UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 20-F
(Mark One)
☐
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
or
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
or
☐
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
or
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report ___________________
For the transition period from to _______________
Commission file number: 001-36222
Autohome Inc.
(Exact name of Registrant as specified in its charter)
N/A
(Translation of Registrant’s name into English)
Cayman Islands
(Jurisdiction of incorporation or organization)
18th Floor Tower B, CEC Plaza
3 Dan Ling Street
Haidian District, Beijing 100080
The People’s Republic of China
(Address of principal executive offices)
Tao Wu
Chief Executive Officer
Tel: +86 (10) 5985-7001
E-mail:
ir@autohome.com.cn
Fax: +86 (10) 5985-7400
18th Floor Tower B, CEC Plaza
3 Dan Ling Street
Haidian District, Beijing 100080
The People’s Republic of China
(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of Each Class
American depositary shares, each representing four ordinary shares
Ordinary shares, par value US$0.0025 per share
Trading Symbol(s)
ATHM
2518
Name of Each Exchange on Which Registered
The New York Stock Exchange
The Stock Exchange of Hong Kong Limited
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
(Title of Class)
Indicate the number of outstanding shares of each of the Issuer’s classes of capital or common stock as of the close of the period covered by the annual report. 483,398,100
ordinary shares (excluding 25,989,500 treasury shares and ordinary shares that had been issued and reserved for the purpose of our share incentive plans as of
December 31, 2023), par value US$0.0025 per share, were outstanding as of December 31, 2023.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒
No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files) Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See definition of
“large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ☒
Accelerated filer ☐
Non-accelerated filer ☐
Emerging growth company ☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the
extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. Yes ☐ No ☐
† 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.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes ☒
No ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any
of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP ☒
International Financial Reporting Standards as issued by the International Accounting Standards Board
☐
Other ☐
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐
Item 18 ☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐
TABLE OF CONTENTS
INTRODUCTION
FORWARD-LOOKING STATEMENTS
PART I.
ITEM 1
ITEM 2
ITEM 3
ITEM 4
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS
OFFER STATISTICS AND EXPECTED TIMETABLE
KEY INFORMATION
INFORMATION ON THE COMPANY
ITEM 4A
UNRESOLVED STAFF COMMENTS
ITEM 5
ITEM 6
ITEM 7
ITEM 8
ITEM 9
ITEM 10
ITEM 11
ITEM 12
PART II.
ITEM 13
ITEM 14
ITEM 15
ITEM 16A
ITEM 16B
ITEM 16C
ITEM 16D
ITEM 16E
ITEM 16F
ITEM 16G
ITEM 16H
ITEM 16I
ITEM 16J
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
FINANCIAL INFORMATION
THE OFFER AND LISTING
ADDITIONAL INFORMATION
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
CONTROLS AND PROCEDURES
AUDIT COMMITTEE FINANCIAL EXPERT
CODE OF ETHICS
PRINCIPAL ACCOUNTANT FEES AND SERVICES
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
CORPORATE GOVERNANCE
MINE SAFETY DISCLOSURE
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
INSIDER TRADING POLICIES
ITEM 16K
CYBERSECURITY
PART III.
ITEM 17
ITEM 18
ITEM 19
SIGNATURES
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
EXHIBITS
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Unless otherwise indicated and except where the context otherwise requires, references in this annual report on Form 20-F to:
INTRODUCTION
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“ADSs” are to our American depositary shares, each of which represents four ordinary shares, par value US$0.0025 per share, after our variation
of share capital in 2021;
“CAC” are to the Cyberspace Administration of China and the Office of the Central Cyberspace Affairs Commission;
“CAGR” are to compound annual growth rate;
“CCASS” are to the Central Clearing and Settlement System established and operated by Hong Kong Securities Clearing Company Limited, a
wholly-owned subsidiary of Hong Kong Exchange and Clearing Limited;
“China” or the “PRC” are to the People’s Republic of China, including Hong Kong, Macau and Taiwan; and “mainland China” refers to the
People’s Republic of China, excluding Hong Kong, Macau and Taiwan;
“CSRC” are to the China Securities Regulatory Commission;
“ESG report” are to our 2023 ESG report, which is accessible via hyperlink in our press release furnished to the SEC as Exhibit 99.1 to our Form
6-K (File No. 001-36222) on March 27, 2024;
“HK$” or “Hong Kong dollars” or “HK dollars” are to Hong Kong dollars, the lawful currency of Hong Kong;
“Hong Kong” or “HK” or “Hong Kong S.A.R.” are to the Hong Kong Special Administrative Region of the PRC;
“Hong Kong Listing Rules” are to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, as amended or
supplemented from time to time;
“Hong Kong Share Registrar” are to Computershare Hong Kong Investor Services Limited;
“Hong Kong Stock Exchange” are to The Stock Exchange of Hong Kong Limited;
“ICP License” are to the license for provision of internet information services;
“Main Board” are to the stock market (excluding the option market) operated by the Hong Kong Stock Exchange which is independent from and
operated in parallel with the Growth Enterprise Market of the Hong Kong Stock Exchange;
“MIIT” are to the Ministry of Industry and Information Technology of PRC;
“MOFCOM” are to the Ministry of Commerce of PRC;
“NDRC” are to the National Development and Reform Commission of PRC;
“Ping An Group” are to Ping An Insurance (Group) Company of China, Ltd. (HKEX: 2318; SHA: 601318), a company organized under the laws
of the PRC whose H shares and A shares are listed on the Hong Kong Stock Exchange and the Shanghai Stock Exchange, respectively;
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“RMB” and “Renminbi” are to the legal currency of mainland China;
“SCNPC” are to the Standing Committee of the National People’s Congress of the PRC;
“SEC” are to the U.S. Securities and Exchange Commission;
“SFC” are to the Securities and Futures Commission of Hong Kong;
“SFO” are to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), as amended or supplemented from time to time;
“shares” or “ordinary shares” are to our ordinary shares, par value US$0.0025 per share, after our variation of share capital in 2021;
“TTP” are to TTP Car Inc., a company operating an online bidding platform for used automobiles and the control of which was acquired by us in
the fourth quarter of 2020;
“VIEs” and “VIE Entities” are to the variable interest entities, primarily including (i) Beijing Autohome Information Technology Co., Ltd., or
Autohome Information, (ii) Beijing Shengtuo Hongyuan Information Technology Co., Ltd., or Shengtuo Hongyuan, (iii) Shanghai Jinwu Auto
Technology Consultant Co., Ltd., or Shanghai Jinwu, and (iv) Shanghai Jinyou Auto Technology Co., Ltd., or Shanghai Jinyou;
“we,” “us,” “our,” “our company” or “the Company” are to Autohome Inc., its predecessors, subsidiaries and, in the context of describing our
operations and consolidated financial information, the VIEs in mainland China;
“WFOEs,” for the purpose of this annual report, are to the wholly foreign-owned enterprises which have entered into contractual arrangements
with the VIEs, including (i) Beijing Cheerbright Technologies Co., Ltd., or Autohome WFOE, (ii) Beijing Chezhiying Technology Co., Ltd., or
Chezhiying WFOE, and (iii) Shanghai Jinpai E-commerce Co., Ltd. or TTP WFOE;
“U.S. GAAP” refers to generally accepted accounting principles in the United States; and
“$,” “dollars,” “US$” or “U.S. dollars” refers to the legal currency of the United States.
In February 2021 we effected a 4-for-1 share split and an ADS-to-ordinary share ratio adjustment from one ADS representing one Class A ordinary
share to one ADS representing four ordinary shares upon the approval of our shareholders, which applies to all share numbers in this annual report
retrospectively.
Substantially all of our operations are conducted in mainland China and substantially all of our revenues are denominated in RMB. This annual report
contains translations of RMB and Hong Kong dollar amounts into U.S. dollars at specific rates solely for the convenience of the readers. Unless otherwise
noted, all translations from RMB and Hong Kong dollars to U.S. dollars and from U.S. dollars to RMB in this annual report were made at a rate of
RMB7.0999 to US$1.00 and HK$7.8109 to US$1.00, the respective exchange rates set forth in the H.10 statistical release of the Board of Governors of the
Federal Reserve System as of December 29, 2023. We make no representation that any RMB, Hong Kong dollar or U.S. dollar amounts could have been,
or could be, converted into U.S. dollars, RMB or Hong Kong dollars, as the case may be, at any particular rate, or at all. The mainland China government
imposes control over its foreign currency reserves in part through direct regulation of the conversion of RMB into foreign exchange and through
restrictions on foreign trade. Any discrepancies in any table between totals and sums of amounts listed therein are due to rounding.
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FORWARD-LOOKING STATEMENTS
This annual report contains forward-looking statements that reflect our current expectations and views of future events. The forward-looking
statements are contained principally in the sections titled “Item 3. Key Information—D. Risk Factors,” “Item 4. Information on the Company—B. Business
Overview” and “Item 5. Operating and Financial Review and Prospects.” These forward-looking statements are made under the “safe-harbor” provisions of
the U.S. Private Securities Litigation Reform Act of 1995. Known and unknown risks, uncertainties and other factors, including those listed under “Item 3.
Key Information—D. Risk Factors,” may cause our actual results, performance or achievements to be materially different from those expressed or implied
by the forward-looking statements.
You can identify some of these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,”
“intend,” “plan,” “believe,” “is/are likely to,” “potential,” “continue” or other similar expressions. We have based these forward-looking statements largely
on our current expectations and projections about future events that we believe may affect our financial condition, results of operations, business strategy
and financial needs. These forward-looking statements include statements relating to:
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our ability to attract and retain users and customers;
our business strategies and initiatives as well as our new business plans;
our future business development, financial condition and results of operations;
our ability to further enhance our brand recognition;
our ability to attract, retain and motivate key personnel;
competition in our industry in mainland China;
risks related to our corporate structure, in particular the VIE structure; and
relevant government policies and regulations relating to our industry.
These forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in these forward-
looking statements are reasonable, our expectations may later be found to be incorrect. Our actual results could be materially different from our
expectations. Other sections of this annual report include additional factors that could adversely impact our business and financial performance. Moreover,
we operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not possible for our management to predict all
risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in any forward-looking statements. You should read thoroughly this annual report and the
documents that we refer to with the understanding that our actual future results may be materially different from, or worse than, what we expect. We
qualify all of our forward-looking statements by these cautionary statements.
This annual report contains certain data and information that we obtained from various government and private publications. Statistical data in these
publications also include projections based on a number of assumptions. The online automotive advertising industry may not grow at the rate projected by
market data, or at all. The failure of this market to grow at the projected rate may have a material adverse effect on our business and the market price of our
ADSs and/or ordinary shares. In addition, the rapidly changing nature of the online automotive advertising industry and the online automobile transaction
industry results in significant uncertainties for any projections or estimates relating to the growth prospects or future condition of our market. Furthermore,
if any one or more of the assumptions underlying the market data are later found to be incorrect, actual results may differ from the projections based on
these assumptions. You should not place undue reliance on these forward-looking statements.
The forward-looking statements made in this annual report relate only to events or information as of the date on which the statements are made in this
annual report. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of
new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You
should read this annual report and the documents that we refer to in this annual report and exhibits to this annual
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report completely and with the understanding that our actual future results may be materially different from what we expect.
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ITEM 1 IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS
Not applicable.
ITEM 2 OFFER STATISTICS AND EXPECTED TIMETABLE
PART I.
Not applicable.
ITEM 3 KEY INFORMATION
Our Holding Company Structure and VIE Contractual Arrangements
Autohome Inc. is not an operating company but a Cayman Islands holding company with operations primarily conducted through (i) its mainland
China subsidiaries and (ii) the VIEs with which its WFOEs have maintained contractual arrangements in order to comply with the PRC laws and
regulations, which place certain restrictions on foreign ownership of companies that provide internet content services in mainland China. Accordingly,
these businesses are operated in mainland China through our subsidiaries and the VIEs, and we rely on contractual arrangements among our WFOEs, the
VIEs and their shareholders to obtain the financial interest of VIEs. The VIEs are consolidated for accounting purposes, but are not entities in which our
Cayman Islands holding company, or our investors, own equity. Revenues contributed by the VIEs accounted for 13.1%, 12.7% and 13.5% of our total net
revenues for the fiscal years 2021, 2022 and 2023, respectively. As used in this annual report, “we,” “us,” “our,” “our company” or “the Company” refer to
Autohome Inc., its predecessors, subsidiaries and, only in the context of describing our operations and consolidated financial information, the VIEs in
mainland China. Autohome Inc. has no equity ownership in the consolidated VIEs. Therefore, investors investing in its ordinary shares or ADSs are not
holding equity interest in the VIEs in mainland China but instead are holding equity interest in a holding company incorporated in the Cayman Islands.
A series of contractual agreements, including power of attorney, equity interest pledge agreements, exclusive technology consulting and service
agreements, equity option agreements and loan agreements, have been entered into by and among our WFOEs, the VIEs and their respective shareholders.
Terms contained in each set of contractual arrangements with the VIEs and their respective shareholders are substantially similar. As a result of the
contractual arrangements, Autohome Inc. becomes the primary beneficiary of the VIEs and their subsidiaries for accounting purposes and treat each of
them as a mainland China consolidated entity under U.S. GAAP. For more details of these contractual arrangements, see “Item 7. Major Shareholders and
Related Party Transactions—B. Related Party Transactions—Contractual Arrangements with the Variable Interest Entities.” The following diagram
illustrates our corporate structure, including our principal subsidiaries and VIEs, as of the date of this annual report:
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Notes:
(1)
The two individuals are Quan Long and Youdong Wang, each a PRC citizen. Each of Quan Long and Youdong Wang holds 50% of the equity interests in each of Autohome Information
and Shengtuo Hongyuan. Quan Long is our director and chairman of the board of directors. Youdong Wang is the vice president of our company.
(2) Weiwei Wang, a PRC citizen, holds 100% of the equity interests in Shanghai Jinwu. Weiwei Wang is the founder of TTP Car Inc.
(3)
The two individuals are Weiwei Wang and Lan Zhang, each a PRC citizen. Weiwei Wang holds 95% of the equity interests in Shanghai Jinyou and Lan Zhang holds 5% of the equity
interests in Shanghai Jinyou. Weiwei Wang is the founder of TTP Car Inc. Lan Zhang is the vice president of TTP Car Inc.
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However, the contractual arrangements may not be as effective as direct ownership in providing us with control over the VIEs, and we may incur
substantial costs to enforce the terms of the arrangements. In addition, these contractual arrangements have not been tested in courts of mainland China. See
“Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—Our contractual arrangements with the VIEs may not be as
effective in providing operational control as direct ownership” and “—The interests of the individual nominee shareholders of the VIEs may be different
from our interests, which may materially and adversely affect our business.”
In addition, our corporate structure is subject to risks associated with our contractual arrangements with the VIEs. There are certain uncertainties
regarding the interpretation and application of current and future laws, regulations and rules of China regarding the status of the rights of our Cayman
Islands holding company with respect to its contractual arrangements with the VIEs and their shareholders.
If the PRC government deems that our contractual arrangements with the VIEs do not comply with regulatory restrictions of China on foreign
investment in the relevant industries, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future,
we could be subject to severe penalties or be forced to relinquish our interests in those operations. Our holding company, our China subsidiaries and the
VIEs, and investors of our company face uncertainty about potential future actions by the PRC government that could affect the enforceability of the
contractual arrangements with the VIEs and, consequently, significantly affect the financial performance of the VIEs and our company as a whole. For a
detailed description of the risks associated with our corporate structure, please refer to risks disclosed under “Item 3. Key Information—D. Risk Factors—
Risks Related to Our Corporate Structure.”
Doing Business in China
We face various risks and uncertainties related to doing business in China primarily through our subsidiaries and the VIEs. Our business operations
are primarily conducted in China, and we are subject to complex and evolving PRC laws and regulations. For example, we face risks associated with
regulatory approvals on offshore offerings, anti-monopoly regulatory actions, and oversight on cybersecurity and data privacy. The PRC government’s
certain authority in regulating our operations and its oversight and control over offerings conducted overseas by, and foreign investment in, China-based
issuers could affect our ability to offer or continue to offer securities to investors. Implementation of industry-wide regulations, including data security or
anti-monopoly related regulations, in this nature may cause the value of our securities to significantly decline or become worthless. For a detailed
description of risks related to doing business in China, please refer to risks disclosed under “Item 3. Key Information—D. Risk Factors—Risks Related to
Doing Business in China.”
Risks and uncertainties arising from the legal system in China, including risks and uncertainties regarding the enforcement of laws and evolving rules
and regulations in China, could result in a material adverse change in our operations and the value of our ADSs and ordinary shares. For more details, see
“Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—The PRC legal system is evolving, and failure to respond to such
evolvement could affect us” and “—We may be adversely affected by the complexity, uncertainties and changes in the regulation of internet business and
companies in China.”
The Holding Foreign Companies Accountable Act
Pursuant to the Holding Foreign Companies Accountable Act, or the HFCAA, if the SEC determines that we have filed audit reports issued by a
registered public accounting firm that has not been subject to inspections by the Public Company Accounting Oversight Board, or the PCAOB, for two
consecutive years, the SEC will prohibit our shares or the ADSs from being traded on a national securities exchange or in the over-the-counter trading
market in the United States. On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to
inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong, including our auditor. In May 2022,
the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal
year ended December 31, 2021. On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed
mainland China and Hong Kong from the list of jurisdictions where it is unable
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to inspect or investigate completely registered public accounting firms. For this reason, we do not expect to be identified as a Commission-Identified Issuer
under the HFCAA after we file this annual report on Form 20-F.
Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other
jurisdictions. If PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China
and Hong Kong and we continue to use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements
filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal
year. There can be no assurance that we would not be identified as a Commission-Identified Issuer for any future fiscal year, and if we were so identified
for two consecutive years, we would become subject to the prohibition on trading under the HFCAA. See “Item 3. Key Information—D. Risk Factors—
Risks Relating to Our Business and Industry—The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for
our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of
such inspections,” and “—Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect
or investigate completely auditors located in China. The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the
value of your investment.”
Permissions Required from the PRC Authorities for Our Operations
We conduct our business primarily through our subsidiaries and the VIEs in mainland China. Our operations in mainland China are governed by laws
and regulations of mainland China. As of the date of this annual report, our mainland China subsidiaries and the VIEs have obtained the requisite licenses
and permits from the PRC government authorities that are material for the business operations of our holding company, the VIEs in mainland China,
including, among others, the Value-added Telecommunications Services Licenses, the Surveying and Mapping Qualification Certificates for Internet
Mapping, the Operating Licenses for the Production and Dissemination of Radio and Television Programs, the internet Audio/Video Program Transmission
License, the Internet Culture Business Permit (such certificate held by the Autohome Information is in the process of the renewal), and the auction business
approval certificate. Given the uncertainties of interpretation and implementation of relevant laws and regulations and the enforcement practice by relevant
government authorities, we may be required to obtain additional licenses, permits, filings or approvals for the functions and services of our platform in the
future. For more detailed information, see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—We may be adversely
affected by the complexity, uncertainties and changes in the regulation of internet business and companies in China.”
Also, in connection with issuance of securities to foreign investors, the PRC government has recently indicated an intent to exert more oversight over
offerings that are conducted overseas and/or foreign investment in China-based issuers. For example, on February 17, 2023, the China Securities
Regulatory Commission, or the CSRC, issued Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the
Overseas Listing Trial Measures, and five supporting guidelines, which became effective on March 31, 2023. Pursuant to the Overseas Listing Trial
Measures, mainland China domestic companies that seek to offer and list securities in overseas markets, either in direct or indirect means, must file with
the CSRC within three business days after submitting their listing application documents to the regulator in the place of intended listing. The Overseas
Listing Trial Measures also provides that a mainland China domestic company must file with the CSRC within three business days after completion of its
follow-on offering of securities or is involved in other circumstances that require filing with the CSRC. If the company fails to complete the filing
procedure or conceals any material fact or falsifies any major content in its filing documents, it may be subject to administrative penalties. We may be
subject to the filing requirements for our future refinancing activities, if any, under the Overseas Listing Trial Measures.
Furthermore, if we are deemed as a critical information infrastructure operator under the cybersecurity laws and regulations of China, we must fulfill
certain obligations as required under the cybersecurity laws and regulations of China, including, among others, storing personal information and important
data collected and produced within the China territory during our operations in China, and we may be subject to review when purchasing internet products
and services. If we are not able to comply with the cybersecurity and data privacy requirements in a timely manner, or at all, we may be subject to
government enforcement actions and investigations, fines, penalties, suspension of
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our non-compliant operations, or removal of our app from the relevant application stores, among other sanctions, which could materially and adversely
affect our business and results of operations.
Any failure to complete such procedures would subject us to sanctions by the CSRC, CAC or other PRC regulatory authorities. These regulatory
authorities may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operating privileges in
China, delay or restrict the repatriation of the proceeds from our offshore offerings into China or take other actions that could materially and adversely
affect our business, financial condition, results of operations, and prospects, as well as the trading price of our ADSs and ordinary shares. For more detailed
information, see “Item 3. Key Information—D. Risk Factors—Risks Related to our Business and Industry—Our business is subject to complex and
evolving Chinese laws and regulations regarding data privacy and cybersecurity, many of which are subject to changes and uncertain interpretations. Any
changes in these laws could cause changes to our business practices and increased cost of operations, and any security breaches or our actual or perceived
failure to comply with such laws could result in claims, penalties, damages to our reputation and brand, declines in user growth or engagement, or
otherwise harm our business, results of operations and financial condition,” and “—Risks Related to Doing Business in China—The approval of and filing
with the CSRC or other PRC government authorities may be required if we were to conduct offshore offerings in the future, and, if required, we cannot
predict whether or for how long we will be able to obtain such approval or complete such filing.”
Cash Flows through Our Organization
Autohome Inc. is a holding company with no operations of its own. We conduct our operations in mainland China primarily through our subsidiaries
and the VIEs in mainland China. As a result, although other means are available for us to obtain financing at the holding company level, Autohome Inc.’s
ability to pay dividends to the shareholders and to service any debt it may incur may depend upon dividends paid by our mainland China subsidiaries and
service fees paid by the VIEs.
If any of our subsidiaries incurs debt on its own behalf in the future, the instruments governing such debt may restrict its ability to pay dividends to
Autohome Inc. In addition, our mainland China subsidiaries are permitted to pay dividends to Autohome Inc. only out of their retained earnings, if any, as
determined in accordance with PRC accounting standards and regulations. Further, our mainland China subsidiaries and the VIEs are required to make
appropriations to certain statutory reserve funds or may make appropriations to certain discretionary funds, which are not distributable as cash dividends
and can only be used for specific purposes. Under the laws and regulations of mainland China, our mainland China subsidiaries and the VIEs are subject to
certain restrictions with respect to paying dividends or otherwise transferring any of their net assets to us. Remittance of dividends by a wholly foreign-
invested enterprise out of mainland China is also subject to examination by the banks designated by the State Administration of Foreign Exchange, or
SAFE. The amounts restricted include the paid-up capital and the statutory reserve funds of our mainland China subsidiaries and the net assets of the VIEs
in which we have no legal ownership. For more details, see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—
Holding Company Structure.” For risks relating to the fund flows of our operations in mainland China, see “Item 3. Key Information—D. Risk Factors—
Risks Related to Our Corporate Structure—We may rely to a significant extent on dividends and other distributions on equity paid by our mainland China
subsidiaries to fund any cash and financing requirements we may have. Any limitation on the ability of our mainland China subsidiaries to pay dividends to
us could have a material adverse effect on our ability to conduct our business.” In the years ended December 31, 2021, 2022 and 2023, our mainland China
subsidiaries paid to Autohome Inc. and its offshore subsidiaries a total of RMB681.4 million, RMB1,430.0 million and RMB2,000.0 million (US$281.7
million), respectively, in the form of dividends.
Under the laws of mainland China, Autohome Inc. and its offshore subsidiaries may provide funding to our mainland China subsidiaries only through
capital contributions or loans, and to the VIEs only through loans, subject to satisfaction of applicable government registration and approval requirements.
The VIEs may transfer cash to our WFOEs by paying service fees according to the exclusive technology consulting and service agreements. Pursuant
to these agreements, the VIEs agree to pay the applicable subsidiaries technology consulting and service fees, subject to conditions therein.
9
Autohome Inc. has in place a regular dividend policy. For the fiscal years of 2021, 2022 and 2023, we paid cash dividends in the total amounts of
US$105.7 million, US$61.1 million and US$69.2 million, respectively, to our shareholders, pursuant to our dividend policy. See “Item 8. Financial
Information—A. Consolidated Statements and Other Financial Information—Dividend Policy.” For the United States federal income tax consequences of
the dividends we make, see “Item 10. Additional Information—E. Taxation—United States Federal Income Tax Considerations—Dividends.” For mainland
China, Hong Kong and United States federal income tax considerations of an investment in our ADSs and/or ordinary shares, see “Item 10. Additional
Information—E. Taxation.”
The cash transfer within the Company was summarized as below:
(1)
(1)
Cash flows from intercompany borrowings and loans among the entities
Capital contributions from offshore subsidiaries to onshore subsidiaries
Amounts from parent to offshore subsidiaries
Amounts from offshore subsidiaries to parent
(2)
Amounts from VIEs to onshore subsidiaries
Amounts from onshore subsidiaries to VIEs
Cash flows from dividend payment among the entities
Dividend paid by WFOEs and onshore subsidiaries to offshore subsidiaries
Dividend paid by offshore subsidiaries to parent company
Cash flows from services transaction among the entities
Cash paid by WFOEs and onshore subsidiaries to the VIEs
Cash paid by VIEs to onshore subsidiaries and WFOEs
(2)
(4)
(3)
For the Year Ended December 31,
2021
RMB
2022
RMB
2023
RMB
US$
(in thousands)
163,755
5,524,211
2,000,733
375,370
163,424
—
2,750,371
3,505,307
823,937
666,853
—
1,392,807
1,142,809
1,087,092
1,115,463
—
196,173
160,961
153,114
157,110
681,427
682,188
1,430,000
1,210,471
2,000,000
486,084
281,694
68,463
251,369
587,771
138,414
316,357
137,647
577,177
19,387
81,294
Notes:
(1)
(2)
(3)
(4)
It represented temporary operating cash support, which was transferred among parent and offshore subsidiaries, including the proceeds in connection with our Hong Kong Offering in
March 2021.
It represented temporary operating cash support, which was transferred among VIEs and onshore subsidiaries.
It mainly represented service fees paid by the WFOEs and other subsidiaries to the VIEs for information services.
It mainly represented service fees paid by VIEs to the WFOEs and other subsidiaries for technology consulting and service fees.
In the years ended December 31, 2021, 2022 and 2023, no assets other than cash were transferred through our organization.
10
A.
[Reserved]
Financial Information Related to the VIEs
The following table presents the condensed consolidating schedule of financial position for the VIEs and other entities as of the dates presented.
Selected Condensed Consolidating Statements of Income Information
Parent Only
Other
Subsidiaries
For the Year Ended December 31, 2023
Primary
Beneficiary
of VIEs
VIEs and
VIEs’
subsidiaries
(RMB in thousands)
Eliminations
Consolidated
Total
—
—
—
(29,920 )
1,922,857
—
42,373
1,935,310
—
1,935,310
6,028,836
68,845
6,097,681
(5,171,591 )
52,322
—
1,030,830
2,009,242
(96,286 )
1,912,956
—
9,901
1,935,310
1,922,857
186,430
746,379
932,809
(818,601 )
(2,844 )
(112,791 )
43,388
41,961
7,517
49,478
—
49,478
968,869
179,587
1,148,456
(1,285,510 )
—
—
7,649
(129,405 )
16,614
(112,791 )
—
(994,811 )
(994,811 )
994,811
(1,972,335 )
112,791
—
(1,859,544 )
—
(1,859,544 )
—
—
(112,791 )
(1,859,544 )
7,184,135
—
7,184,135
(6,310,811 )
—
—
1,124,240
1,997,564
(72,155 )
1,925,409
9,901
1,935,310
Net revenues:
-Third-party revenues
-Inter-company revenues
(1)
Total Revenue
Total Cost and expense
Share of income of subsidiaries and
(2)
VIEs :
-Share of income of subsidiaries
-Loss of the VIEs
Others, Income/(loss)
Income before income taxes
Income tax (expense)/ benefit
Net income/(loss)
Net loss/(income) attributable to
noncontrolling
interests
Net income/(loss) attributable to
Autohome Inc.
Notes:
(1)
(2)
It represents the elimination of the intercompany service charge at the consolidation level.
It represents the elimination of incurrence of income/(loss) by parent company and its subsidiaries for, or the receipt of economic benefits by parent company and its subsidiaries from, their
respective subsidiaries and the VIEs.
11
Parent Only
Other
Subsidiaries
For the Year Ended December 31, 2022
Primary
Beneficiary
of VIEs
VIEs and
VIEs’
subsidiaries
(RMB in thousands)
Eliminations
Consolidated
Total
Net revenues:
-Third-party revenues
-Inter-company revenues
(1)
Total Revenue
Total Cost and expense
Share of income of subsidiaries and
(2)
VIEs :
-Share of income of subsidiaries
-Loss of the VIEs
Others, Income/(loss)
Income before income taxes
Income tax benefit
Net income/(loss)
Net loss/(income) attributable to
noncontrolling
interests
Net income/(loss) attributable to
Autohome Inc.
Notes:
—
—
—
(18,462 )
5,743,002
5,456
5,748,458
(4,980,484 )
315,550
831,890
1,147,440
(864,216 )
882,276
160,272
1,042,548
(1,155,269 )
1,854,834
—
18,802
1,855,174
—
1,855,174
—
1,855,174
201,386
—
805,666
1,775,026
49,260
1,824,286
30,548
1,854,834
4,770
(85,283 )
746
203,457
2,699
206,156
—
206,156
—
—
17,617
(95,104 )
9,821
(85,283 )
—
(997,618 )
(997,618 )
997,618
(2,060,990 )
85,283
—
(1,975,707 )
—
(1,975,707 )
—
—
(85,283 )
(1,975,707 )
(1)
(2)
It represents the elimination of the intercompany service charge at the consolidation level.
It represents the elimination of incurrence of income/(loss) by parent company and its subsidiaries for, or the receipt of economic benefits by parent company and its subsidiaries from, their
respective subsidiaries and the VIEs.
Net revenues:
-Third-party revenues
-Inter-company revenues
(1)
Total Revenue
Total Cost and expense
(2)
Share of income of subsidiaries and VIEs :
(3)
-Share of income of subsidiaries
-Loss of the VIEs
Others, Income/(loss)
Income before income taxes
Income tax (expense)/benefit
Net income/(loss)
Net loss/(income) attributable to noncontrolling
interests
Net income attributable to Autohome Inc.
Notes:
Parent Only
Other
Subsidiaries
—
—
—
(36,007 )
2,326,018
—
(41,226 )
2,248,785
—
2,248,785
—
2,248,785
6,081,662
18,446
6,100,108
(4,671,667 )
130,868
—
725,283
2,284,592
(64,207 )
2,220,385
105,633
2,326,018
Eliminations
Consolidated
Total
For the Year Ended December 31, 2021
Primary
Beneficiary
of VIEs
VIEs and
VIEs’
subsidiaries
(RMB in thousands)
206,822
1,085,139
1,291,961
(1,100,250 )
948,520
131,524
1,080,044
(1,176,818 )
—
—
1,861
(94,913 )
5,516
(89,397 )
26,825
(89,397 )
3,869
133,008
24,685
157,693
—
157,693
—
(1,235,109 )
(1,235,109 )
1,235,109
(2,483,711 )
89,397
—
(2,394,314 )
—
(2,394,314 )
—
—
(89,397 )
(2,394,314 )
(1)
(2)
It represents the elimination of the intercompany service charge at the consolidation level.
It represents the elimination of incurrence of income/(loss) by parent company and its subsidiaries for, or the receipt of economic benefits by parent company and its subsidiaries from, their
respective subsidiaries and the VIEs.
12
6,940,828
—
6,940,828
(6,020,813 )
—
—
842,831
1,762,846
61,780
1,824,626
30,548
1,855,174
7,237,004
—
7,237,004
(5,749,633 )
—
—
689,787
2,177,158
(34,006 )
2,143,152
105,633
2,248,785
Selected Condensed Consolidating Balance Sheets Information
Parent Only
Other
Subsidiaries
As of December 31, 2023
Primary
Beneficiary
of VIEs
VIEs and
VIEs’
subsidiaries
(RMB in thousands)
Eliminations
Consolidated
Total
430,709
21,365,715
3,479,362
3,821
3,913,892
111,861
1,725,149
23,202,725
21,017,930
3,360,385
—
—
21,017,930
24,931,822
17,532
984,332
—
—
—
1,771
1,003,635
—
1,003,635
—
23,928,187
—
23,928,187
24,931,822
—
3,397,891
6,758,276
29,961,001
2,383,890
—
36,629
764,808
216,139
4,205,837
7,607,303
90,717
7,698,020
1,758,933
21,017,930
(513,882 )
20,504,048
29,961,001
1,511,305
812,876
23,033
2,347,214
—
1,640,357
123,451
1,763,808
4,111,022
238,100
—
207
—
8,298
51,574
298,179
452,458
750,637
—
3,360,385
—
3,360,385
4,111,022
367,772
244,649
97,484
709,905
—
23,675,501
(4,648,748 )
—
(4,648,748 )
—
1,849,487
25,524,988
—
(24,378,315 )
—
—
1,789,401
1,789,401
2,499,306
317,277
—
68,543
36,773
2,823
389,566
814,982
43,967
858,949
—
1,640,357
—
1,640,357
2,499,306
(1,640,357 )
—
(26,018,672 )
(30,667,420 )
—
—
—
—
—
(4,648,748 )
(4,648,748 )
—
(4,648,748 )
—
(26,018,672 )
—
(26,018,672 )
(30,667,420 )
—
5,310,743
5,310,743
30,835,731
2,956,799
984,332
105,379
801,581
227,260
—
5,075,351
587,142
5,662,493
1,758,933
23,928,187
(513,882 )
23,414,305
30,835,731
Cash and cash equivalents, restricted
cash and
short-term investments
Amounts due from Group
companies
Other current assets
Total current assets
Investment in subsidiaries and VIEs
-Investment in subsidiaries
-Contractual interests in the
VIEs
(1)
(1)
Other non-current assets
Total non-current assets
Total assets
Accrued expenses and other
payables
Dividends payable
Advance from customers
Deferred revenue
Income tax payable
Amounts due to Group companies
Total current liabilities
Total non-current liabilities
Total liabilities
Mezzanine equity
Total Autohome Inc.
shareholders’ equity
Noncontrolling interests
Total shareholders’ equity
Total liabilities, mezzanine equity
and equity
Note:
(1)
It represents the elimination of the equity investment in subsidiaries and contractual interests in the VIEs by parent company, other subsidiaries, and primary beneficiary of VIEs.
13
Parent Only
Other
Subsidiaries
As of December 31, 2022
Primary
Beneficiary
of VIEs
VIEs and
VIEs’
subsidiaries
(RMB in thousands)
Eliminations
Consolidated
Total
1,267,174
3,413,603
12,918
4,693,695
19,214,273
—
—
19,214,273
23,907,968
17,355
—
—
—
1,771
19,126
—
19,126
—
23,888,842
—
23,888,842
23,907,968
18,180,625
1,773,135
2,175,054
22,128,814
2,280,661
—
3,352,420
5,633,081
27,761,895
2,057,770
30,806
1,091,727
220,791
3,863,942
7,265,036
82,802
7,347,838
1,605,639
19,214,273
(405,855 )
18,808,418
27,761,895
2,322,350
576,346
54,927
2,953,623
400,571
1,610,343
100,757
2,111,671
5,065,294
238,415
91
19,305
27,486
1,661,511
1,946,808
437,254
2,384,062
—
2,681,232
—
2,681,232
5,065,294
319,917
333,174
91,966
745,057
—
—
1,837,711
1,837,711
2,582,768
250,837
65,150
36,099
2,844
569,034
923,964
48,461
972,425
—
1,610,343
—
1,610,343
2,582,768
—
(6,096,258 )
—
(6,096,258 )
(21,895,505 )
(1,610,343 )
—
(23,505,848 )
(29,602,106 )
—
—
—
—
(6,096,258 )
(6,096,258 )
—
(6,096,258 )
—
(23,505,848 )
—
(23,505,848 )
(29,602,106 )
22,090,066
—
2,334,865
24,424,931
—
—
5,290,888
5,290,888
29,715,819
2,564,377
96,047
1,147,131
251,121
—
4,058,676
568,517
4,627,193
1,605,639
23,888,842
(405,855 )
23,482,987
29,715,819
Cash and cash equivalents, restricted
cash and short-
term investments
Amounts due from Group companies
Other current assets
Total current assets
Investment in subsidiaries and VIEs
-Investment in subsidiaries
-Contractual interests in the VIEs
(1)
(1)
(2)
Other non-current assets
Total non-current assets
Total assets
Accrued expenses and other payables
Advance from customers
Deferred revenue
Income tax payable
Amounts due to Group companies
Total current liabilities
Total non-current liabilities
Total liabilities
Mezzanine equity
Total Autohome Inc. shareholders’
equity
Noncontrolling interests
Total shareholders’ equity
Total liabilities, mezzanine equity and
equity
Note:
(1)
It represents the elimination of the equity investment in subsidiaries and contractual interests in the VIEs by parent company, other subsidiaries, and primary beneficiary of VIEs.
Selected Condensed Consolidating Cash Flows Information
Net cash (used in)/provided by
operating activities
Net cash (used in)/provided by
investing activities
Net cash (used in)/provided by
financing activities
Parent Only
Other Equity
Subsidiaries
Primary
Beneficiary of
VIEs
VIEs and VIEs’
subsidiaries
Eliminations
Consolidated
Total
For the Year Ended December 31, 2023
(RMB in thousands)
514,237
3,305,802
(907,108 )
24,582
(486,084 )
2,451,429
664,852
(5,752,493 )
(2,296,960 )
(1,092,190 )
9,477,140
1,000,349
(1,124,493 )
4,484,833
3,390,760
1,115,463
(8,991,056 )
(1,124,493 )
14
Parent Only
Other Equity
Subsidiaries
Primary
Beneficiary
of VIEs
VIEs and VIEs’
subsidiaries
Eliminations
Consolidated
Total
For the Year Ended December 31, 2022
(RMB in thousands)
1,229,589
3,405,168
121,500
19,289
(2,210,471 )
2,565,075
(447,143 )
(4,376,954 )
(326,046 )
(812,606 )
2,853,332
(3,109,417 )
(1,140,065 )
(191,728 )
167,736
666,853
(642,861 )
(1,140,065 )
Parent Only
Other Equity
Subsidiaries
Primary
Beneficiary
of VIEs
VIEs and VIEs’
subsidiaries
Eliminations
Consolidated
Total
For the Year Ended December 31, 2021
(RMB in thousands)
671,418
3,534,327
269,838
411,966
(1,363,615 )
3,523,934
(3,523,479 )
(5,362,851 )
173,535
(386,343 )
5,286,125
(3,813,013 )
2,898,296
3,886,326
(127,240 )
163,424
(3,922,510 )
2,898,296
Net cash (used in)/provided by
operating activities
Net cash (used in)/provided by
investing activities
Net cash (used in)/provided by
financing activities
Net cash (used in)/provided by
operating activities
Net cash (used in)/provided by
investing activities
Net cash (used in)/provided by
financing activities
B. Capitalization and Indebtedness
Not applicable.
C. Reasons for the Offer and Use of Proceeds
Not applicable.
D. Risk Factors
Summary of Risks Factors
An investment in our ADSs or ordinary shares involves significant risks. Below is a summary of material risks we face, organized under relevant
headings. All the legal and operational risks associated with being based in and having operations in mainland China also apply to operations in Hong
Kong. These risks are discussed more fully in "Item 3. Key Information—D. Risk Factors."
Risks Related to Our Business and Industry
• We are dependent on mainland China’s automotive industry for substantially all of our revenues and future growth, the prospects of which are
subject to many uncertainties, including government regulations and policies and health epidemics.
• We face significant competition, and if we fail to compete effectively, we may lose market share and our business, prospects and results of
operations may be materially and adversely affected.
• We may not be able to maintain our current level of growth or ensure the success of our expansion and new business initiatives.
•
If we fail to attract and retain users and customers or if our services do not gain market acceptance or result in the loss of our current customer
base, our business and results of operations may be materially and adversely affected.
15
•
•
•
Our business depends on strong brand recognition, and failure to maintain or enhance our brands could adversely affect our business and
prospects.
Our business is subject to complex and evolving Chinese laws and regulations regarding data privacy and cybersecurity, many of which are
subject to changes and uncertain interpretations. Any changes in these laws could cause changes to our business practices and increased cost of
operations, and any security breaches or our actual or perceived failure to comply with such laws could result in claims, penalties, damages to
our reputation and brand, declines in user growth or engagement, or otherwise harm our business, results of operations and financial condition.
A limited number of automaker customers have accounted for, and are expected to continue to account for, a large portion of our revenues.
Failure to maintain or to increase revenues from these customers could harm our prospects.
Risks Related to Our Corporate Structure
• We are a Cayman Islands holding company with no equity ownership in the VIEs and we conduct our operations in mainland China primarily
through our subsidiaries and VIEs, with which we have maintained contractual arrangements. Investors in our ordinary shares and ADSs thus are
not holding equity interest in the VIEs in mainland China but instead are holding equity interest in a Cayman Islands holding company. If the
PRC government finds that the agreements that establish the structure for operating our services in China do not comply with PRC governmental
restrictions on foreign investment in internet businesses, or if these regulations or the interpretation of existing regulations change in the future,
we could be subject to severe penalties or be forced to relinquish our interests in those operations, and we may face significant disruption to our
business operations. Our holding company, VIEs and investors of our company face uncertainty about potential future actions by the PRC
government that could affect the enforceability of the contractual arrangements with the VIEs and, consequently, significantly affect the financial
performance of the VIEs and our company as a whole. The mainland China regulatory authorities could disallow the variable interest entities
structure, which would likely result in a material adverse change in our operations, and our ordinary shares or our ADSs may decline
significantly in value.
•
•
•
•
•
Our contractual arrangements with the VIEs may not be as effective in providing operational control as direct ownership.
The shareholders of the VIEs may breach, or cause the VIEs to breach, or refuse to renew, the existing contractual arrangements we have with
them and the VIEs. Any failure by the VIEs or their shareholders to perform their obligations under our contractual arrangements with them
would have a material adverse effect on our business and financial condition.
The contractual arrangements among our subsidiaries and the VIEs may be subject to scrutiny by the PRC tax authorities and a finding that we or
the VIEs owe additional taxes could substantially reduce our consolidated net income and the value of your investment.
The interests of the individual nominee shareholders of the VIEs may be different from our interests, which may materially and adversely affect
our business.
If we were deemed an investment company under the Investment Company Act of 1940, applicable restrictions could have a material adverse
effect on our business and the price of our ADSs and ordinary shares.
Risks Related to Doing Business in China
•
•
The PRC government’s regulations and discretion over our business operations could result in a material adverse change in our operations and
the value of our ADSs and/or ordinary shares.
Changes in the economic, political or social conditions or government policies could have a material adverse effect on our business and
operations.
16
•
•
The PRC legal system is evolving, and failure to respond to such evolvement could affect us.
The interpretation and implementation of the PRC Foreign Investment Law may impact the viability of our current corporate structure, corporate
governance and business operations.
• We may be adversely affected by the complexity, uncertainties and changes in the regulation of internet business and companies in China.
•
•
•
The approval of and filing with the CSRC or other PRC government authorities may be required if we were to conduct offshore offerings in the
future, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.
The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed
for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past
has deprived our investors with the benefits of such inspections.
Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate
completely auditors located in China. The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the
value of your investment.
Risks Related to Our ADSs and Ordinary Shares
•
The trading price of our ADSs and/or ordinary shares has been and is likely to continue to be, volatile, which could result in substantial losses to
holders of our ADSs and/or ordinary shares.
• We believe that we were a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for the taxable year ended
December 31, 2023, which could result in adverse U.S. federal income tax consequences to U.S. holders of our ADSs or ordinary shares.
• We adopt different practices as to certain matters as compared with many other companies listed on the Hong Kong Stock Exchange.
Risks Related to Our Business and Industry
We are dependent on mainland China’s automotive industry for substantially all of our revenues and future growth, the prospects of which are subject
to many uncertainties, including government regulations and policies and health epidemics.
We rely on mainland China’s automotive industry for substantially all of our revenues and future growth. We have greatly benefited from the growth
of mainland China’s automotive industry historically. However, this industry has experienced fluctuations in its development. In July 2018, mainland
China’s automotive industry experienced negative growth for the first time in the past 28 years and new passenger vehicle purchases in mainland China
declined for the whole year of 2018, 2019 and 2020. Although we believe the automotive industry in China has experienced growth as emerged from the
COVID-19 pandemic and propelled by the increasing popularity of new energy vehicles, we cannot predict how this industry will develop in the future, as
it could be affected by complex factors, including the general economic conditions, the urbanization rate, the growth of disposable household income, the
costs of new automobiles, the trade barriers and tensions, as well as taxes and incentives related to automobile purchases, among other things. Specifically,
tariffs or a global trade war could increase the cost of imported automobiles, which could negatively impact the demand for automobiles and adversely
impact our business. In addition, governmental policies including restrictions by major cities on new passenger vehicle plate issuance, increasingly
stringent emission standards, adjustment of purchase tax and termination of subsidies may have a considerable impact on the growth of the automotive
industry in mainland China.
The automotive industry in mainland China was negatively impacted as well by the outbreak of COVID-19, during which automobile production and
the number of purchasers declined due to precautionary closures of certain travel and business, the delay resumption of service and mass production and the
related quarantine measures. The containment efforts also caused delay in the near-term marketing demand of our automaker and dealer customers.
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While substantially all of the restrictions on movement had been relaxed as of the date of this annual report, there is uncertainty as to the future
development of the COVID-19 outbreak and its impact on the automotive industry.
Such regulatory developments, health epidemics as well as other uncertainties, may adversely affect the growth prospects of mainland China’s
automotive industry, and in turn reduce demand for automobiles. If automakers and automobile dealers were to reduce their marketing expenditures as a
result, our business, financial condition and results of operations could be materially and adversely affected.
We face significant competition, and if we fail to compete effectively, we may lose market share and our business, prospects and results of operations
may be materially and adversely affected.
The markets for our services are highly competitive. With respect to our auto media and leads generation businesses, we face competition from
China’s automotive vertical websites and mobile applications, such as BitAuto, Dongchedi, Xcar and PCauto, from the automotive channels of major
internet portals, such as Sina and Sohu, and from companies engaged in mobile social media, news, video and live-streaming applications. We may also
face competition from online automobile transaction platforms, such as Uxin, Guazi and Renrenche as we develop our used car transaction business. Our
auto finance business faces competition from other auto finance companies, such as Yixin and Souche. In addition, we also face competition from
companies engaged in social media business, such as ByteDance and Tencent, companies engaged in data product offering, such as Bitauto and Dongchedi,
and companies engaged in AI and big data technologies. We may also face competition from mobile applications of automakers as some automakers
explore to connect with users directly. As we launch our offline experience store, Autohome Space, in 20 cities across the country, some dealers may also
view us as their competitors in the market. Competition with these and other websites and mobile applications is primarily centered on increasing user
reach, user engagement and brand recognition, building relationships with the suppliers, and attracting and retaining customers, among other factors.
Some of our competitors or potential competitors have longer operating histories and may have greater financial, management, technological, sales,
marketing and other resources than we do. They may use their experience and resources to compete with us in a variety of ways, including by competing
more heavily for users and customers, investing more heavily in marketing, traffic acquisition and research and development, and making more
acquisitions. Some of our competitors have entered or may enter into business cooperation agreements with search engines, which may impact our ability
to obtain additional user traffic from the same sources. Our competitors may be acquired and consolidated by, or cooperate with, industry conglomerates
who are able to further invest with significant resources into our operating space. We cannot assure you that any such large internet business or other
popular technology companies will not in the future focus on the automotive sector. If we are unable to compete effectively and at a reasonable cost against
our existing and future competitors, our business, prospects and results of operations could be materially and adversely affected.
For our media business, we also face competition from traditional advertising media, such as newspapers, magazines, television, radio and outdoor
media. Advertisers in China generally allocate certain portion of their marketing budgets to traditional advertising media. If we cannot effectively compete
with traditional media for the marketing budgets of our existing and potential customers, our results of operations and growth prospects could be adversely
affected. For our online marketplace business, as online automobile transaction is a relatively new business model and consumers in China might be
accustomed to make automobile purchases offline, we cannot guarantee that the automobile consumers in China will accept such business model.
Beginning in 2019, we expanded our business to the European market and established two subsidiaries in the UK and Germany. These subsidiaries
have not generated significant revenues as of December 31, 2023. As of the date of this annual report, we have dissolved our UK subsidiary and expect to
dissolve our German subsidiary in the first half of 2024, primarily due to the macroenvironmental changes and the evolution of our strategies. However, if
we maintain our business overseas or decide to expand our global footprint in the future, we will face competition from local automotive vertical websites
and mobile applications and online automobile transaction platforms, which may have more experience in the local markets and have relatively more
established user bases. We cannot guarantee that we will be able to compete effectively for talents, users or customers. We may also incur additional
expenses in our overseas acquisitions and subsequent marketing and other spending to acquire new customers. If we
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cannot maintain customer recognition and trust in us and successfully attract and retain sufficient users on our overseas platform, our results of operations
and growth prospects could be adversely affected.
We may not be able to maintain our current level of growth or ensure the success of our expansion and new business initiatives.
Our historical growth rates may not be indicative of our future growth, and we may not be able to generate similar growth rates in the future. Our
revenue or profit growth may slow down, or our revenues or profits may decline for possible reasons, including increased costs and operating expenses,
increasing competition, slow growth of our business development, failure in new business initiative exploration, emergence of alternative business models,
adjustment of our certain business operations, and changes in government policies or general economic conditions. We cannot assure you that we will grow
at the same rate as we had in the past.
We expect to continue to grow our user base and our business operations. We have been implementing our future strategy to integrate and create a
consumer centric automotive ecosystem, but we may not have sufficient experience in executing our new business initiatives during this process. These
new business initiatives may not be well received by the market and we may determine to cease some new initiatives from time to time. We cannot assure
you that they will achieve the success we expect, in which case we may not be able to recoup the resources we invest to develop, optimize and expand our
new business initiatives.
To manage the further expansion of our business, we need to continuously expand and enhance our infrastructure and technology, and improve our
operational and financial systems, procedures and internal controls. We need to adapt our business management to the local corporate cultures and customs,
and train, manage and motivate our growing employee base. In addition, we need to maintain and expand our relationships with automakers, automobile
dealers, advertising agencies, financial institutions, insurance companies and other third parties. We cannot assure you that our current and planned
personnel, infrastructure, systems, procedures and controls will be adequate to support our expanding operations, neither can we guarantee that we will be
able to effectively adapt our business management to the local corporate cultures and customs and attract and motivate sufficient talents to support our new
business initiatives if and when any of them are launched.
We may be required to further increase our research and development expenses in order to enhance our technology capabilities, such as artificial
intelligence technologies, big data technologies and cloud technologies, to support any such expansion and our efforts may not be effective. Our new
business initiatives may also expose us to new regulatory risks, which could be different from what we have experienced before and may increase our
compliance costs. Lack of experience in handling these new risks and managing the related costs may result in failure to generate the expected results of
operations and prospects, and may subject us to substantial liabilities, which could harm our reputation and business operations.
If we fail to attract and retain users and customers or if our services do not gain market acceptance or result in the loss of our current customer base,
our business and results of operations may be materially and adversely affected.
In order to maintain and strengthen our position as the leading online destination for automobile consumers in China, we must continue to attract and
retain users to our websites and mobile applications, which requires us to continue to provide quality content throughout the automobile ownership life
cycles. We must also innovate and introduce services and applications that enhance user experience. In addition, we must maintain and enhance our brand
recognition among consumers. If we fail to provide high-quality, enriched and customized content, offer a superior user experience or maintain and
enhance our brand recognition, we may not be able to attract and retain users. If our user base decreases, our websites and mobile applications may be
rendered less attractive to customers, including automakers and dealers, and our services may become less attractive, which may have a material and
adverse impact on our business, financial condition and results of operations.
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In addition, one element of our growth strategy is to expand our services to customers. As a result, we have added additional services in the past few
years. To serve our dealer customers, we had local sales and service representatives covering 52 cities across mainland China as of December 31, 2023. We
intend to increase our penetration in existing dealer advertising and subscription services markets. We have implemented business strategies to further
monetize our large dealer network by enlarging the offering of products and services with new technologies on our dealer digital platform, increasing the
average spending of our existing dealer subscribers and upselling our dealership packages for our leads generation services. In order to increase the average
spending of our existing dealer subscribers, we keep close communications and negotiations with relevant parties such as dealers, dealer groups and
automakers. However, we may not succeed in making our customers sufficiently aware of existing and future services or in creating customer acceptance of
these services at the prices we would like to charge, and we cannot guarantee that our pricing strategy and measures will always be agreed and accepted by
any and all of our customers. We may not be able to achieve the market acceptance of our products and services as we expect and thus may fail to achieve
an increase from our “share of wallet” approach. Our existing customers may even terminate their cooperation with us if they are not satisfied with our
pricing strategy or measures, which may subject us to negative publicity or other consequences that may adversely impact our business. The decline in the
auto market may result in our dealer customers’ cancelation of subscription services from us or even discontinuance of operations, which would directly
impact our number of dealer customers. Also, we may not identify trends correctly, or may not be able to bring new services to market as quickly,
effectively or price-competitively as our competitors. New services may alienate existing customers or cause us to lose business to our competitors. If the
number of our dealer customers decreases, we might not be able to generate sufficient revenues to cover our increased costs and expenses. As a result, our
business and results of operations may be materially and adversely affected.
Our ability to attract and retain users and customers may also be impacted by the sales and marketing approach taken by automakers. For example, our
potential users may be diverted to automakers of new energy vehicles that are pushing for direct sale model. While certain other automakers of new energy
vehicles are conducting advertising and marketing through direct engagement with consumers in addition to advertising placements on internet platforms
like us, and we are actively exploring new business initiatives in relation to the new energy vehicles, such as launching our offline experience store,
Autohome Space, in 20 cities across the country, helping us build brand awareness among users; there remain uncertainties that a portion, if not all, of our
users or potential users who are interested in new energy vehicles direct sale model may be diverted to these automakers. In addition, our products and
services under current business model may not be able to meet the needs of the continuous development of the new energy industry. Although we offer
diversified products and services and look for new avenues to capture the opportunities brought by this trend, we cannot assure you that our products and
services will gain wide acceptance from automakers. Any of these occurrences could adversely affect our results of operations, financial condition and
business prospects.
Our business depends on strong brand recognition, and failure to maintain or enhance our brands could adversely affect our business and prospects.
Maintaining and enhancing our “Autohome,” “Che168” and “TTP” brands is critical to our business and prospects. We believe that brand recognition
will become increasingly important as the number of internet users in China grows and competition in our industry intensifies. A number of factors could
prevent us from successfully promoting our brands, including user dissatisfaction with the content offered on our websites or mobile applications, negative
publicity involving our business, our management, our brand spokespersons, our relationship with our partners and customers, the failure of our sales and
marketing activities, employee relationship and welfare, regulatory compliance and financial conditions. If we fail to maintain and enhance our brands, or if
we incur excessive expenses in this effort, our business, results of operations and financial condition might be materially and adversely affected.
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Our business is subject to complex and evolving Chinese laws and regulations regarding data privacy and cybersecurity, many of which are subject to
changes and uncertain interpretations. Any changes in these laws could cause changes to our business practices and increased cost of operations, and
any security breaches or our actual or perceived failure to comply with such laws could result in claims, penalties, damages to our reputation and
brand, declines in user growth or engagement, or otherwise harm our business, results of operations and financial condition.
Our platform collects, stores and processes certain personal and other sensitive data from our users for purpose of providing our services. We have
taken technical measures to ensure the security of such personal information and prevent the personal information from being divulged, damaged or lost,
and we believe the measures we take regarding collection, storage, and use of personal data are generally compliant with industry standards. However, we
face risks inherent in handling and protecting personal data. In particular, we face a number of challenges relating to data from transactions and other
activities on our platform, including:
•
•
•
protecting the data in and hosted on our system, including against attacks on our system by outside parties or fraudulent behavior or improper use
by our employees;
addressing concerns related to privacy and sharing, safety, security and other factors; and
complying with applicable laws, rules and regulations relating to the collection, use, storage, transfer, disclosure and security of personal
information which are subject to change and new interpretations, including any requests from regulatory and government authorities relating to
such data.
In general, we expect that data security and data protection compliance will receive greater attention and focus from regulators, both domestically and
globally, as well as continued or greater public scrutiny and attention going forward, which could increase our compliance costs and subject us to
heightened risks and challenges associated with data security and protection. If we are unable to manage these risks, or if we are accused of failing to
comply with such laws and regulations, we could be subject to penalties, including fines, suspension of business, websites or applications, and revocation
of required licenses, and our reputation and results of operations could be materially and adversely affected.
21
Regulatory authorities in mainland China have enhanced data protection and cybersecurity regulatory requirements, many of which are subject to
change and uncertain interpretation. These laws continue to develop, and the PRC government may adopt further rules, restrictions and clarifications in the
future. On March 10, 2023, the NPC adopted the institutional reform plan of the State Council, or the “Institutional Reform Plan (2023)”. Pursuant to
Institutional Reform Plan (2023), the State Bureau for Data was established on October 25, 2023, aiming to be responsible for coordinating and promoting
the development of data infrastructure of the State and to undertake some tasks related data infrastructure which was originally undertaken by CAC and
NDRC. Moreover, different PRC regulatory bodies, including the SCNPC, the MIIT, the CAC, The Ministry of Public Security and the State
Administration for Market Regulation, or the SAMR, have enforced data privacy and protections laws and regulations with varying standards and
applications. See “Item 4. Information on the Company—B. Business Overview—Regulation—Regulations on Internet Privacy and Data Security.” The
following are non-exhaustive examples of certain recent PRC regulatory activities in this area:
Cybersecurity
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Data Security
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The Cybersecurity Law of the PRC, or the PRC Cybersecurity Law, which became effective in June 2017, created China’s first
national-level data protection framework for “network operators”, which requires, among other things, that network operators take
security measures to protect the network from interference, damage and unauthorized access and to prevent data from being divulged,
stolen or tampered with. Network operators are also required to collect and use personal information in compliance with the principles
of legitimacy, properness and necessity, expressly notify the purpose, methods and scope of such collection and use, and obtain the
consent of the person whose personal information is to be collected. Substantial financial, managerial and human resources are
required to comply with such legal requirements, enhance information security and address any issues caused by security failures.
Even if our security measures are sufficient and in compliance, we nonetheless face the risk of security breaches or similar disruptions.
Due to the data assets we have, our platform is an attractive target and potentially vulnerable to cyberattacks, computer viruses,
physical or electronic break-ins or similar disruptions. Because techniques used to sabotage or obtain unauthorized access to systems
evolve continuously and frequently and generally are not recognized until they are launched against a target, we may be unable to
anticipate these techniques or to implement adequate preventative counter-measures. In addition to advances in technology, an
increased level of sophistication and diversity of our products and services, an increased level of expertise of hackers, new discoveries
in the field of cryptography or other risks can result in the compromise or breach of our websites or our apps. If security measures are
breached because of third-party action, employee error, malfeasance or otherwise, or if design flaws in our technology infrastructure
are exposed and exploited, user data or personal information could be stolen or misused, which could expose us to penalties or other
administrative actions, time-consuming and expensive litigation and negative publicity, materially and adversely affect our business
and reputation and deter potential users from using our products, each of which would have a material adverse impact on our results of
operations, financial condition and business prospect.
In June 2021, the SCNPC promulgated the PRC Data Security Law, which took effect in September 2021. The PRC Data Security
Law, among other things, provides for security review procedure for data-related activities that may affect national security. A series of
regulations, guidelines and other measures have been and are expected to be adopted to implement the requirements created by the
PRC Data Security Law. For example, in July 2021, the State Council promulgated the Regulations on Protection of Critical
Information Infrastructure, which became effective on September 1, 2021. Pursuant to this regulation, a “critical information
infrastructure” is defined as key network facilities or information systems of critical industries or sectors, such as public
communication and information service, energy, transportation, water conservation, finance, public services, e-government affairs and
national defense science, the damage, malfunction or data leakage of which may endanger national security, people’s livelihoods and
the
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public interest. In December 2021, the CAC, together with other authorities, jointly promulgated the Cybersecurity Review Measures,
which became effective on February 15, 2022 and replaces its predecessor regulation. Pursuant to the Cybersecurity Review Measures,
critical information infrastructure operators purchasing network products and services and internet platform operators carrying out data
processing activities, in a manner which affects or may affect national security, are subject to cybersecurity review. The Cybersecurity
Review Measures further provides that network platform operators that hold personal information of over one million users shall apply
with the Cybersecurity Review Office for a cybersecurity review before any public offering at a foreign stock exchange. As of the date
of this annual report, we have not been informed that we are a “critical information infrastructure operator” by any government
authority. However, the exact scope of “critical information infrastructure operators” under the current regulatory regime remains
unclear, and the PRC government authorities may have wide discretion in the interpretation and enforcement of the applicable laws.
Therefore, it is uncertain whether we would be deemed to be a critical information infrastructure operator under PRC law. If we are
deemed a “critical information infrastructure operator” under the PRC cybersecurity laws and regulations, we may be subject to
obligations in addition to those with which we are currently obligated to comply.
•
In November 2021, the CAC released the Regulations on the Network Data Security (Draft for Comments), or the Draft Regulations
on Network Data Security. The Draft Regulations on Network Data Security define “data processors” as individuals or organizations
that can autonomously determine the purpose and the manner of data processing. In accordance with the Draft Regulations on Network
Data Security, data processors shall apply for a cybersecurity review for certain activities, including, among other things, (i) seeking
for listing abroad of data processors that process the personal information of more than one million users and (ii) any data processing
activity that affects or may affect national security. However, there have been no clarifications from the relevant authorities as of the
date of this annual report as to the standards for determining whether an activity is one that “affects or may affect national security”
under the Draft Regulations on Network Data Security. In addition, the Draft Regulations on Network Data Security requires that data
processors that process “important data” or which seeks for listing overseas must conduct an annual data security self-assessment or
third party assessment, and submit the assessment report of the preceding year to the municipal cybersecurity department by the end of
January each year. As of the date of this annual report, the Draft Regulations on Network Data Security were released for public
comment only, and their respective provisions and anticipated adoption or effective date may be subject to change with substantial
uncertainty.
Personal Information and Privacy
•
•
The Guideline on Anti-monopoly of Platform Economy Sector published by the Anti-monopoly Committee of the State Council,
effective on February 7, 2021, prohibits unnecessary collection of user information through coercive means by online platform
operators.
In August 2021, the SCNPC promulgated the Personal Information Protection Law, which took effect on November 1, 2021. The
Personal Information Protection Law further strengthened requirements on personal information protection, enhanced the punishment
for illegal processing of personal information and consolidated various previously promulgated rules with respect to personal
information rights and privacy protection. We update our compliance practices and privacy policies from time to time to meet the latest
regulatory requirements of PRC government authorities and adopt technical measures to protect data and ensure cybersecurity in a
systematic way. Nonetheless, certain evolving personal information protection requirements remain to be clarified by the CAC, other
regulatory authorities, and courts in practice. We may be required to make adjustments to our business practices to comply with the
personal information protection laws and regulations.
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Furthermore, the PRC government authorities have taken steps to limit the method and manner that internet companies may apply when using
algorithms. For instance, on December 31, 2021, the CAC, the MIIT, the Ministry of Public Security, and the SAMR jointly promulgated the
Administrative Provisions on Algorithm Recommendation in Internet Information Services, which came into effect on March 1, 2022. The Administrative
Provisions on Algorithm Recommendation in Internet Information Services implements classification and hierarchical management for algorithm
recommendation service providers based on various criteria. Under the Administrative Provisions on Algorithm Recommendation in Internet Information
Services, algorithm recommendation service providers shall inform users in a conspicuous manner that algorithm is used in service recommendations,
inform users of the basic principles, purpose and intentions, and inform users in an appropriate manner of the main operating mechanisms for the algorithm
recommendation services. Under the Administrative Provisions on Algorithm Recommendation in Internet Information Services, algorithm
recommendation service providers selling goods or providing services to consumers shall (i) protect consumers’ rights of fair trade, and (ii) be prohibited
from applying differential treatments to consumers with respect to transaction terms and conditions in an unreasonable manner based on consumers’
preferences, purchasing habits and such other characteristics. In addition, on June 24, 2022, the SCNPC released the final version of the revised Anti-
monopoly Law, which came into effect on August 1, 2022. The revised Anti-monopoly Law provides, among others, that business operators shall not
abuse, among others, algorithms, to exclude or limit competition, and makes several major changes and additions, including prohibiting the use of certain
technology to engage in anti-competitive behavior and raising the maximum fines for violations. As of the date of this annual report, we have not applied
any algorithms-driven discriminatory treatment towards users. In addition, we have also provided an option for our users to deactivate the algorithm-driven
recommendations. However, we cannot assure you that our algorithm recommendation functions are or will continue to be in compliance in all respects
with the evolving rules in the area of the algorithm-based recommendations. We will closely monitor the regulatory development and adjust our business
operations from time to time to comply with the regulations over algorithm-based recommendation. If our algorithm recommendation functions were to be
required to adjust in a manner that is adverse to our business in accordance with applicable rules, our ability to enhance the quality of content offering on
our platform and deepen user engagement may be adversely affected.
Many of the data and data privacy-related laws and regulations are relatively new and certain concepts thereunder remain subject to interpretation by
the regulators. If any data that we possess belongs to data categories that are or may become subject to heightened scrutiny, we may be required to adopt
stricter measures for protection and management of such data. We cannot predict the impact of the Cybersecurity Review Measures and the Draft
Regulations on Network Data Security, if any, at this stage, and we will closely monitor and assess any developments in the rule-making process. If the
Cybersecurity Review Measures and the enacted version of the Draft Regulations on Network Data Security mandate clearance of cybersecurity review and
other specific actions to be taken by issuers like us, we face uncertainties as to whether these additional procedures can be completed by us timely, or at all,
which may subject us to government enforcement actions and investigations, fines, penalties, suspension of our non-compliant operations, or removal of
our app from the relevant application stores, and materially and adversely affect our business and results of operations. As of the date of this annual report,
we have not been requested or notified by the CAC to conduct any cybersecurity review.
In general, compliance with the existing PRC laws and regulations, as well as additional laws and regulations that PRC legislative and regulatory
bodies may enact in the future, related to cybersecurity, data security and personal information protection, may be costly and result in additional expenses
to us, and subject us to negative publicity, which could harm our reputation and business operations. There are also uncertainties with respect to how such
laws and regulations will be implemented and interpreted in practice. In light of the fact that laws and regulations on cybersecurity, data privacy and
personal information protection are evolving and uncertainty remains with respect to their interpretation and implementation, we cannot guarantee that we
will be able to maintain full compliance at all times, or that our existing user information protection system and technical measures will be considered
sufficient. Any non-compliance or perceived non-compliance with all applicable data privacy and protection laws and regulations may lead to warnings,
fines, investigations, lawsuits, confiscation of illegal gains, revocation of licenses, closedown of websites, removal of apps and suspension of downloads,
price drops in our securities or even criminal liabilities against us by government agencies or other individuals. In addition, our launch of new products or
services or other actions that we take in the future may subject us to additional laws, regulations, or other government scrutiny.
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Furthermore, the activities of third parties, including our customers and business partners, are beyond our direct control. If our business partners
violate the laws and regulations relating to cybersecurity, data privacy and personal information protection, or fail to adhere to the service agreements with
us, or if any of our employees fails to comply with our internal control protocols and misuse the information, we may be subject to penalties and other legal
liabilities. Any failure or perceived failure by us to prevent information security breaches or to comply with data security and privacy policies or related
legal obligations, or any compromise of security that results in the unauthorized use, release or transfer of personally identifiable information or other data,
could potentially subject us to legal liabilities and sanctions. We expect that these areas will be subject to greater public scrutiny and attention from
regulators and more frequent and rigid investigation or review by regulators, which will escalate our compliance expenditures and operational challenges.
We may have to spend significant resources evaluating and managing these risks and challenges in normal course of business, maintaining active
cooperation with regulatory authorities. Failure to effectively manage these concerns may result in punitive measures, including, but not limited to,
financial penalties, operational suspension, or the rescindment of licenses, which could materially and negatively impact our reputation and operating
results.
A limited number of automaker customers have accounted for, and are expected to continue to account for, a large portion of our revenues. Failure to
maintain or to increase revenues from these customers could harm our prospects.
A limited number of automaker customers have accounted for, and are expected to continue to account for, a large portion of our revenues. In 2021,
2022 and 2023, 91, 100 and 96 automakers operating in mainland China used our media services, respectively. These automakers include independent
Chinese automakers, joint ventures between Chinese and international automakers and international automakers that sell cars made outside of mainland
China. In 2023, our top five automaker customers contributed 24.2% of our media services revenues. We believe that our major future revenue growth will
be focused on deepening our existing commercial relationships with automakers to increase our share of each automaker’s budget. We cannot assure you
that our automaker customers will continue to be satisfied with our cooperation model and strategy as well as our services, or our relationships with any of
these automaker customers will continue in the future. Failure to provide deliverables satisfactory to our automaker customers or failure to reach a mutually
amicable agreement with our automaker customers on the collection of payable fees may adversely impact our relationships with our automaker customers,
which would have a negative impact on our reputation and results of operations. If we lose one or more of our important automaker customers, or if they
materially reduce their purchase of our services, our results of operations would be materially and adversely affected.
We typically extend credit terms to automaker customers, which is relatively longer than other customers. We face risk of being unable to collect all
the accounts receivable from automaker customers in light of fluctuations in mainland China’s domestic automotive market. If we fail to collect accounts
receivable from automakers in a timely manner, or at all, our business, results of operations and financial conditions may be materially and adversely
affected. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—We are subject to credit risk in collecting the
accounts receivable due from our customers.”
Due to the limited number of automakers operating in mainland China, which is exacerbated by the increasing competition and concentration of
automakers in mainland China, and our revenue concentration attributable to a small number of these companies, any of the following events, among
others, may cause a material decline in our revenue and materially and adversely affect our results of operations and prospects:
•
•
•
contract reduction, delay or cancelation by one or more significant customers and our failure to identify and acquire additional or replacement
customers;
dissatisfaction with our services by one or more of our significant customers;
a substantial reduction by one or more of our significant customers in the price they are willing to pay for our services; and
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•
financial difficulty of one or more of our significant customers who become unable to make timely payment for our services.
If we are unable to grow our used automobile-related business, we may not be able to achieve our expected business growth and our results of
operations may be adversely affected.
Our che168.com website has been focusing on used automobile information and content since October 2011. We also launched che168.com mobile
application in 2012. Through these platforms, we offer used automobile listing services to used automobile dealers and individual car owners through a
user interface that allows potential used car buyers to identify listings that meet their specific requirements and contact the seller. To further enhance user
experience and optimize our used automobile-related business, in June 2018, we invested in TTP Car Inc., or TTP, a company operating an online bidding
platform for used automobiles, and in the fourth quarter of 2020, we acquired control in TTP.
We may not be able to successfully grow our used automobile-related business. Although the used automobile market in China is growing due to the
increased number of consumer-owned automobiles, there is still significant uncertainty regarding the extent to which our used automobile-related business
may benefit from such growth. We may not be able to source sufficient used automobiles or attract a broad user base to our che168.com and ttpai.cn
website and mobile application or be successful compared to our competitors. Even if we are able to do so, we may not be able to establish a business
model that allows us to effectively monetize the user traffic. We may not be able to successfully facilitate used car transactions and our services might not
be satisfactory to the used car buyers or sellers. Additionally, customers may not respond well to our new business initiatives as we expect. In such cases,
we may suffer pressure from public and regulatory risks, we may not be able to achieve our expected business growth and our results of operations and
reputation may be adversely affected.
If we are unable to conduct our marketing activities cost-effectively, our results of operations and financial condition may be materially and adversely
affected.
We have incurred expenses on a variety of marketing and brand promotion efforts designed to enhance our brand recognition and increase sales of our
products and services. Our marketing and promotional activities may not be well received by customers and may not result in the level of sales of products
and services that we anticipate. We incurred RMB2,759.9 million, RMB2,866.2 million and RMB3,012.5 million (US$424.3 million) in sales and
marketing expenses in 2021, 2022 and 2023, respectively, representing 38.1%, 41.3% and 41.9% respectively, of total net revenues in the corresponding
years. Marketing approaches and tools in the consumer products market in China are evolving. This further requires us to enhance our marketing
approaches and experiment with new marketing methods to keep pace with industry developments and consumer preferences, which may not be as cost-
effective as our marketing activities in the past and may lead to significantly higher marketing expenses in the future. We conducted various sales and
marketing initiatives to promote our brands through websites, search engines, mobile platforms, navigation sites and traditional media channels, for
example, the annual “Singles’ Day” event, the “AR Auto Show” event and TV ad broadcast on China Central Television. We also conducted various offline
promotional activities and cooperated with brands and dealers for promotions in target regions. In August 2019, we launched the 818 Super Auto Show, the
first auto-themed gala in mainland China that created an innovative integration of online and offline promotion elements, which attracted a large number of
automakers, dealers and potential auto consumers to participate and further promoted Autohome’s brand awareness to a much wider user base. As of the
date of this annual report, we had held the show for five consecutive years. In addition, we engaged celebrities, primarily athletes, as our brand
spokespersons to further promote our brand and stimulate user interest in our platform. We may not be able to continue or conduct these activities
efficiently, and our marketing activities may not yield satisfactory results. Failure to refine our existing marketing approaches or to introduce new effective
marketing approaches in a cost-effective manner could impact our net revenues and profitability.
Our auto insurance brokerage businesses are highly regulated. Non-compliance with applicable laws, regulations and regulatory requirements or
failure to respond to legal and regulatory changes may adversely affect our business and prospects.
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We have obtained the relevant license to conduct auto insurance brokerage businesses from the China Banking and Insurance Regulatory Commission,
or the CBIRC, and such businesses generated an insignificant amount of revenue for us in the three years ended December 31, 2021, 2022 and 2023. The
insurance industry in mainland China is highly regulated, and the regulatory regime continues to evolve. The CBIRC has extensive authority to supervise
and regulate the insurance industry in mainland China. The CBIRC conducts various reviews and inspections on insurance brokerage business operations
from time to time, which could cover a broad range of aspects, including financial reporting, tax reporting, internal control and compliance with applicable
laws, rules and regulations. On March 10, 2023, the NPC adopted the Institutional Reform Plan (2023), pursuant to which the National Financial
Regulatory Administration was established on May 18, 2023, replacing the CBIRC as the regulatory authority responsible for overseeing the PRC
insurance industry. If any non-compliance incidents in our insurance brokerage business operation are identified, we may be required to take certain
rectification measures in accordance with applicable laws and regulations, and would be subject to regulatory actions including penalties, warnings,
suspension of operations, revocation of licenses, tax, civil, administrative and criminal liabilities, any one or a combination of which would have negative
impacts on our reputation, businesses, results of operations and financial conditions.
Furthermore, mainland China’s insurance regulatory regime is undergoing significant changes. Development of regulations applicable to online
insurance business or our auto insurance brokerage business may result in additional restrictions on its business operations or more intensive competition in
this industry. We might be required to spend time and resources in order to comply with any material changes in the regulatory environment, which could
trigger changes to the competitive landscape and we may lose some or all of our competitive advantages on our auto insurance business during this process.
The attention of our management team could be diverted to these efforts to cope with an evolving regulatory or competitive environment. Meanwhile,
staying compliant with the restriction may result in limitation to our insurance brokerage business and limitation to its product and service offerings, which
may reduce the attraction to clients. As a result, our business and results of operations might be negatively affected though insurance brokerage business
currently does not contribute a material amount of revenue for us.
Goodwill and intangible assets impairment could adversely affect our results of operations and financial condition.
We recorded goodwill of RMB3,941.8 million, RMB3,941.8 million and RMB3,941.8 million (US$555.2 million) as of December 31, 2021, 2022 and
2023, respectively, in connection with the acquisition of Cheerbright International Holdings Limited, or Cheerbright, China Topside Co., Ltd. and Norstar
Advertising Media Holdings Co., Ltd. in June 2008 and the acquisition of TTP, in December 2020. In addition, we recorded intangible assets of RMB202.1
million (US$28.5 million) as of December 31, 2023, primarily consisting of technologies, trademarks, customer relationship and database from the
acquisition of TTP. We do not amortize goodwill. We have and will continue to incur amortization expenses as we amortize intangible assets over their
estimated useful life on a straight-line basis. We undertake goodwill and intangible assets impairment reviews periodically or more frequently if there are
indicators of impairment present. As of December 31, 2021, 2022 and 2023, we performed an impairment assessment and no provisions of goodwill and
intangible assets were required. However, if in the future our goodwill or intangible assets is determined to be impaired, we would be required to write
down the carrying value or record a provision of impairment loss for goodwill or intangible assets in our financial statements during the period in which
our goodwill or intangible assets is determined to be impaired, and this impairment would adversely affect our results of operations and our financial
condition.
We may be adversely affected by the mergers, acquisitions and other consolidation activities in the automobile industry which may exacerbate our
customer concentration.
The potential mergers, acquisitions and other consolidation activities in mainland China’s automobile industry will result in a lower number of
automakers and dealers, which make up a major part of our customer base. We are already subject to risks related to customer concentration. See “—A
limited number of automaker customers have accounted for, and are expected to continue to account for, a large portion of our revenues. Failure to maintain
or to increase revenues from these customers could harm our prospects.” Further consolidation within the automobile industry could exacerbate our
customer concentration. If we fail to maintain a good relationship with a large customer, our business, results of operations and financial condition could be
harmed.
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Increasing focus with respect to environmental, social and governance matters may impose additional costs on us or expose us to additional risks.
Failure to adapt to or comply with the evolving expectations and standards on environmental, social and governance matters from investors and the
PRC government may adversely affect our business, financial condition and results of operation.
The PRC government and public advocacy groups have been increasingly focused on environment, social and governance, or ESG, issues in recent
years, making our business more sensitive to ESG issues and changes in governmental policies and laws and regulations associated with environment
protection and other ESG-related matters. Investor advocacy groups, certain institutional investors, investment funds, and other influential investors are
also increasingly focused on ESG practices and in recent years have placed increasing importance on the implications and social cost of their investments.
Regardless of the industry, increased focus from investors and the PRC government on ESG and similar matters may hinder access to capital, as investors
may decide to reallocate capital or to not commit capital as a result of their assessment of a company’s ESG practices. We described our concepts, specific
practices and key achievements in ESG matters in our 2023 ESG report, which is accessible via hyperlink in our press release furnished to the SEC as
Exhibit 99.1 to our Form 6-K (File No. 001-36222) on March 27, 2024. See “Item 4. Information on the Company—B. Business Overview—
Environmental, Social and Governance Initiatives” for more information regarding our ESG report. Any ESG concern or issue could increase our
regulatory compliance costs. If we do not adapt to or comply with the evolving expectations and standards on ESG matters from investors and the PRC
government or are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement
to do so, we may suffer from reputational damage and the business, financial condition, and the price of our ADSs and/or ordinary shares could be
materially and adversely effected.
Our business is subject to fluctuations, including seasonality, which makes our results of operations difficult to predict and may cause our quarterly
results of operations to fall short of expectations.
Our quarterly revenues and other operating results have fluctuated in the past and may continue to fluctuate depending upon a number of factors,
many of which are beyond our control. Our business experiences seasonal variations in association with the demand for automobiles in mainland China.
For example, the first quarter of each year generally contributes the lowest portion of our annual net revenues primarily due to a slowdown in business
activity around and during the Chinese New Year holiday, which occurs during the period. Consequently, our results of operations may fluctuate from
quarter to quarter. For these reasons, comparing our operating results on a period-to-period basis may not be meaningful, and you should not rely on our
historical results as an indication of our future performance. As each of our business lines may have different seasonality factors and the mix of our revenue
source may shift from year to year, our past performance may not be indicative of future trends.
In addition, because a portion of our revenues arising from our media services is attributable to new model promotion campaigns, the timing and the
number of new car releases of our major automaker advertisers can have a significant impact on our results of operations. The timing and the number of
such releases, however, is subject to uncertainty due to various factors, such as automakers’ design or manufacturing issues, marketing conditions and
government incentives or restrictions. These factors may make our results of operations difficult to predict and cause our quarterly results of operations to
fall short of expectations.
If we are unable to maintain our relationships with advertising agencies or if we are unable to collect accounts receivable from advertising agencies in
a timely manner, our results of operations and prospects may be materially and adversely affected.
We are currently selling a substantial portion of our advertising services and solutions to third-party advertising agencies that represent the automakers
and automobile dealers, who could maintain our business relationships with automakers and automobile dealers. We do not have long-term cooperation
agreements or exclusive arrangements with these agencies and they may elect to direct business to other advertising service providers, including our
competitors. If we fail to retain and enhance our business relationships with third-party advertising agencies, in particular the few ones we frequently
transact with, we may suffer from a loss of advertisers and our business, financial condition, results of operations and prospects may be materially and
adversely affected. In our agreements with certain major advertising agencies, we undertake to provide them with most favored pricing terms. Such most
favored pricing terms may hinder our ability to acquire new customers using special pricing terms.
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In addition, we have been relying on third-party advertising agencies for the collection of payment from advertisers and we have been relying on a few
advertising agencies to collect a significant portion of our total account receivables. As a result, the financial soundness of advertising agencies may affect
our collection of accounts receivable. We make a credit assessment of a potential advertising agency to evaluate the collectability of the advertising service
fees before entering into an advertising contract. However, we cannot assure you that we will be able to accurately assess the creditworthiness of each
advertising agency, and any failure of advertising agencies to pay us in a timely manner may adversely affect our liquidity and cash flows. Amid the
fluctuations in new automobile purchases in mainland China, certain automakers operating in mainland China have suffered declining performance or
financial difficulties. As a result, advertising agencies that represent the automakers and automobile dealers may encounter financial and operational
difficulties, or even go out of businesses. This in turn causes us to suffer from longer accounts receivable turnover days, allowance for expected credit
losses. Initiating legal proceedings against such advertising agencies can be expensive and time-consuming, and could divert our management’s attention
and other resources from our business operations, which could adversely affect our results of operations. Even if we receive a favorable judgment in such
legal proceedings, it may still be challenging and uncertain for us to collect the outstanding payments promptly and in full from the advertising agencies if
they are experiencing financial difficulties or even go bankrupt. Moreover, even if we are able to enforce our rights against any collaterals other than cash
for the outstanding payments, it may still be challenging and uncertain for us to effectively liquidate such collaterals.
If online advertising and promotion do not continue to grow in mainland China, our ability to increase revenue and profitability could be materially
and adversely affected.
With the continuous growth of internet usage in mainland China, the internet has become an increasingly important marketing and advertising channel
to mainland China’s automotive industry. Although online advertising and promotion have constituted a significant portion of the overall marketing
activities of our current and potential advertisers and dealer subscribers, if the promotional effect or outcome realized through online advertising and
promotion cannot meet the expectations of advertisers and dealer subscribers or address their needs, our advertisers and dealer subscribers may decrease
their spending and efforts on online advertising and promotion. Our ability to increase revenue and profitability from online marketing may be adversely
impacted by a number of factors, many of which are beyond our control, including:
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difficulties associated with developing a larger user base with demographic characteristics attractive to advertisers;
increased competition and potential downward pressure on online advertising prices;
difficulties in acquiring and retaining advertisers or dealer subscribers;
uncertainties and changes in regards to PRC regulations on internet advertisements;
failure to develop an independent and reliable means of verifying online traffic; and
decreased use of the internet or online marketing in mainland China.
If the internet does not become more widely accepted as an effective media platform for advertising and marketing by mainland China’s automotive
industry, our business, financial condition and results of operations could be materially and adversely affected.
We are subject to credit risk in collecting the accounts receivable due from our customers.
The credit terms we extend to our customers result in accounts receivable. As of December 31, 2021, 2022 and 2023, our accounts receivable (net of
allowance for doubtful accounts) were RMB2,139.5 million, RMB1,927.7 million and RMB1,472.5 million (US$207.4 million), respectively, and we
recognized additions to allowance for doubtful accounts of RMB53.3 million, RMB8.3 million and deductions of RMB22.1 million (US$3.1 million) in
2021, 2022 and 2023, respectively. We usually make credit assessment of our customers before entering into
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agreements. However, we cannot assure you that we are or will be able to accurately assess the creditworthiness of each of our customers before entering
into agreements, neither can we guarantee that each of these customers will be able to strictly follow and enforce the payment schedules provided in the
agreements. Any inability of our customers to pay us in a timely manner may adversely affect our liquidity and cash flows, which in turn has a material
adverse effect on our business operations and financial condition.
Our short-term investments may expose us to default risk and adversely affect our business, financial condition and results of operations.
During the years ended December 31, 2021, 2022 and 2023, we invested in bank deposits and adjustable-rate financial products. As of December 31,
2021, 2022 and 2023, our short-term investments amounted to RMB16,496.3 million, RMB19,279.6 million and RMB18,552.4 million (US$2,613.0
million), respectively. We are subject to default risk associated with these short-term investments. We have experienced default once on payment by asset
managers of certain of our investments. The investment of one of our subsidiaries in an adjustable-rate financial product experienced deferral of payment
by the financial institution when the relevant investment units reached maturity. As of the date of this annual report, we have not received all the payment
from such financial institution, for which we recognized the related loss in the consolidated statements of comprehensive income. Although we have
initiated legal proceedings to recover such payment, uncertainties to the outcome of such legal proceedings exist. Even if we receive a favorable judgment
in such legal proceedings, there is no guarantee for us to collect the outstanding payments promptly and/or in full. Neither can we assure you that we will
receive investment income or will not incur financial losses from our other investments. In addition, changes of inputs such as annual interest rate will
change the fair value of certain of our short-term investments. In the event that we incur financial losses from these short-term investments, our business,
financial condition and results of operations may be adversely affected.
Inaccuracy in pricing and listing information provided by third parties on our platform may adversely affect our business and financial performance.
Our automobile listings and promotional information are provided and updated by third parties on our platform, including the automakers, dealers,
financial partners and used car sellers. Users interested in particular vehicle models can conveniently search for up-to-date information on such models
without having to visit the local showrooms of relevant dealers or solicit related information from other sources. Although we have optimized our system to
detect pricing inaccuracy and have leveraged our advanced technology and third-party data to improve the accuracy of price listings and promotional
information on our platform, we cannot assure you that these measures are always effective to ensure the accuracy and reliability of pricing and listing
information provided to our users. If such listings and promotional information provided by the third parties on our platform are frequently inaccurate or
not reliable, our users may lose faith in our websites and mobile applications, resulting in reduced user traffic to our websites and mobile applications and
diminished value to customers. We may receive more customer complaints, and we may need to allocate more resources in responding and handling such
complaints. We cannot guarantee that such complaints will be resolved in satisfactory outcome. Our reputation could be harmed, which could adversely
affect our business and financial performance. For used car listings on our platforms in particular, we are subject to risks associated with inaccurate
representation of used car conditions in the inspection reports we show on the listings. We may receive complaints or claims of damages arising out of such
inaccuracies. While we are attempting to mitigate the issue through third-party inspection warranty, revising the report items and showing inspection
methodologies, there is no guarantee that those measures will be effective.
If we are unable to effectively manage our auto finance business, we may not be able to achieve our expected business growth, our results of operations
may be adversely affected and we may be subject to penalties as a result of noncompliance.
Since 2017, with the collaboration of our business with Ping An Group, we have been developing our auto finance services for our cooperative banks
and financial institutions and displaying and marketing their financial products, including financing and financial leasing products, on our platform. We
enable banks and financial institutions to present their financial products to users of our websites and mobile applications and to accept users’ auto
financing applications. Although we have an existing large user base, we cannot assure you that the business model of our auto finance business will be
attractive to users and financial partners. Failure to provide satisfactory
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services on our platform or facilitate financing transactions between our users and financial product providers would cause an adverse impact on our auto
finance business. As a result, we may not be able to achieve our expected business growth and our results of operations may be adversely affected.
Since our auto finance business is subject to certain regulation and supervision in the PRC, we may need to handle regulatory inspections during our
ordinary course of business from time to time. In addition, although we don’t have business operations in the U.S., we may nevertheless be subject to its
laws and regulations related to our auto finance business such as anti-money laundering laws and regulations. We have developed an internal control
system relating to compliance matters for auto finance business. However, we cannot assure you that the internal control system could always work
effectively in tracking and administering the compliance matters relevant to our auto finance business and we may need to incur increased compliance costs
to maintain and upgrade such internal control system effectively. If we cannot satisfy any of the requirements of competent authorities, we would be
exposed to the relevant regulatory risks, which may result in penalties imposed against us.
Any financial or economic crisis, or perceived threat of such a crisis, including a significant decrease in consumer confidence, may materially and
adversely affect our business, financial condition and results of operations.
The global financial markets experienced significant disruptions in 2008 and the United States, European and other economies went into recession.
The recovery from the lows of 2008 and 2009 was uneven and the global financial markets are facing new challenges, including the escalation of the
European sovereign debt crisis since 2011, the hostilities in the Ukraine, the end of quantitative easing by the U.S. Federal Reserve and the economic
slowdown in the Eurozone in 2014. In addition, the recent conflict in Ukraine and the imposition of broad economic sanctions on Russia could raise energy
prices and disrupt global markets. It is unclear whether these challenges will continue to exist and what effects they each may have. There is considerable
uncertainty over the long-term effects of the expansionary monetary and fiscal policies that have been adopted by the central banks and financial authorities
of some of the world’s leading economies, including mainland China’s. Economic conditions in mainland China are sensitive to global economic
conditions. Any prolonged slowdown in mainland China’s economic development might lead to tighter credit markets, increased market volatility, sudden
drops in business and consumer confidence and dramatic changes in business and consumer behaviors. In response to their perceived uncertainty in
economic conditions, consumers might delay, reduce or cancel purchases of automobiles, and our customers may also defer, reduce or cancel purchasing
our services. To the extent any fluctuations in the Chinese economy significantly affect automakers’ and dealers’ demand for our services or change their
spending habits, our results of operations may be materially and adversely affected.
We and our directors and officers may be subject to claims, suits, government investigations, and other proceedings that may result in adverse
outcomes.
We and our directors and officers may be subject to claims, suits, and government investigations involving competition, intellectual property, privacy,
consumer protection, tax, fiduciary duty, labor and employment, commercial disputes, advertisements and content placed on our websites and mobile
applications, and other matters. Our business may also face intellectual property infringement claims, as further discussed elsewhere in this annual report,
that expose us to the risk of reputation damage. Such claims, suits, and government investigations are inherently uncertain and their results cannot be
predicted with certainty. Regardless of the outcome, any of these types of legal proceedings can have an adverse impact on us and our directors and officers
due to the legal costs, diversion of management resources, negative publicity and other factors involved therein. It is possible that one or more of such
proceedings could result in substantial fines and penalties that could adversely affect our business.
If we fail to protect our intellectual property rights, our brand and business may suffer.
We rely on a combination of trademark, patent, copyright and trade secret protection laws in mainland China and other jurisdictions, as well as
through confidentiality agreements and other measures, to protect our intellectual property rights. Our major brand names and logos are registered
trademarks in mainland China. Most of our originally-generated content and professionally-generated content available on our websites and mobile
applications and proprietary software are protected by copyright laws. Despite our precautions, third parties may obtain and use our intellectual property
without our authorization. Protection of intellectual property rights for many
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internet-related activities, such as internet commercial methods patents, may not be sufficient in the countries and regions that we operate. From time to
time, other websites or mobile applications may use our articles, photos or other content without our proper authorization. Although such use has not in the
past caused any material damage to our business, it is possible that there may be misappropriation on a much larger scale with a material adverse impact to
our business. If we are unable to adequately protect our intellectual property rights in the future, our brand and business may suffer.
We may be vulnerable to intellectual property infringement claims brought against us by others.
Internet, technology and media companies are frequently involved in litigation based on allegations of infringement of intellectual property rights,
unfair competition, invasion of privacy, defamation and other violation of other parties’ rights. We have not experienced any material claims on these issues
against us in the past, but as we face increasing competition and as litigation becomes more common in mainland China in resolving commercial disputes,
we face a higher risk of being the subject of intellectual property infringement claims. Also, third parties may submit intellectual property infringement
claims against us to the app stores where our mobile applications are available. In such cases, our mobile applications may be taken down by the relevant
app stores until such claims have been resolved, which could significantly restrict our users from downloading or updating our mobile applications and thus
adversely affect our business and results of operations. In addition, we may be subject to legal proceedings and claims from time to time relating to the
intellectual property of others in the ordinary course of our business. We could also be subject to claims based upon the content that is displayed on our
websites, our mobile platforms or accessible from our websites through links to other websites or information on our websites and mobile applications
supplied by third parties. Intellectual property claims and litigation are expensive and time-consuming to investigate and defend and may divert resources
and management attention from the operation of our websites and mobile applications. Such claims, even if they do not result in liability, may harm our
reputation. Any resulting liability or expenses, or changes required to our websites and mobile applications to reduce the risk of future liability, may have a
material adverse effect on our business, financial condition and results of operations.
