limitation on rights of dissenters |
1. | Directors and Executive Officers of Huya |
Name |
Position with Huya |
Present Principal Occupation |
Business Address |
Citizenship | ||||
Lingdong Huang | Chairman of Board of Directors | General Manager at Tencent Holdings Limited’s Interactive Entertainment Group | Building C, Kexing Science Park, Nanshan District, Shenzhen, the People’s Republic of China | People’s Republic of China | ||||
Rongjie Dong | Director, Chief Executive Officer | * | Building A3, E-Park, 280 Hanxi Road, Panyu District, Guangzhou 511446, People’s Republic of China |
People’s Republic of China | ||||
David Xueling Li | Director | Co-founder, Chairman and Chief Executive Officer of JOYY Inc. |
Building B-1, North Block of Wanda Plaza, No. 79 Wanbo 2nd Road, Panyu District, Guangzhou, 511442, the People’s Republic of China |
People’s Republic of China | ||||
Zhi Cheng | Director | Assistant General Manager at Tencent Holdings Limited | Building C, Kexing Science Park, Nanshan District, Shenzhen, the People’s Republic of China. | People’s Republic of China | ||||
Hai Tao Pu | Director | General Manager at Tencent Holdings Limited | 29/F, Three Pacific Place, 1 Queen’s Road East, Wanchai, Hong Kong | People’s Republic of China (Hong Kong SAR) | ||||
Guang Xu | Director | General Manager at Tencent Holdings Limited’s Interactive Entertainment Group | Building C, Kexing Science Park, Nanshan District, Shenzhen, the People’s Republic of China | People’s Republic of China | ||||
Lei Zheng | Director | General Manager of the User Platform Department of Tencent Holdings Limited | Building C, Kexing Science Park, Nanshan District, Shenzhen, the People’s Republic of China | People’s Republic of China | ||||
Hongqiang Zhao | Independent Director | Chief Financial Officer of BaiRong Yunchuang Technology Co. Ltd. | No. 10 Furong Street, Chaoyang District, Beijing, the People’s Republic of China | United States of America | ||||
Tsang Wah Kwong |
Independent Director | / | Flat B, 11/F., Block 9, Vista Paradiso, 2 Hang Ming Street, Ma On Shan, New Territories, Hong | People’s Republic of China (Hong Kong SAR) | ||||
Catherine Xiaozheng Liu | Chief Financial Officer | * | Building A3, E-Park, 280 Hanxi Road, Panyu District, Guangzhou 511446, People’s Republic of China |
People’s Republic of China (Hong Kong SAR) |
Name |
Position with Huya |
Present Principal Occupation |
Business Address |
Citizenship | ||||
Ligao Lai | Chief Technology Officer | * | Building A3, E-Park, 280 Hanxi Road, Panyu District, Guangzhou 511446, People’s Republic of China |
People’s Republic of China |
* |
His/Her present principal occupation is the same with his/her position with Huya. |
2. | Directors and Executive Officers of Merger Sub |
Name |
Position with Merger Sub |
Present Principal Occupation |
Business Address |
Citizenship | ||||
Rongjie Dong | Sole Director | Chief Executive Officer of Huya | Building A3, E-Park, 280 Hanxi Road, Panyu District, Guangzhou 511446, People’s Republic of China |
People’s Republic of China |
3. |
Directors and Executive Officers of DouYu |
Name |
Position with DouYu |
Present Principal Occupation |
Business Address |
Citizenship | ||||
Shaojie Chen |
Founder, Chief Executive Officer, Director | * | 20/F, Building A, New Development International Center, No. 473 Guanshan Avenue, Hongshan District, Wuhan, Hubei Province, the People’s Republic of China | People’s Republic of China | ||||
Wenming Zhang |
Co-founder, Co-Chief Executive Officer, Director |
* | 20/F, Building A, New Development International Center, No. 473 Guanshan Avenue, Hongshan District, Wuhan, Hubei Province, the People’s Republic of China | People’s Republic of China | ||||
Chao Cheng |
Chief Operational Officer | * | 20/F, Building A, New Development International Center, No. 473 Guanshan Avenue, Hongshan District, Wuhan, Hubei Province, the People’s Republic of China | People’s Republic of China | ||||
Mingming Su |
Chief Strategy Officer, Director | * | 20/F, Building A, New Development International Center, No. 473 Guanshan Avenue, Hongshan District, Wuhan, Hubei Province, the People’s Republic of China | People’s Republic of China | ||||
Hao Cao | Vice President, Director | * | 20/F, Building A, New Development International Center, No. 473 Guanshan Avenue, Hongshan District, Wuhan, Hubei Province, the People’s Republic of China | People’s Republic of China | ||||
Song Zhou | Director | Vice General Manager of Finance at Tencent Holdings Limited | Room 1631, Building C, Kexing Science Park, Kejizhongsan Avenue, Nanshan District, Shenzhen, the People’s Republic of China | People’s Republic of China |
Name |
Position with DouYu |
Present Principal Occupation |
Business Address |
Citizenship | ||||
Haiyang Yu | Director | Vice General Manager at Tencent Holdings Limited | 29/F, Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong | People’s Republic of China | ||||