We may be subject to liability for advertisements and other content placed on our websites and mobile applications.
The PRC government has adopted regulations governing advertising content as well as internet access and the distribution of information over the
internet. Under PRC advertising laws and regulations, we are obligated to monitor the advertising content shown on our websites and mobile applications
to ensure that such content is true and accurate and in full compliance with applicable laws and regulations. See “Item 4. Information on the Company—B.
Business Overview—PRC Regulation—Regulations on Advertisements.”
Under the Provisions on Governance of Network Information Content Ecosystem, which was promulgated on December 15, 2019 and came into
effect on March 1, 2020, the network information content service platform shall strengthen the management of information content, and upon detecting any
illegal information, shall immediately take measures prescribed by laws, keep relevant records, and report to the relevant competent authority. Additionally,
the network information content platform shall also strengthen the examination and inspection of the advertising space set on the platform and the
advertising content displayed on the platform. Those who publish illegal advertisements shall be punished according to laws. On August 25, 2017, the CAC
promulgated the Administrative Provisions on Internet Follow-up Comment Services and the Administrative Provisions on Internet Forum and Community
Services, both of which became effective as of October 1, 2017. As stipulated in the provisions, the internet follow-up comment service providers are
imposed on strict primary obligations such as verifying the authenticity of registered users’ identity information, protecting personal information of users
and developing system to review follow-up comments on news information prior to the publication. Moreover, the internet forum and community services
providers may establish the systems of information review, real-time public information check, emergency response, personal information protection and
other information security administration systems. In November 2022, the CAC issued the revised Administrative Provisions on Internet Follow-up
Comment Services, which came into effect on December 15, 2022, expanding the scope of the supervision and specifying wider responsibilities, relevant
internal control obligations of network operators and service providers. See “Item 4. Information on the Company—B. Business Overview—PRC
Regulation—Regulations on Internet Content Services.”
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Under the Provisions on the Administration of Online Live Streaming Services, online live-streaming service providers shall establish platforms for
reviewing live-streaming content. Online live-streaming service providers and online live-streaming publishers that provide internet news information
services without permits, or exceeding the scope of their permits, are subject to punishment. In addition, online live-streaming service providers shall make
record filings with the local internet information office and the local public security authorities. Online live-streaming service providers that fail to file
records with or get relevant permission from relevant authorities will be punished in accordance with laws. See “Item 4. Information on the Company—B.
Business Overview—PRC Regulation—Regulations on Online Live-streaming Services.”
We display automotive advertisements on our websites, mobile applications and new media platforms. In addition, we allow users to upload written
materials, images, pictures and other content on our websites, mobile applications, including user forums, and also allow users to share and link to content
from other websites through our websites, mobile applications, including user forums. Moreover, we have also added online live-streaming features on our
websites and mobile applications. Failure to identify and prevent illegal or inappropriate content from being displayed on or through our websites and
mobile applications may subject us to liability. We cannot assure you that all of the advertisements and content shown or posted on our websites and mobile
applications adhere to the advertising and internet content laws and regulations, especially given the uncertainty in the interpretation of these PRC laws and
regulations.
If PRC regulatory authorities determine that any advertisements or content displayed on our websites and mobile applications do not adhere to
applicable laws and regulations, they may require us to limit or eliminate the dissemination or availability of such advertisements and other content on our
websites and mobile applications in the form of take-down orders or otherwise. Such regulatory authorities may also impose penalties on us, including
fines, confiscation of advertising income or, in circumstances involving more serious violations by us, the termination of our internet content related
licenses, any of which would materially and adversely affect our business and results of operations.
In addition, we may be subject to claims by consumers asserting that the information on our websites and mobile applications is misleading, and we
may not be able to recover our losses from advertisers. As a result, our business, financial condition and results of operations could be materially and
adversely affected.
Problems with our network infrastructure or information technology systems could impair our ability to provide services.
Our ability to provide our users with a high-quality online experience depends on the continuing operation and scalability of our network
infrastructure and information technology systems. Our systems are potentially vulnerable to damage or interruption as a result of earthquakes, floods,
fires, extreme temperatures, power loss, telecommunications failures, technical error, computer viruses, hacking or similar events. We may encounter
problems when upgrading our systems or services and undetected programming errors could adversely affect the performance of the software we use to
provide our services. The development and implementation of software upgrades and other improvements to our internet services is a complex process, and
issues not identified during pre-launch testing of new services may only become evident when such services are made available to our entire user base.
In addition, we rely on content delivery networks, data centers and other network facilities provided by third parties. Any disruption to these network
facilities may result in service interruptions, decreases in connection speed, degradation of our services or the permanent loss of user data and uploaded
content. If we experience frequent or persistent service disruptions, whether caused by failures of our own systems or those of third-party service providers,
our reputation or relationships with our users or customers may be damaged and our users and customers may switch to our competitors, which may have a
material adverse effect on our business, financial condition and results of operations.
Computer viruses and hacking may cause delays or interruptions on our systems and may reduce use of our services and damage our reputation and
brand.
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Computer viruses and “hacking” may cause delays or other service interruptions on our systems. “Hacking” involves efforts to gain unauthorized
access to information or systems or to cause intentional malfunctions, loss or corruption of data, including user data, software, hardware or other computer
equipment. In addition, the inadvertent transmission of computer viruses could result in significant damage to our hardware and software systems and
databases, disruptions to our business activities, including our e-mail and other communications systems, breaches of security and inadvertent disclosure of
confidential or sensitive information, interruptions in access to our website through the use of “denial of service” or similar attacks and other material
adverse effects on our operations. We have experienced hacking attacks in the past, and although such attacks in the past have not had a material adverse
effect on our operations, there is no assurance that there will be no serious computer viruses or hacking attacks in the future. We may incur significant costs
to protect our systems and equipment against the threat of, and to repair any damage caused by, computer viruses and hacking. Moreover, if a computer
virus or hacking affects our systems and is highly publicized, our reputation and brand could be materially damaged and use of our services may decrease.
The continuing and collaborative efforts of our senior management, key employees and highly skilled personnel are crucial to our success, and our
business may be harmed if we were to lose their services.
Our success depends on the continuous efforts and services of our senior management team and other key personnel. If one or more of our executive
officers or other key personnel are unable or unwilling to continue to provide us with their services, we might not be able to replace them within a short
period of time or at all. Our business could be severely disrupted, our financial condition and results of operations could be materially and adversely
affected, and we might incur additional expenses to recruit, train and retain personnel. Our senior management team is crucial to executing our business
strategies. Failure to retain our key management and personnel may create considerable uncertainty on the direction of our future development. If any of
our executive officers joins a competitor or forms a competing company, we may lose customers, know-how and key professionals and staff members.
Each of our executive officers has entered into an employment agreement with us, which contains non-competition provisions. However, if any dispute
arises between us and our executive officers, we may have to incur substantial costs and expenses in order to enforce these agreements in mainland China.
Our performance and future success also depend on our ability to identify, hire, develop, motivate and retain skilled personnel for all areas of our
organization. Competition in the automotive and internet advertising industries and the online automobile transaction industry for qualified employees is
intense, and if competition in these industries further intensifies, it may be more difficult for us to hire, motivate and retain highly skilled personnel. If the
personnel holding key positions at our company are not as qualified as we expect or if we do not succeed in attracting additional highly skilled personnel or
retaining or motivating our existing personnel, we may be unable to grow effectively or at all.
In addition, employee misconduct could expose us to significant legal liability and reputational harm. If any of our employees and management
members engages in improper, illegal or suspicious activities or other misconduct in violation of our ethical policies, regulatory rules or regulations
concerning anti-corruption, bribery and other ethical issues, we could suffer serious harm to our reputation, financial condition, relationships with our
business partners, automakers and dealers and our ability to attract new users and customers. We could even be subject to regulatory sanctions and
significant legal liability.
We may undertake acquisitions, investments, joint ventures or other alliances, which could prove difficult to integrate, disrupt our business or
otherwise negatively impact our results of operations.
As part of our business strategy, we regularly evaluate potential acquisitions, investments and alliances, including joint ventures, minority equity
investments and strategic investments. These transactions involve numerous risks, including:
•
•
•
the failure to achieve the expected benefits of the acquisition, investment or alliance;
difficulties in, and the cost of, integrating operations, technologies, services and personnel;
write-offs of investments or acquired assets;
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•
•
•
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non-performance by, or conflicts of interest with, the parties with whom we enter into investments or alliances;
limited ability to monitor or control the actions of other parties with whom we enter into investments or alliances;
misuse of proprietary information shared in connection with an acquisition, investment or alliance; and
depending on the nature of the acquisition, investment or alliance, exposure to new regulatory risks. The realization of any of these risks could
materially and adversely affect our business. To the extent any of our directors or officers also invests in a capacity other than as our director or
officer, his or her interest may not be aligned with ours.
In addition, if we finance acquisitions by issuing equity or convertible debt securities, our existing shareholders may be diluted, which could affect the
market price of our ADSs and/or ordinary shares.
Furthermore, we may fail to identify or secure suitable acquisition, investment and other strategic opportunities, or our competitors may capitalize on
such opportunities before we do, which could impair our ability to compete with our competitors and adversely affect our growth prospects and results of
operations.
Our vendors may raise prices and, as a result, increase our operating expenses.
We rely on third parties for certain essential services such as internet services and we may not have any control over the costs of the services they
provide. The third-party service providers may raise prices, which might not be commercially reasonable to us. If we are forced to seek other providers,
there is no assurance that we will be able to find alternative providers that are willing or able to provide comparable high-quality services and that will not
charge us higher prices for their services. If the prices that we are required to pay to third-party service providers rise significantly, our results of operations
could be adversely affected.
Divestitures of businesses and assets may have a material and adverse effect on our business and financial situation.
We have undertaken, and may undertake in the future, partial or complete divestitures or other disposal transactions in connection with certain of our
businesses and assets, particularly ones that are not closely related to our core focus areas or might require excessive resources or financial capital, to help
our company meet its objectives. We also have and may in the future withdraw from certain of our businesses to shift our focus to other businesses. For
example, we substantially withdrew from the offline insurance brokerage business in mainland China in 2021 and dissolved our UK subsidiary in 2023 and
expect to dissolve our German subsidiary in the first half of 2024, primarily due to the macroenvironmental changes and the evolution of our strategies.
These decisions are largely based on our management’s assessment of the business models and likelihood of success of these businesses. However, our
judgment could be inaccurate, and we may not achieve the desired strategic and financial benefits from these transactions. Our financial results could be
adversely affected by the impact from the loss of earnings and corporate overhead contribution/allocation associated with divested businesses. In addition,
as our net (loss)/ income from discontinued operations are non-recurrent, it may be difficult for investors and analysts to predict our future earnings
potential based on our historical financial performance.
Dispositions may also involve continued financial involvement in the divested business, such as through guarantees, indemnities or other financial
obligations. Under these arrangements, performance by the divested businesses or other conditions outside of our control could affect our future financial
results. We may also be exposed to negative publicity as a result of the potential misconception that the divested business is still part of our consolidated
group. On the other hand, we cannot assure you that the divesting business would not pursue opportunities to provide services to our competitors or other
opportunities that would conflict with our interests. If any conflicts of interest that may arise between the divesting business and us cannot be resolved in
our favor, our business, financial condition, results of operations could be materially and adversely affected.
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Furthermore, reducing or eliminating our ownership interests in these businesses might negatively affect our operations, prospects, or long-term value.
We may lose access to resources or know-how that would have been useful in the development of our own business. Our ability to diversify or expand our
existing businesses or to move into new areas of business may be reduced, and we may have to modify our business strategy to focus more exclusively on
areas of business where we already possess the necessary expertise. We may sell our interests too early, and thus forego gains that we otherwise would have
received had we not sold. Selecting businesses to dispose of or spin off, finding buyers for them (or the equity interests in them to be sold) and negotiating
prices for what may be relatively illiquid ownership interests with no easily ascertainable fair market value will also require significant attention from our
management and may divert resources from our existing business, which in turn could have an adverse effect on our business operations.
Ping An Group has substantial influence over our company and its interests may not be aligned with ours.
As of March 31, 2024, Yun Chen Capital Cayman, or Yun Chen, a subsidiary of Ping An Group, owned 46.4% of the total equity interest in our
company. Because Ping An Group beneficially owns a significant percentage of the voting rights in our company, it has substantial influence in
determining the outcome of any corporate transaction or other matter submitted to the shareholders for approval, including mergers, consolidations and the
sale of all or substantially all of our assets, election of directors and other significant corporate actions. Without the consent of Ping An Group, we may be
prevented from entering into transactions that could be beneficial to us. The interests of Ping An Group may differ from the interests of our other
shareholders. Furthermore, Ping An Group’s business activities, although not related to our operations, may adversely impact reputation. As Ping An Group
is a public company listed on the Hong Kong Stock Exchange and the Shanghai Stock Exchange, and beneficially controls a significant percentage of our
voting rights, Ping An Group may be required to disclose information on us from time to time, which may subject us to additional costs and efforts in
making such disclosures.
We have and expect to continue to have related party transactions with Ping An Group. In 2021, 2022 and 2023, Ping An Group provided us with
services and assets in the amount of RMB176.9 million, RMB191.8 million and RMB191.4 million (US$27.0 million), respectively. In 2021, 2022 and
2023, we provided services to Ping An Group in the amount of RMB417.1 million, RMB226.5 million and RMB134.4 million (US$18.9 million),
respectively. Besides these transactions, we had cash or time deposits in commercial banks associated with Ping An Group and purchased short-term cash
management products managed by Ping An Group as a part of our cash management plan, which totaled RMB4,144.8 million, RMB5,187.0 million and
RMB5,729.6 million (US$807.0 million) as of December 31, 2021, 2022 and 2023, respectively. In January 2022, we entered into a limited partner interest
subscription agreement, a limited partnership agreement and certain other auxiliary documents with Ping An Capital Co., Ltd., pursuant to which we
subscribed for RMB400 million worth of limited partner interests in an equity investment fund managed by Ping An Capital Co., Ltd. Although we did not
and do not expect to rely upon revenues from Ping An Group, if Ping An Group decides to reduce or even terminate its transactions with us, our business,
financial conditions and results of operations may be adversely affected.
If we fail to maintain an effective system of internal control over financial reporting, our ability to accurately and timely report our financial results or
prevent fraud may be adversely affected, and investor confidence and the market price of our ADSs and/or ordinary shares may be adversely impacted.
The SEC, as required by Section 404 of the Sarbanes-Oxley Act of 2002, adopted rules requiring every public company to include a management
report on the company’s internal control over financial reporting in its annual report, which contains management’s assessment of the effectiveness of the
company’s internal control over financial reporting. Our management has concluded that our internal control over financial reporting was effective as of
December 31, 2023. Our independent registered public accounting firm has issued an attestation report, which has concluded that our internal control over
financial reporting was effective in all material aspects as of December 31, 2023. However, if we fail to maintain effective internal control over financial
reporting in the future, our management and our independent registered public accounting firm may not be able to conclude that we have effective internal
control over financial reporting at a reasonable assurance level. This could in turn result in loss of investor confidence in the reliability of our financial
statements and negatively impact the trading price of our ADSs and/or ordinary shares. Furthermore, we have incurred and anticipate that we will continue
to incur considerable costs, management time and other resources in an effort to comply with Section 404 and other requirements of the Sarbanes-Oxley
Act.
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We have limited business insurance coverage.
We consider that the coverage from the insurance policies maintained by us is in line with the industry norm. However, we do not have general third-
party business liability or interruption insurance to cover our operations. Any uninsured occurrence of business disruption may result in our incurring
substantial costs and the diversion of resources, which could have an adverse effect on our results of operations and financial condition.
We face risks related to health epidemics, natural disasters or other unexpected events.
We are vulnerable to health epidemics, natural disasters, and other calamities. Any of such occurrences could cause severe disruption to our daily
operations, and may even require a temporary closure of our offices, which may disrupt our business operations and adversely affect our results of
operations. In addition, our results of operations could be adversely affected to the extent that any of these catastrophic events harms the Chinese economy
in general. Our business operations and financial results may be adversely affected in the future by COVID-19 resurgence. In addition, acts of war or
terrorism may also injure our employees, cause loss of lives, disrupt our business network and destroy our markets. Any of the foregoing events and other
events beyond our control could have an adverse effect on the overall business sentiment and environment, cause uncertainties in the regions where we
conduct business, cause our business to suffer in ways that we cannot predict and materially and adversely impact our business, financial condition and
results of operations
Risks Related to Our Corporate Structure
If the PRC government finds that the agreements that establish the structure for operating our services in China do not comply with PRC governmental
restrictions on foreign investment in internet businesses, or if these regulations or the interpretation of existing regulations change in the future, we
could be subject to severe penalties or be forced to relinquish our interests in those operations, and we may face significant disruption to our business
operations.
Current laws and regulations of mainland China place certain restrictions on foreign ownership of companies that provide internet content services
and other related services in mainland China. Pursuant to the Special Administrative Measures (Negative List) for the Access of Foreign Investment (2021
Version) promulgated on December 27, 2021 and became effective on January 1, 2022, or the Negative List, and the Provisions on Administration of
Foreign Invested Telecommunications Enterprises, or the FITE Provisions, promulgated by the State Council on December 11, 2001 and amended from
time to time with the latest amendment effective on May 1, 2022, foreign investors are not allowed to own more than 50% of the equity interests in a value-
added telecommunication service provider, unless otherwise stipulated in relevant rules. On April 8, 2024, MIIT issued Announcement on the Pilot
Program for the Expansion of Opening-Up in the Value-Added Telecommunications Services. According to this announcement, in the regions approved for
the pilot program, restrictions on foreign equity shares shall be removed for certain businesses including online data processing and transaction processing
business, as well as information services for information release platforms and delivery services (excluding internet news information, online publishing,
internet audio-visual services, and internet cultural operations). Given the recent enactment of this announcement, there remains uncertainty with respect to
the interpretation and practical application. As a Cayman Islands company and foreign legal person under laws of mainland China, we are subject to these
provisions. According to the Negative List, although a foreign investor is allowed to own more than 50% of the equity interest in an e-commerce business,
a domestic multi-party communication business, an information storage and re-transmission business and a call center business, other requirements
provided by these provisions still apply. In addition, foreign investors are prohibited from investing in companies engaged in online live-streaming and
radio and television programs production and dissemination. Accordingly, we believe that it would be impracticable for us to acquire any equity interest in
the variable interest entities without diverting management attention and resources. Moreover, we believe that our contractual arrangements with these
entities and the individual nominee shareholders allow us to have the power to direct the activities of these entities that most significantly impact their
economic performance. Accordingly, we currently do not plan to acquire any equity interest in any of the variable interest entities.
As such, we conduct our business activities related to internet content services by entering into a series of contractual arrangements with the VIEs in
mainland China, primarily including Autohome Information, Shengtuo
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Hongyuan, Shanghai Jinwu and Shanghai Jinyou, and their respective shareholders. In particular, Autohome Information currently holds Value-added
Telecommunications Services Licenses, a Surveying and Mapping Qualification Certificate for Internet Mapping, an Operating License for the Production
and Dissemination of Radio and Television Programs, an internet Audio/Video Program Transmission License, and an Internet Culture Business Permit
which is in the process of the renewal. In addition, Autohome Information is the sole shareholder of Shanghai Tianhe Insurance Brokerage Co., Ltd., or
Shanghai Tianhe, an insurance brokerage company, which has completed the registration process required for engaging in online insurance business in the
mainland China. Shengtuo Hongyuan currently holds an ICP license, a Surveying and Mapping Qualification Certificate for Internet Mapping, and an
Operating License for the Production and Dissemination of Radio and Television Programs and is operating the che168.com website and mobile
application-related business. Shanghai Jinyou currently holds an ICP license, an auction business approval certificate, and is filed as an entity conducting
used automobiles brokerage business in the relevant systems of the MOFCOM, and as of the date of this annual report, the operation of the www.ttpai.cn
website has been transferred from Shanghai Jinwu to Shanghai Jinyou.
These VIEs are currently owned by individual shareholders who are PRC citizens and hold the requisite licenses or permits to operate internet
business in mainland China. We do not have any equity interests in these VIEs but substantially control their operations and receive the economic benefits
through contractual arrangements. We have been and are expected to continue to be dependent upon these VIEs and their respective subsidiaries for the
above-mentioned business operations. For more information regarding these contractual arrangements, see “Item 7. Major Shareholders and Related Party
Transactions—B. Related Party Transactions—Contractual Arrangements with the Variable Interest Entities.”
Based on the advice of our PRC legal counsel, Commerce & Finance Law Offices, the corporate structure of the VIEs and our subsidiaries in
mainland China are in compliance with all existing PRC laws and regulations. However, we are a Cayman Islands holding company with no equity
ownership in the VIEs and we conduct our operations in mainland China primarily through our subsidiaries and the VIEs with which we have maintained
contractual arrangements. Investors in our ordinary shares or the ADSs thus are not holding equity interest in the VIEs in mainland China but instead are
holding equity interest in a Cayman Islands holding company. If the PRC government deems that our contractual arrangements with the VIEs do not
comply with mainland China's regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing
regulations change or are interpreted differently in the future, we could be subject to severe penalties or be forced to relinquish our interests in those
operations. The value of our ADSs/ordinary shares may decline or become worthless, if we are unable to assert our contractual control rights over the assets
of the VIEs, which contributed 13.5% of our revenues in 2023. Our holding company in the Cayman Islands, the VIEs, and investors of our company face
uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with the VIEs and,
consequently, significantly affect the financial performance of the VIEs and our company as a whole.
There are certain uncertainties regarding the interpretation and application of PRC laws and regulations, we cannot assure you that the PRC
government would agree that our corporate structure or any of the above contractual arrangements comply with PRC licensing, registration or other
regulatory requirements, with existing policies or with requirements or policies that may be adopted in the future. PRC laws and regulations governing the
validity of these contractual arrangements are uncertain and the relevant government authorities have certain discretion in interpreting these laws and
regulations. The PRC regulatory authorities could disallow the variable interest entities structure, which would likely result in a material adverse change in
our operations, and our ordinary shares or our ADSs may decline significantly in value.
If we or any of the current or future VIEs or our subsidiaries are found to be in violation of any existing or future laws or regulations of mainland
China, or fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities, including the MIIT, the CAC, which
regulates internet information services companies, the National Radio and Television Administration, or NRTA, and the CSRC, would have certain
discretion in dealing with such violations, including, without limitation, levying fines, confiscating our income or the income of our WFOEs and the VIEs,
revoking the business licenses or operating licenses of our WFOEs and the VIEs, shutting down our servers or blocking our websites and mobile
applications, discontinuing or placing restrictions or onerous conditions on our operations, requiring us to undergo a costly and disruptive restructuring,
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restricting the VIEs’ right to collect revenues, imposing additional conditions or requirements with which the VIEs may not be able to comply, or taking
other enforcement actions that could be harmful to our business.
Any of these actions could cause significant disruption to our business operations, including our business operations not carried out through the VIEs,
and severely damage our reputation, which would in turn materially and adversely affect our business and results of operations. As we generate
substantially all our revenues through or with the support of our online platforms, whose operation is dependent on the business or operating licenses held
by our WFOEs and the VIEs, if such licenses are revoked, or if our servers are shut down or our websites and mobile applications are blocked, we may not
be able to continue our operation. In addition, if the imposition of any of these penalties causes us to lose the rights to direct the activities of the VIEs or
our right to receive their economic benefits, we would no longer be able to consolidate the VIEs.
Our contractual arrangements with the VIEs may not be as effective in providing operational control as direct ownership.
We have relied and expect to continue to rely on, among others, (i) contractual arrangements with Autohome Information and its shareholders, (ii)
contractual arrangements with Shengtuo Hongyuan and its shareholders, (iii) contractual arrangements with Shanghai Jinwu and its shareholder and (iv)
contractual arrangements with Shanghai Jinyou and its shareholders. For a description of these contractual arrangements, see “Item 7. Major Shareholders
and Related Party Transactions—B. Related Party Transactions—Contractual Arrangements with the Variable Interest Entities.” These contractual
arrangements have not been tested in courts of mainland China. There are very few precedents as to whether contractual arrangements would be judged to
form a controlling financial interest in the relevant VIEs through the contractual arrangements, or how contractual arrangements in the context of a VIE
should be interpreted or enforced by the courts of China. Should legal actions become necessary, we cannot guarantee that the court will rule in favor of the
enforceability of the VIE contractual arrangements. In the event we are unable to enforce these contractual arrangements, or if we suffer significant delay or
other obstacles in the process of enforcing these contractual arrangements, we may not be able to obtain a controlling financial interest in the VIEs, and our
ability to conduct our business may be materially adversely affected. Therefore, these contractual arrangements may not be as effective in providing us with
control over the VIEs as direct ownership. If we had direct ownership of these entities, we would be able to exercise our rights as a shareholder to effect
changes in the board of directors, which in turn could effect changes, subject to any applicable fiduciary obligations, at the management level. However,
under the current contractual arrangements, we rely on the performance by these entities and their shareholders of their contractual obligations to exercise
control over the VIEs. Therefore, our contractual arrangements with the VIEs may not be as effective in ensuring our control over their operations as direct
ownership would be.
The shareholders of the VIEs may breach, or cause the VIEs to breach, or refuse to renew, the existing contractual arrangements we have with them
and the VIEs. Any failure by the VIEs or their shareholders to perform their obligations under our contractual arrangements with them would have a
material adverse effect on our business and financial condition.
The shareholders of the VIEs may breach, or cause the VIEs to breach, or refuse to renew, the existing contractual arrangements we have with them
and the VIEs. If the VIEs or their shareholders fail to perform their obligations under the contractual arrangements, we may have to incur substantial costs
and expend resources to enforce our rights under the contracts. We may have to rely on legal remedies under PRC law, including seeking specific
performance or injunctive relief and claiming damages, which may not be effective. For example, if the shareholders of the VIEs were to refuse to transfer
their equity interests in the VIEs to us or our designee when we exercise the call option pursuant to these contractual arrangements, if they transfer the
equity interests to other persons against our interests, or if they were otherwise to act in bad faith toward us, then we may have to take legal actions to
compel them to perform their contractual obligations.
All of these contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC.
Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal
procedures. The legal system in the PRC differs from those in other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal
system may limit our ability to enforce these contractual arrangements. Under PRC law, rulings by arbitrators are final, parties cannot
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appeal the arbitration results in courts, and the prevailing parties may only enforce the arbitration awards in PRC courts through arbitration award
recognition proceedings, which would incur additional expenses and delay. In the event we are unable to enforce these contractual arrangements, we may
not be able to obtain a controlling financial interest in the VIEs, and our ability to conduct our business may be negatively affected.
The contractual arrangements among our subsidiaries and the VIEs may be subject to scrutiny by the PRC tax authorities and a finding that we or the
VIEs owe additional taxes could substantially reduce our consolidated net income and the value of your investment.
Under PRC laws and regulations, arrangements and transactions among related parties may be subject to audit or challenge by the PRC tax authorities.
We could face material and adverse tax consequences if the PRC tax authorities determine that the contractual arrangements among our WFOEs, the VIEs
and the shareholders of the VIEs do not represent arm’s length prices and consequently adjust our WFOEs’ or the VIEs’ income in the form of a transfer
pricing adjustment. A transfer pricing adjustment could, among other things, result in a reduction, for PRC tax purposes, of expense deductions recorded by
the VIEs, which could in turn increase their tax liabilities. In addition, the PRC tax authorities may impose late payment fees and other penalties on our
WFOEs or the VIEs for any unpaid taxes. Our consolidated net income may be materially and adversely affected if our WFOEs or the VIEs’ tax liabilities
increase or if they are subject to late payment fees or other penalties.
The interests of the individual nominee shareholders of the VIEs may be different from our interests, which may materially and adversely affect our
business.
The individual nominee shareholders of Autohome Information and Shengtuo Hongyuan are Quan Long, the chairman of our board of directors, and
Youdong Wang, the vice president of our company. They each hold 50% of the equity interests in Autohome Information and Shengtuo Hongyuan. Each of
these two individuals is a PRC citizen. The individual nominee shareholder of Shanghai Jinwu is Weiwei Wang, who holds 100% of the equity interests in
Shanghai Jinwu. The individual nominee shareholders of Shanghai Jinyou are Weiwei Wang and Lan Zhang, holding 95% and 5% of the equity interests,
respectively, in Shanghai Jinyou. Weiwei Wang is the founder of TTP and Lan Zhang is the vice president of TTP. Both of Weiwei Wang and Lan Zhang
are PRC citizens. The interests of the individual nominee shareholders of the VIEs may be different from our interest. For example, the individual nominee
shareholders of the VIEs do not have a significant equity stake in our company. These shareholders may breach, or cause the VIEs to breach, or refuse to
renew, the existing contractual arrangements we have with them and the VIEs, which would have a material and adverse effect on our ability to obtain a
controlling financial interest in VIEs and receive substantially all the economic benefits from them. For example, the shareholders may be able to cause our
agreements with the VIEs to be performed in a manner adverse to us by, among other things, failing to remit payments due under the contractual
arrangements to us on a timely basis. We cannot assure you that when a conflict of interest arises, any or all of these shareholders will act in the best
interests of our company or such conflict will be resolved in our favor.
Currently, we rely on our contractual arrangements with these individual nominee shareholders and do not have other arrangements to address any
potential conflicts of interests between them and our company. We rely on these individuals to comply with the laws of the PRC, which provide that
directors and executive officers owe a fiduciary duty to our company and require them to avoid conflicts of interest and not to take advantage of their
positions for personal gain. We also rely on Mr. Quan Long, the chairman of our board of directors, Ms. Weiwei Wang, the director of TTP Car Inc., to
abide by the laws of the Cayman Islands, which provide that directors owe fiduciary duties to our company. However, the legal frameworks of China and
the Cayman Islands do not provide guidance on resolving conflicts in the event of a conflict with another corporate governance regime. If we cannot
resolve any difference of interests or dispute between us and the shareholders of the VIEs, we would have to rely on legal proceedings, which could result
in disruption of our business and subject us to substantial uncertainty as to the outcome of any such legal proceedings.
The individual nominee shareholders of the VIEs may be involved in personal disputes with third parties or other incidents that may have an adverse
effect on their respective equity interests in the relevant VIEs and the validity or enforceability of our contractual arrangements with the relevant entity and
its shareholders. For example, in the event that any of such individual nominee shareholders divorces his spouse, the spouse may claim that the equity
interests of the relevant VIE held by such individual nominee shareholder is part of their community property
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and should be divided between such individual nominee shareholder and his spouse. If such claim is supported by the court, the relevant equity interests
may be obtained by the individual nominee shareholder’s spouse or another third party who is not subject to obligations under our contractual
arrangements, which could result in a loss of the controlling financial interest in the relevant VIE by us. Similarly, if any of the equity interests of the VIEs
is inherited by a third party with whom the current contractual arrangements are not binding, we could lose our control over the relevant VIE or have to
maintain such control by incurring unpredictable costs, which could cause significant disruption to our business and operations and harm our financial
condition and results of operations.
Although under our current contractual arrangements, the VIEs and their individual nominee shareholders shall not assign any of their respective
rights or obligations to any third party without the prior written consent of our WFOEs, we cannot assure you that these undertakings and arrangements will
be complied with or effectively enforced. In the case any of them is breached or becomes unenforceable and leads to legal proceedings, it could disrupt our
business, distract our management’s attention and subject us to substantial uncertainties as to the outcome of any such legal proceedings.
We may rely to a significant extent on dividends and other distributions on equity paid by our mainland China subsidiaries to fund any cash and
financing requirements we may have. Any limitation on the ability of our mainland China subsidiaries to pay dividends to us could have a material
adverse effect on our ability to conduct our business.
We are a holding company and conduct our business primarily through our subsidiaries and the VIEs. We may rely to a significant extent on dividends
and other distributions on equity to be paid by our wholly-invested mainland China subsidiaries for our cash and financing requirements, including the
funds necessary to pay dividends and other cash distributions to our shareholders and service any debt we may incur. If our mainland China subsidiaries
incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions to us.
Under PRC laws and regulations, our mainland China subsidiaries, as wholly foreign-invested enterprises in the PRC, may pay dividends only out of
their accumulated profits as determined in accordance with PRC accounting standards and regulations. In addition, according to PRC Company Law,
before the distribution of the dividends, enterprises in PRC are required to set aside at least 10% of their accumulated after-tax profits, if any, each year to
fund certain statutory reserve funds, until the aggregate amount of such funds reach 50% of their registered capital. These statutory reserve funds are not
distributable as cash dividends.
Any limitation on the ability of our mainland China subsidiaries to pay dividends or make other distributions to us could materially and adversely
limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our
business.
PRC regulation of loans to, and direct investment in, mainland China's entities by offshore holding companies and governmental control of currency
conversion may restrict or prevent us from using the proceeds of our equity offerings to make loans to our mainland China subsidiaries and the VIEs
or to make additional capital contributions to our mainland China subsidiaries, which may materially and adversely affect our liquidity and our ability
to fund and expand our business.
We are an offshore holding company conducting our operations in mainland China primarily through our mainland China subsidiaries and the VIEs.
We may make loans to our mainland China subsidiaries and the VIEs, or we may make additional capital contributions to our mainland China subsidiaries.
Any loans by us to our mainland China subsidiaries, which are treated as foreign-invested enterprises under laws of mainland China, are subject to
regulations and foreign exchange loan registrations of mainland China. For example, loans by us to our mainland China subsidiaries to finance its activities
cannot exceed statutory limits and must be registered with the competent local counterpart of the SAFE, or filed with SAFE in its information system. We
may also decide to finance our mainland China subsidiaries by means of capital contributions. These capital contributions must be filed with the local
counterparts of SAMR and subject to registration with a local bank authorized by SAFE. Any medium or long-term loans to be provided by us to the VIEs
must be registered with the NDRC and SAFE or their local branches. Further, we are not likely to finance the activities of the VIEs by means of capital
contributions due to regulatory
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restrictions relating to foreign investment in mainland China in domestic enterprises engaged in internet content services.
Pursuant to the Circular on the Reforming of the Management Method of the Settlement of Foreign Currency Capital of Foreign-Invested Enterprises,
or SAFE Circular 19, which became effective on June 1, 2015 and was amended on December 30, 2019 and March 23, 2023, along with the Circular on
Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular 16 which was promulgated in
June 2016 and amended in December 2023, foreign-invested enterprises may either continue to follow the current payment-based foreign currency
settlement system or choose to follow the “conversion-at-will” system for foreign currency settlement. SAFE Circular 19 and SAFE Circular 16, therefore,
have substantially lifted the restrictions on the usage by a foreign-invested enterprise of its Renminbi registered capital, foreign debt and repatriated funds
raised through overseas listing converted from foreign currencies. According to SAFE Circular 19 and SAFE Circular 16, such Renminbi capital, foreign
debt and repatriated funds raised through overseas listing may be used at the discretion of the foreign-invested enterprise and SAFE will eliminate the prior
approval requirement and only examine the authenticity of the declared usage afterwards. In addition, SAFE promulgated the Circular Regarding Further
Promotion of the Facilitation of Cross-Border Trade and Investment on October 23, 2019 which was amended on December 4, 2023, or SAFE Circular 28,
pursuant to which all foreign-invested enterprises can make equity investments in the mainland China with their capital funds in accordance with the law.
As the relevant government authorities have certain discretion in interpreting the regulation, it is unclear whether SAFE will permit such capital funds to be
used for equity investments in the PRC in actual practice. See “Item 4. Information on the Company—B. Business Overview—PRC Regulation—
Regulations on Foreign Exchange.”
In light of the various requirements imposed by regulations of mainland China on loans to and direct investment in entities in mainland China by
offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations, filings or obtain the necessary
government approvals on a timely basis, if at all. If we fail to complete such registrations, filings or obtain such approvals, our ability to use the proceeds
we received from our equity offerings and to capitalize or otherwise fund our operations in mainland China may be negatively affected, which could
materially and adversely affect our liquidity and our ability to fund and expand our business.
If our mainland China subsidiaries or the VIEs become the subject of a bankruptcy or liquidation proceeding, we may lose the ability to use and enjoy
some of our key assets, which could reduce the size of our operations and materially and adversely affect our business, our ability to generate revenues
and the market price of our securities.
As of the date of this annual report, we conduct our business mostly through our mainland China subsidiaries and the VIEs, which hold operating
permits and licenses and some of the key assets that are important to the operation of our business. We expect to continue to be dependent on the VIEs to
operate our business related to internet content services in mainland China. If the VIEs go bankrupt and all or part of their assets become subject to liens or
rights of third-party creditors, we may be unable to continue some or all of our business activities, which would materially and adversely affect our
business, financial condition and results of operations. If the VIEs undergo a voluntary or involuntary liquidation proceeding, their equity holders or
unrelated third-party creditors may claim rights to some or all of these assets, thereby hindering our ability to operate our business, which would materially
and adversely affect our business, our ability to generate revenues and the market price of our securities.
If we were deemed an investment company under the Investment Company Act of 1940, applicable restrictions could have a material adverse effect on
our business and the price of our ADSs and ordinary shares.
We are not an “investment company” and do not intend to become registered as an “investment company” under the Investment Company Act of
1940, or the Investment Company Act. Generally, a company is an “investment company” if it is or holds itself out as being engaged primarily in the
business of investing, reinvesting or trading in securities or owns or proposes to own investment securities having a value exceeding 40% of the value of its
total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis, unless an exception, exemption or safe harbor applies. We
do not hold ourselves out as being primarily engaged, or proposing to engage primarily, in the business of investing, reinvesting or trading in securities.
Rather, we are primarily engaged in the business of delivering comprehensive, independent and interactive content and tools to automobile
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consumers as well as a full suite of services to automakers and dealers across the auto value chain. Our investment securities represent less than 40% of the
value of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis calculated in accordance with Section 3(a)(1)
(C) of the Investment Company Act. We intend to continue to conduct our operations so that we will not be deemed an investment company.
Our status under the Investment Company Act may depend on several factors, including the ability of certain subsidiary to comply with the safe
harbor requirements of Rule 3a-8 of the Investment Company Act, and whether time deposits are treated as investment securities for purposes of the
calculation under Section 3(a)(1)(C) of the Investment Company Act. If, at any time, the subsidiary is not eligible for the Rule 3a-8 safe harbor, or certain
time deposits are required to be treated as investment securities for purposes of the calculation under Section 3(a)(1)(C) of the Investment Company Act, or
we become or are determined to be primarily engaged in the business of investing, reinvesting or trading in securities, we could become subject to
regulation under the Investment Company Act. If we were to become subject to the Investment Company Act, any violation of the Investment Company
Act could subject us to material adverse consequences, including potentially significant regulatory penalties and the possibility that certain of our contracts
would be deemed unenforceable. Additionally, as a foreign private issuer, we would not be eligible to register under the Investment Company Act.
Accordingly, we would either have to obtain exemptive relief from the SEC, modify our contractual rights or dispose of investments in order to fall outside
the definition of an investment company, each of which may have a material adverse effect on the Company. Additionally, we may have to forego potential
future acquisitions of interests in companies that may be deemed to be investment securities within the meaning of the Investment Company Act. Finally,
failure to avoid being deemed an investment company under the Investment Company Act could also make us unable to comply with our reporting
obligations as a public company in the United States and lead to our being delisted from New York Stock Exchange, which would have a material adverse
effect on the liquidity and value of our ADSs and ordinary shares.
We are subject to evolving laws and regulations regarding regulatory matters, corporate governance and public disclosure that may increase both our
costs and the risk of non-compliance.
We are subject to rules and regulations by various governmental and self-regulatory organizations at various levels of the governing bodies, including,
for example, the SEC, the Hong Kong Stock Exchange, the SFC and other financial market exchange entities, which are charged with the protection of
investors and the oversight of companies whose securities are publicly traded, and various regulatory authorities in China, the Cayman Islands, the British
Virgin Islands and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and evolving laws and regulations have
resulted in and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from
revenue-generating activities to compliance activities.
Moreover, because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as
new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by
ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may
be subject to penalty and our business may be harmed. For instance, on December 29, 2023, the SCNPC promulgated the amended PRC Company Law,
which will come into effect on July 1, 2024 and supersede the existing PRC Company Law. The amended PRC Company Law imposes more stringent
requirements on capital contribution for companies established within mainland China. On February 6, 2024, the SAMR issued a draft of the Provisions of
the State Council on Implementing the Registered Capital Registration and Management System under the PRC Company Law for public comments until
March 5, 2024, which further specify the criteria and procedures for registering and managing a company’s registered capital under the amended PRC
Company Law. See “Item 4. Information on the Company—B. Business Overview—PRC Regulation—Regulations on Corporate Governance.” According
to the amended PRC Company Law, we may be required to fulfill the obligations of capital contribution to our subsidiaries or to provide financial support
to the nominee shareholders of the VIEs within a significantly reduced timeframe compared to current regulations. However, since the amended PRC
Company Law is still relatively new and the foregoing draft provisions were released for public comment only, there is still uncertainty regarding the
implementation and interpretation of the amended PRC Company Law and the adoption and effective date of such provisions. We will closely monitor the
legislative developments concerning the amended PRC Company Law and its implementation measures, ensuring a prompt evaluation of any potential
implications for our operations.
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Risks Related to Doing Business in China
The PRC government’s regulations and discretion over our business operations could result in a material adverse change in our operations and the
value of our ADSs and/or ordinary shares.
We conduct our business primarily in mainland China. Our operations in mainland China are governed by PRC laws and regulations. We are subject
to the regulations and discretion of applicable governmental authorities over the conduct of our business, which may influence our operations as the
government deems appropriate to advance regulatory and societal goals and policy positions. We have observed new published policies that affected certain
industries and we cannot rule out the possibility that it will in the future release regulations or policies that directly or indirectly affect our industry or
require us to seek additional permission to continue our operations, which could result in a material adverse change in our operation and/or the value of our
ADSs and/or ordinary shares. Therefore, investors of our company and our business face potential uncertainty from actions taken by the PRC government
affecting our business.
Changes in the economic, political or social conditions or government policies could have a material adverse effect on our business and operations.
The majority of our assets and operations are located in mainland China. Accordingly, our business, financial condition, results of operations and
prospects are subject to political, economic, social and legal developments in China. Our business has been and will continue to be affected by the PRC’s
economy, which in turn is continuously influenced by the global economy. Uncertainties in the global economy and the political environment around the
world would also affect China’s economic growth. It may be difficult for us to predict all the risks that we could face as a result of the current economic,
political, social and regulatory development and many of these risks are beyond our control. Failure to respond to such development and risks could
materially affect our business operations and financial performance.
The PRC legal system is evolving, and failure to respond to such evolvement could affect us.
We conduct our business primarily through our subsidiaries and the VIEs in China. Our operations in China are governed by PRC laws and
regulations. The legislation in China and the PRC legal system has continued to evolve over the past few decades and the PRC government has made
certain progress in promulgating laws and regulations related to economic affairs and matters, for example, such laws and regulations have enhanced the
protections afforded to various forms of foreign investments in China. However, many of these laws and regulations are relatively new, and we may need to
take certain corresponding measures to maintain our regulatory compliance, such as adjusting the relevant business or transactions and introducing
compliance experts and talents, which may incur additional related costs and impact on our business. Any failure to respond to evolvement in the
regulatory environment in China could materially affect our business and impede our ability to continue our operations.
The interpretation and implementation of the PRC Foreign Investment Law may impact the viability of our current corporate structure, corporate
governance and business operations.
In March 2019, the Foreign Investment Law was enacted by the National People’s Congress and it became effective in January 2020. The Foreign
Investment Law embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international
practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic investments.
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The VIE structure has been adopted by many mainland China-based companies, including us, to obtain necessary licenses and permits in the
industries that are currently subject to foreign investment restrictions in mainland China. See “Item 7. Major Shareholders and Related Party Transactions
—B. Related Party Transactions—Contractual Arrangements with the Variable Interest Entities” and “Item 3. Key Information—D. Risk Factors—Risks
Related to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating our services in China do not
comply with PRC governmental restrictions on foreign investment in internet businesses, or if these regulations or the interpretation of existing regulations
change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations, and we may face significant
disruption to our business operations.” Although the Foreign Investment Law does not explicitly classify “contractual arrangements” as a form of foreign
investment, it contains a catch-all provision under the definition of “foreign investment” which includes investments made by foreign investors through
means stipulated in laws or administrative regulations or other methods prescribed by the State Council. Therefore, it still reserves certain leeway for future
legislation by the Stale Council to provide “contractual arrangements” as a form of foreign investment, in which case it will be uncertain as to whether our
contractual arrangements with the VIEs will be deemed to be in violation of the market access requirements for foreign investments under the PRC laws
and regulations, such as the Negative List. According to the Classification Catalog of Telecommunications Services, or 2015 Catalog and the Negative List,
the provision of internet content services, which we conduct through the VIEs, is subject to foreign investment restrictions. Therefore, such foreign
investment restrictions will be inevitably imposed on the VIEs if our contractual arrangements with the VIEs are further defined or regarded as a form of
foreign investment by any future provisions stipulated in laws or administrative regulations or other methods prescribed by the State Council. In addition, if
future laws, administrative regulations or provisions prescribed by the State Council mandate further actions to be taken by companies with respect to
existing contractual arrangements, we may face substantial uncertainties as to whether we could complete such actions in a timely manner, or at all, and our
business and financial condition may be materially and adversely affected. Given the foregoing, uncertainties still exist in relation to the interpretation and
implementation of the Foreign Investment Law, which may result in adverse impact on our current corporate structure.
If our contractual arrangements with the VIEs are defined or regarded as a form of foreign investment in the future, our corporate governance practice
may be impacted and our compliance costs may increase. For instance, the Foreign Investment Law requires foreign investors or foreign-funded enterprises
to submit the investment information to competent governmental authorities for review. Although the contents and scope of such information shall be
determined under the principle of necessity and the information that can be obtained through interdepartmental information sharing will not be required to
be resubmitted, foreign investors or foreign-funded enterprises which fail to report their investment information as requested will be required to take
corrective measures and/or be subject to fines. Moreover, the Foreign Investment Law provides that a security examination mechanism will be established
to examine any foreign investment activity that affects or may affect national security. The decision made upon the security examination may impact the
operations of the foreign-funded enterprises.
We may be adversely affected by the complexity, uncertainties and changes in the regulation of internet business and companies in China.
The PRC government extensively regulates the internet industry, including foreign ownership of, and the licensing and permit requirements pertaining
to, companies in the internet industry. These internet-related laws and regulations are evolving, and their interpretation and enforcement may change from
time to time. As a result, in certain circumstances it may be difficult to determine what actions or omissions may be deemed to be in violations of
applicable laws and regulations. Issues, risks and uncertainties relating to the PRC government regulation of the internet industry include, but are not
limited to, the following:
• We only have contractual control over our websites and mobile applications. The regulation of the internet industry in China may be amended
from time to time, and the licensing requirements may keep evolving. This means that permits, licenses or operations at some of our subsidiaries
and the VIEs may be subject to challenge, or we may fail to obtain permits or licenses that applicable regulators may deem necessary for our
operations, or we may not be able to obtain or renew permits or licenses. For example, the VIEs may be required to obtain additional licenses,
including internet publishing licenses and internet news information service licenses, if the release of articles and information on our mobile
applications and websites is
45
•
•
•
deemed by the PRC regulatory authorities as being provision of internet publishing service or internet news information service. See “Item 4.
Information on the Company—B. Business Overview—PRC Regulation—Regulations on Internet Publishing” and “Item 4. Information on the
Company—B. Business Overview—PRC Regulation—Regulations on Internet News Information Service” for additional details.
The evolving regulatory system for the internet industry of China may lead to the establishment of new regulatory agencies. For example, in
March 2018, the Central Committee of the Chinese Communist Party announced to transform the Central Leading Group for Cyberspace Affairs
into a new department, CAC. The primary role of this new agency is to facilitate the policy-making and legislative development in this field, to
direct and coordinate with the relevant departments in connection with online content administration and to deal with cross-ministry regulatory
matters in relation to the internet industry, and the National Computer Network and Information Security Management Center was adjusted to be
managed by CAC instead of the MIIT. On March 10, 2023, the NPC adopted the Institutional Reform Plan (2023), pursuant to which the
National Financial Regulatory Administration was established on May 18, 2023 and the State Bureau for Data was established on October 25,
2023 aiming to be responsible for coordinating and promoting the development of data infrastructure of the State.
New laws and regulations may be promulgated to regulate internet activities. As such, additional licenses may be required for our operations. If
our operations do not comply with these new regulations at the time they become effective, or if we fail to obtain any licenses required under
these new laws and regulations, we could be subject to penalties.
New government policies and internal rules relating to the regulations on internet activities may negatively affect our user traffic growth. For
example, the Administrative Provisions on Internet Pop-up Push Notification Services, issued by the CAC, MIIT and SAMR on September 9,
2022 and effective from September 30, 2022, requires that providers of internet pop-up push notification services shall establish and improve
management systems such as information content review, ecological governance, data security and personal information protection, and
protection of minors. Complying with such requirements may negatively affect the growth rate of user traffic on our websites and mobile
applications. The promulgation of laws and regulations relating to the internet activities may further impair our user traffic growth.
On August 31, 2018, the SCNPC issued the E-commerce Law, which came into effect on January 1, 2019. Pursuant to the E-commerce Law, operators
of e-commerce platforms shall verify and register the basic information of e-commerce operators on their platforms, including the identity, address, contact
and administrative license, and establish archives with regular updates for such information. It further provides that operators of e-commerce platforms
shall submit information on the identification of e-commerce operators to department for market regulation, and submit e-commerce operators’
identification information and other information relating to tax payment to tax authority. Additionally, operators of e-commerce platforms shall record and
save information released on their platform about commodities and services, and report to competent authorities, if such information shows that e-
commerce operators have failed to obtain the administrative license when they are subject to the relevant administrative approval, or commodities sold or
services offered by e-commerce operators are found to be in violation of certain requirements to safeguard personal safety, property security and the
requirements on environmental protection, or to be prohibited by laws and administrative regulations. The E-commerce Law establishes obligations to
protect consumers for operators of e-commerce platforms, such as obligations to protect consumers’ personal information and record information of deals
concluded on their platforms, obligations to refund guarantee deposits to consumers in a timely manner and obligations to noticeably label commodities or
services ranked under competitive bidding with the word “Advertisement.” E-commerce operators shall not conduct false or misleading commercial
publicity by fabricating transactions, making up user reviews or any other means, to cheat or mislead consumers. E-commerce platform operators shall not
delete consumers’ ratings of commodities sold or services provided on the platform. We have carried out compliance work in accordance with these
regulatory requirements. However, there are substantial uncertainties with respect to the interpretation and implementation of the E-commerce Law and
how it may impact our business operations. We cannot guarantee that the compliance measures we have taken are fully consistent with the interpretation of
regulators, and there is a risk that the company will be punished by those regulators because of any non-compliance activities.
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In addition, on February 7, 2021, the Anti-monopoly Committee of the State Council published the Guideline on Anti-monopoly of Platform
Economy Sector, or the Guideline, which became effective on the same day, aiming at enhancing anti-monopoly administration on businesses that operate
under the platform model and the overall platform economy. The Guideline mainly covers five aspects, including general provisions, monopoly
agreements, abusing market dominance, concentration of undertakings, and abusing of administrative powers eliminating or restricting competition and
intends to regulate abuse of a dominant market position and other anti-competitive practices by online platform operators and the related operators and
service providers on online platforms, i.e. unfairly locking in exclusive agreements with operators on the platform and targeting specific customers with
unreasonable big-data driven tailored pricing through their online behavior to eliminate or limit market competition. There remains uncertainties as to how
the Guideline will be implemented, and we cannot assure you that the governmental authorities will not take an opposite opinion. Any failure or perceived
failure by us to comply with the Guideline and other anti-monopoly laws and regulations may result in governmental investigations or enforcement actions,
litigation or claims against us and could have an adverse effect on our business, financial condition and results of operations.
The interpretation and application of existing laws, regulations and policies and possible new laws, regulations or policies relating to the internet
industry of mainland China have created substantial uncertainties regarding the legality of existing and future foreign investments in, and the businesses
and activities of, internet businesses in mainland China, including our business. We cannot assure you that we will be able to maintain our existing licenses
or obtain any new licenses if required by any new laws or regulations. There are also risks that we may be found to violate existing or future laws and
regulations given the uncertainty and complexity of mainland China’s regulation of the internet industry. If we or the VIEs fail to obtain or maintain any of
the required assets, licenses or approvals, our continued business operations in the internet industry may subject us to various penalties, including the
confiscation of illegal net revenues, fines and the discontinuation or restriction of our operations, any of which would materially and adversely affect our
business and results of operations.
The approval of and filing with the CSRC or other PRC government authorities may be required if we were to conduct offshore offerings in the future,
and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.
On July 6, 2021, the relevant PRC government authorities issued Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with
the Law. These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by
mainland China-based companies and proposed to take effective measures, such as promoting the construction of relevant regulatory systems to deal with
the risks and incidents faced by mainland China-based overseas-listed companies.
On December 27, 2021, the NDRC and the MOFCOM, jointly issued the Negative List, effective from January 1, 2022. Pursuant to the Negative List,
if a domestic company engaging in the prohibited business stipulated in the Negative List seeks an overseas offering and listing, it shall obtain the approval
from the competent governmental authorities. Besides, the foreign investors of the company shall not be involved in the company’s operation and
management, and their shareholding percentage shall be subject, mutatis mutandis, to the relevant regulations on the domestic securities investments by
foreign investors. According to the public responses of relevant officials from the NDRC and the MOFCOM to reporters’ questions regarding the Negative
List, no reduction in shareholding percentage of foreign investor is required with respect to enterprises that have been listed overseas, if the percentage of
foreign shareholding of such enterprises had exceeded the stipulated threshold before the promulgation of the Negative List. As of the date of this annual
report, no official implementation rules on the Negative List have been issued yet. Therefore, there remain substantial uncertainties as to the interpretation
and implementation of these new requirements, and it is unclear as to whether and to what extent listed companies like us will be subject to these new
requirements. If we are required to comply with these requirements and fail to do so on a timely basis, if at all, our business operation, financial conditions
and business prospect may be adversely and materially affected.
On February 17, 2023, the CSRC promulgated the Overseas Listing Trial Measures and relevant five guidelines, which became effective on March 31,
2023. The Overseas Listing Trial Measures comprehensively reformed the existing regulatory regime for direct and indirect overseas offering and listing of
mainland China domestic companies’ securities. Pursuant to the Overseas Listing Trial Measures, mainland China domestic companies that seek to offer
and list securities in overseas markets, either in direct or indirect means, are required to fulfil the filing
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procedure with the CSRC and report relevant information. The Overseas Listing Trial Measures provide that if the issuer meets both the following criteria,
the overseas securities offering and listing conducted by such issuer will be deemed as indirect overseas offering by mainland China domestic companies:
(i) 50% or more of any of the issuer's operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements
for the most recent fiscal year is accounted for by domestic companies; and (ii) the main parts of the issuer's business activities are conducted in mainland
China, or its main place(s) of business are located in mainland China, or the majority of senior management staff in charge of its business operations and
management are PRC citizens or have their usual place(s) of residence located in mainland China. Where an issuer submits an application for initial public
offering to competent overseas regulators, such issuer must file with the CSRC within three business days after such application is submitted.
On the same day, the CSRC also held a press conference for the release of the Overseas Listing Trial Measures and clarifies that mainland China
domestic companies that have been listed overseas are existing enterprises, which are not required to complete the overseas listing filing immediately, but
shall complete filings as required if they conduct refinancing or are involved in other circumstances that require filing with the CSRC. If we were to
conduct offshore offerings in the future, it is uncertain whether we can complete such filing procedure, if we fail to complete such filing procedures, we
would be subject to sanctions by the CSRC or other PRC regulatory authorities. These regulatory authorities may impose fines and penalties on our
operations in mainland China, limit our ability to pay dividends outside of mainland China, limit our operating privileges in mainland China, delay or
restrict the repatriation of the proceeds from our offshore offerings into China or take other actions that could materially and adversely affect our business,
financial condition, results of operations, and prospects, as well as the trading price of our listed securities. There remain substantial uncertainties as to their
interpretation, application, and enforcement and how they will affect our operations and our future financing. We cannot guarantee that new rules or
regulations promulgated in the future will not impose any additional requirements on us or otherwise tighten the regulations on companies with VIE
structures.
It may be difficult for overseas regulators to conduct investigations or collect evidence within mainland China.
Cross-border shareholders claims or regulatory investigations may be difficult to pursue as a matter of law or practicality in mainland China. For
example, in mainland China, there are legal and other obstacles to providing information needed for regulatory investigations or litigation initiated outside
mainland China. Although the authorities in mainland China may establish a regulatory cooperation mechanism with the securities regulatory authorities of
another country or region to implement cross-border supervision and administration, such cooperation with the securities regulatory authorities in the
United States or other jurisdictions may not be efficient in the absence of a mutual and practical cooperation mechanism. Furthermore, according to Article
177 of the PRC Securities Law, or Article 177, which became effective in March 2020, no overseas securities regulator is allowed to directly conduct
investigation or evidence collection activities within the territory of mainland China, without the consent by the Chinese securities regulatory authorities
under the State Council and the State Council related competent agencies, no entity or individual may provide documents or materials related to securities
business to any foreign party. While detailed interpretation of or implementation rules under Article 177 have yet to be promulgated, the inability of an
overseas securities regulator to directly conduct investigation or evidence collection activities within mainland China and the potential obstacles for
information provision may further increase difficulties you face in protecting your interests. See also “—Risks Related to Our ADSs and Ordinary Shares—
You may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts or Hong Kong courts may be
limited because we are incorporated under Cayman Islands law, we conduct substantially all of our operations in mainland China and most of our directors
and officers reside outside the United States and Hong Kong” for risks associated with investing in us as a Cayman Islands company.
The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability
of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such inspections.
Our auditor, the independent registered public accounting firm that issues the audit report included elsewhere in this annual report, as an auditor of
companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the
PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. The auditor is located in mainland China, a
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jurisdiction where the PCAOB was historically unable to conduct inspections and investigations completely before 2022. As a result, we and investors in
our ordinary shares or ADSs were deprived of the benefits of such PCAOB inspections. The inability of the PCAOB to conduct inspections of auditors in
mainland China and Hong Kong in the past has made it more difficult to evaluate the effectiveness of our independent registered public accounting firm’s
audit procedures or quality control procedures as compared to auditors outside of mainland China and Hong Kong that are subject to the PCAOB
inspections. On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong
Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms. However, if the PCAOB
determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong, and we
use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the Securities and Exchange
Commission, we and investors in our ordinary shares or ADSs would be deprived of the benefits of such PCAOB inspections again, which could cause
investors and potential investors in our ordinary shares or ADSs to lose confidence in our audit procedures and reported financial information and the
quality of our financial statements.
Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate
completely auditors located in China. The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of
your investment.
Pursuant to the HFCAA, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject
to inspections by the PCAOB for two consecutive years, the SEC will prohibit our ordinary shares or ADSs from being traded on a national securities
exchange or in the over-the-counter trading market in the United States.
On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate
completely registered public accounting firms headquartered in mainland China and Hong Kong and our auditor was subject to that determination. In May
2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the
fiscal year ended December 31, 2021. On December 15, 2022, the PCAOB removed mainland China and Hong Kong from the list of jurisdictions where it
is unable to inspect or investigate completely registered public accounting firms. For this reason, we do not expect to be identified as a Commission-
Identified Issuer under the HFCAA after we file this annual report on Form 20-F for the fiscal year ended December 31, 2023.
Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other
jurisdictions. If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland
China and Hong Kong and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed
with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year.
In accordance with the HFCAA, our securities would be prohibited from being traded on a national securities exchange or in the over-the-counter trading
market in the United States if we are identified as a Commission-Identified Issuer for two consecutive years in the future. Although our ordinary shares
have been listed on the Hong Kong Stock Exchange and the ADSs and ordinary shares are fully fungible, we cannot assure you that an active trading
market for our ordinary shares on the Hong Kong Stock Exchange will be sustained or that the ADSs can be converted and traded with sufficient market
recognition and liquidity, if our shares and ADSs are prohibited from trading in the United States. A prohibition of being able to trade in the United States
would substantially impair your ability to sell or purchase our ordinary shares and/or ADSs when you wish to do so, and the risk and uncertainty associated
with delisting would have a negative impact on the price of our ordinary shares or ADSs. Also, such a prohibition would to some extent affect our ability to
raise capital on terms acceptable to us, or at all, which would have a material adverse impact on our business, financial condition, and prospects.
Fluctuations in exchange rates may have a material adverse effect on your investment.
Substantially all of our revenues and costs are denominated in RMB. The conversion of RMB into foreign currencies, including U.S. dollars, is based
on rates set by the People’s Bank of China. The value of RMB against U.S. dollar and other currencies is affected by changes in China’s political and
economic conditions and by China’s foreign exchange policies, among other things. The PRC government may in the future announce further changes to
49
the exchange rate system, and we cannot assure you that the RMB will not appreciate or depreciate significantly in value against the U.S. dollar in the
future. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in
the future.
Significant revaluation of the RMB may have a material and adverse effect on your investment. To the extent that we need to convert U.S. dollars into
RMB for capital expenditures and working capital and other business purposes, appreciation of the RMB against the U.S. dollar would have an adverse
effect on the RMB amount we would receive from the conversion. Conversely, if we decide to convert RMB into U.S. dollars for the purpose of making
payments for dividends on our ordinary shares or ADSs, strategic acquisitions or investments or other business purposes, appreciation of the U.S. dollar
against the RMB would have a negative effect on the U.S. dollar amount available to us. In addition, a significant depreciation of the RMB against the U.S.
dollar may significantly reduce the U.S. dollar equivalent of our earnings, which in turn could adversely affect the price of our ADSs.
Very limited hedging options are available in mainland China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into
any hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging transactions in
the future, the availability and effectiveness of these hedges may be limited and we may not be able to adequately hedge our exposure or to hedge our
exposure at all. In addition, our currency exchange losses may be magnified by the exchange control regulations of mainland China that restrict our ability
to convert RMB into foreign currency. As a result, fluctuations in exchange rates may have a material adverse effect on your investment.
Governmental regulation of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.
The PRC government regulates the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out of mainland
China. We receive substantially all of our revenues in RMB. Under the existing foreign exchange regulations of mainland China, payments of current
account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign
currencies without prior SAFE approval by complying with certain procedural requirements. Therefore, our mainland China subsidiaries are able to pay
dividends in foreign currencies to us without prior approval from SAFE. However, approval from or registration with appropriate government authorities is
required where RMB is to be converted into foreign currency and remitted out of mainland China to pay capital expenses such as the repayment of loans
denominated in foreign currencies. The PRC government may also at its discretion regulates access to foreign currencies for current account transactions in
the future. If the foreign exchange regulation system prevents us from obtaining sufficient foreign currency to satisfy our foreign currency demands, we
may not be able to pay dividends in foreign currencies to our shareholders, including holders of our ADSs and/or ordinary shares.
Any failure or perceived failure by us to comply with the enacted Guideline on Anti-monopoly of Platform Economy Sector and other antimonopoly
laws and regulations may result in governmental investigations or enforcement actions, litigation or claims against us and could have an adverse effect
on our business, financial condition and results of operations.
The PRC anti-monopoly enforcement agencies have in recent years strengthened enforcement under the PRC Anti-monopoly Law. In March 2018, the
SAMR was formed as a new regulatory agency to take over, among other things, the anti-monopoly enforcement functions from the relevant departments
under the MOFCOM, the NDRC and the then State Administration for Industry and Commerce, or SAIC (the predecessor of the SAMR), respectively. On
November 18, 2021, the National Anti-monopoly Bureau was officially established to formulate anti-monopoly institutional measures and guidelines,
implement anti-monopoly law enforcement, undertake the guidance for enterprises’ anti-monopoly action responding abroad and so on. In practice, the
PRC regulatory authorities are actively working to establish a new order for the platform economy, simultaneously enhancing the supervision of
monopolistic practices and other forms of unfair competition.
In September 2020, the Anti-monopoly Committee of the State Council issued Anti-monopoly Compliance Guideline for Business Operators,
encouraging the operators to establish anti-monopoly compliance management systems to prevent anti-monopoly compliance risks. On February 7, 2021,
the Anti-monopoly Committee of the State Council published the Guideline on Anti-monopoly of Platform Economy Sector, or the Guideline, which
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became effective on the same day. The Guideline comprehensively addresses five aspects: general provisions, monopoly agreements, market dominance
abuse, business concentration, and the misuse of administrative powers to eliminate or restrict competition. It specifically prohibits monopolistic behaviors
by internet platforms, aiming to foster a competitive market environment, and to safeguard the interests of consumers and businesses engaged in the
internet platform economy.
On June 24, 2022, the SCNPC released the amended Anti-monopoly Law, which came into effect on August 1, 2022. On March 10, 2023, the SAMR
issued the Provisions on the Prohibitions of Monopoly Agreements, the Provisions on the Prohibitions of Acts of Abuse of Dominant Market Positions and
the Provisions on Review of Concentration of Undertakings, all of which took effect on April 15, 2023. The amended Anti-monopoly Law and the
implementing rules (i) require that where concentration of undertakings reaches the filing threshold stipulated by the State Council, a filing must be made
with the anti-monopoly authority before the parties implement the concentration, (ii) prohibit a business operator with a dominant market position from
abusing such position, such as by selling commodities at unfairly high prices or buying commodities at unfairly low prices, selling products at prices below
cost without any justifiable cause, or refusing to trade with a trading party without any justifiable cause, and (iii) prohibit business operators from entering
into monopoly agreements, which refer to agreements that eliminate or restrict competition with competing business operators or transaction counterparties,
such as by boycotting transactions, fixing or changing the price of commodities, limiting the output of commodities or fixing the price of commodities for
resale to third parties, unless the agreements satisfy certain exemptions under the PRC Anti-monopoly Law.
The strengthened enforcement of the Anti-Monopoly Law could result in investigations on our acquisition transactions conducted in the past and
make our acquisition transactions in the future more difficult due to the prior filing requirements. Besides, the MOFCOM shall be notified in advance of
any change-of-control transaction in which a foreign investor takes control of a mainland China domestic enterprise or a foreign company with substantial
mainland China operations, if certain thresholds under the Provisions on Thresholds for Prior Notification of Concentrations of Undertakings, issued by the
State Council on August 3, 2008 and amended on September 18, 2018 and January 22, 2024, are triggered. See “Item 4. Information on the Company—B.
Business Overview—PRC Regulation—Regulations on Anti-Monopoly.”
Due to the enhanced enforcement of and tightened regulatory requirements under the revised Anti-monopoly Law, we may receive greater scrutiny
and attention from regulators and more frequent and stringent investigation or review by regulators, which will increase our compliance costs and subject
us to heightened risks and challenges. Moreover, there is considerable uncertainty surrounding the local implementation of anti-monopoly and competition
regulations in mainland China, as well as the dynamic nature of legislative developments. In order to mitigate the risk of non-compliance, substantial
investment in terms of time, financial resources, and personnel may be required to effectively assess and manage these evolving risks and issues. Any
actual or perceived non-compliance with the Guideline on Anti-monopoly of Platform Economy Sector or other relevant anti-monopoly regulations could
lead to governmental investigations, enforcement actions, and legal claims against our company. Such outcomes could adversely affect our business
operations, financial standing, and reputation.
Failure to comply with PRC regulations regarding the registration requirements for employee share ownership plans or share option plans may subject
the PRC plan participants or us to fines and other legal or administrative sanctions.
In December 2006, the People’s Bank of China, or PBOC, promulgated the Administrative Measures of Foreign Exchange Matters for Individuals,
which sets forth the respective requirements for foreign exchange transactions by individuals (both PRC and non-PRC citizens) under either the current
account or the capital account. In January 2007, SAFE issued relevant implementing rules which were further revised by SAFE in 2016 and 2023, that
specified approval requirements for certain capital account transactions such as a PRC citizen’s participation in the employee stock incentive plans or share
option plans of an overseas publicly listed company. In February 2012, SAFE promulgated the Notice on the Administration of Foreign Exchange Matters
for Domestic Individuals Participating in the Stock Incentive Plans of Overseas Listed Companies, or the Stock Option Notice. The Stock Option Notice
supersedes the requirements and procedures for the registration of mainland China resident individuals’ participation in stock incentive plans set forth by
certain rules promulgated by SAFE in March 2007 and January 2008. Under these measures, mainland China resident individuals who participate in an
employee stock
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incentive plan or a share option plan in an overseas publicly listed company are required to register with SAFE and complete certain other procedures. A
domestic qualified agent appointed through the mainland China subsidiaries of such overseas listed company must file applications on behalf of such
mainland China resident individuals with SAFE or its local counterpart to obtain approval for an annual allowance with respect to the foreign exchange in
connection with stock holding or share option exercises. With the approval from SAFE or its local counterpart, the domestic qualified agent must open a
special foreign exchange account at a mainland China bank to hold the funds required in connection with the stock purchase or option exercise, payment
received upon sales of shares, dividends issued on the stock and any other income or expenditures approved by SAFE or its local counterpart. We and our
mainland China resident employees who participate in our share incentive plans are subject to these regulations as we are an overseas listed company. We
have made registration with the local counterparts of SAFE for our mainland China resident employees who participate in our share incentive plans as
required under the Stock Option notice and relevant rules. If we or our PRC plan participants fail to comply with these regulations, we or our PRC plan
participants may be subject to fines and other legal or administrative sanctions. See “Item 4. Information on the Company—B. Business Overview—PRC
Regulation—Regulations on Employee Stock Options Plans.”
We face uncertainties with respect to indirect transfers of equity interests in mainland China resident enterprises by their non-mainland China holding
companies.
On February 3, 2015, the State Administration of Taxation, or the SAT, issued SAT Notice 7, which was amended in December 2017, to supersede the
existing tax rules in relation to the indirect transfer of assets by non-mainland China resident enterprises. SAT Notice 7 introduces a more sophisticated
anti-avoidance guidance. SAT Notice 7 extends its tax jurisdiction to capture not only indirect transfer but also transactions involving transfer of movable
and immovable property in mainland China of a foreign company through the offshore transfer of a foreign intermediate holding company. According to
SAT Notice 7, if a non-resident enterprise indirectly transfers mainland China taxable properties through an arrangement without reasonable commercial
purpose but to avoid PRC Corporate Income Tax, the indirect transfer shall be re-characterized and treated as a direct transfer of mainland China taxable
properties. SAT Notice 7 also interprets the term “transfer of the equity interests in a foreign intermediate holding company” broadly. In addition, SAT
Notice 7 provides clearer criteria on how to assess reasonable commercial purposes and introduces safe harbor scenarios applicable to the public trading of
shares in a listed company holding taxable mainland China assets and indirect transfers resulting from a corporate restructuring.
Further, SAT Notice 7 adopts a voluntary reporting regime. Both the foreign transferor and the transferee, and the mainland China tax resident
enterprise whose equity interests being transferred may voluntarily report the transfer by submitting the documents required in SAT Notice 7. In addition to
the voluntary reporting, SAT Notice 7 empowers the Chinese tax authorities to require various documents from the parties involved. Although SAT Notice
7 provides clarities in many important areas such as reasonable commercial purpose and reporting requirements, it brings challenges to both the foreign
transferor and transferee of the indirect transfer as they are required to make a self-assessment on whether the transaction should be subject to PRC tax and
to file or withhold the PRC tax accordingly.
On October 17, 2017, the SAT issued the Announcement of the State Administration of Taxation on Matters Concerning Withholding of Income Tax
of Non-Resident Enterprises at Source, or SAT Circular 37, which became effective on December 1, 2017. The SAT Circular 37 applies the principle of
withholding of income tax of non-resident enterprises at source. The SAT Circular 37 stipulates that the taxable income from equity transfers refers to the
balance of deducting the net value of equity transferred from the total income from the applicable equity transfer. Pursuant to SAT Circular 37, the payer,
namely the principal, the designator, or the warrantee or the guaranteed party, should assume the obligation of withholding income tax in the circumstances
where the payer entrusts an agent or designates a third party to make payments on its behalf, or the payments should be made by a third-party warrantor or
guarantor as provided in the applicable guarantee contracts or applicable laws.
SAT Notice 7 became effective on February 3, 2015, but it also applies to indirect transfers which occurred before its issuance but have not received
assessments from the tax authorities. SAT Circular 37 and SAT Notice 7 may be determined by the tax authorities to be applicable to our corporate
restructuring where non-resident investors were involved, if any of such transactions were determined by the tax authorities to lack reasonable commercial
purpose. As a result, we and our non-resident investors in such transactions may become at risk of being taxed under SAT Circular 37 and SAT Notice 7
and we may be required to expend valuable resources to comply with SAT
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Circular 37 and SAT Notice 7 or to establish that we should not be taxed under the general anti-avoidance rule of the amended PRC Enterprise Income Tax
Law, or EIT Law, which may have a material adverse effect on our financial condition and results of operations or such non-resident investors’ investments
in us.
Discontinuation of any of the preferential tax treatments or imposition of any additional taxes could adversely affect our financial condition and results
of operations.
The amended EIT Law and its implementation rules permit certain “high and new technology enterprises strongly supported by the state”, or HNTEs,
which hold independent ownership of core intellectual property to enjoy a preferential enterprise income tax rate of 15% subject to certain qualification
criteria. In addition, PRC laws permit reduction in income tax for “key software enterprises”, or KSEs, or “software enterprises.” All of these statuses are
subject to review and renewal, with HNTEs to be renewed every three years and KSEs and software enterprises annually. Currently we have six
subsidiaries eligible for preferential tax treatments, six of which are recognized as HNTE and are eligible for the preferential 15% enterprise income tax
rate, three of which are recognized as software enterprises and two of which is accredited as KSEs. However, if any of these subsidiaries fails to pass the
review by, and filing with, the relevant tax authorities to be qualified as a HNTE, a KSE or a software enterprise, such company will no longer enjoy the
corresponding preferential tax treatment described above.
Our global income and the dividends that we may receive from our mainland China subsidiaries, dividends distributed to our non-mainland China
shareholders and ADS holders, and gains recognized by such shareholders or ADS holders, may be subject to PRC taxes under the EIT Law, which
would have a material adverse effect on our results of operations.
Under the EIT Law, which became effective on January 1, 2008 and was most recently amended on December 29, 2018, and its implementation rules,
which became effective on January 1, 2008 and was most recently amended on April 23, 2019, an enterprise established outside of the mainland China with
“de facto management bodies” within the mainland China is considered a resident enterprise and will be subject to the enterprise income tax at the rate of
25% on its global income. The SAT issued the Notice Regarding the Determination of Chinese-Controlled Offshore Incorporated Enterprises as PRC Tax
Resident Enterprises on the Basis of De Facto Management Bodies, or SAT Circular 82, on April 22, 2009, which was amended in 2013 and 2017
respectively. SAT Circular 82 provides certain specific criteria for determining whether the “de facto management body” of a Chinese-controlled offshore-
incorporated enterprise is located in mainland China. On July 27, 2011, the SAT issued the Administrative Measures of Enterprise Income Tax of Chinese-
Controlled Offshore Incorporated Resident Enterprises (Trial), which became effective on September 1, 2011 and was most recently amended in 2018, to
provide more guidance on the implementation of SAT Circular 82. Although we do not believe that our legal entities organized outside of the mainland
China constitute mainland China resident enterprises, it is possible that the PRC tax authorities could reach a different conclusion. In such case, we may be
considered a mainland China resident enterprise and may therefore be subject to enterprise income tax at a rate of 25% on our global income. If we are
considered a mainland China resident enterprise and earn income other than dividends from our mainland China subsidiaries, a 25% enterprise income tax
on our global income could significantly increase our tax burden and materially and adversely affect our cash flow and profitability.
Pursuant to the amended EIT Law and its implementation rules, dividends generated after January 1, 2008 and payable by a foreign-invested
enterprise in mainland China to its foreign investors, which are non-mainland China tax resident enterprises without an establishment in mainland China, or
whose income has no connection with their institutions and establishments inside mainland China, are subject to withholding tax at a rate of 10%, unless
any such foreign investor’s jurisdiction of incorporation has a tax treaty with mainland China that provides for a different withholding arrangement. We are
a Cayman Islands holding company and we conduct our business through our wholly-owned subsidiaries and VIEs in mainland China, of which our
WFOEs are the primary beneficiaries of the VIEs. Autohome WFOE is 100% owned by Cheerbright, our wholly owned subsidiary located in the British
Virgin Islands. The British Virgin Islands currently does not have any tax treaty with mainland China with respect to withholding tax. As long as
Cheerbright is considered a non-mainland China resident enterprise, dividends that it receives from Autohome WFOE may be subject to withholding tax at
a rate of 10%. As to our subsidiaries located in Hong Kong, such as Autohome Media Limited, the shareholder of our mainland China subsidiaries
currently engaging in advertising business, and Autohome Link Hong Kong Limited, the shareholder of Chezhiying WFOE, and TTP CAR (HK)
LIMITED, the shareholder of TTP WFOE, under the Arrangement between mainland China and the Hong Kong Special Administrative Region on the
Avoidance of Double Taxation
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and Prevention of Fiscal Evasion, as long as each of our Hong Kong subsidiaries is considered a non-mainland China resident enterprise and directly holds
at least 25% of the equity interests of its respective mainland China subsidiaries, dividends that it receives from its mainland China subsidiaries may be
subject to withholding tax at a preferential rate of 5%, if it is the beneficial owner of the dividends, upon receiving the approval from the local tax authority.
In August 2015, the SAT promulgated the Administrative Measures for Non-Resident Taxpayers to Enjoy Treatments under Tax Treaties, or SAT Circular
60, which became effective on November 1, 2015. The SAT Circular 60 was replaced by the Administrative Measures for Non-Resident Taxpayers to
Enjoy Treatments under Treaties, or SAT Circular 35, promulgated by the SAT on October 14, 2019 and became effective on January 1, 2020. Pursuant to
the SAT Circular 35, non-resident enterprises are not required to obtain pre-approval from the relevant tax authority in order to enjoy the reduced
withholding tax rate, and non-resident enterprises and their withholding agents may, by self-assessment and upon their confirmation that the prescribed
criteria to enjoy the tax treaty benefits are met, directly apply the reduced withholding tax rate, and file necessary forms when performing tax filings.
Moreover, non-resident enterprises and their withholding agents shall keep the supporting documents for post-filing examinations by the relevant tax
authorities.
As uncertainties remain regarding the interpretation and implementation of the amended EIT Law and its implementation rules, we cannot assure you
that if we are regarded as a mainland China resident enterprise, any dividends to be distributed by us to our non-mainland China enterprise shareholders
and ADS holders would not be subject to any PRC withholding tax at a rate of 10% and to non-mainland China individual shareholders and ADS holders
would not be subject to PRC individual income tax at a rate of 20%. Similarly, any gain recognized by such non-mainland China shareholders or ADS
holders on the sale of shares or ADSs, as applicable, may also be subject to PRC tax. If our dividends payable to our non-mainland China enterprise
shareholders, non-mainland China individual shareholders and ADS holders, or on gains recognized by such non-mainland China shareholders or ADS
holders are required under the EIT Law and the Individual Income Tax Law to be subject to PRC tax, such investors’ investment in our ordinary shares or
ADSs may be materially and adversely affected.
Increases in labor costs and enforcement of stricter labor-related laws and regulations may adversely affect our business and our results of operations.
China’s overall economy and the average wage in China have increased in recent years and are expected to continue to grow. The average wage level
for our employees has also increased in recent years. We expect that our labor costs, including wages and employee benefits, will continue to increase.
Unless we are able to pass on these increased labor costs to our users and customers by increasing prices for our services, our profitability and results of
operations may be materially and adversely affected.
In addition, we have been subject to stricter regulatory requirements in terms of entering labor contracts with our employees and paying various
statutory employee benefits, including pensions, housing fund, medical insurance, work-related injury insurance, unemployment insurance and
childbearing insurance to designated government agencies for the benefit of our employees. Pursuant to the PRC Labor Contract Law, or the Labor
Contract law, which became effective in January 2008, as amended in December 2012 and effective as of July 1, 2013, and its implementation rules that
became effective in September 2008, employers are subject to stricter requirements in terms of signing labor contracts, minimum wages, paying
remuneration, determining the term of employees’ probation and unilaterally terminating labor contracts. In the event that we decide to terminate some of
our employment contracts or otherwise change our employment or labor practices, the Labor Contract Law and its implementation rules may limit our
ability to effect those changes in a desirable or cost- effective manner, which could adversely affect our business and results of operations. In October 2010,
the SCNPC promulgated the PRC Social Insurance Law, or the Social Insurance Law, which became effective on July 1, 2011 and was amended on
December 29, 2018. According to the Social Insurance Law, employees must participate in pension insurance, work-related injury insurance, medical
insurance, unemployment insurance and maternity insurance and the employers must, together with their employees or separately, pay the social insurance
premiums for such employees. On February 18, 2019, the Ministry of Human Resources and Social Security and eight other departments issued the
Circular on Further Regulating Recruitment Activities to Promote Equal Employment for Women, or Circular on Promoting Equal Employment for
Women, which came into force simultaneously. The Circular stipulates that if employers or human resources agencies are found to have posted hiring
advertisements containing discriminatory content, they may be ordered to correct such discriminatory advertisements. Failure to correct the discriminatory
advertisements as ordered will be punishable by a maximum fine of RMB50,000. Inquiring about a female
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applicant’s marital and childbearing status, conducting pregnancy test in the entry medical examination and other behaviors involving gender
discrimination are also prohibited by the Circular on Promoting Equal Employment for Women.
As the interpretation and implementation of labor-related laws and regulations are still evolving, we cannot assure you that our employment practice
does not and will not violate labor-related laws and regulations in mainland China, which may subject us to labor disputes or government investigations. If
we are deemed to have violated relevant labor-related laws and regulations, we could be required to provide additional compensation to our employees and
our business, financial condition and results of operations may be materially and adversely affected.
Changes in international trade policies and rising political tensions may adversely impact our business and operating results.
There have been changes in international trade policies and rising political tensions. For example, the U.S. government has made statements and taken
certain actions that may lead to potential changes to U.S. and international trade policies towards China. Rising trade and political tensions could reduce
levels of trades, investments, technological exchanges and other economic activities between China and other countries, which would have an adverse
effect on global economic conditions, the stability of global financial markets, and international trade policies.
While cross-border business currently may not be an area of our focus and we are scaling back our European business, any rising trade and political
tensions or unfavorable government policies on international trade and Chinese companies could impact our competitive position or hinder our commercial
activities in certain countries. In addition, our results of operations could be adversely affected if any such tensions or unfavorable government trade
policies harm the Chinese economy or the global economy in general.
Risks Related to Our ADSs and Ordinary Shares
The trading price of our ADSs and/or ordinary shares has been and is likely to continue to be, volatile, which could result in substantial losses to
holders of our ADSs and/or ordinary shares.
The trading price of our ADSs and/or ordinary shares has been and is likely to continue to be volatile and could fluctuate widely in response to a
variety of factors, many of which are beyond our control. For example, the daily closing trading prices for our ADSs on the NYSE ranged from US$26.08
to US$37.57 in 2023. Likewise, the daily closing trading prices for our ordinary shares on the Hong Kong Stock Exchange ranged from HK$49.90 to
HK$73.80 in 2023. The trading price for our ADSs and/or ordinary shares may continue to fluctuate in response to factors including, without limitation, the
following:
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•
•
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•
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regulatory developments in our target markets affecting us, our customers or our competitors;
conditions in the entire automotive ecosystem;
conditions in the online industry;
actual or anticipated fluctuations in our quarterly results of operations and changes or revisions to our expected results;
changes in financial estimates by securities research analysts;
fluctuations of exchange rates among the RMB, the Hong Kong dollar and the U.S. dollar;
announcements of studies and reports relating to the quality of our services or those of our competitors;
changes in the economic performance or market valuations of other companies that provide online automotive related services;
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•
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announcements by us or our competitors of new solutions, acquisitions, strategic relationships, joint ventures or capital commitments;
additions to or departures of our senior management;
release or expiry of lock-up or other transfer restrictions on our outstanding ordinary shares or ADSs;
sales or perceived potential sales of additional ordinary shares or ADSs;
obtaining or revocation of any operating license or permit in relation to our business;
pending or potential litigation or administrative investigation;
publicity involving our business and the effectiveness of our sales and marketing activities; and
alleged untrue statement of a material fact or alleged omission to state a material fact in our public announcements or press releases or
misinterpretation thereto.
In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to
the operating performance of companies like us. For example, concerns over economic slowdown resulting from the COVID-19 pandemic have triggered a
US key market-wide circuit breaker for several times since March 9, 2020, leading to a historic drop for the US capital market. No guarantee can be given
on how the capital markets will react although actions have been taken worldwide to combat the spread of the coronavirus. These broad market and
industry fluctuations may adversely affect the market price of our ADSs and/or ordinary shares. The market price of our ADSs and/or ordinary shares may
also be adversely affected by any alleged untrue statement or alleged omission to state a material fact in our public announcements or press releases, which
may even lead to securities class action suits against us. In the past, shareholders of a public company often brought securities class action suits against the
company following periods of instability in the market price of that company’s securities. If we were involved in a class action suit, it could divert a
significant amount of our management’s attention and other resources from our business and operations, which could harm our results of operations and
require us to incur significant expenses to defend the suit. Any such class action suit, whether or not successful, could harm our reputation and restrict our
ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could
have a material adverse effect on our financial condition and results of operations. Volatility or a lack of positive performance in our ADS and/or ordinary
share price may also adversely affect our ability to retain key employees, most of whom have been granted options or other equity incentives.
We believe that we were a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for the taxable year ended December 31,
2023, which could result in adverse U.S. federal income tax consequences to U.S. holders of our ADSs or ordinary shares.
Under United States federal income tax law, we will be classified as a passive foreign investment company, or PFIC, for any taxable year if either (i)
at least 75% of our gross income for the taxable year is passive income or (ii) at least 50% of the value of our assets (generally based on the average
quarterly value of our assets during the taxable year) is attributable to assets that produce or are held for the production of passive income (the “asset test”).
Although the law in this regard is not entirely clear, we treat the VIEs as being owned by us for United States federal income tax purposes because we
control their management decisions and are entitled to substantially all of the economic benefits associated with such entities, and, as a result, we
consolidate their results of operations in our consolidated U.S. GAAP financial statements.
Based upon the nature and composition of our assets (in particular, the retention of substantial amounts of cash, deposits and investments), and the
market price of our ADSs, we believe that we were a PFIC for United States federal income tax purposes for the taxable year ended December 31, 2023,
and we will likely be a PFIC for our current taxable year unless the market price of our ADSs increases and/or we invest a substantial amount of the cash
and other passive assets we hold in assets that produce or are held for the production of active income. U.S. Holders
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should consult with their tax advisors regarding the implications of owning stock in a PFIC. No assurances regarding our PFIC status can be provided for
any past, current or future taxable years. The determination of whether we are a PFIC is a fact-intensive determination made on an annual basis and the
applicable law is subject to varying interpretation. Our U.S. counsel expresses no opinion with respect to our PFIC status for our taxable year ended
December 31, 2023 or any future taxable year.
If we are classified as a PFIC, a U.S. Holder (as defined in “Item 10. Additional Information-E. Taxation-United States Federal Income Tax
Considerations-General”) may incur significantly increased United States income tax on gains recognized on the sale or other disposition of the ADSs or
ordinary shares and on the receipt of distributions on the ADSs or ordinary shares to the extent such gain or distribution is treated as an “excess
distribution” under United States federal income tax rules. Further, if we are a PFIC for any year during which a U.S. Holder held our ADSs or ordinary
shares, we generally would continue to be treated as a PFIC as to such U.S. Holder for all succeeding years during which such U.S. Holder held our ADSs
or ordinary shares. For more information, see “Item 10. Additional Information—E. Taxation—United States Federal Income Tax Considerations—Passive
Foreign Investment Company Rules.”
We adopt different practices as to certain matters as compared with many other companies listed on the Hong Kong Stock Exchange.
We completed our public offering in Hong Kong in March 2021 and the trading of our ordinary shares on the Hong Kong Stock Exchange
commenced on March 15, 2021 under the stock code “2518.” As a company listed on the Hong Kong Stock Exchange pursuant to Chapter 19 of the Hong
Kong Listing Rules, we are not subject to certain provisions of the Hong Kong Listing Rules pursuant to Rule 19C.11, including, among others, rules on
notifiable transactions, connected transactions, share option schemes, content of financial statements as well as certain other continuing obligations. In
addition, in connection with the listing of our ordinary shares on the Hong Kong Stock Exchange, we applied for a number of waivers and/or exemptions
from strict compliance with the Hong Kong Listing Rules, the Companies (Winding Up and Miscellaneous Provisions) Ordinance, the Takeovers Codes
and the SFO. As a result, we adopt different practices as to those matters as compared with other companies listed on the Hong Kong Stock Exchange that
do not enjoy those exemptions or waivers.
Furthermore, if there occurs involuntary delisting of our ADSs, or 55% or more of the total worldwide trading volume, by dollar value, of our
ordinary shares and ADSs over our most recent fiscal year takes place on the Hong Kong Stock Exchange, the Hong Kong Stock Exchange will regard us
as having a dual primary listing in Hong Kong and we will no longer enjoy certain exemptions or waivers from strict compliance with the requirements
under the Hong Kong Listing Rules, the Companies (Winding Up and Miscellaneous Provisions) Ordinance, the Takeovers Codes and the SFO, which
could result in us having to amend our corporate structure and memorandum and articles of association and our incurring of incremental compliance costs.
We cannot guarantee that any share repurchase program will be fully consummated or that any share repurchase program will enhance long-term
shareholder value, and share repurchases could increase the volatility of the price of our ADSs and/or ordinary shares and could diminish our cash
reserves.
On November 18, 2021, our board of directors authorized a share repurchase program, under which we may repurchase up to US$200 million of our
ADSs over the next 12 months (the “Share Repurchase Program”). The Share Repurchase Program was publicly announced on the same day. On November
3, 2022, our board of directors authorized an extension of the term of the Share Repurchase Program for another twelve months to November 17, 2023. As
of November 17, 2023, we have repurchased 6,726,883 ADSs for a total cost of approximately US$200.0 million. Our board of directors may authorize
additional share repurchase program in the future. Any such share repurchase program may affect the price of our stock and increase volatility, diminish our
cash reserve, and may be suspended or terminated at any time. We cannot guarantee that any share repurchase program we institute will be fully
consummated or that it will enhance long-term shareholder value. For details of the volume of ADSs repurchased pursuant to our repurchase program,
please see “Item 16E—Purchases of Equity Securities by the Issuer and Affiliated Purchasers.”
If securities or industry analysts do not publish research or reports about our business, or publish inaccurate or unfavorable research or reports about
our business or if they adversely change their recommendations regarding
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our ADSs and/or ordinary shares, the market price for our ADSs and/or ordinary shares and trading volume could decline.
The trading market for our ADSs and/or ordinary shares will depend in part on the research and reports that securities or industry analysts publish
about us or our business. If we do not establish and maintain adequate research coverage or if one or more of the analysts who covers us downgrades our
ADSs and/or ordinary shares or publishes inaccurate or unfavorable research about our business, the market price for our ADSs and/or ordinary shares
would likely decline. If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, we could lose visibility in
the financial markets, which, in turn, could cause the market price or trading volume for our ADSs and/or ordinary shares to decline.
Although we have a regular dividend policy in place, we cannot assure you that our existing dividend policy will not change in the future or the amount
of dividends that you may receive, neither can we guarantee that we will have sufficient profits, reserves set aside from profits or otherwise funds to
justify and enable dividend declaration and payment in compliance with laws for any year and, therefore, you may need to rely on price appreciation of
our ADSs and/or ordinary shares as the sole source for return on your investment.
In November 2019, our board of directors resolved to adopt a regular dividend policy. Under this policy, we may issue recurring cash dividend every
year from 2020 in an amount of approximately 20% of the net income generated in the previous fiscal year, with the exact amount to be determined by our
directors based on our financial performance and cash position prior to the distribution. On February 16, 2023, our board of directors approved an
amendment to change the annual cash dividend to a fixed amount of at least RMB500.0 million between 2022 and 2026. The exact amount of the annual
cash dividend will be determined by our board of directors based on our financial performance and cash position prior to the distribution, and is expected to
be adjusted upward each year. On December 12, 2023, our board of directors approved a further amendment to the dividend policy, pursuant to which the
board intends to declare a cash dividend semi-annually from 2024 to 2026. The total yearly cash dividend is expected to be no less than RMB1.5 billion
with the exact amount to be determined by the board based on our then financial performance, cash position, and applicable foreign exchange laws and
regulations in China, among other factors.
Despite a regular dividend policy being in place, before any dividend is declared and paid for any given year, we need to have enough profits to justify
such declaration and payment, or we need to have sufficient reserves set aside from profits previously generated that our board of directors determines are
no longer needed. In addition, we must be able to pay our debts as they fall due in the ordinary course of business immediately following the dividend
payment. We cannot assure you that we will be able to meet all of such conditions to enable dividend declaration and payment in compliance with laws.
Even if our board of directors decides to declare and pay dividends, the timing and amount of future dividends, if any, will depend on, among other things,
our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our
subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors. Therefore, the amount of
dividends that you may receive is uncertain and subject to change.
Furthermore, our regular dividend policy is subject to change at any time at the discretion of our board of directors, and there can be no assurance that
we will not adjust or terminate our dividend policy in the future. Accordingly, you should not rely on your investment in our ADSs and/or ordinary shares
as a source for any future dividend income and the future return on your investment in our ADSs and/or ordinary shares will likely depend entirely upon
any future price appreciation of our ADSs and/or ordinary shares. There is no guarantee that our ADSs and/or ordinary shares will appreciate in value or
even maintain the price at which you purchased the ADSs and/or ordinary shares. You may not realize a return on your investment in our ADSs and/or
ordinary shares and you may even lose your entire investment in our ADSs and/or ordinary shares.
Substantial future sales or perceived potential sales of our shares could cause the price of our ADSs and/or ordinary shares to decline.
Sales of our ADSs and/or ordinary shares in the public market or through private transactions, or the perception that these sales could occur, could
cause the market price of our ADSs and/or ordinary shares to decline. Yun Chen owned 46.4% of our total outstanding shares as of March 31, 2024. In
addition to unregistered sale, it can also
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dispose of these shares through registered transaction as it has the right to cause us to register under the Securities Act the sale of its shares. Sales of these
shares, or the perception that such sales could occur, could cause the price of our ADSs and/or ordinary shares to decline. Such sales also might make it
more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem appropriate. We cannot predict what effect, if
any market sales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on
the market price of our ADSs and/or ordinary shares.
In addition, if we issue additional ordinary shares, through private transactions or in the public markets in the United States, Hong Kong or another
jurisdiction, your ownership interests in our company would be diluted and this, in turn, could have a material and adverse effect on the price of our ADSs
and/or ordinary shares.
Holders of our ADSs may not have the same voting rights as the holders of our ordinary shares and may not receive voting materials in time to be able
to exercise their right to vote.
Except as described in this annual report and in the deposit agreement, holders of our ADSs will not be able to exercise voting rights attaching to the
ordinary shares represented by our ADSs on an individual basis. Holders of our ADSs will appoint the depositary or its nominee as their representative to
exercise the voting rights attaching to the ordinary shares represented by the ADSs. Upon receipt of their voting instructions, the depositary will vote the
underlying ordinary shares in accordance with these instructions.
Pursuant to our seventh amended and restated memorandum and articles of association, we may convene an annual general meeting upon 21 clear
days’ notice or other shareholders’ meeting upon 14 clear calendar days’ notice. If we give timely notice to the depositary under the terms of the deposit
agreement (30 business days’ notice), the depositary will notify holders of our ADSs, of the upcoming general meeting and arrange to deliver our voting
materials to them. We cannot guarantee that holders of our ADSs will receive the voting materials in time to instruct the depositary to vote the ordinary
shares underlying their ADSs, and it is possible that they, or persons who hold their ADSs through brokers, dealers or other third parties, will not have the
opportunity to exercise a right to vote. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for the
manner of carrying out voting instructions. This means that holders of our ADSs may not be able to exercise their right to vote and there may be nothing
they can do if the ordinary shares underlying their ADSs are not voted as they requested. In addition, although holders of our ADSs may directly exercise
their right to vote by withdrawing the ordinary shares underlying their ADSs and become a registered holder of such shares prior to the record date for the
general meeting, they may not receive sufficient advance notice of an upcoming shareholders’ meeting to withdraw the ordinary shares underlying their
ADSs to allow them to vote with respect to any specific matter.
The right of our ADS holders to participate in any future rights offerings may be limited, which may cause dilution to their holdings, and they may not
receive cash dividends if it is illegal or impractical to make such dividends available to them.
We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we cannot make rights available to
holders of our ADSs in the United States unless we register both the rights and the securities to which the rights relate under the Securities Act or an
exemption from the registration requirements is available. Under the deposit agreement, the depositary will not make rights available to holders of our
ADSs unless both the rights and the underlying securities to be distributed to ADS holders are either registered under the Securities Act or exempt from
registration under the Securities Act. We are under no obligation to file a registration statement with respect to any such rights or securities or to endeavor
to cause such a registration statement to be declared effective and we may not be able to establish a necessary exemption from registration under the
Securities Act. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings.
The depositary of our ADSs has agreed to pay to holders of our ADSs the cash dividends or other distributions it or the custodian receives on ordinary
shares or other deposited securities after deducting its fees and expenses. Holders of our ADSs will receive these distributions in proportion to the number
of ordinary shares their ADSs represent. However, the depositary is not responsible if it decides that it is inequitable or impractical to make a distribution
available to any holders of ADSs. For example, the depositary may determine that it is not feasible to
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distribute certain property through the mail. Additionally, the value of certain distributions may be less than the cost of mailing them. In those cases, the
depositary may determine not to distribute such property. We have no obligation to register under U.S. securities laws any ADSs, ordinary shares, rights or
other securities received through such distributions. We also have no obligation to take any other action to permit the distribution of ADSs, ordinary shares,
rights or anything else to holders of ADSs. This means that holders of our ADSs may not receive the distribution we make on our ordinary shares or any
value for them if it is illegal or impractical for us to make them available to holders of our ADSs. These restrictions may have a material adverse effect on
the value of the ADSs held by them.
Holders of our ADSs may be subject to limitations on the transfer of their ADSs.
Our ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when
it deems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs
generally when our books or the books of the depositary are closed, or at any time if we or the depositary deems it advisable to do so because of any
requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason in accordance
with the terms of the deposit agreement.
You may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts or Hong Kong courts may
be limited because we are incorporated under Cayman Islands law, we conduct substantially all of our operations in mainland China and most of our
directors and officers reside outside the United States and Hong Kong.
We are incorporated in the Cayman Islands and conduct most of our operations in mainland China through our mainland China subsidiaries, the VIEs
and their subsidiaries in the mainland China, and majority of our assets are located in the mainland China. We do not and are not, and holders of our ADSs
and ordinary shares do not and are not, legally permitted to have any, or more than the permitted percentage of, equity interest in the VIEs as current PRC
laws and regulations restrict foreign ownership and investment in certain industries as provided in the Negative List. As a result, we provide the services
that may be subject to such restrictions in the mainland China through the VIEs and their subsidiaries, and we operate our businesses in the mainland China
through certain contractual arrangements with the VIEs and their respective shareholders. For more details of these contractual arrangements, see “Item 7.
Major Shareholders and Related Party Transactions—B. Related Party Transactions—Contractual Arrangements with the Variable Interest Entities.” Our
ADSs and ordinary shares are equity securities of a Cayman Islands holding company rather than equity securities of our subsidiaries and the VIEs. In
addition, most of our directors and officers reside in mainland China and a substantial portion of the assets of such directors and officers are located in
mainland China. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in United States or Hong
Kong in the event that you believe that your rights have been infringed under the U.S. securities laws, Hong Kong laws or otherwise. Even if you are
successful in bringing an action of this kind, the laws of the Cayman Islands and mainland China may render you unable to enforce a judgment against our
assets or the assets of our directors and officers.
There is no statutory enforcement in the Cayman Islands of judgments obtained in the Hong Kong courts or federal or state courts of the United States
(and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments). The courts of the Cayman Islands
would recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that
a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided
certain conditions are met. For such a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a
liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter,
impeachable on the grounds of fraud or obtained in a manner, and or be of a kind the enforcement of which is, contrary to natural justice or the public
policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands court may stay
enforcement proceedings if concurrent proceedings are being brought elsewhere. However, the Cayman Islands courts are unlikely to enforce a judgment
obtained from the U.S. or Hong Kong courts under civil liability provisions of the U.S. federal securities law or Hong Kong law if such judgment is
determined by the courts of the Cayman Islands to give rise to obligations to make payments that are penal or punitive in nature. Because such a
determination has not yet been
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made by a court of the Cayman Islands, it is uncertain whether such civil liability judgments from U.S. or Hong Kong courts would be enforceable in the
Cayman Islands.
The recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law. The courts of mainland China may
recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law based either on treaties between mainland
China and the country where the judgment is made or on principles of reciprocity between jurisdictions. Mainland China does not have any treaties or other
forms of reciprocity with the United States that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the
PRC Civil Procedures Law, the courts of mainland China will not enforce a foreign judgment against us or our director and officers if they decide that the
judgment violates the basic principles of PRC laws or national sovereignty, security or public interest. As a result, it is uncertain whether and on what basis
a court of mainland China would enforce a judgment rendered by a court in the United States.
Our corporate affairs are governed by our memorandum and articles of association, as amended and restated from time to time, and by the Cayman
Islands Companies Act (As Revised), and common law of the Cayman Islands. The rights of shareholders to take legal action against us and our directors
and officers, actions by minority shareholders and the fiduciary responsibilities of our directors are to a large extent governed by the common law of the
Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as
from English common law, which provides persuasive, but not binding, authority. The rights of our shareholders and the fiduciary responsibilities of our
directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedents in the United States. In particular,
the Cayman Islands has a less developed body of securities laws than the United States and provides significantly less protection to investors. In addition,
Cayman Islands companies may not have standing to initiate a shareholder derivative action in U.S. federal courts or a court of Hong Kong.
As a result, our public shareholders may have more difficulty in protecting their interests through actions against us, our management, our directors or
our major shareholders than shareholders of a corporation incorporated in a jurisdiction in the United States or Hong Kong.
Our memorandum and articles of association contain anti-takeover provisions that could adversely affect the rights of holders of our ordinary shares
and ADSs and/or ordinary shares.
Our seventh amended and restated memorandum and articles of association contain certain provisions that could limit the ability of others to acquire
control of our company, including a provision that grants authority to our board of directors to establish from time to time one or more series of preferred
shares without action by our shareholders and to determine, with respect to any series of preferred shares, the terms and rights of that series subject to the
Companies Act (As Revised) of the Cayman Islands and, where applicable, the rules of the New York Stock Exchange or any other stock exchange on
which our ADSs or shares are listed for trading. Preferred shares could be issued quickly with terms calculated to delay or prevent a change in control of
our company or make removal of management more difficult. If our board of directors decides to issue preferred shares, the price of our ADSs and/or
ordinary shares may fall and the voting and other rights of the holders of our ADSs and/or ordinary shares may be materially and adversely affected. These
provisions could have the effect of depriving our shareholders of the opportunity to sell their shares at a premium over the prevailing market price by
discouraging third parties from seeking to obtain control of our company in a tender offer or similar transaction.
We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable
to U.S. domestic public companies.
Because we qualify as a foreign private issuer under the Securities Exchange Act of 1934, as amended, or the Exchange Act, we are exempt from
certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including:
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the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K;
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•
•
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the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the
Exchange Act;
the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders
who profit from trades made in a short period of time; and
the selective disclosure rules by issuers of material nonpublic information under Regulation FD.
We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. We intend to publish our results on a quarterly
basis as press releases, distributed pursuant to the rules and regulations of the NYSE. Press releases relating to financial results and material events will
also be furnished to the SEC on Form 6-K.
However, the information we are required to file with or furnish to the SEC will be less extensive and less frequent compared to that required to be
filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information, which would be made available to
you, were you investing in a United States domestic issuer.
As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance
matters that differ significantly from the New York Stock Exchange listing standards.
As a Cayman Islands company listed on the New York Stock Exchange, we are subject to the New York Stock Exchange listing standards. However,
New York Stock Exchange rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate
governance practices in the Cayman Islands, which is our home country, may differ significantly from the New York Stock Exchange listing standards.
Currently, we rely on home country practice in lieu of the New York Stock Exchange listing standard with respect to our corporate governance, including
requirements that listed companies have, among other things, a majority of their board members to be independent and have a nominating and corporate
governance committee and a compensation committee composed entirely of independent directors. Therefore, our shareholders may be afforded less
protection than they would otherwise enjoy if we complied fully with the New York Stock Exchange listing standards.
We incur increased costs as a result of being a public company.
As a public company, we incur significant accounting, legal and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act,
including Section 404 therein relating to internal control over financial reporting, as well as rules subsequently implemented by the SEC and the NYSE,
have detailed requirements concerning corporate governance practices of public companies. We expect these rules and regulations applicable to public
companies to increase our accounting, legal and financial compliance costs and to make certain corporate activities more time-consuming and costly. Our
management is required to devote substantial time and attention to our public company reporting obligations and other compliance matters. We evaluate
and monitor developments with respect to these rules and regulations, and we cannot predict or estimate the amount of additional costs we may incur or the
timing of such costs. We also incur additional costs as a result of the listing of our ordinary shares on the Hong Kong Stock Exchange. Our reporting and
other compliance obligations as a public company may place a significant strain on our management, operational and financial resources and systems for
the foreseeable future.
The different characteristics of the capital markets in Hong Kong and the U.S. may negatively affect the trading prices of our ADSs and/or ordinary
shares.
We are subject to Hong Kong and NYSE listing and regulatory requirements concurrently. The Hong Kong Stock Exchange and NYSE have different
trading hours, trading characteristics (including trading volume and liquidity), trading and listing rules, and investor bases (including different levels of
retail and institutional participation). As a result of these differences, the trading prices of our ordinary shares and our ADSs may not be the same, even
allowing for currency differences. Fluctuations in the price of our ADSs due to circumstances
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peculiar to the U.S. capital markets could materially and adversely affect the price of our ordinary shares, or vice versa. Certain events having significant
negative impact specifically on the U.S. capital markets may result in a decline in the trading price of our ordinary shares notwithstanding that such event
may not impact the trading prices of securities listed in Hong Kong generally or to the same extent, or vice versa.
Exchange between our ordinary shares and our ADSs may adversely affect the liquidity and/or trading price of each other.
Subject to compliance with U.S. securities law and the terms of the deposit agreement, holders of our ordinary shares may deposit ordinary shares
with the depositary in exchange for the issuance of our ADSs. Any holder of ADSs may also surrender ADSs and withdraw the underlying ordinary shares
represented by the ADSs pursuant to the terms of the deposit agreement for trading on the Hong Kong Stock Exchange. In the event that a substantial
number of ordinary shares are deposited with the depositary in exchange for ADSs or vice versa, the liquidity and trading price of our ordinary shares on
the Hong Kong Stock Exchange and our ADSs on NYSE may be adversely affected.
The time required for the exchange between ordinary shares and ADSs might be longer than expected and investors might not be able to settle or effect
any sale of their securities during this period, and the exchange of ordinary shares into ADSs involves costs.
There is no direct trading or settlement between NYSE and the Hong Kong Stock Exchange on which our ADSs and our ordinary shares are
respectively traded. In addition, the time differences between Hong Kong and New York and unforeseen market circumstances or other factors may delay
the deposit of ordinary shares in exchange of ADSs or the withdrawal of ordinary shares represented by the ADSs. Investors will be prevented from settling
or effecting the sale of their securities during such periods of delay. In addition, there is no assurance that any exchange of ordinary shares into ADSs (and
vice versa) will be completed in accordance with the timelines investors may anticipate.
Furthermore, the depositary for the ADSs is entitled to charge holders fees for various services including for the issuance of ADSs upon deposit of
ordinary shares, cancelation of ADSs, distributions of cash dividends or other cash distributions, distributions of ADSs pursuant to share dividends or other
free share distributions, distributions of securities other than ADSs and annual service fees. As a result, shareholders who exchange ordinary shares into
ADSs, and vice versa, may not achieve the level of economic return the shareholders may anticipate.
An active trading market for our ordinary shares on the Hong Kong Stock Exchange might not develop or be sustained and trading prices of our
ordinary shares might fluctuate significantly.
Since the listing of our ordinary shares on the Hong Kong Stock Exchange, we have consistently been an actively-traded company on the Hong Kong
Stock Exchange. However, we cannot assure you that an active trading market for our ordinary shares on the Hong Kong Stock Exchange will be sustained.
The trading price or liquidity for our ADSs on NYSE might not be indicative of those of our ordinary shares on the Hong Kong Stock Exchange. If an
active trading market of our ordinary shares on the Hong Kong Stock Exchange is not sustained, the market price and liquidity of our ordinary shares could
be materially and adversely affected.
In 2014, the Hong Kong, Shanghai and Shenzhen Stock Exchanges collaborated to create an inter-exchange trading mechanism called Stock Connect
that allows international and mainland Chinese investors to trade eligible equity securities listed in each other’s markets through the trading and clearing
facilities of their home exchange. Stock Connect currently covers over 2,000 equity securities trading in the Hong Kong, Shanghai and Shenzhen markets.
Stock Connect allows mainland Chinese investors to trade directly in eligible equity securities listed on the Hong Kong Stock Exchange, known as
Southbound Trading; without Stock Connect, mainland Chinese investors would not otherwise have a direct and established means of engaging in
Southbound Trading. However, it is unclear whether and when the ordinary shares of our company, with a secondary listing in Hong Kong, will be eligible
to be traded through Stock Connect, if at all. The ineligibility or any delay of our ordinary shares for trading through Stock Connect will affect mainland
Chinese investors’ ability to trade our ordinary shares and therefore may limit the liquidity of the trading of our ordinary shares on the Hong Kong Stock
Exchange.
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There is uncertainty as to whether Hong Kong stamp duty will apply to the trading or conversion of our ADSs.
In connection with our initial public offering of ordinary shares in Hong Kong, or the Hong Kong IPO, we have established a branch register of
members in Hong Kong, or the Hong Kong share register. Our ordinary shares that are traded on the Hong Kong Stock Exchange, including those issued in
the Hong Kong IPO and those that may be converted from ADSs, are registered on the Hong Kong share register, and the trading of these ordinary shares
on the Hong Kong Stock Exchange will be subject to the Hong Kong stamp duty. To facilitate ADS-ordinary share conversion and trading between NYSE
and the Hong Kong Stock Exchange, we also moved a portion of our issued ordinary shares from our register of members maintained in the Cayman
Islands to our Hong Kong share register.
Under the Hong Kong Stamp Duty Ordinance, any person who effects any sale or purchase of Hong Kong stock, defined as stock the transfer of
which is required to be registered in Hong Kong, is required to pay Hong Kong stamp duty. The stamp duty is currently set at a total rate of 0.2% of the
greater of the consideration for, or the value of, shares transferred, with 0.1% payable by each of the buyer and the seller.
To the best of our knowledge, Hong Kong stamp duty has not been levied in practice on the trading or conversion of ADSs of companies that are
listed in both the United States and Hong Kong and that have maintained all or a portion of their ordinary shares, including ordinary shares underlying
ADSs, in their Hong Kong share registers. However, it is unclear whether, as a matter of Hong Kong law, the trading or conversion of ADSs of these dual-
listed companies constitutes a sale or purchase of the underlying Hong Kong-registered ordinary shares that is subject to Hong Kong stamp duty. We advise
investors to consult their own tax advisors on this matter. If Hong Kong stamp duty is determined by the competent authority to apply to the trading or
conversion of our ADSs, the trading price and the value of your investment in our ADSs and/or ordinary shares may be affected.
ITEM4 INFORMATION ON THE COMPANY
A. History and Development of the Company
We incorporated Autohome Inc. under the laws of the Cayman Islands under its former name, Sequel Limited, in June 2008 and adopted its current
name in October 2011. Shortly after our inception, in June 2008, we acquired all of the equity interests of the following entities:
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•
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Cheerbright, a British Virgin Islands company that operates autohome.com.cn, which was launched in 2005;
Norstar Advertising Media Holdings Limited, or Norstar, a Cayman Islands company that, among other businesses, operated che168.com, which
was launched in 2004; and
China Topside Limited, or China Topside, a British Virgin Islands company.
To sharpen our business focus on the automotive industry, we completed a corporate reorganization in 2011 by spinning off our then subsidiaries that
were not involved in our core business, after which we have been focusing on serving the automotive industry in China through our autohome.com.cn and
che168.com websites.
In October 2013, we acquired Autohome Media Limited through one of our wholly-owned subsidiaries in Hong Kong. Autohome Media Limited had
engaged in the advertising business outside the mainland China for more than three years at the time. We completed the migration of our advertising
business from our then VIEs to the subsidiaries of Autohome Media Limited in 2015.
In December 2013, we completed our initial public offering of and listed our ADSs on the New York Stock Exchange under the symbol “ATHM.”
On June 22, 2016, Telstra Holdings Pty Limited, or Telstra, our then largest shareholder, completed the sale of approximately 47.4% of our then total
issued and outstanding shares to Yun Chen for a consideration of US$1.6
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billion. On February 22, 2017, Yun Chen further acquired from Telstra the remaining 6.5% equity interests held by Telstra in us.
In September 2017, we acquired 100% equity interests of Shanghai Tianhe, a company licensed by the CBIRC to engage in insurance brokerage
business in the mainland China, through Autohome Information, with a total cash consideration of RMB21.1 million.
In June 2018, we invested in TTP, a company operating an online bidding platform for used automobiles, and we acquired control in TTP in
December 2020.
On March 15, 2021, our ordinary shares commenced trading on the Main Board of the Hong Kong Stock Exchange under the stock code “2518.” We
raised from our global offering in connection with the listing in Hong Kong approximately HK$4,294.9 million in net proceeds after deducting
underwriting commissions, share issuance costs and the offering expenses.
Our principal executive offices are located at 18th Floor Tower B, CEC Plaza, 3 Dan Ling Street, Haidian District, Beijing 100080, the People’s
Republic of China. Our telephone number at this address is +86 (10) 5985 7001. Our registered office in the Cayman Islands is located at the offices of
Maples Corporate Services Limited at PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.
See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Material Cash Requirement” for a discussion of
our capital expenditures and divestitures.
B. Business Overview
Overview
We are the leading online destination for automobile consumers in China, ranking first among automotive service platforms in China in terms of
mobile daily active users as of December 31, 2023, according to QuestMobile. Through our three websites, autohome.com.cn, che168.com and ttpai.cn,
accessible mainly through PCs, mobile devices, our mobile applications and mini apps, we deliver comprehensive, independent and interactive content and
tools to automobile consumers as well as a full suite of services to automakers and dealers across the auto value chain.
We began in 2008 as a content-led vertical media company focusing on media services (“1.0 Media”). In 2016, we launched our “4+1” strategic
transformation initiative (“2.0 Platform”), building a platform that covers “auto contents,” “auto transactions,” “auto financing” and “auto lifestyle” to
transform and upgrade from a content-led vertical company to a data and technology-driven automotive platform. Since 2018, we have focused on
developing a full suite of intelligent products and solutions with artificial intelligence (“AI”), big data and cloud technologies (collectively, “ABC”) to
build an integrated ecosystem that connects all participants in the auto industry by providing end-to-end data-driven products and solutions across the value
chain (“3.0 Intelligence”). We have been leveraging our “software as a service” (“SaaS”) capabilities together with our core AI, big data, and cloud
technologies (“4.0 ABC + SaaS”) to both expand our product and service categories and refine our existing ones, and have upgraded our strategies to
further develop the ecosystem around our offerings since 2021 to better serve stakeholders across the auto value chain, including consumers, automakers,
dealers and other related eco-partners.
We generate revenues from media services, leads generation services and online marketplace and others.
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Media services: Through our media services, we provide automakers with targeted-marketing solutions in connection with brand promotion, new
model release and sales promotion. Our large and engaged user base of automobile consumers provides a broad reach for automakers’ marketing
messages.
Leads generation services: Our leads generation services enable our dealer subscribers to create their own online stores, list pricing and
promotional information, provide dealer contact information, place advertisements and manage customer relationships to help them reach a
broad set of potential customers and effectively market their automobiles to consumers online and ultimately generate sales leads. Our leads
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generation services also include used car listing services, which provide a user interface that allows potential used car buyers to identify suitable
listings and contact the relevant sellers.
•
Online marketplace and others: While we continue to strengthen our media and leads generation services, we are also further developing our
online marketplace and other businesses. These businesses focus on providing facilitation services for new and used vehicles transactions and
other platform-based services for new and used car buyers and sellers. Through our auto financing business, we provide services to our
cooperative financial institutions that involve facilitating the sale of their loans and insurance products to consumers and used automobile sellers.
From the end of 2017, we have been offering data products, which leverage our intelligent big data analytics capabilities and massive pool of
accumulated user data to provide end-to-end data-driven products and solutions for automakers and dealers across different stages of the value
chain. We believe the breadth and depth of these products and solutions on our platform will allow us to build a robust and technology-driven
automotive ecosystem that covers all aspects of the automobile ownership life cycle. We also provide comprehensive auto-related services to our
users by integrating TTP’s offline vehicle examination, ownership transfer services and other ancillary services with our online services.
The chart below illustrates our integrated ecosystem, including transaction flows and fund flows within each of our businesses1:
1. As of December 31, 2023, the VIEs primarily carried out part of the leads generation services to dealers (used car listing services), part of used
vehicles transaction services, and other comprehensive auto-related services.
Delivery of Content
We deliver our auto-related content to users mainly through our websites, mobile applications and mini apps, and our interactive online community, all
of which are powered by our data and technology capability as well as the extensive accumulated user data. We have access to valuable data of users’
needs, behaviors and patterns in their automotive ownership life cycles, which allows us to accurately and effectively customize content and commercial
offerings. Our accurate and comprehensive user profiling enables us to continuously enhance user experience and improve our ability to attract and retain
customers.
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Our Websites
Our user-centric approach has successfully attracted a growing user base with a steady increase of daily active users to our websites. Our
autohome.com.cn website targets a wide spectrum of automobile consumers with a focus on new automobiles and our che168.com and ttpai.cn websites
focus on used automobiles.
Most of the content on our websites is tagged by vehicle models to facilitate easy user access. We have developed and are continuing to improve our
user intelligence engine to analyze user browsing behavior and preferences and prioritize the content that the user is likely to find relevant and interesting.
A user who searches for or navigates to a page for a specific vehicle model will be provided with links to relevant content such as vehicle specifications,
photos and video clips, reviews, competing vehicle models, and listing and promotional information from local dealers. Users can easily compare
competing vehicle models and brands for price and specifications to make informed purchase decisions. In addition, these user behavior data are
summarized and analyzed on a regular basis to improve user experience and provide consumer intelligence to our customers.
To provide a superior experience to our users, we label sponsored content as advertisement to maintain objectivity.
Our Mobile Websites and Applications
For mobile users, our content can be accessed mainly on our websites, on our mobile applications and on our mini apps. We have made significant
efforts in recent years to optimize the mobile version of our websites to display our content and develop and enhance the functions of our mobile
applications to capture a greater number of users that access our services through mobile devices. For example, according to QuestMobile, our mobile daily
active users amounted to 46.8 million, 54.4 million and 68.2 million in December 2021, December 2022, and December 2023, respectively. We were
among the earliest in our industry in mainland China to introduce both iOS- and Android-based applications to allow users to easily access our content.
Users can conveniently enjoy features available on our mobile websites and applications from their mobile devices, such as reading articles, checking
vehicle prices and model parameters, viewing pictures, viewing dealer’s information, visiting our Autohome Mall and participating in forum discussions.
Our Content and Tools
The foundation of our platform is a large amount of originally-generated content, professionally-generated content, user-generated content, as well as
a comprehensive automobile library and extensive automobile listing and promotional information organized around our automotive information database.
Leveraging our content and user data, as well as our technological capabilities, we also offer a series of intelligent tools on our platform to provide our
users with a smooth and efficient purchase experience.
Originally-generated Content
Our originally-generated content is created by our dedicated editorial team and includes automobile-related articles and reviews, pricing trends in
various local markets, photographs, video clips and live streaming. This content covers topics throughout the automobile ownership life cycle, from
automobile research, selection and purchase to ownership and maintenance and to eventual replacement. In 2018, we launched a new channel focusing on
new energy vehicles to accommodate the increasing interest and attention of our users on new energy vehicles. Our review writers obtain first-hand
experiences by test-driving many newly released vehicle models provided by various automakers. We also have an AH-100 Vehicle Rating System which
applies standard criteria to measure a comprehensive set of performance-based features of the vehicles on sale, such as safety, dynamics, fuel consumption,
comfortableness and driving experience. Our AH-100 Vehicle Rating System helps automobile consumers make an easier choice when selecting vehicles to
purchase. In 2021, we further launched our motorcycle model library and car-in-use model library to expand our content offerings and rolled out Modified
Car channel to broaden our user reach. In 2022, we launched our new energy vehicle library to expand our product service and offerings to cater to users’
diverse needs. We were also able to attract more users by leveraging our core IP brands. Our editorial team at our Beijing headquarters and sales offices
located in 52 cities throughout mainland China work
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closely with automakers, dealers and other industry participants to create automobile-related articles. Although automakers may provide us with sample
vehicles to test drive, we review all new automobiles independently, based upon our teams’ experience and from our users’ perspective.
We follow well-developed guidelines in creating and publishing content with attention to details, such as the angles of photos, image sizes and the
time between industry events and the relevant article publication. These practices enable us to streamline our editorial process and quickly and efficiently
make national and local content available to our users, while ensuring that we maintain high-quality standards and a consistent user experience.
Professionally-generated Content
In 2016, we launched an open content platform to invite the key opinion leaders and influential bloggers or writers in the automotive field to
contribute their high-quality professional review, analysis and insights on automotive-related topics, including vehicle reviews, industry trends, auto
photography, maintenance and others. Our diversified professionally-generated contents complement our automotive ecosystem strategy and bring our
users enriched and customized content consisting of high-quality articles, photographs, video clips and live streaming. As of December 31, 2023, we had
30,991 professional content contributors on our platform, compared to over 29,598 contributors as of December 31, 2022. Since 2018, we have been
expanding our collaboration with automakers, key opinion leaders, professional experts and social media to further upgrade our professionally-generated
content ecosystem.
User-generated Content and User Forum
Our platform hosts an open and vibrant community of automobile consumers, from first-time buyers to sophisticated automobile enthusiasts. Our user
community centers around our discussion forums, which are organized based on vehicle models, cities and regions, and various topics of interest.
Registered users utilize our discussion forums to share a wide range of automotive experiences such as driving experiences and usage and maintenance tips.
Users also frequently provide reviews of automobiles or automotive products and services, post questions and receive answers from fellow forum
members. We continued to enhance user engagement and participation in the content generation and delivery process. For example, we launched the lite
version of the Autohome application to attract younger audiences.
We strive to ensure the credibility, appeal and usefulness of our forums by identifying verified automobile owners and empowering selected registered
users as forum moderators. Our verified automobile owners are registered users whose vehicle ownership has been confirmed through various channels.
Our forum moderators are generally active registered users with significant forum post counts whom we have identified as being reputable automobile
enthusiasts within our online community.
As of December 31, 2021, 2022 and 2023, we had over 170.4 million, over 189.5 million and over 208.6 million registered users, respectively. As our
user base has grown and our user engagement and forum activity has increased, our database of user-generated content has expanded, which in turn has
attracted more users.
We have taken a series of measures to ensure that there is no inappropriate, illegal or offensive advertising content published on our platform,
particularly content contributed by users. We have dedicated advertising content reviewers who review the content posted on our platform and block illegal
and inappropriate advertising content by using our sensitive words filter. We give a conspicuous reminder in our user agreement and the content uploading
page that users should ensure that the content uploaded is legal and does not violate any third-party rights. Information published by automobile dealers on
our platform is accompanied by a warning that the information comes from dealers and its truthfulness, accuracy and lawfulness are the responsibilities of
the publishers, not the platform. In addition, we work with relevant government authorities in policing the content on our platform and remove illegal
content and provide regular trainings on content monitoring to relevant employees.
As advised by our PRC legal counsel, if we fail to identify or monitor illegal or inappropriate content and limit or eliminate the dissemination or
availability of such content on our platform, we may be subject to penalties imposed by the relevant regulatory authorities, including fines, confiscation of
advertising income or, in circumstances involving more serious violations by us, the termination of our internet content licenses. In addition, we may be
subject to claims by consumers asserting that the information on the websites and mobile applications
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operated by us is misleading. Please refer to “Item 3. Key Information—D. Risk Factors—We may be subject to liability for advertisements and other
content placed on our websites and mobile applications”, “Item 4. Information on the Company—B. Business Overview—PRC Regulation—Regulations
on Advertisements” and “Item 4. Information on the Company—B. Business Overview—PRC Regulation—Regulations on Internet Content Services” for
details.
Automobile Library and Listing
We have one of the most comprehensive automobile libraries within our industry in mainland China with approximately 77,853 vehicle model
configurations as of December 31, 2023.
We believe our automobile library covers the substantial majority of passenger vehicle models released in mainland China since 2005. It includes a
broad range of specifications covering performance levels, dimensions, powertrains, vehicle bodies, interiors, safety, entertainment systems and other
unique features, as well as automakers’ suggested retail prices. The scale of content in our automobile library, which we believe would require significant
time, expertise and expense to replicate, makes it a valuable tool for our users in researching both new and used automobiles. Our database also includes a
large amount of new and used automobile listings and promotional information. With the comprehensive and continuously updated listing information,
users can conveniently search for up-to-date information of vehicle models without having to visit each individual dealer at their local showrooms. In
addition, our automotive library contains a significant amount of user-generated content originating from our user forums. Leveraging our innovative AR-
and VR-related technologies, we utilize three-dimension technology to restore the actual appearances of vehicles and present stereoscopic 720-degree
review of automobiles on our platform. Compared to the traditional two-dimensional picture-based display of automobile appearances, the AR- and VR-
based vehicle review functionality on our platform enables users to have a real perception of the specific vehicles they are interested in buying and has
greatly enhanced user experience. In 2021, we also launched our motorcycle model library and car-in-use model library to diversify our content offering
and in 2022, we launched new energy vehicle library to expand our product service and offerings to cater to users’ diverse needs.
Our Interactive Tools
Leveraging the rich content and user data on our platform and our advanced AI and data technologies, we have developed a portfolio of intelligent
tools to facilitate our users’ potential vehicle purchases. For example, AskBob is a smart assistant tool empowered and enhanced by our rich data and
unique algorisms and can generate customized purchase reports for users on the basis of each user’s browsing records and other data. Our car model
comparison tool allows users to select a number of car models and compare them by a variety of metrics and other information, thus enabling the users to
make an informed purchase decision based on extensive and immediately available comparative data. Our “7-step purchase tool” facilitates each step of a
user’s purchase process from developing a purchase intent, viewing and choosing cars to visiting a dealer store and picking up the purchased car. The
Intelligent Car Finder, on the other hand, is an interactive AI-based tool trained by the rich data we have and can answer a variety of questions from
potential purchasers and recommend suitable choices to the users.
Our Services
Media Services to Automakers
Leveraging our large and rapidly growing user base and utilizing the user intelligence data we have collected, we provide our advertisers with a broad
range of advertising solutions and tools. Our advertisers under media services are comprised primarily of automakers and automobile brands’ regional
offices. The majority of our online advertising service contracts involve multiple deliverables or performance obligations presented on PC and mobile
platforms and in different formats, such as banner advertisements, links and logos, other media insertions and promotional activities that are delivered over
different periods of time. As millions of consumers visit our platform for automotive information, we have become an increasingly important medium for
automakers and automobile brands’ regional offices to conduct their advertising and marketing campaigns.
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Automakers typically utilize our advertising services for brand promotion, new model releases and sales promotions. We believe we are well-
positioned to provide solutions to meet all of these needs. Our large and growing automobile purchase- and ownership-oriented user base provides a broad
reach for automakers’ marketing messages. Our automotive content delivery and advertisement management platform allows us to segment our user base in
a number of different dimensions, including by users’ geographical locations and specific automotive interests, and enables us to place advertisements with
targeted audiences likely to be receptive to particular advertising messages.
Leveraging our large user base and extensive forum posting data, we provide automakers with more reliable and timely business insights than
traditional customer surveys or other post-sales feedback channels. For instance, we analyze user posts in our forums to evaluate consumer behavioral and
preference response. In addition, we organize various types of offline national or local events for our automaker customers through our online marketing
campaigns and user forum activities to complement our advertising services. For example, we help automakers increase their brand awareness and execute
sales promotions by organizing large-scale test driving activities and for specific vehicle models in multiple cities across mainland China. Users can
conveniently participate and interact with automaker representatives through our forums.
In each of 2021, 2022 and 2023, 91, 100 and 96 automakers operating in mainland China, which include independent Chinese automakers, joint
ventures between Chinese and international automakers and international automakers that sell their cars made outside of mainland China, purchased media
services from us, respectively. As is customary in mainland China, we sell our advertising services and solutions primarily through third-party advertising
agencies that represent the automakers and automobile brands’ regional offices. We typically enter into individual advertising agreements with the third-
party advertising agencies. Although we sell our advertising services and solutions to third-party advertising agencies, we consider the automakers and
automobile brands’ regional offices, who are the main decision makers as to whether to place advertisements on our websites and mobile applications, to be
our end-customers.
As a result, our sales efforts focus primarily on automakers and automobile brands’ regional offices. However, through direct contact between our
sales team, advertisers and advertising agencies, we are able to maintain good relationships with existing advertisers and their advertising agencies. The
majority of the advertising content on our platform is provided by advertisers or created by advertising agencies or other third parties.
Leads Generation Services to Dealers
Our leads generation services enable our dealer subscribers to create their own online stores, list pricing and promotional information, provide dealer
contact information, place advertisements and manage customer relationships to help them reach a broad set of potential customers and effectively market
their automobiles to consumers online and ultimately generate sales leads. Our leads generation services also include used car listing services, which
provide a user interface that allows potential used car buyers to identify suitable listings and contact the relevant sellers. We provided leads generation
services to 23,669, 24,126 and 24,248 dealers in 2021, 2022 and 2023, respectively.
Dealer Subscription Services
We provide subscription services to dealers which allow them to market their inventory and services through our websites and mobile applications,
extending the reach of their physical showrooms to potentially millions of internet users in mainland China and generating sales leads for them. Our dealer
subscription services are delivered through our dealership information system mainly on a fixed-fee basis, typically for a period of one year. Through the
web-based interface of our dealership information system, dealers can create online stores hosted on our websites and mobile applications and upload and
manage their automobile inventories, pricing and promotional information. Potential automobile purchasers can interact with our dealer subscribers online
or through phone numbers presented on the platform to inquire for more detailed information and schedule test drives. Our dealer subscribers can track all
the interactions with their customers originating from our websites and mobile applications, analyze the number of sales leads and assess the effectiveness
of their marketing activities.
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We continue to develop our dealer subscription services and have begun to implement additional enriched and upgraded services, which we believe
will allow us to expand sales leads based on consumer behaviors and preferences and enhance leads conversion and personalized marketing, and further to
offer upgraded subscription packages at different price levels.
Advertising Services for Individual Dealers
We also offer advertising services for individual dealers to complement our leads generation services. Our dealer customers utilize our advertising
services and leverage our large user base to support their sales and marketing activities. In addition to larger brand promotion advertising campaigns
organized by the automakers or the group dealers, individual dealers utilize our advertising services to further enhance their visibility in local community,
address local market conditions and promote local events. We also facilitate the process and connect our users from online to offline to generate sales leads
and transaction for our dealer customers.
Used Automobile Listing and Other Platform-based Services
Our used automobile listing services allow dealers and individuals to market their used automobiles for sale on our websites and mobile applications.
Our used automobile listing database has been expanding rapidly.
The che168.com website is a platform primarily focusing on used automobile services and is dedicated to providing features consisting of content,
listings and interactive functionality similar to our autohome.com.cn website. We have been continuously developing and enhancing the functions of the
used automobile website and application and have begun to provide advertising services, dealer subscription services, generation of sales leads and other
platform-based services in selected cities.
Online Marketplace and Other Services
Our online marketplace and other businesses include our data products, our new and used car transaction services and our auto financing business,
among others. Our data products leverage our intelligent big data analytics capabilities and massive pool of accumulated user data to provide end-to-end
data-driven products and solutions for automakers and dealers across different stages of the value chain. We facilitate new and used vehicles transactions
and provide other platform-based services for new and used car buyers and sellers. In September 2022, we launched our offline experience store,
Autohome Space, helping us build brand awareness among users. In May 2023, we unveiled our Autohome Space franchise store in Haikou, Hainan
province. We further refined this new retail business model by integrating our used car business into these stores. In addition to providing a one-stop
service for selecting and purchasing new energy vehicles from multiple brands, these stores now also offer consumers the opportunity to trade in their cars
and apply the proceeds towards the purchase of a new one, taking advantage of the vehicle disposal capacity of TTP. By the end of 2023, our Autohome
Space stores were present in 20 cities across the country. We also provide an extensive suite of auto-related services to our users by integrating TTP’s
offline vehicle examination, ownership transfer services and other ancillary services with our online services. Through our auto financing business, we
provide services to our cooperative financial institutions that involve facilitating the sale of their loans and insurance products to consumers and used
automobile sellers.
Data Products
We have been leveraging our AI, big data, cloud capabilities and other technologies to continue developing and providing to automakers and dealers
innovative data products from the end of 2017 and have successfully advanced our data and intelligent recommendation and reinforced our entire
ecosystem by providing highly differentiated value and data-driven end-to-end SaaS based solutions to our customers. The data products and solutions we
offer to automakers and dealers on our platform primarily consist of (i) Intelligent R&D, Intelligent New Car Launch, Intelligent Activities, analytical tools
and customized data reports prepared based on our big data and multi-dimensional analyzes on user reviews, purchasing interest and preferences,
geographical competitive advantages of the relevant automakers and dealers and their geographical distribution strategies, and (ii) Intelligent Showroom,
Smart DCC, Smart Sales, Smart Aftersales, Smart Call-Out, Smart Assistant, Compass and Smart Quality Control. Our Intelligent New Car Launch
product generates large user attention with comprehensive launch plans based on
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big data, informing automakers of when and where to launch new products, what groups of potential buyers to target, what competition and selling points
strategies to adopt, and what creative content to use in the launch. Post-launch, automakers continue to benefit from our Intelligent Activities services in
maintaining a high level of market enthusiasm in the newly launched products and other mature products. The Intelligent Showroom, which is an
intelligent and scenario-based marketing platform, integrates the technologies of AR, VR, big data and voice recognition to achieve the functions of
panoramic car shopping, smart push notifications and smart shopping guide. Moreover, we also applied AI technology and large language models across a
wide range of our products and services, further enhancing our service quality. Going forward, we will continue to enrich our data product portfolio to
cover the data needs of the entire automobile ownership life cycle.
Used Vehicles Transactions
After the acquisition of TTP, we continuously enhance our strategic synergy and integration with TTP. Our transaction platform for used vehicles
functions as a transaction system, which connects automobile buyers and used automobile sellers and facilitates their vehicle transactions on our platform
through providing a wide range of auto related services, such as online bidding services, auto financing products and valuation tools. The used vehicle
transaction platform has improved the under- served used automobile market and addressed problems such as lack of sourcing, traffic and consumer
confidence, and has fostered business-to-consumer purchasing experiences for our consumers. We also provide comprehensive auto-related services to our
users by integrating TTP’s offline vehicle examination, ownership transfer services and other ancillary services with our online-based services.
New Vehicles Transactions
We act as the platform for users to review automotive-related information and inquiry, and facilitates of transaction by delivering sales leads to the
automakers. We primarily generate revenues by providing platform-based services and delivering sales leads to the automakers.
Auto Financing Services
Since 2017, with the collaboration of our business with Ping An Group, we have been developing our auto financing business to address the under-
served auto financing market in mainland China by providing comprehensive online-based financial services. We gradually shifted our focus from leads
generation to transaction facilitation and promote successful transactions with targeted and diversified auto financial services. Based on users’ preferences
and our big data analysis, we recommend a broad range of loans and insurance products offered by our cooperative financial institutions to our users that
have auto financing needs and match them to facilitate transactions as an insurance brokerage service provider with the relevant license from the CBIRC.
We also introduced merchant loans offered by our cooperative financial institutions to automobile sellers. Through our platform, we plan to enable our
users and automobile sellers who are in need of auto financing to easily access various high-quality loans and insurance products and allow our cooperative
financial partners to effectively increase the volume of their financing transactions. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our
Business and Industry—If we are unable to effectively manage our auto finance business, we may not be able to achieve our expected business growth, our
results of operations may be adversely affected and we may be subject to penalties as a result of noncompliance.” We primarily generate revenues from
collecting commissions for facilitating transactions of auto-financing and insurance products on our platform.
Our Pricing Policies and Revenue Models
For our media services to automakers, we primarily use a “cost per day” pricing model to price our online advertising services by charging advertisers
on a daily basis for an advertisement placed in a given location on our websites and mobile applications. Although we have set up “cost per thousand
impressions,” “cost per click” and other performance-based pricing models, the amount generated on the basis of such models is relatively insignificant.
For our leads generation services to dealers, we charge different subscription fees based on the version of subscription (tech-version, premium-version etc.),
tier of city (first tier, second tier etc.) and length of subscription (semi-yearly, yearly, etc.) for dealer subscription services, and charge for the advertising
services to individual dealer advertisers and used car listing services mostly on a “cost per time” basis. We price our data products based on the scope of
services provided by each product. For our transactions and auto financing services,
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we charge commissions on a per sale or lead basis, taking into consideration industry standards and the value of our services. When pricing all our products
and services, we consider the price of comparable products or services (if any) in the market as well as our products and services themselves.
Technology and Product Development
Our technologies and infrastructure are critical to our success. We follow a user-centric strategy for our system architecture and have developed a
robust and scalable technology platform driven by AI, big data and cloud technologies with sufficient flexibility to support our rapid growth.
A key component of our user-centric strategy is our user intelligence engine which we have developed and are continually enhancing. Our user
intelligence engine allows us to rapidly gather user intelligence by analyzing large amounts of data from many sources throughout our content production
system. We are able to monitor and analyze user behaviors and preferences through their browsing record on our platforms. We can utilize such user
intelligence data to personalize user interfaces, associate and understand the relationship of information from different sources and facilitate interactions
among users and various elements on our websites and mobile applications. It also helps us recommend suitable products, services and user connections to
our users. Through our user intelligence engine, we can engage our users more closely by providing them with relevant content throughout their automotive
life cycles. We are also able to provide precision and targeted marketing services to our automakers, dealers and other automotive-related customers so that
they can accurately deliver relevant advertisements to targeted users who are more receptive to such marketing information. Leveraging our user
intelligence engine and AI, big data and cloud capabilities, we have been able to further enrich our content library with our AI-enabled content generation
tool by generating customized content in a timely manner.
We provide automobile consumers trend analysis services for our automaker and dealer customers that help them analyze data in specific demographic
markets such as consumer purchasing behavior characteristics and their brand strength in comparison to those of their competitors. We believe the
consumer intelligence gathered from our large user base reflects the current automotive market trends in China and provides excellent market insight to our
automaker and dealer customers.
We invested heavily in mobile technologies and were among the earliest in our industry in mainland China to introduce a mobile version of our
websites and both Apple iOS- and Android-based applications to allow our users to easily access our content. We have built up a team of research and
development personnel to focus exclusively on the development and enhancement of our mobile websites and applications and to explore new business
models and opportunities through mobile technology. We plan to continue to leverage our mobile technology to enhance the functions and user interfaces of
our mobile applications for Apple iOS and Android platforms focusing on convenience, real-time interaction and location-based services.
Leveraging AR- and VR-related technologies, we realized significant technology upgrade in 2017 and launched AR automobile showroom and AR
auto show during the year, all of which had enabled us to provide our users with an innovative and superior automobile review experience and thus
enhanced our user loyalty. In addition, these technology improvements had strengthened our ability to obtain additional user traffic and expanded our user
base. We have been continuing our efforts in expanding our VR product portfolio and utilizing AR- and VR-related technologies to improve the features of
our services and commercialize innovative business initiatives. Since the second half of 2017, we have rolled out additional VR products including VR
branding showrooms, intelligent automobile showrooms as well as direct visual access to automakers’ factory design and manufacturing process, which
improved our user experience by enabling our users to review and comprehend the entire automobile production process. In 2019, we employed our AR
and VR technologies in constructing a 360-degree panoramic multi-dimensional online visual scene that creates an offline auto show atmosphere for our
818 Super Auto Show, further carrying forward our pursuit of all round sensory user experience and aiding the creation of an innovative integration of auto
show and the internet that helps automakers and dealers better engage with consumers. We plan to continue to make further upgrades and develop new
technology to provide more diversified platforms for our users, and to expand the use of AR- and VR-related technologies throughout our ecosystem in
order to offer automakers and dealers with more innovative and effective branding and marketing tools and greater exposure to highly targeted potential
consumers throughout China. Also, we will continue to develop significant resources to
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expand the content breadth and depth offered on our platform in order to deliver the best user experience in the market.
We had an experienced product development team of 1,436 engineers as of December 31, 2023. Our past innovation has focused on helping users
research, select and purchase suitable vehicles through our websites. We plan to develop additional products and services for our mobile applications and
media-related technology and enhance our big data analytics capabilities and AR- and VR-related technologies.
Sales and Marketing and User Acquisition
Our nationwide in-house team of sales representatives sells our services to automakers and dealers. As of December 31, 2023, we had 1,438 sales and
marketing representatives operating our physical sales office network spanning 52 cities across mainland China and visiting customers in an additional 179
satellite cities. We have a prudent expansion plan and we typically only open new physical sales offices in a city after we have already established a
sufficient customer base in the area. In cities where we do not yet have a customer base, we provide sales coverage by telephone. Our Beijing-based
telephone sales team provides sales coverage to the cities in which we do not have physical sales offices. Our sales team also provides ongoing customer
support to our customers. In the past years, we have successfully expanded our market presence in the first- and second-tier cities in mainland China. We
plan to continue to expand our sales and marketing efforts into third- and fourth-tier cities to further capture the opportunities for automobile sales growth
in those markets.
Our sales team is equipped with specialized automotive industry knowledge and expertise, understands our customers’ needs and is trained to help
them develop their advertising strategies. Salespeople work directly with our advertisers and advertising agencies that represent advertisers. Our sales team
also maintains close relationships with our dealer customers by, among other things, providing continuing training, support and ongoing customer service
for our dealer subscriptions services and other value-added services. Our sales team for transaction business is in charge of customer services and maintains
our relationships with automakers, our dealership partners, and business development personnel.
Compensation for our salespeople includes a base salary and incentives based on the sales revenues they generate. We provide regular in-house and
external education and training to our salespeople to help them provide current and prospective customers with information on, and the advantages of
using, our services. We believe that our performance-linked compensation structure and career-oriented training help to retain and motivate our
salespeople.
We believe brand recognition is important to our ability to attract users. We focus our sales and marketing efforts through search engines, navigation
websites and mobile platforms to retain and strengthen our leading position in terms of user reach. For example, we cooperate with application stores and
mobile browsers to promote our mobile applications and our websites. We also conduct online marketing events on Autohome Mall and other traditional
and social media channels as well as offline promotional campaigns with our partners. For example, we conduct the annual “Singles’ Day” campaign to
generate quality sales leads and further facilitate the transactions. Since the fourth quarter of 2017, we have been paying for TV ads on different channels of
the China Central Television, the predominant state television broadcaster in mainland China, to reach more audience in the third- or lower-tier cities and
towns in mainland China and promote their recognition of our platform as a one-stop destination for selecting and purchasing automobiles and various
types of auto-related services. We have also engaged celebrities, primarily athletes, as our brand spokespersons to further promote our brand and stimulate
user interest in our platform.
Intellectual Property
Our intellectual property includes trademarks and trademark applications related to our brands and services, software copyrights, trade secrets and
other intellectual property rights and licenses. We seek to protect our intellectual property assets and brands through a combination of trademark, patent,
copyright and trade secret protection laws in the PRC and other jurisdictions, as well as through confidentiality agreements and other measures.
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We hold “汽车之家” and “车之家” (both meaning “auto home” in English), “AUTOHOME®” and “天天拍车” trademarks in mainland China through
the VIEs, with each registered under different categories. In addition, as of December 31, 2023, we held 106 pending trademark applications and 670
registered trademarks. As at the same date, we had 96 registered domain names, including our main website domain names, autohome.com.cn, che168.com
and ttpai.cn, 335 pending patent applications, and 367 registered patents. We had 1,038 computer software copyrights as of December 31, 2023.
Competition
With respect to our auto media and leads generation businesses, we face competition from mainland China’s automotive vertical websites and mobile
applications, such as BitAuto, Dongchedi, Xcar and PCauto, from the automotive channels of major internet portals, such as Sina and Sohu, and from
companies engaged in mobile social media, news, video and live-streaming applications. We may also face competition from online automobile transaction
platforms, such as Uxin, Guazi and Renrenche, as we develop our used car transaction business. Our auto finance business faces competition from other
auto finance companies, such as Yixin and Souche. In addition, we also face competition from companies engaged in social media business, such as
ByteDance and Tencent, companies engaged in data product offering, such as BitAuto and Dongchedi, and companies engaged in AI and big data
technologies. We may also face competition from mobile applications of automakers as some automakers are exploring to connect with users directly.
Competition will be centered on factors similar to those affecting our current media services and leads generation services, primarily centered on increasing
user reach, user engagement and brand recognition, relationships with the suppliers, and attracting and retaining advertisers or customers, among other
factors. For our transaction business, as online automobile transaction is a relatively new business model and consumers in mainland China might be
accustomed to make automobile purchases with traditional dealerships, we cannot guarantee that the automobile consumers in mainland China will accept
such business model. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—We face significant competition, and
if we fail to compete effectively, we may lose market share and our business, prospects and results of operations may be materially and adversely affected.”
Seasonality
Our quarterly revenues and other operating results have fluctuated in the past and may continue to fluctuate depending upon a number of factors,
many of which are beyond our control. Our business experiences seasonal variations in association with the demand for automobiles in mainland China.
For example, the first quarter of each year generally contributes the lowest portion of our annual net revenues primarily due to a slowdown in business
activities around and during the Chinese New Year holiday, which occurs during the period. Consequently, our results of operations may fluctuate from
quarter to quarter. As each of our business lines may have different seasonality factors and the mix of our revenue sources may shift from year to year, our
past performance may not be indicative of future trends. See also “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry
—Our business is subject to fluctuations, including seasonality, which makes our results of operations difficult to predict and may cause our quarterly
results of operations to fall short of expectations.”
Environmental, Social and Governance Initiatives
We filed our ESG report for the year ended December 31, 2023 on March 27, 2024. As a leading online destination for automobile consumers in
China, we are committed to providing consumers with one-stop services covering the entire car purchase and ownership cycle, including high-quality
services on automotive consumption and lifestyle to support the vigorous development of the automotive industry in mainland China. As a market leader,
we have the responsibility to lead our industry toward a more sustainable future. To this end, we seek to build sustainability into everything we do. Below
is a summary of our 2023 ESG highlights:
Environmental. In 2022, we prepared and released the Autohome Carbon Neutrality Report, announced the climate-related goal of “achieving carbon
neutrality by 2030,” set the environmental management targets and carried out activities to identify climate change risks. In 2023, we updated our lights’
management system, and 100% of our lights are energy-saving LEDs. We actively advocated green travel initiatives and facilitated the trading of both new
energy and used vehicles.
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Social. In 2023, we made donation of RMB2,081,000 to public welfare projects and contributed 864 hours in community service project. As of
December 31, 2023, 36% of our employees were women. We do not use child labor or forced labor, and 100% of our employees are covered by mainland
China’s social security system. Training courses were delivered to employees in both online and offline formats, with a participation rate of 100% and
average training hours exceeding 31.2 hours.
Governance. In 2023, 100% of our directors and employee received integrity training. We encourage suppliers and related partners to act with
honesty, integrity and self-discipline and in accordance with laws in their business activities with us. In 2023, 100% of our suppliers and business partners
signed up the Commitment on Integrity (Anti-Corruption and Anti-Bribery).
The ESG report describes ESG topics that we consider are material to our business, how we manage them, our current performance, our long-term
targets, and our strategies to achieving those long-term targets. For more information, please refer to the ESG report, which is accessible via hyperlink in
our press release furnished to the SEC as Exhibit 99.1 to our Form 6-K (File No. 001-36222) on March 27, 2024.
Compliance and Legal Proceedings
We may from time to time and in the future be subject to various claims and legal, regulatory and/or administrative proceedings that arise in the
ordinary course of our business. There are currently no legal proceedings that, in the opinion of our management, may have a material adverse effect on our
business and results of operations.
PRC Regulation
This section summarizes the principal laws and regulations of mainland China relevant to our business and operations.
Regulations on Corporate Governance
On December 29, 2023, the SCNPC promulgated the amended PRC Company Law, or the Amended PRC Company Law, which will come into effect
on July 1, 2024. The Amended PRC Company Law will supersede the existing PRC Company Law amended in October 2018, introducing significant
changes to various key aspects of corporate formation, operations, and governance. These changes include modifications to the statutory timeframe for the
payment of registered capital and alterations in the composition of the board of directors and the board of supervisors, among other areas.
Regarding the payment period for registered capital, under the Amended PRC Company Law, all shareholders of a PRC limited liability company are
required to fully pay the registered capital subscribed within five years from the company’s establishment date, except as otherwise stipulated by specific
laws and regulations. For companies established prior to the effective date of the Amended PRC Company Law, any capital contribution timeframe
exceeding the requirements must be amended in their articles of association. Moreover, for companies whose capital contribution period or registered
capital amount is deemed significantly irregular, the competent governmental authority may require such company to make adjustment accordingly in a
timely manner. The Amended PRC Company Law provides that the detailed implementation measures for the aforesaid provisions will be formulated by
the State Council.
On February 6, 2024, the SAMR issued a draft of the Provisions of the State Council on Implementing the Registered Capital Registration and
Management System under the PRC Company Law for public comments until March 5, 2024, which further specify the criteria and procedure for
registering and managing a company’s registered capital under the amended PRC Company Law. Pursuant to such draft provisions, there shall be a three-
year transitional period, from July 1, 2024, to June 30, 2027, allowing existing companies to align their capital contribution timelines accordingly.
Concerning corporate governance structures, the Amended PRC Company Law removes the maximum limit on the number of directors for a limited
liability company. It mandates the inclusion of an employee representative as a
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director on the board of directors of such companies, which lack a board of supervisors but employ more than 300 individuals. This representative must be
democratically elected through an employee general assembly or other democratic processes. Additionally, after the effective date of the amended PRC
Company Law, limited liability companies, joint-stock companies of a smaller scale or with fewer shareholders, and wholly state-owned enterprises are
permitted to establish an audit committee in lieu of a board of supervisors. These entities may opt not to establish a board of supervisors or any supervisory
positions.
Regulations on Value-Added Telecommunications Services
On September 25, 2000, the State Council promulgated the Telecommunications Regulations, or the Telecom Regulations, which draw a distinction
between “basic telecommunication services” and “value-added telecommunications services.” The Telecommunications Regulations were subsequently
revised on July 29, 2014 and on February 6, 2016. On December 28, 2015, the MIIT published the 2015 Catalog, which took effect on March 1, 2016 and
was partially revised on June 6, 2019. Under the 2015 Catalog, “value-added telecommunication services” was further classified into two sub-categories
and 10 items. Both internet content provision services, or ICP services, and online data processing and transaction processing services are under the second
subcategory of value-added telecommunications businesses. Under the Telecom Regulations, commercial operators of value-added telecommunications
services must first obtain an operating license from the MIIT or its provincial level counterparts.
On September 25, 2000, the State Council issued the Administrative Measures on Internet Information Services, or the Internet Measures. The
measures were subsequently revised on January 8, 2011. According to the Internet Measures, commercial ICP service operators must obtain an ICP license
from the relevant government authorities before engaging in any commercial ICP operations within the PRC.
On March 1, 2009, the MIIT promulgated the Administrative Measures on Telecommunications Business Operating License, or the Telecom License
Measures, which took effect on April 10, 2009. The measures were subsequently revised on September 1, 2017. The Telecom License Measures set forth
the types of licenses required to operate value-added telecommunications services and the qualifications and procedures for obtaining such licenses. For
example, an ICP operator providing value-added services in multiple provinces is required to obtain an inter-regional license, whereas an ICP operator
providing the same services in one province is required to obtain a local license.
To comply with these PRC laws and regulations, Shengtuo Hongyuan and Shanghai Jinyou hold ICP licenses. Autohome Information holds a value-
added telecommunications services license for conducting online data processing and transaction processing services (for e-commerce only) and internet
information services, and a value-added telecommunications services license for information services (excluding internet information services).
Restrictions on Foreign Ownership in Value-Added Telecommunications Services
According to the FITE Provisions, promulgated by the State Council on December 11, 2001 and amended from time to time, with the latest
amendment effective on May 1, 2022, the ultimate foreign equity ownership in a value-added telecommunications service provider must not exceed 50%,
unless otherwise stipulated in relevant rules.
Although these provisions deleted the prior requirement that major foreign investors holding equity in enterprises providing value-added
telecommunications services in mainland China must have a good track record and operational experience in providing these services, the PRC government
authorities have not promulgated detailed implementation rules in line with these new changes. Accordingly, there are uncertainties as to whether foreign
investors without a good track record and operational experience in providing these services may qualify as major foreign investors in value-added
telecommunications enterprises.
As a Cayman Islands company and foreign legal person under laws of mainland China, we are subject to the aforesaid provisions. To comply with
these regulations of mainland China, we operate our websites through the VIEs. Each of Autohome Information and Shengtuo Hongyuan is currently 50%
owned by Quan Long and 50%
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owned by Youdong Wang, both of whom are PRC citizens. Shanghai Jinwu is wholly owned by Weiwei Wang, and Shanghai Jinyou is currently 95%
owned by Weiwei Wang and 5% owned by Lan Zhang. Both of Weiwei Wang and Lan Zhang are PRC citizens. Each of Autohome Information, Shengtuo
Hongyuan and Shanghai Jinyou holds an ICP license.
On April 8, 2024, MIIT issued Announcement on the Pilot Program for the Expansion of Opening-Up in the Value-Added Telecommunications
Services. According to this announcement, in the regions approved for the pilot program, restrictions on foreign equity shares shall be removed for certain
businesses including online data processing and transaction processing business, as well as information services for information release platforms and
delivery services (excluding internet news information, online publishing, internet audio-visual services, and internet cultural operations). Given the recent
enactment of this announcement, there remains uncertainty with respect to the interpretation and practical application.
According to the Negative List, although a foreign investor is allowed to own more than 50% of the total equity interest in an e-commerce business, a
domestic multi-party communication business, an information storage and re-transmission business and a call center business, other requirements provided
by these provisions still apply. In addition, foreign investors are prohibited from investing in companies engaged in online live-streaming and radio and
television programs production and dissemination. Accordingly, we believe that it would be impracticable for us to acquire any equity interest in the
variable interest entities without diverting management attention and resources. Moreover, we believe that our contractual arrangements with these entities
and the individual nominee shareholders allow us to have the power to direct the activities of these entities that most significantly impact their economic
performance. Accordingly, we currently do not plan to acquire any equity interest in any of the variable interest entities.
Regulations on Foreign Investment
On March 15, 2019, the Foreign Investment Law was enacted by the National People’s Congress, which became effective on January 1, 2020 and
replaced the trio of the laws regulating foreign investment in mainland China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-
foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary
regulations. The Foreign Investment Law embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with
prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic investments.
The Foreign Investment Law does not explicitly expand the definition of “foreign investment” to include entities established through a VIE structure
but contains a catch-all provision under the definition of “foreign investment” which includes investments made by foreign investors through means
stipulated in laws or administrative regulations or other methods prescribed by the State Council.
Moreover, the Foreign Investment Law establishes a foreign investment information reporting system. Foreign investors or foreign-funded enterprises
shall submit the investment information to competent governmental departments for commerce through the enterprise registration system and the enterprise
credit information publicity system. The contents and scope of foreign investment information to be reported shall be determined under the principle of
necessity. Where foreign-investors or foreign-invested enterprises are found to be non-compliant with these information reporting obligations, competent
department for commerce shall order corrections within a specified period; if such corrections are not made in time, a penalty of not less than RMB100,000
yet not more than RMB500,000 shall be imposed. Aside from the reporting system for foreign investment information, the Foreign Investment Law shall
also establish a security examination mechanism for foreign investment and conducts security review of foreign investment that affects or may affect
national security. The decision made upon the security examination in accordance with the law shall be final. We will be subject to the Foreign Investment
Law if our contractual arrangements with the VIEs are defined or regarded as a form of foreign investment in the future.
On December 30, 2019, the MOFCOM and the SAMR jointly promulgated the Measures for Reporting of Information on Foreign Investment, which
came into effect on January 1, 2020 and pursuant to which, foreign investors or foreign-invested enterprises shall report investment information when
foreign investors carry out investment activities directly or indirectly within mainland China, for example, the establishment of the
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foreign-invested enterprises, including establishment through holding the equities of a domestic enterprise or subscribing to the increased capital of a
domestic enterprise, and its subsequent changes are required to submit an initial or change report through the Enterprise Registration System.
Regulations on Internet Content Services
The National People’s Congress has enacted laws with respect to maintaining the security of internet operation and internet content. According to the
Internet Measures, violators may be subject to penalties, including criminal sanctions, for internet content that:
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opposes the fundamental principles stated in the PRC constitution;
compromises national security, divulges state secrets, subverts state power or damages national unity;
harms the dignity or interests of the state;
incites ethnic hatred or racial discrimination or damages inter-ethnic unity;
undermines the PRC’s religious policy or propagates heretical teachings or feudal superstitions;
disseminates rumors, disturbs social order or disrupts social stability;
disseminates obscenity or pornography, encourages gambling, violence, murder or fear or incites the commission of a crime;
insults or slanders a third party or infringes upon the lawful rights and interests of a third party; or
is otherwise prohibited by law or administrative regulations.
In accordance with the Internet Measures, ICP operators are required to monitor their websites. They may not post or disseminate any content that
falls within these prohibited categories and must remove any such content from their websites. The PRC government may order ICP operators to suspend
their operations, or revoke their ICP licenses if such ICP license holders violate any of the above-mentioned content restrictions.
On February 4, 2015, the CAC promulgated the Administrative Provisions on Account Names of Internet Users, or the Account Names Provisions,
which became effective as of March 1, 2015. The Account Name Provisions require all users of internet information service providers to authenticate their
real identity information for registration of accounts. Relevant internet information service providers are responsible for the protection of users’ privacy,
consistency of user information, such as account names, avatars, the requirements contemplated in the Account Names Provisions, making reports to the
competent authorities if the names of institutions or social celebrities are illegally used for or associated with registration of account names, and taking
appropriate measures to stop any such violations, such as notifying the user to make corrections within a specified time and suspending or closing accounts
in the event of continuing non-compliance.
On August 25, 2017, the CAC promulgated the Administrative Provisions on Internet Follow-up Comment Services and the Administrative
Provisions on Internet Forum and Community Services, both of which became effective as of October 1, 2017. As stipulated in the provisions, the internet
follow-up comment service providers are imposed on strict primary obligations such as verifying the authenticity of registered users’ identity information,
protecting personal information of users and developing system to review follow-up comments on news information prior to the publication. Moreover, the
internet forum and community services providers may establish the systems of information review, real-time public information check, emergency
response, personal information protection and other information security administration systems. In addition, the service providers should not publish
information in violation of laws, regulations and the relevant provisions of the state. The Administrative Provisions on Internet Follow-up Comment
Services was later amended by the CAC in November 2022 and took effect on December 15, 2022. The new amendment further clarifies the obligations of
the internet follow-up comment service providers, for
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example, for the users of internet follow-up comment services that release illegal and harmful information, the service providers shall take such measures
as warning and reminding, refusing to release, deleting information, restricting account functions, suspending account updating, closing the account and
prohibiting re-registration according to law or as agreed and keep the relevant records; for the content producers and business operators of official accounts
that fail to fulfil their management obligations, which leads to illegal and harmful information exposed in the follow-up comments, the service providers
shall take such measures as warning and reminding, deleting information, suspending the follow-up comment area functions till permanently closing the
follow-up comment area, restricting account functions, suspending account updating, closing the account and prohibiting re-registration according to law or
as agreed, keep the relevant records and timely report to the cyberspace administrations. The new amendment defines “internet follow-up comment
services” as the services of threading text, symbols, expressions, pictures, audio and video and other information provided for the users by the internet
websites, applications and other online platforms with a public opinion attribute or social mobilization capability, by way of comments, replies, messages,
bullet screens, likes, etc.
On September 7, 2017, the CAC promulgated the Provisions on the Administration of Information Services Provided through Chat Groups on the
Internet, or the Chat Groups Provision, and the Administrative Provisions on the Information Services Provided through Public Official Accounts of
Internet Users, or the Public Official Accounts Provision, both of which became effective as of October 8, 2017. The Public Official Accounts Provision
was subsequently revised on January 22, 2021, and became effective on February 22, 2021. According to the Provisions, the internet service providers are
required to verify the authenticity of identity information of their users. In addition, for any violation of laws and regulations by chat groups or public
official accounts, service providers should take certain measures such as issuing a warning, suspending publication of the inappropriate information, and
closing the chat groups or the public official accounts.
On December 15, 2019, the CAC promulgated the Provisions on Governance of Network Information Content Ecosystem, which became effective as
of March 1, 2020 and specifies the content scopes that are encouraged, prohibited, or prevented from producing, reproducing, and publishing. The online
information content service platform must fulfill the main responsibility of content management, establish an ecological governance mechanism of the
internet information, and improve system for user registration, account management, information publishing review, and emergency response. And the
online information content service platform will be punished for violating related laws and regulations. The related legal consequences include suspension
of information updates, restrictions on engaging in online information services, restrictions on online behavior, and prohibition of industry access.
On June 27, 2022, the CAC promulgated the Administrative Provisions on the Account Information of Internet Users, which became effective as of
August 1, 2022 and sets out guidelines on the account information of Internet users. Specifically, Internet-based information service providers that provide
internet users with information release services shall (i) formulate and make public the rules for the management of accounts of Internet users and platform
conventions, (ii) enter into service agreements with Internet users, (iii) require the users who apply for registration of accounts for production of
information content in the fields of economy, education, medical care and health, justice, etc., to provide relevant materials such as service qualification,
professional qualification and professional background, verify the same and add a special mark to the account information (iv) display the home location
information of the Internet protocol (IP) addresses of internet users’ accounts within a reasonable scope on the information page of internet users’ accounts
so as to facilitate supervision by the public for public interests, and (v) establish a dynamic verification system for account information and a convenient
portal for complaints and whistleblowing. Any Internet-based information service provider in violation of the present provisions shall be punished in
accordance with relevant laws and administrative regulations.
On September 9, 2022, the Administrative Provisions on Internet Pop-up Push Notification Services was issued by the CAC, MIIT and SAMR,
effective from September 30, 2022, which requires that providers of internet pop-up push notification services shall establish and improve management
systems such as information content review, ecological governance, data security and personal information protection, and protection of minors.
These laws and regulations apply to the Internet content services we provide through the VIEs and impose responsibilities on the VIEs for monitoring
the websites, mobile applications and users, safeguarding the security of the internet as well as maintaining the internet content.
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Regulations on Internet Privacy and Data Security
In recent years, PRC government authorities have enacted legislation on internet use to protect personal information from any unauthorized disclosure.
The PRC law does not prohibit ICP operators from collecting and using personal information from their users with the users’ consent. However, the
Internet Measures prohibit an ICP operator from insulting or slandering a third party or infringing the lawful rights and interests of a third party. The
regulations further authorize the relevant telecommunications authorities to order ICP operators to rectify unauthorized disclosure. ICP operators are
subject to legal liability if the unauthorized disclosure results in damages or losses to users. The PRC government, however, has the power and authority to
order ICP operators to turn over personal information if an internet user posts any prohibited content or engages in illegal activities on the internet. On
December 29, 2011, the MIIT promulgated the Several Provisions on Regulating the Market Order of Internet Information Services, effective as of March
15, 2012. It stipulates that ICP operators may not, without a user’s consent, collect the user’s information that can be used alone or in combination with
other information to identify the user and may not provide any such information to third parties without the user’s prior consent. ICP operators may only
collect users’ personal information that is necessary to provide their services and must expressly inform the users of the method, content and purpose of the
collection and use of such personal information. In addition, an ICP operator may only use users’ personal information for the stated purposes under the
ICP operator’s scope of service. ICP operators are also required to ensure the proper security of users’ personal information, and take immediate remedial
measures if users’ personal information is suspected to have been inappropriately disclosed. If the consequences of any such disclosure are expected to be
serious, ICP operators must immediately report the incident to the telecommunications regulatory authority and cooperate with the authorities in their
investigations.
On December 28, 2012, the SCNPC issued the Decision on Strengthening the Protection of Online Information. Most requirements under this
decision relevant to ICP operators are consistent with the requirements already established under the MIIT provisions discussed above, but are often stricter
and broader. Under this decision, ICP operators are required to take such technical and other measures necessary to safeguard information against
inappropriate disclosure. To further implement this decision and relevant rules, MIIT issued the Regulation of Protection of Telecommunication and
Internet User Information on July 16, 2013, which became effective on September 1, 2013.
In August 2015, the SCNPC promulgated the Ninth Amendment to the Criminal Law, which became effective in November 2015 and amended the
standards of crime of infringing citizens’ personal information and reinforced the criminal culpability of unlawful collection, transaction, and provision of
personal information. It further provides that any internet service provider that fails to fulfill the obligations related to internet information security
administration as required by applicable laws and refuses to rectify upon orders will be subject to criminal penalty if such failure (i) causes dissemination of
illegal information in large scale; (ii) causes user information leaks resulting in severe consequences; (iii) causes serious loss of evidence for criminal
investigations; or (iv) implicates other severe circumstances.
On March 15, 2017, the National People’s Congress of the PRC issued the General Rules of the Civil Law of the People’s Republic of China, which
came into effect on October 1, 2017. The General Rules have introduced personal information rights and data protection and provide that personal
information of a natural person should be protected by the law. On May 28, 2020, the National People’s Congress of the PRC approved the Civil Code of
the PRC, or the Civil Code, which came into effect on January 1, 2021 and abolished the General Rules of the Civil Law of the People’s Republic of China.
Pursuant to the Civil Code, the collection, storage, use, process, transmission, provision and processing of personal information should follow the
principles of legitimacy, properness and necessity.
The PRC Cybersecurity Law, which was promulgated on November 7, 2016 by the SCNPC and came into effect on June 1, 2017, provides that
network operators shall meet their cyber security obligations and shall take technical measures and other necessary measures to protect the safety and
stability of their networks. Under the PRC Cybersecurity Law, network operators are subject to various security protection-related obligations, including:
(i) network operators shall comply with certain obligations regarding maintenance of the security of internet systems; (ii) network operators shall verify
users’ identities before signing agreements or providing certain services such as information publishing or real-time communication services; (iii) when
collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of the information collection, the use of
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information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictly preserve the privacy of
user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthen management of
information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, they shall
immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,
saving relevant records, and reporting to the relevant governmental agencies. In addition, the PRC Cybersecurity Law requires that critical information
infrastructures operators generally shall store, within the territory of the mainland China, the personal information and important data collected and
produced during their operations in the mainland China and their purchase of network products and services that affect or may affect national securities
shall be subject to national cybersecurity review. According to the PRC Cybersecurity Law, no individual or organization may engage in activities that
threaten cybersecurity such as unlawful intrusion into others’ networks, interfering with the normal functions of others’ network and stealing network data,
provide programs or tools for such intrusions, interference or stealing, or provide any assistance such as technical support, advertisement, payment or
settlement for any other person if the individual or organization is fully aware that such person engages in an activity endangering cybersecurity.
On April 10, 2019, the Cyber Security and Protection Bureau of the Ministry of Public Security, the Beijing Internet Industry Association and the
Third Research Institute of the Ministry of Public Security jointly issued Internet Personal Information Security Protection Guidance. The guidance applies
to “personal information holders”, which means enterprises that provide services through the internet and organizations or individuals who use a private or
internet- disconnected space to control and process personal information. It indicates that in addition to traditional internet companies, companies or
individuals in other fields are also subject to its governance for long as they are involved in the control and processing of personal information. The
guidance heightened requirements on the collection of personal information by personal information holders. For example, the guidance provides that
personal information that is not related to the services provided by personal information holders should not be collected, and service providers shall not
force users to provide personal information by bundling products or various business functions of the service.
On November 28, 2019, the Secretary Bureau of the CAC, the General Office of the MIIT, the General Office of the Ministry of Public Security and
the General Office of SAMR, issued the Notice on the Measures for the Determination of the Collection and Use of Personal Information by Apps in
Violation of Laws and Regulations. The notice requires that there shall be a privacy policy in the app, and the privacy policy shall contain the rules for
collecting and using personal information. The notice also requires that the app shall prompt their users to read the privacy policy through obvious methods
such as pop-up windows when an app is put into operation for the first time. According to the notice, the type of personal information collected by the app
should be limited to the extent necessary to meet the operation of the corresponding business function. If personal information collected through app for a
new business function is beyond the scope of a user’s previous consent, refusing to provide the original business function by the app upon the user’s
disagreement with the new scope of personal information collection shall be considered as in violation of the necessity principle, except in the case where
the new business function replaces the previous business function.
On June 10, 2021, the SCNPC promulgated the PRC Data Security Law, which became effective in September 2021. The PRC Data Security Law
provides for data security and privacy obligations on entities and individuals carrying out data activities and introduces a data classification and hierarchical
protection system based on the importance of data in economic and social development, as well as the degree of harm it will cause to national security,
public interests, or legitimate rights and interests of individuals or organizations when such data is tampered with, destroyed, leaked, or illegally acquired or
used. The appropriate level of protection measures is required to be taken for each respective category of data. For example, a processor of important data
shall designate the personnel and the management body responsible for data security, carry out risk assessments for its data processing activities and file the
risk assessment reports with the competent authorities. In addition, the PRC Data Security Law provides a national security review procedure for those data
activities which affect or may affect national security and imposes export restrictions on certain data and information.
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On July 30, 2021, the State Council promulgated the Regulations on Protection of Critical Information Infrastructure, which became effective on
September 1, 2021. Pursuant to the Regulations on Protection of Critical Information Infrastructure, critical information infrastructure shall mean any
important network facilities or information systems of the important industry or field such as public communication and information service, energy,
transportation, water conservation, finance, public services, e-government affairs and national defense science, which may endanger national security,
people’s livelihood and public interest in case of damage, function loss or data leakage. In addition, relevant administration departments of each critical
industry and sector, or Protection Departments, shall be responsible to formulate eligibility criteria and determine the critical information infrastructure
operator in the respective industry or sector. The operators shall be informed about the final determination as to whether they are categorized as critical
information infrastructure operators.
On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law, which came into effect on November 1, 2021. The Personal
Information Protection Law integrates the scattered rules with respect to personal information rights and privacy protection. Pursuant to the Personal
Information Protection Law, personal information refers to information related to identified or identifiable natural persons which is recorded by electronic
or other means (excluding the anonymized information). The Personal Information Protection Law provides the circumstances under which a personal
information processor could process personal information, including but not limited to, where the consent of the individual concerned is obtained and
where it is necessary for the conclusion or performance of a contract to which the individual is a contractual party. It also stipulates certain specific rules
with respect to the obligations of a personal information processor, such as to inform the purpose and method of processing to the individuals, and the
obligation of the third party who has access to the personal information by way of co-processing or delegation etc. Processors processing personal
information exceeding the threshold to be set by the relevant authorities and critical information infrastructure operators are required to store, within the
territory of the mainland China, the personal information collected and produced within the mainland China. Specifically, personal information processors
using personal information for automated decision-making shall ensure the transparency of decision-making and the fairness and impartiality of the results,
and shall not impose unreasonable differential treatment on individuals in terms of pricing and other transaction conditions. The relevant governmental
authorities shall organize assessment on mobile apps’ personal information protection and publicize the outcome. The mobile apps that are identified as not
in compliance with personal information protection requirements under such law may be required to suspend or terminate the services and the operators
may also be subject to penalties including confiscation of illegal revenues and fines. Furthermore, the Personal Information Protection Law also provides
for the rights of natural persons whose personal information is processed, and heightens the protection of the personal information of minors under 14 and
sensitive personal information.
On November 14, 2021, the CAC issued the Draft Regulations on Network Data Security, which provide that data processors conducting the
following activities shall apply for cybersecurity review: (i) merger, reorganization or division of Internet platform operators that have acquired a large
number of data resources related to national security, economic development or public interests affects or may affect national security; (ii) listing abroad of
data processors processing over one million users’ personal information; (iii) listing in Hong Kong which affects or may affect national security; or (iv)
other data processing activities that affect or may affect national security.
On December 28, 2021, the CAC, the NDRC, the MIIT, the Ministry of Public Security, the Ministry of National Security, the MOF, the MOFCOM,
the People’s Bank of China, the SAMR, NRTA, the CSRC, the National Administration of State Secrets Protection and the State Cryptography
Administration jointly released the Cybersecurity Review Measures, which took effect on February 15, 2022. Pursuant to the Cybersecurity Review
Measures, network platform operators with personal information of over one million users shall apply with the Cybersecurity Review Office for a
cybersecurity review before going to list abroad.
On December 31, 2021, the CAC, the MIIT, the Ministry of Public Security, and the SAMR jointly promulgated the Administrative Provisions on
Algorithm Recommendation in Internet Information Services, which came into effect on March 1, 2022. The Administrative Provisions on Algorithm
Recommendation in Internet Information Services implements classification and hierarchical management for algorithm recommendation service providers
based on various criteria, stipulates that algorithm recommendation service providers shall inform users of their provision of algorithm recommendation
services in a conspicuous manner, and publicize the basic principles, purpose intentions, and main operating mechanisms of algorithm recommendation
services in an appropriate manner, and that algorithm recommendation service providers selling goods or providing services to consumers
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shall protect consumers’ rights of fair trade, and are prohibited from carrying out illegal conducts such as unreasonable differential treatment on transaction
conditions based on consumers’ preferences, purchasing habits, and such other characteristics.
On February 22, 2023, the CAC promulgated the Measures on the Standard Contract for Outbound Transfer of Personal Information, which came into
effect on June 1, 2023. On September 28, 2023, the CAC issued the Provisions on Regulating and Promoting Cross-border Data Flow (Draft for
Comments). The aforementioned two provisions provide rules on the cross-border data transfer, including the regulation on the personal information
processor that transfers personal information offshore by establishing standardized contracts.
On May 23, 2023, the SAMR and the Standardization Administration of the People's Republic of China jointly released the Guide to the Classification
of Cybersecurity Incidents, defined the classification of cybersecurity incidents and expanded the scope of identifying cybersecurity incidents.
On December 8, 2023, the CAC promulgated the Administrative Measures for Cybersecurity Incident Reporting (Draft for Comments). Pursuant to
the Administrative Measures for Cybersecurity Incident Reporting (Draft for Comments), upon occurrence of a cybersecurity incident, the operator shall
promptly activate its emergency plan for disposal. According to the Guide to the Classification of Cybersecurity Incidents, a relatively serious, serious or
especially serious cybersecurity incident shall be reported within one hour.
To comply with these laws and regulations, we require our users to accept a user terms of service whereby they agree to provide certain personal
information to us, and have established information security systems to protect users’ privacy. To enhance data security, we have closely evaluated the
effectiveness of our data security systems, and our core system has obtained a MLPS Level III certification. We have also built technology systems to
protect us from security breach along the cycle of data usage, including data access control, data storage security, data audit and emergency response,
among others.
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Regulations on Anti-Monopoly
The Anti-monopoly Law promulgated by the SCNPC, which became effective on August 1, 2008 and latest amended on June 24, 2022. The amended
revised version (i) makes changes to the merger review process by enabling SAMR to review non-threshold transactions and introducing the stop-clock
system, (ii) changes the rules on anticompetitive agreements for resale price maintenance, introducing a “safe harbor” for vertical monopoly agreement,
(iii) provides undertakings “may not organize other undertakings to reach a monopoly agreement or provide substantial assistance for other undertakings to
reach a monopoly agreement”,(iv) increases in fines imposed on different parties, e.g., amending the fine for illegal concentration of business operators
from “a fine of up to RMB500,000” to “a fine of no more than ten percent of its prior year’s sales revenue if the concentration of the business operators has
or may have an effect of eliminating or restricting competitions; or a fine of up to RMB5 million if the concentration of business operators does not have an
effect of eliminating or restricting competitions,” (v) creates new fines, including, for example, the specific amount of the fine at not less than two times but
not more than five times of the normal amount of the fine determined by the competent authority in case of particularly serious circumstances with
particularly adverse effects and serious consequences. On March 10, 2023, the SAMR issued the Provisions on the Prohibitions of Monopoly Agreements,
the Provisions on the Prohibitions of Acts of Abuse of Dominant Market Positions and the Provisions on Review of Concentration of Undertakings, all of
which took effect on April 15, 2023. The provisions detail the relevant rules set forth in the amended Anti-monopoly Law and further elaborate on the
factors to be taken into consideration when assessing monopoly agreements, acts of abusing market dominance and concentration of undertakings. For
example, the Provisions on Prohibitions of Monopoly Agreements further clarify the subject scope of “undertakings with a competitive relationship” in
horizontal monopoly agreements, the Prohibitions of Acts of Abuse of Dominant Market Positions further specify that a business operator with a dominant
market position may not abuse its dominant market position to conduct acts, sanctions for violation include an order to cease the activities, confiscation of
the illegal gains and fines (from 1% to 10% of sales revenue from the previous year), and the Provisions on the Review of Concentrations of Undertakings
require that transactions which are deemed concentrations involving business operators that meet revenue threshold prescribed by the State Council are
subject to filing at the SAMR.
Furthermore, the PRC government is also enhancing the regulations specially related to platform economy operators. In September 2020, the Anti-
monopoly Committee of the State Council issued Anti-monopoly Compliance Guideline for Business Operators, encouraging the operators to establish
anti-monopoly compliance management systems to prevent anti-monopoly compliance risks. In particular, on February 7, 2021, the Anti-monopoly
Committee of the State Council published the Guideline on Anti-monopoly of Platform Economy Sector, or the Guideline, which became effective on the
same day. As a compliance guidance under the existing PRC anti-monopoly laws and regulations for platform economy operators, the Guideline
comprehensively addresses five aspects: general provisions, monopoly agreements, market dominance abuse, business concentration, and the misuse of
administrative powers to eliminate or restrict competition. It specifically prohibits monopolistic behaviors by internet platforms, aiming to foster a
competitive market environment, and to safeguard the interests of consumers and businesses engaged in the internet platform economy.
In addition, the Guideline stipulates that if any concentration of undertakings involves any variable interest entity, such variable interest entity shall
fall within the scope of anti-monopoly review. If a concentration of undertakings meets the criteria for declaration as stipulated by the State Council, an
operator shall report such concentration of undertakings to the anti-monopoly law enforcement agency under the State Council in advance.
On January 22, 2024, the State Council released the Provisions of the State Council on the Threshold for the Filing of Concentration of Undertakings
mainly to optimize the filing standard. These provisions significantly adjust the revenue threshold of merger control filing to either one of the following
two conditions: (i) the worldwide revenue of all business operators involved in the concentration exceeds RMB12 billion (the previous threshold was
RMB10 billion) collectively in the last fiscal year, and the revenue in mainland China of at least two business operators among them each exceeds
RMB800 million (the previous threshold was RMB400 million) in the last fiscal year; or (ii) the revenue in mainland China of all the business operators
involved in the concentration exceeds RMB4 billion (the previous threshold was RMB2 billion) collectively in the last fiscal year, and the revenue in
mainland China of at least two business operators among them each exceeds RMB800 million (the previous threshold was RMB400 million) in the last
fiscal year. Furthermore, if there is evidence indicating that the
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concentration of business operator has or may have an effect of excluding or limiting competition, the anti-monopoly authority may order the operators to
file for clearance, regardless of the threshold standard.
Regulations on Advertisements
Advertisers, advertising operators and advertising distributors are required by PRC advertising laws and regulations to ensure that the content of the
advertisements they produce or distribute are true and in full compliance with applicable laws and regulations. In addition, where a special government
review is required for certain categories of advertisements before publishing, the advertisers, advertising operators and advertising distributors are obligated
to confirm that such review has been duly performed and that the relevant approval has been obtained. Violation of these regulations may result in
penalties, including fines, confiscation of advertising income, orders to cease dissemination of the advertisements and orders to publish an advertisement
correcting the misleading information. In circumstances involving serious violations, the SAMR or its local branches may order the violator to terminate its
advertising operation or even revoke its business license. Furthermore, advertisers, advertising operators or advertising distributors may be subject to civil
liabilities if they infringe on the legal rights and interests of third parties.
On April 29, 2021, the SCNPC revised the PRC Advertising Law or the Advertising Law, which came into effect on the same date. The Advertising
Law applies to all advertising activities conducted via the internet. The Advertising Law requires that users must be able to close online pop-up ads with
one click. Moreover, internet service providers are obligated to cease publishing any advertisements that they know or should know are illegal. Violation of
these regulations may result in penalties, including fines, confiscation of the advertising incomes, termination of advertising operations and even
suspension of the provider’s business license.
On February 25, 2023, the SAMR promulgated the Measures for the Administration of Internet Advertisements, or the Measures for Internet
Advertisement Administration, which will took effect on May 1, 2023. The Measures for Internet Advertisement Administration strengthens the
management of, for example, pop-up advertisements, link advertisements and advertorials. The Measures for Internet Advertisement Administration
stipulates that the promotion of commodities or services in the form of paid listing on the internet must be conspicuously identified as an advertisement,
and it requires advertisers, operators and publishers of internet advertisements containing links to examine the contents in the next level link. Furthermore,
the Internet platform operators are obliged to cooperate with advertising monitoring and assist in supervision and provide statistical data.
To comply with these laws and regulations, we include clauses in our advertising contracts requiring that all advertising content provided by
advertisers must comply with relevant laws and regulations. Prior to posting on websites and mobile applications, our staff reviews advertising materials to
ensure there is no violent, pornographic or any other improper content, and will request the advertiser to provide government approval if the advertisement
is subject to special government review.
Regulations on Broadcasting Audio/Video Programs through the Internet
On July 6, 2004, the State Administration of Radio, Film, and Television, or the SARFT (currently known as National Radio and Television
Administration, or the NRTA), promulgated the Rules for the Administration of Broadcasting of Audio/Video Programs through the Internet and Other
Information Networks, or the A/V Broadcasting Rules, which were replaced by Provisions on the Administration of Private Network and Targeted
Communication Audio-visual Program Services which took effect on June 1, 2016 and was amended on March 23, 2021. For an entity that engages in
content delivery, integrated broadcast control, transmission distribution and other private network and targeted communication to send audio-visual
program service, an “Internet Audio/Video Program Transmission License” is required.
On April 13, 2005, the State Council announced Several Decisions on Investment by Non-state-owned Companies in Culture-related Business in
mainland China. These decisions encourage and support non-state-owned companies to enter certain culture-related business in mainland China, subject to
restrictions and prohibitions for investment in audio/video broadcasting, website news and certain other businesses by non-state-owned companies. These
decisions authorize the SARFT, the Ministry of Culture and Tourism and the National Press and Publication Administration to adopt detailed
implementation rules according to these decisions.
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On December 20, 2007, the SARFT and the MIIT jointly issued the Rules for the Administration of Internet Audio and Video Program Services,
commonly known as Circular 56, which came into effect as of January 31, 2008 and was amended in August 2015. Circular 56 reiterates the requirement
that online audio/video service providers must obtain an “Internet Audio/video Program Transmission License”. Furthermore, Circular 56 requires all
online audio/video service providers to be either wholly state-owned or state-controlled companies. According to relevant official answers to press
questions published on the SARFT’s website dated February 3, 2008, officials from the SARFT and the MIIT clarified that online audio/video service
providers that already had been operating lawfully prior to the issuance of Circular 56 may re-register and continue to operate without becoming state-
owned or controlled, provided that such providers have not engaged in any unlawful activities. This exemption will not be granted to online audio/video
service providers established after Circular 56 was issued. These policies have been reflected in the application procedure for Internet Audio/video Program
Transmission License. Failure to obtain the internet audio/video program transmission license may subject an online audio/video service provider to
various penalties, including fines of up to RMB30,000, seizure of related equipment and servers used primarily for such activities and even suspension of
its online audio/video services.
On March 17, 2010, the SARFT issued the Internet Audio/Video Program Services Categories (Provisional), or the Provisional Categories, which
were amended on March 10, 2017. The amended Provisional Categories classified Internet audio/video programs into four categories, which are further
divided into seventeen sub-categories.
To comply with these laws and regulations, Autohome Information obtained an internet audio/video program transmission license, for automotive-
industry-information-related audio/video programs posted on our autohome.com.cn website and relevant mobile applications.
Regulations on Producing Audio/Video Programs
On July 19, 2004, the SARFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, effective
as of August 20, 2004. On August 28, 2015, State General Administration of Press, Publication, Radio, Film and Television Decree No. 3 was issued to
amend some provisions of the aforesaid Measures, which was further revised on by the NRTA on October 29, 2020. These Measures provide that any
entities that engage in the production of radio and television programs are required to apply for a Permit for Production and Operation of Radio and TV
Programs from the competent administrative authority. Applicants for this permit must meet several criteria.