Xi Cao | Independent Director | Partner of Sequoia Capital China | Room 3606, China Central Place Tower 3, 77 Jianguo Road, Beijing, People’s Republic of China | People’s Republic of China | ||||
Zhaoming Chen | Independent Director | Chief Financial Officer of Dada Nexus Limited | 22/F, Oriental Fisherman’s Wharf, No. 1088 Yangshupu Road, Yangpu District, Shanghai, the People’s Republic of China | People’s Republic of China | ||||
Xuehai Wang | Independent Director | Chairman of Jissbon Sanitary Products Co. and Chairman of Humanwell Healthcare (Group) Co., Ltd. | No. 666 Gaoxin Avenue, East Lake New Technology Development Zone, Wuhan, the People’s Republic of China | People’s Republic of China | ||||
Zhi Yan |
Independent Director | Chairman of Zall Holding Co., Ltd., the Co-Chairman and Co-Chief Executive Officer of Zall Smart Commerce Group, the Chairman and Director of China Infrastructure & Logistics Group Ltd., the Director of LightInTheBox Holding Co., Ltd. and the Chairman and the Director of Hanshang Group | Special #1, Julong Avenue, Panlong Town Economics Development Zone, Wuhan, the People’s Republic of China | People’s Republic of China |
* |
His/Her present principal occupation is the same with his/her position with DouYu. |
4. | Directors and Executive Officers of Tencent Holdings Limited |
Name |
Business Address |
Present Principal Occupation or Employment |
Country of Citizenship | |||
Ma Huateng (1) |
c/o Tencent Holdings Limited, 29/F., Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong |
Executive director, Chairman of the Board and Chief Executive Officer of Tencent Holdings Limited | People’s Republic of China | |||
Lau Chi Ping Martin (2) |
c/o Tencent Holdings Limited, 29/F., Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong |
Executive director and President of Tencent Holdings Limited | People’s Republic of China (Hong Kong SAR) | |||
Jacobus Petrus (Koos) Bekker (3) |
c/o Tencent Holdings Limited, 29/F., Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong |
Non-executive director of Tencent Holdings Limited and non-executive chairman of Naspers Limited |
Republic of South Africa | |||
Charles St Leger Searle (4) |
c/o Tencent Holdings Limited, 29/F., Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong |
Non-executive director of Tencent Holdings Limited and Chief Executive Officer of Naspers Internet Listed Assets |
Republic of South Africa |
Name |
Business Address |
Present Principal Occupation or Employment |
Country of Citizenship | |||
Dong Sheng Li (5) |
c/o Tencent Holdings Limited, 29/F., Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong |
Independent non-executive director of Tencent Holdings Limited, Chairman and Chief Executive Officer of TCL Technology Group Corporation, Chairman and executive director of TCL Electronics Holdings Limited |
People’s Republic of China | |||
Iain Ferguson Bruce (6) |
c/o Tencent Holdings Limited, 29/F., Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong |
Independent non-executive director of Tencent Holdings Limited |
People’s Republic of China (Hong Kong SAR) | |||
Ian Charles Stone (7) |
c/o Tencent Holdings Limited, 29/F., Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong |
Independent non-executive director of Tencent Holdings Limited, Chief Executive Officer of Saudi Integrated Telecom Company, Director of Franco Development Ltd |
People’s Republic of China (Hong Kong SAR) | |||
Yang Siu Shun (8) |
c/o Tencent Holdings Limited, 29/F., Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong |
Independent non-executive director of Tencent Holdings Limited |
People’s Republic of China (Hong Kong SAR) | |||
Ke Yang (9) |
c/o Tencent Holdings Limited, 29/F., Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong |
Independent non-executive director of Tencent Holdings Limited |
People’s Republic of China | |||
Xu Chenye (10) |
c/o Tencent Holdings Limited, 29/F., Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong |
Chief Information Officer of Tencent Holdings Limited | People’s Republic of China | |||
Ren Yuxin (11) |
c/o Tencent Holdings Limited, 29/F., Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong |
Chief Operating Officer and President of Platform & Content Group and Interactive Entertainment Group of Tencent Holdings Limited | People’s Republic of China | |||
James Gordon Mitchell (12) |
c/o Tencent Holdings Limited, 29/F., Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong |
Chief Strategy Officer and Senior Executive Vice President of Tencent Holdings Limited | United Kingdom of Great Britain and Northern Ireland | |||
David A M Wallerstein (13) |
c/o Tencent Holdings Limited, 29/F., Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong |
Chief eXploration Officer and Senior Executive Vice President of Tencent Holdings Limited | United States of America |
Name |
Business Address |
Present Principal Occupation or Employment |
Country of Citizenship | |||