Both Autohome Information and Shengtuo Hongyuan hold operating licenses for the production and dissemination of radio and television programs
(excluding current affairs news and similar themed specials or columns)..
Regulations on Internet Mapping Services
According to the Administrative Rules on Surveying Qualification, as most recently amended by the Ministry of Natural Resources on June 7, 2021,
which became effective on July 1, 2021, an entity providing internet mapping services should apply for the Surveying and Mapping Qualification
Certificate for Surveying and Mapping, and perform within the scope of the certificate. According to these rules, certain conditions and requirements, such
as the number of technical personnel and map security verification personnel, security facilities and approval from relevant provincial or national
government on the service provider’s security system, qualification management and filings management, are necessary for an entity applying for a
Surveying and Mapping Qualification Certificate.
Pursuant to the Notice on Further Strengthening the Administration of Internet Map Services Qualification issued by the NASMG in December 2011,
any entity that has not yet applied for a surveying qualification certificate for internet mapping services is prohibited from providing any internet mapping
services.
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On November 26, 2015, the State Council enacted the Administrative Regulations on Maps, or the Maps Regulations, effective as of January 1, 2016.
The Maps Regulations requires entities engaging in internet mapping services, such as geographic positioning, the uploading of geographic information or
markings, and the development of a public map database, to obtain a relevant qualification certificate for surveying and mapping. The Maps Regulations
require entities engaging in online map services to use mapping data approved by the relevant governmental authorities, host servers storing map data
within the mainland China, and establish a management system as well as protection measures for the data security of the online maps. The mapping data
must not contain any content prohibited by the Maps Regulations, and no entities or individuals are allowed to upload or mark such prohibited content
online. Further, entities engaging in internet mapping services shall keep confidential any information involving state secrets and trade secrets acquired
during their work.
We have provided maps on our websites and mobile applications for the convenience of our users to locate certain service providers. Both Autohome
Information and Shengtuo Hongyuan hold the Surveying and Mapping Qualification Certificates for internet mapping.
Regulations on Online Cultural Services
On February 17, 2011, the Ministry of Culture, the predecessor of the Ministry of Culture and Tourism, promulgated the Interim Administrative
Provisions on Internet Culture, which became effective on April 1, 2011 and was most recently amended in December 2017. The Interim Administrative
Provisions on Internet Culture require ICP operators engaged in “internet culture activities” to obtain an Internet Culture Business Permit from the
provincial administration of culture. The term “internet culture activities” includes, among other things, online dissemination of internet cultural products
(such as audio-video products, gaming products, performances of plays or programs, works of art and cartoons) and the production, reproduction,
importation, publication and broadcasting of internet cultural products.
On August 12, 2013, the Ministry of Culture promulgated the Notice on Implementing the Administrative Measures for the Content Self-examination
of Internet Culture Business Entities. According to this notice, any cultural product or service shall be reviewed by the provider before being released to the
public and the review process shall be done by persons who have obtained the relevant content review certificate.
Autohome Information has obtained an Internet Culture Business Permit in January 2013. As of the date of this annual report, such permit is in the
process of the renewal.
Regulations on Online Live-streaming Services
The Provisions on the Administration of Online Live Streaming Services was issued by the CAC on November 4, 2016 and was effective on
December 1, 2016. Under the provisions, those who provide online live-streaming services through online performances, internet video and audio
programs, and so forth, shall obtain relevant qualifications as required by laws and regulations. Online live streaming service providers shall be the main
responsible party, equip professionals comparable to the service scale, and improve systems for information review, information security management, duty
patrols, emergency response, and technical guarantee. Online live streaming service providers shall establish platforms for reviewing live streaming
content. Online live streaming service providers and online live streaming publishers that provide internet news information services without licenses, or
exceeding the scope of their licenses, are subject to punishment. Other violations of these provisions are subject to penalties from the national or local
Internet information offices, or even criminal liabilities. Violations of the relevant laws and provisions in providing online live streaming services through
Internet performances, online audio and visual programs and so forth are subject to punishment by the relevant departments in accordance with law.
The Notice of Launch of Record Filing for Internet Live-Streaming Service Enterprises was issued by the CAC on July 12, 2017. Under the notice,
CAC requires the companies that provide internet live-streaming service to register with the local internet information office, commencing on July 15,
2017. Internet live-streaming service companies (including commercial news mobile applications that provide live-streaming sections/channels) which
engage in internet news information republishing services or provide dissemination platform services, and other types of internet live-streaming service
companies are subject to such notice and the requirements thereunder.
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The Notice on Tightening the Administration of Online Live-streaming Services, or the Online Live-streaming Services Notice, was jointly issued by
the CAC and five other PRC governmental authorities August 1, 2018. Under the Online Live-streaming Services Notice, the online live-streaming service
provider involved in the business of telecommunications and internet news information, online shows, live-streaming of online audiovisual programs and
other services shall apply to the relevant departments for licenses on operations of telecommunications business, internet news information services,
internet culture business, and internet audio/video program transmission, respectively. In addition, live streaming services providers are required to file with
the local public security authority within 30 days after it commences the service online.
According to the Guiding Opinions on Strengthening the Standardized Administration of Online Live-streaming issued by the CAC, the Office of the
National Anti-pornography and Anti-illegal Working Group, the MIIT, the Ministry of Public Security, the Ministry of Culture and Tourism, the SAMR and
the NRTA on February 9, 2021, live streaming platforms that carry out network audio-visual program services must hold the internet audio/video program
transmission license (or complete the registration in the national network audio-visual platform information registration management system) and carry out
ICP filing. Live streaming platforms shall file with local cyberspace administration office in a timely manner, and shall cancel its filing immediately after it
ceases to provide live streaming services.
Currently we are providing online live-streaming services through our websites and mobile applications. To comply with the requirements of the
aforementioned regulations, Autohome Information holds the internet audio/video program transmission license.
Regulations on Internet Publishing
The Administrative Provisions on Online Publishing Services, or the Online Publishing Provisions, was jointly issued by the MIIT and the State
General Administration of Press, Publication, Radio, Film and Television (currently known as the National Press and Publication Administration, or the
NPPA), in 2016, and came into effect on March 10, 2016. The Online Publishing Provisions define “online publishing services” as providing online
publications to the public through information networks. Any online publishing services provided in the territory of the mainland China are subject to these
provisions. The Online Publishing Provisions requires any internet publishing services provider to obtain an online publishing service license to engage in
online publishing services. Under the Online Publishing Provisions, online publications refer to digital works which have publishing features such as digital
work that have been edited, produced or processed and which are made available to the public through information networks, including written works,
pictures, maps, games, cartoons, audio/video reading materials and other methods. Any online game shall obtain approval from SAPPRFT or NPPA before
it is launched online. Furthermore, Sino-foreign equity joint ventures, Sino-foreign cooperative joint ventures and wholly foreign-invested enterprises
cannot engage in providing online publishing services.
If we are deemed to be in breach of relevant internet publishing regulations, the PRC regulatory authorities may seize the related equipment and
servers used primarily for such activities and confiscate any revenues generated from such activities. In addition, relevant PRC authorities may also impose
a fine of five to ten times of any revenues exceeding RMB10,000 or a fine of not more than RMB50,000 if such related revenues are below RMB10,000.
Regulations on Internet News Information Service
On May 2, 2017, the CAC issued the Provisions for the Administration of Internet News Information Services, or Internet News Provision, which
became effective on June 1, 2017 and replaced the original provisions promulgated in 2005.
Internet news information services shall include service of collecting, editing and publishing internet news information, service of reposting and
service of providing dissemination platform. Under the Internet News Provision, internet news service providers shall also include entities that are not
established by the press but reproduce internet news from other sources, provide electronic bulletin services on current and political events, and transmit
such information to the public. The CAC shall be in charge of the supervision and administration of the internet news information services throughout
mainland China.
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If any of the internet news posted on our websites and mobile applications is deemed by the government to be political in nature, related to
macroeconomics, or otherwise requires such license based on the sole discretion of the government authority, we would need to apply for such license. If
we are deemed to be in breach of the Internet News Provision or other relevant internet news releasing regulations, the PRC regulatory authorities may
suspend the related internet service and impose a fine exceeding RMB10,000 but not more than RMB30,000.
Regulations on E-commerce
China’s e-commerce industry is at an early stage of development and there are few PRC laws or regulations specifically regulating the e-commerce
industry. Pursuant to the Measures for the Supervision and Administration of Online Trading (which became effective on May 1, 2021 and apply to
business activities involving the sale of commodities or provision of services through the Internet and other information networks as well as the supervision
and administration thereof by market regulatory departments), online transaction operators shall go through the market entity registration in accordance
with the law, except for the circumstances under which registration is not required as specified in Article 10 of the E-Commerce Law. In addition, online
transaction operators shall disclose commodity or service information in a comprehensive, truthful, accurate and timely manner, and protect consumers’
right to know and right to choose. Our platform business is subject to these aforementioned measures.
In August 2018, the SCNPC issued the E-commerce Law of the People’s Republic of China, or the E-commerce Law, which took effect on January 1,
2019. The E-commerce Law strengthens the regulation on e-commerce operators relating to consumer protection, personal data protection and intellectual
property rights protection. If the goods or services may affect consumers’ life and health, and a platform operator fails to examine the qualifications of the
operators on the platform or fails to fulfill the responsibilities of protecting consumers’ safety, it shall take corresponding liabilities and may be subject to
warnings and fines up to RMB2,000,000. In accordance with the E-commerce Law, e-commerce operators include (i) platform operators; (ii) operators on
platforms; and (iii) other e-commerce operators that sell goods or provide services through self-established websites or channels other than the platforms. A
platform operator shall require operators who apply to sell commodities or provide services on its platform to submit truthful information, verify and
register such information, establish registration archives, and regularly verify and update the information. Besides, an e-commerce platform operator shall
(i) submit the identification information of the operators on its platform to the competent market regulation authorities and remind the operators to
complete the registration with such authorities; (ii) submit identification information and tax-related information to tax authorities and remind the operators
to complete the tax registration; (iii) record and retain the information of the products and information on its platform and the sales information; (iv)
display the platform service agreement and the transaction rules or links to such information on the homepage of the platform; (v) display information to let
users know in the case of any products or services that are provided by the platform operator itself, and take responsibility for such products and services;
(vi) establish a credit evaluation system, display the credit evaluation rules, provide consumers with accesses to make comments on the products and
services provided on its platform, and refrain from deleting such comments; and (vii) establish intellectual property protection rules, and take necessary
measures when any intellectual property holder notifies the platform operator that his intellectual property rights have been infringed.
An e-commerce platform operator shall take joint liabilities with the relevant operators on its platform and may be subject to warnings and fines up to
RMB2,000,000 where (i) it fails to take necessary measures when it knows or should have known that the products or services provided by an operator on
its platform does not comply with the personal or property safety requirements or such operator’s other acts may infringe on the lawful rights and interests
of the consumers; or (ii) it fails to take necessary measures, such as deleting and blocking information, disconnecting, terminating transactions and services,
when it knows or should have known that an operator on its platform infringes any intellectual property rights of any other third party. An E-commerce
platform operator shall not take advantage of the service agreement, transaction rules or other means to impose unreasonable restrictions or transaction
conditions on the transactions of operators on its platform or the price of such transactions, or collect unreasonable fees against operators on its platform.
On February 7, 2021, the Anti-monopoly Committee of the State Council published the Guideline on Anti-monopoly of Platform Economy Sector, or
the Guideline, which became effective on the same day. As a compliance guidance under the existing PRC anti-monopoly laws and regulations for platform
economy operators, the Guideline intends to regulate abuse of a dominant position and other anti-competitive practices. Pursuant to the Guideline,
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representative examples of abuse of dominance include unfairly locking in exclusive agreements with operators and targeting specific customers with
unreasonable big-data driven tailored pricing through their online behavior to eliminate or limit market competition.
Regulations on Mobile Internet Applications
On June 28, 2016, the CAC promulgated the Administrative Provisions on Mobile Internet Applications Information Services, or the Mobile
Application Administrative Provisions, which took effect on August 1, 2016. The Mobile Application Administrative Provisions was partially revised on
June 14, 2022, and took effect on August 1, 2022. According to the revised Mobile Application Administrative Provisions, “mobile internet applications”
refers to application software that run on mobile smart devices providing information services. “Mobile internet application providers” refer to the owners
or operators of mobile internet applications. “Application distribution services” refer to the activities of providing application releasing, downloading,
dynamic loading and other services through the Internet, including Internet application stores, quick application centers, Internet applet platforms, browser
plug-in platforms and other types. The revised Mobile Application Administrative Provisions further emphasizes that mobile internet application providers
shall comply with relevant provisions on the scope of necessary personal information when engaging in personal information processing activities.
According to the revised Mobile Application Administrative Provisions, mobile internet application providers shall not compel users to agree to non-
essential personal information collection out of any reason, and shall not ban users from their basic functional services due to their refusal of providing
unnecessary personal information. On December 16, 2016, the MIIT promulgated the Interim Administrative Provisions on the Pre-installation and
Distribution of the Mobile Smart Terminal Application Software, which took effect on July 1, 2017 and requires, among others, that internet information
service providers must ensure that a mobile application, as well as its ancillary resource files, configuration files and user data can be uninstalled on a
convenient basis, unless the mobile application is a basic function software, which refers to a software that supports the normal functioning of the hardware
and operating system of a mobile smart device. In addition, mobile smart terminal application software involving charges should strictly comply with the
relevant regulations such as sale at an expressly marked price, and express the charge standard and method. The content expressed should be true, accurate,
eye-catching and normative, and users should be charged only after their confirmation.
Pursuant to the Mobile Application Administrative Provisions, an internet application program provider must verify a user’s mobile phone number
and other identity information under the principle of mandatory real name registration at the back-office end and voluntary real name display at the front-
office end. An internet application provider must not enable functions that can collect a user’s geographical location information, access user’s contact list,
activate the camera or recorder of the user’s mobile smart device or other functions irrelevant to its services, nor is it allowed to conduct bundle
installations of irrelevant application programs, unless it has clearly indicated to the user and obtained the user’s consent on such functions and application
programs. In respect of internet application store service providers, the Mobile Application Administrative Provisions requires that, among others, it must
file a record with the provincial authority within 30 days after it rolls out the internet application service online. It must also examine the authenticity,
security and legality of mobile internet application providers on its platform, establish a system to monitor application providers’ credit and file a record of
such information with relevant governmental authorities. If an application provider violates the regulations, the internet application store service provider
must take measures to stop the violations, including warning, suspension of release, withdrawal of the application from the platform, keeping a record and
reporting the incident to the relevant governmental authorities.
On July 21, 2023, the MIIT released Notice on the Record-filing of Mobile Internet Apps, which stipulates that APP providers engaged in Internet
information services within the territory of the People's Republic of China shall complete the record-filing formalities. Any operator shall not conduct the
internet information services via Apps before the completion of the record-filing formalities with respect to such mobile internet apps. As of the date of this
annual report, the company has completed the aforesaid record-filing formalities for Autohome and other relevant apps with the MIIT.
Regulations on Used Automobiles Brokerage Business
On August 29, 2005, the MOFCOM, the Ministry of Public Security, the SAIC, and SAT together promulgated the Measures for the Administration of
the Circulation of Used Automobiles, which was amended on 14 September
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2017. On November 22, 2005, the MOFCOM further promulgated the Notice on Issues Concerning the Implementation of the Measures for the
Administration of the Circulation of Used Automobiles. According to aforesaid regulations, the entity which engages brokerage of used automobiles shall
be an enterprise with legal personality and shall go through the registration with the administrative department of industry and commerce. After obtaining
the business license from the local branch of SAIC, the used automobile market operators and used automobile brokerage entities shall also file for record
with the provincial level branch of the SAIC within two months. “Brokerage of used automobiles” refers to the business activities whereby a brokerage
entity of used automobiles, for the purpose of collecting commissions, engages in such business activities as an intermediary, an agent, or a broker to
promote other persons’ transaction of used automobiles.
We established Shanghai Jinyou in December 2021, which has been filed as an entity conducting used automobiles business in the MOFCOM’s
national car circulation information management and application service systems.
Regulations on Insurance Brokerage Business
In April 2015, the SCNPC promulgated the Insurance Law of PRC. In October 2015, the CIRC promulgated the Provisions on the Supervision and
Administration of Insurance Brokers, which was replaced by the Provisions on the Regulation of Insurance Brokers, or the Insurance Brokers Provisions,
on May 1, 2018. The Insurance Brokers Provisions define insurance brokers as institutions which provide intermediary services, in favor of the insured, in
the course of concluding insurance contracts between the insured and the insurance companies and charge certain commission as agreed. Pursuant to the
Insurance Law and Insurance Brokers Provisions, a license for engaging in insurance brokerage businesses is required in the course of setting up an
insurance brokerage company. The companies which intend to provide insurance brokerage service should meet certain requirements set up by the CIRC
and should not conduct insurance brokerage business unless the aforesaid license is acquired.
On December 7, 2020, the CBIRC published the Regulatory Measures for Internet Insurance Business, which became effective on February 1, 2021.
The Regulatory Measures for Internet Insurance Business stipulates that only insurance companies and professional insurance intermediaries established
upon approval by insurance regulatory authorities and registered could provide internet insurance services, such as providing insurance products
consultation services, assisting policyholders with selecting insurance products, calculating insurance premiums, drafting insurance plans for policyholders
and processing insurance application formalities. It also provides that insurance intermediaries are required to manage their marketing activities and retain
records of online insurance transactions. In addition, it requires insurance intermediaries that conduct online insurance business to improve IT infrastructure
and cybersecurity protection.
In September 2017, we acquired Shanghai Tianhe, a company holding the license for engaging in insurance brokerage businesses. In October 2018,
Shanghai Tianhe completed the registration process required for engaging in online insurance business.
Regulations on Auction
Pursuant to the Auction Law of the People’s Republic of China (2015 Amendment), which was promulgated by the SCNPC on July 5, 1996 and last
amended on April 24, 2015, and Measures for the Administration of Auctions (2019 Amendment), which was promulgated by the MOFCOM on October
28, 2015 and last amended on November 30, 2019, an enterprise engaging in the bidding and auction of various products as permitted by auction-related
laws of the PRC other than cultural relics shall satisfy various criteria, such as having registered capital of at least RMB1 million and at least one qualified
auctioneer. To engage in the bidding and auction business, domestic entities shall first be verified and authorized by the municipal counterparts of
MOFCOM at the locality, and then obtain auction business permit from the competent provincial counterparts of MOFCOM before launching their auction
business. The enterprise engaging in auction business without approval and registration shall be banned by the administrative department for industry and
commerce, the illegal gains shall be confiscated and he may also be subject to fines.
Currently, Shanghai Jinyou holds an auction business approval certificate issued by the Shanghai Municipal Commission of Commerce of the PRC.
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Regulations on Intellectual Property Rights
China has adopted legislation governing intellectual property rights, including trademarks, patents, copyrights, and domain names. China is a
signatory to the major international conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of
Intellectual Property Rights upon its accession to the World Trade Organization in December 2001.
Patent. The SCNPC adopted the Patent Law in 1984, and amended it in 1992, 2000, 2008 and 2020 (the current effective revision became effective on
June 1, 2021). The purpose of the Patent Law is to protect lawful interests of patent holders, encourage invention, foster applications of inventions, enhance
innovative capabilities and promote the development of science and technology. To be patentable, invention or utility models must meet three conditions:
novelty, inventiveness and practical applicability. Patents cannot be granted for scientific discoveries, rules and methods for intellectual activities, methods
used to diagnose or treat diseases, animal and plant breeds, substances obtained by means of nuclear transformation or a design which has major marking
effect on the patterns or colors of graphic print products or a combination of both patterns and colors. The Patent Office under the China National
Intellectual Property Administration is responsible for receiving, examining and approving patent applications. A patent is valid for a term of twenty years
in the case of an invention, a term of ten years in the case of utility models and a term of fifteen years in the case of designs. A third-party user must obtain
consent or a proper license from the patent owner to use the patent. Otherwise, the use constitutes an infringement of patent rights.
Copyright. The SCNPC adopted the Copyright Law in 1990 and amended it in 2001, 2010 and 2020 (the current effective revision became effective
on June 1, 2021), respectively. The Copyright Law, and its related implementation regulations that were promulgated in 2002 and amended in 2013, are the
principal laws and regulations governing the copyright related matters.
To address the problem of copyright infringement related to the content posted or transmitted over the internet, the National Copyright Administration
and the MIIT jointly promulgated the Measures for Administrative Protection of Internet Copyright on April 29, 2005. This measure became effective on
May 30, 2005.
In order to further implement the Computer Software Protection Regulations promulgated by the State Council on December 20, 2001, as amended in
2013, the National Copyright Administration of the PRC issued Computer Software Copyright Registration Procedures on February 20, 2002, which apply
to software copyright registration, license contract registration and transfer contract registration.
On December 26, 2009, the SCNPC adopted the Torts Liability Law, which became effective on July 1, 2010 and was abolished by the Civil Code
which became effective on January 1, 2021. Pursuant to the Civil Code, both internet users and internet service providers may be liable for the wrongful
acts of users who infringe the lawful rights of other parties. If an internet user utilizes internet services to commit a tortious act, the party whose rights are
infringed may request the internet service provider to take measures, such as removing or blocking the content, or disabling the links thereto. Failure to take
necessary measures after receiving such notice will subject the internet service providers to joint liability for any further damages suffered by the rights
holder. Furthermore, if an internet service provider fails to take necessary measures when it knows that an internet user utilizes its internet services to
infringe the lawful rights and interests of other parties, it will be held jointly liable with the internet user for damages resulting from the infringement.
Trademark. The PRC Trademark Law, adopted in 1982 and amended in 1993, 2001, 2013 and 2019, protects registered trademarks. The Trademark
Office under the China National Intellectual Property Administration handles trademark registrations and grants a term of ten years for registered
trademarks. Trademark license agreements must be filed with the Trademark Office for record. We hold “汽车之家” and “车之家” (both meaning “auto
home” in English), “AUTOHOME®” and “天天拍车” trademarks in mainland China, with each registered under different categories.
Domain Names. On August 24, 2017, the MIIT promulgated the Administrative Measures for Internet Domain Names, which came into effect on
November 1, 2017 and replaced the original measures promulgated in 2004. The measures regulate the registration of domain names, such as the first tier
domain name “.cn.” Pursuant to the
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Implementing Rules on Registration of National Top-level Domain Names promulgated by the China Internet Network Information Center and took into
effect on June 18, 2019, the domain name services follow a “first come, first file” principle. Applicants for registration of domain names shall provide their
true, accurate and complete information of such domain names to and enter into registration agreements with domain name registration service institutions.
The applicants will become the holders of such domain names upon the completion of the registration procedure. We have registered a number of domain
names through the VIEs, including autohome.com.cn, autohome.com, che168.com and ttpai.cn.
Regulations on Overseas Offering and Listing
On July 6, 2021, the relevant PRC government authorities issued Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with
the Law. These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by
China-based companies and proposed to take effective measures, such as promoting the construction of relevant regulatory systems to deal with the risks
and incidents faced by China-based overseas-listed companies.
On December 27, 2021, the NDRC and the MOFCOM, jointly issued the Negative List, effective from January 1, 2022. Pursuant to the Negative List,
if a domestic company engaging in the prohibited business stipulated in the Negative List seeks an overseas offering and listing, it shall obtain the approval
from the competent governmental authorities. Besides, the foreign investors of the company shall not be involved in the company’s operation and
management, and their shareholding percentage shall be subject, mutatis mutandis, to the relevant regulations on the domestic securities investments by
foreign investors.
On February 17, 2023, the CSRC released the Overseas Listing Trial Measures and five supporting guidelines, which took effect on March 31, 2023.
Pursuant to the Overseas Listing Trial Measures, mainland China domestic companies that seek to offer or list securities overseas, both directly and
indirectly, should fulfill the filing procedure and report relevant information to the CSRC. If a mainland China domestic company fails to complete the
filing procedure or conceals any material fact or falsifies any major content in its filing documents, such mainland China domestic company may be
subject to administrative penalties, such as order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge
and other directly liable persons may also be subject to administrative penalties, such as warnings and fines.
Regulations on Tax
See “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Taxation—Mainland China” and “Item 10. Additional
Information—E. Taxation—Mainland China Taxation.”
Regulations on Foreign Exchange
Foreign exchange activities in mainland China are primarily governed by the following regulations:
•
•
Foreign Currency Administration Rules (2008), or the Exchange Rules; and
Administration Rules of the Settlement, Sale and Payment of Foreign Exchange (1996), or the Administration Rules.
Under the Exchange Rules, if documents certifying the purposes of the conversion of RMB into foreign currency are submitted to the relevant foreign
exchange conversion bank, the RMB will be convertible for current account items, including the distribution of dividends, interest and royalties payments,
and trade and service-related foreign exchange transactions. Conversion of RMB for capital account items, such as direct investment, loans, securities
investment and repatriation of investment, however, is subject to the approval of, or registration with, SAFE or its local counterpart. Capital investments by
mainland China entities outside of mainland China, after obtaining the required approvals of, or making filings with, the relevant approval authorities, such
as the MOFCOM and the NDRC, or their local counterparts, are also required to register with SAFE or its local counterpart.
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Under the Administration Rules, foreign-invested enterprises may only buy, sell and/or remit foreign currencies at banks authorized to conduct foreign
exchange business after providing valid commercial documents and, in the case of capital account item transactions, obtaining approval from or being
registered with SAFE or its local counterpart.
In utilizing the proceeds we received from our equity offerings, as an offshore holding company with mainland China subsidiaries, we may (a) make
additional capital contributions to our mainland China subsidiaries, (b) establish new mainland China subsidiaries and make capital contributions to these
new mainland China subsidiaries, (c) make loans to our mainland China subsidiaries or VIEs or (d) acquire offshore entities with business operations in
mainland China in offshore transactions. However, such use of proceeds is subject to mainland China regulations.
On March 30, 2015, SAFE issued the Circular on the Reforming of the Management Method of the Settlement of Foreign Currency Capital of
Foreign-Invested Enterprises, or SAFE Circular 19, which became effective on June 1, 2015 and was amended on December 30, 2019 and March 23, 2023.
On June 9, 2016, SAFE issued the Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts,
or SAFE Circular 16, , which was amended on December 4, 2023. SAFE Circular 16 revised some provisions of SAFE Circular 19. According to SAFE
Circular 19 and SAFE Circular 16, the flow and use of the Renminbi capital converted from registered capital denominated in foreign currency of a
foreign-invested company is regulated such that Renminbi capital may not be used for business beyond its business scope or to provide loans to persons
other than the foreign-invested company’s affiliates unless otherwise permitted under its business scope. Violations of SAFE Circular 19 or SAFE Circular
16 could result in administrative penalties. Pursuant to both of SAFE Circular 19 and SAFE Circular 16, foreign-invested enterprises may either continue to
follow the current payment-based foreign currency settlement system or choose to follow the “conversion-at-will” system for foreign currency settlement.
Where a foreign-invested enterprise follows the conversion-at-will system for foreign currency settlement, it may convert part or all of the amount of the
foreign currency in its capital account, special account for foreign debt or special account for overseas listing into Renminbi at any time. The converted
Renminbi will be kept in a designated account labeled as settled but pending payment, and if the foreign-invested enterprise needs to make payment from
such designated account, it still needs to go through the review process with its bank and provide necessary supporting documents. SAFE Circular 19 and
SAFE Circular 16, therefore, have substantially lifted the restrictions on the usage by a foreign-invested enterprise of its Renminbi registered capital,
foreign debt and repatriated funds raised through overseas listing converted from foreign currencies. According to SAFE Circular 19 and SAFE Circular
16, such Renminbi capital, foreign debt and repatriated funds raised through overseas listing may be used at the discretion of the foreign-invested enterprise
and SAFE will eliminate the prior approval requirement and only examine the authenticity of the declared usage afterwards. Nevertheless, it is still not
clear whether foreign-invested enterprises like our mainland China subsidiaries are allowed to extend intercompany loans to the VIEs. See “Item 3. Key
Information—D. Risk Factor—Risks Related to Our Corporate Structure—PRC regulation of loans to, and direct investment in, mainland China's entities
by offshore holding companies and governmental control of currency conversion may restrict or prevent us from using the proceeds of our equity offerings
to make loans to our mainland China subsidiaries and the VIEs or to make additional capital contributions to our mainland China subsidiaries, which may
materially and adversely affect our liquidity and our ability to fund and expand our business.”
Moreover, on January 26, 2017, SAFE promulgated Circular on Further Advancing the Reform of Foreign Exchange Administration and Improving
Examination of Authenticity and Compliance, or the Circular 3. The Circular 3 stipulates several control measures with respect to the outbound remittance
of any profit from domestic entities to offshore entities, including (i) under the principle of genuine transaction, banks should review board resolutions, the
original version of tax filing records and audited financial statements before wiring the foreign exchange profit distribution of a foreign-invested enterprise
exceeding US$50,000; and (ii) domestic entities should hold income to make up previous years’ losses before remitting the profits to offshore entities.
Moreover, pursuant to Circular 3, verification on the genuineness and compliance of foreign direct investments in domestic entities has also been tightened.
On October 23, 2019, SAFE issued the Circular Regarding Further Promotion of the Facilitation of Cross-Border Trade and Investment, or the
Circular 28, which was amended on December 4, 2023. The Circular 28 expressly allows all foreign-invested enterprises to make equity investments in the
PRC with their capital funds in accordance with the law. In addition, Circular 28 stipulates that qualified enterprises in certain pilot areas may use
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their capital income from registered capital, foreign debt and overseas listing, for the purpose of domestic payments without providing authenticity
certifications to the relevant banks in advance for those domestic payments.
Regulations on Dividend Distribution
The principal regulations governing dividend distributions of wholly foreign-invested enterprises include:
•
•
•
the Company Law (2005, as amended in 2013, 2018 and 2023);
the Foreign Investment Law (2019);
the Implementation Regulation of the Foreign investment Law (2019).
Under these regulations, foreign investors may freely remit into or out of mainland China, in Renminbi or any other foreign currency, their capital
contributions, profits, capital gains, income from asset disposal, intellectual property royalties, lawfully acquired compensation, indemnity or liquidation
income and so on generated within the territory of mainland China.
Wholly foreign-invested enterprises in the mainland China may pay dividends only out of their accumulated profits as determined in accordance with
PRC accounting standards and regulations. In addition, according to PRC Company Law, these wholly foreign-invested enterprises are required to set aside
at least 10% of their respective accumulated profits each year, if any, to fund certain statutory reserve funds, until the aggregate amount of such fund
reaches 50% of its registered capital.
Regulations on Offshore Investment by Mainland China Residents
On July 4, 2014, SAFE promulgated the Notice on Relevant Issues Concerning Foreign Exchange Control of Domestic Residents’ Overseas
Investment and Financing and Roundtrip Investment through Offshore Special Purpose Vehicles, or SAFE Circular No. 37, which replaced the former
Notice on Relevant Issues Concerning Foreign Exchange Administration for Domestic Residents to Engage in Financing and Inbound Investment via
Overseas Special Purpose Vehicles (generally known as SAFE Circular No. 75) promulgated by SAFE on October 21, 2005.
SAFE Circular No. 37 requires mainland China residents to register with local branches of SAFE in connection with their direct establishment or
indirect control of an offshore entity, for the purpose of overseas investment and financing, with such mainland China residents’ legally owned assets or
equity interests in domestic enterprises or offshore assets or interests, which is referred to in SAFE Circular No. 37 as a “special purpose vehicle.” SAFE
Circular No. 37 further requires amendment to the registration in the event of any significant changes with respect to the special purpose vehicle, such as an
increase or decrease of capital contributed by mainland China residents, share transfer or exchange, merger, division or other material events. In the event
that a mainland China resident holding interests in a special purpose vehicle fails to complete the required SAFE registration, the mainland China
subsidiaries of that special purpose vehicle may be prohibited from making profit distributions to the offshore parent and from carrying out subsequent
cross-border foreign exchange activities and the special purpose vehicle may be restricted in its ability to contribute additional capital into its mainland
China subsidiaries. Furthermore, failure to comply with the various SAFE registration requirements described above could result in liability under PRC law
for evasion of foreign exchange controls.
Pursuant to the Circular on Further Simplifying and Improving the Direct Investment-related Foreign Exchange Administration Policies, or SAFE
Circular No. 13, which was promulgated by SAFE on February 13, 2015, came into effect on June 1, 2015, and was amended on December 30, 2019, the
administrative approvals of foreign exchange registration for direct domestic investment and direct overseas investment were canceled. In addition, SAFE
Circular No. 13 simplified the procedures of registration of foreign exchange by allowing investors to register with local banks with respect to the
registration of foreign exchange for direct domestic investment and direct overseas investment.
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Should there be any mainland China residents proposed to become our shareholders in the future, they shall register with the competent local branch
of SAFE or relevant banks with respect to their investments in our company as required by SAFE Circular No. 37 or SAFE Circular No. 13 and shall
update their registration filings with SAFE or relevant banks when there are any changes that should be registered under SAFE Circular No. 37 or SAFE
Circular No. 13.
Regulations on Employee Stock Options Plans
In December 2006, the PBOC promulgated the Administrative Measures of Foreign Exchange Matters for Individuals, setting forth the respective
requirements for foreign exchange transactions by individuals (both PRC or non-PRC citizens) under either the current account or the capital account. The
relevant implementing rules which were issued in January 2007 and further revised in May 2016 and March 2023 by SAFE specified approval
requirements for certain capital account transactions, such as a PRC citizen’s participation in employee stock ownership plans or share option plans of an
overseas publicly listed company. In February 2012, SAFE promulgated the Stock Option Notice that supersedes the requirements and procedures for the
registration of mainland China resident individuals’ participation in stock incentive plans set forth by certain rules promulgated by SAFE in March 2007.
The purpose of the Stock Option Notice is to regulate the foreign exchange administration of mainland China resident individuals who participate in
employee stock holding plans and share option plans of overseas listed companies.
According to the Stock Option Notice, if a mainland China resident individual participates in any employee stock incentive plan of an overseas listed
company, a domestic qualified agent appointed through the mainland China subsidiary of such overseas listed company must, among other things, file, on
behalf of such individual, an application with SAFE or its local counterpart to obtain approval for an annual allowance with respect to the purchase of
foreign exchange in connection with stock holding or share option exercises. With the approval from SAFE or its local counterpart, the domestic qualified
agent shall open a special foreign exchange account at a domestic bank to hold the funds required in connection with the stock purchase or option exercise,
any returned principal or profits upon sales of shares, any dividends issued on the stock and any other income or expenditures approved by SAFE or its
local counterpart.
Under the Foreign Currency Administration Rules, as amended, the foreign exchange proceeds of domestic entities and individuals can be remitted
into mainland China or deposited abroad, subject to the terms and conditions to be issued by SAFE. However, the implementing rules in respect of
depositing the foreign exchange proceeds abroad have not been issued by SAFE. The foreign exchange proceeds from the sales of shares can be converted
into RMB or transferred to such individuals’ foreign exchange savings account after the proceeds have been remitted back to the special foreign exchange
account opened at the domestic bank. If share options are exercised in a cashless exercise, the domestic individuals are required to remit the proceeds to
special foreign exchange accounts.
Many issues with respect to the Stock Option Notice require further interpretation. We and our employees working in mainland China who participate
in an employee stock incentive plan are subject to the Stock Option Notice as we are an overseas listed company. We have registered with the local
counterparts of SAFE for our domestic resident employees who participate in our share incentive plans, as required under the Stock Option Notice and
relevant rules. If we or our employees working in mainland China fail to comply with the Stock Option Notice, we and our employees working in mainland
China may face sanctions imposed by the PRC foreign exchange authority or any other PRC government authorities, including restrictions on foreign
currency conversions and additional capital contribution to our mainland China subsidiaries.
In addition, the MOF and the SAT has issued circulars concerning employee share options. Under these circulars, our employees working in mainland
China who exercise share options will be subject to PRC individual income tax. Our mainland China subsidiary has obligations to file documents related to
employee share options with relevant tax authorities and withhold the individual income taxes of employees who exercise their share options. If our
employees fail to pay and we fail to withhold their income taxes, we may face sanctions imposed by tax authorities or any other PRC government
authorities. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Failure to comply with PRC regulations
regarding the registration requirements for employee share ownership plans or share option plans may subject the PRC plan participants or us to fines and
other legal or administrative sanctions.”
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Regulation on Employment
Pursuant to the PRC Labor Law and the PRC Labor Contract Law, employers must execute written labor contracts with full-time employees. All
employers must compensate their employees with wages equal to at least the local minimum wage standards. All employers are required to establish a
system for labor safety and sanitation, strictly abide by state rules and standards and provide employees with workplace safety training. Violations of the
PRC Labor Contract Law and the PRC Labor Law may result in the imposition of fines and other administrative liabilities.
In addition, employers in mainland China are obliged to provide employees with welfare schemes covering pension insurance, unemployment
insurance, maternity insurance, work-related injury insurance, medical insurance and housing funds.
According to the Social Security Law of the PRC, which was promulgated by the SCNPC on October 28, 2010 and came into effect on July 1, 2011,
and was amended on December 29, 2018, and other relevant PRC laws and regulations such as the Interim Regulations on the Collection and Payment of
Social Insurance Premiums effective on January 22, 1999 and amended on March 24, 2019, Regulations on Work Injury Insurance implemented on January
1, 2004 and amended on December 20, 2010, Regulations on Unemployment Insurance promulgated on January 22, 1999 and Trial Measures on Employee
Maternity Insurance of Enterprises implemented on January 1, 1995, the employer shall contribute to social insurance plans covering basic pensions
insurance, basic medical insurance, maternity insurance, employment injury insurance and unemployment insurance. Basic pension, medical and
unemployment insurance contributions shall be paid by both employers and employees, while employment injury insurance and maternity insurance
contributions shall be paid only by employers, and employers who failed to promptly contribute social security premiums in full amount shall be ordered
by the social security premium collection agency to make or supplement contributions within a stipulated period, and shall be subject to a late payment fine
computed from the due date at the rate of 0.05% per day; and where payment is not made within the stipulated period, the relevant administrative
authorities shall impose a fine ranging from one to three times the amount of the amount in arrears.
According to the Regulations on the Administration of Housing Fund, which was promulgated by the State Council and became effective on April 3,
1999, and was amended on March 23, 2002 and March 23, 2019, enterprises in the mainland China must register with the competent managing center for
housing provident funds and upon the examination by such center, these enterprises shall complete procedures for opening an account at the relevant bank
for the deposit of employees’ housing provident funds. Enterprises are also required to pay and deposit housing provident funds on behalf of their
employees in full and in a timely manner. Employers that violate these regulations and fail to process housing provident fund payments or deposit
registrations with the housing provident fund administration center within a designated period are subject to a fine ranging from RMB10,000 to
RMB50,000.
Pursuant to the Reform Plan of the State Tax and Local Tax Collection Administration System, which was promulgated by the General Office of the
Communist Party of China and the General Office of the State Council of the PRC on July 20, 2018, from January 1, 2019, all the social insurance
premiums including the premiums of the basic pension insurance, unemployment insurance, maternity insurance, employment injury insurance and basic
medical insurance will be collected by the tax authorities. According to the Notice by the General Office of the State Administration of Taxation on
Conducting the Relevant Work Concerning the Collection Administration of Social Insurance Premiums in a Steady, Orderly and Effective Manner
promulgated on September 13, 2018 and the Urgent Notice of the General Office of the Ministry of Human Resources and Social Security on
Implementing the Spirit of the Executive Meeting of the State Council in Stabilizing the Collection of Social Security Contributions promulgated on
September 21, 2018, all the local authorities responsible for the collection of social insurance are strictly forbidden to conduct self-collection of historical
unpaid social insurance contributions from enterprises. Notice of the State Administration of Taxation on Implementing Measures on Further Support and
Serve the Development of Private Economy promulgated on November 16, 2018 reiterates that tax authorities at all levels may not organize self-collection
of arrears of taxpayers including private enterprises in the previous years.
Regulations on Concentration in Merger and Acquisition Transactions
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In August 2006, six PRC regulatory agencies, including the CSRC, jointly adopted the Provisions Regarding Mergers and Acquisitions of Domestic
Enterprises by Foreign Investors, or the M&A Rule, which became effective in September 2006 and was further amended in June 2009. The M&A Rules
established procedures and requirements that could make merger and acquisition activities by foreign investors more time-consuming and complex. These
rules require, among other things, that the MOFCOM be notified in advance of any change-of-control transaction in which a foreign investor will take
control of a mainland China domestic enterprise or a foreign company with substantial mainland China operations, if certain thresholds under the
Provisions on Thresholds for Prior Notification of Concentrations of Undertakings issued by the State Council on August 3, 2008 and amended on
September 18, 2018 and January 22, 2024 are triggered. This M&A Rule also purports to require, among other things, offshore special purpose vehicles,
formed for listing purposes through acquisition of mainland China domestic companies and controlled by mainland China companies or individuals, to
obtain the approval from the CSRC prior to publicly listing their securities on an overseas stock exchange.
Complying with these requirements could affect our ability to expand our business or maintain our market share. See “Item 3. Key Information—D.
Risk Factors—Risks Related to Doing Business in China—Any failure or perceived failure by us to comply with the enacted Guideline on Anti-monopoly
of Platform Economy Sector and other antimonopoly laws and regulations may result in governmental investigations or enforcement actions, litigation or
claims against us and could have an adverse effect on our business, financial condition and results of operations.”
C. Organizational Structure
The following diagram illustrates our corporate structure, including our principal subsidiaries and VIEs, as of the date of this annual report:
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Notes:
(1)
The two individuals are Quan Long and Youdong Wang, each a PRC citizen. Each of Quan Long and Youdong Wang holds 50% of the equity interests in each of Autohome Information
and Shengtuo Hongyuan. Quan Long is our director and chairman of the board of directors. Youdong Wang is the vice president of our company.
(2) Weiwei Wang, a PRC citizen, holds 100% of the equity interests in Shanghai Jinwu. Weiwei Wang is the founder of TTP Car Inc.
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(3)
The two individuals are Weiwei Wang and Lan Zhang, each a PRC citizen. Weiwei Wang holds 95% of the equity interests in Shanghai Jinyou and Lan Zhang holds 5% of the equity
interests in Shanghai Jinyou. Weiwei Wang is the founder of TTP Car Inc. Lan Zhang is the vice president of TTP Car Inc.
As of March 31, 2024, Yun Chen owned 46.4% of our total issued and outstanding ordinary shares. Yun Chen is a subsidiary of Ping An Group, which
beneficially owned 46.4% of the total voting rights in our company.
Autohome WFOE has entered into a series of contractual agreements with Autohome Information and each of its individual nominee shareholders.
The currently effective contractual agreements were entered into in January 2024 by and between Autohome WFOE, Autohome Information, Mr. Quan
Long, our director and chairman of the board of directors, and Mr. Youdong Wang, the vice president of our company. Autohome WFOE has also entered
into a series of contractual agreements with Autohome Information and two of its subsidiaries, respectively, namely Autohome Advertising and Chengshi
Advertising. Such contractual arrangements allow us to (i) have power to direct significant activities of Autohome Information and its subsidiaries, (ii)
receive substantially all of the economic benefits of Autohome Information and its subsidiaries, and (iii) have an exclusive option to purchase all or part of
the equity interests in Autohome Information and its subsidiaries when and to the extent permitted by the PRC laws.
In addition, Chezhiying WFOE has entered into a series of contractual agreements with Shengtuo Hongyuan and each of its individual nominee
shareholders. The currently effective contractual agreements were entered into in January 2024 by and between Chezhiying WFOE, Shengtuo Hongyuan,
Mr. Quan Long, our director and chairman of the board of directors, and Mr. Youdong Wang, the vice president of our company. Chezhiying WFOE has
also entered into a series of contractual agreements with Shengtuo Hongyuan and its subsidiary, namely Autohome Used Car Appraisal. Such contractual
arrangements allow us to (i) have power to direct significant activities of Shengtuo Hongyuan and its subsidiary, (ii) receive substantially all of the
economic benefits of Shengtuo Hongyuan and its subsidiary, and (iii) have an exclusive option to purchase all or part of the equity interests in Shengtuo
Hongyuan and its subsidiary when and to the extent permitted by the PRC laws.
In December 2020, we acquired TTP which operated an online bidding platform for used automobiles in mainland China primarily through Shanghai
Jinwu, which held an auction business approval certificate and an ICP License. In August 2015, TTP WFOE entered into a series of contractual
agreements with Shanghai Jinwu and Weiwei Wang, being the individual nominee shareholder of Shanghai Jinwu. In March and May of 2022, TTP WFOE
also entered into a series of contractual agreements with Shanghai Jinyou and its individual nominee shareholders, namely Weiwei Wang and Lan Zhang.
As of the date of this annual report, the operation of online bidding platform for used automobiles in Shanghai Jinwu has been transferred to Shanghai
Jinyou, which holds an auction business approval certificate and an ICP license. The contractual arrangements of TTP WFOE with Shanghai Jinwu and
Shanghai Jinyou, respectively, and their respective shareholder(s) allow TTP to (i) have power to direct significant activities of Shanghai Jinwu and
Shanghai Jinyou, (ii) receive substantially all of the economic benefits of Shanghai Jinwu and Shanghai Jinyou, and (iii) have an exclusive option to
purchase all or part of the equity interests in Shanghai Jinwu and Shanghai Jinyou when and to the extent permitted by the PRC laws.
For the information regarding our contractual arrangements, please refer to “Item 7. Major Shareholders and Related Party Transactions—B. Related
Party Transactions—Contractual Arrangements with the Variable Interest Entities.”
D. Property, Plants and Equipment
Our corporate headquarter is located in Beijing, China, where we lease office space with an area of approximately 24,489 square meters. We generally
make rental payments on a monthly or quarterly basis. In addition, as of December 31, 2023, we also leased office space in 52 cities for our representative
offices, including regional operation centers in Shanghai, Guangzhou and Tianjin in China. We believe that our existing facilities are generally adequate to
meet our current needs, but we expect to seek additional space as needed to accommodate future growth.
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Our servers are primarily hosted at internet data centers owned by major domestic internet data center providers. We believe that our current facilities
are adequate and that we will be able to obtain additional facilities, principally through leasing, to accommodate any future expansion plans.
ITEM 4A UNRESOLVED STAFF COMMENTS
None.
ITEM 5 OPERATING AND FINANCIAL REVIEW AND PROSPECTS
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated
financial statements and the related notes included elsewhere in this annual report. This discussion contains forward-looking statements that involve risks
and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as
a result of various factors, including those set forth under “Risk Factors” and elsewhere in this annual report.
A. Operating Results
Overview
We are the leading online destination for automobile consumers in mainland China, ranking first among automotive service platforms in China in
terms of mobile daily active users as of December 31, 2023, according to QuestMobile. Through our three websites, autohome.com.cn, che168.com and
ttpai.cn, accessible mainly through PCs, mobile devices, our mobile applications and mini apps, we deliver comprehensive, independent and interactive
content and tools to automobile consumers as well as a full suite of services to automakers and dealers across the auto value chain.
We generate revenues from media services, leads generation services and online marketplace and others.
•
•
•
Media services: Through our media services, we provide automakers with targeted-marketing solutions in connection with brand promotion, new
model release and sales promotion. Our large and engaged user base of automobile consumers provides a broad reach for automakers’ marketing
messages.
Leads generation service: Our leads generation services enable our dealer subscribers to create their own online stores, list pricing and
promotional information, provide dealer contact information, place advertisements and manage customer relationships to help them reach a
broad set of potential customers and effectively market their automobiles to consumers online and ultimately generate sales leads. Our leads
generation services also include used car listing services, which provide a user interface that allows potential used car buyers to identify suitable
listings and contact the relevant sellers.
Online marketplace and others: While we continue to strengthen our media and leads generation services, we are also further developing our
online marketplace and other businesses. These businesses focus on providing facilitation services for new and used vehicles transactions and
other platform-based services for new and used car buyers and sellers. Through our auto financing business, we provide services to our
cooperative financial institutions that involve facilitating the sale of their loans and insurance products to consumers and used automobile sellers.
From the end of 2017, we began offering data products, which leverage our intelligent big data analytics capabilities and massive pool of
accumulated user data to provide end-to-end data- driven products and solutions for automakers and dealers across different stages of the value
chain. We believe the breadth and depth of these products and solutions on our platform will allow us to build a robust and technology-driven
automotive ecosystem that covers all aspects of the automobile ownership life cycle. We also provide comprehensive auto-related services to our
users by integrating TTP’s offline vehicle examination, ownership transfer services and other ancillary services with our online services.
102
Our net revenues decreased by 4.1% from RMB7,237.0 million in 2021 to RMB6,940.8 million in 2022, and increased by 3.5% from RMB6,940.8
million in 2022 to RMB7,184.1 million (US$1,011.9 million) in 2023. Our net income attributable to Autohome Inc. decreased by 17.5% from
RMB2,248.8 million in 2021 to RMB1,855.2 million in 2022 and increased by 4.3% from RMB1,855.2 million in 2022 to RMB1,935.3 million (US$272.6
million) in 2023.
General Factors Affecting Our Results of Operations
Our business and results of operations are significantly affected by mainland China’s overall economic conditions and the general trends in the
automotive industry, especially automobile sales in mainland China and the sales and marketing budgets of automakers and dealers. Economic growth in
mainland China has contributed to an increase in household disposable income and improved the availability of financing for automobile purchases. New
automobile sales in mainland China experienced rapid growth for a sustained period of time until the first decline in annual sales starting in 2018, which
trend continued through 2019 and 2020. New automobile sales achieved growth in the first quarter of 2021 primarily due to a low base effect of the first
quarter of 2020 during which the COVID-19 pandemic negatively impacted the auto sales, while the decline trend remained throughout the rest of the year
of 2021 due to shortage in auto chip supply. With the support of government policies and the ease of the COVID-19 pandemic situation, the automotive
industry showed a recovery since 2022, driven by the NEV sales growth. The ICE sales volume, however, experienced continuous decline while most of
our revenues come from ICE automakers. In addition, our business is subject to the overall advertising expenditures by automakers and automobile dealers,
the development of online advertising industry in mainland China and the market acceptance of online advertising and promotion. Our results of operations
can also be significantly impacted by our ability to minimize costs and maximize efficiency in our operations.
In addition, our business and results of operations may be affected by our user reach, the level of user experience and engagement. Automakers and
dealers, which contribute a substantial portion of our revenues, choose to advertise on our websites and mobile applications in significant part because of
our leading market position in the online automotive advertising industry and the rich, diverse and customized content on our websites and mobile
applications. Also, effective marketing and promotion activities we conduct are critical for us to maintain and enhance our brand recognition and attract
more traffic to our platform. We anticipate that our ability to maintain a large user base while delivering superior user engagement and experience will
affect our ability to attract new advertisers and dealer subscribers, which will ultimately impact our ability to generate leads and transactions. Finally, our
business and results of operations may be affected by the development of e-commerce in mainland China and consumers’ acceptance of online automobile
purchases.
Key Income Statement Line Items and Specific Factors Affecting Our Results of Operations
While our business and results of operations are generally affected by the factors detailed above, our results of operations are more directly affected by
specific financial factors such as the ones described below.
Net Revenues
We currently generate our net revenues from media services, leads generation services, online marketplace and others.
Media services mainly include automaker advertising services and regional marketing campaigns conducted by certain automobile brands’ regional
offices. We sell our advertising services primarily to automakers and dealers through third-party advertising agencies, with automakers contributing a
substantial majority of our advertising services revenues. We offer rebates to advertising agencies who represent automakers and automobile dealers that
place advertisements on our platform. Our net revenues are presented net of rebates to advertising agencies.
We generate revenues from leads generation services through dealer subscription services, advertising services sold to individual dealer advertisers
and used car listing services. We sell our dealer subscription services to automobile dealers mainly on a fixed-fee subscription basis, with fee rates that
depend on the length and version of the subscription, and the cities where the automobile dealers are located.
103
We also generate revenues from online marketplace and others, which consist of data products, new and used vehicle transactions, auto financing and
others. For data products, we provide end-to-end data-driven products and solutions for automakers and dealers. For new and used vehicle transactions and
auto financing business, we provide services such as transaction facilitation, transaction-oriented marketing solutions, sales leads, loan facilitation and
insurance brokerage services. The service fees are recognized when the services are provided, sales leads are delivered or upon the successful of transaction
facilitation, or over the service period of data-driven products and solutions by automakers and dealers.
The following table sets forth the principal components of our net revenues in absolute amounts and as percentages of our total net revenues for the
years presented:
Net revenues:
Media services
Leads generation services
Online marketplace and
others
Total net revenues
Media Services Revenues
2021
RMB
%
For the Year Ended December 31,
2022
RMB
%
(in thousands, except percentages)
RMB
2023
US$
%
2,011,446
2,988,075
27.8
41.3
1,963,289
3,056,924
28.3
44.0
1,870,819
3,111,805
263,499
438,289
26.0
43.3
2,237,483
7,237,004
30.9
100.0
1,920,615
6,940,828
27.7
100.0
2,201,511
7,184,135
310,076
1,011,864
30.6
100.0
We generate media services revenues primarily from automaker advertising services and regional marketing campaigns conducted by certain
automobile brands’ regional offices. In 2021, 2022 and 2023, 91, 100 and 96 automakers operating in mainland China, respectively, purchased media
services from us directly or through third-party advertising agencies. We primarily use a “cost per day” pricing model to price our online advertising
services by charging advertisers on a daily basis for an advertisement placed in a given location on our websites and mobile applications. As we continue to
grow our user base and enhance user engagement, we have set up “cost per thousand impressions,” “cost per click” and other performance-based pricing
models. These initiatives have already begun to generate revenues, but the amount was relatively insignificant compared to the revenues generated from the
“cost per day” pricing model.
We will continue to leverage a combination of the following to attract spending by automakers on our websites and mobile applications: (i) our ability
to increase advertising volume, either due to (a) higher sell-through rates, which is calculated as the percentage of advertising locations actually sold over
total advertising locations available for sale in a given period, or (b) the increased volume contribution from our mobile websites and applications; (ii) our
ability to increase our pricing, as measured by price per location per day, as our user reach continues to expand, and we continue to enhance the
effectiveness of the services we offer and build automakers’ increasing awareness of our platform; and (iii) our ability to constantly provide more
diversified and optimized portfolio of product offerings.
Leads Generation Services Revenues
We generate leads generation services revenues through (i) dealer subscription services, (ii) advertising services sold to individual dealer advertisers,
and (iii) used car listing services. Our dealer subscribers are dealers that have purchased subscription packages which are delivered through our dealership
information system. We provide our dealer subscribers with additional tools and features to enable them to more effectively market their inventories on our
websites and mobile applications. Our used car listing services primarily consist of listing and display of used vehicles and generation of sales leads to
dealers through our platform. We provided leads generation services to 23,669, 24,126 and 24,248 dealers in 2021, 2022 and 2023, respectively. Our leads
generation services revenues accounted for 41.3%, 44.0% and 43.3% of our net revenues in 2021, 2022 and 2023, respectively. We will continue to
enhance our ability to (i) increase the penetration rate of high-end subscription packages; (ii) provide more diversified and upgraded value-added services
to our dealer customers, leveraging our capabilities of connecting dealers with our large user base; and (iii) ultimately increase the average revenue
contribution per dealer.
104
Online Marketplace and Others Revenues
We generate revenues from online marketplace and others through our data products, new and used vehicle transaction platform, auto financing
services and others. Our data products leverage our intelligent big data analytics capabilities and massive pool of accumulated user data to provide end-to-
end data-driven products and solutions for automakers and dealers across different stages of the value chain. For new vehicles, our transaction business
currently focuses on platform-based services including facilitating transactions, providing transaction-oriented marketing solutions and other platform-
based services. For used vehicles, our transaction platform functions as a transaction system, which connects automobile buyers and used automobile
sellers and facilitates their vehicle transactions on our platform through providing a wide range of auto related services, such as online bidding services and
valuation tools. For our auto financing business, based on users’ preferences and our big data analysis, we recommend a broad range of loans and insurance
products offered by our cooperative financial institutions to our users who have auto financing needs and we match them with these financial institutions to
facilitate transactions. We have also introduced merchant loans offered by our cooperative financial institutions to automobile sellers. As a result of our
acquisition of Shanghai Tianhe in 2017, we currently facilitate the transactions of insurance products between consumers and our cooperative insurance
business partner as an insurance brokerage service provider. We also provide comprehensive auto-related services to our users by integrating TTP’s offline
vehicle examination, ownership transfer services and other ancillary services with our online services. Our revenues from online marketplace and others
accounted for 30.9%, 27.7% and 30.6% of our net revenues in 2021, 2022 and 2023, respectively. Going forward, we will explore diversified business
models and opportunities to build a robust and comprehensive e-commerce platform and continue to develop our transaction system and data products
businesses.
Cost of Revenues
Cost of revenues refers primarily to (i) operational costs, (ii) content costs, (iii) bandwidth and internet data center (“IDC”) costs and (iv) tax
surcharges. The following table sets forth the principal components of our cost of revenues in absolute amounts and as a percentage of our total net
revenues for the years indicated:
2021
RMB
%
For the Year Ended December 31,
2022
RMB
%
(in thousands, except percentages)
RMB
2023
US$
%
520,805
204,614
105,343
39,240
177,890
1,047,892
7.2
2.8
1.5
0.5
2.5
14.5
548,309
359,404
113,150
97,379
116,931
1,235,173
7.9
5.2
1.6
1.4
1.7
17.8
696,197
396,502
110,508
95,147
113,527
1,411,881
98,057
55,846
15,565
13,401
15,990
198,859
9.7
5.5
1.5
1.3
1.6
19.7
(1)
Cost of revenues:
Operational costs
Content costs
Bandwidth and IDC costs
Tax surcharges
Others
Total cost of revenues
Note:
(1)
Including share-based compensation expenses of RMB23.1 million for 2021, RMB8.6 million for 2022 and RMB 8.0 million (US$1.1 million) for 2023.
Operational Costs
Operational costs consist of costs for our revenue-generating business activities and maintaining our business operations, including the transaction
fees incurred on our platform, execution costs of service contracts, salaries and benefits, and share-based compensation expenses of related employees.
Content Costs
Content costs consist of costs for creating and editing the originally-generated content, organizing and maintaining user-generated content on our
websites and mobile applications, and purchasing professionally-generated content displayed on our websites and mobile applications.
105
Bandwidth and IDC Costs
Bandwidth and IDC costs consist of fees that we pay to telecommunication carriers and other service providers for telecommunication services and for
hosting our servers at their internet data centers, as well as fees we pay to our content delivery network service provider for the distribution of our content.
Tax Surcharges
Our tax surcharges primarily consist of cultural development fees charged for our advertising services, construction and maintenance tax and
education surcharges. Our overall tax surcharges as a percentage of our total net revenues was 0.5% in 2021, 1.4% in 2022 and 1.3% in 2023. The increase
of tax surcharges from 2021 to 2022 was mainly due to the resumption of payment in 2022 of the previously exempted cultural development fees.
Others
Others mainly include depreciation and amortization expenses, telecommunication charges, and miscellaneous charges such as travel and office
expenses of our editorial and operation personnel.
Operating Expenses
Our operating expenses consist of sales and marketing expenses, general and administrative expenses and product development expenses. The
following table sets forth our operating expenses in absolute amounts and as percentages of our total net revenues for the years indicated:
Operating expenses
Sales and marketing expenses
General and administrative expenses
Product development expenses
Total operating expenses
(3)
(1)
(2)
2021
RMB
%
For the Year Ended December 31,
2022
RMB
(in thousands, except percentages)
%
RMB
2023
US$
%
2,759,905
543,799
1,398,037
4,701,741
38.1
7.5
19.3
64.9
2,866,206
502,340
1,417,094
4,785,640
41.3
7.2
20.4
68.9
3,012,479
537,979
1,348,472
4,898,930
424,299 41.9
7.5
75,773
189,928 18.8
690,000 68.2
Notes:
(1)
(2)
(3)
Including share-based compensation expenses of RMB46.8 million for 2021, RMB38.3 million for 2022 and RMB49.3 million (US$6.9 million) for 2023.
Including share-based compensation expenses of RMB48.8 million for 2021, RMB53.2 million for 2022 and RMB51.9 million (US$7.3 million) for 2023.
Including share-based compensation expenses of RMB87.3 million for 2021, RMB68.8 million for 2022 and RMB85.9 million (US$12.1 million) for 2023.
Sales and Marketing Expenses
Our sales and marketing expenses primarily consist of the branding and marketing expenses incurred in connection with promoting our brands and
platform through search engines, mobile platforms, navigation sites and traditional media channels, sales promotion activities and salaries and benefits and
sales commissions for our sales and marketing personnel. Our sales and marketing expenses also include offline execution and business development
expenses associated with the implementation of our business and office- and travel-related expenses associated with our sales and marketing activities.
General and Administrative Expenses
Our general and administrative expenses primarily consist of expected credit losses, personnel-related expenses for management and administrative
personnel and professional service fees.
106
Product Development Expenses
Our product development expenses primarily consist of personnel-related expenses associated with the development of new technologies and
products, investment in underlying big data, AR and VR related technologies, and enhancement of our websites and mobile applications. We recognize
these costs as expenses when incurred, unless they qualify for capitalization as software development costs.
Other Operating Income, net
Our other operating income, net primarily consists of VAT refunds, government grants and others. The government grants primarily represent
subsidies and tax refunds for operating a business in certain jurisdictions and fulfillment of specified tax payment obligations. These grants are not subject
to any specific requirements and are recorded when received. Depending on the local government policies, some of the grants are not recurring in nature.
The following table sets forth our other operating income, net in absolute amounts and as percentages of our total net revenues for the years indicated:
2021
RMB
%
For the Year Ended December 31,
2022
RMB
%
(in thousands, except percentages)
RMB
2023
US$
%
VAT refunds
Government grants
Others
Other Operating Income, net
Taxation
Cayman Islands
231,452
51,685
11,104
294,241
3.2
0.7
0.2
4.1
223,926
56,406
47,175
327,507
3.2
0.8
0.7
4.7
233,922
27,184
2,995
264,101
32,947
3,829
422
37,198
3.3
0.4
0.0
3.7
Autohome Inc., Autohome Link Inc. and TTP Car Inc. were incorporated in the Cayman Islands. Autohome Inc. conducts substantially all of its
business through its mainland China subsidiaries and VIEs. Under the current laws of the Cayman Islands, companies incorporated in the Cayman Islands
are not subject to income or capital gains tax. In addition, dividend payments are not subject to withholding tax in the Cayman Islands.
British Virgin Islands
Cheerbright and Auto Pai Ltd. were incorporated in the British Virgin Islands. Under the current laws of the British Virgin Islands, they are not subject
to income or capital gains tax. In addition, dividend payments are not subject to withholding tax in the British Virgin Islands.
Hong Kong
Autohome (Hong Kong) Limited, Autohome Media Limited, Autohome Link Hong Kong Limited and TTP Car (HK) Limited, were incorporated in
Hong Kong. Subsidiaries in Hong Kong are subject to 16.5% income tax on their taxable income generated from operations in Hong Kong. On April 1,
2018, a two-tiered profits tax regime was introduced. The profits tax rate for the first HK$2 million of profits of corporations is lowered to 8.25%, while
profits above that amount continue to be subject to the tax rate of 16.5%. Under the Hong Kong tax law, our subsidiaries in Hong Kong are exempted from
income tax on their foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends.
Mainland China
On December 29, 2018, the SCNPC amended the EIT Law, which was issued on March 16, 2007. The Implementing Regulations of the Law of the
PRC on Enterprise Income Tax was issued on December 6, 2007 and became effective on January 1, 2008 and was revised on April 23, 2019. Under the
EIT Law and its implementation
107
rules, a standard 25% enterprise income tax rate is generally applicable to both foreign-invested enterprises and domestic enterprises, unless they qualify
for certain exceptions.
An enterprise may benefit from a preferential tax rate of 15% under the EIT Law if it qualifies as a “High and New Technology Enterprise” strongly
supported by the state. Pursuant to the Administrative Measures on the Recognition of High and New Technology Enterprises, or the Recognition
Measures, as amended in January 2016, the provincial counterparts of the Ministry of Science and Technology, the Ministry of Finance and the State
Administration of Taxation make joint determination on whether an enterprise is qualified as a “High and New Technology Enterprise” under the EIT Law.
In making such determination, these government agencies consider, among other factors, ownership of core technology, whether the key technology
supporting the core products or services falls within the scope of high and new technology strongly supported by the state as specified in the Recognition
Measures, the ratios of research and development personnel to total personnel, the ratio of research and development expenditures to annual sales revenues,
the ratio of revenues attributed to high and new technology products or services to total revenues, and other measures set forth in relevant guidance. A
“High and New Technology Enterprise” certificate is effective for a period of three years.
Autohome WFOE, Chezhiying WFOE, Beijing Autohome Technologies Co., Ltd., or Beijing Autohome Technologies, Beijing Prbrownies Software
Co., Ltd., or Beijing Prbrownies, Hainan Chezhiyitong Information Technology Co., Ltd., or Hainan Chezhiyitong, and Tianjin Autohome Software Co.,
Ltd., or Tianjin Autohome, are recognized as HNTEs and are eligible for a 15% preferential tax rate effective until 2024, 2023, 2023, 2023, 2025 and 2025,
respectively, upon the completion of their filings with the relevant tax authorities.
An enterprise may benefit from a tax exemption or preferential tax rate of 10% under the EIT law if it qualifies as a “Key Software Enterprise.” “Key
Software Enterprise” status will be subject to relevant governmental authorities’ assessment each year as to whether they are entitled to the tax exemption
or preferential tax rate of 10%. In May 2016, the four PRC governmental authorities jointly issued a notice, pursuant to which an enterprise may be entitled
to the preferential income tax rate of 10% by filing with the local tax authority with supporting documentation proving its qualifications to be a “Key
Software Enterprise” during its annual income tax filing process. In December 2020, the Ministry of Finance, the State Administration of Taxation, the
NDRC, and the MIIT jointly issued a circular which has repealed the original preferential tax treatment applicable to the “Key Software Enterprise.” Such
circular provides that the Key Software Enterprise’s EIT would be waived for five years since its first year of making profit and it may benefit from a
preferential tax rate of 10% for the following years.
Beijing Prbrownies registered as a KSE and enjoyed a reduced enterprise income tax of 10% for tax year from 2017 to 2022. Tianjin Autohome
registered as a KSE in 2021 and 2022 with enjoying a tax exemption. Going forward, if Beijing Prbrownies or Tianjin Autohome, fails to complete the
filing and registration with the relevant tax authorities, it will no longer enjoy the tax exemption or preferential tax rate.
Pursuant to the Circular on Income Tax Policies for Further Encouraging the Development of Software Industry and Integrated Circuit Industry jointly
issued by the SAT and the MOF, on April 20, 2012, the Circular on Issues concerning Preferential Enterprise Income Tax Policies for Software and
Integrated Circuit Industries jointly issued by the MOF, the SAT, the NDRC and the MIIT on May 4, 2016, and the Circular on Issues concerning Corporate
Income Tax Policies for Promoting High-quality Development of Integrated Circuit Industry and Software Industry jointly issued by the MOF, the SAT, the
NDRC and the MIIT on December 11, 2020, eligible software enterprises which pass annual review and filing with the relevant tax authorities can enjoy
exemption of enterprise income tax for the first and second year as calculated from the profit making year or no later than December 31, 2017 if no profit is
made prior to that date, and thereafter enjoy half of the statutory rate of 25% for the third through fifth year thereafter until the expiration of the preferential
period.
Chezhiying WFOE, Hainan Chezhiyitong and Tianjin Autohome are recognized as software enterprise and could be exempt from income tax for the
tax year of 2019 and 2020 and enjoyed a 50% reduction in the statutory income tax rate of 25% for the tax year from 2021 to 2023. Tianjin Autohome
enjoyed a tax exemption for the tax year from 2021 to 2022 as KSE. Above three entities can continue to enjoy the 12.5% preferential tax rate or the tax
exemption for the years of 2023 provided that they maintain their status as a SE during each relevant tax year.
108
Except for the above-mentioned entities, our remaining mainland China subsidiaries and all the VIEs were subject to enterprise income tax at a rate of
25%.
If our holding company in the Cayman Islands, Autohome Inc., were deemed to be a “mainland China resident enterprise” under the EIT Law, it
would be subject to enterprise income tax on its global income at a rate of 25%. If a subsidiary of us established in Hong Kong were deemed to be a
“mainland China resident enterprise” and Autohome Inc. were not deemed to be a “mainland China resident enterprise” under the EIT Law, then dividends
payable by such subsidiary to Autohome Inc. may become subject to 10% PRC dividend withholding tax. Under such circumstances, it is not clear whether
dividends payable by our mainland China subsidiaries to their respective shareholders in Hong Kong would still be subject to PRC dividend withholding
tax at a rate of 5%. If such subsidiary in Hong Kong were deemed to be a “mainland China resident enterprise” under the EIT Law, it would be subject to
enterprise income tax at a rate of 25%. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Our global income
and the dividends that we may receive from our mainland China subsidiaries, dividends distributed to our non-mainland China shareholders and ADS
holders, and gains recognized by such shareholders or ADS holders, may be subject to PRC taxes under the EIT Law, which would have a material adverse
effect on our results of operations.”
Results of Operations
The following table presents our results of operations in absolute amounts and as a percentage of our total net revenues for the years indicated.
2021
RMB
%
For the Year Ended December 31,
2022
RMB
%
(in thousands, except percentages)
RMB
2023
US$
%
Net revenues
Media services
Leads generation services
Online marketplace and others
Total net revenues
Cost of revenues
(1)
Gross Profit
Operating expenses
Sales and marketing expenses
General and administrative expenses
Product development expenses
(1)
(1)
(1)
Total operating expenses
Other operating income, net
Operating profit
Interest and investment income, net
Earnings/(loss) from equity method
investments
Income before income taxes
Income tax (expense)/benefit
Net income
Net loss attributable to
noncontrolling interests
Net income attributable to Autohome Inc.
Accretion of mezzanine equity.
Accretion attributable to noncontrolling
interests.
Net income attributable to ordinary
shareholders.
Notes:
2,011,446
2,988,075
2,237,483
7,237,004
(1,047,892 )
6,189,112
(2,759,905 )
(543,799 )
(1,398,037 )
(4,701,741 )
294,241
1,781,612
395,245
301
2,177,158
(34,006 )
2,143,152
105,633
2,248,785
(411,792 )
311,573
2,148,566
27.8
41.3
30.9
100.0
(14.5 )
85.5
(38.1 )
(7.5 )
(19.3 )
(65.0 )
4.1
24.6
5.5
0.0
30.1
(0.5 )
29.6
1.5
31.1
(5.7 )
4.3
29.7
1,963,289
3,056,924
1,920,615
6,940,828
(1,235,173 )
5,705,655
(2,866,206 )
(502,340 )
(1,417,094 )
(4,785,640 )
327,507
1,247,522
565,090
(49,766 )
1,762,846
61,780
1,824,626
30,548
1,855,174
(137,610 )
89,612
1,807,176
28.3
44.0
27.7
100.0
(17.8 )
82.2
(41.3 )
(7.2 )
(20.4 )
(68.9 )
4.7
18.0
8.1
(0.7 )
25.4
0.9
26.3
0.4
26.7
(2.0 )
1.3
26.0
1,870,819
3,111,805
2,201,511
7,184,135
(1,411,881 )
5,772,254
(3,012,479 )
(537,979 )
(1,348,472 )
(4,898,930 )
264,101
1,137,425
831,006
29,133
1,997,564
(72,155 )
1,925,409
9,901
1,935,310
(153,294 )
263,499
438,289
310,076
1,011,864
(198,859 )
813,005
(424,299 )
(75,773 )
(189,928 )
(690,000 )
37,198
160,203
117,045
4,103
281,351
(10,163 )
271,188
1,395
272,583
(21,591 )
98,071
13,813
1,880,087
264,805
26.0
43.3
30.6
100.0
(19.7 )
80.3
(41.9 )
(7.5 )
(18.8 )
(68.2 )
3.7
15.8
11.6
0.4
27.8
(1.0 )
26.8
0.1
26.9
(2.1 )
1.4
26.2
(1)
Including share-based compensation expenses as follows:
109
2021
2022
For the Year Ended December 31,
RMB
%
RMB
(in thousands, except percentages)
%
RMB
2023
US$
%
Allocation of Share-Based Compensation Expenses
Cost of revenues
Sales and marketing expenses
General and administrative expenses
Product development expenses
Total share-based compensation expenses
23,142
46,823
48,803
87,292
206,060
0.3
0.6
0.7
1.2
2.8
8,608
38,317
53,209
68,756
168,890
0.1
0.6
0.8
1.0
2.5
7,982
49,305
51,860
85,945
195,092
1,124
6,945
7,304
12,105
27,478
0.1
0.7
0.7
1.2
2.7
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022
Net Revenues
Our net revenues increased by 3.5% from RMB6,940.8million in 2022 to RMB7,184.1 million (US$1,011.9 million) in 2023.
Media services. Our media services revenues decreased by 4.7% from RMB1,963.3 million in 2022 to RMB1,870.8 million (US$263.5 million) in
2023. The decrease in revenues from our media services was primarily attributable to a slight decrease in average revenue per automaker advertiser from
RMB19.6 million in 2022 to RMB19.5 million in 2023.
Leads generation services. Leads generation services revenues increased by 1.8% from RMB3,056.9 million in 2022 to RMB3,111.8 million
(US$438.3 million) in 2023. The increase in leads generation services revenues was mainly due to higher percentage of premium-version subscribed by
dealers.
Online marketplace and others. Revenues from online marketplace and others increased by 14.6% from RMB1,920.6 million in 2022 to RMB2,201.5
million (US$310.1 million) in 2023. This increase was primarily attributable to the growth of sales of data products.
Cost of Revenues
Our cost of revenues increased by 14.3% from RMB1,235.2 million in 2022 to RMB1,411.9 million (US$198.9 million) in 2023. In addition, share-
based compensation expenses included in cost of revenues in 2023 was RMB8.0 million (US$1.1 million), compared to RMB8.6 million in 2022.
Operational costs. Our operational costs increased by 27.0% from RMB548.3 million in 2022 to RMB696.2 million (US$98.1 million) in 2023,
primarily due to the increased transaction fees incurred on the platform, growth of execution costs of service contracts, and salaries and benefits of related
employees.
Content Costs. Our content costs increased by 10.3% from RMB359.4 million in 2022 to RMB396.5 million (US$55.8 million) in 2023, primarily due
to continuous investment in content generation, acquisition and execution.
Bandwidth and IDC Costs. Our bandwidth and IDC costs decreased by 2.3% from RMB113.2 million in 2022 to RMB110.5 million (US$15.6
million) in 2023.
Tax Surcharges. Tax surcharges decreased by 2.3% from RMB97.4 million in 2022 to RMB95.1 million (US$13.4 million) in 2023.
Others. Other costs decreased by 2.9% from RMB116.9 million in 2022 to RMB113.5 million (US$16.0 million) in 2023.
Operating Expenses
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Our operating expenses increased by 2.4% from RMB4,785.6 million in 2022 to RMB4,898.9 million (US$690.0 million) in 2023.
Sales and Marketing Expenses. Our sales and marketing expenses increased by 5.1% from RMB2,866.2 million in 2022 to RMB3,012.5 million
(US$424.3 million) in 2023, primarily due to the increase in marketing and promotional spending. As a percentage of net revenues, sales and marketing
expenses were 41.9% in 2023, compared to 41.3% in 2022. Share-based compensation expense included in sales and marketing expenses in 2023 was
RMB49.3 million (US$6.9 million), compared to RMB38.3 million in 2022.
General and Administrative Expenses. Our general and administrative expenses increased by 7.1% from RM502.3 million in 2022 to RMB538.0
million (US$75.8 million) in 2023. As a percentage of net revenues, general and administrative expenses increased from 7.2% in 2022 to 7.5% in 2023.
Share-based compensation expense included in general and administrative expenses in 2023 was RMB51.9 million (US$7.3 million), compared to
RMB53.2 million in 2022.
Product Development Expenses. Our product development expenses decreased by 4.8% from RMB1,417.1 million in 2022 to RMB1,348.5 million
(US$189.9 million) in 2023. As a percentage of net revenues, product development expenses were 18.8% in 2023, compared to 20.4% in 2022. Share-
based compensation expense included in product development expenses in 2023 was RMB85.9 million (US$12.1 million), compared to RMB68.8 million
in 2022.
Other operating income, net
Our other operating income, net, primarily consists of VAT refund, government grants and others. Other operating income, net, was RMB264.1
million (US$37.2 million) in 2023, compared to RMB327.5 million in 2022. The decrease in other net operating income was primary due to the reduction
of the government subsidies.
Income before Income Taxes
Our income before income taxes was RMB1,997.6 million (US$281.4 million) in 2023, compared to RMB1,762.8 million in 2022.
Income Tax Expense/Benefit
We recorded an income tax expense of RMB72.2 million (US$10.2 million) in 2023, compared to an income tax benefit of RMB61.8 million in 2022,
primarily due to the withholding tax related to the declared cash dividend in December 2023.
Net Income Attributable to Autohome
As a result of the foregoing, we had net income attributable to Autohome Inc. of RMB1,935.3 million (US$272.6 million) in 2023, increasing by 4.3%
compared to net income attributable to Autohome Inc. of RMB1,855.2 million in 2022.
Net Income attributable to Ordinary Shareholders
The net income attributable to ordinary shareholders was RMB1,880.1 million (US$264.8 million) in 2023, increasing by 4.0% compared to net
income attributable to ordinary shareholders of RMB1,807.2 million in 2022.
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021
Net Revenues
Our net revenues decreased by 4.1% from RMB7,237.0 million in 2021 to RMB6,940.8 million in 2022.
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Media services. Our media services revenues decreased by 2.4% from RMB2,011.4 million in 2021 to RMB1,963.3 million in 2022. The decrease in
revenues from our media services was primarily attributable to a 11.2% decrease in average revenue per automaker advertiser from RMB22.1 million in
2021 to RMB19.6 million in 2022.
Leads generation services. Leads generation services revenues increased by 2.3% from RMB2,988.1 million in 2021 to RMB3,056.9 million. The
increase in leads generation services revenues was mainly driven by the higher pricing policy in 2022.
Online marketplace and others. Revenues from online marketplace and others decreased by 14.2% from RMB2,237.5 million in 2021 to RMB1,920.6
million in 2022. This decrease was primarily attributable to automakers’ decreased spending on data products and the impact of COVID-19 pandemic in
China.
Cost of Revenues
Our cost of revenues increased by 17.9% from RMB1,047.9 million in 2021 to RMB1,235.2 million in 2022. In addition, share-based compensation
expenses included in cost of revenues in 2022 was RMB8.6 million, compared to RMB23.1 million in 2021.
Operational costs. Our operational costs increased by 5.3% from RMB520.8 million in 2021 to RMB548.3 million in 2022.
Content Costs. Our content costs increased by 75.6% from RMB204.6 million in 2021 to RMB359.4 million in 2022, primarily due to continuous
investment in content generation, acquisition and execution.
Bandwidth and IDC Costs. Our bandwidth and IDC costs increased by 7.4% from RMB105.3 million in 2021 to RMB113.2 million in 2022.
Tax Surcharges. Tax surcharges increased by 148.2% from RMB39.2 million in 2021 to RMB97.4 million in 2022, primarily due to the resumption of
payment in 2022 of the previously exempted cultural development fees.
Others. Other costs decreased by 34.3% from RMB177.9 million in 2021 to RMB116.9 million in 2022.
Operating Expenses
Our operating expenses increased by 1.8% from RMB4,701.7 million in 2021 to RMB4,785.6 million in 2022.
Sales and Marketing Expenses. Our sales and marketing expenses increased by 3.9% from RMB2,759.9 million in 2021 to RMB2,866.2 million in
2022 primarily due to the increase in marketing and promotional spending. As a percentage of net revenues, sales and marketing expenses were 41.3% in
2022, compared to 38.1% in 2021. Share-based compensation expense included in sales and marketing expenses in 2022 was RMB38.3 million, compared
to RMB46.8 million in 2021.
General and Administrative Expenses. Our general and administrative expenses decreased by 7.6% from RMB543.8 million in 2021 to RMB502.3
million in 2022. This decrease was primarily due to the decline of expected credit losses and professional expenses. As a percentage of net revenues,
general and administrative expenses decreased from 7.5% in 2021 to 7.2% in 2022. Share-based compensation expense included in general and
administrative expenses in 2022 was RMB53.2 million, compared to RMB48.8 million in 2021.
Product Development Expenses. Our product development expenses increased by 1.4% from RMB1,398.0 million in 2021 to RMB1,417.1 million in
2022. As a percentage of net revenues, product development expenses were 20.4% in 2022, compared to 19.3% in 2021. Share-based compensation
expense included in product development expenses in 2022 was RMB68.8 million, compared to RMB87.3 million in 2021.
Other operating income, net
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Our other operating income, net, primarily consists of VAT refund, government grants and others. Other operating income, net, was RMB327.5
million in 2022, compared to RMB294.2 million in 2021. The increase in other net operating income was primary due to the increase of input VAT
deductions.
Income before Income Taxes
Our income before income taxes was RMB1,762.8 million in 2022, compared to RMB2,177.2 million in 2021.
Income Tax Expense/Benefit
We recorded an income tax benefit of RMB61.8 million in 2022, compared to an income tax expense of RMB34.0 million in 2021, primarily due to
the lower taxable income and tax filing adjustments as a result of the PRC preferential income tax rate and tax holidays for certain subsidiaries in 2022.
Net Income Attributable to Autohome
As a result of the foregoing, we had net income attributable to Autohome of RMB1,855.2 million in 2022, decreasing by 17.5% compared to net
income attributable to Autohome Inc. of RMB2,248.8 million in 2021.
Net Income attributable to Ordinary Shareholders
The net income attributable to ordinary shareholders was RMB1,807.2 million in 2022, decreasing by 15.9 % compared to net income attributable to
ordinary shareholders of RMB2,148.6 million in 2021.
Inflation
Since our inception, inflation in China has not materially impacted our results of operations. According to the National Bureau of Statistics of China,
the consumer price index in mainland China increased by 0.9%, 2.0% and 0.2% in 2021, 2022 and 2023, and the year-over-year percent changes in the
consumer price index for December 2021, 2022 and 2023 were increases of 1.5%, increases of 1.8% and decreases of 0.3%, respectively. Although we
have not in the past been materially affected by inflation since our inception, we can provide no assurance that we will not be affected in the future by
higher rates of inflation in mainland China.
Recent Accounting Pronouncements
See Item 17 of Part III, “Financial Statements—Note 2—Summary of significant accounting policies—Recent accounting pronouncements.”
B. Liquidity and Capital Resources
Cash Flows and Working Capital
As of December 31, 2023, we had cash and cash equivalents, restricted cash and short-term investments altogether amounting to RMB23.7 billion
(US$3.3 billion).
We believe that our current cash and anticipated cash flow from operations will be sufficient to meet our anticipated cash needs, including our cash
needs for at least the next 12 months. We may require additional cash due to unanticipated business conditions or other future developments. We may also
need additional cash resources if we find and wish to pursue opportunities for investments, acquisitions, strategic cooperation or other similar actions. If
our existing cash is insufficient to meet our requirements, we may seek to sell additional equity securities, debt securities or secure debt funding from
financial institutions.
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The following table sets forth a summary of our cash flows for the years indicated.
Net cash generated from operating activities
Net cash (used in)/ generated investing activities
Net cash generated/ (used in) from financing activities
Effect of exchange rate changes on cash and cash
equivalents and restricted cash
Net increase/ (decrease) in cash and cash equivalents and
restricted cash
Cash and cash equivalents and restricted cash at
beginning of year
Cash and cash equivalents and restricted cash at end of
year
Operating Activities
For the Year Ended December 31,
2021
RMB
2022
RMB
2023
RMB
US$
(in thousands)
3,523,934
(3,813,013 )
2,898,296
2,565,075
(3,109,417 )
(1,140,065 )
2,451,429
1,000,349
(1,124,493 )
345,276
140,897
(158,381 )
(46,809 )
168,325
(14,612 )
(2,059 )
2,562,408
(1,516,082 )
2,312,673
325,733
1,769,148
4,331,556
2,815,474
396,552
4,331,556
2,815,474
5,128,147
722,285
Net cash generated from operating activities was RMB2,451.4 million (US$345.3 million) for 2023. The difference between the net income of
RMB1,925.4 million (US$271.2 million) and the net cash generated from the operating activities of RMB2,451.4 million was primarily due to additional
cash of RMB112.4 million (US$15.8 million) generated from working capital, and adding back certain non-cash expense items mainly including share-
based compensation of RMB195.1 million (US$27.5 million), amortization of operating lease right-of-use asset of RMB108.1 million (US$15.2 million)
and depreciation of RMB167.8 million (US$23.6 million). The change in working capital was in turn the result of (i) a RMB479.9 million (US$67.6
million) decrease in accounts receivable; (ii) a RMB244.1 million (US$34.4 million) increase in prepaid expenses and other current assets; (iii) a
RMB193.0 million (US$27.2 million) increase in other non-current assets; (iv) a RMB367.0 million (US$51.7 million) increase in accrued expenses and
other payables; and (v) a RMB345.6 million (US$48.7 million) decrease in deferred revenue.
The decrease in accounts receivable was primarily attributable to the enhanced credit risk management. The increase in prepaid expenses and other
current assets was primarily attributable to the increased prepaid technical service expenses and receivables from third-party payment platform. The
increase in other non-current assets was primarily attributable to the recognition of operating lease right-of-use assets. The increase in accrued expenses and
other payables was primarily attributable to the increased promotion expenses. The decrease in deferred revenue was primarily attributable to the extension
of collection of subscription fees from certain dealers.
Net cash generated from operating activities was RMB2,565.1 million for 2022. The difference between the net income of RMB1,824.6 million and
the net cash generated from the operating activities of RMB2,565.1 million was primarily due to additional cash of RMB120.2 million generated from
working capital, and adding back certain non-cash expense items including share-based compensation of RMB168.9 million, amortization of operating
lease right-of-use asset of RMB 118.8 million and depreciation of RMB226.1 million. The change in working capital was in turn the result of (i) a
RMB203.6 million decrease in accounts receivable; (ii) a RMB534.3 million increase in accrued expenses and other payables; (iii) a RMB405.9 million
decrease in deferred revenue; and (iv) a RMB101.5 million increase in other non-current assets.
The decrease in accounts receivable was in line with the decrease in revenue. The increase in accrued expenses and other payables was primarily
attributable to the increased promotion expenses. The decrease in deferred revenue was primarily attributable to the extension of collection of subscription
fees from certain dealers affected by the outbreak of COVID 19 in December 2022. The increase in other non-current assets was primarily attributable to
the recognition of operating lease right-of-use assets.
Net cash generated from operating activities was RMB3,523.9 million for 2021. The difference between the net income of RMB2,143.2 million and
the net cash generated from the operating activities of RMB3,523.9 million was primarily due to additional cash of RMB735.4 million generated from
working capital, and adding back certain
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non-cash expense items including share-based compensation of RMB206.1 million, and depreciation of RMB225.3 million. The change in working capital
was in turn the result of (i) a RMB931.4 million decrease in accounts receivable; (ii) a RMB432.2 million decrease in accrued expenses and other payables;
(iii) a RMB237.3 million increase in deferred revenue; and (iv) a RMB148.2 million increase in income tax payable.
The decrease in accounts receivable was in line with the decrease in revenue. The decrease in accrued expenses and other payables was primarily
attributable to the decreased promotion expenses. The increase in deferred revenue was primarily attributable to the increased advanced payment related to
dealer subscription services as of December 31, 2021. The increase in income tax payable was primarily attributable to the withholding tax.
As of December 31, 2023, 91.6% (or RMB1,936.4 million) of our total accounts receivable at the end of 2022 and 93.3% (or RMB2,161.9 million) of
our total accounts receivable at the end of 2021 were subsequently settled. Our accounts receivable turnover days, which are the average accounts
receivable balances as of the beginning and the end of the period divided by total net revenues during the period and multiplied by the number of days
during the period, were 132.7 days in 2021, 106.9 days in 2022 and 85.2 days in 2023.
Investing Activities
Net cash generated in investing activities was RMB1,000.3 million (US$140.9 million) in 2023, which was primarily attributable to the redemption of
time deposits and adjustable-rate financial products.
Net cash used in investing activities was RMB3,109.4 million in 2022, which was primarily attributable to purchase of time deposits and adjustable-
rate financial products, increased capital expenditures primarily related to the purchase of servers and software, and acquisition of equity investment in
Ping An Capital Co., Ltd.
Net cash used in investing activities was RMB3,813.0 million in 2021, which was primarily attributable to purchase of time deposits and adjustable-
rate financial products, increased capital expenditures primarily related to the purchase of servers and software, and payment related to the acquisition of
TTP.
Financing Activities
Net cash used in financing activities in 2023 was RMB1,124.5 million (US$158.4 million), which was primarily attributable to payment for
repurchase of ordinary shares and payment of dividends.
Net cash used in financing activities in 2022 was RMB1,140.1 million, which was primarily attributable to payment for repurchase of ordinary shares
and payment of dividends.
Net cash generated from financing activities in 2021 was RMB2,898.3 million, which was primarily attributable to the net proceeds from issuance of
our ordinary shares in connection with the listing on the Hong Kong Stock Exchange in March 2021, partially offset by payment of dividends, and payment
for repurchase of ordinary shares.
Material Cash Requirement
Our material cash requirement as of December 31, 2023 and any subsequent interim period include our capital expenditures and operating lease
obligations.
Our capital expenditures were primarily used for the purchase of servers and software for our business. Cash outflow in connection with capital
expenditures amounted to RMB218.8 million, RMB116.5 million and RMB78.6 million (US$11.1 million) in 2021, 2022 and 2023, respectively.
Our operating lease obligations mainly relate to the lease of office space and internet data centers. Lease cost for the years ended December 31, 2021,
2022 and 2023 were RMB231.5 million, RMB215.7 million and RMB211.3 million (US$29.8 million), respectively, with the figures in 2021, 2022 and
2023 including those related to lease of data centers.
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The following summarizes our contractual obligations as of December 31, 2023:
Operating lease obligations
(1)
Note:
Less than 1 Year
1 to 3 Years
Payments Due by Period
3 to 5 Years
More than 5 Years
Total
111,367
95,735
(RMB in thousands)
1,241
—
208,343
(1) Operating lease obligations related to the lease of office space and internet data centers.
We intend to fund our existing and future material cash requirements with our existing cash balance. We will continue to make cash commitments,
including capital expenditures, to support the growth of our business.
We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not
entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity. Furthermore, we do not have any retained or
contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any
variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research
and development services with us.
Other than as discussed above, we did not have any significant capital and other commitments, long-term obligations or guarantees as of December
31, 2023.
Holding Company Structure
Our ability to pay dividends is primarily dependent on our receiving distributions of funds from our subsidiaries. Relevant statutory laws and
regulations of mainland China permit payments of dividends by our mainland China subsidiaries only out of their retained earnings, if any, as determined in
accordance with PRC accounting standards and regulations. The results of operations reflected in the consolidated financial statements prepared in
accordance with U.S. GAAP differ from those reflected in the statutory financial statements of our mainland China subsidiaries.
Under PRC law, our mainland China subsidiaries are required to provide for certain statutory reserves, namely a general reserve, an enterprise
expansion fund and a staff welfare and bonus fund and allocate at least 10% of their after-tax profits on an individual company basis as determined under
PRC accounting standards to the general reserve, and have the right to discontinue allocations to the general reserve if such reserve has reached 50% of
registered capital on an individual company basis. In addition, they are also required to make appropriations to the enterprise expansion fund and staff
welfare and bonus fund at the discretion of their respective boards of directors. The VIEs in mainland China are also subject to similar statutory reserve
requirements. These reserves can only be used for specific purposes and are not transferable to us in the form of loans, advances or cash dividends. As of
December 31, 2021, 2022 and 2023, our mainland China subsidiaries and the VIEs had appropriated RMB91.3 million, RMB93.6 million and RMB 132.5
million (US$18.7 million), respectively, of retained earnings for their statutory reserves.
As a result of these mainland China laws and regulations, prior to allocations of after-tax profits to the statutory reserves, our PRC subsidiaries and the
VIEs are restricted in their ability to transfer a portion of their net assets to us.
Foreign exchange and other regulation in the PRC may further restrict our mainland China subsidiaries and the VIEs from transferring funds to us in
the form of dividends, loans and advances. As of December 31, 2021, 2022 and 2023, the amounts of the net restricted assets of our mainland China
subsidiaries and the VIEs were RMB4,925.0 million, RMB5,162.5 million and RMB5,073.2 million (US$714.5 million), respectively.
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C. Research and Development, Patents and Licenses, etc.
Technology and Product Development
Our technologies and infrastructure are critical to our success. We follow a user-centric strategy for our system architecture and have developed a
robust and scalable technology platform driven by AI, big data and cloud technologies with sufficient flexibility to support our rapid growth.
We had an experienced product development team of 1,436 engineers as of December 31, 2023. Our past innovation has focused on helping users
research, select and purchase suitable vehicles through our websites. We plan to develop additional products and services for our mobile applications and
media-related technology and enhance our big data analytics capabilities and AR- and VR-related technologies. See “Item 4. Information on the Company
—B. Business Overview—Technology and Product Development” for more details.
Intellectual Property
See “Item 4. Information on the Company—B. Business Overview—Intellectual Property.”
D. Trend Information
Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments, or events since the
beginning of our fiscal year 2023 and as of the date of this annual report that are reasonably likely to have a material effect on our net revenues, income
from operations, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future
operating results or financial condition.
E. Critical Accounting Estimates
Critical Accounting Estimates
We prepare our financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the end of each reporting period and the reported amount of
revenue and expenses during each reporting period. We evaluate these estimates and assumptions based on historical experience, knowledge and
assessment of current business and other conditions and expectations that we believe to be reasonable under the circumstances.
We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly
uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of
different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of
operations. Such critical estimates are discussed below. For further information on our other significant accounting estimates, see Note 2 to our
consolidated financial statements included elsewhere in this annual report.
Allowance for Credit Losses
The allowance for credit losses represents our management’s estimate of the expected lifetime credit losses inherent in accounts receivables as of
December 31, 2023. The adequacy of allowance for credit losses is assessed quarterly, and the assumptions and models used in establishing the allowance
are evaluated regularly.
We estimated the allowance by segmenting accounts receivable into groups based on certain credit risk characteristics and estimated the allowance for
credit losses on receivables not sharing similar risk characteristic on an individual basis. The key factors considered when determining the allowances for
credit losses include the historical loss experience, lifetime for debt recovery, financial performance of the customers, current and future economic
conditions.
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We also provide specific provisions for allowance when facts and circumstances indicate that the receivable is unlikely to be collected. Expected
credit losses are recorded as general and administrative expenses on the consolidated statements of comprehensive income. Changes in these estimates and
assumptions could materially affect the credit losses.
Mezzanine Equity
The mezzanine equity represents the convertible redeemable noncontrolling interests in TTP as of December 31, 2023. According to different share
purchase agreements between TTP and its preferred shareholders, the accounting measurement of TTP’s different rounds of preferred share issuance varies.
Depending on the accounting measurement adopted, the value of mezzanine equity we recorded can be determined as (i) a percentage of the issue price, (ii)
the fair value of the underlying convertible redeemable noncontrolling interests or a percentage of the issue price, whichever is higher, and (iii) the fair
value of the underlying convertible redeemable noncontrolling interests or the compound annual interests accrued on such convertible redeemable
noncontrolling interests, whichever is higher . See Note 20 to our consolidated financial statements for information regarding mezzanine equity.
The valuation of the fair value of these convertible redeemable noncontrolling interests is based on valuation techniques under the income approach
and market approach. Major assumptions used in determining the fair value of these convertible redeemable noncontrolling interests include revenue
growth rate, operating margin and discount rate. The projection of revenue growth rate is consistent with our management’s current assumptions about our
business outlook in a short term and our management’s best estimates of our long-term growth and the return on equity in a longer term.
In addition, we used the option pricing model in determining the fair value. The major unobservable input used in the option pricing model included
the equity value of underlying business, which was determined by our management using valuation techniques under the income approach and the market
approach. The significant assumptions used in the valuation included revenue growth rate, operating margin, discount rate and selection of valuation
multiples.
Critical Accounting Policies
When reviewing our consolidated financial statements, you should consider (a) our selection of critical accounting policies, (b) the judgment and other
uncertainties affecting the application of such policies and (c) the sensitivity of reported results to changes in conditions and assumptions. For further
information on our significant accounting policies, see Note 2 to our consolidated financial statements for 2021, 2022 and 2023. We consider the policies
discussed below to be critical to an understanding of our consolidated financial statements as their application places significant demands on the judgment
of our management. They should be read in conjunction with our consolidated financial statements, the risks and uncertainties as described under “Item 3.
Key Information—D. Risk Factors” and other disclosures included in this annual report.
Revenue Recognition and Accounts Receivable
Under ASC 606, revenues are recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the
consideration we expect to be entitled to in exchange for those goods or services. The recognition of revenue involves certain management judgments
including identification of performance obligations, stand-alone selling price for each performance obligation, estimation of variable consideration
represented by sales rebates, etc. We provide rebates to agency companies based on their cumulative annual advertising and service volume, and the
timeliness of their payments, which are accounted for as variable consideration. We estimate our obligations under such agreements by applying the most
likely amount method, based on an evaluation of the likelihood of the agency companies’ achievement of the advertising and service volume targets and the
timeliness of their payments, after taking into account the agency companies’ purchase trends and history. A refund liability, included in accrued expenses
and other payables, is recognized for expected sales rebates payable to agency companies in relation to advertising services provided. We recognize
revenue for the amount of fees we receive from the customers, after deducting these sales rebates, and net of VAT collected from
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customers. We believe that there will not be significant changes to our estimates of variable consideration and update the estimate at each reporting period
as actual utilization becomes available.
We determine revenue recognition through the following steps:
•
•
•
•
•
identification of the contract, or contracts, with a customer;
identification of the performance obligations in the contract;
determination of the transaction price;
allocation of the transaction price to the performance obligations in the contract; and
recognition of revenue when, or as, we satisfy a performance obligation.
Media services
Media services revenues mainly include revenues from automaker advertising services and regional marketing campaigns conducted by certain
automobile brands’ regional offices. The majority of our online advertising service contracts involve multiple deliverables or performance obligations
presented on PC and mobile platforms and in different formats, such as banner advertisements, links and logos, other media insertions and promotional
activities that are delivered over different periods of time.
Revenue is allocated among these different deliverables based on their relative stand-alone selling prices. We generally determine the stand-alone
selling price as the observable price of a product or service charged to customers when sold on a stand-alone basis. Advertising services are primarily
delivered based on cost per day (“CPD”) pricing model. For CPD advertising arrangements, revenue is recognized when the corresponding advertisements
are published over the stated display period. For cost per thousand impressions (“CPM”) model, revenue is recognized when the advertisements are
displayed and based on the number of times that the advertisement has been displayed. For cost-per-click (“CPC”) model, revenue is recognized when the
user clicks on the customer-sponsored links and based on the number of clicks. For certain marketing campaigns and promotional activities services,
revenue is recognized when the corresponding services have been rendered.
Leads generation services
Leads generation services primarily include revenues from (i) dealer subscription services, (ii) advertising services sold to individual dealer
advertisers, and (iii) used car listing services. Under the dealer subscription services, we make available throughout the subscription period a webpage
linked to our websites and mobile applications where the dealers can publish information such as the pricing of their products, locations and addresses and
other related information. Usually, advanced payment is normally made for the dealer subscription services and revenue is recognized over time on a
straight line basis as services are constantly provided over the subscription period. For the advertising services sold to individual dealers, revenue is
recognized when the advertising is published over the stated display period. The used car listing services primarily include listing and display of used
vehicles, generation of sales leads, etc. through our platform. Our used car platform acts as a user interface that allows potential used car buyers to identify
listings that meet their specific requirements and contact the sellers. Our service fee is charged based on the number of displayed days, or quantity of sales
leads delivered. Revenue is recognized respectively over the stated displaying period or at a point in time upon the delivery of sales leads.
Online marketplace and others
Online marketplace and others revenues primarily consist of revenues related to (i) data products, (ii) new and used vehicle transaction platform, and
(iii) auto financing business, and others.
For the data products, we provide data-driven products and solutions for automakers and dealers, and recognize revenue over the service period of
data-driven products and solutions by the automakers and dealers.
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For the new and used vehicle transaction business, we provide platform-based services including facilitation of transactions, transaction-oriented
marketing solutions, and generation of sales leads. For the new car vehicle transaction, we act as the platform for users to review automotive-related
information and inquiry, and facilitates of transaction by delivering sales leads to the automakers. For the used vehicle transaction, we act as a used car
consumer-to-business-to-consumer transaction system that facilitates the used car transaction between the sellers and buyers and charge the service fee per
each sale. The new and used vehicle transaction revenue is recognized at a point in time when the sales leads are delivered or upon the successful
facilitation of transaction.
For the auto-financing business, we provide a platform which serves as a bridge to match users and automobile sellers that have auto financing needs
with our cooperative financial institutions that offer a variety of products covering merchant loans, consumer loans, leases and insurance services. The
auto-financing service fee is charged on a per sale or lead basis, and the service fee is recognized at a point in time when the sales leads are delivered or
upon the successful facilitation of transaction.
Contract Balances and Accounts Receivable
Deferred revenue is primarily related to the advanced payment related to dealer subscription services and used car listings under leads generation
services. As of December 31, 2021 and 2022 and 2023, there was deferred revenue of RMB1,553.0 million, RMB1,147.1 million and RMB801.6 million
(US$112.9 million), respectively.
The beginning balance of deferred revenue of RMB1,147.1 million was mostly recognized as revenue for the year ended December 31, 2023, and the
unrecognized part was immaterial.
Practical Expedients and Exemptions
We have elected to use the practical expedient to not disclose the remaining performance obligations for contracts that have durations of one year or
less. We do not have significant remaining performance obligations in excess of one year. For the remaining performance obligations as of December 31,
2023, most of them are to be recognized within a year.
The revenue standard requires us to recognize an asset for the incremental costs of obtaining a contract with a customer if the benefit of those costs is
expected to be longer than one year. We have determined that sales commission for sales personnel meet the requirements of capitalization. However, we
apply a practical expedient to expense these costs as incurred for costs to obtain a contract with a customer when the amortization period would have been
one year or less.
Leases
New Lease Accounting Policies
We determine if an arrangement is a lease and determine the classification of the lease, as either operating or finance, at commencement. We have
operating leases for office buildings and data centers and has no finance leases as of December 31, 2023. Operating lease ROU assets and operating lease
liabilities are recognized based on the present value of the lease payments over the lease term at commencement date.
As our leases do not provide an implicit rate, an incremental borrowing rate is used based on the information available at commencement date, to
determine the present value of lease payments. The incremental borrowing rates approximate the rate we would pay to borrow in the currency of the lease
payments for the weighted-average life of the lease.
The operating lease ROU assets also include any lease payments made prior to lease commencement and excludes lease incentives and initial direct
costs incurred if any. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease
expense for minimum lease payments is recognized on a straight-line basis over the lease term.
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Our lease agreements contain both lease and non-leas components, which are accounted for separately based on their relative standalone price.
As of December 31, 2023, we recognized the following items related to operating lease in its consolidated balance sheet.
Operating lease ROU assets
Operating lease liabilities, current portion
Operating lease liabilities, non-current portion
Lease cost recognized in our consolidated statements of comprehensive income is summarized as follows:
Operating lease cost
Cost of other leases with terms less than one year
Income taxes
As of December 31, 2023
RMB
US$
(in thousands)
199,305
106,953
89,187
28,072
15,064
12,562
For the Year Ended December 31,
2023
RMB
US$
(in thousands)
119,484
91,815
16,829
12,932
We account for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on the
difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the
differences are expected to reverse. We record a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is more-
likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in
income in the period that includes the enactment date.
We apply ASC 740, Accounting for Income Taxes, to account for uncertainty in income taxes. ASC 740 prescribes a recognition threshold a tax
position is required to meet before being recognized in the financial statements. We have recorded unrecognized tax benefits in the other liabilities line item
in the accompanying consolidated balance sheets. We have elected to classify interest and penalties related to unrecognized tax benefits, if and when
required, as part of “income tax expense”, in the consolidated statements of comprehensive income.
Our estimated liability for unrecognized tax benefits and the related interest and penalties are periodically assessed for adequacy and may be affected
by changing interpretations of laws, rulings by tax authorities, changes and/or developments with respect to tax audits, and expiration of the statute of
limitations. The actual benefits ultimately realized may differ from our estimates. As each audit is concluded, adjustments, if any, are recorded in our
consolidated financial statements. Additionally, in future periods, changes in facts and circumstances, and new information may require us to adjust the
recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recognized in the
period in which they occur.
Fair Value Measurements of Financial Instruments
Our financial instruments primarily comprise of cash and cash equivalents, restricted cash, short-term investments, accounts receivable, amounts due
from related parties, prepaid expenses and other current assets excluding prepayments and staff advances, other non-current assets excluding operating
lease right-of-use assets and prepayments, accrued expenses and other payables, and amounts due to related parties. The carrying values of these financial
instruments excluding other non-current assets approximated their fair values due to the short-term maturity of these instruments.
ASC topic 820 (“ASC 820”), Fair Value Measurements and Disclosures, establishes a three-tier fair value hierarchy, which prioritizes the inputs used
in measuring fair value as follows:
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Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets
Level 2—Include other inputs that are directly or indirectly observable in the marketplace
Level 3—Unobservable inputs which are supported by little or no market activity
ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost
approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or
liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the
value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to
replace an asset.
Intangible Assets
Intangible assets are carried at cost less accumulated amortization and any recorded impairment. Intangible assets acquired in a business combination
were recognized initially at fair value at the date of acquisition. Intangible assets acquired in asset acquisitions are measured based on the cost to the
acquiring entity, which generally includes transaction costs. Intangible assets with finite useful lives are amortized using a straight-line method of
amortization that reflects the estimated pattern in which the economic benefits of the intangible asset are to be consumed.
Goodwill
Goodwill represents the excess of the purchase price over the amounts assigned to the fair value of the assets acquired and the liabilities assumed of an
acquired business. Our goodwill at December 31, 2021, 2022 and 2023 was related to our acquisition of Cheerbright, China Topside, Norstar and TTP. In
accordance with ASC 350, Goodwill and Other Intangible Assets, recorded goodwill amounts are not amortized, but rather are tested for impairment
annually or more frequently if there are indicators of impairment present. Also, the management has the option to choose whether it will apply the
qualitative assessment first and then the quantitative assessment, if necessary, or to apply the quantitative assessment directly.
Goodwill is tested for impairment at the reporting unit level on an annual basis (December 31 for us) and between annual tests if an event occurs or
circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying value. These events or circumstances
include a significant change in stock prices, business environment, legal factors, financial performances, competition, or events affecting the reporting unit.
Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to
reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit.
Our management has determined that we represent the lowest level within the entity at which goodwill is monitored for internal management
purposes. The management applied the quantitative assessment and performed the goodwill impairment test by quantitatively comparing the fair values of
the reporting unit to it carrying amounts. The management determined the fair value of the reporting unit based on its quoted stock price, and no
impairment charge was recognized for the years ended December 31, 2021, 2022 and 2023.
Share-based Compensation
Share-based awards granted to employees are accounted for under ASC 718, Compensation-Stock Compensation, which requires that share-based
awards granted to employees be measured based on the grant date fair value and recognized as compensation expense over the requisite service period
(which is generally the vesting period) in the consolidated statements of comprehensive income. We have elected to recognize compensation expense using
the straight-line method for all share-based awards granted with service conditions that have a graded vesting schedule. For awards with performance
condition and multiple service dates, if the performance conditions are all set at inception and independent for each year, each tranche should be accounted
for as a separate award with
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its own requisite service period. Compensation cost should be recognized over the respective requisite service period separately for each separately-vesting
tranche as though each tranche of the award is, in substance, a separate award.
Under ASC 718, an entity can make an accounting policy election to either estimate the number of awards that are expected to vest or account for
forfeitures when they occur. We have elected to estimate the forfeiture rate at the time of grant and revise, if necessary, in subsequent periods if actual
forfeitures differ from initial estimates. We recognize compensation cost for awards with performance conditions if and when we conclude that it is
probable that the performance condition will be achieved. We reassess the probability of vesting at each reporting period for awards with performance
conditions and adjust compensation cost based on its probability assessment.
Forfeiture rates are estimated based on historical and future expectations of employee turnover rates and are adjusted to reflect future changes in
circumstances and facts, if any. Share-based compensation expense is recorded net of estimated forfeitures such that expense is recorded only for those
share- based awards that are expected to vest. To the extent we revise these estimates in the future, the share- based payments could be materially impacted
in the period of revision, as well as in following periods. We, with the assistance of an independent third-party valuation firm, determined the fair value of
the stock options granted to employees. The binomial option pricing model was applied in determining the estimated fair value of the options granted to
employees. Subsequent to the IPO, fair value of the ordinary shares is the price of our publicly traded shares.
We account for a change in any of the terms or conditions of share-based awards as a modification in accordance with ASC subtopic 718-20,
Compensation-Stock Compensation: Awards Classified as Equity, whereby the incremental fair value, if any, of a modified award, is recorded as
compensation cost on the date of modification for vested awards or over the remaining vesting period for unvested awards. The incremental compensation
cost is the excess of the fair value of the modified award on the date of modification over the fair value of the original award immediately before the
modification.
ITEM 6 DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A. Directors and Senior Management
The following table sets forth information regarding our directors and executive officers as of the date of this annual report.
Directors and Executive Officers
Quan Long
Tao Wu
Keke Ding
Fan Lu
Junling Liu
Tianruo Pu
Dazong Wang
Craig Yan Zeng
Bibo Xiang
Age
53
50
48
46
59
55
69
55
46
Position/Title
Chairman of the Board and Non-executive Director
Executive Director and Chief Executive Officer
Non-executive Director
Non-executive Director
Independent Director
Independent Director
Independent Director
Chief Financial Officer
Chief Technology Officer
Mr. Quan Long has served as our director and chairman of the board since January 2021, and has served as our chief executive officer between
January 2021 and December 2023. Before joining Autohome, Mr. Long had held a series of leadership roles within Ping An Group since he first joined as a
salesman in 1998, including as the assistant general manager, vice general manager and general manager of several provincial-level branches of Ping An
Property & Casualty Insurance Company of China, Ltd. He currently serves as the chairman of the board and the chief executive officer of Ping An
Property & Casualty Insurance Company of China, Ltd. since November 2023. In addition, Mr. Long has extensive experience in business management at
leading Internet companies, such as serving as the assistant general manager of Lufax Holding Ltd (NYSE: LU; HKEX: 6623) in charge of insurance
business between October 2015 and January 2017, as the senior director of Ant Group’s insurance business since February 2017, and as the director,
general manager and chief executive officer of Cathay Insurance Company Limited between June 2017 and September 2018. Mr. Long received his
bachelor’s degree in engineering and master’s degree in engineering in June 1992 and April 2001, respectively, both from Wuhan University of
Technology.
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Mr. Tao Wu has served as our director and the chief executive officer since December 2023. Mr. Wu has over 28 years of experience in the property
and casualty insurance and automobile services industries. Mr. Wu currently serves as a director of Ping An Property & Casualty Insurance Company of
China, Ltd. Before joining Autohome, he served as an executive director and a vice general manager of Ping An Property & Casualty Insurance Company
of China, Ltd. Mr. Wu joined Ping An Property & Casualty Insurance Company of China, Ltd. in September 2001, and held a series of leadership roles
there, including operating director, general manager of the Guangdong Branch, general manager of the Auto, Accident & Health Insurance Claims
Department, vice general manager of the Fujian Branch and vice general manager of the Xiamen Branch. Mr. Wu also served as a vice president of
Autohome from July 2016 to November 2020. Mr. Wu received his bachelor’s degree in automotive engineering from Tsinghua University in July 1995.
Ms. Keke Ding has served as our director since July 2023. Ms. Ding has over 27 years of experience in property insurance industry and business
management. Ms. Ding currently serves as the assistant general manager at Ping An Property & Casualty Insurance Company of China, Ltd. Ms. Ding has
held multiple management roles relating to insurance and business management within Ping An Property & Casualty Insurance Company of China, Ltd.
and its several provincial-level branches since May 1997, including managing distribution channels, retail customer marketing, and digital customer
platforms. Ms. Ding received her bachelor’s degree in insurance from Dongbei University of Finance and Economics in July 1997.
Dr. Fan Lu has served as our director since July 2023. Dr. Lu has over 18 years of institutional investment management experience, spanning the areas
of global macro hedge fund, quantitative investment, A-share market fundamental research, asset allocation and insurance asset-liability management. Dr.
Lu currently serves as the general manager of asset management department at Ping An Property & Casualty Insurance Company of China, Ltd.. Dr. Lu has
held a series of management roles relating to investment management within Ping An Group and its affiliates since September 2011. Prior to that, Dr. Lu
held various positions of investment management at companies including AlphaSimplex, a hedge fund company in Boston, United States, and Haitong
Securities Co., Ltd. (SHA: 600837; HKEX: 6837), a top securities firm in China. Dr. Lu received his PhD degree in statistics and a master’s degree in
computer science from the University of Wisconsin-Madison in June 2006 and June 2005, respectively, and received his bachelor’s degree in biophysics
from Nanjing University in June 1999.
Mr. Junling Liu has served as our independent director since January 2015. Mr. Liu is the co-founder, chairman and chief executive officer of 111, Inc.
(Nasdaq: YI), an online healthcare cloud service provider. He co-founded and served as chief executive officer of YHD.com from 2008 to 2015. Prior to
founding YHD.com, Mr. Liu served as the global vice president and president for mainland China and Hong Kong at Dell Inc. from 2006 to 2007. He also
held various executive positions at internationally renowned technology companies such as Avaya (China) Communication Co., Ltd. Mr. Liu received his
bachelor’s degree in education from Flinders University in Australia and master’s degree in international business administration from Flinders University.
Mr. Tianruo Pu has served as our independent director since December 2016. Mr. Pu currently serves as an independent director and chairman of the
audit committee of OneConnect Financial Technology Co., Ltd. (NYSE: OCFT; HKEX: 6638), a financial technology company, as an independent director
and chairman of the audit committee of 3SBio Inc. (HKEX: 1530), a bio-pharmaceutical company and as a director, chairman of the audit committee and
member of the compensation committee as well as nominating committee of Fresh2 Group Ltd. (NASDAQ: FRES), formerly AnPac Bio-Medical Science
Co., Ltd. (NASDAQ: ANPC), a B2B ecommerce and supply chain management company within the restaurant and food industry. Mr. Pu has more than
twenty years of work experience in finance and accounting in both the United States and China. Previously, Mr. Pu served as the chief financial officer of
several companies including Zhaopin Limited (formerly NYSE: ZPIN), UTStarcom (Nasdaq: UTSI) and Nuokang Bio-Pharmaceutical (formerly Nasdaq:
NKBP). Mr. Pu received an MBA degree in June 2000 from Northwestern University’s Kellogg School of Management in the U.S. and a Master of Science
degree in accounting in May 1996 from the University of Illinois in the U.S.
Dr. Dazong Wang has served as our independent director since December 2016. Dr. Wang has been the founder and the chairman of Ophoenix Capital
Management since 2011. From 2008 to 2011, Dr. Wang was the president and chief executive officer of Beijing Automotive Industry Corporation. From
2006 to 2008, Dr. Wang served as the vice president of Shanghai Automotive Industry Corporation, where he was responsible for engineering and key
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component operations. Dr. Wang received a Ph.D. degree from Cornell University in 1985 and a Master of Science degree from Huazhong University of
Science and Technology in China in 1982.
Mr. Craig Yan Zeng joined our Group as the chief financial officer since May 2022. Mr. Zeng has over 20 years of experience in capital market and
has held senior management positions in many companies. He has been a director of LexinFintech (Nasdaq: LX) since December 2017 and served as the
chief financial officer of LexinFintech from November 2016 to June 2021. Prior to joining LexinFintech, Mr. Zeng served as the chief financial officer of
YeePay, an e-payment service provider in China. Before that, he served as the vice president of Hop Hing Group Holdings Limited, a company previously
listed on the Hong Kong Stock Exchange, from 2013 to 2015, and as the executive vice president of VanceInfo Technologies Inc., a company previously
listed on the New York Stock Exchange, from 2010 to 2013. Prior to 2010, Mr. Zeng served as a financial director of Microsoft (Greater China) from 2008
to 2009, and worked for Venustech Group Inc. (SZ: 002439) from 2006 to 2008, during which he served several senior management positions including as
its chief operating officer and chief financial officer. He also worked for General Electric in the U.S. Mr. Zeng received his master’s degree in business
administration from the Stern School of Business of New York University in 1999, and his bachelor’s degree in chemistry from Beijing University of
Chemical Technology in 1991.
Mr. Bibo Xiang has extensive experience in the fields of search engine, commercial advertising, recommendation system, natural language processing
and data mining. Prior to joining Autohome, Mr. Xiang served as senior vice president of VIPKID, and Chief Technology Officer of East Buy Holding
Limited (formerly known as Koolearn Technology Holding Limited) (HKEX: 1797), in charge of digital transformation of education and training business.
Prior to that, Mr. Xiang worked at Yahoo Search, Taobao Advertising, Shanda Online, 360 Search and 360 Commercial Products, where he was responsible
for technology management of search, recommendation and advertising businesses. Mr. Xiang received his bachelor’s degree in Computer Science and
Technology from Southwest Jiaotong University in 1999, and his master’s degree in Information Security from Beijing University of Posts and
Telecommunications in 2006.
B. Compensation of Directors and Executive Officers
For the fiscal year of 2023, we paid an aggregate compensation expense of approximately RMB18.5 million (US$2.6 million) for our executive
officers and directors (not including share-based compensation expenses). Our mainland China subsidiaries and the VIEs are required by laws to make
contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance, unemployment insurance, housing
fund and other statutory benefits. Other than the above-mentioned statutory contributions mandated by applicable PRC laws, we have not set aside or
accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors. For additional information on share
incentive grants to our directors and executive officers, see “—Share Incentive Plans.”
Employment Agreements
We have entered into employment agreements with each of our executive officers. Under these agreements, each of our executive officers is employed
for a specified time period. We may terminate employment for cause at any time without advance notice or remuneration for certain acts of the executive
officer, such as a conviction or plea of guilty to a felony or any crime involving moral turpitude, negligent or dishonest acts to our detriment, or misconduct
or a failure to perform agreed duties. In such case, the executive officer will not be entitled to receive payment of any severance benefits or other amounts
by reason of the termination, and the executive officer’s right to all other benefits will terminate, except as required by any applicable law. We may also
terminate an executive officer’s employment without cause upon one-month advance written notice. In such case of termination by us, we are required to
provide compensation to the executive officer, including cash compensation determined based on the term of office of the involved executive officer. The
executive officer may terminate the employment at any time with a one-month advance written notice, if there is any significant change in the executive
officer’s duties and responsibilities inconsistent in any material and adverse respect with his or her title and position, or a material reduction in the
executive officer’s annual salary before the next annual salary review, or if otherwise approved by the board of directors.
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Each executive officer has agreed to hold, both during and after the termination or expiry of his or her employment agreement, in strict confidence and
not to use, except as required in the performance of his or her duties in connection with the employment, any of our confidential information or trade
secrets, any confidential information or trade secrets of our clients or prospective clients, or the confidential or proprietary information of any third party
received by us and for which we have confidential obligations. The executive officers have also agreed to disclose in confidence to us all inventions,
designs and trade secrets which they conceive, develop or reduce to practice and to assign all right, title and interest in them to us, and assist us in obtaining
patents, copyrights and other legal rights for these inventions, designs and trade secrets.
In addition, each executive officer has agreed to be bound by non-competition and non-solicitation restrictions during the term of his or her
employment. Specifically, each executive officer has agreed not to (a) approach our clients, advertisers or contacts or other persons or entities introduced to
the executive officer for the purpose of doing business with such persons or entities that will harm our business relationships with these persons or entities;
(b) assume employment with or provide services to any of our competitors, or engage, whether as principal, partner, licensor or otherwise, any of our
competitors; or (c) seek directly or indirectly, to solicit the services of any of our employees who is employed by us on or after the date of the executive
officer’s termination, or in the year preceding such termination.
Share Incentive Plans
Unless otherwise specified, numbers of shares disclosed in this section have taken into account the effect of the share re-designation and share
subdivision effective in February 2021.
2013 Share Incentive Plan
We adopted the 2013 Share Incentive Plan in November 2013. The maximum aggregate number of ordinary shares which may be issued pursuant to
all awards under the 2013 Share Incentive Plan is 13,400,000. As of December 31, 2023, the 2013 Share Incentive Plan has expired.
Amended and Restated 2016 Share Incentive Plan
Our board of directors adopted and amended the 2016 Share Incentive Plan, or the Amended and Restated 2016 Plan, in March 2017 and April 2017,
respectively. The Amended and Restated 2016 Plan was approved by our then parent company Ping An Group at its general meeting on June 16, 2017 and
was subsequently approved, confirmed and ratified by our shareholders at our extraordinary general meeting of shareholders on June 27, 2017. The
maximum aggregate number of ordinary shares which may be issued pursuant to all awards under the Amended and Restated 2016 Plan is 19,560,000. As
of December 31, 2023, options to purchase 2,169,996 ordinary shares under the Amended and Restated 2016 Plan at exercise prices ranging from US$5.55
to US$24.01 were outstanding, and 4,205,804 restricted shares under the Amended and Restated 2016 Plan were outstanding.
The following table summarizes, as of December 31, 2023, the outstanding options we had granted to our directors and officers and to other
individuals as a group under the Amended and Restated 2016 Plan.
Name
Quan Long
Craig Yan Zeng
Bibo Xiang
Other individuals as
a group
Note:
Options
*
*
*
*
Exercise Price
(US$/Share)
9.73
Date of Grant
November 1, 2021
6.73
9.73
August 1, 2022
November 1, 2021
5.55-24.01
Between October 28, 2020
and February 22, 2023
Date of
Expiration
Ten years after grant
date
Ten years after grant
date
Ten years after grant
date
Ten years after grant
date
Vesting Schedule
Approximately four years
from grant date
Approximately four years
from grant date
Approximately four years
from grant date
Approximately four years
from grant date
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*
Less than 1% of our total outstanding share capital.
The following table summarizes, as of December 31, 2023, the outstanding restricted shares we had granted to individuals other than directors
and officers as a group under the Amended and Restated 2016 Plan.
Name
Individuals other than directors and
officers as a group
Note:
* Less than 1% of our total outstanding share capital.
Restricted Shares
*
Date of Grant
Vesting Schedule
Between February 22, 2023 and
Approximately four years from
December 15, 2023
each date of grant
The following paragraphs describe the principal terms of the Amended and Restated 2016 Plan:
Types of Awards. The Amended and Restated 2016 Plan permits the awards of options, restricted shares, restricted share units and share appreciation
rights. The following briefly describe the principal features of the various awards that may be granted under the Amended and Restated 2016 Plan.
•
•
•
•
Options. Options provide for the right to purchase a specified number of our ordinary shares at a specified price and usually will become
exercisable at the discretion of our plan administrator in one or more installments after the grant date. The total number of ordinary shares issued
and to be issued upon the exercise of the options granted and to be granted to any participant in any 12-month period up to and including the date
of grant shall not exceed 1% of the issued and outstanding shares of the Company as at the date of grant. The option exercise price may be paid,
subject to the discretion of the plan administrator, in cash or check, in our ordinary shares which have been held by the option holder for such
period of time as may be required by our plan administrator, in other property with value equal to the exercise price, through a broker-assisted
cashless exercise, or by any combination of the foregoing. For so long as we remain a subsidiary of a company which is listed on the Hong Kong
Stock Exchange, or the Hong Kong Parent, the administration of the Amended and Restated 2016 Plan shall comply with Hong Kong Listing
Rules, in respect of options.
The options shall lapse (to the extent not already exercised) automatically on the earliest of: (i) expiry of the term of any option, (ii) the date of
termination of employment for certain causes, (iii) expiry of the 60-day period from the date of voluntary resignation of the participant, (iv) the
date of termination of such other contract or agreement constituting a participant for his breach of the terms thereof or in accordance with the
termination provisions of such contract or agreement by any contracting party, (v) expiry of the three-month period following the occurrence of
an event which causes the participant to cease to be an eligible person, including ill-health, injury, disability, death or retirement, (vi) the date on
which the resolution to voluntarily wind up the Company is passed and the date of the commencement of winding up of the Company.
Restricted Shares. A restricted share award is the grant of our ordinary shares which are subject to certain restrictions and may be subject to risk
of forfeiture. Unless otherwise determined by our plan administrator, a restricted share is nontransferable and may be forfeited or repurchased by
us upon termination of employment or service during a restricted period. Our plan administrator may also impose other restrictions on the
restricted shares, such as limitations on the right to vote or the right to receive dividends.
Restricted Share Units. A restricted share unit award is the grant of the right to receive an ordinary share at a future date and may be subject to
forfeiture. Our plan administrator has the discretion to set performance objectives or other vesting criteria that will determine the number or
value of restricted share units to be granted. Unless otherwise determined by our plan administrator, a restricted share unit is nontransferable and
may be forfeited or repurchased by us upon termination of employment or service during a restricted period. Our plan administrator, at the time
of grant, specifies the dates on which the restricted share units become fully vested.
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•
Share Appreciation Rights. Share appreciation rights may be granted under our Amended and Restated 2016 Plan. Share appreciation rights
allow the recipient to receive the appreciation in the fair market value of our ordinary shares between the exercise date and the date of grant. The
exercise price of share appreciation rights granted under our Amended and Restated 2016 Plan must at least be equal to the fair market value of
our ordinary shares on the grant date. The plan administrator determines the terms of share appreciation rights, including when such rights vest
and become exercisable and whether to settle such awards in cash or with our ordinary shares, or a combination thereof. Share appreciation rights
expire under the same rules that apply to options.
Plan Administration. Our board or a committee of one or more members of our board duly authorized for the purpose of the Amended and Restated
2016 Plan can act as the plan administrator. Such committee may from time to time in its absolute discretion waive or amend the rules of the Amended and
Restated 2016 Plan as it deems desirable, provided that, except with the prior approval of the shareholders of our Company and the shareholders of our
Hong Kong Parent (for so long as we remain a subsidiary of the Hong Kong Parent) in general meetings: (i) no alterations to any of the matters set out in
Rule 17.03 of the Hong Kong Listing Rules shall be made to the advantage of participants; and (ii) no alterations to the terms and conditions of the
Amended and Restated 2016 Plan which are of a material nature or any change to the terms of the options granted may be made, except where the
alterations take effect automatically under the existing terms of the Amended and Restated 2016 Plan, provided that as we remain a subsidiary of the Hong
Kong Parent, the amended terms must still comply with the relevant requirements of Chapter 17 of the Hong Kong Listing Rules.
Award Agreement. Options, restricted shares or restricted share units granted under the Amended and Restated 2016 Plan are evidenced by an award
agreement that sets forth the terms, conditions and limitations for each grant.
Eligibility. We may grant awards to our directors, employees or consultants.
Exercise Price. The exercise price in respect of any option shall be determined by the plan administrator and set forth in the award agreement which
may be a fixed or variable price related to the fair market value of the shares. The exercise price per share subject to an option may be amended or adjusted
in the absolute discretion of the plan administrator, the determination of which shall be final, binding and conclusive. For so long as we remain a subsidiary
of the Hong Kong Parent, the determination of the exercise price shall comply with the Hong Kong Listing Rules.
Term of the Options. The term of each option grant shall normally be no more than ten years from the date of the grant. If the grantee is an employee
of ours who owns shares representing more than ten percent of the voting power of all classes of our shares immediately prior to the time the option is
granted, then the term of the grant shall be no more than five years from the date of the grant.
Vesting Schedule and Condition. In general, the plan administrator determines the vesting schedule and condition, which is set forth in the award
agreement.
Transfer Restrictions. Unless otherwise determined by the plan administrator, no awards may be transferred other than by will or the laws of descent
and distribution. Nevertheless, awards (other than options) can be transferred to certain persons or entities related to the plan participants.
Termination. The Amended and Restated 2016 Plan will expire in 2027 and may be terminated earlier with the approval of our board.
Amended 2016 Share Incentive Plan II
We adopted the 2016 Share Incentive Plan II (as amended by Amendment No. 1 to the 2016 Share Incentive Plan II), or the Amended 2016 Share
Incentive Plan II, at the annual general meeting of shareholders in December 2016. The maximum aggregate number of ordinary shares which may be
issued pursuant to all awards under the Amended 2016 Share Incentive Plan II is 12,000,000. As of December 31, 2023, 4,571,016 restricted shares under
the Amended 2016 Share Incentive Plan II were outstanding.
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The following table summarizes the outstanding restricted shares that we had granted to our directors and officers and to other individuals as a group
under our Amended 2016 Share Incentive Plan II as of December 31, 2023.
Name
Quan Long
Craig Yan Zeng
Bibo Xiang
Directors and officers as a group
Other individuals as a group
Note:
* Less than 1% of our total outstanding share capital.
Restricted
Shares
*
Date of Grant
November 1, 2021
*
*
*
*
August 1, 2022
November 1, 2021
March 1, 2021
Between December 3, 2019 and
December 1, 2022
Vesting Schedule
Approximately four years from each
date of grant
Approximately four years from each
date of grant
Approximately four years from each
date of grant
Approximately four years from each
date of grant
Approximately four years from each
date of grant
The following paragraphs describe the principal terms of the Amended 2016 Share Incentive Plan II:
Types of Awards. The Amended 2016 Share Incentive Plan II permits the awards of restricted shares. A restricted share award is the grant of our
ordinary shares which are subject to certain restrictions and may be subject to risk of forfeiture. Unless otherwise determined by our plan administrator, a
restricted share is nontransferable and may be forfeited or repurchased by us upon termination of employment or service during a restricted period. Our
plan administrator may also impose other restrictions on the restricted shares, such as limitations on the right to vote or the right to receive dividends.
Plan Administration. Our board or a committee of one or more members of our board duly authorized for the purpose of the Amended 2016 Share
Incentive Plan II can act as the plan administrator.
Award Agreement. Restricted shares granted under the Amended 2016 Share Incentive Plan II are evidenced by an award agreement that sets forth the
terms, conditions and limitations for each grant.
Eligibility. We may grant awards to our directors, employees or consultants.
Vesting Schedule and Condition. In general, the plan administrator determines the vesting schedule and condition, which is set forth in the award
agreement.
Transfer Restrictions. Unless otherwise determined by the plan administrator, no awards may be transferred other than by will or the laws of descent
and distribution, or to certain persons or entities related to the plan participants.
Termination. The Amended 2016 Share Incentive Plan II will expire in 2026 and may be terminated earlier with the approval of our board of directors.
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Clawback Policy
On November 30, 2023, our Board adopted an Incentive Compensation Recoupment Policy (the “Clawback Policy”) providing for the recoupment of
certain incentive compensation from current and former executive officers of the Company in the event the Company is required to restate any of its
financial statements filed with the SEC under the Exchange Act in order to correct an error that is material to the previously-issued financial statements, or
that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. Adoption of the
Clawback Policy was mandated by New York Stock Exchange Listed Company Manuel introduced pursuant to Exchange Act Rule 10D-1. A copy of the
Clawback Policy has been filed herewith as Exhibit 97.1.
C. Board Practices
Board of Directors
Our board of directors consists of seven directors. A director is not required to hold any shares in the Company by way of qualification. A director
may vote with respect to any contract, proposed contract or arrangement in which he or she is materially interested provided that (a) such director, if his or
her interest in such contract or arrangement is material, has declared the nature of his or her interest at the earliest meeting of the board at which it is
practicable for him or her to do so, either specifically or by way of a general notice and (b) if such contract or arrangement is a transaction with a related
party, such transaction has been approved by the audit committee. The directors may exercise all the powers of the company to borrow money, mortgage its
undertaking, property and uncalled capital, and issue debentures or other securities whenever money is borrowed or as security for any obligation of the
company or of any third party. None of our independent directors has a service contract with us that provides for benefits upon termination of service.
Board committees
We have established three committees under the board of directors: the audit committee, the compensation committee and the nominating and
corporate governance committee. We have adopted a charter for each of the three committees. The committee charters are available on our website. Each
committee’s members and functions are described below.
Audit Committee. Our audit committee consists of Mr. Tianruo Pu, Dr. Dazong Wang and Mr. Junling Liu. Mr. Tianruo Pu is the chairman of our audit
committee. All of the members of our audit committee satisfy the “independence” requirements of Section 303A of the New York Stock Exchange Listed
Company Manual and Rule 10A-3 under the Exchange Act. In addition, our board of directors has determined that Mr. Tianruo Pu qualifies as an audit
committee financial expert as defined in Item 16A of Form 20-F.
The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company. The audit
committee is responsible for, among other things:
•
•
•
•
•
•
appointing the independent auditors and preapproving all auditing and non-auditing services permitted to be performed by the independent
auditors;
reviewing with the independent auditors any audit problems or difficulties and management’s response;
discussing the annual audited financial statements with management and the independent auditors;
reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and
control major financial risk exposures;
reviewing and approving all proposed related party transactions;
meeting separately and periodically with management and the independent auditors; and
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•
monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to
ensure proper compliance.
Compensation Committee. Our compensation committee consists of Mr. Quan Long, Ms. Keke Ding and Dr. Dazong Wang. Mr. Quan Long is the
chairman of our compensation committee. Dr. Dazong Wang satisfies the “independence” requirements of Section 303A of the New York Stock Exchange
Listed Company Manual.
The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating
to our directors and executive officers. Our chief executive officer may not be present at any committee meeting during which his compensation is
deliberated. The compensation committee is responsible for, among other things:
•
•
•
reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive
officers;
reviewing and recommending to the board for determination with respect to the compensation of our nonemployee directors; and
reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements.
Nominating and Corporate Governance Committee. Our nominating and corporate governance committee consists of Mr. Quan Long, Mr. Tianruo Pu
and Ms. Keke Ding. Mr. Quan Long is the chairman of our nominating and corporate governance committee. Mr. Tianruo Pu satisfies the “independence”
requirements of Section 303A of New York Stock Exchange Listed Company Manual.
The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors and in
determining the composition of the board and its committees. The nominating and corporate governance committee is responsible for, among other things:
•
•
•
•
selecting and recommending to the board nominees for election by the shareholders or appointment by the board;
reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills,
experience and diversity;
making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and
advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our
compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any
remedial action to be taken.
Duties of Directors
Under Cayman Islands laws, our directors have a duty to act honestly in good faith with a view to our best interests. Our directors also owe to our
company a duty to act with skill and care. It was previously considered that a director needs not exhibit in the performance of his or her duties a greater
degree of skill than may reasonably be expected from a person of his or her knowledge and experience. However, English and Commonwealth courts have
moved towards an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands. In
fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association. Our company has the right to
seek damages if a duty owed by our directors is breached.
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Terms of Directors and Officers
Our directors are elected by an ordinary resolution or by a resolution of the directors. A director may be removed by way of an ordinary resolution of
the shareholders at any time before the expiration of his period of office for reasonable cause, including but not limited to fraud, criminal conviction or
failure by such director to fulfill the duties of a director. A vacancy on the board created by the removal of a director may be filled by the appointment by
ordinary resolution at the meeting at which such director is removed or by the affirmative vote of a simple majority of the remaining directors present and
voting at a board meeting. In addition, a director will cease to be a director if he (i) becomes bankrupt or has a receiving order made against him or
suspends payment or compounds with his creditors; (ii) dies or is found to be or becomes of unsound mind; (iii) resigns his office by notice in writing; (iv)
without special leave of absence from our board, is absent from meetings of our board for six consecutive months and the board resolves that his office be
vacated; (v) is prohibited by law from being a director; or (vi) ceases to be a director by virtue of the Companies Act or is removed from office pursuant to
our memorandum and articles of association. Our officers are elected by and serve at the discretion of the board of directors.
D. Employees
We had 5,793, 5,355 and 5,511 employees as of December 31, 2021, 2022 and 2023, respectively. The following table sets forth the number of our
employees by function as of December 31, 2023:
Functional Area
Sales and marketing
Product development
Content and editorial
Management and administrative
Total
Number of
Employees
2,330
1,436
1,357
388
5,511
Through a combination of short-term performance evaluations and long-term incentive arrangements, we intend to build a competent, loyal and highly
motivated workforce. We have not experienced any work stoppages due to labor disputes.
E.
Share Ownership
Ordinary Shares
As of March 31, 2024, we had 484,443,872 ordinary shares issued and outstanding (excluding 24,943,728 treasury shares and ordinary shares that are
reserved for future issuance under our share incentive plans). In addition, as of March 31, 2024, we had granted, and had outstanding, options to purchase a
total of 2,153,508 ordinary shares and 8,770,344 restricted shares to our employees and directors. For information regarding the share incentive plans, see
“Item 6. Directors, Senior Management and Employees—B. Compensation of Directors and Executive Officers.”
Beneficial Ownership of Ordinary Shares
Except as specifically noted in the table, the following table sets forth information with respect to the beneficial ownership of our ordinary shares as of
March 31, 2024:
•
•
each of our directors and executive officers; and
each person known to us to own beneficially more than 5% of our ordinary shares.
Beneficial ownership is determined in accordance with the rules and regulations of the SEC. In computing the number of shares beneficially owned by
a person and the percentage ownership of that person, we have included
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shares that the person has the right to acquire within 60 days, including through the exercise of any option, warrant or other right or the conversion of any
other security. These shares, however, are not included in the computation of the percentage ownership of any other person.
Directors and Executive Officers:**
(2)
(3)
Quan Long
Tao Wu
Keke Ding
Fan Lu
Junling Liu
Tianruo Pu
Dazong Wang
Craig Yan Zeng
Bibo Xiang
All Directors and Executive Officers as a Group
(7)
(6)
(4)
(5)
Principal Shareholders:
Yun Chen
Entities Affiliated with FIL
(8)
(9)
Ordinary Shares Beneficially Owned as of
March 31, 2024
Number
(1)
%
*
—
—
—
*
*
*
*
*
*
224,800,512
26,508,092
*
—
—
—
*
*
*
*
*
*
46.4
5.5
Notes:
* Less than 1% of our total outstanding share capital.
** Except as indicated otherwise below, the business address of our directors and executive officers is 18th Floor Tower B, CEC Plaza, 3 Dan Ling Street, Haidian District, Beijing 100080, The
People’s Republic of China.
(1)
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 the total
number of our total ordinary shares outstanding, which is 484,443,872 ordinary shares as of March 31, 2024 (excluding 24,943,728 treasury shares and ordinary shares that had been issued
and reserved for the purpose of our Share Incentive Plans as of March 31, 2024), and the number of shares such person or group has the right to acquire upon exercise of option, warrant or
other right within 60 days after March 31, 2024.
Represents ordinary shares in the form of ADSs Mr. Long has the right to acquire upon exercise of options or will be entitled to upon vesting of restricted shares within 60 days after March
31, 2024.
Represents ordinary shares in the form of ADSs vested from restricted shares held by Mr. Liu.
Represents ordinary shares in the form of ADSs vested from restricted shares held by Mr. Pu.
Represents ordinary shares in the form of ADSs vested from restricted shares held by Dr. Wang.
Represents ordinary shares in the form of ADSs Mr. Zeng has the right to acquire upon exercise of options or will be entitled to upon vesting of restricted shares within 60 days after March
31, 2024.
Represents ordinary shares in the form of ADSs Mr. Xiang has the right to acquire upon exercise of options or will be entitled to upon vesting of restricted shares within 60 days after
March 31, 2024.
Represents 224,800,512 ordinary shares as reported in a Schedule 13D/A filed with the SEC on April 21, 2023 jointly by Yun Chen, a Cayman Islands company and a special purpose
vehicle and subsidiary of Ping An Group, and Ping An Group. Ping An Group is a company organized under the laws of the People’s Republic of China. Ping An Group’s business address
is Ping An Finance Building, No. 1333 Lujiazui Ring Road, Pudong District, Shanghai 200120, People’s Republic of China.
The number of ordinary shares beneficially owned is as of December 29, 2023, as reported in a Form 13G/A filed with the SEC on February 9, 2024 by FIL Limited (“FIL”), Pandanus
Partners, L.P. (“Pandanus”) and Pandanus Associates, Inc. (“PAI”), which are collectively referred to as the Entities Affiliated with Fidelity, and consists of 26,508,092 ordinary shares. FIL
is a non-U.S. institution in accordance with §240.13d-1(b)(1)(ii)(J). Pandanus owns shares of FIL voting stock. While the percentage of total voting power represented by these shares of
FIL voting stock may fluctuate as a result of changes in the total number of shares of FIL voting stock outstanding from time to time, it normally represents more than 25% and less than
48.5% of the total votes which may be cast by all holders of FIL voting stock. PAI acts as general partner of Pandanus. FIL Limited’s business address is Pembroke Hall, 42 Crow Lane,
Hamilton HM19 Bermuda. Pandanus’s business address is c/o FIL Limited, 42 Crow Lane, Hamilton HM19, Bermuda. PAI’s business address is 11 Keewaydin Drive, Suite 100, Salem,
New Hampshire, USA, 03079.
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
To our knowledge, as of March 31, 2024, 274,104,540 ordinary shares (excluding 24,943,728 treasury shares and ordinary shares that are reserved for
future issuance under our share incentive plans as of March 31, 2024) were held by one person in the United States, Deutsche Bank Trust Company
Americas, the depositary of our ADS program, which holds ordinary shares in our company indirectly through HKSCC Nominees Limited following the
Hong Kong Offering. The number of beneficial owners of our ADSs in the United States is likely to be much larger than the number of record holders of
our ordinary shares in the United States.
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F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation
Not applicable.
ITEM 7 MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A. Major Shareholder
As of March 31, 2024, Yun Chen owned 46.4% of our total issued and outstanding ordinary shares. Yun Chen is a subsidiary of Ping An Group. As
such, we are indirectly controlled by Ping An Group, which beneficially owned 46.4% of the total voting rights in our company.
Please refer to “Item 6. Directors, Senior Management and Employees—E. Share Ownership.”
B. Related Party Transactions
Contractual Arrangements with the Variable Interest Entities
PRC laws and regulations currently limit foreign ownership of companies that engage in internet services. As a result, we provide the services that
may be subject to such restrictions in the PRC through the VIEs and their subsidiaries, and we operate our businesses in the mainland China through certain
contractual arrangements with the VIEs and their respective shareholders. Terms contained in each set of contractual arrangements with the VIEs and their
respective shareholders are substantially similar. As a result of the contractual arrangements, Autohome Inc. becomes the primary beneficiary of the VIEs
and their subsidiaries for accounting purposes and treat each of them as a mainland China consolidated entity under U.S. GAAP.
However, investors in our ordinary shares or ADSs are not holding equity interest in the VIEs in mainland China but instead are holding equity
interest in a holding company incorporated in the Cayman Islands. The contractual arrangements may not be as effective as direct ownership in providing
us with control over the VIEs, and we may incur substantial costs to enforce the terms of the arrangements. In addition, these arrangements have not been
tested in courts of mainland China. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—Our contractual
arrangements with the VIEs may not be as effective in providing operational control as direct ownership” and “—The interests of the individual nominee
shareholders of the VIEs may be different from our interests, which may materially and adversely affect our business.”
We have the following contractual arrangements by and among the following entities to conduct most of our operations in mainland China:
•
•
•
•
Autohome WFOE, Autohome Information, the shareholders of Autohome Information and two subsidiaries of Autohome Information, namely
Chengshi Advertising and Autohome Advertising;
Chezhiying WFOE, Shengtuo Hongyuan, the shareholders of Shengtuo Hongyuan and one subsidiary of Shengtuo Hongyuan, namely Beijing
Autohome Used Car Appraisal Co., Ltd., or Autohome Used Car Appraisal;
TTP WFOE, Shanghai Jinwu and the shareholder of Shanghai Jinwu; and
TTP WFOE, Shanghai Jinyou and the shareholders of Shanghai Jinyou.
Autohome WFOE entered into a series of contractual agreements with Autohome Information and each of its individual nominee shareholders. The
currently effective contractual agreements were entered into in January 2024 by and between Autohome WFOE, Autohome Information, Mr. Quan Long,
our chairman of the board of directors, and Mr. Youdong Wang. Autohome WFOE has also entered into a series of contractual agreements with Autohome
Information and two of its subsidiaries, respectively, namely Autohome Advertising and Chengshi Advertising. Such contractual arrangements allow us to
(i) have power to direct significant activities of Autohome Information
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and its subsidiaries, (ii) receive substantially all of the economic benefits of Autohome Information and its subsidiaries, and (iii) have an exclusive option
to purchase all or part of the equity interests in Autohome Information and its subsidiaries when and to the extent permitted by the PRC laws.
In addition, Chezhiying WFOE has entered into a series of contractual agreements with Shengtuo Hongyuan and each of its individual nominee
shareholders. The currently effective contractual agreements were entered into in January 2024 by and between Chezhiying WFOE, Shengtuo Hongyuan,
Mr. Quan Long, our chairman of the board of directors, and Mr. Youdong Wang. Chezhiying WFOE has also entered into a series of contractual agreements
with Shengtuo Hongyuan and its subsidiary, namely Autohome Used Car Appraisal. Such contractual arrangements allow us to (i) have power to direct
significant activities of Shengtuo Hongyuan and its subsidiary, (ii) receive substantially all of the economic benefits of Shengtuo Hongyuan and its
subsidiary, and (iii) have an exclusive option to purchase all or part of the equity interests in Shengtuo Hongyuan and its subsidiary when and to the extent
permitted by the PRC laws.
In December 2020, the Company acquired TTP which operates an online bidding platform for used automobiles in mainland China primarily through
Shanghai Jinwu, which held an auction business approval certificate and an ICP License. In August 2015, TTP WFOE entered into a series of contractual
agreements with Shanghai Jinwu and Weiwei Wang, being the individual nominee shareholder of Shanghai Jinwu. In March and May of 2022, TTP WFOE
also entered into a series of contractual agreements with Shanghai Jinyou and its two individual nominee shareholders, namely Weiwei Wang and Lan
Zhang. As of the date of this annual report, the operation of online bidding platform for used automobiles in Shanghai Jinwu has been transferred to
Shanghai Jinyou, which holds an auction business approval certificate and an ICP License. The contractual arrangements of TTP WFOE with Shanghai
Jinwu and Shanghai Jinyou, respectively, and their respective shareholder(s) allow TTP to (i) have power to direct significant activities of Shanghai Jinwu
and Shanghai Jinyou, (ii) receive substantially all of the economic benefits of Shanghai Jinwu and Shanghai Jinyou, and (iii) have an exclusive option to
purchase all or part of the equity interests in Shanghai Jinwu and Shanghai Jinyou when and to the extent permitted by the PRC laws.
We have also entered into contractual arrangements with other affiliate entities and their respective nominee shareholders, through our WFOEs in
mainland China, which results in our WFOEs being the primary beneficiary of the relevant affiliate entities for accounting purposes. As a result of these
contractual arrangements, we consolidate such affiliate entities as well, which have not generated significant revenues as of the date of this annual report.
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The diagram below illustrates the general structure of the economic flow and control under the VIE structure created by the contractual arrangements:
Agreements that provide us power to direct significant activities of Autohome Information, Autohome Advertising and Chengshi Advertising
The following is a summary of the currently effective contractual arrangements by and among Autohome WFOE, Autohome Information, the
shareholders of Autohome Information, Autohome Advertising and Chengshi Advertising (as applicable).
Equity Interest Pledge Agreements. Pursuant to the equity interest pledge agreements between Autohome WFOE and each of the two shareholders of
Autohome Information entered into in January 2024, each shareholder of Autohome Information pledges to Autohome WFOE all of his equity interests in
Autohome Information to secure the performance of such shareholder’s respective obligations and Autohome Information’s obligations under the loan
agreements, equity option agreements, and the exclusive technology consulting and service agreements. Without Autohome WFOE’s consent, shareholders
of Autohome Information shall not create or permit to create any encumbrances on the pledged equity interests in Autohome Information. In the event of
default, Autohome WFOE is entitled to request immediate repayment of the outstanding amounts payable under the loan agreements, the equity option
agreements and the exclusive technology consulting and service agreements or to dispose of the pledged equity interests at Autohome WFOE’s sole
discretion. The equity interest pledge agreements have an indefinite term and will terminate after all the secured obligations under these agreements have
been satisfied in full or the pledged equity interests have been transferred to Autohome WFOE or its designee.
Pursuant to the equity interest pledge agreements between Autohome WFOE and Autohome Information entered into in September 2016, Autohome
Information pledges to Autohome WFOE all of its equity interests in Chengshi Advertising and Autohome Advertising to secure the performance of its
obligations under the equity option agreements and the obligations of Chengshi Advertising and Autohome Advertising under the exclusive technology
consulting and service agreements. These equity interest pledge agreements contain substantially the
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same terms as the equity interest pledge agreements between Autohome WFOE and the shareholders of Autohome Information.
Exclusive Technology Consulting and Service Agreements. Pursuant to the exclusive technology consulting and service agreements entered into
between Autohome WFOE and each of Autohome Information, Autohome Advertising and Chengshi Advertising in January 2024, September 2016 and
September 2016, respectively, Autohome WFOE has the exclusive right to provide each of these companies comprehensive technology and management
consulting services. In addition, Autohome WFOE is obligated to provide financing support to each of these companies to ensure the cash flow
requirements of the day-to-day operations of these companies. Each of these companies is obligated to pay to Autohome WFOE service fees, which are
calculated based on such company’s revenues reduced by its tax, operating expenses and an appropriate amount of retained profit that is determined
pursuant to our tax planning strategies and relevant tax laws. Such service fees may be adjusted by Autohome WFOE at Autohome WFOE’s sole
discretion. Autohome WFOE owns the intellectual properties arising from the performance of these agreements. These agreements have a 30-year term that
can be automatically extended for another 10 years at the option of Autohome WFOE and can only be terminated by the parties’ mutual written consent or
by Autohome WFOE’s prior 30-day notice at its sole discretion. During the term of these agreements, these companies may not enter into any agreements
with third parties for the provision of any technology or management consulting services without prior consent of Autohome WFOE.
Equity Option Agreements. Pursuant to the equity option agreements among Autohome WFOE, Autohome Information and each of the two
shareholders of Autohome Information entered into in January 2024, each shareholder of Autohome Information jointly and severally grants to Autohome
WFOE an option to purchase all or part of his equity interests in Autohome Information at a price equivalent to the lowest price permitted by PRC law. The
purchase price is to be offset against the loan repayments under the loan agreements. If there will be additional payments to be made by Autohome
Information to these shareholders required by the PRC law, these shareholders must immediately return the received payments to Autohome WFOE.
Autohome WFOE may exercise its option at any time or transfer the rights and obligations under the equity option agreement to any of its designated
parties. The equity option agreements have an indefinite term and will terminate at the earlier of (i) the date on which the equity interests in Autohome
Information have been transferred to Autohome WFOE or its designated parties, or (ii) the unilateral termination by Autohome WFOE.
Pursuant to the equity option agreements among Autohome WFOE, Autohome Information and two of Autohome Information’s subsidiaries, namely
Autohome Advertising and Chengshi Advertising, entered into in September 2016, Autohome Information granted Autohome WFOE or its designated
parties an option to purchase all or part of Autohome Information’s equity interests in these Autohome Information subsidiaries at a price equivalent to the
lowest price permitted by PRC laws. Autohome WFOE may exercise its option at any time. The equity option agreements have an indefinite term and will
terminate at the earlier of (i) the date on which all of Autohome Information’s equity interests in these subsidiaries have been transferred to Autohome
WFOE or its designated parties, or (ii) the unilateral termination by Autohome WFOE.
Power of Attorney. In January 2024, each of the shareholders of Autohome Information executed an irrevocable power of attorney appointing
Autohome WFOE, or any person designated by Autohome WFOE, as their attorney-in-fact, to vote on their behalf at the shareholders’ meetings of
Autohome Information and to exercise full voting rights as the shareholders of the company with powers granted under PRC laws and regulations and the
articles of association of the company, including the rights to appoint directors and management personnel. In September 2016, Autohome Information
executed irrevocable powers of attorney appointing Autohome WFOE, or any person designated by Autohome WFOE, as their attorney-in-fact, to vote on
their behalf at the shareholders’ meetings of Autohome Advertising and Chengshi Advertising and to exercise full voting rights as the shareholders of these
companies with powers granted under PRC laws and regulations and the articles of association of each of the above companies, including the rights to
appoint directors and management personnel.
Loan Agreements. Pursuant to the loan agreements between Autohome WFOE and each of the two shareholders of Autohome Information entered
into in January 2024, Autohome WFOE granted interest-free loans to these two shareholders of Autohome Information. The loans are to be used solely for
the purpose of making capital contributions to the registered capital of Autohome Information. The term of the loans is indefinite and must be
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repaid in the manner specified in the agreements upon written notice from Autohome WFOE at any time in Autohome WFOE’s sole discretion or upon an
event of default by the shareholders of Autohome Information.
Agreements that provide us power to direct significant activities of Shengtuo Hongyuan and Autohome Used Car Appraisal
Equity Interest Pledge Agreements. In January 2024, Chezhiying WFOE and each of the shareholders of Shengtuo Hongyuan entered into equity
interest pledge agreements with respect to their equity interest in Shengtuo Hongyuan. The terms of these agreements are substantially the same as the
equity interest pledge agreements between Autohome WFOE and each of the two shareholders of Autohome Information described above. In September
2016, Chezhiying WFOE and Shengtuo Hongyuan entered into equity interest pledge agreements with respect to the latter’s equity interest in Autohome
Used Car Appraisal. The terms of this agreement are substantially the same as the equity interest pledge agreements between Autohome WFOE and
Autohome Information.
Exclusive Technology Consulting and Service Agreements. In January 2024, Chezhiying WFOE and Shengtuo Hongyuan entered into an exclusive
technology consulting and service agreement. In September 2016, Chezhiying WFOE and Autohome Used Car Appraisal entered into an exclusive
technology consulting and service agreement. The terms of these agreements are substantially the same as the exclusive technology consulting and service
agreements between Autohome WFOE and each of Autohome Information, Autohome Advertising and Chengshi Advertising described above.
Equity Option Agreements. In January 2024, Chezhiying WFOE, Shengtuo Hongyuan and each of the shareholders of Shengtuo Hongyuan entered
into equity option agreements. The terms of these agreements are substantially the same as the equity option agreements among Autohome WFOE,
Autohome Information and each of the two shareholders of Autohome Information described above. In September 2016, Chezhiying WFOE, Shengtuo
Hongyuan and Autohome Used Car Appraisal entered into an equity option agreement. The terms of such agreement are substantially the same as the
equity option agreements among Autohome WFOE, Autohome Information and each of Autohome Advertising and Chengshi Advertising.
Power of Attorney. In January 2024, each of the shareholders of Shengtuo Hongyuan executed an irrevocable power of attorney appointing
Chezhiying WFOE, or any person designated by Chezhiying WFOE, as their attorney-in-fact, to vote on their behalf at the shareholders’ meetings of
Shengtuo Hongyuan and to exercise full voting rights as the shareholders of Shengtuo Hongyuan with powers granted under PRC laws and regulations and
the articles of association of the company, including the rights to appoint directors and management personnel. In September 2016, Shengtuo Hongyuan
executed an irrevocable power of attorney appointing Chezhiying WFOE, or any person designated by Chezhiying WFOE, as its attorney-in-fact, to vote
on its behalf at the shareholders’ meetings of Autohome Used Car Appraisal to exercise full voting rights as the shareholder of Autohome Used Car
Appraisal with powers granted under PRC laws and regulations and the articles of association of Autohome Used Car Appraisal, including the rights to
appoint directors and management personnel.
Loan Agreements. In January 2024, Chezhiying WFOE and each of the shareholders of Shengtuo Hongyuan entered into loan agreements. The terms
of these agreements are substantially the same as the loan agreements between Autohome WFOE and each of the two shareholders of Autohome
Information described above.
Agreements that provide us power to direct significant activities of Shanghai Jinwu and Shanghai Jinyou
In December 2020, the Company acquired TTP which conducted its business related to internet content services in mainland China primarily through
Shanghai Jinwu. In August 2015, TTP WFOE entered into a series of contractual agreements with Shanghai Jinwu and Weiwei Wang, being the individual
nominee shareholder of Shanghai Jinwu. The contractual arrangements of TTP WFOE with Shanghai Jinwu and its shareholder allow TTP to (i) have
power to direct significant activities of Shanghai Jinwu, (ii) receive substantially all of the economic benefits of Shanghai Jinwu, and (iii) have an exclusive
option to purchase all or part of the equity interests in Shanghai Jinwu when and to the extent permitted by the PRC laws.
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In March and May of 2022, TTP WFOE also entered into a series of contractual agreements with Shanghai Jinyou and its two individual nominee
shareholders, namely Weiwei Wang and Lan Zhang. As of the date of this annual report, the operation of online bidding platform for used automobiles in
Shanghai Jinwu has been transferred to Shanghai Jinyou, which holds an auction business approval certificate and an ICP License. The terms of the
contractual agreements of TTP WFOE with Shanghai Jinyou and its individual nominee shareholders are substantially the same as the contractual
agreements among TTP WFOE, Shanghai Jinwu and its individual nominee shareholder as described above.
Autohome WFOE, Chezhiying WFOE and TTP WFOE recognized service fees from all the VIEs in the amount of RMB309.7 million in 2021,
RMB496.9 million in 2022 and RMB525.3 million (US$74.0 million) in 2023 in consideration for services provided to the VIEs. In the years ended
December 31, 2021, 2022 and 2023, the VIEs contributed in aggregate 13.1%, 12.7% and 13.5%, respectively, of our total net revenue.
Transactions with Entities Affiliated with Our Shareholders
Since Ping An Group became our controlling shareholder, it provided services including rental and property management services, technical services
and other miscellaneous services, and assets to us for a total amount of RMB176.9 million in 2021, RMB191.8 million in 2022 and RMB191.4 million
(US$27.0 million) in 2023.
We earned service fees primarily for providing facilitation services related to insurance products and loan and leasing product transactions for Ping An
Group or its affiliates on our platform as well as providing advertising services to Ping An Group for a total amount of RMB417.1 million in 2021,
RMB226.5 million in 2022 and RMB134.4 million (US$18.9 million) in 2023.
We also had cash or time deposits with commercial banks affiliated with Ping An Group and purchased in short-term cash management products
managed by Ping An Group as a part of our cash management plan, which totaled RMB4,144.8 million, RMB5,187.0 million and RMB5,729.6 million
(US$807.0 million) as of December 31, 2021, 2022 and 2023, respectively. On January 4, 2022, we entered into a limited partner interest subscription
agreement, a limited partnership agreement and certain other auxiliary documents with Ping An Capital Co., Ltd., an affiliate of Ping An Group, pursuant
to which we subscribed for RMB400 million worth of limited partner interests in an equity investment fund managed by Ping An Capital Co., Ltd. The
subject subscription was approved by our board of directors and its audit committee and was announced on the same day.
Investor’s Rights Agreements
Following Yun Chen’s acquisition of 47.4% the Company’s equity interest from Telstra in June 2016, we entered into an investor’s rights agreement
with Yun Chen on September 30, 2016 to the effect that Yun Chen shall enjoy the same special rights given to Telstra under the previous investors rights
agreement. Under this investor’s rights agreement with Yun Chen, so long as Yun Chen holds at least 20% of our issued and outstanding shares, (i) we must
permit Yun Chen and its designated representatives, at their own cost and expense, at reasonable times and upon reasonable prior notice to us, to review our
books and records and to discuss our financial condition with our officers; and (ii) we must provide to Yun Chen our financial statements stated in the
investor’s rights agreement so long as its external auditor considers it to be necessary to consolidate our financial statements into Yun Chen’s financial
statements in accordance with the PRC accounting standards; and (iii) we must provide to Yun Chen a copy of our register of members after the end of each
quarter. The investor’s rights agreement was approved by the Audit Committee and the Board.
Save as disclosed above, there are no other rights granted to Yun Chen or Ping An Group or other shareholders which are not available to all
shareholders of the Company. The Directors take the view that the special rights granted to Yun Chen pursuant to the investor’s rights agreement are fair
and reasonable and not prejudicial to the interest of our Company’s other shareholders. The same rights were granted to Telstra, the previous controlling
shareholder of our Company (details of which were disclosed in the registration statement at the time of our Company’s listing on the NYSE and other
public filings). Such rights were granted to Yun Chen in recognition of the significant investment made by Yun Chen. Taking into account the benefits of
Yun Chen maintaining a significant shareholding interest in our Company, the Directors take the view that the grant of such rights to Yun Chen is in the
best interest of our Company and the shareholders as a whole. After consulting our legal advisors, the
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Directors take the view that the grant of such special rights to Yun Chen does not contravene the shareholders’ protection requirements under the relevant
U.S. federal securities laws and the NYSE rules, and the terms of the investor’s rights agreement in relation to the grant of such special rights to Yun Chen
do not violate the applicable laws and regulations in the Cayman Islands.
Employment Agreements
See “Item 6. Directors, Senior Management and Employees—B. Compensation of Directors and Executive Officers—Employment Agreements” for a
description of the employment agreements we have entered into with our senior executive officers.
Share Incentive Plans
See “Item 6. Directors, Senior Management and Employees—B. Compensation of Directors and Executive Officers—Share Incentive Plans” for a
description of share-based compensation awards we have granted to our directors and officers and to other individuals as a group.
See Note 12 to our financial statements for further information about our related party transactions.
C.
Interests of Experts and Counsel
Not applicable.
ITEM 8 FINANCIAL INFORMATION
A. Consolidated Statements and Other Financial Information
We have appended consolidated financial statements filed as part of this annual report.
Legal Proceedings
From time to time, we may be subject to various claims and legal actions that arise in the ordinary course of our business. There are currently no legal
proceedings that, in the opinion of our management, may have a material adverse effect on our business and results of operations.
Dividend Policy
Our board of directors has complete discretion to declare dividends subject to our Memorandum and Articles of Association and certain restrictions
under Cayman Islands law. Our shareholders may also by ordinary resolution declare dividends but no dividend shall be declared in excess of the amount
recommended by the board of directors. In November 2017, our board of directors declared a special cash dividend of US$0.76 per ordinary share
(inclusive of applicable fees payable to our depositary bank) in favor of holders of our ordinary shares as of the close of business on January 4, 2018, which
special cash dividend was paid on or about January 15, 2018. On November 4, 2019, our board of directors resolved to adopt a regular dividend policy.
Under this policy, we may issue recurring cash dividend every year from 2020 in an amount of approximately 20% of the net income generated in the
previous fiscal year, with the exact amount to be determined by our directors based on our financial performance and cash position prior to the distribution.
For the fiscal years of 2021, 2022 and 2023, we paid cash dividends in a total amount of US$105.7 million, US$61.1 million and US$69.2 million,
respectively, to our shareholders, pursuant to our dividend policy.
On February 16, 2023, our board of directors approved an amendment to change the annual cash dividend to a fixed amount of at least RMB500.0
million between 2022 and 2026. The exact amount of the annual cash dividend will be determined by our board of directors based on our financial
performance and cash position prior to the distribution, and is expected to be adjusted upward each year. On December 12, 2023, our board of directors
approved an amendment to its dividend policy, pursuant to which our board of directors intends to declare a cash
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dividend semi-annually from 2024 to 2026. The total yearly cash dividend is expected to be no less than RMB1.5 billion with the exact amount to be
determined by our board of directors based on our then financial performance, cash position, and applicable foreign exchange laws and regulations in
China, among other factors.
Despite the dividend policy in place, our board of directors has the authority to decide the timing and amount of any future dividends, if any, based on,
among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us
from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors.
We are a holding company incorporated under the laws of the Cayman Islands. We may rely on dividends from our subsidiaries in mainland China for
our cash requirements, including any payment of dividends to our shareholders. PRC regulations may restrict the ability of our mainland China subsidiaries
to pay dividends to us. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—We may rely to a significant extent on
dividends and other distributions on equity paid by our mainland China subsidiaries to fund any cash and financing requirements we may have. Any
limitation on the ability of our mainland China subsidiaries to pay dividends to us could have a material adverse effect on our ability to conduct our
business.”
If we pay any dividends on our ordinary shares, we will pay those dividends which are payable in respect of the ordinary shares underlying our ADSs
to the depositary, as the registered holder of such ordinary shares, and the depositary will then pay such amounts to our ADS holders in proportion to the
ordinary shares underlying the ADSs held by such ADS holders, subject to the terms of the deposit agreement, including the fees and expenses payable
thereunder. See “Item 12. Description of Securities other than Equity Securities—D. American Depositary Shares.” Cash dividends on our ordinary shares,
if any, will be paid in U.S. dollars.
B.
Significant Changes
Except as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our audited consolidated
financial statements included in this annual report.
ITEM 9 THE OFFER AND LISTING
A. Offering and Listing Details
See “—C. Markets.”
B. Plan of Distribution
Not applicable.
C. Markets
Our ADSs have been listed on the NYSE since December 11, 2013 under the symbol “ATHM.”
Our ordinary shares have been listed on the Hong Kong Stock Exchange since March 15, 2021 under the stock code “2518.”
D. Selling Shareholders
Not applicable.
E. Dilution
Not applicable.
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F. Expenses of the Issue
Not applicable.
ITEM 10 ADDITIONAL INFORMATION
A. Share Capital
Not applicable.
B. Memorandum and Articles of Association
We are a Cayman Islands company and our affairs are governed by our memorandum and articles of association and the Companies Act (As Revised)
of the Cayman Islands, referred to as the Companies Act below. The following are summaries of certain provisions of our memorandum and articles of
association in effect as of the date of this annual report insofar as they relate to the material terms of our ordinary shares.
Registered Office and Objects
Our registered office in the Cayman Islands is located at the offices of Maples Corporate Services Limited at PO Box 309, Ugland House, Grand
Cayman, KY1-1104, Cayman Islands. The memorandum of association provides, inter alia, that the liability of the shareholders of our company is limited
to the amount, if any, for the time being unpaid on the ordinary shares. The objects for which our company is established are unrestricted (including acting
as an investment company), and we shall have and be capable of exercising all the functions of a natural person of full capacity irrespective of corporate
benefit, as provided in section 27(2) of the Companies Act and in view of the fact that we are an exempted Company, we will not trade in the Cayman
Islands with any person, firm or corporation except in furtherance of our business carried on outside the Cayman Islands.
Board of Directors
See “Item 6. Directors, Senior Management and Employees—C. Board Practices—Duties of Directors” and “—Terms of Directors and Officers.”
Ordinary Shares
General
All of our issued and outstanding ordinary shares are fully paid and non-assessable. Certificates representing the ordinary shares are issued in
registered form. Our shareholders who are non-residents of the Cayman Islands may freely hold and transfer their ordinary shares.
Ordinary Shares
The capital of our company is US$1,000,000,000 divided into 400,000,000,000 ordinary shares of a nominal or par value of US$0.0025 each. All of
our issued and outstanding ordinary shares are fully paid and non-assessable. Certificates representing our ordinary shares are issued in registered form.
Our shareholders who are non-residents of the Cayman Islands may freely hold and vote their ordinary shares.
Dividends
The holders of our ordinary shares are entitled to such dividends as may be declared by us in general meeting or by our board of directors, but no
dividend may exceed the amount recommended by our directors. Our seventh amended and restated memorandum and articles of association provide that
dividends may be declared and paid out of the funds of our Company lawfully available therefor. Under the laws of the Cayman Islands, our company may
pay a dividend out of either profit or share premium account; provided that in no circumstances may a dividend be
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paid if this would result in our company being unable to pay its debts as they fall due in the ordinary course of business.
Voting Rights
At any general meeting every holder of ordinary shares who is present in person or by proxy (or, in the case of a shareholder being a corporation, by
its duly authorized representative) shall have one vote on a show of hands, subject to any rights and restrictions for the time being attached to any share
(including, for as long as our ordinary shares remain listed on the Hong Kong Stock Exchange, applicable rules under the Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”), as amended from time to time (unless otherwise waived)), and on a poll
every shareholder holding ordinary shares present in person or by proxy (or, in the case of a shareholder being a corporation, by its duly appointed
representative) shall have one vote for each fully paid ordinary share of which such shareholder is the holder.
A quorum required for a meeting of shareholders consists of one or more shareholders entitled to vote and present in person or by proxy or, if a
corporation or other non-natural person, by its duly authorized representative holding at least ten percent of the voting rights represented by the issued and
outstanding ordinary shares throughout the meeting. We shall hold a general meeting in each year within six months (or such other period as may be
permitted by the Listing Rules or the rules of the New York Stock Exchange or any other stock exchange on which our ADSs or shares are listed for
trading) as our annual general meeting. The annual general meeting shall be held at such time and place as may be determined by the directors. No business
shall be transacted at any annual general meeting of the Company unless stated in the Company’s notice of annual general meeting. Each general meeting,
other than an annual general meeting, shall be an extraordinary general meeting. A majority of our board of directors or our chairman may call
extraordinary general meetings. Advance notice of at least 21 clear days shall be given of an annual general meeting and at least fourteen clear days shall
be given of any other shareholders’ meetings. The agenda of any extraordinary general meeting will be set by a majority of the directors then in office.
An ordinary resolution to be passed by the shareholders requires the affirmative vote of a simple majority of the votes attaching to the ordinary shares
cast in a general meeting, while a special resolution requires the affirmative vote of not less than two-thirds of the votes cast by shareholders as, being
entitled so to do, vote in person or by proxy at a general meeting duly noticed and convened. A special resolution will be required for important matters
such as a change of name or making changes to our seventh amended and restated memorandum and articles of association.
Transfer of Ordinary Shares
Subject to the restrictions of our seventh amended and restated memorandum and articles of association, as applicable, any of our 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 our board of
directors.
Our board of directors may, in its absolute discretion, decline to register any transfer of any ordinary share which is not fully paid up or on which we
have a lien, or any share issued under any share incentive scheme for employees upon which a restriction on transfer imposed thereby still subsists. Our
board of directors may also decline to register any transfer of any ordinary share unless:
•
•
•
•
the instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates and such other evidence as
our board of directors may reasonably require to show the right of the transferor to make the transfer;
the instrument of transfer is in respect of only one class of ordinary shares;
the instrument of transfer is properly stamped, if required; and
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.
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If our 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 Designated Stock Exchange (as defined in the seventh amended and
restated memorandum and articles of association), be suspended and the register closed at such times and for such periods as our board of directors 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.
Liquidation
On a return of capital on winding up or otherwise (other than on conversion, redemption or purchase of ordinary shares), assets available for
distribution among the holders of ordinary shares shall be distributed among the holders of the ordinary shares on a pro rata basis in proportion to the
amount paid up on the ordinary shares. The amount received by holders of ordinary shares should be the same in any liquidation event. If our assets
available for distribution are insufficient to repay all of the paid-up capital, the assets will be distributed so that, as nearly as may be, the losses shall be
borne by the shareholders in proportion to the capital paid up, or which ought to have been paid up, at the commencement of the winding up on the shares
held by them respectively.
Calls on Ordinary Shares and Forfeiture of Ordinary Shares
Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their ordinary shares in a notice served to such
shareholders at least 14 clear days prior to the specified time of payment. The ordinary shares that have been called upon and remain unpaid are subject to
forfeiture.
Redemption of Ordinary Shares
Subject to the provisions of the Companies Act, we may repurchase or redeem shares at our option, on such terms and in such manner, including out
of capital, as may be determined by our board of directors (subject further to compliance with the rules of the Designated Stock Exchange and any other
relevant codes, rules and regulations applicable to the listing of our ADSs on the Designated Stock Exchange), and provided that with respect to a
redemption or repurchase of any shares not underlying ADSs shares, the Company shall (i) serve a redemption or repurchase notice in a form approved by
the Board on the relevant shareholder at least two business days prior to the date specified in the notice as being the redemption or repurchase date, (ii)
agree the price for the relevant shares with the applicable shareholder, (iii) specify the effective date of the redemption or repurchase in the redemption or
repurchase notice, and (iv) redeem or repurchase the shares on such other terms as specified in the redemption or repurchase notice as determined and
agreed by the Board and the applicable shareholder in their sole discretion.
Variations of Rights of Shares
All or any of the special rights attached to any class of shares may, subject to the provisions of the Companies Act, be varied with the sanction of a
special resolution passed at a general meeting of the holders of the shares of that class. The rights conferred upon the holders of the shares of any class shall
not, unless otherwise expressly provided by the rights attaching to or the terms of issue of the shares of that class, be deemed to be varied by the creation or
issue of further shares ranking pari passu with such existing class of shares.
General Meetings of Shareholders
Shareholders’ meetings may be convened by a majority of our board of directors or our chairman. Advance notice of at least 21 clear days is required
for the convening of our annual general meeting and at least fourteen clear days is required for the convening of our any other general meeting of our
shareholders. In addition, general meetings will also be convened on the requisition in writing of any shareholder or shareholders holding not less than one-
tenth of the voting rights, on a one vote per share basis, in the capital of our company.
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Appointment of Directors
Our shareholders may by ordinary resolution elect any person to fill a casual vacancy or as an addition to the existing board.
The directors will also have the power from time to time and at any time to appoint any person as a director to fill a casual vacancy on the board or as
an addition to the existing board. Any director so appointed by the board of directors shall hold office only until the first annual general meeting of the
Company after his appointment, and shall then be eligible for re-election at that meeting.
Inspection of Books and Records
Holders of our ordinary shares have no general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or our corporate
records (other than copies of our memorandum and articles of association, register of mortgages and charges and any special resolutions passed by our
shareholders). However, we will allow our shareholders to inspect our register of members and provide our shareholders with annual audited financial
statements.
Pursuant to the investor’s rights agreement we have with the Yun Chen and other shareholders, Yun Chen has the right to access our books and records
so long as it holds in aggregate at least 20% of our issued and outstanding share capital.
Issuance of Additional Preferred Shares
Our seventh amended and restated memorandum and articles of association authorizes our board of directors to issue additional ordinary shares from
time to time as our board of directors shall determine, to the extent of available authorized but unissued shares.
Our seventh amended and restated memorandum and articles of association authorizes our board of directors, subject to the Companies Act (As
Revised) of the Cayman Islands and, where applicable, the rules of the New York Stock Exchange or any other stock exchange on which our ADSs or
shares are listed for trading, to establish from time to time one or more series of preferred shares and to determine, with respect to any series of preferred
shares, the terms and rights of that series, including:
•
•
•
•
the designation of the series;
the number of shares of the series;
the dividend rights, dividend rates, conversion rights, voting rights; and
the rights and terms of redemption and liquidation preferences.
Our board of directors may issue preferred shares without action by our shareholders to the extent authorized but unissued. The issuance of preferred
shares may be used as an anti-takeover device without further action on the part of the shareholders. Issuance of these shares may dilute the voting rights of
holders of ordinary shares.
C. Material Contracts
We have not entered into any material contracts other than in the ordinary course of business and other than those described elsewhere in “Item 4.
Information on the Company—B. Business Overview,” “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions,” or
elsewhere in this annual report.
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D. Exchange Controls
See “Item 4. Information on the Company—B. Business Overview—PRC Regulation—Regulations on Foreign Exchange.”
E. Taxation
Cayman Islands Taxation
The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation
in the nature of inheritance tax or estate duty. There are no other taxes levied by the Government of the Cayman Islands that are likely to be material to
holders of ADSs or ordinary shares. The Cayman Islands is not party to any double tax treaties that are applicable to any payments made to or by our
company. There are no exchange control regulations or currency restrictions in the Cayman Islands.
Pursuant to Section 6 of the Tax Concessions Act (As Revised) of the Cayman Islands, we have obtained an undertaking from the Governor-in-
Cabinet:
(a)
that no law which is enacted in the Cayman Islands imposing any tax to be levied on profits or income or gains or appreciation shall apply to us
or our operations; and
(b)
that the aforesaid tax or any tax in the nature of estate duty or inheritance tax shall not be payable on our shares, debentures or other obligations.
The undertaking for us is for a period of 20 years from July 22, 2008.
Hong Kong Taxation
Our subsidiaries in Hong Kong are subject to 16.5% income tax on their taxable income generated from operations in Hong Kong. On April 1, 2018, a
two-tiered profits tax regime was introduced. The profits tax rate for the first HK$2 million of profits of corporations is lowered to 8.25%, while profits
above that amount continue to be subject to the tax rate of 16.5%.
Our principal register of members is maintained by our principal share registrar in the Cayman Islands, and our Hong Kong register of members is
maintained by the Hong Kong Share Registrar in Hong Kong.
Dealings in our ordinary shares registered on our Hong Kong Share Register are subject to Hong Kong stamp duty. The stamp duty is charged to each
of the seller and purchaser at the rate of 0.1% of the consideration for, or (if greater) the value of, our ordinary shares transferred. In other words, a total of
0.2% is currently payable on a typical sale and purchase transaction of our ordinary shares. In addition, a fixed duty of HK$5.00 is charged on each
instrument of transfer (if required). To facilitate ADS-ordinary share conversion and trading between NYSE and the Hong Kong Stock Exchange, we have
moved a portion of our issued ordinary shares from our Cayman share register to our Hong Kong share register. It is unclear whether, as a matter of Hong
Kong law, the trading or conversion of ADSs constitutes a sale or purchase of the underlying Hong Kong registered ordinary shares that is subject to Hong
Kong stamp duty. We advise investors to consult their own tax advisors on this matter. See “Item 3. Key Information — D. Risk Factors — Risks Related
to Our ADSs and Ordinary Shares — There is uncertainty as to whether Hong Kong stamp duty will apply to the trading or conversion of our ADSs.”
Mainland China Taxation
We are a holding company incorporated in the Cayman Islands, which indirectly holds Autohome WFOE, Chezhiying WFOE and other subsidiaries
in the mainland China. Our business operations are principally conducted through our mainland China subsidiaries and the VIEs. Although we believe we
are not a mainland China resident enterprise for enterprise income tax purposes, substantial uncertainty exists. In the event that our company or any of our
offshore entities, is considered to be a mainland China resident enterprise: (a) our company or our offshore
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entities, as the case may be, would be subject to the mainland China enterprise income tax at the rate of 25% on worldwide income; and (b) dividend
income that our company or our offshore entities, as the case may be, receives from our mainland China subsidiaries would be exempt from the mainland
China withholding tax since such income is exempted under the EIT Law for mainland China resident enterprise; and (c) any dividends we pay to our non-
mainland China shareholders or ADS holders as well as gains realized by such shareholders or ADS holders from the transfer of our shares or ADSs may
be regarded as mainland China-sourced income and as a result become subject to mainland China withholding tax at a rate of up to 10%, subject to
reduction or exemption by an applicable treaty. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Our global
income and the dividends that we may receive from our mainland China subsidiaries, dividends distributed to our non-mainland China shareholders and
ADS holders, and gains recognized by such shareholders or ADS holders, may be subject to PRC taxes under the EIT Law, which would have a material
adverse effect on our results of operations.”
As uncertainties remain regarding the interpretation and implementation of the EIT Law and its implementation rules, we cannot assure you that, if we
are deemed a mainland China resident enterprise, any dividends to be distributed by us to our non-mainland China shareholders and ADS holders would
not be subject to any PRC withholding tax. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Our global
income and the dividends that we may receive from our mainland China subsidiaries, dividends distributed to our non-mainland China shareholders and
ADS holders, and gains recognized by such shareholders or ADS holders, may be subject to PRC taxes under the EIT Law, which would have a material
adverse effect on our results of operations.”
United States Federal Income Tax Considerations
The following discussion is a summary of United States federal income tax considerations relating to the ownership and disposition of our ADSs or
ordinary shares by U.S. Holders (as defined below) that will hold ADSs or ordinary shares as “capital assets” (generally, property held for investment)
under the United States Internal Revenue Code of 1986, as amended (the “Code”). This discussion is based upon applicable provisions of the Code,
Treasury regulations (proposed, temporary and final) promulgated thereunder (“Regulations”), pertinent judicial decisions, interpretive rulings of the
Internal Revenue Service and such other authorities as we have considered relevant, which are subject to change, possibly with retroactive effect. This
discussion does not address all aspects of United States federal income taxation that may be important to particular investors in light of their individual
investment circumstances, including investors subject to special tax rules (for example, certain financial institutions, insurance companies, broker-dealers,
pension plans, regulated investment companies, real estate investment trusts, cooperatives, and tax-exempt organizations (including private foundations),
holders who are not U.S. Holders, holders who own (directly, indirectly, or constructively) 10% or more of our stock (by vote or value), investors that will
hold their ADSs or ordinary shares as part of a straddle, hedge, conversion, constructive sale, or other integrated transaction for United States federal
income tax purposes, investors that are traders in securities that have elected the mark-to-market method of accounting or investors that have a functional
currency other than the United States dollar), all of whom may be subject to tax rules that differ significantly from those discussed below. In addition, this
discussion does not address United States federal estate, gift, Medicare, and alternative minimum tax considerations, or any non-United States, state, or
local tax considerations. Each U.S. Holder is urged to consult its tax advisors regarding the United States federal, state, local, and non-United States income
and other tax considerations of an investment in ADSs or ordinary shares.
General
For purposes of this summary, a “U.S. Holder” is a beneficial owner of our ADSs or ordinary shares that is, for United States federal income tax
purposes, (i) an individual who is a citizen or resident of the United States, (ii) a corporation, or other entity treated as a corporation for United States
federal income tax purposes, created in, or organized under the laws of the United States or any state thereof or the District of Columbia, or treated as such
for United States federal income tax purposes, (iii) an estate the income of which is includible in gross income for United States federal income tax
purposes regardless of its source, or (iv) a trust (A) the administration of which is subject to the primary supervision of a United States court and which has
one or more United States persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise validly elected to be
treated as a United States person under the Code.
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If a partnership (or other entity treated as a partnership for United States federal income tax purposes) is a beneficial owner of our ADSs or ordinary
shares, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. If a U.S.
Holder is a partner of a partnership holding our ADSs or ordinary shares, the U.S. Holder is urged to consult its tax advisors regarding an investment in our
ADSs or ordinary shares.
It is generally expected that a U.S. Holder of ADSs will be treated as the beneficial owner, for United States federal income tax purposes, of the
underlying shares represented by the ADSs. The remainder of this discussion assumes that a U.S. Holder of our ADSs will be treated in this manner.
Accordingly, deposits or withdrawals of our ordinary shares for our ADSs will not be subject to United States federal income tax.
Passive Foreign Investment Company Considerations
A non-United States corporation, such as our company, will be classified as a PFIC, for United States federal income tax purposes for any taxable
year, if either (i) 75% or more of its gross income for such year consists of certain types of “passive” income or (ii) 50% or more of the value of its assets
(generally determined on the basis of a quarterly average) during such year produce or are held for the production of passive income. Passive income
generally includes dividends, interest, royalties, rents, annuities, net gains from the sale or exchange of property producing such income and net foreign
currency gains. For this purpose, cash is categorized as a passive asset and the company’s goodwill and other unbooked intangibles associated with active
business activity are taken into account as non-passive assets. We will be treated as owning our proportionate share of the assets and earning our
proportionate share of the income of any other corporation in which we own, directly or indirectly, 25% or more (by value) of the stock.
Although the law in this regard is unclear, we treat the VIEs as being owned by us for United States federal income tax purposes, not only because we
have power to direct significant activities of such entities but also because we are entitled to substantially all of their economic benefits, and, as a result, we
consolidate their results of operation in our consolidated U.S. GAAP financial statements.
Based upon the nature and composition of our assets (in particular, the retention of substantial amounts of cash, deposits and investments), and the
market price of our ADSs, we believe that we were a PFIC for United States federal income tax purposes for the taxable year ended December 31, 2023,
and we will likely be a PFIC for our current taxable year unless the market price of our ADSs increases and/or we invest a substantial amount of the cash
and other passive assets we hold in assets that produce or are held for the production of active income. U.S. Holders should consult with their tax advisors
regarding the implications of owning stock in a PFIC. No assurances regarding our PFIC status can be provided for any past, current or future taxable
years. The determination of whether we are a PFIC is a fact-intensive determination made on an annual basis and the applicable law is subject to varying
interpretation. Our U.S. counsel expresses no opinion with respect to our PFIC status for our taxable year ended December 31, 2023 or any future taxable
year.
If we are classified as a PFIC for any taxable year during which a U.S. Holder holds our ADSs or ordinary shares, we generally will continue to be
treated as a PFIC for all succeeding years during which such U.S. Holder holds our ADSs or ordinary shares.
The United States federal income tax rules that apply if we are treated as a PFIC are generally discussed below under “Passive Foreign Investment
Company Rules.”
Dividends
Subject to the discussion below under “Passive Foreign Investment Company Rules,” any cash distributions (including the amount of any mainland
China tax withheld, if any) paid on our ADSs or ordinary shares out of our earnings and profits, as determined under United States federal income tax
principles, will generally be includible in the gross income of a U.S. Holder as dividend income on the day actually or constructively received by the U.S.
Holder, in the case of ordinary shares, or by the depositary bank, in the case of ADSs. Because we do not intend to determine our earnings and profits on
the basis of United States federal income tax principles, any distribution paid
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will generally be treated as a “dividend” for United States federal income tax purposes. Dividends received on our ADSs or ordinary shares will not be
eligible for the dividends received deduction allowed to corporations.