John Shek Hon Lo (14) |
c/o Tencent Holdings Limited, 29/F., Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong |
Chief Financial Officer and Senior Vice President of Tencent Holdings Limited | People’s Republic of China (Hong Kong SAR) |
(1) | Ma Huateng has been in the current position for the past five years. |
(2) | Lau Chi Ping Martin has been in the current position for the past five years. |
(3) | Jacobus Petrus (Koos) Bekker has been in the current position for the past five years. |
(4) | Charles St Leger Searle has been in the current position for the past five years. |
(5) | Dong Sheng Li was an independent director of Legrand from 2015 to 2018 and a non-executive director of Fantasia Holdings Group Co., Limited from 2015 to 2020. |
(6) | Iain Ferguson Bruce was an independent non-executive director of Sands China Ltd. from 2015 to 2016, an independent non-executive director of Noble Group Limited from 2015 to 2017, and an independent non-executive director of Yingli Green Energy Holding Company Limited from 2015 to 2020. |
(7) | Ian Charles Stone has been in the current position for the past five years. |
(8) | Yang Siu Shun has been an independent non-executive director of Industrial and Commercial Bank of China Limited since 2016. |
(9) | Ke Yang has been in the current position for the past five years. |
(10) | Xu Chenye has been in the current position for the past five years. |
(11) | Ren Yuxin has been in the current position for the past five years. |
(12) | James Gordon Mitchell has been in the current position for the past five years. |
(13) | David A M Wallerstein has been in the current position for the past five years. |
(14) | John Shek Hon Lo has been in the current position for the past five years. |
5. | Directors and Executive Officers of Nectarine Investment Limited |
Name |
Business Address |
Present Principal Occupation or Employment |
Country of Citizenship | |||
Ma Huateng (1) |
c/o Tencent Holdings Limited, 29/F., Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong |
Executive director, Chairman of the Board and Chief Executive Officer of Tencent Holdings Limited | People’s Republic of China | |||
Charles St Leger Searle (2) |
c/o Tencent Holdings Limited, 29/F., Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong |
Non-executive director of Tencent Holdings Limited and Chief Executive Officer of Naspers Internet Listed Assets |
Republic of South Africa |
(1) | Ma Huateng has been in the current position for the past five years. |
(2) | Charles St Leger Searle has been in the current position for the past five years. |
6. |
Directors and Executive Officers of Warrior Ace Holding Limited |
Name |
Business Address |
Present Principal Occupation or Employment |
Country of Citizenship | |||
Shaojie Chen (1) |
20/F, Building A, New Development International Center, No. 473 Guanshan Avenue, Hongshan District, Wuhan, Hubei Province | Chairman and chief executive officer of DouYu International Holdings Limited | People’s Republic of China |
(1) | Mr. Shaojie Chen has been in the current position for the past five years. |
7 . |
Directors and Executive Officers of Starry Zone Investments Limited |
Name |
Business Address |
Present Principal Occupation or Employment |
Country of Citizenship | |||
Wenming Zhang (1) |
20/F, Building A, New Development International Center, No. 473 Guanshan Avenue, Hongshan District, Wuhan, Hubei Province | Director and co-chief executive officer of DouYu International Holdings Limited | People’s Republic of China |
(1) | Mr. Wenming Zhang has been in the current position for the past five years. |
Item 20. |
Indemnification of Directors and Officers |
Item 21. |
Exhibits and Financial Statement Schedules |
Item 22. |
Undertakings |
† | Previously filed |
HUYA Inc. | ||
By: | /s/ Catherine Xiaozheng Liu | |
Name: | Catherine Xiaozheng Liu | |
Title: | Chief Financial Officer |
Signature |
Title |
Date | ||
/s/ Rongjie Dong |
Director and Chief Executive Officer (principal executive officer) | January 29, 2021 | ||
Rongjie Dong | ||||
/s/ Catherine Xiaozheng Liu |
Chief Financial Officer (principal financial and accounting officer) | January 29, 2021 | ||
Catherine Xiaozheng Liu | ||||
* |
Chairman of the Board of Directors | January 29, 2021 | ||
Lingdong Huang | ||||
* |
Director | January 29, 2021 | ||
David Xueling Li | ||||
* |
Director | January 29, 2021 | ||
Zhi Cheng | ||||
* |
Director | January 29, 2021 | ||
Hai Tao Pu | ||||
* |
Director | January 29, 2021 | ||
Guang Xu | ||||
* |
Director | January 29, 2021 | ||
Lei Zheng | ||||
* |
Director | January 29, 2021 | ||
Hongqiang Zhao | ||||
* |
Director | January 29, 2021 | ||
Tsang Wah Kwong |
*By: | /s/ Catherine Xiaozheng Liu | |||
Name: | Catherine Xiaozheng Liu, Attorney-in-fact |
Authorized U.S. Representative | ||
By: | /s/ Colleen A. De Vries | |
Name: | Colleen A. De Vries, on behalf of COGENCY GLOBAL INC. | |
Title: | Senior Vice President |