With respect to individuals and certain other non-corporate U.S. Holders, dividends may constitute “qualified dividend income” that is subject to tax
at the lower applicable capital gains rates provided that (i) the ADSs or ordinary shares on which the dividends are paid are readily tradable on an
established securities market in the United States, or, in the event that we are deemed to be a resident enterprise under the PRC tax law, we are eligible for
the benefit of the United States-PRC income tax treaty (the “Treaty”), (ii) we are not a PFIC for either our taxable year in which the dividend was paid or
the preceding taxable year, and (iii) certain holding period requirements are met. The ADSs, but not our ordinary shares, are listed on the NYSE so we
anticipate that the ADSs should qualify as readily tradable on an established securities market in the United States, although there can be no assurances in
this regard. In the event we are deemed to be a mainland China resident enterprise under the EIT Law, we may be eligible for the benefits of the Treaty. If
we are eligible for such benefits, dividends we pay on our ordinary shares, regardless of whether such shares are represented by the ADSs, and regardless
of whether our ADSs are readily tradable on an established securities market in the United States, would be eligible for the reduced rates of taxation
applicable to qualified dividend income. U.S. Holders should consult their tax advisors regarding the availability of the lower capital gains rate applicable
to qualified dividend income for dividends paid with respect to the ADSs or ordinary shares.
Dividends will generally be treated as income from foreign sources for United States foreign tax credit purposes and will generally constitute passive
category income. In the event that we are deemed to be a mainland China resident enterprise under the EIT Law, a U.S. Holder may be subject to PRC
withholding taxes on dividends paid on our ADSs or ordinary shares. Depending on the U.S. Holder’s individual facts and circumstances, a U.S. Holder
may be eligible, subject to a number of complex limitations, to claim a foreign tax credit not in excess of any applicable treaty rate in respect of any foreign
withholding taxes imposed on dividends received on our ADSs or ordinary shares. A U.S. Holder who does not elect to claim a foreign tax credit for
foreign tax withheld may instead claim a deduction, for United States federal income tax purposes, in respect of such withholding, but only for a year in
which such holder elects to do so for all creditable foreign income taxes. The rules governing the foreign tax credit are complex and their outcome depends
in large part on the U.S. Holder’s individual facts and circumstances. Accordingly, U.S. Holders are urged to consult their tax advisors regarding the
availability of the foreign tax credit under their particular circumstances.
As mentioned above, we believe that we were a PFIC for the taxable year ended December 31, 2023, and we will likely be classified as a PFIC for our
current taxable year. U.S. Holders are urged to consult their tax advisors regarding the availability of the reduced tax rate on dividends with respect to our
ADSs or ordinary shares under their particular circumstances.
Sale or Other Disposition of ADSs or Ordinary Shares
Subject to the discussion below under “Passive Foreign Investment Company Rules,” a U.S. Holder will generally recognize gain or loss upon the sale
or other disposition of our ADSs or ordinary shares in an amount equal to the difference between the amount realized upon the disposition and the holder’s
adjusted tax basis in such ADSs or ordinary shares. The gain or loss will generally be capital gain or loss. Individuals and other non-corporate U.S. Holders
who have held the ADS or ordinary shares for more than one year will generally be eligible for reduced tax rates. The deductibility of a capital loss may be
subject to limitations. Any such gain or loss that the U.S. Holder recognizes will generally be treated as U.S.-source income or loss for foreign tax credit
limitation purposes, which will generally limit the availability of foreign tax credits.
As described in “Item 10. Additional Information—E. Taxation—People’s Republic of China Taxation,” if we are deemed to be a mainland China
resident enterprise under the EIT Law, gains from the disposition of the ADSs or ordinary shares may be subject to mainland China income tax and will
generally be U.S.-source, which may limit the ability to receive a foreign tax credit. If a U.S. Holder is eligible for the benefits of the Treaty, such holder
may be able to elect to treat such gain as mainland China-source income under the Treaty. Pursuant to recently issued Regulations, however, if a U.S.
Holder is not eligible for the benefits of the Treaty or does not elect to apply the Treaty, then such holder may not be able to claim a foreign tax credit
arising from any mainland China tax imposed on the disposition of the ADSs or ordinary shares. The rules regarding foreign tax credits and deduction of
foreign
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taxes are complex. U.S. Holders should consult their tax advisors regarding the availability of a foreign tax credit or deduction in light of their particular
circumstances, including their eligibility for benefits under the Treaty, and the potential impact of the recently issued Regulations.
As mentioned above, we believe that we were a PFIC for the taxable year ended December 31, 2023, and we will likely be classified as a PFIC for our
current taxable year. U.S. Holders are urged to consult their tax advisors regarding the tax considerations of the sale or other disposition of our ADSs or
ordinary shares under their particular circumstances.
Passive Foreign Investment Company Rules
As mentioned above, we believe that we were a PFIC for the taxable year ended December 31, 2023, and we will likely be classified as a PFIC for our
current taxable year. If we are classified as a PFIC for any taxable year during which a U.S. Holder holds our ADSs or ordinary shares, and unless the U.S.
Holder makes a mark-to-market election with respect to ADSs (as described below), the U.S. Holder will generally be subject to special tax rules that have
a penalizing effect, regardless of whether we remain a PFIC, on (i) any excess distribution that we make to the U.S. Holder (which generally means any
distribution paid during a taxable year that is greater than 125% of the average annual distributions paid in the three preceding taxable years or, if shorter,
the U.S. Holder’s holding period for the ADSs or ordinary shares), and (ii) any gain realized on the sale or other disposition, including a pledge, under
certain circumstances, of ADSs or ordinary shares. Under these PFIC rules:
•
•
•
•
the U.S. Holder’s excess distribution or gain will be allocated ratably over the U.S. Holder’s holding period for the ADSs or ordinary shares;
the amount allocated to the current taxable year and any taxable years in the U.S. Holder’s holding period prior to the first taxable year in which
we are classified as a PFIC (each, a “pre-PFIC year”) will be taxable as ordinary income;
the amount allocated to each prior taxable year, other than a pre-PFIC year, will be subject to tax at the highest tax rate in effect applicable to
individuals or corporations, as appropriate, for that year; and
an additional tax equal to the interest charge generally applicable to underpayments of tax will be imposed on the tax attributable to each prior
taxable year, other than a pre-PFIC year.
If we are a PFIC for any taxable year during which a U.S. Holder holds our ADSs or ordinary shares and any of our non-United States subsidiaries is
also a PFIC (i.e., a lower-tier PFIC), such U.S. Holder would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC
and would be subject to the rules described above on certain distributions by a lower-tier PFIC and a disposition of shares of a lower-tier PFIC even though
such U.S. Holder would not receive the proceeds of those distributions or dispositions. U.S. Holders are urged to consult their tax advisors regarding the
application of the PFIC rules to any of our subsidiaries.
As an alternative to the foregoing rules, a U.S. Holder of “marketable stock” in a PFIC may make a mark-to-market election with respect to our ADSs,
provided that the ADSs are regularly traded on the NYSE. We anticipate that the ADSs should qualify as being regularly traded, but no assurances may be
given in this regard. If a U.S. Holder makes this election, the U.S. Holder will generally (i) include as ordinary income for each taxable year the excess, if
any, of the fair market value of ADSs held at the end of the taxable year over the adjusted tax basis of such ADSs and (ii) deduct as an ordinary loss the
excess, if any, of the adjusted tax basis of such ADSs over the fair market value of such ADSs held at the end of the taxable year, but such deduction will
be allowed only to the extent of the amount previously included in income as a result of the mark-to-market election. The U.S. Holder’s adjusted tax basis
in the ADSs would be adjusted to reflect any income or loss resulting from the mark-to-market election. If a U.S. Holder makes a mark-to-market election
in respect of a corporation classified as a PFIC and such corporation ceases to be classified as a PFIC, the U.S. Holder will not be required to take into
account the gain or loss described above during any year that such corporation is not classified as a PFIC. If a U.S. Holder makes a mark-to-market
election, any gain such U.S. Holder recognizes upon the sale or other disposition of our ADSs in a year when we are a PFIC will be treated as ordinary
income and any loss will be treated as ordinary loss, but such loss will only be
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treated as ordinary loss to the extent of the net amount previously included in income as a result of the mark-to-market election. In the case of a U.S.
Holder who has held ADSs or ordinary shares during any taxable year in respect of which we are or were classified as a PFIC and continues to hold such
ADSs or ordinary shares (or any portion thereof) and has not previously made a mark-to-market election, and if such U.S. Holder makes a mark-to-market
election, special tax rules may apply relating to purging the PFIC taint of such ADSs or ordinary shares.
Because, as a technical matter, a mark-to-market election cannot be made for any lower-tier PFICs that we may own, a U.S. Holder may continue to
be subject to the PFIC rules with respect to its indirect interest in any investments held by us that are treated as an equity interest in a PFIC for United
States federal income tax purposes.
We do not intend to provide information necessary for U.S. Holders to make “qualified electing fund” elections which, if available, would result in tax
treatment different from the general tax treatment for PFICs described above.
If a U.S. Holder owns our ADSs or ordinary shares during any taxable year that we are a PFIC, the U.S. Holder must generally file an annual report
with the Internal Revenue Service, subject to certain limited exceptions. Each U.S. Holder is urged to consult its tax advisor concerning the United States
federal income tax consequences of owning and disposing of our ADSs or ordinary shares if we are or become treated as a PFIC, including filing
requirements, the possibility of making a mark-to-market election and the unavailability of the qualifying electing fund election.
Information Reporting and Backup Withholding
Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries are subject to
information reporting, and may be subject to backup withholding, unless (i) the U.S. Holder is a corporation or other exempt recipient or (ii) in the case of
backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding.
Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit
against the U.S. Holder’s U.S. federal income tax liability and may entitle the U.S. Holder to a refund, provided that the required information is timely
furnished to the IRS.
U.S. Holders should consult their tax advisors regarding the information reporting requirements and the application of the backup withholding rules in
their particular circumstances.
THIS DISCUSSION IS FOR GENERAL INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. U.S. HOLDERS SHOULD
CONSULT THEIR TAX ADVISORS REGARDING THE U.S. FEDERAL, STATE, AND LOCAL AND NON-U.S. INCOME AND NON-INCOME
TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF ORDINARY SHARES, INCLUDING THE IMPACT OF
ANY POTENTIAL CHANGE IN LAW, IN THEIR PARTICULAR CIRCUMSTANCES.
F. Dividends and Paying Agents
Not applicable.
G. Statement by Experts
Not applicable.
H. Documents on Display
We previously filed with the SEC registration statements on Form F-1 under the Securities Act with respect to our initial public offering and our
follow-on offering of our ordinary shares represented by ADSs.
We are subject to the periodic reporting and other informational requirements of the Securities Exchange Act of 1934, or the Exchange Act. Under the
Exchange Act, we are required to file reports and other information with the
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SEC. Specifically, we are required to file annually a Form 20-F within four months after the end of each fiscal year, which is December 31. The SEC
maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make
electronic filings with the SEC using its EDGAR system. Copies of reports and other information, when filed, may also be inspected without charge, and
may be obtained at prescribed rates at the public reference facilities maintained by the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549.
The public may obtain information regarding the Washington, D.C. Public Reference Room by calling the SEC at 1-800-SEC-0330. As a foreign private
issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of quarterly reports and proxy statements, and officers,
directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.
We will furnish Deutsche Bank Trust Company Americas, the depositary of our ADSs, with our annual reports, which will include a review of
operations and annual audited consolidated financial statements prepared in conformity with U.S. GAAP, and all notices of shareholders’ meetings and
other reports and communications that are made generally available to our shareholders. The depositary will make such notices, reports and
communications available to holders of ADSs and, upon our request, will mail to all record holders of ADSs the information contained in any notice of a
shareholders’ meeting received by the depositary from us.
In accordance with NYSE Rule 203.01, we will post this annual report on our website http://ir.autohome.com.cn. In addition, we will provide
hardcopies of our annual report to shareholders, including ADS holders, free of charge upon request.
I.
Subsidiary Information
Not applicable.
J. Annual Report to Security Holders
Not applicable.
ITEM 11 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk
Our exposure to interest rate risk primarily relates to the interest income generated by excess cash, which is mostly held in interest-bearing bank
deposits and adjustable-rate short-term investments. We have not used derivative financial instruments in our investment portfolio. Interest earning
instruments carry a degree of interest rate risk. We have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in market
interest rates. However, our future interest income may fall short of expectations due to changes in market interest rates. See “Item 5. Operating and
Financial Review and Prospects—B. Liquidity and Capital Resources.”
Foreign Exchange Risk
Substantially all of our revenues and expenses are denominated in RMB. We do not believe that we currently have any significant direct foreign
exchange risk and have not used any derivative financial instruments to hedge exposure to such risk. Although our exposure to foreign exchange risks
should be limited in general, the value of your investment in our ADSs will be affected by the exchange rate between U.S. dollar and RMB because the
value of our business is effectively denominated in RMB, while our ADSs will be traded in U.S. dollars.
Any significant appreciation or depreciation of the RMB may however materially affect the value of, and any dividends payable on, our ADSs in U.S.
dollars. To the extent that we need to convert U.S. dollars into RMB for our operations, appreciation of the RMB against the U.S. dollar would have an
adverse effect on the RMB amount we receive from the conversion. Conversely, if we decide to convert RMB into U.S. dollars for the purpose of making
payments for dividends on our ordinary shares or ADSs or for other business purposes, appreciation of the U.S. dollar against the RMB would have a
negative effect on the U.S. dollar amounts available to us.
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As of December 31, 2023, we had RMB-denominated cash and cash equivalents, restricted cash and short-term investments of RMB18.1 billion, and
U.S. dollar-denominated cash and cash equivalents, restricted cash and short-term investments of US$793.6 million. Assuming we had converted RMB18.1
billion into U.S. dollars at the exchange rate of RMB7.0999 for US$1.00 as of December 31, 2023, our U.S. dollar cash balance would have been US$3.3
billion. If the RMB had depreciated by 10% against the U.S. dollar, our U.S. dollar cash balance would have been US$3.1 billion instead.
ITEM 12 DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
A. Debt Securities
Not applicable.
B. Warrants and Rights
Not applicable.
C. Other Securities
Not applicable.
D. American Depositary Shares
Fees and Charges Our ADS Holders May Have to Pay
Deutsche Bank Trust Company Americas, the depositary of our ADS program, collects its fees for delivery and surrender of ADSs directly from
investors depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The principal executive office of
the depositary is located at 60 Wall Street, New York, NY 1005, USA. An ADS holder will be required to pay the following service fees to the depositary
bank:
Service
• Issuance of ADSs, including issuances resulting from a distribution
Fees
Up to US$0.05 per ADS issued
of shares or rights or other property
• Cancellation of ADSs, including in the case of termination of the
Up to US$0.05 per ADS cancelled
deposit agreement
• Distribution of cash dividends or other cash distributions
Up to US$0.05 per ADS held
• Distribution of ADSs pursuant to share dividends, free share
Up to US$0.05 per ADS held
distributions or exercise of rights
• Distribution of securities other than ADSs or rights to purchase
A fee equivalent to the fee that would be payable if securities distributed to the
additional ADSs
• Depositary services
• Transfer of ADRs
ADS holder had been ordinary shares and the ordinary shares had been deposited
for issuance of ADSs
Up to US$0.05 per ADS held on the applicable record date(s) established by the
depositary bank
US$1.50 per certificate presented for transfer
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An ADS holder will also be responsible for paying certain fees and expenses incurred by the depositary bank and certain taxes and governmental
charges (in addition to any applicable fees, expenses, taxes and other governmental charges payable on the deposited securities represented by any of the
ADSs held) such as:
•
•
•
•
•
•
•
Fees for the transfer and registration of ordinary shares charged by the registrar and transfer agent for the ordinary shares in the Cayman Islands
(i.e., upon deposit and withdrawal of ordinary shares).
Expenses incurred for converting foreign currency into U.S. dollars.
Expenses for cable, telex and fax transmissions and for delivery of securities.
Taxes and duties upon the transfer of securities, including any applicable stamp duties, any stock transfer charges or withholding taxes (i.e., when
ordinary shares are deposited or withdrawn from deposit).
Fees and expenses incurred in connection with the delivery or servicing of ordinary shares on deposit.
Fees and expenses incurred in connection with complying with exchange control regulations and other regulatory requirements applicable to
ordinary shares, deposited securities, ADSs and ADRs.
Any applicable fees and penalties thereon.
The depositary fees payable upon the issuance and cancellation of ADSs are typically paid to the depositary bank by the brokers (on behalf of their
clients) receiving the newly issued ADSs from the depositary bank and by the brokers (on behalf of their clients) delivering the ADSs to the depositary
bank for cancellation. The brokers in turn charge these fees to their clients. Depositary fees payable in connection with distributions of cash or securities to
ADS holders and the depositary services fee are charged by the depositary bank to the holders of record of ADSs as of the applicable ADS record date.
The depositary fees payable for cash distributions are generally deducted from the cash being distributed or by selling a portion of distributable
property to pay the fees. In the case of distributions other than cash (i.e., share dividends, rights), the depositary bank charges the applicable fee to the ADS
record date holders concurrent with the distribution. In the case of ADSs registered in the name of the investor (whether certificated or uncertificated in
direct registration), the depositary bank sends invoices to the applicable record date ADS holders. In the case of ADSs held in brokerage and custodian
accounts (via the Depository Trust Company, or DTC), the depositary bank generally collects its fees through the systems provided by DTC (whose
nominee is the registered holder of the ADSs held in DTC) from the brokers and custodians holding ADSs in their DTC accounts. The brokers and
custodians who hold their clients’ ADSs in DTC accounts in turn charge their clients’ accounts the amount of the fees paid to the depositary banks.
In the event of refusal to pay the depositary fees, the depositary bank may, under the terms of the deposit agreement, refuse the requested service until
payment is received or may set off the amount of the depositary fees from any distribution to be made to the ADS holder.
Fees and Other Payments Made by the Depositary to Us
Our depositary has agreed to reimburse us for a portion of certain expenses we incur that are related to establishment and maintenance of the ADR
program, including investor relations expenses. There are limits on the amount of expenses for which the depositary will reimburse us, but the amount of
reimbursement available to us is not related to the amounts of fees the depositary collects from investors. Further, the depositary has agreed to reimburse us
certain fees payable to the depositary by holders of ADSs. Neither we nor the depositary can determine the exact amount to be made available to us
because (i) the number of ADSs that will be issued and outstanding, (ii) the level of service fees to be charged to holders of ADSs and (iii) our
reimbursable expenses related to the program are not known at this time. In 2023, we received reimbursement from the depositary of US$1.6 million.
Conversion between Ordinary Shares and ADSs
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Dealings and Settlement of Ordinary Shares in Hong Kong
Our ordinary shares trade on the Hong Kong Stock Exchange in board lots of 100 ordinary shares. Dealings in our ordinary shares on the Hong Kong
Stock Exchange will be conducted in Hong Kong dollars.
The transaction costs of dealings in our ordinary shares on the Hong Kong Stock Exchange include:
•
•
•
•
•
•
•
•
Hong Kong Stock Exchange trading fee of 0.005% of the consideration of the transaction, charged to each of the buyer and seller;
SFC transaction levy of 0.0027% of the consideration of the transaction, charged to each of the buyer and seller;
trading tariff of HK$0.50 on each and every purchase or sale transaction. The decision on whether or not to pass the trading tariff onto investors
is at the discretion of brokers;
transfer deed stamp duty of HK$5.00 per transfer deed (if applicable), payable by the seller;
ad valorem stamp duty at a total rate of 0.2% of the value of the transaction, with 0.1% payable by each of the buyer and the seller;
stock settlement fee, which is currently 0.002% of the gross transaction value, subject to a minimum fee of HK$2.00 and a maximum fee of
HK$100.00 per side per trade;
brokerage commission, which is freely negotiable with the broker (other than brokerage commissions for IPO transactions which are currently
set at 1% of the subscription or purchase price and will be payable by the person subscribing for or purchasing the securities); and
the Hong Kong Share Registrar will charge between HK$2.50 to HK$20.00, depending on the speed of service (or such higher fee as may from
time to time be permitted under the Hong Kong Listing Rules), for each transfer of ordinary shares from one registered owner to another, each
share certificate canceled or issued by it and any applicable fee as stated in the share transfer forms used in Hong Kong.
Investors must settle their trades executed on the Hong Kong Stock Exchange through their brokers directly or through custodians. For an investor
who has deposited his or her ordinary shares in his or her stock account or in his or her designated Central Clearing and Settlement System participant’s
stock account maintained with the Central Clearing and Settlement System, or CCASS, settlement will be effected in CCASS in accordance with the
General Rules of CCASS and CCASS Operational Procedures in effect from time to time. For an investor who holds the physical certificates, settlement
certificates and the duly executed transfer forms must be delivered to his or her broker or custodian before the settlement date.
Conversion between Ordinary Shares Trading in Hong Kong and ADSs
In connection with the listing of our ordinary shares on the Hong Kong Stock Exchange, we have established a branch register of members in Hong
Kong, or the Hong Kong share register, which will be maintained by our Hong Kong Share Registrar, Computershare Hong Kong Investor Services
Limited. Our principal register of members will continue to be maintained by our principal share registrar, Maples Fund Services (Cayman) Limited.
All ordinary shares offered in connection with our listing in Hong Kong are registered on the Hong Kong share register in order to be listed and traded
on the Hong Kong Stock Exchange. As described in further detail below, holders of ordinary shares registered on the Hong Kong Share Register will be
able to convert these ordinary shares into ADSs, and vice versa.
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In connection with our listing in Hong Kong, and to facilitate fungibility and conversion between ADSs and ordinary shares and trading between
NYSE and the Hong Kong Stock Exchange, we moved a portion of our issued ordinary shares from our register of members maintained in the Cayman
Islands to our Hong Kong share register.
Converting Ordinary Shares Trading in Hong Kong into ADSs
An investor who holds ordinary shares registered in Hong Kong and who intends to convert them to ADSs to trade on NYSE must deposit or have his
or her broker deposit the ordinary shares with the depositary’s Hong Kong custodian, Deutsche Bank AG, Hong Kong Branch, Hong Kong, or the
custodian, in exchange for ADSs.
A deposit of ordinary shares trading in Hong Kong in exchange for ADSs involves the following procedures:
•
•
•
If ordinary shares have been deposited with CCASS, the investor must transfer ordinary shares to the depositary’s account with the custodian
within CCASS by following the CCASS procedures for transfer and submit and deliver a duly completed and signed letter of transmittal to the
custodian via his or her broker.
If ordinary shares are held outside CCASS, the investor must arrange to deposit his or her ordinary shares into CCASS for delivery to the
depositary’s account with the custodian within CCASS, submit and deliver a duly completed and signed letter of transmittal to the custodian via
his or her broker.
Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, if applicable, and subject
in all cases to the terms of the deposit agreement, the depositary will issue the corresponding number of ADSs in the name(s) requested by an
investor and will deliver the ADSs to the designated DTC account of the person(s) designated by an investor or his or her broker.
For ordinary shares deposited in CCASS, under normal circumstances, the above steps generally require two business days. For ordinary shares held
outside CCASS in physical form, the above steps may take 14 business days, or more, to complete. Temporary delays may arise. For example, the transfer
books of the depositary may from time to time be closed to ADS issuances. The investor will be unable to trade the ADSs until the procedures are
completed.
Converting ADSs to Ordinary Shares Trading in Hong Kong
An investor who holds ADSs and who intends to convert his/her ADSs into ordinary shares to trade on the Hong Kong Stock Exchange must cancel
the ADSs the investor holds and withdraw ordinary shares from our ADS program and cause his or her broker or other financial institution to trade such
ordinary shares on the Hong Kong Stock Exchange.
An investor that holds ADSs indirectly through a broker should follow the broker’s procedure and instruct the broker to arrange for cancelation of the
ADSs, and transfer of the underlying ordinary shares from the depositary’s account with the custodian within the CCASS system to the investor’s Hong
Kong stock account.
For investors holding ADSs directly (not holding through brokers), the following steps must be taken:
•
•
To withdraw ordinary shares from our ADS program, an investor who holds ADSs may turn in such ADSs at the office of the depositary (and the
applicable ADR(s) if the ADSs are held in certificated form), and send an instruction to cancel such ADSs to the depositary.
Upon payment or net of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, if applicable, and
subject in all cases to the terms of the deposit agreement, the depositary will instruct the custodian to deliver ordinary shares underlying the
canceled ADSs to the CCASS account designated by an investor.
156
•
If an investor prefers to receive ordinary shares outside CCASS, he or she must receive ordinary shares in CCASS first and then arrange for
withdrawal from CCASS. Investors can then obtain a transfer form signed by HKSCC Nominees Limited (as the transferor) and register ordinary
shares in their own names with the Hong Kong Share Registrar.
For ordinary shares to be received in CCASS, under normal circumstances, the above steps generally require two business days. For ordinary shares to
be received outside CCASS in physical form, the above steps may take 14 business days, or more, to complete. The investor will be unable to trade the
ordinary shares on the Hong Kong Stock Exchange until the procedures are completed.
Temporary delays may arise. For example, the transfer books of the depositary may from time to time be closed to ADS cancelations. In addition,
completion of the above steps and procedures is subject to there being a sufficient number of ordinary shares on the Hong Kong share register to facilitate a
withdrawal from the ADS program directly into the CCASS system. We are not under any obligation to maintain or increase the number of ordinary shares
on the Hong Kong share register to facilitate such withdrawals.
Depositary Requirements
Before the depositary issues ADSs or permits withdrawal of ordinary shares, the depositary may require:
•
•
production of satisfactory proof of the identity and genuineness of any signature or other information it deems necessary; and
compliance with procedures it may establish, from time to time, consistent with the deposit agreement, including, but not limited to, presentation
of transfer documents.
The depositary may refuse to deliver, transfer, or register issuances, transfers and cancelations of ADSs generally when the transfer books of the
depositary or our Hong Kong Share Registrar are closed or at any time if the depositary or we determine it advisable to do so.
All costs attributable to the transfer of ordinary shares to effect a withdrawal from or deposit of ordinary shares into our ADS program will be borne
by the investor requesting the transfer. In particular, holders of ordinary shares and ADSs should note that the Hong Kong Share Registrar will charge
between HK$2.50 to HK$20, depending on the speed of service (or such higher fee as may from time to time be permitted under the Hong Kong Listing
Rules), for each transfer of ordinary shares from one registered owner to another, each share certificate canceled or issued by it and any applicable fee as
stated in the share transfer forms used in Hong Kong. In addition, holders of ordinary shares and ADSs must pay up to US$5.00 (or less) per 100 ADSs for
each issuance of ADSs and each cancelation of ADSs, as the case may be, in connection with the deposit of ordinary shares into, or withdrawal of ordinary
shares from, our ADS program.
ITEM 13 DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
PART II.
None.
ITEM 14 MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
See “Item 10. Additional Information” for a description of the rights of securities holders, which remain unchanged.
The following “Use of Proceeds” information relates to:
157
•
•
•
the registration statement on Form F-1, as amended (File Number 333-192085) for our initial public offering of 8,993,000 ADSs (reflecting the
full exercise of the over-allotment option by the underwriters to purchase an additional 1,173,000 ADSs), representing 35,972,000 ordinary
shares (8,993,000 Class A ordinary shares without reflecting the share split in 2021), which registration statement was declared effective by the
SEC on December 10, 2013. Deutsche Bank Securities Inc. and Goldman Sachs (Asia) L.L.C. acted as the representatives of the underwriters in
our initial public offering;
the registration statement on Form F-1, as amended (File Number 333-199862) for our offering in 2014 of 9,645,659 ADSs (reflecting the partial
exercise of the over-allotment option by the underwriters to purchase an additional 1,145,659 ADSs), representing 38,582,636 ordinary shares
(9,645,659 Class A ordinary shares without reflecting the share split in 2021), or the 2014 Offering, which registration statement was declared
effective by the SEC on November 19, 2014. Deutsche Bank Securities Inc. and Goldman Sachs (Asia) L.L.C. acted as the representatives of the
underwriters in our 2014 Offering; and
the registration statement on Form F-3 (File Number 333-253792) and prospectus supplement filed on March 10, 2021 for the Hong Kong
Offering. The public offering closed in March 2021. China International Capital Corporation Hong Kong Securities Limited, Goldman Sachs
(Asia) L.L.C. and Credit Suisse (Hong Kong) Limited are the joint representatives of the underwriters for our public offering. We issued
24,738,400 ordinary shares at a public offering price of HK$176.30 per ordinary share, taking into account the ordinary shares sold upon the
exercise of the over-allotment option by our underwriters. We raised HK$4,294.9 million in net proceeds from our public offering after deducting
underwriting commissions and discounts and the offering expenses payable by us.
We incurred expenses and paid to others US$12.8 million for underwriting discounts and commissions in connection with our initial public offering.
We incurred expenses and paid to others US$5.0 million for underwriting discounts and commissions in connection with our 2014 Offering. We incurred
expenses and paid to others HK$66.5 million for underwriting discounts and commissions in connection with our Hong Kong Offering. We received net
proceeds of approximately US$142.6 million, US$97.3 million and HK$4,294.9 million from our initial public offering, 2014 Offering and Hong Kong
Offering, respectively.
For the period from December 10, 2013, the date that our registration statement on Form F-1 for our initial public offering was declared effective by
the SEC, to December 31, 2023, we used an aggregate of approximately US$259.9 million of the net proceeds from our initial public offering, the 2014
Offering and the Hong Kong Offering for payment of establishment of new subsidiaries, investment in joint venture and other strategic investments,
professional fees, insurance fees, compensation to directors and general corporate purposes.
We intend to use the remainder of the proceeds from the offerings listed above for general corporate purposes, including funding potential investments
and acquisitions of complementary businesses, assets and technologies.
ITEM 15 CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer and chief financial officer, has performed an evaluation of the effectiveness of
our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report, as required
by Rule 13a-15(b) under the Exchange Act. Based on that evaluation, our management has concluded that, as of December 31, 2023, our disclosure
controls and procedures were effective.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of consolidated financial statements in accordance with U.S. GAAP and includes those policies and
158
procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of a
company’s assets, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in
accordance with generally accepted accounting principles, and that a company’s receipts and expenditures are being made only in accordance with
authorizations of a company’s management and directors, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of a company’s assets that could have a material effect on the consolidated financial statements. Our management, with the
participation of our chief executive officer and chief financial officer, conducted an evaluation of the effectiveness of our company’s internal control over
financial reporting as of December 31, 2023 based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 Framework). Based on this evaluation, our management concluded that our internal control over
financial reporting was effective as of December 31, 2023.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, any evaluation of
effectiveness as to future periods is subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
Attestation Report of the Independent Registered Public Accounting Firm
The effectiveness of our internal control over financial reporting as of December 31, 2023 has been audited by PricewaterhouseCoopers Zhong Tian
LLP, our independent registered public accounting firm, as stated in its report included on page F-2 of this annual report.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the year ended December 31, 2023 that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 16A AUDIT COMMITTEE FINANCIAL EXPERT
Our board of directors has determined that Mr. Tianruo Pu is our audit committee financial expert, who is an independent director under the standards
set forth in Section 303A of the New York Stock Exchange Listed Company Manual and Rule 10A-3 of the Exchange Act. Mr. Pu is the chairman of our
audit committee.
ITEM 16B CODE OF ETHICS
Our board of directors has adopted a code of business conduct and ethics that applies to our directors, officers, employees and agents, including
certain provisions that specifically apply to our chairman, chief executive officer, chief financial officer, controller, vice presidents and any other persons
who perform similar functions for us. We filed our code of business conduct and ethics as Exhibit 99.1 to our registration statement on Form F-1, as
amended, which was originally filed with the SEC on November 4, 2013. We subsequently amended the code of business conduct and ethics and filed it as
Exhibit 11.1 to our annual report on Form 20-F filed with the SEC on March 31, 2014. We further amended the code of business conduct and ethics on
October 31, 2022 and furnished it to the SEC as Exhibit 99.1 to a Form 6-K dated November 3, 2022. We have posted a copy of our code of business
conduct and ethics on our website at http://ir.autohome.com.cn
ITEM 16C PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered by
PricewaterhouseCoopers Zhong Tian LLP, our independent registered public accounting firm, for the years indicated. We did not pay any other fees to our
independent registered public accounting firm during the years other than those indicated below.
159
Audit fees
(2)
Tax fees
Other fees
(1)
(3)
2021
For the Year Ended December 31,
2022
(RMB in thousands)
2023
17,380
410
600
11,380
140
67
11,380
316
449
Notes:
(1)
(2)
(3)
“Audit fees” means the aggregate fees billed for professional services rendered by our independent registered public accounting firm for the audit of our annual financial statements, the
audit of our internal control over financial reporting and the review of our quarterly financial information.
“Tax fees” represents the aggregated fees billed for professional services rendered by our independent registered public accounting firm for tax compliance, tax advice and tax planning.
“Other fees” represents the aggregate fees charged to us for services rendered by our independent registered public accounting firm other than services reported under “audit fees” and “tax
fees.”
The policy of our audit committee is to preapprove all audit and non-audit services provided by our independent registered public accounting firm,
including audit services, tax services and other services as described above, other than those for de minimis services which are approved by the audit
committee prior to the completion of the audit. Our audit committee has approved all of our audit fees, tax fees and other fees for the year ended December
31, 2023.
ITEM 16D EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not applicable.
ITEM 16E PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
On November 18, 2021, our board of directors authorized a share repurchase program, under which we may repurchase up to US$200 million of our
ADSs over the next 12 months (the “Share Repurchase Program”). The Share Repurchase Program was publicly announced on the same day. On November
3, 2022, our board of directors authorized an extension of the term of the Share Repurchase Program for another twelve months to November 17, 2023.
As of November 17, 2023, we had repurchased approximately 6.7 million ADSs under this share repurchase program. The table below is a summary
of the shares repurchased by us from November 18, 2021 to November 17, 2023. All shares were repurchased in the open market pursuant to the share
repurchase program announced on November 18, 2021.
160
Period
December 1-December 31, 2021
January 1-January 31, 2022
February 1-February 28, 2022
March 1-March 31, 2022
April 1-April 30, 2022
May 1-May 31, 2022
June 1-June 30, 2022
July 1-July 31, 2022
August 1-August 31, 2022
September 1-September 30, 2022
October 1-October 31, 2022
November 1-November 30, 2022
March 1-March 31, 2023
April 1-April 30, 2023
May 1-May 31, 2023
June 1-June 30, 2023
July 1-July 31, 2023
August 1-August 31, 2023
September 1-September 30, 2023
October 1-October 31, 2023
November 1-November 21, 2023
Total
Total Number of ADSs
Purchased
Average Price
Paid Per ADS
Total Number of ADSs
Purchased as Part of the
Publicly Announced
Plan
Approximate Dollar Value
of ADSs that May Yet Be
Purchased Under the Plan
166,067 US$
61,929 US$
410,718 US$
418,105 US$
257,152 US$
337,344 US$
124,872 US$
107,719 US$
455,194 US$
543,645 US$
627,317 US$
176,265 US$
133,580 US$
109,200 US$
136,080 US$
439,747 US$
209,568 US$
609,714 US$
454,382 US$
541,585 US$
406,700 US$
6,726,883
29.45
29.71
28.07
27.52
28.39
26.91
34.39
34.71
35.10
32.97
29.00
28.16
29.73
29.30
29.38
29.21
29.37
30.24
29.78
28.70
26.91
N/A
166,067
61,929
410,718
418,105
257,152
337,344
124,872
107,719
455,194
543,645
627,317
176,265
133,580
109,200
136,080
439,747
209,568
609,714
454,382
541,585
406,700
6,726,883
195,109,105.50
193,269,117.99
181,738,728.37
170,230,722.13
162,931,018.56
153,852,653.77
149,558,133.80
145,818,917.18
129,839,403.23
111,917,757.83
93,727,225.27
88,762,864.24
84,791,673.38
81,591,787.57
77,593,921.51
64,750,206.42
58,594,818.11
40,155,445.11
26,623,231.40
11,077,581.37
-
N/A
ITEM 16F CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 16G CORPORATE GOVERNANCE
As a Cayman Islands company listed on the New York Stock Exchange, we are subject to the New York Stock Exchange corporate governance listing
standards. However, the New York Stock Exchange rules permit a foreign private issuer like us to follow the corporate governance practices of its home
country. Pursuant to Sections 303A.01, 303A.04, 303A.05 and 303A.07 of the New York Stock Exchange Listed Company Manual, a company listed on
the New York Stock Exchange must have a majority of independent directors, a nominating and corporate governance committee composed entirely of
independent directors, and a compensation committee composed entirely of independent directors. We currently follow our home country practice in lieu of
these requirements. We may also continue to rely on these and other exemptions available to foreign private issuers in the future. See “Item 3. Key
Information—D. Risk Factors—Risks Related to our ADSs and Ordinary Shares—As a company incorporated in the Cayman Islands, we are permitted to
adopt certain home country practices in relation to corporate governance matters that differ significantly from the New York Stock Exchange listing
standards.”
ITEM 16H MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
161
ITEM 16J INSIDER TRADING POLICIES
Not applicable.
ITEM 16K CYBERSECURITY
Risk management and strategy
We have implemented and maintain various information security processes designed to identify, assess and manage material risks from cybersecurity
threats to our critical computer networks, communications systems, hardware and software, and our critical data, including intellectual property, and
confidential information that is proprietary, strategic or competitive in nature (“Information Systems and Data”).
Under the supervision of our board of directors, our Cybersecurity Incident Response Teams (as defined below) help identify, assess and manage our
cybersecurity threats and risks. Depending on the environment, we implement and maintain various technical, physical, and organizational measures,
processes, standards and policies designed to manage and mitigate risks from cybersecurity threats to our Information Systems and Data, including,
technical safeguards, procedural protocols, an intensive monitoring program of our corporate network, ongoing internal and external evaluations of our
security measures, a solid incident response framework, and regular cybersecurity training sessions for our employees
Our assessment and management of material risks from cybersecurity threats are integrated into the Company’s overall risk management processes.
For example, (1) cybersecurity risk is addressed as a component of the our enterprise risk management program; (2) the Cybersecurity Incident Response
Teams coordinate and work together to prioritize our risk management processes and mitigate cybersecurity threats that are more likely to lead to a material
impact to our business; (3) our senior management evaluates material risks from cybersecurity threats against our overall business objectives and reports to
the board of directors, which evaluates our overall enterprise risk.
We engage external experts and legal advisors to assist us to identify, assess, and manage material risks from cybersecurity threats, depending on the
situation.
As of the date of this annual report, we have not experienced any material cybersecurity incidents or identified any material cybersecurity threats that
have affected or are reasonably likely to materially affect us, our business strategy, results of operations or financial condition.
Governance
Our board of directors addresses the Company’s cybersecurity risk management as part of its general oversight function. The board of directors is
responsible for overseeing our cybersecurity risk management processes, including oversight and mitigation of risks from cybersecurity threats.
Under the supervision of our board of directors, our cybersecurity risk assessment and management processes are implemented and maintained by
various dedicated teams, mainly including (a) members of senior management, (b) security committee responsible for overseeing the implementation of our
information and security system, (c) incident response operating team, (d) incident response handling team, and (e) public relations team (“Cybersecurity
Incident Response Teams").
We have adopted a cybersecurity incident response policy which provides cybersecurity incident response workflow among our Cybersecurity
Incident Response Teams, among others.
162
•
•
•
Our incident response operating team continuously and promptly monitors, investigates and assesses reported cybersecurity incidents.
Our security committee shall promptly investigate the reported cybersecurity incident and report to Company’s senior management any such
incident that may have a material adverse effect on the Company’s business operations, financial performance, information and security
system, and /or Company’s reputation. The security committee shall also supervise the measures taken to mitigate the risks or losses relating
to such cybersecurity incident, among others.
Our senior management will work together with all relevant parties, to investigate and assess the materiality of the cybersecurity incidents,
and to supervise the mitigation measures, among others.
Our board of directors shall receive reports from our senior management regarding the Company’s material cybersecurity threats and incidents, as well
as the processes and measures the Company has implemented to address them. The board also shall receive various reports, summaries or presentations
related to cybersecurity from the senior management from time to time.
ITEM 17 FINANCIAL STATEMENTS
We have elected to provide financial statements pursuant to Item 18.
ITEM 18 FINANCIAL STATEMENTS
PART III.
The consolidated financial statements of Autohome Inc. are included at the end of this annual report.
ITEM 19 EXHIBITS
Exhibit
Number
Description of Document
1.1
2.1
2.2
2.3
2.4
Seventh Amended and Restated Memorandum and Articles of Association of the Registrant, adopted on June 26, 2023 and effective as of
June 26, 2023 (incorporated by reference to Exhibit 3.1 to the Form 6-K (File No. 001-36222), furnished with the SEC on June 26, 2023)
Registrant’s Specimen American Depositary Receipt (incorporated herein by reference to the prospectus filed with the Securities and
Exchange Commission on February 5, 2021 pursuant to Rule 424(b)(3) (File No. 333-192583) under the registration statement on Form
F-6 initially filed with the Securities and Exchange Commission on November 27, 2013)
Registrant’s Specimen Certificate for Ordinary Shares (incorporated by reference to Exhibit 2.2 to our annual report on Form 20-F (File
No. 001-36222), filed with the SEC on March 2, 2021)
Deposit Agreement among the Registrant, the depositary and holders of the American Depositary Receipts dated as of December 10,
2013 (incorporated herein by reference to Exhibit 4.3 to the registration statement on Form S-8 (File No. 333-196006), filed with the
Securities and Exchange Commission on May 16, 2014)
Description of Securities (incorporated by reference to Exhibit 2.4 to our annual report on Form 20-F (File No. 001-36222), filed with the
SEC on March 2, 2021)
163
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
Form of Indemnification Agreement between the Registrant and its directors and officers (incorporated herein by reference to Exhibit
10.3 to the registration statement on Form F-1, as amended (File No. 333-192085), initially filed with the Securities and Exchange
Commission on November 4, 2013)
English translation of Form of Employment Agreement between a subsidiary of the Registrant and an executive officer of the Registrant
(incorporated herein by reference to Exhibit 10.4 to the registration statement on Form F-1, as amended (File No. 333-192085), initially
filed with the Securities and Exchange Commission on November 4, 2013)
English translation of the Executed Form of the Exclusive Technology Consulting and Service Agreement between Autohome WFOE and
Autohome Advertising dated September 30, 2016 (incorporated by reference to Exhibit 4.17 to our annual report on Form 20-F (File No.
001-36222), filed with the SEC on April 25, 2017)
English translation of the Executed Form of the Exclusive Technology Consulting and Service Agreement between Autohome WFOE and
Chengshi Advertising dated September 30, 2016 (incorporated by reference to Exhibit 4.18 to our annual report on Form 20-F (File No.
001-36222), filed with the SEC on April 25, 2017)
English translation of the Executed Form of the Exclusive Technology Consulting and Service Agreement between Chezhiying WFOE
and Autohome Used Car Appraisal dated September 30, 2016 (incorporated by reference to Exhibit 4.19 to our annual report on Form 20-
F (File No. 001-36222), filed with the SEC on April 25, 2017)
English translation of the Executed Form of the Exclusive Service Agreement between TTP WFOE and Shanghai Jinwu dated August 31,
2015 (incorporated by reference to Exhibit 4.11 to our annual report on Form 20-F (File No. 001-36222), filed with the SEC on March 2,
2021)
English translation of the Executed Form of the Loan Agreement between TTP WFOE and Weiwei Wang dated August 31, 2015
(incorporated by reference to Exhibit 4.17 to our annual report on Form 20-F (File No. 001-36222), filed with the SEC on March 2, 2021)
English translation of the Executed Form of the Equity Option Agreement among Autohome WFOE, Autohome Information and
Autohome Advertising dated September 30, 2016 (incorporated by reference to Exhibit 4.37 to our annual report on Form 20-F (File No.
001-36222), filed with the SEC on April 25, 2017)
English translation of the Executed Form of the Equity Option Agreement among Autohome WFOE, Autohome Information and
Chengshi Advertising dated September 30, 2016 (incorporated by reference to Exhibit 4.38 to our annual report on Form 20-F (File No.
001-36222), filed with the SEC on April 25, 2017)
English translation of the Executed Form of the Equity Option Agreement among Chezhiying WFOE, Shengtuo Hongyuan and
Autohome Used Car Appraisal dated September 30, 2016 (incorporated by reference to Exhibit 4.39 to our annual report on Form 20-F
(File No. 001-36222), filed with the SEC on April 25, 2017)
English translation of the Executed Form of the Equity Option Agreement between TTP WFOE, and Weiwei Wang dated August 31,
2015 (incorporated by reference to Exhibit 4.26 to our annual report on Form 20-F (File No. 001-36222), filed with the SEC on March 2,
2021)
English translation of the Executed Form of the Equity Interest Pledge Agreement between Autohome WFOE and Autohome Information
dated September 30, 2016 (incorporated by reference to Exhibit 4.49 to our annual report on Form 20-F (File No. 001-36222), filed with
the SEC on April 25, 2017)
164
4.13
4.14
4.15
4.16
4.17
4.18
4.19
4.20
4.21
4.22
4.23
4.24
4.25
4.26
English translation of the Executed Form of the Equity Interest Pledge Agreement between Autohome WFOE and Autohome Information
dated September 30, 2016 (incorporated by reference to Exhibit 4.50 to our annual report on Form 20-F (File No. 001-36222), filed with
the SEC on April 25, 2017)
English translation of the Executed Form of the Equity Interest Pledge Agreement between Chezhiying WFOE and Shengtuo Hongyuan
dated September 30, 2016 (incorporated by reference to Exhibit 4.52 to our annual report on Form 20-F (File No. 001-36222), filed with
the SEC on April 25, 2017)
English translation of the Executed Form of the Equity Interest Pledge Agreement between TTP WFOE and Weiwei Wang dated August
31, 2015 (incorporated by reference to Exhibit 4.36 to our annual report on Form 20-F (File No. 001-36222), filed with the SEC on March
2, 2021)
English translation of the Executed Form of the Power of Attorney by Autohome Information dated September 30, 2016 (incorporated by
reference to Exhibit 4.61 to our annual report on Form 20-F (File No. 001-36222), filed with the SEC on April 25, 2017)
English translation of the Executed Form of the Power of Attorney by Autohome Information dated September 30, 2016 (incorporated by
reference to Exhibit 4.62 to our annual report on Form 20-F (File No. 001-36222), filed with the SEC on April 25, 2017)
English translation of the Executed Form of the Power of Attorney by Shengtuo Hongyuan dated September 30, 2016 (incorporated by
reference to Exhibit 4.63 to our annual report on Form 20-F (File No. 001-36222), filed with the SEC on April 25, 2017)
English translation of the Executed Form of the Proxy Agreement among TTP WFOE, Shanghai Jinwu and Weiwei Wang dated August
31, 2015 (incorporated by reference to Exhibit 4.46 to our annual report on Form 20-F (File No. 001-36222), filed with the SEC on March
2, 2021)
Amended and Restated 2016 Share Incentive Plan of the Registrant, as amended on April 20, 2017 (incorporated by reference to Exhibit
4.65 to our annual report on Form 20-F (File No. 001-36222), filed with the SEC on April 25, 2017)
2016 Share Incentive Plan II (as amended by Amendment No 1 to the 2016 Share Incentive Plan II) of the Registrant (incorporated by
reference to Exhibit 4.66 to our annual report on For 20-F (File No. 001-36222), filed with the SEC on April 25, 2017)
Investor’s Rights Agreement by and among the Registrant and Yun Chen dated September 30, 2016 (incorporated by reference to Exhibit
4.67 to our annual report on Form 20-F (File No. 001-36222), filed with the SEC on April 25, 2017)
Investment Agreement relating to US$100 Million 8.0% Convertible Bond and other Convertible Bonds issued by TTP Car Inc. between
the Registrant and TTP Car Inc. dated June 6, 2018 (incorporated by reference to Exhibit 4.59 to our annual report on Form 20-F (File
No. 001-36222), filed with the SEC on April 12, 2019)
Preferred Share Purchase Agreement by and among the Registrant and TTP Car Inc. dated October 27, 2020 (incorporated by reference to
Exhibit 4.58 to our annual report on Form 20-F (File No. 001-36222), filed with the SEC on March 2, 2021)
English translation of the Limited Partner Interest Subscription Agreement by and between Ping An Capital Co., Ltd. and Tianjin
Autohome Software Co., Ltd. dated January 4, 2022 (incorporated by reference to Exhibit 4.53 to our annual report on Form 20-F (File
No. 001-36222), filed with the SEC on April 25, 2022)
English translation of the Limited Partnership Agreement by and among Ping An Capital Co., Ltd., Tianjin Autohome Software Co., Ltd.
and others dated January 4, 2022 (incorporated by reference to
165
4.27
4.28
4.29
4.30
4.31
4.32
4.33
4.34*
4.35*
4.36*
4.37*
4.38*
4.39*
4.40*
4.41*
Exhibit 4.54 to our annual report on Form 20-F (File No. 001-36222), filed with the SEC on April 25, 2022)
English translation of the Supplemental Limited Partnership Agreement by and among Ping An Capital Co., Ltd., Guangzhou Ping An
Consumption Equity Investment Partnership (Limited Partnership) and Tianjin Autohome Software Co., Ltd. dated January 4, 2022
(incorporated by reference to Exhibit 4.55 to our annual report on Form 20-F (File No. 001-36222), filed with the SEC on April 25, 2022)
English translation of the Executed Form of the Exclusive Service Agreement between TTP WFOE and Shanghai Jinyou dated March 1,
2022 (incorporated by reference to Exhibit 4.56 to our annual report on Form 20-F (File No. 001-36222), filed with the SEC on April 25,
2023)
English translation of the Executed Form of the Equity Interest Pledge Agreement between TTP WFOE and Weiwei Wang and Lan
Zhang dated March 1, 2022 (incorporated by reference to Exhibit 4.57 to our annual report on Form 20-F (File No. 001-36222), filed with
the SEC on April 25, 2023)
English translation of the Executed Form of the Proxy Agreement among TTP WFOE, Shanghai Jinyou and Weiwei Wang and Lan
Zhang dated March 1, 2022 (incorporated by reference to Exhibit 4.58 to our annual report on Form 20-F (File No. 001-36222), filed
with the SEC on April 25, 2023)
English translation of the Executed Form of the Equity Option Agreement between TTP WFOE, and Weiwei Wang and Lan Zhang dated
March 1, 2022 (incorporated by reference to Exhibit 4.59 to our annual report on Form 20-F (File No. 001-36222), filed with the SEC on
April 25, 2023)
English translation of the Executed Form of the Loan Agreement between TTP WFOE and Weiwei Wang dated May 2, 2022
(incorporated by reference to Exhibit 4.60 to our annual report on Form 20-F (File No. 001-36222), filed with the SEC on April 25, 2023)
English translation of the Executed Form of the Loan Agreement between TTP WFOE and Lan Zhang dated May 2, 2022 (incorporated
by reference to Exhibit 4.61 to our annual report on Form 20-F (File No. 001-36222), filed with the SEC on April 25, 2023)
English translation of the Executed Form of the Exclusive Technology Consulting and Service Agreement between Autohome WFOE and
Autohome Information dated January 28, 2024
English translation of the Executed Form of the Exclusive Technology Consulting and Service Agreement between Chezhiying WFOE
and Shengtuo Hongyuan dated January 28, 2024
English translation of the Executed Form of the Loan Agreement between Autohome WFOE and Quan Long dated January 28, 2024
English translation of the Executed Form of the Loan Agreement between Autohome WFOE and Youdong Wang dated January 28, 2024
English translation of the Executed Form of the Loan Agreement between Chezhiying WFOE and Quan Long dated January 28, 2024
English translation of the Executed Form of the Loan Agreement between Chezhiying WFOE and Youdong Wang dated January 28, 2024
English translation of the Executed Form of the Equity Option Agreement among Autohome WFOE, Autohome Information and Quan
Long dated January 28, 2024
English translation of the Executed Form of the Equity Option Agreement among Autohome WFOE, Autohome Information and
Youdong Wang dated January 28, 2024
166
4.42*
4.43*
4.44*
4.45*
4.46*
4.47*
4.48*
4.49*
4.50*
4.51*
4.52*
4.53*
4.54*
4.55*
4.56*
4.57*
8.1*
11.1
English translation of the Executed Form of the Equity Option Agreement among Chezhiying WFOE, Shengtuo Hongyuan and Quan
Long dated January 28, 2024
English translation of the Executed Form of Equity Option Agreement among Chezhiying WFOE, Shengtuo Hongyuan and Youdong
Wang dated January 28, 2024
English translation of the Executed Form of the Equity Interest Pledge Agreement between Autohome WFOE and Quan Long dated
January 28, 2024
English translation of the Executed Form of the Equity Interest Pledge Agreement between Autohome WFOE and Youdong Wang
January 28, 2024
English translation of the Executed Form of the Equity Interest Pledge Agreement between Chezhiying WFOE and Quan Long dated
January 28, 2024
English translation of the Executed Form of the Equity Interest Pledge Agreement between Chezhiying WFOE and Youdong Wang dated
January 28, 2024
English translation of the Executed Form of the Power of Attorney by Quan Long dated January 28, 2024
English translation of the Executed Form of the Power of Attorney by Youdong Wang dated January 28, 2024
English translation of the Executed Form of the Power of Attorney by Quan Long dated January 28, 2024
English translation of the Executed Form of the Power of Attorney by Youdong Wang dated January 28, 2024
Termination Agreement on the control documents in connection with Autohome Information by and among Autohome WFOE, Autohome
Information, Quan Long, Haiyun Lei dated January 28, 2024
Equity Interest Purchase Agreement by and among Autohome Information, Haiyun Lei and Youdong Wang dated January 28, 2024
Debt Transfer and Offset Agreement by and between Autohome WFOE, Haiyun Lei and Youdong Wang dated January 28, 2024
Termination Agreement on the control documents in connection with Shengtuo Hongyuan by and among Chezhiying WFOE, Shengtuo
Hongyuan, Quan Long, Haiyun Lei dated January 28, 2024
Equity Interest Purchase Agreement by and among Shengtuo Hongyuan, Haiyun Lei and Youdong Wang dated January 28, 2024
Debt Transfer and Offset Agreement by and between Chezhiying WFOE, Haiyun Lei and Youdong Wang dated January 28, 2024
List of Principal Subsidiaries and VIEs
Amended and Restated Code of Business Conduct and Ethics of the Registrant (incorporated herein by reference to Exhibit 99.1 to the
Form 6-K (File No. 001-36222), filed with the Securities and Exchange Commission on November 3, 2022)
12.1*
Certification by Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
167
12.2*
Certification by Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1**
Certification by Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2**
Certification by Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1*
15.2*
97.1*
Consent of PricewaterhouseCoopers Zhong Tian LLP, independent registered public accounting firm
Consent of Commerce & Finance Law Offices
Incentive Compensation Recoupment Policy
101.INS*
Inline XBRL Instance Document-this instance document does not appear on the Interactive Data File because its XBRL tags are
embedded within the Inline XBRL document
101.SCH*
Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Filed with this annual report on Form 20-F.
** Furnished with this annual report on Form 20-F.
168
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned
to sign this annual report on its behalf.
SIGNATURES
Date: April 25, 2024
Tao Wu
Chief Executive Officer and Executive Director
AUTOHOME INC.
By:
/s/ Tao Wu
Name:
Title:
169
AUTOHOME INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of independent registered public accounting firm (PCAOB ID: 1424)
Consolidated balance sheets as of December 31, 2022 and 2023
Consolidated statements of comprehensive income for the years ended December 31, 2021, 2022 and 2023
Consolidated statements of cash flows for the years ended December 31, 2021, 2022 and 2023
Consolidated statements of changes in shareholders’ equity for the years ended December 31, 2021, 2022 and 2023
Notes to the consolidated financial statements
Page
F-2-F-4
F-5-F-6
F-7
F-8
F-9
F-10-F-43
F-1
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of Autohome Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Autohome Inc. and its subsidiaries (the “Company”) as of December 31, 2023 and 2022,
and the related consolidated statements of comprehensive income, changes in shareholders’ equity and cash flows for each of the three years in the period
ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the
Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of
December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in
conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated
Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting,
and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Annual Report on Internal Control over
Financial Reporting appearing under Item 15. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the
Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting
Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective
internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated
financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our
audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also
included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our
opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control
over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that
F-2
transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii)
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could
have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were
communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated
financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not
alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below,
providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Allowance for current expected credit losses on accounts receivable
As described in Notes 2(o) and 4 to the consolidated financial statements, as of December 31, 2023, the gross balance of accounts receivable was
RMB1,633.5 million, against which an allowance for current expected credit losses of RMB161.0 million was provided. The allowance is management’s
estimate of current expected credit losses. Management estimated the allowance by segmenting accounts receivable into groups based on certain credit risk
characteristics and estimated the allowance for credit losses on receivables not sharing similar risk characteristic on an individual basis. The key factors
considered when determining the allowances for credit losses include the historical loss experience, lifetime for debt recovery, financial performance of the
customers, current and future economic conditions.
The principal considerations for our determination that performing procedures relating to the allowance for current expected credit losses on accounts
receivable is a critical audit matter are the significant estimates and judgments made by management when developing the allowance for current expected
credit losses to be incurred over the expected life of these receivables. This in turn led to a high degree of auditor judgment, subjectivity and audit effort in
(i) performing procedures and evaluating audit evidence obtained relating to management’s significant estimates and judgments about credit risk
characteristics and estimated loss rates; and (ii) the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated
financial statements. These procedures included testing the effectiveness of controls relating to management’s estimate of the allowance for current
expected credit losses. These procedures also included, among others, (i) evaluating the appropriateness of the model and methodology; (ii) testing the
completeness and accuracy of underlying data used in the model; and (iii) evaluating the reasonableness of significant assumptions used by management
related to credit risk characteristics and expected loss rates, consideration of the historical loss experience, lifetime for debt recovery, financial performance
of the customers, current and future economic conditions. Professionals with specialized skill and knowledge were used to assist in evaluating the
appropriateness of the model and methodology and evaluating the reasonableness of management’s significant assumptions.
The determination of fair value of convertible redeemable noncontrolling interests in TTP Car Inc. (“TTP”)
As described in Notes 2(dd) and 20 to the consolidated financial statements, the Company recorded RMB1,758.9 million convertible redeemable
noncontrolling interests in TTP as mezzanine equity as of December 31, 2023. The recorded balance is determined in accordance with the underlying share
purchase agreements, based on a combination of issue price, compound interest rates, and fair value. For the determination of fair value, option pricing
model was
F-3
used. The major unobservable input used in the option pricing model included equity value of underlying business, which was determined by management
using valuation techniques under the combination of income approach and market approach. The significant assumptions used in the valuation included
revenue growth rates, operating margin, discount rate and selection of valuation multiples.
The principal considerations for our determination that performing procedures relating to the fair value determination of convertible redeemable
noncontrolling interests is a critical audit matter are the significant estimates and judgments made by the management when developing the fair value of
those convertible redeemable noncontrolling interests. This in turn led to a high degree of auditor judgment, subjectivity, and audit effort in (i) performing
procedures and evaluating audit evidence of the significant assumptions related to revenue growth rates, operating margin, discount rate and selection of
valuation multiples to determine the fair value of the convertible redeemable noncontrolling interests; and (ii) the use of professionals with specialized skill
and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated
financial statements. These procedures included testing the effectiveness of internal controls relating to the management’s fair value estimate for the
convertible redeemable noncontrolling interests as of December 31, 2023, which included controls over the development of the significant assumptions
used in the valuation techniques. These procedures also included, among others, testing the management’s process for developing the fair value estimate of
the convertible redeemable noncontrolling interests as of December 31, 2023, which included (i) evaluating the appropriateness of the valuation techniques,
(ii) testing the completeness and accuracy of the underlying data used in the valuation method; and (iii) evaluating the reasonableness of significant
assumptions used by management related to revenue growth rates, operating margin, discount rate and selection of valuation multiples. Professionals with
specialized skill and knowledge were used to assist in evaluating the appropriateness of the valuation method and reasonableness of management’s
significant assumptions.
/s/PricewaterhouseCoopers Zhong Tian LLP
Beijing, the People’s Republic of China
April 25, 2024
We have served as the Company’s auditor since 2016.
F-4
AUTOHOME INC.
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2022 AND 2023
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”) except for number of shares and per share data)
ASSETS
Current assets:
Cash and cash equivalents
Restricted Cash
Short-term investments
Accounts receivable (net of allowance for doubtful
accounts of RMB185,755 and
RMB161,022 (US$22,679 ) as of December 31, 2022
and 2023, respectively)
Amounts due from related parties, current
Prepaid expenses and other current assets
Total current assets
Non-current assets:
Restricted cash, non-current
Property and equipment, net
Intangible assets, net
Goodwill
Long-term investments
Amounts due from related parties, non-current
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets
LIABILITIES AND EQUITY
Current liabilities:
Accrued expenses and other payables
Advance from customers
Deferred revenue
Income tax payable
Amounts due to related parties
Dividends payable
Total current liabilities (including current liabilities of
consolidated VIEs without recourse to Autohome
WFOE, Chezhiying WFOE or TTP WFOE of
RMB354,930 and RMB425,416 (US$59,918) as of
December 31, 2022 and 2023, respectively)
Non-current liabilities:
Other liabilities
Deferred tax liabilities
Total non-current liabilities (including non-current
liabilities of consolidated VIEs without recourse to
Autohome WFOE, Chezhiying WFOE or TTP WFOE of
RMB48,461 and RMB43,967 (US$6,192) as of
December 31, 2022 and 2023, respectively)
Total liabilities (including total liabilities of consolidated
VIEs without recourse to Autohome WFOE, Chezhiying
WFOE or TTP WFOE of RMB403,391 and
RMB469,383 (US$66,110) as of December 31, 2022 and
2023, respectively)
Commitments and contingencies
Note
2(h)
4
12
5
2(h)
7
8, 19
19
9
12
6
10
11
12
2(s),6
6, 19
13
2022
RMB
As of December 31,
2023
RMB
US$
2,801,299
9,175
19,279,592
1,927,699
49,644
357,522
24,424,931
5,000
255,298
278,485
3,941,820
419,208
9,419
265,606
116,052
5,290,888
29,715,819
2,537,281
96,047
1,147,131
251,121
27,096
—
4,058,676
50,591
517,926
4,996,353
126,794
18,552,354
1,472,489
16,439
360,559
25,524,988
5,000
200,860
202,148
3,941,820
448,341
16,048
295,598
200,928
5,310,743
30,835,731
2,932,227
105,379
801,581
227,260
24,572
984,332
5,075,351
89,187
497,955
703,722
17,859
2,613,044
207,396
2,315
50,784
3,595,120
704
28,291
28,472
555,194
63,148
2,260
41,634
28,300
748,003
4,343,123
412,997
14,842
112,900
32,009
3,461
138,640
714,849
12,562
70,135
568,517
587,142
82,697
4,627,193
5,662,493
797,546
The accompanying notes are an integral part of these consolidated financial statements.
F-5
AUTOHOME INC.
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2022 AND 2023
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”) except for number of shares and per share data)
Mezzanine equity:
Convertible redeemable noncontrolling interests
Shareholders’ equity:
Ordinary shares (par value of US$0.0025 per share; 400,000,000,000
ordinary shares authorized; 492,742,468 and 483,398,100 ordinary shares
issued and outstanding, as of December 31, 2022 and 2023,
respectively)
Additional paid-in capital
Treasury stock
Accumulated other comprehensive income
Retained earnings
Total Autohome Inc. shareholders’ equity
Noncontrolling interests
Total equity
Total liabilities, mezzanine equity and equity
Note
20
2022
RMB
As of December 31,
2023
RMB
US$
1,605,639
1,758,933
247,741
2(a),15
8,550
8,599
15
19
8,064,283
(750,337 )
369,643
16,196,703
23,888,842
(405,855 )
23,482,987
29,715,819
8,211,583
(1,336,097 )
442,634
16,601,468
23,928,187
(513,882 )
23,414,305
30,835,731
1,211
1,156,577
(188,185 )
62,344
2,338,268
3,370,215
(72,379 )
3,297,836
4,343,123
The accompanying notes are an integral part of these consolidated financial statements.
F-6
AUTOHOME INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2021, 2022 AND 2023
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”) except for number of shares and per share data, continued)
Net revenues:
Media services
Leads generation services
Online marketplace and others
Total net revenues (including related party transactions of RMB417,051, RMB226,539 and
RMB134,378(US$18,927) for the years ended December 31, 2021, 2022 and 2023, respectively)
Cost of revenues (including related party transactions of RMB68,639, RMB64,876 and
RMB62,372 (US$8,785) for the years ended December 31, 2021, 2022 and 2023, respectively)
Gross profit
Operating expenses:
Sales and marketing expenses
General and administrative expenses (including provision for doubtful accounts of
RMB53,294 and RMB8,828 for the years ended December 31, 2021 and 2022, respectively, and
reversal of allowance for doubtful accounts of RMB24,359 (US$3,431) for the years ended
December 31, 2023)
Product development expenses
Total Operating expenses (including related party transactions of RMB108,955,
RMB126,812 and RMB128,155 (US$18,050) for the years ended December 31, 2021, 2022 and
2023, respectively)
Other operating income, net
Operating profit
Interest and investment income, net (including related party transactions of RMB136,613,
RMB143,848 and RMB202,304 (US$28,494) for the years ended December 31, 2021, 2022 and
2023, respectively)
Earnings/(loss) from equity method investments
Income before income taxes
Income tax (expense)/benefit
Net income
Net loss attributable to noncontrolling interests
Net income attributable to Autohome Inc.
Accretion of mezzanine equity
Accretion attributable to noncontrolling interests
Net income attributable to ordinary shareholders
Earnings per share attributable to ordinary shareholders:
Basic
Diluted
Earnings per ADS attributable to ordinary
shareholders (one ADS equals four ordinary shares)
Basic
Diluted
Weighted average number of shares used to
compute earnings per share attributable to
ordinary shareholders:
Basic
Diluted
Net income
Other comprehensive income/(loss)
Foreign currency translation adjustments
Comprehensive income
Comprehensive loss attributable to
noncontrolling interests
Comprehensive income attributable to Autohome Inc.
Note
2(o)
14
2(aa)
19
6
20
17
17
17
17
17
17
2021
RMB
Year ended December 31,
2022
RMB
RMB
2023
US$
2,011,446
2,988,075
2,237,483
1,963,289
3,056,924
1,920,615
1,870,819
3,111,805
2,201,511
263,499
438,289
310,076
7,237,004
6,940,828
7,184,135
1,011,864
(1,047,892 )
6,189,112
(1,235,173 )
5,705,655
(1,411,881 )
5,772,254
(198,859 )
813,005
(2,759,905 )
(2,866,206 )
(3,012,479 )
(424,299 )
(543,799 )
(1,398,037 )
(502,340 )
(1,417,094 )
(537,979 )
(1,348,472 )
(4,701,741 )
294,241
1,781,612
(4,785,640 )
327,507
1,247,522
(4,898,930 )
264,101
1,137,425
395,245
301
2,177,158
(34,006 )
2,143,152
105,633
2,248,785
(411,792 )
311,573
2,148,566
4.30
4.29
17.19
17.17
565,090
(49,766 )
1,762,846
61,780
1,824,626
30,548
1,855,174
(137,610 )
89,612
1,807,176
3.62
3.62
14.48
14.47
831,006
29,133
1,997,564
(72,155 )
1,925,409
9,901
1,935,310
(153,294 )
98,071
1,880,087
3.84
3.83
15.35
15.31
(75,773 )
(189,928 )
(690,000 )
37,198
160,203
117,045
4,103
281,351
(10,163 )
271,188
1,395
272,583
(21,591 )
13,813
264,805
0.54
0.54
2.16
2.16
499,861,764
500,481,540
2,143,152
(106,893 )
2,036,259
100,326
2,136,585
499,160,564
499,666,792
1,824,626
418,931
2,243,557
31,165
2,274,722
489,952,172
491,252,460
1,925,409
72,936
1,998,345
9,956
2,008,301
489,952,172
491,252,460
271,188
10,273
281,461
1,402
282,863
The accompanying notes are an integral part of these consolidated financial statements
F-7
AUTOHOME INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2021, 2022 AND 2023
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”) except for number of shares and per share data)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income
Adjustments to reconcile net income to net cash from operating
activities:
Depreciation of property and equipment
Amortization of intangible assets
Amortization of operating lease assets
Gain on disposal of property and equipment
Provision for doubtful accounts
(Earnings)/loss from equity method investments
Impairment of long-term investments
Fair value change of short-term investments
Share-based compensation
Deferred income taxes
Changes in operating assets and liabilities:
Accounts receivable
Amounts due from related parties, current
Prepaid expenses and other current assets
Amounts due from related parties, non-current
Other non-current assets
Accrued expenses and other payables
Advance from customers
Deferred revenue
Income tax payable
Amounts due to related parties
Other liabilities
Net cash generated from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment
Proceeds from disposal of property and equipment
Purchase of intangible assets
Cash consideration paid for the TTP acquisition, net of cash acquired
Acquisition of equity-method investment
Purchase of short-term investments
Maturity of short-term investments
Net cash (used in)/generated from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of share options
Payment of dividends
Proceeds from issuance of ordinary shares
Payments for repurchase of ordinary shares
Net cash generated from/(used in) financing activities
Effect of exchange rate changes on cash and cash equivalents and
restricted
cash
Net increase/(decrease) in cash and cash equivalents and restricted
cash
Cash and cash equivalents and restricted cash at beginning of year
Cash and cash equivalents and restricted cash at end of year
Supplemental disclosures of cash flow information:
Income taxes paid
Purchase of fixed assets included in accrued expenses and other
payables
Dividends declared but not paid
Cash paid for operating lease cost
Right-of-use assets acquired under operating leases
Note
2021
RMB
Year ended December 31,
2022
RMB
RMB
2023
US$
2,143,152
1,824,626
1,925,409
271,188
225,310
83,710
122,144
(1,203 )
53,294
(301 )
—
107,526
206,060
(151,188 )
931,432
(36,073 )
1,046
10,634
3,177
(432,192 )
(3,865 )
237,346
148,165
(47,998 )
(76,242 )
3,523,934
(218,798 )
1,030
(810 )
(77,444 )
—
(27,082,428 )
23,565,437
(3,813,013 )
37,032
(673,375 )
3,565,843
(31,204 )
2,898,296
226,086
79,104
118,828
(1,109 )
8,828
49,766
1,696
116,510
168,890
(148,340 )
203,581
33,732
(149,766 )
(1,890 )
(101,497 )
534,285
(27,323 )
(405,882 )
17,779
(4,801 )
21,972
2,565,075
(116,503 )
1,721
(1,039 )
—
(400,000 )
(18,945,702 )
16,352,106
(3,109,417 )
748
(421,680 )
—
(719,133 )
(1,140,065 )
167,775
76,688
108,111
(874 )
(24,359 )
(29,133 )
—
(29,699 )
195,092
(49,963 )
479,943
33,205
(244,111 )
(6,629 )
(192,988 )
366,969
9,332
(345,550 )
(23,861 )
(2,524 )
38,596
2,451,429
(78,567 )
921
(329 )
—
—
(17,512,173 )
18,590,497
1,000,349
296
(490,990 )
—
(633,799 )
(1,124,493 )
(46,809 )
168,325
(14,612 )
2,562,408
1,769,148
4,331,556
340,215
18,624
—
137,693
38,023
(1,516,082 )
4,331,556
2,815,474
284,332
4,743
—
125,448
107,351
2,312,673
2,815,474
5,128,147
199,916
35,216
984,332
113,000
192,100
23,631
10,801
15,227
(123 )
(3,431 )
(4,103 )
—
(4,183 )
27,478
(7,037 )
67,599
4,677
(34,382 )
(934 )
(27,182 )
51,686
1,314
(48,670 )
(3,361 )
(355 )
5,436
345,276
(11,066 )
130
(46 )
—
—
(2,466,538 )
2,618,417
140,897
42
(69,154 )
—
(89,269 )
(158,381 )
(2,059 )
325,733
396,552
722,285
28,158
4,960
138,640
15,916
27,057
1
15
The accompanying notes are an integral part of these consolidated financial statements
F-8
AUTOHOME INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2021, 2022 AND 2023
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”) except for number of shares and per share data)
.
Note
Ordinary shares
Amount
RMB
Shares
Number
479,219,62
8
Balance as of December 31, 2020
Net income
Other comprehensive (loss)/income
Dividends declared (US$0.87 per ADS)
Exercise and vesting of share-based
awards
Share-based compensation
Issuance of ordinary shares, net of
issuance costs
Repurchase of ordinary shares
Accretion of redeemable noncontrolling
interests
Balance as of December 31, 2021
Net income
Other comprehensive income/(loss)
Dividends declared (US$0.53 per ADS)
Exercise and vesting of share-based
awards
Share-based compensation
Adjustment of issuance costs
Repurchase of ordinary shares
Accretion of redeemable noncontrolling
interests
Balance as of December 31, 2022
Net income
Other comprehensive income/(loss)
Dividends declared (US$0.58 per ADS)
Exercise and vesting of share-based
awards
Share-based compensation
Repurchase of ordinary shares
Accretion of redeemable noncontrolling
interests
Balance as of December 31, 2023
Balance as of December 31, 2023, in
US$
—
—
—
1,890,028
—
1
15
24,738,400
(664,268 )
—
505,183,78
8
—
—
—
1,639,720
—
—
(14,081,04
15
0 )
—
492,742,46
8
—
—
—
2,817,856
—
(12,162,22
4 )
—
483,398,10
0
15
Additional
capital
paid-in
RMB
Treasury
stock
RMB
Accumulate
d
other
comprehen
sive
income
RMB
Noncontroll
ing
interests
RMB
Retained
earnings
RMB
13,336,
Total
equity
RMB
8,089
4,089,763
—
62,295
016
126,821 17,622,984
—
—
—
32
—
402
—
—
2,248,7
—
—
—
—
—
(112,200 )
85
—
(105,633 )
5,307
2,143,152
(106,893 )
—
—
—
5 )
—
(673,375 )
(673,37
36,547
206,060
—
—
3,553,857
—
—
(31,204 )
—
—
—
—
—
—
—
—
—
—
—
(100,21
—
—
36,579
206,060
—
—
3,554,259
(31,204 )
9 )
(311,573 )
(411,792 )
14,811,
8,523
7,886,227
(31,204 )
(49,905 )
207
(285,078 ) 22,339,770
—
—
—
27
—
—
—
—
—
—
—
—
—
419,548
74
—
(30,548 )
(617 )
1,824,626
418,931
1,855,1
—
—
—
0 )
—
(421,680 )
(421,68
717
168,890
8,449
—
—
—
(719,13
—
—
—
—
—
—
—
—
—
744
168,890
8,449
—
3 )
—
—
—
(719,133 )
—
—
—
(750,33
(47,998 )
16,196,
(89,612 )
(137,610 )
8,550
8,064,283
7 )
369,643
703
(405,855 ) 23,482,987
—
—
—
49
—
—
—
1,935,3
—
—
—
—
—
72,991
10
—
(9,901 )
(55 )
1,925,409
72,936
—
—
—
22 )
—
(1,475,322 )
(1,475,3
247
195,092
—
—
—
—
—
—
—
—
296
195,092
(585,76
(48,039 )
0 )
—
—
—
(633,799 )
—
—
—
(1,336,0
(55,223 )
16,601,
(98,071 )
(153,294 )
8,599
8,211,583
97 )
442,634
468
(513,882 ) 23,414,305
1,211
1,156,577
5 )
62,344
68
(72,379 )
3,297,836
(188,18
2,338,2
The accompanying notes are an integral part of these consolidated financial statements
F-9
AUTOHOME INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2021, 2022 AND 2023
1.
ORGANIZATION
Autohome Inc., formerly known as Sequel Limited (together with its subsidiaries, VIEs and VIEs’ subsidiaries is defined as the “Company”), was
incorporated under the laws of the Cayman Islands on June 23, 2008. Upon incorporation, the Company was 100% owned by Telstra Holdings Pty Ltd.
(“Telstra”). On June 27, 2008 (the “Acquisition date”), the Company acquired Cheerbright International Holdings Limited (“Cheerbright”), China Topside
Co., Ltd. (“China Topside”), and Norstar Advertising Media Holdings Co., Ltd. (“Norstar”), and their respective wholly foreign-owned enterprises and
variable interest entities (“VIEs”). Subsequent to the acquisition, the Company was owned 55% by Telstra, and 45% by the selling shareholders of
Cheerbright, China Topside and Norstar. In May 2012, Telstra acquired additional ordinary shares of Autohome Inc. from other shareholders. In June 2016,
Telstra completed the sale of approximately 47.4% of the then total issued shares in Autohome Inc. to Yun Chen Capital Cayman (“Yun Chen”), a
subsidiary of Ping An Insurance Company of China, Ltd. (“Ping An”) and on February 22, 2017, Yun Chen further acquired from Telstra approximately
6.5% of the then total issued shares in Autohome Inc. After the consummation of the sale, Yun Chen has become the Company’s controlling shareholder
since June 2016.
Autohome Inc. successfully completed its IPO and listing of 8,993,000 American Depositary Shares (“ADSs”) on the New York Stock Exchange in
December, 2013, and raised net proceeds of US$142.59 million from the offering. Each ADS represents four ordinary shares (previously 1 ADS represents
1 ordinary share before the ADS Ratio Change as detailed in Note 2(a)). Upon the completion of IPO in December 2013, Autohome Inc.’s dual-class
ordinary share structure came into effect. Upon the completion of follow-on offering in November 2014, 2,424,801 ADSs were issued by Autohome Inc.
and 6,964,612 Class B ordinary shares before the Share Subdivision as detailed in Note 2(a) were converted into Class A ordinary shares. The net proceeds
from the follow-on offering amounted to US$97.34 million net of issuance cost. Upon the transfer of 47.4% share ownership by Telstra to Yun Chen in
June 2016, all the Class B ordinary shares were converted into Class A ordinary shares.
On March 15, 2021, Autohome Inc. successfully completed its global offering and the Company’s ordinary shares have been listed on the Hong Kong
Stock Exchange. Autohome Inc. issued 24,738,400 ordinary shares, including 4,544,000 ordinary shares under an over-allotment option. Net proceeds
raised by the Autohome Inc. from the global offering after deducting underwriting discounts and commissions and other offering expenses amounted to
Hong Kong Dollar (“HK$”) 4,294.85 million.
As of December 31, 2023, Autohome Inc. had 483,398,100 issued and outstanding ordinary shares after considering the effects of the Share Subdivision as
detailed in Note 2(a). Yun Chen is the Company’s controlling shareholder who held 46.5% of the total equity interest and a significant percentage of the
voting rights in the Company as of December 31, 2023, by which it has substantial influence in determining the outcome of any corporate transaction or
other matter submitted to the shareholders for approval, including mergers, consolidations and the sale of all or substantially all of the Company’s assets,
election of directors and other significant corporate actions.
The Company, through its subsidiaries, VIEs and VIEs’ subsidiaries, is engaged in the provision of media services, leads generation services and online
marketplace and others.
F-10
As of December 31, 2023, the following table sets forth the Company’s principal subsidiaries, principal VIEs and VIEs’ subsidiaries:
Entity
Principal Subsidiaries
Cheerbright International Holdings Limited
(“Cheerbright”)
Autohome Link Inc.
Autohome (Hong Kong) Limited (“Autohome HK”)
Autohome Link Hong Kong Limited
Autohome Media Limited (“Autohome Media”)
TTP Car Inc. (“TTP”)
Auto Pai Ltd.
TTP Car (HK) Limited
Beijing Cheerbright Technologies Co., Ltd.
(“Autohome WFOE”)
Autohome Shanghai Advertising Co., Ltd.
(“Shanghai Advertising”)
Beijing Prbrownies Software Co., Ltd.
Beijing Autohome Technologies Co., Ltd.
Beijing Autohome Advertising Co., Ltd.
Beijing Chezhiying Technology Co., Ltd.
(“Chezhiying WFOE”)
Guangzhou Chezhihuitong Advertising Co., Ltd.
Hainan Chezhiyitong Information Technology Co., Ltd.
Tianjin Autohome Software Co., Ltd.
Autohome Zhejiang Advertising Co., Ltd.
Shanghai Chezhitong Information Technology Co., Ltd.
Shanghai Jinpai E-commerce Co., Ltd. (“TTP WFOE”)
Principal VIEs and VIEs’ subsidiaries
Beijing Autohome Information Technology Co., Ltd.
(“Autohome Information”)
Beijing Shengtuo Hongyuan Information Technology
Co., Ltd. (“Shengtuo Hongyuan”)
Shanghai Tianhe Insurance Brokerage Co., Ltd.
Shanghai Jinwu Auto Technology Consultant Co., Ltd.
(“Shanghai Jinwu”)
Shanghai Jinyou Auto Technology Consultant Co., Ltd.
(“Shanghai Jinyou”)
Note: Please refer to Note 19 for the disclosure of acquisition.
Date of
incorporation or
acquisition
June 13, 2006
January 29, 2015
March 16, 2012
February 16, 2015
October 18, 2013
June 12, 2015
September 25, 2020
June 23, 2015
Place of
incorporation
British Virgin Islands
Cayman Islands
Hong Kong
Hong Kong
Hong Kong
Cayman Islands
British Virgin Islands
Hong Kong
Percentage of
direct
ownership by
the Company
100 %
100 %
100 %
100 %
100 %
51% (Note)
51 %
51 %
September 1, 2006
Mainland China
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
51 %
Mainland China
Mainland China
Mainland China
Mainland China
Mainland China
Mainland China
Mainland China
Mainland China
Mainland China
Mainland China
Mainland China
September 29, 2013
November 12, 2013
November 12, 2013
November 13, 2013
May 26, 2015
August 20, 2018
August 20, 2018
October 15, 2018
December 19, 2018
September 16, 2020
July 31, 2015
Date of
incorporation or
acquisition
Place of
incorporation
Percentage of
indirect economic
interest
August 28, 2006
Mainland China
November 8, 2010
September 21, 2017
Mainland China
Mainland China
September 20, 2007
Mainland China
December 3, 2021
Mainland China
100 %
100 %
100 %
51 %
51 %
The Company provides media services, leads generation services and online marketplace and others through its websites and mobile applications. These
services are primarily offered to automakers and dealers, advertising agencies that represent automakers and dealers in the automobile industry, and
financial institutions. The Company’s principal geographic market is in mainland China. Autohome Inc. does not conduct any substantive operations of its
own but conducts its primary business operations through its principal subsidiaries, the VIEs and VIEs' subsidiaries.
Mainland China laws and regulations prohibit or restrict foreign ownership of internet content businesses. To comply with these foreign ownership
restrictions, the Company and its subsidiaries operate websites and mobile applications and conduct its business related to internet content services through
VIEs. The paid-in capital of the VIEs was funded by the Company’s mainland China subsidiaries, Autohome WFOE, Chezhiying WFOE and TTP WFOE,
through loans extended to the VIEs’ shareholders (“Nominee Shareholders”).
F-11
The Company obtained a controlling financial interest in the VIEs and VIEs’ subsidiaries by entering into a series of contractual agreements (the
“Contractual Agreements”) through the WFOEs. As a result of the Contractual Agreements, the WFOEs are entitled to substantially all of the economic
benefits from the VIEs and VIEs’ subsidiaries and are obligated to absorb all of the VIEs and VIEs’ subsidiaries' expected losses and therefore the
Company has determined that it is the primary beneficiary of the VIEs and VIEs’ subsidiaries. Accordingly, the Company has consolidated the VIEs and
VIEs’ subsidiaries results of operations and assets and liabilities in the Company’s consolidated financial statements in accordance with US GAAP.
Autohome WFOE entered into a series of contractual agreements with Autohome Information and each of its individual nominee shareholders. The
currently effective contractual agreements were entered into in January 2024 by and between Autohome WFOE, Autohome Information, Mr. Quan Long,
the Company’s chairman of the Board of Directors, and Mr. Youdong Wang, taking place of the previous contractual agreements entered into in February
2021 by and between Autohome WFOE, Autohome Information, Mr. Quan Long and Ms. Haiyun Lei (the previous individual nominee shareholder of
Autohome Information).
Chezhiying WFOE also entered into a series of contractual agreements with Shengtuo Hongyuan and each of its individual nominee shareholders. The
currently effective contractual agreements were entered into in January 2024 by and between Chezhiying WFOE, Shengtuo Hongyuan, Mr. Quan Long, the
Company’s chairman of the Board of Directors, and Mr. Youdong Wang, taking place of the previous contractual agreements entered into in February 2021
by and between Autohome WFOE, Autohome Information, Mr. Quan Long and Ms. Haiyun Lei (the previous individual nominee shareholder of Shengtuo
Hongyuan).
In the end of December 2020, the Company acquired TTP, its subsidiaries and VIEs, which also conduct its business related to internet content services
through VIEs. In August 2015, the then individual nominee shareholders of Shanghai Jinwu, entered into Equity Interest Purchase Agreements and Debt
Transfer and Offset Agreements with Weiwei Wang, pursuant to which the then individual nominee shareholders transferred all of its equity interest of
Shanghai Jinwu to Weiwei Wang. In August 2015, TTP WFOE, Shanghai Jinwu and Weiwei Wang, as the individual nominee shareholder of VIE, entered
into a series of contractual agreements. In March and May of 2022, Weiwei Wang and Lan Zhang, as the individual nominee shareholders of Shanghai
Jinyou, entered into a series of contractual agreements with TTP WFOE.
Despite the lack of technical majority ownership, there exists a parent-subsidiary relationship between the Company and the VIEs through the irrevocable
power of attorney agreement, whereby the Nominee Shareholders effectively assigned all of their voting rights underlying their equity interest in the VIEs
to the WFOEs. In addition, through the Contractual Agreements the Company demonstrates its ability and intention to continue to exercise the ability to
absorb substantially all of the expected losses and majority of the profits of the VIEs through the WFOEs.
The following is a summary of the Contractual Arrangements that the Company, through its WFOEs, entered with the VIEs and their Nominee
Shareholders:
Exclusive technology consulting and service agreements
Pursuant to the exclusive technology consulting and service agreements that have been entered into by the WFOEs and the VIEs, the VIEs have engaged
the WFOEs as their exclusive provider of technical support and management consulting services. In addition, the WFOEs shall provide the necessary
financial support to the VIEs whether or not the VIEs incur any losses, and not request for repayment if the VIEs are unable to do so. The VIEs shall pay to
the WFOEs service fees calculated based on such VIE’s revenues reduced by its value-added taxes and surcharges, operating expenses and an appropriate
amount of retained profit that is determined pursuant to the Company’s tax planning strategies and relevant tax laws. The service fees can be adjusted by
the WFOEs unilaterally. The WFOEs shall exclusively own any intellectual property arising from the performance of these agreements. This agreement has
30-year term that can be automatically extended for another 10 years at the option of the WFOEs. The agreement can only be terminated mutually by the
parties in writing. During the term of the agreement, the VIEs may not enter into any agreement with third parties for the provision of any technical or
management consulting services without prior consent of the WFOEs.
Loan agreements
Pursuant to the loan agreements between the Nominee Shareholders of the VIEs and the WFOEs, the WFOEs granted interest-free loans for the Nominee
Shareholders’ contributions to the VIEs. The term of the loan is indefinite until the WFOEs requests repayment. The manner and timing of the repayment
shall be at the sole discretion of the WFOEs and at the WFOEs’ option may be in the form of transferring the VIEs’ equity interest to the WFOEs or their
designated persons.
F-12
Equity option agreements
Pursuant to the equity option agreements entered into among the Nominee Shareholders of the VIEs, VIEs and the WFOEs, the Nominee Shareholders
jointly and severally granted to the WFOEs an option to purchase their equity interests in the VIEs. The purchase price will be offset against the loan
repayments under the loan agreements. If the transfer price of the equity interest is greater than the loan amount, the Nominee Shareholders are required to
immediately return the received transfer price in excess of the loan amount to the WFOEs or any person designated by the WFOEs. The WFOEs may
exercise such option at any time until it has acquired all equity interests of the VIEs or freely transfer the option to any third party and such third party may
assume the right and obligations of the option agreement. In addition, dividends and distributions are not permitted without the prior consent of the
WFOEs, to the extent there is a dividend or distribution, the Nominee Shareholders will remit the amounts in full to the WFOEs immediately. In the event
of liquidation or dissolution of the VIEs, all assets shall be sold to the WFOEs at the lowest selling price permitted by applicable mainland China law, and
any proceeds from the transfer and any residual interests in the VIEs shall be remitted to the WFOEs immediately. The equity option agreements have an
indefinite term and will terminate at the earlier of i) the date on which all of the equity interests have been transferred to the WFOEs or any person
designated by the WFOEs; or ii) the unilateral termination by the WFOEs.
Equity interest pledge agreements
Pursuant to the equity interest pledge agreements entered into between the Nominee Shareholders of the VIEs and the WFOEs, the Nominee Shareholders
pledged all of their equity interests in the VIEs to the WFOEs as collateral for all of their payments due to the WFOEs and to secure their obligations under
the above agreements. The Nominee Shareholders may not transfer or assign the shares, the rights and obligations in the share pledge agreement or create
or permit to create any pledges which may have an adverse effect on the rights or benefits of the VIEs without the WFOE’s preapproval. The WFOE is
entitled to transfer or assign in full or in part the shares pledged. In the event of default, the WFOE as the pledgee will be entitled to request immediate
repayment of the loan or to dispose of the pledged equity interests through transfer or assignment. There have been no dividends or distributions from
inception to date. The equity interest pledge agreements have an indefinite term and will terminate after all the obligations under these agreements have
been satisfied in full or the pledged equity interests have been transferred to the WFOEs or their designees.
Power of attorney
Pursuant to the power of attorney, shareholders of the VIEs have given the WFOEs an irrevocable proxy to act on their behalf on all matters pertaining to
the VIEs and to exercise all of their rights as shareholders of the VIEs, including the right to attend shareholders’ meetings, to exercise voting rights and to
transfer all or a part of his equity interests in the VIEs.
Risk in relation to the VIE Structure
Internet content related businesses are subject to significant restrictions under current mainland China laws and regulations. Specifically, foreign investors
are not allowed to own more than 50% equity interest in any Internet Content Provider (“ICP”) business.
The Company conducts its operations in China through Contractual Agreements entered into between the WFOEs and VIEs. If the Company or any of its
current or future VIEs or subsidiaries are found in violation of any existing or future laws or regulations, or fail to obtain or maintain any of the required
permits or approvals, the relevant mainland China regulatory authorities would have certain discretion in dealing with such violations, including levying
fines, confiscating the income of Autohome WFOE, Chezhiying WFOE, TTP WFOE and VIEs, revoking their business licenses or operating licenses,
shutting down the Company’s servers or blocking the Company’s websites and mobile applications, discontinuing or placing restrictions or onerous
conditions on the Company’s operations, requiring the Company to undergo a costly and disruptive restructuring, restricting the Company’s rights to use
the proceeds from the offering to finance the Company’s business and operations in China, or enforcement actions that could be harmful to the Company’s
business. Any of these actions could cause significant disruption to the Company’s business operations and severely damage the Company’s reputation,
which would in turn materially and adversely affect the Company’s business and results of operations. In addition, if the imposition of any of these
penalties causes the Company to lose the rights to direct the activities of VIEs or the Company’s right to receive their economic benefits, the Company
would no longer be able to consolidate the VIEs.
In addition, if Autohome Information and its subsidiaries, Shengtuo Hongyuan and its subsidiaries, Shanghai Jinwu and Shanghai Jinyou or their
shareholders fail to perform their obligations under the Contractual Agreements, the Company may have to incur substantial costs and expend resources to
enforce the Company’s rights under the contracts. The Company may have to rely on legal remedies under mainland China law, including seeking specific
performance or injunctive relief and claiming damages, which may not be effective. All of these Contractual Agreements are governed by mainland China
law and provide for the resolution of disputes through arbitration in
F-13
mainland China. Accordingly, these contracts would be interpreted in accordance with mainland China law and any disputes would be resolved in
accordance with mainland China legal procedures. As a result, uncertainties in the PRC legal system may limit the Company’s ability to enforce these
Contractual Agreements. Under mainland China law, rulings by arbitrators are final, parties cannot appeal the arbitration results in courts, and prevailing
parties may only enforce the arbitration awards in mainland China courts through arbitration award recognition proceedings, which would incur additional
expenses and delay. In the event the Company is unable to enforce these Contractual Agreements, the Company may not be able to obtained a controlling
financial interest in the VIEs and VIEs’ subsidiaries, and the Company’s ability to conduct its business may be negatively affected.
Based on the advice of the Company’s mainland China legal counsel, the corporate structure and Contractual Agreements of the Company’s VIEs and
WFOEs in China are in compliance with all existing mainland China laws and regulations. Therefore, in the opinion of management, (i) the ownership
structure of the Company and the VIEs are in compliance with existing mainland China laws and regulations; (ii) the Contractual Agreements with VIEs
and their nominee shareholders are valid and binding, and will not result in any violation of mainland China laws or regulations currently in effect; and (iii)
the Company’s business operations are in compliance with existing mainland China law and regulations in all material respects.
The VIEs contributed an aggregate of 13.1%, 12.7% and 13.5% of the consolidated net revenues for the years ended December 31, 2021, 2022 and 2023,
respectively, after elimination of inter-company transactions. As of December 31, 2022, and 2023, the VIEs accounted for an aggregate of 7.6% and 7.3%,
respectively, of the consolidated total assets, and 8.7% and 8.3%, respectively, of the consolidated total liabilities after elimination of inter-company
balances.
Relevant mainland China laws and regulations restrict the VIEs from transferring a portion of its net assets to the Company in the form of loans and
advances or cash dividends. Please refer to Note 16 for disclosure of restricted net assets.
The following table sets forth the assets, liabilities, results of operations and cash flows of the VIEs and VIEs’ subsidiaries included in the Company’s
consolidated balance sheets, consolidated statements of comprehensive income and consolidated statements of cash flows.
Current assets
Non-current assets
Total assets
Accrued expenses and other payables
Advance from customers
Deferred revenue
Inter-company payables
Total current liabilities
Other liabilities
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Net revenues
-Third-party revenues
-Inter-company revenues
Net loss
2022
RMB
As of December 31,
2023
US$
RMB
(in thousands)
745,057
1,837,711
2,582,768
253,681
65,150
36,099
569,034
923,964
6,542
41,919
48,461
972,425
1,610,343
709,905
1,789,401
2,499,306
320,100
68,543
36,773
389,566
814,982
13,729
30,238
43,967
858,949
1,640,357
99,988
252,032
352,020
45,085
9,654
5,179
54,870
114,788
1,933
4,259
6,192
120,980
231,040
Year ended December 31,
2021
RMB
2022
RMB
2023
RMB
US$
(in thousands)
948,520
131,524
(89,397 )
882,276
160,272
(85,283 )
968,869
179,587
(112,791 )
136,462
25,294
(15,886 )
F-14
Net cash generated from operating activities
Net cash used in investing activities
Net cash generated from financing activities
Year ended December 31,
2021
RMB
2022
RMB
2023
RMB
US$
411,966
(386,343 )
163,424
(in thousands)
19,289
(812,606 )
666,853
24,582
(1,092,190 )
1,115,463
3,462
(153,832 )
157,110
The revenue-producing assets that are held by the VIEs comprise of customer relationship, trademarks, websites, domain names, operating license and
servers.
The current assets of the VIEs included amounts due from Group companies of RMB333.17 million and RMB244.65 million (US$ 34.46 million), as of
December 31, 2022 and 2023, respectively, which were eliminated upon consolidation by the Company. The current liabilities of the VIEs included
amounts due to Group companies of RMB569.03 million and RMB389.57 million (US$54.87 million), as of December 31, 2022 and 2023, respectively,
which were eliminated upon consolidation by the Company. There was no pledge or collateralization of the VIEs’ assets that can only be used to settle
obligations of the VIEs. Creditors of the VIEs have no recourse to the general credit of the WFOEs, which are the primary beneficiaries of the VIEs. The
WFOEs did not provide or intend to provide financial or other supports not previously contractually required to the VIEs during the years presented.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of accounting
The accompanying consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S.
GAAP”).
On February 2, 2021, the Company announced that the following proposed resolution submitted for shareholder approval has been adopted and approved
as a special resolution at the Company’s extraordinary general meeting of shareholders: All authorized Class A ordinary shares and Class B ordinary shares
are re-designated and combined into one single class of ordinary shares, and subsequently each ordinary share is subdivided into four shares, effective as of
February 5, 2021 (the “Share Subdivision”). As a result of this variation of share capital, the authorized share capital of Autohome Inc. shall be
US$1,000,000,000 divided into 400,000,000,000 ordinary shares of a par value of US$0.0025 each, effective as of February 5, 2021. The Company also
announced that, concurrently with the effectiveness of the variation of share capital of Autohome Inc., the ratio of ADS to ordinary share will be adjusted to
one ADS representing four ordinary shares, beginning on February 5, 2021 (the “ADS Ratio Change”). Accordingly, because the Share Subdivision and
ADS Ratio Change are exactly proportionate, the ADS Ratio Change, in and of itself, is neutral in its impact on the per-ADS trading price of Autohome
Inc.’s ADSs on the New York Stock Exchange (“NYSE”), as the percentage interest in the Company represented by each ADS will not be altered. The
number of issued and unissued ordinary shares as disclosed in these consolidated financial statements are prepared on a basis after taking into account the
effects of the Share Subdivision and the ADS Ratio Change and have been retrospectively adjusted accordingly.
(b)
Principles of Consolidation
The consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIEs and VIEs’ subsidiaries for which the
Company or subsidiaries of the Company are the primary beneficiaries. All significant inter-company transactions and balances between the Company, its
subsidiaries, the VIEs and VIEs’ subsidiaries are eliminated upon consolidation. Results of acquired subsidiaries and VIEs are consolidated from the date
on which control is transferred to the Company, or the Company obtains a controlling financial interest in the VIEs and VIEs’ subsidiaries.
(c) Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements
and the reported amounts of revenues and expenses during the year. Areas where management uses subjective judgment include, but are not limited to:
estimation of variable consideration represented by sales rebates related to revenue transactions; initial valuation of the assets acquired and liabilities
assumed in a business combination; fair value measurement of short-term investments; depreciation or amortization of long-lived assets and intangible
assets; subsequent impairment assessment
F-15
of long-lived assets, intangible assets, goodwill, other non-current assets and long-term investments; provision for expected credit loss for financial assets
which are within the scope of ASC 326; accounting for deferred income taxes, assessment of fair value and estimate of forfeitures for share-based awards;
and accretion of changes in the redemption value on the preferred shares owned by the noncontrolling shareholders. Changes in facts and circumstances
may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial
statements.
(d) Foreign Currency
The functional currency of Autohome Inc., its Cayman subsidiaries and Cheerbright, is the United States dollar (“US$”), whereas the Company’s
subsidiaries, the VIEs and VIEs’ subsidiaries with operations in mainland China, Hong Kong, and other jurisdictions generally use their respective local
currencies as their functional currencies as determined based on the criteria of ASC 830, Foreign Currency Matters. The Company uses the RMB as its
reporting currency. Transactions denominated in foreign currencies are re-measured into the functional currency at the exchange rates prevailing on the
transaction dates. Foreign currency denominated financial assets and liabilities are re-measured at the balance sheet date exchange rate. Exchange gains and
losses are included in other operating income, net in the consolidated statements of comprehensive income.
Assets and liabilities of the Company and Company’s subsidiaries, other than the subsidiaries with the functional currency of RMB, are translated into
RMB at fiscal year-end exchange rates. Income and expense items are translated at monthly average exchange rates prevailing during the fiscal year.
(e) Convenience Translation
Amounts in United States dollars (“US$”) are presented for the convenience of the reader and are translated at the noon buying rate of US$1.00 to
RMB7.0999 on December 29, 2023 in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of
New York. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate.
(f) Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand, demand deposits, and time deposits placed with banks or other financial institutions which are
unrestricted as to withdrawal and use and have original maturities of three months or less.
(g) Short-term Investments
Short-term investments represent bank deposits and adjustable-rate financial products with original maturities of less than 1 year that are measured at fair
value. In accordance with ASC 825, Financial Instruments, for adjustable-rate financial products with the interest rate indexed to performance of
underlying assets, the Company elected the fair value method at the date of initial recognition and carried these investments at fair value. Changes in the
fair value are reflected in the consolidated statements of comprehensive income as “interest and investment income, net”. As of December 31, 2023, the
Company had an investment in an overdue financial product with fair value below its initial investment, and recognized the loss at “interest and investment
income, net” of RMB164.07 million,
RMB73.26 million and RMB23.25 million (US$3.27 million) for the years ended December 31, 2021, 2022 and 2023, respectively.
(h) Restricted Cash and Consolidated Statements of Cash Flows
Restricted cash primarily represents cash deposits in a regulatory escrow account related to deposits or guarantees of third-parties, insurance brokerage
services and litigation-related restricted balance.
The following table provides a reconciliation of the amount of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets to
the total of the same such amounts shown in the consolidated statements of cash flows:
F-16
Amounts shown in Consolidated Balance Sheets:
Cash and cash equivalents
Restricted cash
Total cash, cash equivalents and restricted cash as
shown in Consolidated Statements of Cash Flows
(i) Fair Value Measurements of Financial Instruments
As of December 31,
2021
RMB
2022
RMB
2023
RMB
US$
(in thousands)
4,236,501
95,055
2,801,299
14,175
4,996,353
131,794
4,331,556
2,815,474
5,128,147 —
703,722
18,563
722,285
Financial instruments of the Company primarily comprise of cash and cash equivalents, restricted cash, short-term investments, accounts receivable,
amounts due from related parties, prepaid expenses and other current assets excluding prepayments, other non-current assets excluding operating lease
right-of-use assets, accrued expenses and other payables, and amounts due to related parties. The carrying values of these financial instruments excluding
other non-current assets approximated their fair values due to the short-term maturity of these instruments.
F-17
ASC topic 820 (“ASC 820”), Fair Value Measurements and Disclosures, establishes a three-tier fair value hierarchy, which prioritizes the inputs used in
measuring fair value as follows:
Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets
Level 2 – Include other inputs that are directly or indirectly observable in the marketplace
Level 3 – Unobservable inputs which are supported by little or no market activity
ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost
approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or
liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the
value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to
replace an asset.
(j) Property and Equipment
Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, as follows:
Category
Electronic equipment
Office equipment
Motor vehicles
Software
Leasehold improvements
Estimated useful life
3 – 5 years
3 – 5 years
4 – 5 years
3 – 5 years
Shorter of lease term or the estimated useful lives of the assets
Repair and maintenance costs are charged to expense as incurred, whereas the costs of betterments that extend the useful life of property and equipment are
capitalized as additions to the related assets. Retirements, sale and disposals of assets are recorded by removing the cost and accumulated depreciation with
any resulting gain or loss reflected in the consolidated statements of comprehensive income.
(k)
Intangible Assets
Intangible assets are carried at cost less accumulated amortization and any recorded impairment. Intangible assets acquired in a business combination were
recognized initially at fair value at the date of acquisition. Intangible assets acquired in asset acquisitions are measured based on the cost to the acquiring
entity, which generally includes transaction costs. Intangible assets with finite useful lives are amortized using a straight-line method of amortization that
reflects the estimated pattern in which the economic benefits of the intangible asset are to be consumed. The estimated useful life for the intangible assets is
as follows:
Category
Technologies
Trademarks
Customer relationship
Websites
Domain names
Database
Licensing agreements
Insurance brokerage license
(l) Long-term Investments
Estimated useful life
5 years
3-15 years
5 years
4 years
4-10 years
5 years
1.75 years
4 years
The Company’s long-term investments consist of equity method investments. Investments in entities in which the Company can exercise significant
influence and holds an investment in voting common stock or in-substance common stock (or both) of the investee but does not own a majority equity
interest or control are accounted for using the equity method of accounting in accordance with ASC topic 323 (“ASC 323”), Investments-Equity Method
and Joint Ventures. Under the equity method, the Company initially records its investments at cost. The Company subsequently adjusts the carrying amount
of the investments to recognize the Company’s proportionate share of each equity investee’s net income or loss into earnings after the date of investments.
The Company evaluates the equity method investments for impairment under ASC 323. An impairment loss on the equity method investments is
recognized in earnings when the decline in value is determined to be other-than-temporary.
F-18
(m) Goodwill
Goodwill represents the excess of the purchase price over the amounts assigned to the fair value of the assets acquired and the liabilities assumed of an
acquired business. The Company’s goodwill at December 31, 2022 and 2023 was related to its acquisition of Cheerbright, China Topside and Norstar in
June 2008, and its acquisition of TTP in December 2020. In accordance with ASC 350, Goodwill and Other Intangible Assets, recorded goodwill amounts
are not amortized, but rather are tested for impairment annually or more frequently if there are indicators of impairment present. Also, the Company has the
option to choose whether it will apply the qualitative assessment first and then the quantitative assessment, if necessary, or to apply the quantitative
assessment directly.
Goodwill is tested for impairment at the reporting unit level at least annually in the fourth quarter and between annual tests if an event occurs or
circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying value. These events or circumstances
include a significant change in stock prices, business environment, legal factors, financial performances, competition, or events affecting the reporting unit.
Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to
reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit.
Management has determined that the Company represents the lowest level within the entity at which goodwill is monitored for internal management
purposes. The Company applied the quantitative assessment and performed the goodwill impairment test by quantitatively comparing the fair values of the
reporting unit to it carrying amounts. The Company determines the fair value of the reporting unit based on its quoted stock price, and no impairment
charge was recognized for the years ended December 31, 2021, 2022 and 2023.
If the Company reorganizes its reporting structure in a manner that changes the composition of one or more of its reporting units, goodwill is reassigned
based on the relative fair value of each of the affected reporting units.
(n)
Impairment of Long-Lived Assets and Intangibles
The Company evaluates its long-lived assets or asset group, including intangible assets with finite lives, for impairment whenever events or changes in
circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount of
an asset or a Company of long-lived assets may not be recoverable. When these events occur, the Company evaluates impairment by comparing the
carrying amount of the assets to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the sum of
the expected undiscounted cash flow is less than the carrying amount of the assets, the Company would recognize an impairment loss based on the excess
of the carrying amount of the asset group over its fair value. No impairment charge was recorded for any of the years presented.
(o) Revenue Recognition and Accounts Receivable
The Company’s revenues are derived from media services, leads generation services and online marketplace and others. Under ASC 606, revenues are
recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the
Company expects to be entitled to in exchange for those goods or services. The recognition of revenue involves certain management judgments including
identification of performance obligations, standalone selling price for each performance obligation, estimation of variable consideration represented by
sales rebates, etc. The Company provides rebates to agency companies based on cumulative annual advertising and service volume, and timeliness of their
payments, which are accounted for as variable consideration. The Company estimate its obligations under such agreements by applying the most likely
amount method, based on an evaluation of the likelihood of the agency companies’ achievement of the advertising and service volume targets, and the
timeliness of their payments, after taking into account the agency companies’ purchase trends and history. A refund liability (included in accrued expenses
and other payables) is recognized for expected sales rebates payable to agency companies in relation to advertising services provided. The Company
recognizes revenue for the amount of fees it receives from its clients, after deducting these sales rebates, and net of VAT collected from customers. The
Company believes that there will not be significant changes to its estimates of variable consideration and updates the estimate at each reporting period as
actual utilization becomes available.
The Company determines revenue recognition through the following steps
•
•
identification of the contract, or contracts, with a customer;
identification of the performance obligations in the contract;
F-19
•
•
•
determination of the transaction price;
allocation of the transaction price to the performance obligations in the contract; and
recognition of revenue when, or as, the Company satisfies a performance obligation
Media services
Media services revenues mainly include revenues from automaker advertising services and regional marketing campaigns conducted by certain automobile
brands’ regional offices. The majority of online advertising service contracts involve multiple deliverables or performance obligations presented on PC and
mobile platforms and under different formats such as banner advertisements, links and logos, other media insertions and promotional activities that are
delivered over different periods of time. Revenue is allocated among these different deliverables based on their relative standalone selling prices. The
Company generally determines the standalone selling price as the observable price of a product or service charged to customers when sold on a standalone
basis. Advertising services are primarily delivered based on cost per day (“CPD”) pricing model. For CPD advertising arrangements, revenue is recognized
when the corresponding advertisements are published over the stated displaying period. For cost per thousand impressions (“CPM”) model, revenue is
recognized when the advertisements are displayed and based on the number of times that the advertisement has been displayed. For cost-per-click (“CPC”)
model, revenue is recognized when the user clicks on the customer-sponsored links and based on the number of clicks. For certain marketing campaigns
and promotional activities services, revenue is recognized when the corresponding services have been rendered.
Leads generation services
Leads generation services primarily include revenues from (i) dealer subscription services, (ii) advertising services sold to individual dealer advertisers, and
(iii) used car listing services. Under the dealer subscription services, the Company makes available throughout the subscription period a webpage linked to
its websites and mobile applications where the dealers can publish information such as the pricing of their products, locations and addresses and other
related information. Usually, advanced payment is made for the dealer subscription services and revenue is recognized over time on a straight-line basis as
services are constantly provided over the subscription period. For the advertising services sold to individual dealers, revenue is recognized when the
advertising is published over the stated displaying period. The used car listing services primarily include listing and displaying of used vehicles, generation
of sales leads, etc. for sellers through the Company’s platform. The used car platform acts as a user interface that allows potential used car buyers to
identify listings that meet their specific requirements and contact the sellers. The service fee is charged per the number of displayed days, or quantity of
sales leads delivered. Revenue is recognized respectively over the stated displaying period or at a point in time upon the delivery of sales leads.
Online marketplace and others
Online marketplace and others revenue primarily consist of revenues related to (i) data products, (ii) new and used vehicle transaction platform, and (iii)
auto financing services and others.
For the data products, the Company provides data-driven products and solutions for the automakers and dealers, and recognizes revenue over the service
period of data-driven products and solutions by the automakers and dealers.
For the new and used vehicle transaction business, the Company provides platform-based services including facilitation of transactions, transaction-
oriented marketing solutions, and generation of sales leads. For the new vehicle transaction, the Company acts as the platform for users to review
automotive-related information and inquiry, and facilitates of transaction by delivering sales leads to the automakers. For the used vehicle transaction, the
Company acts as a used car consumer-to-business-to-consumer transaction system that facilitates the used car transaction between the sellers and buyers
and charge the service fee per each sale. The new and used vehicle transaction revenue is recognized at a point in time when the sales leads are delivered or
upon the successful facilitation of transaction.
For the auto-financing business, the Company provides a platform which serves as a bridge to match users and automobile sellers that have auto financing
needs with the Company’s cooperative financial institutions that offer a variety of products covering merchant loans, consumer loans, leases and insurance
services. The auto-financing service fee is charged on a per sale or lead basis, and the service fee is recognized at a point in time when the sales leads are
delivered or upon the successful facilitation of transaction. The Company is not involved in providing the loans and has no further obligation once the
revenue for the sales leads or transaction commissions has been recognized.
F-20
Contract Balances and Accounts Receivable
Payment terms and conditions vary by contract and service types. Generally, excluding dealer subscription and used car listing, the rest of service contracts
usually require payment within several months of service delivery. The term between billings and when payment is due is not significant and the Company
generally does not provide significant financing terms. Timing of revenue recognition may differ from the timing of invoicing to customers. Accounts
receivable represent amounts invoiced and revenue recognized prior to invoicing, when the Company has satisfied its performance obligations and has the
unconditional right to payment. Payments in advance of revenue recognition are recorded as deferred revenue and recognized as revenue along with the
fulfillment of performance obligations. Deferred revenue is primarily related to the advanced payment related to dealer subscription services and used car
listings under leads generation services. Most of the beginning balance of deferred revenue of RMB1,147.13 million (US$161.57million) was recognized
as revenue for the year ended December 31, 2023, and the unrecognized part was immaterial.
On January 1, 2020, the Company adopted Accounting Standards Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement
of Credit Losses on Financial Instruments (“ASC 326”) using the modified retrospective transition method. ASC 326 replaces the existing incurred loss
impairment model with a forward-looking current expected credit loss (“CECL”) methodology. The Company estimated the allowance by segmenting
accounts receivable into groups based on certain credit risk characteristics and estimated the allowance for credit losses on receivables not sharing similar
risk characteristic on an individual basis. The key factors considered when determining the allowances for credit losses include the historical loss
experience, lifetime for debt recovery, financial performance of the customers, current and future economic conditions. An accounts receivable balance is
written off after all collection effort has ceased.
Practical Expedients and Exemptions
The Company has elected to use the practical expedient to not disclose the remaining performance obligations for contracts that have durations of one year
or less. Performance obligations to be recognized over a period in excess of one year are immaterial as of December 31, 2022 and 2023.
The revenue standard requires the Company to recognize an asset for the incremental costs of obtaining a contract with a customer if the benefit of those
costs is expected to be longer than one year. The Company has determined that sales commission for sales personnel meet the requirements of
capitalization. However, the Company applies a practical expedient to expense these costs as incurred for costs to obtain a contract with a customer when
the amortization period would have been one year or less.
(p) Cost of Revenues
Cost of revenues primarily consist of (i) operational costs, (ii) content costs, (iii) bandwidth and Internet Data Center (“IDC”) fees, (iv) tax surcharges and
(v) depreciation & amortization expenses and others. Operational costs primarily include the transaction fees incurred on our platform, execution costs of
service contracts, salaries and benefits, and share-based compensation expenses of related employees. Content costs are costs directly related to purchasing
and producing the professionally-generated content displayed on our websites and mobile applications.
(q)
Advertising Expenditures
Advertising expenditures which amounted to RMB1,341.62 million, RMB1,397.96 million and RMB1,429.06 million (US$201.28 million) for the years
ended December 31, 2021, 2022 and 2023, respectively, are expensed as incurred and are included in sales and marketing expenses.
(r) Product Development Expenses
Product development expenses consist primarily of employee costs related to personnel involved in the development and enhancement of the Company’s
service offerings on its websites and mobile applications, and expenditure for research and development activities. The Company recognizes these costs as
expenses when incurred, unless they qualify for capitalization as software development costs. Capitalized software development costs have not been
material for the periods presented.
(s) Leases
F-21
In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02, Leases (“ASU 2016-02”).
Further, as a clarification of the new guidance, the FASB issued several amendments and updates. The Company adopted the new lease guidance beginning
January 1, 2019 by applying the modified retrospective method to those contracts that are not completed as of January 1, 2019, with the comparative
information not being adjusted and continues to be reported under historic accounting standards. There is no impact to retained earnings at adoption.
The Company has elected to utilize the package of practical expedients at the time of adoption, which allows the Company to (1) not reassess whether any
expired or existing contracts are or contain leases, (2) not reassess the lease classification of any expired or existing leases, and (3) not reassess initial direct
costs for any existing leases. The Company also has elected to utilize the short-term lease recognition exemption and, for those leases that qualified, the
Company did not recognize operating lease right-of-use (“ROU”) assets or operating lease liabilities.
The Company determines if an arrangement is a lease and determines the classification of the lease, as either operating or finance, at commencement. The
Company has operating leases for office buildings and data centers and has no finance leases as of December 31, 2022 and 2023. Operating lease ROU
assets and operating lease liabilities are recognized based on the present value of the lease payments over the lease term at commencement date.
As the Company’s leases do not provide an implicit rate, an incremental borrowing rate is used based on the information available at commencement date,
to determine the present value of lease payments. The incremental borrowing rates approximate the rate the Company would pay to borrow in the currency
of the lease payments for the weighted-average life of the lease.
The operating lease ROU assets also include any lease payments made prior to lease commencement and exclude lease incentives and initial direct costs
incurred if any. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.
Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.
The Company’s lease agreements contain both lease and non-lease components, which are accounted for separately based on their relative standalone price.
As of December 31, 2022 and 2023, the Company recognized the following items related to operating lease in its consolidated balance sheets.
Operating lease ROU assets
Operating lease liabilities, current portion
Operating lease liabilities, non-current portion
2022
RMB
As of December 31,
2023
US$
RMB
(in thousands)
115,118
59,798
50,591
199,305
106,953
89,187
28,072
15,064
12,562
Lease cost recognized in the Company’s consolidated statements of comprehensive income is summarized as follows:
Classification
2021
RMB
Year ended December 31,
2022
RMB
RMB
(in thousands)
2023
US$
Operating lease cost
Cost of other leases with terms less than one year
Cost of revenues
Operating expenses
Cost of revenues
Operating expenses
131,529
28,798
102,731
99,923
88,567
11,356
128,081
21,695
106,386
87,603
79,274
8,329
119,484
15,193
104,291
91,815
82,975
8,840
16,829
2,140
14,689
12,932
11,687
1,245
Maturities of operating lease liabilities as of December 31, 2023 are as follows:
F-22
2024
2025
2026
2027
Total lease payments
Less imputed interest
Total
Amounts
RMB
US$
(in thousands)
111,367
75,179
20,556
1,241
208,343
(12,203 )
196,140
15,686
10,589
2,895
175
29,345
(1,719 )
27,626
As of December 31, 2022 and 2023, the Company’s weighted-average remaining lease term was 1.70 and 1.92 years, and weighted-average discount rate
was 6.71% and 5.75%, respectively.
As of December 31, 2022 and 2023, the Company does not have any significant operating or finance leases that have not yet commenced. The Company’s
lease agreements do not contain any material variable lease payments, material residual value guarantees or material restrictive covenants.
The Company leased office buildings and data centers from its related party, Ping An Company for a total amount of RMB138.01 million, RMB151.78
million and RMB157.53 million (US$22.19million) for the years ended December 31, 2021, 2022 and 2023, respectively.
(t)
Income Taxes
The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on
the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the
differences are expected to reverse. The Company records a valuation allowance against deferred tax assets if, based on the weight of available evidence, it
is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is
recognized in income in the period that includes the enactment date. For reconciliation of tax computed by applying the respective statutory income tax rate
to pre-tax income, please see “TAXATION” under Note 6 to our audited consolidated financial statements.
The Company applies ASC 740, Accounting for Income Taxes, to account for uncertainty in income taxes. ASC 740 prescribes a recognition threshold a tax
position is required to meet before being recognized in the financial statements. The Company has elected to classify interest and penalties related to
unrecognized tax benefits, if and when required, as part of “income tax expense”, in the consolidated statements of comprehensive income.
(u) Earnings Per Share
Earnings per share are calculated in accordance with ASC 260, Earnings per Share. Basic earnings per share are computed by dividing net income
attributable to holders of ordinary shares by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per ordinary share reflects the potential dilution that could occur if incremental ordinary shares were issued upon the exercise of nonvested
share-based awards. The dilutive effect of outstanding share-based awards is reflected in the diluted earnings per share by application of the treasury stock
method.
(v) Comprehensive Income
Comprehensive income is defined to include all changes in shareholders’ equity except those resulting from investments by owners and distributions to
owners. Among other disclosures, ASC 220, Comprehensive Income requires that all items that are required to be recognized under current accounting
standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial
statements. For each of the periods presented, the Company’s comprehensive income includes foreign currency translation adjustments and is presented in
the consolidated statements of comprehensive income. There have been no reclassifications out of accumulated other comprehensive income to net income
for the years presented.
(w) Noncontrolling interests
F-23
Noncontrolling interests are recognized to reflect the portion of the equity of majority-owned subsidiary which is not attributable, directly or indirectly, to
the controlling shareholder. Noncontrolling interests are classified as a separate line item in the equity section of the Company’s consolidated balance
sheets and have been separately disclosed in the Company’s consolidated statements of comprehensive income to distinguish the interests from that of the
Company.
(x) Segment Reporting
In accordance with ASC 280, Segment Reporting, the Company’s chief operating decision maker has been identified as the Chief Executive Officer who
reviews the consolidated results of operations when making decisions about allocating resources and assessing performance of the Company as a whole;
hence, the Company has only one operating segment. The Company does not distinguish between markets or segments for the purpose of internal
reporting. As the Company’s long-lived assets and revenue are substantially located in and derived from mainland China, no geographical segments are
presented.
(y) Employee Benefits
The full-time employees of the Company’s mainland China subsidiaries, the VIEs and VIEs’ subsidiaries are entitled to staff welfare benefits including
medical care, housing fund, pension benefits and unemployment insurance, which are governmental mandated defined contribution plans. These entities are
required to accrue for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the
relevant mainland China regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. The total expenses for the
employee benefits plans were RMB418.52 million, RMB432.06 million and RMB435.45 million (US$61.34 million) for the years ended December 31,
2021, 2022 and 2023, respectively.
(z) Share-based Compensation
Share-based awards granted to employees are accounted for under ASC 718, Compensation—Stock Compensation, which requires that share-based awards
granted to employees be measured based on the grant date fair value and recognized as compensation expense over the requisite service period (which is
generally the vesting period) in the consolidated statements of comprehensive income. The Company has elected to recognize compensation expense using
the straight-line method for all share-based awards granted with service conditions that have a graded vesting schedule. For awards with performance
condition and multiple service dates, if the performance conditions are all set at inception and independent for each year, each tranche is accounted for as a
separate award with its own requisite service period. Compensation cost is recognized over the respective requisite service period separately for each
separately-vesting tranche as though each tranche of the award is, in substance, a separate award.
Under ASC 718, an entity can make an accounting policy election to either estimate the number of awards that are expected to vest or account for
forfeitures when they occur. The Company has elected to estimate the forfeiture rate at the time of grant and revise, if necessary, in subsequent periods if
actual forfeitures differ from initial estimates. The Company recognizes compensation cost for awards with performance conditions if and when the
Company concludes that it is probable that the performance condition will be achieved. The Company reassesses the probability of vesting at each
reporting period for awards with performance conditions and adjusts compensation cost based on its probability assessment.
Forfeiture rates are estimated based on historical and future expectations of employee turnover rates and are adjusted to reflect future changes in
circumstances and facts, if any. Share-based compensation expense is recorded net of estimated forfeitures such that expense is recorded only for those
share-based awards that are expected to vest. To the extent the Company revises these estimates in the future, the share-based payments could be materially
impacted in the period of revision, as well as in following periods. The Company, with the assistance of an independent third-party valuation firm,
determined the fair value of the stock options granted to employees. The binomial option pricing model was applied in determining the estimated fair value
of the options granted to employees. Subsequent to the IPO, fair value of the ADS in the US market or ordinary shares in the HK market is the price of the
Company’s publicly traded shares.
The Company accounts for a change in any of the terms or conditions of share-based awards as a modification in accordance with ASC subtopic 718-20,
Compensation-Stock Compensation: Awards Classified as Equity, whereby the incremental fair value, if any, of a modified award, is recorded as
compensation cost on the date of modification for vested awards or over the remaining vesting period for unvested awards. The incremental compensation
cost is the excess of the fair value of the modified award on the date of modification over the fair value of the original award immediately before the
modification.
(aa) Other operating income, net
F-24
Value Added Tax (“VAT”) refunds are presented as a component of other operating income, net. For Beijing Prbrownies Software Co., Ltd. (“Beijing
Prbrownies”) and Tianjin Autohome Software Co., Ltd. (“Tianjin Autohome”), they are subject to 13% VAT for the dealer subscription services and other
services, which were sold in the form of software products. Beijing Prbrownies and Tianjin Autohome are entitled to an immediate 10% VAT refund, which
is a refund in excess of 3% VAT on the total VAT payable, after their registration of software products with relevant authorities and obtaining a refund
approval from the local tax bureau. For the years ended December 31, 2021, 2022 and 2023, RMB231.45 million, RMB223.93 million and RMB233.92
million (US$32.95 million) of VAT refunds were recorded as other operating income, net.
Other operating income, net also includes government grants, which primarily represent subsidies and tax refunds for operating a business in certain
jurisdictions and fulfilment of specified tax payment obligations. These grants are not subject to any specific requirements and are recorded when received.
For the years ended December 31, 2021, 2022 and 2023, RMB51.69 million, RMB56.41 million and RMB27.18million (US$3.83 million) of government
grants were recorded as other operating income, net.
(bb) Commitment and contingencies
From time to time, the Company is subject to legal proceedings and claims in the ordinary course of business. Liabilities for such contingencies are
recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated.
(cc) Business Combinations
The Company accounts for its business combinations using the acquisition method of accounting in accordance with ASC 805, Business Combinations.
The cost of an acquisition is measured as the aggregate of the acquisition date fair values of the assets transferred and liabilities incurred by the Company to
the sellers and equity instruments issued. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets and liabilities
acquired or assumed are measured separately at their fair values as of the acquisition date, irrespective of the extent of any noncontrolling interests. The
excess of (i) the total costs of acquisition, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interest in
the acquiree over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill. If the cost of acquisition is less than the fair value
of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated statements of comprehensive income. During the
measurement period, which can be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities
assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired
or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of comprehensive loss.
In a business combination achieved in stages, the Company re-measures the previously held equity interest in the acquiree when obtaining control at its
acquisition date fair value and the re-measurement gain or loss, if any, is recognized in the consolidated statements of comprehensive income.
For the Company’s majority-owned subsidiaries and consolidated VIEs, a noncontrolling interest is recognized to reflect the portion of their equity which is
not attributable, directly or indirectly, to the Company. When the noncontrolling interest is contingently redeemable upon the occurrence of a conditional
event, which is not solely within the control of the Company, the noncontrolling interests are classified as mezzanine equity. Consolidated net income on
the consolidated statements of comprehensive income includes the net income/loss attributable to noncontrolling interests and mezzanine equity holders
when applicable.
(dd) Mezzanine Equity
The Company’s acquired subsidiary had issued preferred shares to the Company and other shareholders (Note 20), which could be converted into ordinary
shares or redeemed by such shareholders. Therefore, these preferred shares were accounted for as convertible redeemable noncontrolling interests in the
consolidated balance sheets.
The Company accounts for the changes in accretion to the redemption value in accordance with ASC Topic 480, Distinguishing Liabilities from Equity. The
Company accounts for the changes of redemption value over the period from the date of issuance to the earliest redemption date of the noncontrolling
interest. According to different share purchase agreements, the accounting measurement varies among different rounds of issued preferred shares, which
including (i) a percentage of the issue price, or (ii) the fair value of the underlying convertible redeemable noncontrolling interests or a percentage of the
issue price, whichever is higher, and (iii) the fair value
F-25
of the underlying convertible redeemable noncontrolling interests or the compound annual interests accrued on such convertible redeemable noncontrolling
interests, whichever is higher.
For the determination of fair value, option pricing model was used. The major unobservable input used in the option pricing model included equity value of
underlying business, which was determined by management using valuation techniques under the combination of income approach and market approach.
The significant assumptions used in valuation included revenue growth rate, operating margin, discount rate and selection of valuation multiples.
(ee) Recent Accounting Pronouncements
In November, 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting
(Topic 280): Improvements to Reportable Segments Disclosures.” This standard provides guidance on incremental disclosures related to a public entity’s
reportable segments but does not change the definition of a segment, the method for determining segments, or the criteria for aggregating operating
segments into reportable segments. The FASB issued the new guidance primarily to improve the disclosures about a public entity’s reportable segments and
provide financial statement users with more disaggregated information about a public entity’s reportable segment’s expenses. The standard is effective for
fiscal years beginning after December 31, 2023 and interim periods in fiscal years beginning December 31, 2024. Early adoption is permitted, and the
disclosures in this standard are required to be applied on a retrospective basis. The Company is currently evaluating the potential impact this standard will
have on its consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires disaggregated
income tax disclosure of specific categories on the effective tax rate reconciliation income taxes paid. This standard is effective for annual periods
beginning after December 15, 2024. Early adoption is permitted, and the disclosures in this standard are required to be applied on a prospective basis with
the option to apply the standard retrospectively. The Company is currently evaluating the potential impact this standard will have on its consolidated
financial statements and related disclosures.
In March, 2024, the SEC adopted its rules covering climate-related disclosures which require registrants to provide certain climate-related disclosures in
registrants’ SEC filings. The rules require registrants to disclose strategy, governance, risk management, targets and goals, greenhouse gas emissions, and
financial statement effects. The rules provide phased effective dates and transition provisions, with some entities required to adopt most elements of the
new rules as early as 2025. The Company is currently evaluating the potential impact this standard will have on its consolidated financial statements and
related disclosures.
(ff) Concentration of Risk
Credit risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents,
restricted cash, short-term investments, accounts receivable and other receivables, and amounts due from related parties. As of December 31, 2022, and
2023, cash and cash equivalents, restricted cash and short-term investments altogether amounting to RMB22,095.07 million and RMB23,680.50 million
(US$3,335.33 million), respectively, were deposited with various major reputable financial institutions located in mainland China and international
financial institutions outside of mainland China. Management believes that these financial institutions are of high credit quality and continually monitors
the creditworthiness of these financial institutions. The Company’s total cash and cash equivalents, restricted cash, and short-term investments held at top
three financial institutions in mainland China, representing 23.8%, 20.3% and 15.7% of the Company’s total cash and cash equivalents, restricted cash, and
short-term investments as of December 31, 2023, respectively. Historically, deposits in Chinese banks are secure due to the state policy on protecting
depositors’ interests. However, China promulgated a new Bankruptcy Law in August 2006 that came into effect on June 1, 2007, which contains a separate
article expressly stating that the State Council may promulgate implementation measures for the bankruptcy of Chinese banks based on the Bankruptcy
Law. Under the new Bankruptcy Law, a Chinese bank may go into bankruptcy. In the event of bankruptcy of one of the banks which holds the Company’s
deposits, it is unlikely to claim its deposits back in full since it is unlikely to be classified as a secured creditor based on mainland China laws. The
Company continues to monitor the financial strength of these financial institutions.
Accounts receivable are typically unsecured and derived from revenue earned from customers, which are exposed to credit risk. The risk is mitigated by the
Company’s assessment of its customers’ creditworthiness and its ongoing monitoring process of outstanding balances. The Company maintains reserves for
allowance of doubtful accounts and these allowances have generally been within expectations. There was nil and one customer that individually
represented greater than 10% of the total accounts receivable as of December 31, 2022 and 2023.
F-26
Business, customer, political, social and economic risks
The Company participates in a dynamic high technology industry and believes that changes in any of the following areas could have a material adverse
effect on the Company’s future financial position, results of operations or cash flows; changes in the overall demand for services and products; changes in
business offerings; epidemic outbreak that may cause disruption to business operation of the Company, its customers and suppliers; competitive pressures
due to new entrants; acceptance of the Internet as an effective marketing platform by China’s automotive industry; changes in certain strategic relationships
or customer relationships; growth in China’s automotive industry, regulatory considerations; and risks associated with the Company’s ability to attract and
retain employees necessary to support its growth.
There was no customer that individually represented greater than 10% of the total net revenues for the years ended December 31, 2021, 2022 and 2023,
respectively.
Currency convertibility risk
The Company transacts majority of its business in RMB, which is not freely convertible into foreign currencies. According to the relevant regulations in
mainland China, all foreign exchange transactions are required to take place either through the People’s Bank of China (“PBOC”) or other banks authorized
to buy and sell foreign currencies at the exchange rates quoted by the PBOC. Approval of foreign currency payments by the PBOC or other institutions
requires submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts.
Most of the cash and cash equivalents and short-term investments held by mainland China subsidiaries and the VIEs are denominated in RMB, while a
portion of cash and cash equivalents and short-term investments held by mainland China subsidiaries and the VIEs are denominated in US$. Cash
distributed outside of mainland China by onshore subsidiaries and the VIEs is subject to withholding tax upon dividend payable.
Foreign Currency exchange rate risk
The Company’s exposure to foreign currency exchange rate risk primarily relates to cash and cash equivalents, short-term investments, and dividend
payable denominated in the U.S. dollars. There was appreciation of 2.4%, depreciation of 7.6%, and depreciation of 2.9% of the RMB against the U.S.
dollars for the years ended December 31, 2021, 2022 and 2023, respectively. Any significant appreciation or depreciation of the RMB may materially and
adversely affect the Company’s earnings and financial position, and the value of, and any dividends payable on, the Company’s ADSs in U.S. dollars. For
example, to the extent that the Company need to convert U.S. dollars it received from its initial public offering into RMB to pay its operating expenses,
appreciation of the RMB against the U.S. dollar would have an adverse effect on the RMB amount it would receive from the conversion. Conversely, a
significant depreciation of the RMB against the U.S. dollar may significantly reduce the U.S. dollar equivalent of the Company’s earnings, which in turn
could adversely affect the price of ADSs.
F-27
3.
FAIR VALUE MEASUREMENT
Assets measured at fair value on a recurring basis
Fair Value Measurement at
December 31, 2023 Using
Quoted Prices
in Active
Market
for Identical
Significant
Other
Observable
Assets (Level 1)
Inputs (Level 2)
RMB
RMB
Unobservable
inputs
(Level 3)
RMB
(in thousands)
Fair Value at
December 31, 2023
RMB
US$
—
100,000
—
100,000
14,085
—
—
16,005,923
2,540,702
5,729
5,729
—
18,646,625
—
—
—
—
16,005,923
2,540,702
5,729
18,652,354
2,254,387
357,850
807
2,627,129
Fair Value Measurement at
December 31, 2022 Using
Significant
Other
Observable
Inputs (Level 2)
RMB
Quoted Prices
in Active Market
for Identical
Assets (Level 1)
RMB
Unobservable
inputs
(Level 3)
RMB
Fair Value at
December 31,
2022
RMB
(in thousands)
—
—
—
796,460
14,267,056
5,003,746
8,790
8,790
—
20,067,262
—
—
—
—
—
796,460
14,267,056
5,003,746
8,790
20,076,052
Cash equivalents
Time deposits
Short-term investments
Time deposits
Adjustable-rate financial products
Equity investments with readily
determinable fair value
Cash equivalents
Time deposits
Short-term investments
Time deposits
Adjustable-rate financial products
Equity investments with readily
determinable fair value
Other financial instruments
The followings are other financial instruments not measured at fair value in the consolidated balance sheets, but for which the fair value is estimated for
disclosure purposes.
Financial assets, including accounts receivable, amounts due from related parties, prepaid expenses and other current assets excluding prepayments and
staff advances, and other non-current assets excluding operating lease right-of-use assets, are not measured at fair value in the consolidated balance sheets,
and the carrying values excluding other non-current assets approximated fair value due to their short-term maturity. Financial liabilities, including accrued
expense and other payables, and amounts due to related parties, are also not measured at fair value in the consolidated balance sheets, and the carrying
values approximated fair value due to their short-term maturity.
Assets and liabilities measured at fair value on a non-recurring basis
The Company measures certain assets, including long-term investments, goodwill and intangible assets, at fair value on a non-recurring basis when they are
deemed to be impaired (Level 3). The fair values of these assets are determined based on valuation techniques using the best information available, and
may include management judgments, future performance projections, etc. An impairment charge to
F-28
these investments is recorded when the cost of the investment exceeds its fair value and this condition is determined to be other-than-temporary.
4. ACCOUNTS RECEIVABLE, NET
Accounts receivable and allowance for credit losses consist of the following:
Accounts receivable (Note)
Allowance for credit losses
2022
RMB
As of December 31,
2023
US$
RMB
(in thousands)
2,113,454
(185,755 )
1,927,699
1,633,511
(161,022 )
1,472,489
230,075
(22,679 )
207,396
Note: It contains notes receivables of RMB130.83 million, RMB263.84 million (US$37.16million) for the years ended December 31, 2022 and 2023,
respectively.
The movements in the allowance for credit losses were as follows:
Year ended December 31,
2021
RMB
2022
RMB
2023
RMB
US$
128,199
53,294
—
(3,930 )
177,563
(in thousands)
177,563
20,602
(12,303 )
(107 )
185,755
185,755
20,557
(42,660 )
(2,630 )
161,022
26,163
2,895
(6,009 )
(370 )
22,679
2022
RMB
As of December 31,
2023
US$
RMB
(in thousands)
275,979
23,067
20,634
17,927
2,431
17,484
357,522
281,662
23,633
13,843
29,430
5,827
6,164
360,559
39,671
3,329
1,950
4,145
821
868
50,784
Beginning balance
Additions charged to current expected credit loss
Reversal
Write off
Ending balance
5.
PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consist of the following:
Tax prepayments
Prepaid expenses
Rental and other deposits
Receivables from third-party payment platform
Interest receivable
Other receivables
6.
TAXATION
Enterprise income tax (“EIT”)
Cayman Islands
Autohome Inc. and certain of its subsidiaries are incorporated in the Cayman Islands and conduct substantially all of its business through its mainland
China subsidiaries, the VIEs and VIEs’ subsidiaries. Under the current laws of the Cayman Islands, Autohome Inc. and its
F-29
subsidiaries are not subject to tax on income or capital gains. In addition, upon payments of dividends by these entities to their shareholders, no Cayman
Islands withholding tax will be imposed.
British Virgin Islands
Cheerbright and Auto Pai Ltd. were incorporated in the British Virgin Islands and conducts substantially all the business through its mainland China
subsidiaries and VIEs. Under the current laws of the British Virgin Islands, they are not subject to tax on income or capital gains. In addition, upon
payments of dividends by these entities to their shareholders, no British Virgin Islands withholding tax will be imposed.
Hong Kong
Autohome (Hong Kong) Limited, Autohome Media, Autohome Link Hong Kong Limited, and TTP Car (HK) Limited were incorporated in Hong Kong.
Subsidiaries in Hong Kong are subject to a two-tiered profits tax regime. The profits tax rate for the first HK$2 million of profits of corporations is 8.25%,
while profits above that amount continue are subject to a rate of 16.5%. Under the Hong Kong tax law, the Company’s subsidiaries in Hong Kong are
exempted from income tax on their foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends.
Mainland China
Autohome WFOE, Chezhiying WFOE, Beijing Autohome Technologies Co., Ltd. (“Beijing Autohome Technologies”), Beijing Prbrownies, Hainan
Chezhiyitong Information Technology Co., Ltd. (“Hainan Chezhiyitong”) and Tianjin Autohome are recognized as “High-New Technology Enterprise”
(“HNTE”) and are eligible for a 15% preferential tax rate until 2024, 2023, 2023, 2023, 2025 and 2025, respectively, upon the completion of their filings
with the relevant tax authorities. The qualification as an HNTE is subject to annual evaluation and a three-year review by the relevant authorities in China.
Chezhiying WFOE, Hainan Chezhiyitong and Tianjin Autohome are recognized as software enterprise (“SE”) and could be exempt from income tax for the
tax year of 2019 and 2020 and enjoyed a 50% reduction in the statutory income tax rate of 25% for the tax year from 2021 to 2023. Chezhiying WFOE and
Hainan Chezhiyitong enjoyed a 50% reduction in the statutory income tax rate of 25% for the tax years of 2021 and 2022.They can continue to enjoy the
12.5% preferential tax rate for the tax year of 2023 provided that they maintain their status as a SE during each relevant tax year. Beijing Prbrownies, and
Tianjin Autohome were accredited as key software enterprise (“KSE”) under the relevant mainland China laws and regulations as well in the tax filing of
2021 and 2022, which tax rate will continue to apply for so long as it maintains its KSE status during each relevant tax year. Beijing Prbrownies enjoyed a
more preferential enterprise tax rate of 10% for the tax years of 2021 and 2022. Tianjin Autohome has enjoyed a tax exemption for the tax years of 2021
and 2022.
Except for the above-mentioned entities, the Company’s remaining mainland China subsidiaries and all the VIEs were subject to EIT at a rate of 25% for
2021, 2022 and 2023.
The management subsequently assessed and concluded that uncertain preferential tax rates for certain subsidiaries were able to be realized in the year of
2023 and a reversal of RMB156.45 million (US$22.03million) was recorded in the year of 2023, composed of current income tax expense of RMB180.15
million (US$25.37million) and deferred income tax benefit of RMB23.70 million (US$3.34 million). A reversal of RMB348.59 million and RMB207.67
million was also recorded in the year of 2021 and 2022, which composed of current income tax expense of RMB317.94 million and deferred income tax
expense of RMB30.65 million, and current income tax expense of RMB 196.54 million and deferred income tax expense of RMB11.13 million,
respectively.
The basic earnings per share effects related to the preferential tax rate were RMB1.11, RMB0.54 and RMB0.56 (US$0.08) after considering the effects of
the Share Subdivision as detailed in Note 2(a) for the years ended December 31, 2021, 2022 and 2023, respectively.
The EIT Law also provides that enterprises established under the laws of foreign countries or regions and whose “place of effective management” is
located within the mainland China are considered mainland China tax resident enterprises and subject to EIT at the rate of 25% on worldwide income. The
definition of “place of effective management” refers to an establishment that exercises, in substance, overall management and control over the production
and business, personnel, accounting, properties, and other aspects of an enterprise. If the Company is deemed as a mainland China tax resident, it would be
subject to mainland China tax under the EIT Law. The Company has analyzed the applicability of this law and believes that the chance of being recognized
as a tax resident enterprise is remote for mainland China tax purposes.
F-30
The Company's subsidiaries incorporated in other jurisdictions were subject to income tax charges calculated according to the tax laws enacted or
substantially enacted in the countries where they operate and generate income.
The Company had minimal operations in jurisdictions other than the mainland China. Income/(loss) before income tax expense consists of:
Mainland China
Non-Mainland China
The income tax expense/(benefit) is comprised of:
Current
Deferred
Year ended December 31,
2021
RMB
2022
RMB
2023
RMB
US$
(in thousands)
2,328,917
(151,759 )
2,177,158
1,724,835
38,011
1,762,846
1,813,055
184,509
1,997,564
255,364
25,987
281,351
Year ended December 31,
2021
RMB
2022
RMB
2023
RMB
US$
185,194
(151,188 )
34,006
(in thousands)
86,560
(148,340 )
(61,780 )
122,118
(49,963 )
72,155
17,200
(7,037 )
10,163
The reconciliation of income tax expense/(benefit) for the years ended December 31, 2021, 2022 and 2023 is as follows:
Income before income tax expense
Income tax expense computed at Mainland China statutory tax rates (25%)
Non-deductible expenses
Research and development expenses super-deduction
Change in valuation allowances
Outside basis difference
Effect of international tax rate difference
Effect of preferential tax rate
Effect of withholding tax on dividend
Other adjustments (Note)
Income tax expense/(benefit)
F-31
Year ended December 31,
2021
RMB
2022
RMB
2023
RMB
US$
(in thousands)
2,177,158
544,290
28,725
(185,801 )
50,473
(1,111 )
37,940
(552,567 )
164,946
(52,889 )
34,006
1,762,846
440,713
60,268
(234,179 )
21,338
(5,652 )
(16,835 )
(267,490 )
(1,667 )
(58,276 )
(61,780 )
1,997,564
499,391
44,435
(220,773 )
(3,674 )
5,327
(45,900 )
(276,110 )
99,122
(29,663 )
72,155
281,351
70,338
6,259
(31,095 )
(518 )
750
(6,465 )
(38,889 )
13,961
(4,178 )
10,163
Note: This amount mainly represents tax adjustments relating to share-based compensation exercised in 2020,2021 and 2022, which can be recognized in
calculating income tax expense when realized at the completion of the Company’s tax returns, in 2021,2022 and 2023, respectively.
Deferred tax
The significant components of deferred taxes are as follows:
Deferred tax assets
Allowance for doubtful accounts
Accrued staff cost and expenses
Deferred revenue
Tax losses
VAT refund
Less: Valuation allowances
Total deferred tax assets
Deferred tax liabilities
Identifiable intangible assets arising from acquisition
Intangible assets and internally-developed software
Outside basis difference and others
Withholding income tax
Total deferred tax liabilities
2022
RMB
As of December 31,
RMB
(in thousands)
2023
US$
37,092
134,799
11,570
497,871
4,840
(420,566 )
265,606
41,350
21,181
428,474
26,921
517,926
31,586
108,733
12,525
446,091
8,308
(311,645 )
295,598
30,239
12,721
433,801
21,194
497,955
4,449
15,315
1,764
62,831
1,170
(43,895 )
41,634
4,259
1,792
61,100
2,984
70,135
In assessing the realizability of deferred tax assets, the Company has considered whether it is more-likely-than-not that some portion or all of the deferred
tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods
in which those temporary differences become deductible. The Company records a valuation allowance to reduce deferred tax assets to a net amount that
management believes is more-likely-than-not of being realizable based on the weight of all available evidence. The Company recorded valuation
allowances against the deferred tax assets of mainland China subsidiaries, the VIEs and VIEs’ subsidiaries as of December 31, 2022 and 2023, respectively,
due to the cumulative tax loss positions and insufficient forecasted future taxable income.
As of December 31, 2023, the Company had net operating losses of approximately RMB2,296.24 million (US$323.42 million), which can be carried
forward to offset taxable income. The accumulated tax losses of subsidiaries in Mainland China were RMB2,264.37 million (US$318.93 million) as of
December 31, 2023, which will expire, if unused, in the years ending December 31, 2024 through 2033.
Valuation allowance is provided against deferred tax assets when the Company determines that it is more-likely-than-not that the deferred tax assets will
not be utilized in the future. Movement of valuation allowance is as follow:
Valuation allowance
Balance at beginning of the year
Additions
Reversal and write off (Note)
Balance at ending of the year
2021
RMB
Year ended December 31,
2022
RMB
RMB
(in thousands)
2023
US$
(402,197 )
(93,165 )
42,692
(452,670 )
(452,670 )
(48,944 )
81,048
(420,566 )
(420,566 )
(26,623 )
135,544
(311,645 )
(59,235 )
(3,750 )
19,090
(43,895 )
Note: It mainly represents valuation allowances written off due to the expiration of unused tax losses.
F-32
Deferred tax liabilities arising from undistributed earnings
The EIT Law also imposes a withholding income tax of 10% on dividends distributed by a Foreign Invested Enterprises (“FIEs”) to its immediate holding
company outside of China. A lower withholding income tax rate of 5% is applied if the FIE’s immediate holding company is registered in Hong Kong or
other jurisdictions that have a tax treaty arrangement with China. As of December 31, 2023, the Company’s Hong Kong subsidiary, Autohome Media was
identified as qualified subsidiary, and dividends are subject to a withholding tax rate of 5%.
On November 4, 2019, the Company's Board of Directors approved an annual cash dividend policy. Under the policy, starting from 2020, the Company will
declare and distribute a recurring cash dividend at an amount equivalent to approximately 20% of the Company's net income in the previous fiscal year. On
February 16, 2023, the Company’s Board of Directors approved an amendment to change the annual cash dividend to a fixed amount of at least
RMB500.00 million between 2022 and 2026. On December 12, 2023, the Company's Board of Directors also approved an amendment to its dividend
policy, pursuant to which the total yearly cash dividend is expected to be no less than RMB1.5 billion from 2024 to 2026, with the exact amount to be
determined by the board based on the then financial performance, cash position, and applicable foreign exchange laws and regulations in China, among
other factors. In 2021, 2022 and 2023, the Company accrued RMB53.84 million, RMB26.92 million and RMB21.19 million (US$2.99million) of deferred
income tax expenses associated with the expected cash dividend payment, respectively.
As of December 31, 2022 and 2023, the total amount of undistributed earnings from the Company’s mainland China subsidiaries, the VIEs and VIEs’
subsidiaries is considered to be permanently reinvested was RMB15,927.82 million and RMB15,770.89 million (US$2,221.28million), respectively. As of
December 31, 2022 and 2023, determination of the amount of unrecognized deferred tax liability related to the earnings that are indefinitely reinvested is
not practical.
7.
PROPERTY AND EQUIPMENT, NET
Property and equipment consist of the following:
At cost:
Electronic equipment
Software
Leasehold improvements
Motor vehicles
Office equipment
Less: Accumulated depreciation
2022
RMB
As of December 31,
2023
US$
RMB
(in thousands)
678,753
475,935
86,826
8,318
2,372
1,252,204
(996,906 )
255,298
721,976
516,039
87,817
8,702
2,401
1,336,935
(1,136,075 )
200,860
101,688
72,683
12,369
1,226
338
188,304
(160,013 )
28,291
Depreciation expense was RMB225.31 million, RMB226.09 million and RMB167.78 million (US$23.63million) for the years ended December 31, 2021,
2022 and 2023, respectively.
F-33
8.
INTANGIBLE ASSETS, NET
The following tables present the Company’s intangible assets with definite lives as of the respective balance sheet dates:
Technologies
Trademarks
Database
Customer relationship
Insurance brokerage license
Websites
Licensing agreements
Domain names
Technologies
Trademarks
Database
Customer relationship
Insurance brokerage license
Websites
Domain names
Licensing agreements
December 31, 2023
Gross Carrying
Value
RMB
Accumulated
Amortization
Net Carrying
Value
RMB
RMB
US$
202,100
175,308
73,500
46,900
28,133
27,000
3,086
3,045
559,072
(in thousands)
(121,260 )
(100,448 )
(44,100 )
(30,380 )
(28,133 )
(27,000 )
(3,065 )
(2,538 )
(356,924 )
80,840
74,860
29,400
16,520
—
—
21
507
202,148
11,386
10,544
4,141
2,327
—
—
3
71
28,472
Gross Carrying
Value
RMB
December 31, 2022
Accumulated
Amortization
RMB
(in thousands)
Net Carrying
Value
RMB
202,100
175,308
73,500
46,900
28,133
27,000
3,101
3,024
559,066
(80,840 )
(87,480 )
(29,400 )
(22,120 )
(28,133 )
(27,000 )
(2,616 )
(2,992 )
(280,581 )
121,260
87,828
44,100
24,780
—
—
485
32
278,485
The Company obtained insurance brokerage license in 2017 through acquisition of Shanghai Tianhe Insurance Brokerage Co., Ltd., which was accounted
for as asset acquisition. The Company acquired TTP on December 31, 2020 and identified the intangible assets of technologies, trademarks, customer
relationship and database (Note 19). The intangible assets are amortized using the straight-line method, which is the Company’s best estimate of how these
assets will be economically consumed over their respective estimated useful lives ranging from approximately 2 to 15 years. Amortization expense was
RMB83.71 million, RMB79.10 million and RMB76.69million (US$10.80million) for the years ended December 31, 2021, 2022 and 2023, respectively.
The annual estimated amortization expenses for the acquired intangible assets for each of the next five years are as follows:
Amortization expenses
74,362
74,121
10,739
10,733
10,729
2024
RMB
2025
RMB
2026
RMB
(in thousands)
2027
RMB
2028
RMB
9.
LONG-TERM INVESTMENTS
As of December 31, 2022 and 2023, the Company holds several equity investments through its subsidiaries or VIEs, all of which were accounted for under
the equity method since the Company can exercise significant influence but does not own a majority equity interest in or control them.
F-34
Guangzhou Ping An Consumer Equity Investment Partnership (L.P.)
In January, 2022, the Company entered into a limited partner interest subscription agreement, a limited partnership agreement and certain other auxiliary
documents with Ping An Capital Co., Ltd. (the “Fund Manager”), pursuant to which the Company subscribed for RMB400 million worth of limited partner
interests in an equity investment fund managed by the Fund Manager.
Visionstar Information Technology (Shanghai) Co., Ltd. (“Shanghai Visionstar”)
In July 2017, the Company acquired a 10% interest in Shanghai Visionstar, which primarily engages in augmented reality technology and related operations
in mainland China, with a total cash consideration of RMB30 million. The investment was accounted for using equity method as the Company determined
that it can exercise significant influence over Shanghai Visionstar.
Hunan Mango Autohome Automobile Sales Co., Ltd. (“Mango JV”)
In May 2015, the Company entered into a shareholder agreement with HappiGo Home Shopping Co. (“HappiGo”) to establish a strategic joint venture,
Mango JV, with total capital contribution of RMB100 million, of which the Company subscribed for RMB49 million or 49% of the ordinary shares.
Other investments
The Company also holds several other investments in equity investees.
The carrying amount of all of the equity method investments was RMB419.2 million and RMB448.3 million (US$63.1 million) as of December 31, 2022
and 2023, respectively. The Company excluded the summarized information for these equity method investees as they were insignificant either individually
or on an aggregated basis for all the years presented.
The impairment associated with the equity method investments was immaterial during any of the years presented.
10. OTHER NON-CURRENT ASSETS
Other non-current assets consist of the following:
Operating lease right-of-use assets
Others
As of December 31,
RMB
(in thousands)
2023
US$
199,305
1,623
200,928
28,072
228
28,300
2022
RMB
115,118
934
116,052
F-35
11.
ACCRUED EXPENSES AND OTHER PAYABLES
The components of accrued expenses and other payables are as follows:
Accrued expenses
Accrued rebates
Payroll and welfare payable
Operating lease liabilities - current portion
VAT and surcharges payable
Users’ and third parties’ deposits
Deposit from customers
Professional service fees
Payable for purchase of fixed assets
Payable for exercise of share-based awards
Others
12.
RELATED PARTY TRANSACTIONS
2022
RMB
As of December 31,
2023
US$
RMB
(in thousands)
1,250,946
580,989
508,598
59,798
47,908
35,553
13,129
8,644
5,359
4,402
21,955
2,537,281
1,591,299
461,722
577,671
106,953
54,800
43,487
10,606
26,681
39,795
2,714
16,499
2,932,227
224,130
65,032
81,363
15,064
7,718
6,125
1,494
3,758
5,605
382
2,326
412,997
Yun Chen became the Company’s controlling shareholder in June 2016 and Yun Chen is a subsidiary of Ping An. Therefore Ping An Group became the
Company’s related party since then.
During the years ended December 31, 2021, 2022 and 2023, related party transactions were as follows:
Services provided to Ping An Group (a)
Services provided to other related parties
Net revenues from related parties
Services provided by and assets purchased from
Ping An Group (b)
Services provided by and assets purchased from
other related parties
Services provided by related parties
2021
RMB
Year ended December 31,
2022
RMB
RMB
(in thousands)
2023
US$
417,051
—
417,051
226,539
—
226,539
134,378
—
134,378
176,880
191,751
191,413
714
177,594
2,378
194,129
94
191,507
18,927
—
18,927
26,960
13
26,973
Interest income from Ping An Group
136,613
143,848
202,304
28,494
F-36
As of December 31, 2022 and 2023, balances with related parties were as follows:
Amounts due from related parties, current
Ping An Group (c)
Amounts due from related parties, non-current
Ping An Group (c)
Amounts included in “Cash and cash equivalents” (d)
Amounts included in “Short-term investments” (d)
Amounts included in “Restricted cash” (d)
Amounts due to related parties
Ping An Group (e)
Other related parties
2022
RMB
As of December 31,
2023
US$
RMB
(in thousands)
49,644
16,439
2,315
9,419
16,048
2,260
1,093,434
4,088,598
5,000
1,665,092
3,933,713
130,770
234,523
554,052
18,419
26,042
1,054
27,096
24,558
14
24,572
3,459
2
3,461
(a)
(b)
(c)
(d)
(e)
The amount represents (i) the commission fee for transaction facilitation service on financial product including loan and insurance products, (ii) advertising
services and (iii) technical services provided to Ping An Group.
The amount represents rental and property management services, technical services, other miscellaneous services and assets provided by Ping An Group.
Receivable from Ping An Group primarily consists of deposit in relation to the operating lease and other agreements, service fee receivable, and interest
receivable from cash and cash equivalents.
The Company has cash or time deposits in commercial banks associated with Ping An Group and purchased certain short-term cash management products
managed by Ping An Group as a part of the Company’s cash management plan.
The outstanding payable to Ping An Group primarily consists of payable for provision of services related to business operation, IDC service fee and other
miscellaneous services.
13. COMMITMENTS AND CONTINGENCIES
Legal proceedings
From time to time, the Company is subject to legal proceedings and claims in the ordinary course of business. The Company does not believe that any
currently pending legal proceeding to which the Company is a party will have a material effect on its business, balance sheets, or results of operations or
cash flows.
14.
COST OF REVENUES
Operational costs
Content costs
Bandwidth and IDC costs
Tax surcharges
Depreciation & amortization expenses and others
Year ended December 31,
2021
RMB
2022
RMB
2023
RMB
US$
(in thousands)
520,805
204,614
105,343
39,240
177,890
1,047,892
548,309
359,404
113,150
97,379
116,931
1,235,173
696,197
396,502
110,508
95,147
113,527
1,411,881
98,057
55,846
15,565
13,401
15,990
198,859
F-37
15.
ORDINARY SHARES
As of December 31, 2023, Autohome Inc. had 483,398,100 issued and outstanding ordinary shares after considering the effects of the Share Subdivision as
detailed in Note 2(a).
On November 18, 2021, the Company announced a share repurchase program under which the Company may repurchase up to US$200 million of its ADSs
over the next twelve months through open market transactions at prevailing market prices, in privately negotiated transactions, in block trades and/or
through other legally permissible means, depending on the market conditions and in accordance with applicable rules and regulations. On November 3,
2022, the Board of Directors authorized an extension of the term of the share repurchase program for another twelve months to November 17, 2023.
The Company repurchased 6,726,883 ADSs (equal to 26,907,532 ordinary shares) from the open market with an aggregate purchase price of RMB1,384.14
million (US$200.00 million) till December 31, 2023. The repurchased shares have not been cancelled by the end of 2023 and are reflected as treasury
stock. 2,000,000 ADSs of the treasury stock have been reserved for future issuance upon the exercise of share options and vesting of restricted shares
during the year ended December 31, 2023, of which 229,508 ADSs had been reissued to employees and directors upon the exercise of share options and
vesting of restricted shares.
16.
RESTRICTED NET ASSETS
The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant mainland
China statutory laws and regulations permit payments of dividends by the Company’s mainland China subsidiaries only out of its retained earnings, if any,
as determined in accordance with mainland China accounting standards and regulations. The results of operations reflected in the consolidated financial
statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company’s mainland China
subsidiaries.
Under mainland China law, the Company’s mainland China subsidiaries are required to provide for certain statutory reserves, namely a general reserve, an
enterprise expansion fund and a staff welfare and bonus fund. The subsidiary is required to allocate at least 10% of their after-tax profits on an individual
company basis as determined under mainland China accounting standards to the general reserve and has the right to discontinue allocations to the general
reserve if such reserve has reached 50% of registered capital on an individual company basis.
Appropriations to the enterprise expansion fund and staff welfare and bonus fund are at the discretion of the Board of Directors of the subsidiary. The
Company’s VIEs in mainland China are also subject to similar statutory reserve requirements. These reserves can only be used for specific purposes and are
not transferable to the Company in the form of loans, advances or cash dividends. As of December 31, 2021, 2022 and 2023, the Company’s mainland
China subsidiaries, the VIEs and VIEs’ subsidiaries had appropriated RMB91.34 million, RMB93.59 million and RMB132.53 million (US$18.67 million),
respectively, of retained earnings for its statutory reserves.
As a result of these mainland China laws and regulations subject to the limit discussed above that require annual appropriations of 10% of after-tax income
to be set aside, prior to payment of dividends as general reserve fund, the Company’s mainland China subsidiaries, the VIEs and VIEs’ subsidiaries are
restricted in their ability to transfer a portion of their net assets to the Company. As of December 31, 2022 and 2023, the amounts of net assets restricted
including the paid-up capital, additional paid-in capital and the statutory reserve funds of the Company’s mainland China subsidiaries and the net assets of
the VIEs in which the Company has no legal ownership, were RMB5,162.55 million and RMB5,073.21 million (US$714.55million), respectively.
Furthermore, cash transfers from the Company’s mainland China subsidiaries to their parent companies outside of China are subject to mainland China
government control of currency conversion. Shortages in availability of foreign currency may temporarily restrict the ability of the mainland China
subsidiaries, the VIEs and VIEs’ subsidiaries to remit sufficient foreign currency to pay dividends or other payments to the Company, or otherwise satisfy
their foreign currency denominated obligations.
F-38
17. EARNINGS PER SHARE/ADS
Basic and diluted earnings per share for each of the years presented are calculated as follows:
Basic earnings per share:
Numerator:
Net income attributable to ordinary shareholders
Denominator:
Weighted average ordinary shares outstanding
Basic earnings per share
Diluted earnings per share:
Numerator:
Net income attributable to ordinary shareholders
Denominator:
Weighted average ordinary shares outstanding
Dilutive effect of share-based awards
Weighted average number of shares outstanding-diluted
Diluted earnings per share
Earnings per ADS
Net income per ADS – basic (RMB)
Net income per ADS – diluted (RMB)
2021
RMB
Year ended December 31,
2022
RMB
RMB
(in thousands)
2023
US$
2,148,566
1,807,176
1,880,087
264,805
499,861,764
4.30
499,160,564
3.62
489,952,172
3.84
489,952,172
0.54
2,148,566
1,807,176
1,880,087
264,805
499,861,764
619,776
500,481,540
4.29
499,160,564
506,228
499,666,792
3.62
489,952,172
1,300,288
491,252,460
3.83
489,952,172
1,300,288
491,252,460
0.54
17.19
17.17
14.48
14.47
15.35
15.31
2.16
2.16
The effects of 455,824, 1,484,748 and 1,181,760 stock options were excluded from the calculation of diluted earnings per share as their effect would have
been anti-dilutive during the years ended December 31, 2021, 2022 and 2023, respectively. The effects of 1,407,232, 4,161,652 and 2,051,810 restricted
shares were excluded from the calculation of diluted earnings per share as their effect would have been anti-dilutive during the years ended December 31,
2021, 2022 and 2023, respectively.
18.
SHARE-BASED COMPENSATION
In order to provide additional incentives to employees and to promote the success of the Company’s business, the Company adopted a share incentive plan
in 2011 (the “2011 Plan”), a share incentive plan in 2013 (the “2013 Plan”), Amended and Restated 2016 Share Incentive Plan (the “2016 Plan”) and 2016
Share Incentive Plan II (the “2016 Plan II”) in 2016, collectively the “Plans”. The Company may grant share-based awards to its employees, directors and
consultants to purchase an aggregate of no more than 31,372,400, 13,400,000, 19,560,000 and 12,000,000 ordinary shares (previously 7,843,100,
3,350,000, 4,890,000 and 3,000,000 ordinary shares, respectively before the Share Subdivision as detailed in Note 2(a) of the Company under the 2011
Plan, 2013 Plan, 2016 Plan and 2016 Plan II, respectively.) 2011 Plan, 2013 Plan, 2016 Plan and 2016 Plan II were approved by the Board of Directors in
May 2011, November 2013, March 2017 and December 2016, respectively. The Plans are administered by the Board of Directors or any of its committees
as set forth in the Plans. For share options and restricted shares with service condition or performance condition granted under the Plans, majority are
subject to vesting schedules of approximately four years with 25% of the awards vesting each year and have a contractual term of ten years. As of
December 31, 2023, 2011 Plan and 2013 Plan had expired.
Following the Share Subdivision and the ADS Ratio Change that became effective on February 5, 2021 as detailed in Note 2(a), each ordinary share was
subdivided into four ordinary shares and each ADS represents four ordinary shares. Pro-rata adjustments have been made to the number of ordinary shares
underlying each share option and restricted share granted, so as to give the participants the same proportion of the equity that they would have been entitled
to prior to the Share Subdivision. Prior to February 5, 2021, one ordinary share was issuable upon the exercise of one outstanding share option or the
vesting of one outstanding restricted share, respectively. Subsequent to the Share Subdivision, four ordinary shares are issuable upon the exercise of one
outstanding share option or the vesting of one outstanding restricted share, respectively. The Share Subdivision has no impact on the number of share
options, the number of restricted shares, the weighted average exercise price per share option and the weighted average grant date fair value per restricted
share as stated below.
F-39
Share options
The following table summarizes the Company’s employee share option activity under the share option plans:
Outstanding, January 1, 2023
Granted
Exercised
Forfeited/Cancelled
Outstanding, December 31, 2023
Vested and expected to vest at December 31, 2023
Exercisable as of December 31, 2023
Weighted
average
exercise
price
(USD)
Weighted
average
grant date
fair value
(USD)
Weighted
average
remaining
contractual
term
(USD)
Aggregate
intrinsic
value
(USD in
thousands)
43.96
28.91
26.75
74.43
41.55
41.56
46.39
21.45
16.89
21.32
24.79
19.33
19.54
24.13
8.48
9.15
8.50
7.59
7.58
6.96
587
55
6
258
254
165
Number of
options
564,876
15,416
(1,536 )
(36,257 )
542,499
528,958
243,946
The aggregate intrinsic value in the table above is calculated as the difference between the exercise price of the underlying awards and US$28.06, the
closing stock price of the Company’s ordinary shares on December 31, 2023. The weighted-average grant-date fair value of options granted during the
years ended December 31, 2021, 2022 and 2023 was US$23.00, US$19.82 and US$16.89, respectively. The total grant date fair value of options vested
during the years ended December 31, 2021, 2022 and 2023 was RMB32.23 million, RMB19.60 million and RMB15.09 million (US$2.12million),
respectively. Total intrinsic value of options exercised during the years ended December 31, 2021, 2022 and 2023 was RMB27.95 million, RMB0.47
million and RMB0.04 million (US$0.006 million), respectively.
The aggregate fair value of the outstanding options at the grant dates were determined to be RMB74.46 million (US$10.49 million) and such amount shall
be recognized as compensation expenses using the straight-line method for all employee share options granted with graded vesting. As of December 31,
2023, there was RMB22.42 million (US$3.16million) of total unrecognized share-based compensation expenses, net of estimated forfeitures, related to
unvested share-based awards, which are expected to be recognized over a weighted-average period of 2.00years. Total unrecognized compensation
expenses may be adjusted for future changes in estimated forfeitures.
Restricted shares
Restricted shares activity for the year ended December 31, 2023 was as follows:
Outstanding, January 1, 2023
Granted
Vested
Forfeited/Cancelled
Outstanding, December 31, 2023
Expected to vest, December 31, 2023
Number of
restricted shares
Weighted
average grant
date fair value
(USD)
2,289,260
1,123,342
(702,928 )
(205,984 )
2,503,690
1,917,137
34.22
29.29
34.70
31.74
29.98
30.03
The weighted average grant-date fair value of restricted shares granted during the years ended December 31, 2021, 2022 and 2023 was US$50.79,
US$33.46 and US$29.29, respectively, which was derived from the fair value of the underlying ordinary shares. The total grant date fair value of restricted
shares vested during the years ended December 31, 2021, 2022 and 2023 was RMB165.68 million, RMB172.59 million and RMB171.57 million
(US$24.17 million). The aggregate fair value of the outstanding restricted shares at the grant dates were determined to be RMB532.94 million
(US$75.06million) and such amount shall be recognized as compensation expense using the straight-line method for all restricted shares granted with
graded vesting. As of December 31, 2023, there was RMB312.50 million (US$44.01 million) of total unrecognized share-based compensation expenses,
net of estimated forfeitures, related to unvested restricted shares which are expected to be recognized over a weighted-average period of 2.68 years. Total
unrecognized compensation expenses may be adjusted for future changes in estimated forfeitures.
F-40
The binomial option pricing model was applied in determining the estimated fair value of the options granted to employees. The model requires the input of
highly subjective assumptions including the estimated expected stock price volatility and the exercise multiple for which employees are likely to exercise
share options. For expected volatilities, the Company has referred to the historical price volatilities of the Company. The exercise multiple is estimated as
the ratio of fair value of underlying shares over the exercise price as at the time the option is exercised and is based on a consideration of research study
regarding exercise pattern based on historical statistical data. The risk-free rate for periods within the contractual life of the option is based on the U.S.
Treasury Bills yield curve in effect at the time of grant. The Company’s management is ultimately responsible for the determination of the estimated fair
value of its options. Subsequent to the IPO, fair value of the ordinary shares was the price of the Company’s publicly traded shares.
The Company calculated the estimated fair value of the share-based awards on the respective grant dates using the binomial option pricing model with the
following assumptions:
Fair value of ordinary share
Risk-free interest rates
Expected exercise multiple
Expected volatility
Expected dividend yield
Weighted average fair value per option granted
2021
2022
2023
US$31.06-US$119.82
1.09%-1.62%
2.2-2.8
51%-52%
US$28.76-US$39.35
1.52%-3.91%
2.2-2.8
52%-54%
1.00%
1.00 %
US$10.51-US$60.83
US$3.83-US$21.32
US$29.16-US$35.87
3.50%-4.72%
2.2-2.8
51%-54.19%
1.00 %
US$4.12-US$18.91
Share-based compensation expenses relating to options and restricted shares granted to employees recognized for the years ended December 31, 2021, 2022
and 2023 is as follows:
Cost of revenues
Sales and marketing expenses
General and administrative expenses
Product development expenses
Year ended December 31,
2021
RMB
2022
RMB
2023
RMB
US$
23,142
46,823
48,803
87,292
206,060
(in thousands)
8,608
38,317
53,209
68,756
168,890
7,982
49,305
51,860
85,945
195,092
1,124
6,945
7,304
12,105
27,478
F-41
19.
ACQUISITION
In December 2020, the Company acquired TTP, an online auction platform for used cars in mainland China. The acquisition was accounted for as a
business combination. The financial position and results of operation of TTP and its subsidiaries were included in the Company’s consolidated financial
statements on December 31, 2020.
The Company made estimates and judgments in determining the fair value of the assets acquired and liabilities assumed with the assistance from an
independent valuation firm. The purchase price allocation as the date of the acquisition is as follows:
Intangible assets
- Technologies
- Trademarks
- Customer relationship
- Database
Goodwill
Net liabilities acquired, excluding intangible assets and the related
deferred tax liabilities
Deferred tax liabilities
Noncontrolling interests
Convertible redeemable noncontrolling interests (Note 1)
Amortization
Period
Amount
RMB
(in thousands)
5 years
10 years
5 years
5 years
202,100
106,900
41,300
73,500
2,437,542
(861,918 )
(63,570 )
(147,639 )
(1,056,237 )
731,978
Note 1: TTP had previously issued preferred shares in several series to certain shareholders, which could be redeemed by such shareholders upon
the occurrence of certain events. The outcome of these events is not solely within the control of TTP and, therefore, these preferred shares have been
accounted for as convertible redeemable noncontrolling interests.
The excess of purchase price over net tangible assets and identifiable intangible assets acquired was recorded as goodwill. Goodwill primarily represents
the expected synergies from combining the TTP’s resources and experiences in the used car auction industry with the Company’s current business. The
goodwill is not expected to be deductible for tax purposes.
20. MEZZANINE EQUITY
Balance as of January 1
Accretion of mezzanine equity
Balance as of December 31
2022
RMB
As of December 31,
2023
RMB
(in thousands)
2023
US$
1,468,029
137,610
1,605,639
1,605,639
153,294
1,758,933
226,150
21,591
247,741
The Company held 51.00% of TTP’s equity interest on as-converted basis. As of December 31, 2022 and 2023, TTP had issued 142,196,089 and
142,196,089 preferred shares, respectively, to certain shareholders (including 80,340,268 shares held by the Company and one of its subsidiaries and
eliminated in the consolidated financial statements), which could be converted into ordinary shares or redeemed by such shareholders. In January 2024,
TTP received redemption notices from certain Series C and D preferred shareholders with redemption dates of February 2024. As Series D preferred
shareholders are the Company and one of its subsidiaries, the related amount is eliminated in the consolidated financial statements. The redemptions are
currently outstanding with amount of US$20.59 million on a consolidated basis. And according to the share purchase agreements, prior to such
redemption and payment, the preferred shareholders shall continue to have all the preferred shareholders’ rights (including conversion rights) as they had
before. Accordingly,
F-42
the Company continues to account for these preferred shares in the legal form, as convertible redeemable noncontrolling interests and continues to present
these preferred shares in mezzanine equity after the redemption notices.
21.
SUBSEQUENT EVENTS
Dividends
On December 12, 2023, the Board of Directors approved a dividend of US$1.15 per ADS (or US$0.2875 per ordinary share), which was paid in early
April, 2024.
F-43
Exhibit 4.34
Exclusive Technology Consulting and
Service Agreement
between
Beijing Cheerbright Technologies Co., Ltd.
and
Beijing Autohome Information Technology Co., Ltd.
January, 2024
CONTENTS
APPOINTMENT AND PROVISION OF SERVICES
INTELLECTUAL PROPERTY RIGHTS
SERVICE FEE AND PAYMENT
REPRESENTATIONS AND WARRANTIES
CONFIDENTIALITY
BREACH
FORCE MAJEURE
EFFECTIVE DATE AND TERM
TERMINATION
MISCELLANEOUS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
EXHIBIT:
I.
SCOPE OF SERVICES
II. CALCULATION AND PAYMENT OF THE SERVICE FEE
Exclusive Technology Consulting and Service Agreement - 2 -
3
4
4
4
4
5
5
6
6
7
THIS EXCLUSIVE TECHNOLOGY CONSULTING AND SERVICE AGREEMENT (the “Agreement”) is entered into on
January 28, 2024(the “Execution Date”) in Beijing, the People's Republic of China (“PRC”).
between
(1) Beijing Autohome Information Technology Co., Ltd., with its registered address at 1011-1015, F/10, Tower B, No. 3,
Danling Street, Haidian District, Beijing 100080, China (Party A);
and
(2) Beijing Cheerbright Technologies Co., Ltd., with its registered address at Room 1010, F/10, Tower B, No. 3, Danling
Street, Haidian District, Beijing 100080, China (Party B).
Recitals
A. Party A is a domestic company duly incorporated and validly existing under the laws of the PRC, and is an operating vehicle
of the website (www.autohome.com.cn). Party A wishes to develop its technology, improve its management and increase
and enhance its market position.
B. Party B is a wholly foreign owned enterprise duly incorporated and validly existing under the laws of the PRC, which holds
the resources and qualifications for technical and consulting services. Party B is engaged in research and development
relating to networks and has expertise in providing technical training and consulting services.
NOW, THEREFORE, the parties agree as follows:
1. APPOINTMENT AND PROVISION OF SERVICES
1.1 Scope of Services. Party A hereby appoints Party B to provide Party A with the Services detailed in the Exhibit I
(the “Services”).
1.2 Provision of Services. The Parties agree that Party B shall provide the Services to Party A on an exclusive basis,
for the duration of the term of this Agreement and at standards commonly accepted in the market.
1.3 Financial Support.
To ensure that the cash flow requirements of Party A’s ordinary operations are met and/or
to set off any loss accrued during such operations, Party B is obligated, only to the extent permissible under
PRC law, to provide financing support for Party A, whether or not Party A actually incurs any such operational
loss. Party B’s financing support for Party A may take the form of bank entrusted loans or borrowings.
Contracts for any such entrusted loans or
Exclusive Technology Consulting and Service Agreement - 3 -
borrowings shall be executed separately. Party B will not request repayment if Party A is unable to do so.
2.
INTELLECTUAL PROPERTY RIGHTS
The Parties agree that the intellectual property rights created by Party B in the course of performing this Agreement
(including without limitation any copyrights, trademarks or logos registered or not, patents and proprietary technology),
shall belong to Party B.
3. SERVICE FEE AND PAYMENT
3.1 Service Fee. The Parties agree that the Service Fee under this Agreement shall be determined according to the
Exhibit II.
3.2 Payment Method. Party B shall, within the first 5 days of each month, provide Party A with written statement of
the service fee spent providing the Services during the previous month. Party A shall confirm to Party B in
writing within 3 business days of receipt that the service fee is correct. If Party A fails to provide such
confirmation on time, Party A shall be deemed to have confirmed Party B’s statement. Party A shall pay the
service fee to Party B's designated account within 10 days after confirming the service fee provided in Party B’s
statement.
4. REPRESENTATIONS AND WARRANTIES
Each party represents and warrants to the other that, as of the date of signing hereof:
4.1 it has full power and authority as an independent legal person to execute and deliver this Agreement and to carry
out its responsibilities and obligations hereunder;
4.2 its execution and performance of this Agreement will not result in a breach of any law, regulation, authorization or
agreement to which it is subject.
5. CONFIDENTIALITY
5.1 Confidentiality Obligations. The parties shall protect and maintain the confidentiality of all information relating to
or arisen from this Agreement, or made available under this Agreement to a party or any associate thereof (the
“Confidential Information”). Without the prior written consent of the other party, no party shall disclose any
Confidential Information to any third party unless the disclosure is required by law or by enforceable orders of
the court or related government departments. Under such circumstances, the party required to disclose the
Confidential Information shall notify the other party immediately, take all possible measures to minimize the
disclosure, and notify the persons to whom
Exclusive Technology Consulting and Service Agreement - 4 -
information is being disclosed of the confidentiality obligation. Notwithstanding anything to the contrary above,
Party A shall have the full right to disclose any Confidential Information to its shareholders, affiliates or
professional advisors.
5.2 Obligations upon Termination. Upon termination of this Agreement, either party shall, at the request of the other
party, return any document, material, database, equipment, or software containing the Confidential Information to
the other party. If, for any reason, such document, material, database, equipment, or software cannot be returned,
either party shall destroy all the Confidential Information belonging to the other party and delete such
Confidential Information from any memory devices. No party shall be permitted to continue using the
Confidential Information in any way after the termination of this Agreement.
5.3 No Time Limit. There is no time limit to the confidentiality obligations stipulated in this Article, which
obligations will survive the termination of this Agreement unless the Confidential Information is disclosed to
the public for reasons not due to the breach of this Agreement by any party.
6. BREACH
6.1 Written Notice. If a party breaches any of its respective representations, warranties or obligations under this
Agreement, the non-breaching party may send a written notice to the breaching party demanding rectification
within 10 days.
6.2 Compensation. The breaching party shall be liable to compensate the non-breaching party for any losses it has
sustained as a result of the breach, including loss of profits.
7. FORCE MAJEURE
7.1 Definition. The term Force Majeure refers to any unforeseeable (or if foreseeable, reasonably unavoidable), event
beyond the reasonable control of any party which prevents the performance of this Agreement, including
without limitation acts of government, acts of nature, fire, explosion, typhoon, flood, earthquake, tide, lightning
and war, but excluding any shortage of credit.
7.2 Exemption. Where either party fails to perform this Agreement in full or in part due to Force Majeure, such party
shall be exempted from its responsibilities hereunder, to the extent of the Force Majeure in question and except
where PRC law provides otherwise. For the avoidance of doubt, a party shall not be excused from performing
its obligations hereunder where Force Majeure occurs following the delay by that party to perform this
Agreement.
Exclusive Technology Consulting and Service Agreement - 5 -
7.3 Notice. Should either party be unable to perform this Agreement as a result of Force Majeure, it shall inform the
other party, as soon as possible following the occurrence of such Force Majeure, of the situation and the
reason(s) for non-performance, so as to minimize any losses incurred by the other party as a consequence
thereof. Furthermore, within a reasonable time after notice of Force Majeure has been given, the party
encountering Force Majeure shall provide to the other party a legal certificate issued by a public notary (or
other appropriate organization) of the place wherein the Force Majeure occurred, in witness of the same.
7.4 Mitigation. The party affected by Force Majeure may suspend the performance of its obligations under this
Agreement until any disruption resulting from the Force Majeure has been resolved. However, such party shall
make every effort to eliminate any obstacles resulting from the Force Majeure, thereby minimizing to the
greatest extent possible the adverse effects of such, as well as any resulting losses.
8. EFFECTIVE DATE AND TERM
8.1 Term. This Agreement shall enter into effect as of the date first indicated above and shall continue for a period of
30 years unless it is extended according to Article 8.2 or terminated early according to Article 9.
8.2 Extension. This Agreement shall be automatically extended for another ten (10) years except Party B gives its
written notice terminating this Agreement three (3) months before the expiration of this Agreement.
9. TERMINATION
9.1 Early Termination. This Agreement may be terminated early in the following situations:
9.1.1
with the mutual written consent of the parties following consultation;
9.1.2
in case of a Force Majeure event prevailing for 30 days or longer, the Parties shall discuss
whether performance under this Agreement shall be partially exempted or postponed according
to the degree by which such performance is affected by the Force Majeure event; or
9.1.3
by Party B with 30 days’ prior written notice to Party A at any time.
9.2 Survival of Obligations. The expiry or early termination of this Agreement for any reason whatsoever shall not
affect the payment
Exclusive Technology Consulting and Service Agreement - 6 -
obligations of the parties hereunder, the respective liability of the parties for damages or the confidentiality
obligations of the parties.
10. MISCELLANEOUS
10.1 Notices and Delivery. All notices and communications between the parties shall be written in Chinese or English
and delivered in person (including courier service), by facsimile transmission or by registered mail to the
appropriate addresses set forth below:
Party A
1011-1015, F/10, Tower B, No. 3, Danling Street, Haidian District, Beijing 100080, China
Address:
Tel: +8610-59857002
Fax: +8610-59857400
Attn: Wang Youdong
Party B
Address： Room 1010, F/10, Tower B, No. 3, Danling Street, Haidian District, Beijing 100080, China
Tel: +8610-59857001
Fax: +8610- 59857387
Attn: Wang Youdong
10.2 Timing. The time of receipt of the notice or communication shall be deemed to be:
10.2.1
if in person (including courier), at the time of signing of a receipt by the receiving party or a duly
authorized person at the receiving party’s address;
10.2.2
if by facsimile transmission, at the time displayed in the corresponding transmission record, unless
such facsimile is sent after 5:00 p.m. or on a non-business day in the place of receipt, in which case
the date of receipt shall be deemed to be the following business day; or
10.2.3
if by registered mail, on the 10th day after the date of the receipt of the registered mail.
10.3 No Waiver. Unless otherwise agreed upon by the parties in writing, any failure or delay on the part of either party
to exercise any right, authority or privilege under this Agreement, or under any other agreement relating hereto,
shall not operate as a waiver thereof; nor shall any single or partial exercise of any right, authority or privilege
preclude any other future exercise thereof.
Exclusive Technology Consulting and Service Agreement - 7 -
10.4 Severability. The provisions of this Agreement are severable from each other. The invalidity of any provision of
this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
10.5 Successors. This Agreement shall be valid and binding upon the parties and upon their respective successors and
assigns (if any).
10.6 Assignment. Party A shall not assign its rights or obligations under this Agreement to any third party without the
prior written consent of Party B. Party B may transfer its rights or obligations under this Agreement to any third
party without the consent of Party A, but shall inform Party A of the above assignment.
10.7 Governing Law. The execution, validity, interpretation and implementation of this Agreement and the settlement
of disputes hereunder shall be governed by PRC law.
10.8 Arbitration.
10.8.1
If any dispute arises in connection with this Agreement, the parties shall attempt in the first instance to
resolve such dispute through friendly consultation or mediation.
10.8.2
If the dispute cannot be resolved in the above manner within 30 days after the commencement of the
consultation or mediation, either party may submit the dispute to arbitration as follows:
10.8.2.1 all disputes arising out of or in connection with this Agreement shall be submitted to the
China International Economic and Trade Arbitration Commission for arbitration in
accordance with the Commission’s then-current rules; and
10.8.2.2 the arbitration shall be held in Beijing and conducted in the Chinese language, with the
arbitral award being final and binding upon the parties.
10.8.3 When any dispute is submitted to arbitration, the parties shall continue to perform their obligations
under this Agreement.
10.9 Entire Agreement. This Agreement and its Exhibits shall constitute the entire agreement between the parties in
respect of the subject matter hereof and shall supersede any previous discussions, negotiations and agreements,
including without limitation, the Original Agreement.
10.10
Amendments. Without the prior written consent of Party B, Party A shall not amend this Agreement. If
required by law, the parties shall
Exclusive Technology Consulting and Service Agreement - 8 -
obtain all requisite approvals from the relevant authorities to give effect to the amendment.
10.11
Language and Copies.
This Agreement is prepared in both English and Chinese, and both language versions have the same legal effect.
This Agreement shall be executed in 2 originals, with 1 original copy for each party. Chinese articles shall
prevail over English articles in case of any inconsistency.
[The space below is intentionally left blank.]
Exclusive Technology Consulting and Service Agreement - 9 -
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their duly authorized representatives
on the date first indicated above.
Party A: Beijing Autohome Information Technology Co., Ltd.
/s/ Wang Youdong
Authorized Representative: Wang Youdong
/s/ Beijing Autohome Information Technology Co., Ltd.
Company Seal: Beijing Autohome Information Technology Co., Ltd.
Exclusive Technology Consulting and Service Agreement
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their duly authorized representatives
on the date first indicated above.
Party B: Beijing Cheerbright Technologies Co., Ltd.
/s/ Wang Youdong
Authorized Representative: Wang Youdong
/s/ Beijing Cheerbright Technologies Co., Ltd.
Company Seal: Beijing Cheerbright Technologies Co., Ltd.
Exclusive Technology Consulting and Service Agreement
Scope of Services
Exhibit I
1. Technical Services. Party B will provide technical services and training to Party A, taking advantage of Party B’s advanced
network, website and multimedia technologies to improve Party A’s system integration. Such technical services shall
include:
(a) administering, managing and maintaining Party A’s information application system and website system
infrastructure;
(b) providing system optimization plans and implementing optimization features;
(c) assuring the security and reliability of the website application systems;
(d) procuring, installing and supporting the relevant products produced by Party B, and providing training in the use of
those products;
(e) managing and maintaining all network and providing technologies to assure the reliability and efficiency thereof;
(f) providing information technology services and assuring the reliable operation of the information infrastructure.
2. Marketing and Management Consulting. For the purposes of expanding Party A’s market share, popularizing its
products and creating an efficient internal operations, Party B will provide consulting services regarding marketing and
management, which shall include:
(a) providing strategic co-operation proposals and recommending relevant partners to Party A, and assisting Party A to
establish and develop cooperative relationships with such partners with respect to advertising;
(b) providing Party A with market development strategies, including but not limited to the design and improvement of
Party A’s products, services and business model as well as strategic on its market position and brand-building;
and
(c) training management personnel and providing management consultation services, including but not limited to regular
business training for Party A's management personnel and formulating realistic and effective solutions to existing
problems in Party A's business operations.
Exclusive Technology Consulting and Services Agreement
Calculation and Payment of the Service Fee
Exhibit II
DURING THE TERM OF THIS AGREEMENT, THE SERVICE FEE PAYABLE BY PARTY A TO PARTY B FOR SERVICES RENDERED ACCORDING TO
EXHIBIT I SHALL BE A FEE IN RMB DETERMINED BY THE FOLLOWING FORMULA:
SERVICE FEE PAYABLE = PARTY A’S REVENUE – TURNOVER TAXES – PARTY A’S TOTAL COSTS – PROFIT TO BE RETAINED BY PARTY A;
Where:
(cid:0)
(cid:0)
(cid:0)
(cid:0)
Party A’s Revenue is revenue received by Party A from third parties in the course of its ordinary business;
Turnover Taxes include, but are not limited to, business tax (if applicable), value-added tax, urban maintenance and
construction tax and education surcharges;
Party A’s Total Costs include all costs and expenses, such as costs of goods sold and operating costs incurred by Party
A for carrying out the business; and
Profit to be retained by Party A shall be determined by a reputable certified public accountant designated by Party B.
During the term of this Agreement, Party B shall have the right to adjust the above Fees at its sole discretion without the consent
of Party A.
Exclusive Technology Consulting and Services Agreement
Exhibit 4.35
Exclusive Technology Consulting and
Service Agreement
between
Beijing Chezhiying Technology Co., Ltd.
and
Beijing Shengtuo Hongyuan Information Technology Co., Ltd.
January, 2024
CONTENTS
APPOINTMENT AND PROVISION OF SERVICES
INTELLECTUAL PROPERTY RIGHTS
SERVICE FEE AND PAYMENT
REPRESENTATIONS AND WARRANTIES
CONFIDENTIALITY
BREACH
FORCE MAJEURE
EFFECTIVE DATE AND TERM
TERMINATION
MISCELLANEOUS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
EXHIBIT:
I.
SCOPE OF SERVICES
II. CALCULATION AND PAYMENT OF THE SERVICE FEE
Exclusive Technology Consulting and Service Agreement - 2 -
3
4
4
4
4
5
5
6
6
7
THIS EXCLUSIVE TECHNOLOGY CONSULTING AND SERVICE AGREEMENT (the “Agreement”) is entered into on
January 28, 2024 (the “Execution Date”) in Beijing, the People's Republic of China (“PRC”).
between
(1) Beijing Shengtuo Hongyuan Information Technology Co., Ltd., with its registered address at Unit 53, F/10, Tower B,
No. 3, Danling Street, Haidian District, Beijing 100080, China (the “Party A”);
and
(2) Beijing Chezhiying Technology Co., Ltd., with its registered address at Room 1117, F/11, Tower B, No. 3, Danling Street,
Haidian District, Beijing 100080, China. (the “Party B”).
Recitals
A. Party A is a domestic company duly incorporated and validly existing under the laws of the PRC, which engages in the
business of advertising agency. Party A wishes to develop its technology, improve its management and increase and
enhance its market position.
B. Party B is a wholly foreign owned enterprise duly incorporated and validly existing under the laws of the PRC, which holds
the resources and qualifications for technical and consulting services. Party B is engaged in research and development
relating to networks and has expertise in providing technical training and consulting services.
NOW, THEREFORE, the parties agree as follows:
1. APPOINTMENT AND PROVISION OF SERVICES
1.1 Scope of Services. Party A hereby appoints Party B to provide Party A with the Services detailed in the Exhibit I
(the “Services”).
1.2 Provision of Services. The Parties agree that Party B shall provide the Services to Party A on an exclusive basis,
for the duration of the term of this Agreement and at standards commonly accepted in the market.
1.3 Financial Support.
To ensure that the cash flow requirements of Party A’s ordinary operations are met and/or
to set off any loss accrued during such operations, Party B is obligated, only to the extent permissible under
PRC law, to provide financing support for Party A, whether or not Party A actually incurs any such operational
loss. Party B’s financing support for Party A may take the form of bank entrusted loans or borrowings.
Contracts for any such entrusted loans or
Exclusive Technology Consulting and Service Agreement - 3 -
borrowings shall be executed separately. Party B will not request repayment if Party A is unable to do so.
2.
INTELLECTUAL PROPERTY RIGHTS
The Parties agree that the intellectual property rights created by Party B in the course of performing this Agreement
(including without limitation any copyrights, trademarks or logos registered or not, patents and proprietary technology),
shall belong to Party B.
3. SERVICE FEE AND PAYMENT
3.1 Service Fee. The Parties agree that the Service Fee under this Agreement shall be determined according to the
Exhibit II.
3.2 Payment Method. Party B shall, within the first 5 days of each month, provide Party A with written statement of
the service fee spent providing the Services during the previous month. Party A shall confirm to Party B in
writing within 3 business days of receipt that the service fee is correct. If Party A fails to provide such
confirmation on time, Party A shall be deemed to have confirmed Party B’s statement. Party A shall pay the
service fee to Party B's designated account within 10 days after confirming the service fee provided in Party B’s
statement.
4. REPRESENTATIONS AND WARRANTIES
Each party represents and warrants to the other that, as of the date of signing hereof:
4.1 it has full power and authority as an independent legal person to execute and deliver this Agreement and to carry
out its responsibilities and obligations hereunder;
4.2 its execution and performance of this Agreement will not result in a breach of any law, regulation, authorization or
agreement to which it is subject.
5. CONFIDENTIALITY
5.1 Confidentiality Obligations. The parties shall protect and maintain the confidentiality of all information relating to
or arisen from this Agreement, or made available under this Agreement to a party or any associate thereof (the
“Confidential Information”). Without the prior written consent of the other party, no party shall disclose any
Confidential Information to any third party unless the disclosure is required by law or by enforceable orders of
the court or related government departments. Under such circumstances, the party required to disclose the
Confidential Information shall notify the other party immediately, take all possible measures to minimize the
disclosure, and notify the persons to whom
Exclusive Technology Consulting and Service Agreement - 4 -
information is being disclosed of the confidentiality obligation. Notwithstanding anything to the contrary above,
Party A shall have the full right to disclose any Confidential Information to its shareholders, affiliates or
professional advisors.
5.2 Obligations upon Termination. Upon termination of this Agreement, either party shall, at the request of the other
party, return any document, material, database, equipment, or software containing the Confidential Information to
the other party. If, for any reason, such document, material, database, equipment, or software cannot be returned,
either party shall destroy all the Confidential Information belonging to the other party and delete such
Confidential Information from any memory devices. No party shall be permitted to continue using the
Confidential Information in any way after the termination of this Agreement.
5.3 No Time Limit. There is no time limit to the confidentiality obligations stipulated in this Article, which
obligations will survive the termination of this Agreement unless the Confidential Information is disclosed to
the public for reasons not due to the breach of this Agreement by any party.
6. BREACH
6.1 Written Notice. If a party breaches any of its respective representations, warranties or obligations under this
Agreement, the non-breaching party may send a written notice to the breaching party demanding rectification
within 10 days.
6.2 Compensation. The breaching party shall be liable to compensate the non-breaching party for any losses it has
sustained as a result of the breach, including loss of profits.
7. FORCE MAJEURE
7.1 Definition. The term Force Majeure refers to any unforeseeable (or if foreseeable, reasonably unavoidable), event
beyond the reasonable control of any party which prevents the performance of this Agreement, including
without limitation acts of government, acts of nature, fire, explosion, typhoon, flood, earthquake, tide, lightning
and war, but excluding any shortage of credit.
7.2 Exemption. Where either party fails to perform this Agreement in full or in part due to Force Majeure, such party
shall be exempted from its responsibilities hereunder, to the extent of the Force Majeure in question and except
where PRC law provides otherwise. For the avoidance of doubt, a party shall not be excused from performing
its obligations hereunder where Force Majeure occurs following the delay by that party to perform this
Agreement.
Exclusive Technology Consulting and Service Agreement - 5 -
7.3 Notice. Should either party be unable to perform this Agreement as a result of Force Majeure, it shall inform the
other party, as soon as possible following the occurrence of such Force Majeure, of the situation and the
reason(s) for non-performance, so as to minimize any losses incurred by the other party as a consequence
thereof. Furthermore, within a reasonable time after notice of Force Majeure has been given, the party
encountering Force Majeure shall provide to the other party a legal certificate issued by a public notary (or
other appropriate organization) of the place wherein the Force Majeure occurred, in witness of the same.
7.4 Mitigation. The party affected by Force Majeure may suspend the performance of its obligations under this
Agreement until any disruption resulting from the Force Majeure has been resolved. However, such party shall
make every effort to eliminate any obstacles resulting from the Force Majeure, thereby minimizing to the
greatest extent possible the adverse effects of such, as well as any resulting losses.
8. EFFECTIVE DATE AND TERM
8.1 Term. This Agreement shall enter into effect as of the date first indicated above and shall continue for a period of
30 years unless it is extended according to Article 8.2 or terminated early according to Article 9.
8.2 Extension. This Agreement shall be automatically extended for another ten (10) years except Party B gives its
written notice terminating this Agreement three (3) months before the expiration of this Agreement.
9. TERMINATION
9.1 Early Termination. This Agreement may be terminated early in the following situations:
9.1.1
with the mutual written consent of the parties following consultation;
9.1.2
in case of a Force Majeure event prevailing for 30 days or longer, the Parties shall discuss
whether performance under this Agreement shall be partially exempted or postponed according
to the degree by which such performance is affected by the Force Majeure event; or
9.1.3
by Party B with 30 days’ prior written notice to Party A at any time.
9.2 Survival of Obligations. The expiry or early termination of this Agreement for any reason whatsoever shall not
affect the payment
Exclusive Technology Consulting and Service Agreement - 6 -
obligations of the parties hereunder, the respective liability of the parties for damages or the confidentiality
obligations of the parties.
10. MISCELLANEOUS
10.1 Notices and Delivery. All notices and communications between the parties shall be written in Chinese or English
and delivered in person (including courier service), by facsimile transmission or by registered mail to the
appropriate addresses set forth below:
Party A
Unit 53, F/10, Tower B, No. 3, Danling Street, Haidian District, Beijing 100080, China
Address:
Tel: +8610-59857002
Fax: +8610-59857400
Attn: Wang Youdong
Party B
Address： Room 1117, F/11 Tower B, No. 3, Danling Street, Haidian District, Beijing 100080, China
Tel: +8610-59857001
Fax: +8610- 59857387
Attn: Wang Youdong
10.2 Timing. The time of receipt of the notice or communication shall be deemed to be:
10.2.1
if in person (including courier), at the time of signing of a receipt by the receiving party or a duly
authorized person at the receiving party’s address;
10.2.2
if by facsimile transmission, at the time displayed in the corresponding transmission record, unless
such facsimile is sent after 5:00 p.m. or on a non-business day in the place of receipt, in which case
the date of receipt shall be deemed to be the following business day; or
10.2.3
if by registered mail, on the 10th day after the date of the receipt of the registered mail.
10.3 No Waiver. Unless otherwise agreed upon by the parties in writing, any failure or delay on the part of either party
to exercise any right, authority or privilege under this Agreement, or under any other agreement relating hereto,
shall not operate as a waiver thereof; nor shall any single or partial exercise of any right, authority or privilege
preclude any other future exercise thereof.
Exclusive Technology Consulting and Service Agreement - 7 -
10.4 Severability. The provisions of this Agreement are severable from each other. The invalidity of any provision of
this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
10.5 Successors. This Agreement shall be valid and binding upon the parties and upon their respective successors and
assigns (if any).
10.6 Assignment. Party A shall not assign its rights or obligations under this Agreement to any third party without the
prior written consent of Party B. Party B may transfer its rights or obligations under this Agreement to any third
party without the consent of Party A, but shall inform Party A of the above assignment.
10.7 Governing Law. The execution, validity, interpretation and implementation of this Agreement and the settlement
of disputes hereunder shall be governed by PRC law.
10.8 Arbitration.
10.8.1
If any dispute arises in connection with this Agreement, the parties shall attempt in the first instance to
resolve such dispute through friendly consultation or mediation.
10.8.2
If the dispute cannot be resolved in the above manner within 30 days after the commencement of the
consultation or mediation, either party may submit the dispute to arbitration as follows:
10.8.2.1 all disputes arising out of or in connection with this Agreement shall be submitted to the
China International Economic and Trade Arbitration Commission for arbitration in
accordance with the Commission’s then-current rules; and
10.8.2.2 the arbitration shall be held in Beijing and conducted in the Chinese language, with the
arbitral award being final and binding upon the parties.
10.8.3 When any dispute is submitted to arbitration, the parties shall continue to perform their obligations
under this Agreement.
10.9 Entire Agreement. This Agreement and its Exhibits shall constitute the entire agreement between the parties in
respect of the subject matter hereof and shall supersede any previous discussions, negotiations and agreements,
including without limitation, the Original Agreement.
10.10
Amendments. Without the prior written consent of Party B, Party A shall not amend this Agreement. If
required by law, the parties shall
Exclusive Technology Consulting and Service Agreement - 8 -
obtain all requisite approvals from the relevant authorities to give effect to the amendment.
10.11
Language and Copies.
This Agreement is prepared in both English and Chinese, and both language versions have the same legal effect.
This Agreement shall be executed in 2 originals, with 1 original copy for each party. Chinese articles shall
prevail over English articles in case of any inconsistency.
[The space below is intentionally left blank.]
Exclusive Technology Consulting and Service Agreement - 9 -
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their duly authorized representatives
on the date first indicated above.
Party A: Beijing Shengtuo Hongyuan Information Technology Co., Ltd.
/s/ Wang Youdong
Authorized Representative: Wang Youdong
/s/ Beijing Shengtuo Hongyuan Information Technology Co., Ltd.
Company Seal: Beijing Shengtuo Hongyuan Information Technology Co., Ltd.
Exclusive Technology Consulting and Service Agreement
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their duly authorized representatives
on the date first indicated above.
Party B: Beijing Chezhiying Technology Co., Ltd.
/s/ Wang Youdong
Authorized Representative: Wang Youdong
/s/ Beijing Chezhiying Technology Co., Ltd.
Company Seal: Beijing Chezhiying Technology Co., Ltd.
Exclusive Technology Consulting and Service Agreement
Scope of Services
Exhibit I
1. Technical Services. Party B will provide technical services and training to Party A, taking advantage of Party B’s advanced
network, website and multimedia technologies to improve Party A’s system integration. Such technical services shall
include:
(a) administering, managing and maintaining Party A’s information application system and website system
infrastructure;
(b) providing system optimization plans and implementing optimization features;
(c) assuring the security and reliability of the website application systems;
(d) procuring, installing and supporting the relevant products produced by Party B, and providing training in the use of
those products;
(e) managing and maintaining all network and providing technologies to assure the reliability and efficiency thereof;
(f) providing information technology services and assuring the reliable operation of the information infrastructure.
2. Marketing and Management Consulting. For the purposes of expanding Party A’s market share, popularizing its
products and creating an efficient internal operations, Party B will provide consulting services regarding marketing and
management, which shall include:
(a) providing strategic co-operation proposals and recommending relevant partners to Party A, and assisting Party A to
establish and develop cooperative relationships with such partners with respect to advertising;
(b) providing Party A with market development strategies, including but not limited to the design and improvement of
Party A’s products, services and business model as well as strategic on its market position and brand-building;
and
(c) training management personnel and providing management consultation services, including but not limited to regular
business training for Party A's management personnel and formulating realistic and effective solutions to existing
problems in Party A's business operations.
Exclusive Technology Consulting and Service Agreement
Calculation and Payment of the Service Fee
Exhibit II
DURING THE TERM OF THIS AGREEMENT, THE SERVICE FEE PAYABLE BY PARTY A TO PARTY B FOR SERVICES RENDERED ACCORDING TO
EXHIBIT I SHALL BE A FEE IN RMB DETERMINED BY THE FOLLOWING FORMULA:
SERVICE FEE PAYABLE = PARTY A’S REVENUE – TURNOVER TAXES – PARTY A’S TOTAL COSTS – PROFIT TO BE RETAINED BY PARTY A;
Where:
(cid:0)
(cid:0)
(cid:0)
(cid:0)
Party A’s Revenue is revenue received by Party A from third parties in the course of its ordinary business;
Turnover Taxes include, but are not limited to, business tax (if applicable), value-added tax, urban maintenance and
construction tax and education surcharges;
Party A’s Total Costs include all costs and expenses, such as costs of goods sold and operating costs incurred by Party
A for carrying out the business; and
Profit to be retained by Party A shall be determined by a reputable certified public accountant designated by Party B.
During the term of this Agreement, Party B shall have the right to adjust the above Fees at its sole discretion without the consent
of Party A.
Exclusive Technology Consulting and Service Agreement
Exhibit 4.36
Loan Agreement
between
Beijing Cheerbright Technologies Co., Ltd.
and
Long Quan
January, 2024
CONTENTS
DEFINITIONS AND INTERPRETATIONS
LOAN
CONDITIONS PRECEDENT
REPRESENTATIONS AND WARRANTIES
UNDERTAKINGS
ENFORCEMENT
CONFIDENTIALITY
DISPUTE RESOLUTION
INDEMNITY
MISCELLANEOUS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Loan Agreement
- 2 -
3
4
6
6
7
10
11
12
12
12
THIS LOAN AGREEMENT (this “Agreement”) is entered into on January 28, 2024 in Beijing, the People’s Republic of China
(“PRC”)
by and between
(1) Beijing Cheerbright Technologies Co., Ltd., a wholly foreign owned enterprise duly incorporated and validly existing
under the law of the PRC, with its registered address at Room 1010, F/10, Tower B, No. 3, Danling Street, Haidian District,
Beijing 100080, China (“Party A”);
and
(2) Long Quan, a PRC citizen, holder of identification card number ******, whose residential address is at ****** (“Party
B”).
(Above-mentioned parties are solely referred as a “Party”, and collectively as the “Parties”)
Recitals
A. Party B acquired the equity interest of a PRC domestically funded limited company named Beijing Autohome Information
Technology Co., Ltd. (the “Company”) in Beijing, PRC, jointly with the other shareholder (i.e. Wang Youdong), and
holds 50% of the equity interest of the Company (“Equity Interests”);
B. Now, Party A has provided Party B with a loan to be used for the purposes of acquiring the equity interest of the Company
in accordance with this Agreement. In accordance with the terms and conditions of this Agreement, Party A agrees to
provide an interest-free loan in the amount of RMB5,000,000 (the “Loan”).
NOW, THEREFORE, the parties agree as follows:
1.1 Definitions. Unless otherwise provided in this Agreement, the following terms shall have the meanings set forth below:
1. DEFINITIONS AND INTERPRETATIONS
Designated Party means a third party as designated by Party A;
Event of Default means an event as described in Article 2.3;
Equity Option Agreement means the Equity Option Agreement to be entered into by and among Party A, Party B
and the Company dated on January 28, 2024;
Loan Agreement
- 3 -
Equity Interest Pledge Agreement means the Equity Interest Pledge Agreement to be entered into by and
between Party A, Party B dated on January 28, 2024;
Power of Attorney means an irrevocable Power of Attorney issued by Party B conferring all his rights as a
shareholder of the Company to Party A or the Designated Party dated on January 28, 2024;
Repayment Notice means a written notice from Party A to Party B for purposes of the repayment of the Loan.
1.2 Interpretations. All headings used are for reference purposes only and do not affect the meaning or interpretation of any
provision. Any reference to an Article is to an article of this Agreement. The use of the plural shall include the use of
the singular, and vice versa. Unless otherwise indicated, a reference to a day, month or year is to a calendar day, month
or year. The use of the masculine shall include the use of the feminine, and vice versa.
2. LOAN
2.1 Amount. Party A has provided to Party B, and Party B has received from Party A, the Loan. The Loan shall be interest free.
2.2 Term. The term of the Loan shall continue indefinitely until such time as Party B receives a Repayment Notice and fully
repays the Loan, or an Event of Default occurs unless Party A has sent a notice indicating otherwise within 15 calendar
days after it is aware of such event.
2.3 Event of Default. For purposes of this Agreement, an Event of Default is deemed to have occurred if any of the following
were to apply to Party B:
2.3.1 a proceeding is commenced against him under any applicable bankruptcy, insolvency, reorganization, court
mediation, or other similar law;
2.3.2
he makes or attempts to make any fraudulent use or any unauthorized transfer of the Loan or the Equity
Interests;
2.3.3
he dies or his capacity to perform civil acts is lost or limited;
2.3.4
he is charged with a criminal offense;
2.3.5
any third party institutes a court action against him claiming over RMB 50,000;
Loan Agreement
- 4 -
2.3.6 Party B breaches any of its covenants or other obligations under this Agreement, and such breach has not been
remedied within 15 calendar days after receiving Party A’s written notice requiring remedy;
2.3.7 the representations and warranties made by Party B prove to be false or misleading in any material respect;
2.3.8
any indebtedness, guarantee or other obligation of Party B, whether pursuant to a contract or otherwise, (i) is
accelerated as a result of a default thereunder and is required to be repaid or performed prior to the scheduled
date; or (ii) has become due and is not repaid or performed as scheduled and thereby causes Party A to regard
Party B’s capacity to perform the obligations specified herein as having been adversely affected;
2.3.9
Party B is incapable of repaying his debts as they become due;
2.3.10
the Agreement is illegal as a result of any applicable laws or Party B is restricted from continuing to perform its
obligations as specified herein;
2.3.11
any approval, permits, licenses or authorization from any applicable governmental entity (and registration or
filing procedure) required for the Company to provide value added telecommunications services in respect of
its information services business via the Internet in the PRC are withdrawn, suspended, invalidated or
materially amended;
2.3.12
any approval, permits, licenses or authorization from any applicable government authority required to perform
this Agreement or make this Agreement enforceable, legal and valid are withdrawn, suspended, invalidated or
materially amended;
2.3.13
any property owned by Party B is altered or damaged and thereby causes Party A to deem that the capability of
Party B to perform the obligations stated herein have been adversely affected; or
2.3.14
Party B defaults under either of the Equity Interest Pledge Agreement or the Equity Option Agreement.
2.4 Repayment Date. Unless otherwise agreed by Party A in writing, the Loan borrowed by Party B, any portion of the Loan
and any other payment in arrears, if applicable, under this Agreement shall become due and payable five Business Days
after Party A gives written notice to Party B demanding repayment in accordance with Article 6.1 (Repayment Date).
Without Party A’s express prior written consent, the Loan
Loan Agreement
- 5 -
shall not be repaid and shall continue indefinitely until the Repayment Date.
2.5 Form of Repayment. Unless agreed by the Parties in writing, the Loan may only be repaid in the form specified in Article
6.
2.6 Purpose of Loan. Party B has accepted the Loan provided by Party A and hereby agrees and covenants that the Loan shall
be used only to acquire the equity interest of the Company. Without Party A’s prior written consent, Party B shall not
use the Loan for any other purpose, or sell, assign, transfer, pledge or otherwise dispose of any legal rights or benefits in
connection with, or create any security interest over, the Equity Interest to any third party.
3. CONDITIONS PRECEDENT
Drawdown of the Loan by Party B shall, unless specifically waived by Party A in writing, be conditional upon the fulfillment of
all of the following conditions precedent:
3.1 Representations and Warranties. All the representations and warranties provided by Party B in Article 4.2 are true,
complete and correct, and shall remain true, complete and correct on the date of such drawdown, as if they are provided
on such date.
3.2 No Breach. Party B shall not have breached any of his undertakings provided in Article 5, and no event which may affect
the performance of Party B’s obligations hereunder shall have occurred or be likely to occur.
4. REPRESENTATIONS AND WARRANTIES
4.1 Party A’s Representations and Warranties. Party A represents and warrants as follows:
4.1.1
it is a company incorporated and validly existing under the laws of PRC;
4.1.2
it has the power to enter into and perform this Agreement, and its execution and performance of this Agreement
is in compliance with the business scope of Party A and the provisions of its articles of association or other
constituent documents;
4.1.3
the execution and performance of this Agreement by it will not result in a breach of any laws, regulations,
authorizations, or agreement to which it is subject; and
4.1.4
this Agreement shall constitute its legal, valid, and binding obligations, and is to be enforceable against it.
Loan Agreement
- 6 -
4.2 Party B’s Representations and Warranties. Party B represents and warrants as follows:
4.2.1
he has and shall maintain the full power and authority to enter into this Agreement and to perform his
obligations hereunder;
4.2.2
the execution and performance of this Agreement by himself will not result in a breach of any laws, regulations,
authorizations, or agreement to which he is subject;
4.2.3 this Agreement shall constitute his legal, valid, and binding obligations, and is to be enforceable against himself;
4.2.4
4.2.5
there are no civil, criminal or administrative, claims, actions, suits, investigations or proceedings pending or
threatened against him which, based on his knowledge, would materially and adversely affect this Agreement
and the performance thereof;
there is no provision of any agreement, enforceable judgment or order of any court binding on him or affecting
his property, which would in any way prevent or materially adversely affect his execution or performance of
this Agreement;
4.2.6
the execution and performance of this Agreement and the realization of Party A’s rights hereunder will not
violate any mortgage right, contract, judgment, decree or law that is binding upon him or his assets;
4.2.7 with the exception of the Equity Interest Pledge Agreement, the Equity Option Agreement and the Power of
Attorney, he has not: (a) created any pledge, charge or any other security over any of the Equity Interests; (b)
offered to transfer any of the Equity Interests to any third party; (c) issued an undertaking to any third party
regarding any offer to purchase any of the Equity Interests; or (d) entered into any agreement to transfer any of
the Equity Interests to any third party; and
4.2.8
no dispute, action, arbitration, administrative procedure or other legal proceeding (potential or actual) regarding
himself and/or any of the Equity Interests in existence or pending.
5. UNDERTAKINGS
5.1 Party B’s Undertakings relating to the Company. Party B undertakes to vote his total interest in the Company and to take
all other necessary actions to ensure that
Loan Agreement
- 7 -
the Company:
5.1.1 will obtain or complete all the necessary governmental approvals, authorizations, licenses, registrations and
filing procedures to own its assets and to engage in the businesses specified in the operational scope of its
business license;
5.1.2 will not supplement, change, or modify in any way its articles of association or other constituent documents,
increase or reduce its registered capital, or alter its shareholding structure without the prior written consent of
Party A;
5.1.3 will not sell, transfer, mortgage, pledge, grant any option rights or otherwise dispose of any asset, business or
legal or beneficial interest, or permit the creation of any other security interest over the same without the prior
written consent of Party A;
5.1.4
will not incur, inherit, warrant or permit the existence of any Loan without the prior written consent of Party A;
5.1.5 will not enter into any contracts or extend any loan or credit to any party or provide any guarantee or assume
any obligation of any party without the prior written consent of Party A;
5.1.6 will provide all information relating to its operations and financial affairs to Party A upon the request of Party
A;
5.1.7
will not merge, consolidate with any third party, or acquire or invest in any third party, without the prior written
consent of Party A;
5.1.8 will notify Party A immediately should any legal action, arbitration or administrative procedure relating to its
assets, operations or income arises or is likely to arise;
5.1.9 will execute all necessary or appropriate agreements, take all necessary or appropriate actions and make all
necessary or appropriate defenses for the purpose of maintaining all rights and proprietary interests in respect
of its assets;
5.1.10 will not pay dividends or distributions of any kind to its shareholders without the prior written consent of Party
A;
5.1.11 will strictly observe all of the provisions under this Agreement, the Equity Interest Pledge Agreement, the
Equity Option Agreement and the Power of Attorney and shall not cause any act or omission to take place
which may
Loan Agreement
- 8 -
impair the validity and enforceability of those documents; and
5.1.12 will promptly notify Party A in writing of the occurrence of any event which may materially affect its assets,
obligations, rights or operations.
5.2
Undertakings of Party B. Party B further undertakes as follows:
5.2.1
5.2.2
he will not sell, transfer, mortgage, pledge, grant any option rights or otherwise dispose of any of the Equity
Interests, or permit the creation of any other security interest in the Company without the prior written consent
of Party A;
he will ensure that the shareholders’ meeting of the Company shall not approve any sale, transfer, pledge or
other disposal of the Equity Interests, or permit the creation of any other security interest over the same
without the prior written consent of Party A;
5.2.3
he will ensure that the shareholders’ meeting of the Company shall decide on any matter only with the prior
written instruction of Party A;
5.2.4
he will notify Party A immediately if and when any legal action, arbitration, or administrative procedure relating
to the Equity Interests arises or is likely to arise;
5.2.5
he will enter into all necessary or appropriate agreements, take all necessary or appropriate actions, file all
necessary or appropriate and make all necessary or appropriate defenses for the purpose of maintaining
ownership of the Equity Interests at the instruction of Party A;
5.2.6
he will not cause any actions and/or omissions which may materially and adversely affect the assets, operations
or liability of the Company without the prior written consent of Party A;
5.2.7
he will, upon the request of Party A, appoint any person nominated by Party A as a director of the Company;
5.2.8
in the event that the Party A or the Designated Party purchases the Equity Interests pursuant to the Equity
Option Agreement, he shall apply the proceeds therefrom to repay the Loan to Party A;
5.2.9
he will promptly notify Party A in writing of the occurrence of any event which may materially affect his assets,
obligations, rights or operations;
5.2.10
he shall issue the Power of Attorney simultaneously when entering into this
Loan Agreement
- 9 -
Agreement;
5.2.11
the Equity Option Agreement shall be validly executed, pursuant to which Party B shall grant Party A or the
Designated Party with an exclusive option to purchase the Equity Interests, to the extent permitted under PRC
law;
5.2.12
the Equity Interest Pledge Agreement, the Equity Option Agreement, and the Power of Attorney shall be in full
effect and free of default, and all relevant filing or registrations procedures, approvals, and governmental
proceedings shall have been obtained or completed;
5.2.13 he will strictly observe all the provisions and perform all of his obligations under this Agreement, the Equity
Interest Pledge Agreement and the Equity Option Agreement, causing no actions nor failing to take any
actions that may impair the validity or enforceability of this Agreement, the Equity Interest Pledge Agreement
or the Equity Option Agreement;
5.2.14 he shall maintain as strictly confidential the existence and provisions of this Agreement, as well as any
correspondence, resolutions, ancillary agreements and any other documentation associated herewith; and
5.2.15 he will not be entitled to any dividend or profit distribution of the Company and will not request or receive any of
the same without the prior written consent of Party A. If such dividends or other distributions are distributed to
him from the Company, he will immediately and unconditionally pay or transfer to Party A any such dividends
or other distributions in whatsoever form obtained from the Company as a shareholder of the Company at the
time such payables arise, after having deducted and paid any and all relevant taxes and expenses applicable as
a result of his receipt of such dividends or other distributions.
6.1 Repayment of Loan.
6. ENFORCEMENT
6.1.1 Upon the occurrence of either an Event of Default or a decision by Party A, in its sole discretion, to demand
repayment of the Loan or any portion of the Loan, Party A may at its discretion issue a notice (Repayment
Notice) to Party B requiring repayment of the Loan or any portion of the Loan and any other payment in
arrears under this Agreement.
6.1.2 Party B shall repay the Loan by transferring the Equity Interest to Party A or the Designated Party, as directed by
Party A, by signing and delivering an agreement for the transfer of the Equity Interest satisfactory to the Party
A
Loan Agreement
- 10 -
from the form to the substance.
6.1.3 If Party B fails to comply with its repayment obligations under this Agreement, late payment interest shall be
assessed at the rate of 0.3% per day upon the outstanding amount of the Loan and shall be payable from the
Repayment Date until the date on which the total amount of the overdue loan, overdue interest and other
monies payable to Party A are fully settled.
6.2 Notification. Party B shall immediately notify Party A in writing of the occurrence of any event set forth in Article 2.3 or
any circumstance which may lead to the occurrence of any such event as soon as Party B knows or is aware of such
event or circumstance.
7. CONFIDENTIALITY
7.1 Confidentiality Obligations. The parties shall protect and maintain the confidentiality of all information relating to or
arisen from this Agreement, or made available under this Agreement to a party or any associate thereof (the
“Confidential Information”). Without the prior written consent of the other party, no party shall disclose any
Confidential Information to any third party unless the disclosure is required by law or by enforceable orders of the court
or related government departments. Under such circumstances, the party required to disclose the Confidential
Information shall notify the other party immediately, take all possible measures to minimize the disclosure, and notify
the persons to whom information is being disclosed of the confidentiality obligation. Notwithstanding anything to the
contrary above, Party A shall have the full right to disclose any Confidential Information to its shareholders, affiliates or
professional advisors.
7.2
Obligations upon Termination. Upon termination of this Agreement, either party shall, at the request of the other
party, return any document, material, database, equipment, or software containing the Confidential Information to the
other party. If, for any reason, such document, material, database, equipment, or software cannot be returned, either
party shall destroy all the Confidential Information belonging to the other party and delete such Confidential Information
from any memory devices. No party shall be permitted to continue using the Confidential Information in any way after
the termination of this Agreement.
7.3
No Time Limit. There is no time limit to the confidentiality obligations stipulated in this Article, which obligations
will survive the termination of this Agreement unless the Confidential Information is disclosed to the public for reasons
not due to the breach of this Agreement by any party.
Loan Agreement
- 11 -
8.1 Governing Law. This Agreement shall be governed by the laws of the PRC.
8. DISPUTE RESOLUTION
8.2 Consultation and Mediation. If any dispute arises in connection with this
Agreement, the parties shall attempt in the first instance to resolve such dispute through friendly consultation or
mediation.
8.3 Arbitration. Any dispute, controversy or claim arising out of or in connection with this Agreement shall be submitted to
the China International Economic and Trade Arbitration Commission (the “CIETAC”) for arbitration, which shall be
conducted in accordance with the CIETAC’s rules in effect at the time of applying for arbitration. The place of
arbitration shall be Beijing. The language of the arbitration shall be Chinese. The tribunal shall consist of 3 arbitrators.
The arbitral award is final and binding upon the parties. The cost of arbitration shall be allocated as determined by the
arbitrators.
9.
INDEMNITY
Party A agrees to indemnify and hold harmless Party B for any damages, fines or penalties solely incurred in his capacity as a
shareholder or any other positions (including, without limitation, those of legal representative and director) directly as a result of
the establishment of the Company and the operation of the Company’s business in contravention of PRC law; provided, however,
that in no instance will Party A provide such indemnification if Party B has engaged in fraud or willful misconduct or has
breached or is in breach of this Agreement.
10. MISCELLANEOUS
10.1 Notices. All notices or other communications sent by either party shall be written in English or Chinese, and delivered in
person, by mail or telecopy, to the other party at the following addresses. The date at which the communication shall be
deemed to be duly given or made shall be confirmed as follows: (a) for notices delivered in person, the date of delivery
shall be deemed as having been duly given or made; (b) for notices delivered by mail, the 10th day of the delivery date of
air certified mail with postage prepaid (as shown on stamp) or the 4th day of the delivery date to an internationally
certified delivery institution shall be deemed as having been duly given or made; and (c) for notices by telecopy, the
receipt date showed on the delivery confirming paper of the relevant document shall be deemed as having been duly
given or made.
Party A: Beijing Cheerbright Technologies Co., Ltd.
Address: Room 1010, F/10, Tower B, No. 3, Danling Street,
Loan Agreement
- 12 -
Tel: +8610-59857001
Attn: Wang Youdong
Haidian District, Beijing 100080, China
Long Quan
Party B:
Address: ******
Tel: ******
Attn:
Long Quan
10.2
Entire Agreement. This Agreement, the Exclusive Technology Consulting and Service Agreement, the Equity Interest
Pledge Agreement, the Equity Option Agreement, and the Power of Attorney from Party B to Party A in favor of Party A
shall constitute the entire agreement among the parties in respect of the subject matter hereof and shall supersede any
previous discussions, negotiations and agreements related thereto.
10.3
Amendment. Without the prior written consent of Party A, Party B shall not amend this Agreement. If required by
law, the parties shall obtain all requisite approvals from the relevant authorities to give effect to the amendment.
10.4 No Waiver. Unless otherwise agreed upon by the parties in writing, any failure or delay on the part of either party to
exercise any right, authority or privilege under this Agreement, or under any other agreement relating hereto, shall not
operate as a waiver thereof; nor shall any single or partial exercise of any right, authority or privilege preclude any other
future exercise thereof.
10.5
Severability. The provisions of this agreement are severable from each other. The invalidity of any provision of this
agreement shall not affect the validity or enforceability of any other provision of this agreement.
10.6 Successors. This Agreement shall be valid and binding on the parties, their successors and permitted assigns.
10.7 Assignment. Party A may transfer or assign any or all of its rights and obligations under this Agreement to any of its
designated parties (natural person or legal entity) at any time. In such circumstances, the transferee or assignee shall
enjoy and undertake the same rights and obligations herein of Party A as if the transferee or assignee is Party A
hereunder. When Party A transfers or assigns the rights and obligations under this Agreement, at the request of Party A,
Party B shall execute the relevant agreements and/or documents with respect to such transfer or assignment. Party B
shall not assign any of its rights or obligations hereunder without the prior written consent of the Party A.
Loan Agreement
- 13 -
10.8 Effectiveness. This Agreement shall be effective upon its signing by all the parties or their respective authorized
representative and shall be deemed terminated as of the date when the Loan has been repaid in full.
10.9
Language and Counterparts. This Agreement is prepared in 2 sets of originals both in English and Chinese. Each
party shall hold 1 set. Chinese articles shall prevail over English articles in case of any inconsistency.
[The space below has been intentionally left blank.]
Loan Agreement
- 14 -
IN WITNESS WHEREOF, each of the parties hereto has duly executed or has caused this Agreement to be duly executed in its
name and on its behalf by the officer or representative duly authorized, on the day and year first above written.
Party A: Beijing Cheerbright Technologies Co., Ltd.
January 28, 2024
/s/ Wang Youdong
Authorized Representative: Wang Youdong
/s/ Beijing Cheerbright Technologies Co., Ltd.
Company Seal: Beijing Cheerbright Technologies Co., Ltd.
Loan Agreement
IN WITNESS WHEREOF, each of the parties hereto has duly executed or has caused this Agreement to be duly executed in its
name and on its behalf by the officer or representative duly authorized, on the day and year first above written.
Party B: Long Quan
/s/ Long Quan
Loan Agreement
Exhibit 4.37
Loan Agreement
between
Beijing Cheerbright Technologies Co., Ltd.
and
Wang Youdong
January, 2024
CONTENTS
DEFINITIONS AND INTERPRETATIONS
LOAN
CONDITIONS PRECEDENT
REPRESENTATIONS AND WARRANTIES
UNDERTAKINGS
ENFORCEMENT
CONFIDENTIALITY
DISPUTE RESOLUTION
INDEMNITY
MISCELLANEOUS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Loan Agreement
- 2 -
3
4
6
6
7
10
11
12
12
12
THIS LOAN AGREEMENT (this “Agreement”) is entered into on January 28, 2024 in Beijing, the People’s Republic of China
(“PRC”)
by and between
(1) Beijing Cheerbright Technologies Co., Ltd., a wholly foreign owned enterprise duly incorporated and validly existing
under the law of the PRC, with its registered address at Room 1010, F/10, Tower B, No. 3, Danling Street, Haidian District,
Beijing 100080, China (“Party A”);
and
(2) Wang Youdong , a PRC citizen, holder of identification card number ******, whose residential address is at ******
(“Party B”).
(Above-mentioned parties are solely referred as a “Party”, and collectively as the “Parties”)
Recitals
A. Party B acquired the equity interest of a PRC domestically funded limited company named Beijing Autohome Information
Technology Co., Ltd. (the “Company”) in Beijing, PRC, jointly with the other shareholder (i.e. Long Quan), and holds
50% of the equity interest of the Company (“Equity Interests”);
B. Now, Party A has provided Party B with a loan to be used for the purposes of acquiring the equity interest of the Company
in accordance with this Agreement. In accordance with the terms and conditions of this Agreement, Party A agrees to
provide an interest-free loan in the amount of RMB5,000,000 (the “Loan”).
NOW, THEREFORE, the parties agree as follows:
1.1 Definitions. Unless otherwise provided in this Agreement, the following terms shall have the meanings set forth below:
1. DEFINITIONS AND INTERPRETATIONS
Designated Party means a third party as designated by Party A;
Event of Default means an event as described in Article 2.3;
Equity Option Agreement means the Equity Option Agreement to be entered into by and among Party A, Party B
and the Company dated on January 28, 2024;
Loan Agreement
- 3 -
Equity Interest Pledge Agreement means the Equity Interest Pledge Agreement to be entered into by and
between Party A, Party B dated on January 28, 2024;
Power of Attorney means an irrevocable Power of Attorney issued by Party B conferring all his rights as a
shareholder of the Company to Party A or the Designated Party dated on January 28, 2024;
Repayment Notice means a written notice from Party A to Party B for purposes of the repayment of the Loan.
1.2 Interpretations. All headings used are for reference purposes only and do not affect the meaning or interpretation of any
provision. Any reference to an Article is to an article of this Agreement. The use of the plural shall include the use of
the singular, and vice versa. Unless otherwise indicated, a reference to a day, month or year is to a calendar day, month
or year. The use of the masculine shall include the use of the feminine, and vice versa.
2. LOAN
2.1 Amount. Party A has provided to Party B, and Party B has received from Party A, the Loan. The Loan shall be interest free.
2.2 Term. The term of the Loan shall continue indefinitely until such time as Party B receives a Repayment Notice and fully
repays the Loan, or an Event of Default occurs unless Party A has sent a notice indicating otherwise within 15 calendar
days after it is aware of such event.
2.3 Event of Default. For purposes of this Agreement, an Event of Default is deemed to have occurred if any of the following
were to apply to Party B:
2.3.1 a proceeding is commenced against him under any applicable bankruptcy, insolvency, reorganization, court
mediation, or other similar law;
2.3.2
he makes or attempts to make any fraudulent use or any unauthorized transfer of the Loan or the Equity
Interests;
2.3.3
he dies or his capacity to perform civil acts is lost or limited;
2.3.4
he is charged with a criminal offense;
2.3.5
any third party institutes a court action against him claiming over RMB 50,000;
Loan Agreement
- 4 -
2.3.6 Party B breaches any of its covenants or other obligations under this Agreement, and such breach has not been
remedied within 15 calendar days after receiving Party A’s written notice requiring remedy;
2.3.7 the representations and warranties made by Party B prove to be false or misleading in any material respect;
2.3.8
any indebtedness, guarantee or other obligation of Party B, whether pursuant to a contract or otherwise, (i) is
accelerated as a result of a default thereunder and is required to be repaid or performed prior to the scheduled
date; or (ii) has become due and is not repaid or performed as scheduled and thereby causes Party A to regard
Party B’s capacity to perform the obligations specified herein as having been adversely affected;
2.3.9
Party B is incapable of repaying his debts as they become due;
2.3.10
the Agreement is illegal as a result of any applicable laws or Party B is restricted from continuing to perform its
obligations as specified herein;
2.3.11
any approval, permits, licenses or authorization from any applicable governmental entity (and registration or
filing procedure) required for the Company to provide value added telecommunications services in respect of
its information services business via the Internet in the PRC are withdrawn, suspended, invalidated or
materially amended;
2.3.12
any approval, permits, licenses or authorization from any applicable government authority required to perform
this Agreement or make this Agreement enforceable, legal and valid are withdrawn, suspended, invalidated or
materially amended;
2.3.13
any property owned by Party B is altered or damaged and thereby causes Party A to deem that the capability of
Party B to perform the obligations stated herein have been adversely affected; or
2.3.14
Party B defaults under either of the Equity Interest Pledge Agreement or the Equity Option Agreement.
2.4 Repayment Date. Unless otherwise agreed by Party A in writing, the Loan borrowed by Party B, any portion of the Loan
and any other payment in arrears, if applicable, under this Agreement shall become due and payable five Business Days
after Party A gives written notice to Party B demanding repayment in accordance with Article 6.1 (Repayment Date).
Without Party A’s express prior written consent, the Loan
Loan Agreement
- 5 -
shall not be repaid and shall continue indefinitely until the Repayment Date.
2.5 Form of Repayment. Unless agreed by the Parties in writing, the Loan may only be repaid in the form specified in Article
6.
2.6 Purpose of Loan. Party B has accepted the Loan provided by Party A and hereby agrees and covenants that the Loan shall
be used only to acquire the equity interest of the Company. Without Party A’s prior written consent, Party B shall not
use the Loan for any other purpose, or sell, assign, transfer, pledge or otherwise dispose of any legal rights or benefits in
connection with, or create any security interest over, the Equity Interest to any third party.
3. CONDITIONS PRECEDENT
Drawdown of the Loan by Party B shall, unless specifically waived by Party A in writing, be conditional upon the fulfillment of
all of the following conditions precedent:
3.1 Representations and Warranties. All the representations and warranties provided by Party B in Article 4.2 are true,
complete and correct, and shall remain true, complete and correct on the date of such drawdown, as if they are provided
on such date.
3.2 No Breach. Party B shall not have breached any of his undertakings provided in Article 5, and no event which may affect
the performance of Party B’s obligations hereunder shall have occurred or be likely to occur.
4. REPRESENTATIONS AND WARRANTIES
4.1 Party A’s Representations and Warranties. Party A represents and warrants as follows:
4.1.1
it is a company incorporated and validly existing under the laws of PRC;
4.1.2
it has the power to enter into and perform this Agreement, and its execution and performance of this Agreement
is in compliance with the business scope of Party A and the provisions of its articles of association or other
constituent documents;
4.1.3
the execution and performance of this Agreement by it will not result in a breach of any laws, regulations,
authorizations, or agreement to which it is subject; and
4.1.4
this Agreement shall constitute its legal, valid, and binding obligations, and is to be enforceable against it.
Loan Agreement
- 6 -
4.2 Party B’s Representations and Warranties. Party B represents and warrants as follows:
4.2.1
he has and shall maintain the full power and authority to enter into this Agreement and to perform his
obligations hereunder;
4.2.2
the execution and performance of this Agreement by himself will not result in a breach of any laws, regulations,
authorizations, or agreement to which he is subject;
4.2.3 this Agreement shall constitute his legal, valid, and binding obligations, and is to be enforceable against himself;
4.2.4
4.2.5
there are no civil, criminal or administrative, claims, actions, suits, investigations or proceedings pending or
threatened against him which, based on his knowledge, would materially and adversely affect this Agreement
and the performance thereof;
there is no provision of any agreement, enforceable judgment or order of any court binding on him or affecting
his property, which would in any way prevent or materially adversely affect his execution or performance of
this Agreement;
4.2.6
the execution and performance of this Agreement and the realization of Party A’s rights hereunder will not
violate any mortgage right, contract, judgment, decree or law that is binding upon him or his assets;
4.2.7 with the exception of the Equity Interest Pledge Agreement, the Equity Option Agreement and the Power of
Attorney, he has not: (a) created any pledge, charge or any other security over any of the Equity Interests; (b)
offered to transfer any of the Equity Interests to any third party; (c) issued an undertaking to any third party
regarding any offer to purchase any of the Equity Interests; or (d) entered into any agreement to transfer any of
the Equity Interests to any third party; and
4.2.8
no dispute, action, arbitration, administrative procedure or other legal proceeding (potential or actual) regarding
himself and/or any of the Equity Interests in existence or pending.
5. UNDERTAKINGS
5.1 Party B’s Undertakings relating to the Company. Party B undertakes to vote his total interest in the Company and to take
all other necessary actions to ensure that
Loan Agreement
- 7 -
the Company:
5.1.1 will obtain or complete all the necessary governmental approvals, authorizations, licenses, registrations and
filing procedures to own its assets and to engage in the businesses specified in the operational scope of its
business license;
5.1.2 will not supplement, change, or modify in any way its articles of association or other constituent documents,
increase or reduce its registered capital, or alter its shareholding structure without the prior written consent of
Party A;
5.1.3 will not sell, transfer, mortgage, pledge, grant any option rights or otherwise dispose of any asset, business or
legal or beneficial interest, or permit the creation of any other security interest over the same without the prior
written consent of Party A;
5.1.4
will not incur, inherit, warrant or permit the existence of any Loan without the prior written consent of Party A;
5.1.5 will not enter into any contracts or extend any loan or credit to any party or provide any guarantee or assume
any obligation of any party without the prior written consent of Party A;
5.1.6 will provide all information relating to its operations and financial affairs to Party A upon the request of Party
A;
5.1.7
will not merge, consolidate with any third party, or acquire or invest in any third party, without the prior written
consent of Party A;
5.1.8 will notify Party A immediately should any legal action, arbitration or administrative procedure relating to its
assets, operations or income arises or is likely to arise;
5.1.9 will execute all necessary or appropriate agreements, take all necessary or appropriate actions and make all
necessary or appropriate defenses for the purpose of maintaining all rights and proprietary interests in respect
of its assets;
5.1.10 will not pay dividends or distributions of any kind to its shareholders without the prior written consent of Party
A;
5.1.11 will strictly observe all of the provisions under this Agreement, the Equity Interest Pledge Agreement, the
Equity Option Agreement and the Power of Attorney and shall not cause any act or omission to take place
which may
Loan Agreement
- 8 -
impair the validity and enforceability of those documents; and
5.1.12 will promptly notify Party A in writing of the occurrence of any event which may materially affect its assets,
obligations, rights or operations.
5.2
Undertakings of Party B. Party B further undertakes as follows:
5.2.1
5.2.2
he will not sell, transfer, mortgage, pledge, grant any option rights or otherwise dispose of any of the Equity
Interests, or permit the creation of any other security interest in the Company without the prior written consent
of Party A;
he will ensure that the shareholders’ meeting of the Company shall not approve any sale, transfer, pledge or
other disposal of the Equity Interests, or permit the creation of any other security interest over the same
without the prior written consent of Party A;
5.2.3
he will ensure that the shareholders’ meeting of the Company shall decide on any matter only with the prior
written instruction of Party A;
5.2.4
he will notify Party A immediately if and when any legal action, arbitration, or administrative procedure relating
to the Equity Interests arises or is likely to arise;
5.2.5
he will enter into all necessary or appropriate agreements, take all necessary or appropriate actions, file all
necessary or appropriate and make all necessary or appropriate defenses for the purpose of maintaining
ownership of the Equity Interests at the instruction of Party A;
5.2.6
he will not cause any actions and/or omissions which may materially and adversely affect the assets, operations
or liability of the Company without the prior written consent of Party A;
5.2.7
he will, upon the request of Party A, appoint any person nominated by Party A as a director of the Company;
5.2.8
in the event that the Party A or the Designated Party purchases the Equity Interests pursuant to the Equity
Option Agreement, he shall apply the proceeds therefrom to repay the Loan to Party A;
5.2.9
he will promptly notify Party A in writing of the occurrence of any event which may materially affect his assets,
obligations, rights or operations;
5.2.10
he shall issue the Power of Attorney simultaneously when entering into this
Loan Agreement
- 9 -
Agreement;
5.2.11
the Equity Option Agreement shall be validly executed, pursuant to which Party B shall grant Party A or the
Designated Party with an exclusive option to purchase the Equity Interests, to the extent permitted under PRC
law;
5.2.12
the Equity Interest Pledge Agreement, the Equity Option Agreement, and the Power of Attorney shall be in full
effect and free of default, and all relevant filing or registrations procedures, approvals, and governmental
proceedings shall have been obtained or completed;
5.2.13 he will strictly observe all the provisions and perform all of his obligations under this Agreement, the Equity
Interest Pledge Agreement and the Equity Option Agreement, causing no actions nor failing to take any
actions that may impair the validity or enforceability of this Agreement, the Equity Interest Pledge Agreement
or the Equity Option Agreement;
5.2.14 he shall maintain as strictly confidential the existence and provisions of this Agreement, as well as any
correspondence, resolutions, ancillary agreements and any other documentation associated herewith; and
5.2.15 he will not be entitled to any dividend or profit distribution of the Company and will not request or receive any of
the same without the prior written consent of Party A. If such dividends or other distributions are distributed to
him from the Company, he will immediately and unconditionally pay or transfer to Party A any such dividends
or other distributions in whatsoever form obtained from the Company as a shareholder of the Company at the
time such payables arise, after having deducted and paid any and all relevant taxes and expenses applicable as
a result of his receipt of such dividends or other distributions.
6.1 Repayment of Loan.
6. ENFORCEMENT
6.1.1 Upon the occurrence of either an Event of Default or a decision by Party A, in its sole discretion, to demand
repayment of the Loan or any portion of the Loan, Party A may at its discretion issue a notice (Repayment
Notice) to Party B requiring repayment of the Loan or any portion of the Loan and any other payment in
arrears under this Agreement.
6.1.2 Party B shall repay the Loan by transferring the Equity Interest to Party A or the Designated Party, as directed by
Party A, by signing and delivering an agreement for the transfer of the Equity Interest satisfactory to the Party
A
Loan Agreement
- 10 -
from the form to the substance.
6.1.3 If Party B fails to comply with its repayment obligations under this Agreement, late payment interest shall be
assessed at the rate of 0.3% per day upon the outstanding amount of the Loan and shall be payable from the
Repayment Date until the date on which the total amount of the overdue loan, overdue interest and other
monies payable to Party A are fully settled.
6.2 Notification. Party B shall immediately notify Party A in writing of the occurrence of any event set forth in Article 2.3 or
any circumstance which may lead to the occurrence of any such event as soon as Party B knows or is aware of such
event or circumstance.
7. CONFIDENTIALITY
7.1 Confidentiality Obligations. The parties shall protect and maintain the confidentiality of all information relating to or
arisen from this Agreement, or made available under this Agreement to a party or any associate thereof (the
“Confidential Information”). Without the prior written consent of the other party, no party shall disclose any
Confidential Information to any third party unless the disclosure is required by law or by enforceable orders of the court
or related government departments. Under such circumstances, the party required to disclose the Confidential
Information shall notify the other party immediately, take all possible measures to minimize the disclosure, and notify
the persons to whom information is being disclosed of the confidentiality obligation. Notwithstanding anything to the
contrary above, Party A shall have the full right to disclose any Confidential Information to its shareholders, affiliates or
professional advisors.
7.2
Obligations upon Termination. Upon termination of this Agreement, either party shall, at the request of the other
party, return any document, material, database, equipment, or software containing the Confidential Information to the
other party. If, for any reason, such document, material, database, equipment, or software cannot be returned, either
party shall destroy all the Confidential Information belonging to the other party and delete such Confidential Information
from any memory devices. No party shall be permitted to continue using the Confidential Information in any way after
the termination of this Agreement.
7.3
No Time Limit. There is no time limit to the confidentiality obligations stipulated in this Article, which obligations
will survive the termination of this Agreement unless the Confidential Information is disclosed to the public for reasons
not due to the breach of this Agreement by any party.
Loan Agreement
- 11 -
8.1 Governing Law. This Agreement shall be governed by the laws of the PRC.
8. DISPUTE RESOLUTION
8.2 Consultation and Mediation. If any dispute arises in connection with this
Agreement, the parties shall attempt in the first instance to resolve such dispute through friendly consultation or
mediation.
8.3 Arbitration. Any dispute, controversy or claim arising out of or in connection with this Agreement shall be submitted to
the China International Economic and Trade Arbitration Commission (the “CIETAC”) for arbitration, which shall be
conducted in accordance with the CIETAC’s rules in effect at the time of applying for arbitration. The place of
arbitration shall be Beijing. The language of the arbitration shall be Chinese. The tribunal shall consist of 3 arbitrators.
The arbitral award is final and binding upon the parties. The cost of arbitration shall be allocated as determined by the
arbitrators.
9.
INDEMNITY
Party A agrees to indemnify and hold harmless Party B for any damages, fines or penalties solely incurred in his capacity as a
shareholder or any other positions (including, without limitation, those of legal representative and director) directly as a result of
the establishment of the Company and the operation of the Company’s business in contravention of PRC law; provided, however,
that in no instance will Party A provide such indemnification if Party B has engaged in fraud or willful misconduct or has
breached or is in breach of this Agreement.
10. MISCELLANEOUS
10.1 Notices. All notices or other communications sent by either party shall be written in English or Chinese, and delivered in
person, by mail or telecopy, to the other party at the following addresses. The date at which the communication shall be
deemed to be duly given or made shall be confirmed as follows: (a) for notices delivered in person, the date of delivery
shall be deemed as having been duly given or made; (b) for notices delivered by mail, the 10th day of the delivery date of
air certified mail with postage prepaid (as shown on stamp) or the 4th day of the delivery date to an internationally
certified delivery institution shall be deemed as having been duly given or made; and (c) for notices by telecopy, the
receipt date showed on the delivery confirming paper of the relevant document shall be deemed as having been duly
given or made.
Party A: Beijing Cheerbright Technologies Co., Ltd.
Address: Room 1010, F/10, Tower B, No. 3, Danling Street,
Loan Agreement
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Haidian District, Beijing 100080, China
Tel: +8610-59857001
Attn: Wang Youdong
Party B: Wang Youdong
Address: ******
Tel: ******
Attn: Wang Youdong
10.2
Entire Agreement. This Agreement, the Exclusive Technology Consulting and Service Agreement, the Equity Interest
Pledge Agreement, the Equity Option Agreement, and the Power of Attorney from Party B to Party A in favor of Party A
shall constitute the entire agreement among the parties in respect of the subject matter hereof and shall supersede any
previous discussions, negotiations and agreements related thereto.
10.3
Amendment. Without the prior written consent of Party A, Party B shall not amend this Agreement. If required by
law, the parties shall obtain all requisite approvals from the relevant authorities to give effect to the amendment.
10.4 No Waiver. Unless otherwise agreed upon by the parties in writing, any failure or delay on the part of either party to
exercise any right, authority or privilege under this Agreement, or under any other agreement relating hereto, shall not
operate as a waiver thereof; nor shall any single or partial exercise of any right, authority or privilege preclude any other
future exercise thereof.
10.5
Severability. The provisions of this agreement are severable from each other. The invalidity of any provision of this
agreement shall not affect the validity or enforceability of any other provision of this agreement.
10.6 Successors. This Agreement shall be valid and binding on the parties, their successors and permitted assigns.
10.7 Assignment. Party A may transfer or assign any or all of its rights and obligations under this Agreement to any of its
designated parties (natural person or legal entity) at any time. In such circumstances, the transferee or assignee shall
enjoy and undertake the same rights and obligations herein of Party A as if the transferee or assignee is Party A
hereunder. When Party A transfers or assigns the rights and obligations under this Agreement, at the request of Party A,
Party B shall execute the relevant agreements and/or documents with respect to such transfer or assignment. Party B
shall not assign any of its rights or obligations hereunder without the prior written consent of the Party A.
Loan Agreement
- 13 -
10.8 Effectiveness. This Agreement shall be effective upon its signing by all the parties or their respective authorized
representative and shall be deemed terminated as of the date when the Loan has been repaid in full.
10.9
Language and Counterparts. This Agreement is prepared in 2 sets of originals both in English and Chinese. Each
party shall hold 1 set. Chinese articles shall prevail over English articles in case of any inconsistency.
[The space below has been intentionally left blank.]
Loan Agreement
- 14 -
IN WITNESS WHEREOF, each of the parties hereto has duly executed or has caused this Agreement to be duly executed in its
name and on its behalf by the officer or representative duly authorized, on the day and year first above written.
Party A: Beijing Cheerbright Technologies Co., Ltd.
January 28, 2024
/s/ Wang Youdong_____________________
Authorized Representative: Wang Youdong
/s/ Beijing Cheerbright Technologies Co., Ltd.
Company Seal: Beijing Cheerbright Technologies Co., Ltd.
Loan Agreement
IN WITNESS WHEREOF, each of the parties hereto has duly executed or has caused this Agreement to be duly executed in its
name and on its behalf by the officer or representative duly authorized, on the day and year first above written.
Party B: Wang Youdong
/s/ Wang Youdong
Loan Agreement
Exhibit 4.38
Loan Agreement
between
Beijing Chezhiying Technology Co., Ltd.
and
Long Quan
January 28, 2024
CONTENTS
DEFINITIONS AND INTERPRETATIONS
LOAN
CONDITIONS PRECEDENT
REPRESENTATIONS AND WARRANTIES
UNDERTAKINGS
ENFORCEMENT
CONFIDENTIALITY
DISPUTE RESOLUTION
INDEMNITY
MISCELLANEOUS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Loan Agreement
- 2 -
3
4
6
6
7
10
11
12
12
12
THIS LOAN AGREEMENT (this “Agreement”) is entered into on January 28, 2024 in Beijing, the People’s Republic of China
(“PRC”)
by and between
(1) Beijing Chezhiying Technology Co., Ltd., a wholly foreign owned enterprise duly incorporated and validly existing under
the law of the PRC, with its registered address at Room1117, F/11, Tower B, No. 3, Danling Street, Haidian District, Beijing
100080, China (“Party A”);
and
(2) Long Quan, a PRC citizen, holder of identification card number ******, whose residential address is at ****** (“Party
B”).
(Above-mentioned parties are solely referred as a “Party”, and collectively as the “Parties”)
Recitals
A.
Party B acquired the equity interest of a PRC domestically funded limited company named Beijing Shengtuo Hongyuan
Information Technology Co., Ltd. (the “Company”) in Beijing, PRC, jointly with the other shareholder (i.e. Wang
Youdong), and holds 50% of the equity interest of the Company (“Equity Interests”);
B. Now, Party A has provided Party B with a loan to be used for the purposes of acquiring the equity interest of the Company
in accordance with this Agreement. In accordance with the terms and conditions of this Agreement, Party A agrees to
provide an interest-free loan in the amount of RMB 5,000,000 (the “Loan”).
NOW, THEREFORE, the parties agree as follows:
1.1 Definitions. Unless otherwise provided in this Agreement, the following terms shall have the meanings set forth below:
1. DEFINITIONS AND INTERPRETATIONS
Designated Party means a third party as designated by Party A;
Event of Default means an event as described in Article 2.3;
Loan Agreement
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Equity Option Agreement means the Equity Option Agreement to be entered into by and among Party A, Party B
and the Company dated on January 28, 2024;
Equity Interest Pledge Agreement means the Equity Interest Pledge Agreement to be entered into by and
between Party A, Party B dated on January 28, 2024;
Power of Attorney means an irrevocable Power of Attorney issued by Party B conferring all his rights as a
shareholder of the Company to Party A or the Designated Party dated on January 28, 2024;
Repayment Notice means a written notice from Party A to Party B for purposes of the repayment of the Loan.
1.2 Interpretations. All headings used are for reference purposes only and do not affect the meaning or interpretation of any
provision. Any reference to an Article is to an article of this Agreement. The use of the plural shall include the use of
the singular, and vice versa. Unless otherwise indicated, a reference to a day, month or year is to a calendar day, month
or year. The use of the masculine shall include the use of the feminine, and vice versa.
2. LOAN
2.1 Amount. Party A has provided to Party B, and Party B has received from Party A, the Loan. The Loan shall be interest free.
2.2 Term. The term of the Loan shall continue indefinitely until such time as Party B receives a Repayment Notice and fully
repays the Loan, or an Event of Default occurs unless Party A has sent a notice indicating otherwise within 15 calendar
days after it is aware of such event.
2.3 Event of Default. For purposes of this Agreement, an Event of Default is deemed to have occurred if any of the following
were to apply to Party B:
2.3.1 a proceeding is commenced against him under any applicable bankruptcy, insolvency, reorganization, court
mediation, or other similar law;
2.3.2
he makes or attempts to make any fraudulent use or any unauthorized transfer of the Loan or the Equity
Interests;
2.3.3
he dies or his capacity to perform civil acts is lost or limited;
2.3.4
he is charged with a criminal offense;
Loan Agreement
- 4 -
2.3.5
any third party institutes a court action against him claiming over RMB 50,000;
2.3.6 Party B breaches any of its covenants or other obligations under this Agreement, and such breach has not been
remedied within 15 calendar days after receiving Party A’s written notice requiring remedy;
2.3.7 the representations and warranties made by Party B prove to be false or misleading in any material respect;
2.3.8
any indebtedness, guarantee or other obligation of Party B, whether pursuant to a contract or otherwise, (i) is
accelerated as a result of a default thereunder and is required to be repaid or performed prior to the scheduled
date; or (ii) has become due and is not repaid or performed as scheduled and thereby causes Party A to regard
Party B’s capacity to perform the obligations specified herein as having been adversely affected;
2.3.9
Party B is incapable of repaying his debts as they become due;
2.3.10
the Agreement is illegal as a result of any applicable laws or Party B is restricted from continuing to perform its
obligations as specified herein;
2.3.11
any approval, permits, licenses or authorization from any applicable governmental entity (and registration or
filing procedure) required for the Company to provide value added telecommunications services in respect of
its information services business via the Internet in the PRC are withdrawn, suspended, invalidated or
materially amended;
2.3.12
any approval, permits, licenses or authorization from any applicable government authority required to perform
this Agreement or make this Agreement enforceable, legal and valid are withdrawn, suspended, invalidated or
materially amended;
2.3.13
any property owned by Party B is altered or damaged and thereby causes Party A to deem that the capability of
Party B to perform the obligations stated herein have been adversely affected; or
2.3.14
Party B defaults under either of the Equity Interest Pledge Agreement or the Equity Option Agreement.
2.4 Repayment Date. Unless otherwise agreed by Party A in writing, the Loan borrowed by Party B, any portion of the Loan
and any other payment in arrears, if applicable,
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under this Agreement shall become due and payable five Business Days after Party A gives written notice to Party B
demanding repayment in accordance with Article 6.1 (Repayment Date). Without Party A’s express prior written
consent, the Loan shall not be repaid and shall continue indefinitely until the Repayment Date.
2.5 Form of Repayment. Unless agreed by the Parties in writing, the Loan may only be repaid in the form specified in Article
6.
2.6 Purpose of Loan. Party B has accepted the Loan provided by Party A and hereby agrees and covenants that the Loan shall
be used only to acquire the equity interest of the Company. Without Party A’s prior written consent, Party B shall not
use the Loan for any other purpose, or sell, assign, transfer, pledge or otherwise dispose of any legal rights or benefits in
connection with, or create any security interest over, the Equity Interest to any third party.
3. CONDITIONS PRECEDENT
Drawdown of the Loan by Party B shall, unless specifically waived by Party A in writing, be conditional upon the fulfillment of
all of the following conditions precedent:
3.1 Representations and Warranties. All the representations and warranties provided by Party B in Article 4.2 are true,
complete and correct, and shall remain true, complete and correct on the date of such drawdown, as if they are provided
on such date.
3.2 No Breach. Party B shall not have breached any of his undertakings provided in Article 5, and no event which may affect
the performance of Party B’s obligations hereunder shall have occurred or be likely to occur.
4. REPRESENTATIONS AND WARRANTIES
4.1 Party A’s Representations and Warranties. Party A represents and warrants as follows:
4.1.1
it is a company incorporated and validly existing under the laws of PRC;
4.1.2
it has the power to enter into and perform this Agreement, and its execution and performance of this Agreement
is in compliance with the business scope of Party A and the provisions of its articles of association or other
constituent documents;
4.1.3
the execution and performance of this Agreement by it will not result in a breach of any laws, regulations,
authorizations, or agreement to which it is subject; and
Loan Agreement
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4.1.4
this Agreement shall constitute its legal, valid, and binding obligations, and is to be enforceable against it.
4.2 Party B’s Representations and Warranties. Party B represents and warrants as follows:
4.2.1
he has and shall maintain the full power and authority to enter into this Agreement and to perform his
obligations hereunder;
4.2.2
the execution and performance of this Agreement by himself will not result in a breach of any laws, regulations,
authorizations, or agreement to which he is subject;
4.2.3 this Agreement shall constitute his legal, valid, and binding obligations, and is to be enforceable against himself;
4.2.4
4.2.5
there are no civil, criminal or administrative, claims, actions, suits, investigations or proceedings pending or
threatened against him which, based on his knowledge, would materially and adversely affect this Agreement
and the performance thereof;
there is no provision of any agreement, enforceable judgment or order of any court binding on him or affecting
his property, which would in any way prevent or materially adversely affect his execution or performance of
this Agreement;
4.2.6
the execution and performance of this Agreement and the realization of Party A’s rights hereunder will not
violate any mortgage right, contract, judgment, decree or law that is binding upon him or his assets;
4.2.7 with the exception of the Equity Interest Pledge Agreement, the Equity Option Agreement and the Power of
Attorney, he has not: (a) created any pledge, charge or any other security over any of the Equity Interests; (b)
offered to transfer any of the Equity Interests to any third party; (c) issued an undertaking to any third party
regarding any offer to purchase any of the Equity Interests; or (d) entered into any agreement to transfer any of
the Equity Interests to any third party; and
4.2.8
no dispute, action, arbitration, administrative procedure or other legal proceeding (potential or actual) regarding
himself and/or any of the Equity Interests in existence or pending.
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5.1 Party B’s Undertakings relating to the Company. Party B undertakes to vote his total interest in the Company and to take
all other necessary actions to ensure that the Company:
5. UNDERTAKINGS
5.1.1 will obtain or complete all the necessary governmental approvals, authorizations, licenses, registrations and
filing procedures to own its assets and to engage in the businesses specified in the operational scope of its
business license;
5.1.2 will not supplement, change, or modify in any way its articles of association or other constituent documents,
increase or reduce its registered capital, or alter its shareholding structure without the prior written consent of
Party A;
5.1.3 will not sell, transfer, mortgage, pledge, grant any option rights or otherwise dispose of any asset, business or
legal or beneficial interest, or permit the creation of any other security interest over the same without the prior
written consent of Party A;
5.1.4
will not incur, inherit, warrant or permit the existence of any Loan without the prior written consent of Party A;
5.1.5 will not enter into any contracts or extend any loan or credit to any party or provide any guarantee or assume
any obligation of any party without the prior written consent of Party A;
5.1.6 will provide all information relating to its operations and financial affairs to Party A upon the request of Party
A;
5.1.7
will not merge, consolidate with any third party, or acquire or invest in any third party, without the prior written
consent of Party A;
5.1.8 will notify Party A immediately should any legal action, arbitration or administrative procedure relating to its
assets, operations or income arises or is likely to arise;
5.1.9 will execute all necessary or appropriate agreements, take all necessary or appropriate actions and make all
necessary or appropriate defenses for the purpose of maintaining all rights and proprietary interests in respect
of its assets;
5.1.10 will not pay dividends or distributions of any kind to its shareholders without
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the prior written consent of Party A;
5.1.11 will strictly observe all of the provisions under this Agreement, the Equity Interest Pledge Agreement, the
Equity Option Agreement and the Power of Attorney and shall not cause any act or omission to take place
which may impair the validity and enforceability of those documents; and
5.1.12 will promptly notify Party A in writing of the occurrence of any event which may materially affect its assets,
obligations, rights or operations.
5.2
Undertakings of Party B. Party B further undertakes as follows:
5.2.1
5.2.2
he will not sell, transfer, mortgage, pledge, grant any option rights or otherwise dispose of any of the Equity
Interests, or permit the creation of any other security interest in the Company without the prior written consent
of Party A;
he will ensure that the shareholders’ meeting of the Company shall not approve any sale, transfer, pledge or
other disposal of the Equity Interests, or permit the creation of any other security interest over the same
without the prior written consent of Party A;
5.2.3
he will ensure that the shareholders’ meeting of the Company shall decide on any matter only with the prior
written instruction of Party A;
5.2.4
he will notify Party A immediately if and when any legal action, arbitration, or administrative procedure relating
to the Equity Interests arises or is likely to arise;
5.2.5
he will enter into all necessary or appropriate agreements, take all necessary or appropriate actions, file all
necessary or appropriate and make all necessary or appropriate defenses for the purpose of maintaining
ownership of the Equity Interests at the instruction of Party A;
5.2.6
he will not cause any actions and/or omissions which may materially and adversely affect the assets, operations
or liability of the Company without the prior written consent of Party A;
5.2.7
he will, upon the request of Party A, appoint any person nominated by Party A as a director of the Company;
5.2.8
in the event that the Party A or the Designated Party purchases the Equity Interests pursuant to the Equity
Option Agreement, he shall apply the proceeds therefrom to repay the Loan to Party A;
Loan Agreement
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5.2.9
he will promptly notify Party A in writing of the occurrence of any event which may materially affect his assets,
obligations, rights or operations;
5.2.10
he shall issue the Power of Attorney simultaneously when entering into this Agreement;
5.2.11
the Equity Option Agreement shall be validly executed, pursuant to which Party B shall grant Party A or the
Designated Party with an exclusive option to purchase the Equity Interests, to the extent permitted under PRC
law;
5.2.12
the Equity Interest Pledge Agreement, the Equity Option Agreement, and the Power of Attorney shall be in full
effect and free of default, and all relevant filing or registrations procedures, approvals, and governmental
proceedings shall have been obtained or completed;
5.2.13 he will strictly observe all the provisions and perform all of his obligations under this Agreement, the Equity
Interest Pledge Agreement and the Equity Option Agreement, causing no actions nor failing to take any
actions that may impair the validity or enforceability of this Agreement, the Equity Interest Pledge Agreement
or the Equity Option Agreement;
5.2.14 he shall maintain as strictly confidential the existence and provisions of this Agreement, as well as any
correspondence, resolutions, ancillary agreements and any other documentation associated herewith; and
5.2.15 he will not be entitled to any dividend or profit distribution of the Company and will not request or receive any of
the same without the prior written consent of Party A. If such dividends or other distributions are distributed to
him from the Company, he will immediately and unconditionally pay or transfer to Party A any such dividends
or other distributions in whatsoever form obtained from the Company as a shareholder of the Company at the
time such payables arise, after having deducted and paid any and all relevant taxes and expenses applicable as
a result of his receipt of such dividends or other distributions.
6.1 Repayment of Loan.
6. ENFORCEMENT
6.1.1 Upon the occurrence of either an Event of Default or a decision by Party A, in its sole discretion, to demand
repayment of the Loan or any portion of the Loan, Party A may at its discretion issue a notice (Repayment
Notice) to Party B requiring repayment of the Loan or any portion of the Loan and any
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other payment in arrears under this Agreement.
6.1.2 Party B shall repay the Loan by transferring the Equity Interest to Party A or the Designated Party, as directed by
Party A, by signing and delivering an agreement for the transfer of the Equity Interest satisfactory to the Party
A from the form to the substance.
6.1.3 If Party B fails to comply with its repayment obligations under this Agreement, late payment interest shall be
assessed at the rate of 0.3% per day upon the outstanding amount of the Loan and shall be payable from the
Repayment Date until the date on which the total amount of the overdue loan, overdue interest and other
monies payable to Party A are fully settled.
6.2 Notification. Party B shall immediately notify Party A in writing of the occurrence of any event set forth in Article 2.3 or
any circumstance which may lead to the occurrence of any such event as soon as Party B knows or is aware of such
event or circumstance.
7. CONFIDENTIALITY
7.1 Confidentiality Obligations. The parties shall protect and maintain the confidentiality of all information relating to or
arisen from this Agreement, or made available under this Agreement to a party or any associate thereof (the
“Confidential Information”). Without the prior written consent of the other party, no party shall disclose any
Confidential Information to any third party unless the disclosure is required by law or by enforceable orders of the court
or related government departments. Under such circumstances, the party required to disclose the Confidential
Information shall notify the other party immediately, take all possible measures to minimize the disclosure, and notify
the persons to whom information is being disclosed of the confidentiality obligation. Notwithstanding anything to the
contrary above, Party A shall have the full right to disclose any Confidential Information to its shareholders, affiliates or
professional advisors.
7.2
Obligations upon Termination. Upon termination of this Agreement, either party shall, at the request of the other
party, return any document, material, database, equipment, or software containing the Confidential Information to the
other party. If, for any reason, such document, material, database, equipment, or software cannot be returned, either
party shall destroy all the Confidential Information belonging to the other party and delete such Confidential Information
from any memory devices. No party shall be permitted to continue using the Confidential Information in any way after
the termination of this Agreement.
7.3
No Time Limit. There is no time limit to the confidentiality obligations stipulated
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in this Article, which obligations will survive the termination of this Agreement unless the Confidential Information is
disclosed to the public for reasons not due to the breach of this Agreement by any party.
8.1 Governing Law. This Agreement shall be governed by the laws of the PRC.
8. DISPUTE RESOLUTION
8.2 Consultation and Mediation. If any dispute arises in connection with this
Agreement, the parties shall attempt in the first instance to resolve such dispute through friendly consultation or
mediation.
8.3 Arbitration. Any dispute, controversy or claim arising out of or in connection with this Agreement shall be submitted to
the China International Economic and Trade Arbitration Commission (the “CIETAC”) for arbitration, which shall be
conducted in accordance with the CIETAC’s rules in effect at the time of applying for arbitration. The place of
arbitration shall be Beijing. The language of the arbitration shall be Chinese. The tribunal shall consist of 3 arbitrators.
The arbitral award is final and binding upon the parties. The cost of arbitration shall be allocated as determined by the
arbitrators.
9.
INDEMNITY
Party A agrees to indemnify and hold harmless Party B for any damages, fines or penalties solely incurred in his capacity as a
shareholder or any other positions (including, without limitation, those of legal representative and director) directly as a result of
the establishment of the Company and the operation of the Company’s business in contravention of PRC law; provided, however,
that in no instance will Party A provide such indemnification if Party B has engaged in fraud or willful misconduct or has
breached or is in breach of this Agreement.
10. MISCELLANEOUS
10.1 Notices. All notices or other communications sent by either party shall be written in English or Chinese, and delivered in
person, by mail or telecopy, to the other party at the following addresses. The date at which the communication shall be
deemed to be duly given or made shall be confirmed as follows: (a) for notices delivered in person, the date of delivery
shall be deemed as having been duly given or made; (b) for notices delivered by mail, the 10th day of the delivery date of
air certified mail with postage prepaid (as shown on stamp) or the 4th day of the delivery date to an internationally
certified delivery institution shall be deemed as having been duly given or made; and (c) for notices by telecopy, the
receipt date showed on the delivery confirming paper of the relevant document shall be deemed as having been duly
given or made.
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Party A: Beijing Chezhiying Technology Co., Ltd.
Address: Room 1117, F/11, Tower B, No. 3, Danling Street, Haidian District, Beijing 100080, China
Tel: +8610-59857001
Attn: Wang Youdong
Long Quan
Party B:
Address: ******
Tel: ******
Attn:
Long Quan
10.2
Entire Agreement. This Agreement, the Exclusive Technology Consulting and Service Agreement, the Equity Interest
Pledge Agreement, the Equity Option Agreement, and the Power of Attorney from Party B to Party A in favor of Party A
shall constitute the entire agreement among the parties in respect of the subject matter hereof and shall supersede any
previous discussions, negotiations and agreements related thereto.
10.3
Amendment. Without the prior written consent of Party A, Party B shall not amend this Agreement. If required by
law, the parties shall obtain all requisite approvals from the relevant authorities to give effect to the amendment.
10.4 No Waiver. Unless otherwise agreed upon by the parties in writing, any failure or delay on the part of either party to
exercise any right, authority or privilege under this Agreement, or under any other agreement relating hereto, shall not
operate as a waiver thereof; nor shall any single or partial exercise of any right, authority or privilege preclude any other
future exercise thereof.
10.5
Severability. The provisions of this agreement are severable from each other. The invalidity of any provision of this
agreement shall not affect the validity or enforceability of any other provision of this agreement.
10.6 Successors. This Agreement shall be valid and binding on the parties, their successors and permitted assigns.
10.7 Assignment. Party A may transfer or assign any or all of its rights and obligations under this Agreement to any of its
designated parties (natural person or legal entity) at any time. In such circumstances, the transferee or assignee shall
enjoy and undertake the same rights and obligations herein of Party A as if the transferee or assignee is Party A
hereunder. When Party A transfers or assigns the rights and obligations under this Agreement, at the request of Party A,
Party B shall execute the relevant agreements and/or documents with respect to such transfer or assignment. Party B
shall not assign any of its rights or obligations hereunder without the prior written consent of the Party A.
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10.8 Effectiveness. This Agreement shall be effective upon its signing by all the parties or their respective authorized
representative and shall be deemed terminated as of the date when the Loan has been repaid in full.
10.9
Language and Counterparts. This Agreement is prepared in 2 sets of originals both in English and Chinese. Each
party shall hold 1 set. Chinese articles shall prevail over English articles in case of any inconsistency.
[The space below has been intentionally left blank.]
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IN WITNESS WHEREOF, each of the parties hereto has duly executed or has caused this Agreement to be duly executed in its
name and on its behalf by the officer or representative duly authorized, on the day and year first above written.
Party A: Beijing Chezhiying Technology Co., Ltd.
/s/ Wang Youdong
Authorized Representative: Wang Youdong
/s/ Beijing Chezhiying Technology Co., Ltd.
Company Seal: Beijing Chezhiying Technology Co., Ltd.
Loan Agreement
IN WITNESS WHEREOF, each of the parties hereto has duly executed or has caused this Agreement to be duly executed in its
name and on its behalf by the officer or representative duly authorized, on the day and year first above written.
Party B: Long Quan
/s/ Long Quan
Loan Agreement
Exhibit 4.39
Loan Agreement
between
Beijing Chezhiying Technology Co., Ltd.
and
Wang Youdong
January 28, 2024
CONTENTS
DEFINITIONS AND INTERPRETATIONS
LOAN
CONDITIONS PRECEDENT
REPRESENTATIONS AND WARRANTIES
UNDERTAKINGS
ENFORCEMENT
CONFIDENTIALITY
DISPUTE RESOLUTION
INDEMNITY
MISCELLANEOUS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
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- 2 -
3
4
6
6
7
10
11
12
12
12
THIS LOAN AGREEMENT (this “Agreement”) is entered into on January 28, 2024 in Beijing, the People’s Republic of China
(“PRC”)
by and between
(1) Beijing Chezhiying Technology Co., Ltd., a wholly foreign owned enterprise duly incorporated and validly existing under
the law of the PRC, with its registered address at Room1117, F/11, Tower B, No. 3, Danling Street, Haidian District, Beijing
100080, China (“Party A”);
and
(2) Wang Youdong , a PRC citizen, holder of identification card number ******, whose residential address is at ******
(“Party B”).
(Above-mentioned parties are solely referred as a “Party”, and collectively as the “Parties”)
Recitals
A.
Party B acquired the equity interest of a PRC domestically funded limited company named Beijing Shengtuo Hongyuan
Information Technology Co., Ltd. (the “Company”) in Beijing, PRC, jointly with the other shareholder (i.e. Long
Quan), and holds 50% of the equity interest of the Company (“Equity Interests”);
B. Now, Party A has provided Party B with a loan to be used for the purposes of acquiring the equity interest of the Company
in accordance with this Agreement. In accordance with the terms and conditions of this Agreement, Party A agrees to
provide an interest-free loan in the amount of RMB5,000,000 (the “Loan”).
NOW, THEREFORE, the parties agree as follows:
1.1 Definitions. Unless otherwise provided in this Agreement, the following terms shall have the meanings set forth below:
1. DEFINITIONS AND INTERPRETATIONS
Designated Party means a third party as designated by Party A;
Event of Default means an event as described in Article 2.3;
Equity Option Agreement means the Equity Option Agreement to be entered into by and among Party A, Party B
and the Company dated on January 28, 2024;
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Equity Interest Pledge Agreement means the Equity Interest Pledge Agreement to be entered into by and
between Party A, Party B dated on January 28, 2024;
Power of Attorney means an irrevocable Power of Attorney issued by Party B conferring all his rights as a
shareholder of the Company to Party A or the Designated Party dated on January 28, 2024;
Repayment Notice means a written notice from Party A to Party B for purposes of the repayment of the Loan.
1.2 Interpretations. All headings used are for reference purposes only and do not affect the meaning or interpretation of any
provision. Any reference to an Article is to an article of this Agreement. The use of the plural shall include the use of
the singular, and vice versa. Unless otherwise indicated, a reference to a day, month or year is to a calendar day, month
or year. The use of the masculine shall include the use of the feminine, and vice versa.
2. LOAN
2.1 Amount. Party A has provided to Party B, and Party B has received from Party A, the Loan. The Loan shall be interest free.
2.2 Term. The term of the Loan shall continue indefinitely until such time as Party B receives a Repayment Notice and fully
repays the Loan, or an Event of Default occurs unless Party A has sent a notice indicating otherwise within 15 calendar
days after it is aware of such event.
2.3 Event of Default. For purposes of this Agreement, an Event of Default is deemed to have occurred if any of the following
were to apply to Party B:
2.3.1 a proceeding is commenced against him under any applicable bankruptcy, insolvency, reorganization, court
mediation, or other similar law;
2.3.2
he makes or attempts to make any fraudulent use or any unauthorized transfer of the Loan or the Equity
Interests;
2.3.3
he dies or his capacity to perform civil acts is lost or limited;
2.3.4
he is charged with a criminal offense;
2.3.5
any third party institutes a court action against him claiming over RMB 50,000;
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2.3.6 Party B breaches any of its covenants or other obligations under this Agreement, and such breach has not been
remedied within 15 calendar days after receiving Party A’s written notice requiring remedy;
2.3.7 the representations and warranties made by Party B prove to be false or misleading in any material respect;
2.3.8
any indebtedness, guarantee or other obligation of Party B, whether pursuant to a contract or otherwise, (i) is
accelerated as a result of a default thereunder and is required to be repaid or performed prior to the scheduled
date; or (ii) has become due and is not repaid or performed as scheduled and thereby causes Party A to regard
Party B’s capacity to perform the obligations specified herein as having been adversely affected;
2.3.9
Party B is incapable of repaying his debts as they become due;
2.3.10
the Agreement is illegal as a result of any applicable laws or Party B is restricted from continuing to perform its
obligations as specified herein;
2.3.11
any approval, permits, licenses or authorization from any applicable governmental entity (and registration or
filing procedure) required for the Company to provide value added telecommunications services in respect of
its information services business via the Internet in the PRC are withdrawn, suspended, invalidated or
materially amended;
2.3.12
any approval, permits, licenses or authorization from any applicable government authority required to perform
this Agreement or make this Agreement enforceable, legal and valid are withdrawn, suspended, invalidated or
materially amended;
2.3.13
any property owned by Party B is altered or damaged and thereby causes Party A to deem that the capability of
Party B to perform the obligations stated herein have been adversely affected; or
2.3.14
Party B defaults under either of the Equity Interest Pledge Agreement or the Equity Option Agreement.
2.4 Repayment Date. Unless otherwise agreed by Party A in writing, the Loan borrowed by Party B, any portion of the Loan
and any other payment in arrears, if applicable, under this Agreement shall become due and payable five Business Days
after Party A gives written notice to Party B demanding repayment in accordance with Article 6.1 (Repayment Date).
Without Party A’s express prior written consent, the Loan
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shall not be repaid and shall continue indefinitely until the Repayment Date.
2.5 Form of Repayment. Unless agreed by the Parties in writing, the Loan may only be repaid in the form specified in Article
6.
2.6 Purpose of Loan. Party B has accepted the Loan provided by Party A and hereby agrees and covenants that the Loan shall
be used only to acquire the equity interest of the Company. Without Party A’s prior written consent, Party B shall not
use the Loan for any other purpose, or sell, assign, transfer, pledge or otherwise dispose of any legal rights or benefits in
connection with, or create any security interest over, the Equity Interest to any third party.
3. CONDITIONS PRECEDENT
Drawdown of the Loan by Party B shall, unless specifically waived by Party A in writing, be conditional upon the fulfillment of
all of the following conditions precedent:
3.1 Representations and Warranties. All the representations and warranties provided by Party B in Article 4.2 are true,
complete and correct, and shall remain true, complete and correct on the date of such drawdown, as if they are provided
on such date.
3.2 No Breach. Party B shall not have breached any of his undertakings provided in Article 5, and no event which may affect
the performance of Party B’s obligations hereunder shall have occurred or be likely to occur.
4. REPRESENTATIONS AND WARRANTIES
4.1 Party A’s Representations and Warranties. Party A represents and warrants as follows:
4.1.1
it is a company incorporated and validly existing under the laws of PRC;
4.1.2
it has the power to enter into and perform this Agreement, and its execution and performance of this Agreement
is in compliance with the business scope of Party A and the provisions of its articles of association or other
constituent documents;
4.1.3
the execution and performance of this Agreement by it will not result in a breach of any laws, regulations,
authorizations, or agreement to which it is subject; and
4.1.4
this Agreement shall constitute its legal, valid, and binding obligations, and is to be enforceable against it.
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4.2 Party B’s Representations and Warranties. Party B represents and warrants as follows:
4.2.1
he has and shall maintain the full power and authority to enter into this Agreement and to perform his
obligations hereunder;
4.2.2
the execution and performance of this Agreement by himself will not result in a breach of any laws, regulations,
authorizations, or agreement to which he is subject;
4.2.3 this Agreement shall constitute his legal, valid, and binding obligations, and is to be enforceable against himself;
4.2.4
4.2.5
there are no civil, criminal or administrative, claims, actions, suits, investigations or proceedings pending or
threatened against him which, based on his knowledge, would materially and adversely affect this Agreement
and the performance thereof;
there is no provision of any agreement, enforceable judgment or order of any court binding on him or affecting
his property, which would in any way prevent or materially adversely affect his execution or performance of
this Agreement;
4.2.6
the execution and performance of this Agreement and the realization of Party A’s rights hereunder will not
violate any mortgage right, contract, judgment, decree or law that is binding upon him or his assets;
4.2.7 with the exception of the Equity Interest Pledge Agreement, the Equity Option Agreement and the Power of
Attorney, he has not: (a) created any pledge, charge or any other security over any of the Equity Interests; (b)
offered to transfer any of the Equity Interests to any third party; (c) issued an undertaking to any third party
regarding any offer to purchase any of the Equity Interests; or (d) entered into any agreement to transfer any of
the Equity Interests to any third party; and
4.2.8
no dispute, action, arbitration, administrative procedure or other legal proceeding (potential or actual) regarding
himself and/or any of the Equity Interests in existence or pending.
5. UNDERTAKINGS
5.1 Party B’s Undertakings relating to the Company. Party B undertakes to vote his total interest in the Company and to take
all other necessary actions to ensure that
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the Company:
5.1.1 will obtain or complete all the necessary governmental approvals, authorizations, licenses, registrations and
filing procedures to own its assets and to engage in the businesses specified in the operational scope of its
business license;
5.1.2 will not supplement, change, or modify in any way its articles of association or other constituent documents,
increase or reduce its registered capital, or alter its shareholding structure without the prior written consent of
Party A;
5.1.3 will not sell, transfer, mortgage, pledge, grant any option rights or otherwise dispose of any asset, business or
legal or beneficial interest, or permit the creation of any other security interest over the same without the prior
written consent of Party A;
5.1.4
will not incur, inherit, warrant or permit the existence of any Loan without the prior written consent of Party A;
5.1.5 will not enter into any contracts or extend any loan or credit to any party or provide any guarantee or assume
any obligation of any party without the prior written consent of Party A;
5.1.6 will provide all information relating to its operations and financial affairs to Party A upon the request of Party
A;
5.1.7
will not merge, consolidate with any third party, or acquire or invest in any third party, without the prior written
consent of Party A;
5.1.8 will notify Party A immediately should any legal action, arbitration or administrative procedure relating to its
assets, operations or income arises or is likely to arise;
5.1.9 will execute all necessary or appropriate agreements, take all necessary or appropriate actions and make all
necessary or appropriate defenses for the purpose of maintaining all rights and proprietary interests in respect
of its assets;
5.1.10 will not pay dividends or distributions of any kind to its shareholders without the prior written consent of Party
A;
5.1.11 will strictly observe all of the provisions under this Agreement, the Equity Interest Pledge Agreement, the
Equity Option Agreement and the Power of Attorney and shall not cause any act or omission to take place
which may
Loan Agreement
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impair the validity and enforceability of those documents; and
5.1.12 will promptly notify Party A in writing of the occurrence of any event which may materially affect its assets,
obligations, rights or operations.
5.2
Undertakings of Party B. Party B further undertakes as follows:
5.2.1
5.2.2
he will not sell, transfer, mortgage, pledge, grant any option rights or otherwise dispose of any of the Equity
Interests, or permit the creation of any other security interest in the Company without the prior written consent
of Party A;
he will ensure that the shareholders’ meeting of the Company shall not approve any sale, transfer, pledge or
other disposal of the Equity Interests, or permit the creation of any other security interest over the same
without the prior written consent of Party A;
5.2.3
he will ensure that the shareholders’ meeting of the Company shall decide on any matter only with the prior
written instruction of Party A;
5.2.4
he will notify Party A immediately if and when any legal action, arbitration, or administrative procedure relating
to the Equity Interests arises or is likely to arise;
5.2.5
he will enter into all necessary or appropriate agreements, take all necessary or appropriate actions, file all
necessary or appropriate and make all necessary or appropriate defenses for the purpose of maintaining
ownership of the Equity Interests at the instruction of Party A;
5.2.6
he will not cause any actions and/or omissions which may materially and adversely affect the assets, operations
or liability of the Company without the prior written consent of Party A;
5.2.7
he will, upon the request of Party A, appoint any person nominated by Party A as a director of the Company;
5.2.8
in the event that the Party A or the Designated Party purchases the Equity Interests pursuant to the Equity
Option Agreement, he shall apply the proceeds therefrom to repay the Loan to Party A;
5.2.9
he will promptly notify Party A in writing of the occurrence of any event which may materially affect his assets,
obligations, rights or operations;
5.2.10
he shall issue the Power of Attorney simultaneously when entering into this
Loan Agreement
- 9 -
Agreement;
5.2.11
the Equity Option Agreement shall be validly executed, pursuant to which Party B shall grant Party A or the
Designated Party with an exclusive option to purchase the Equity Interests, to the extent permitted under PRC
law;
5.2.12
the Equity Interest Pledge Agreement, the Equity Option Agreement, and the Power of Attorney shall be in full
effect and free of default, and all relevant filing or registrations procedures, approvals, and governmental
proceedings shall have been obtained or completed;
5.2.13 he will strictly observe all the provisions and perform all of his obligations under this Agreement, the Equity
Interest Pledge Agreement and the Equity Option Agreement, causing no actions nor failing to take any
actions that may impair the validity or enforceability of this Agreement, the Equity Interest Pledge Agreement
or the Equity Option Agreement;
5.2.14 he shall maintain as strictly confidential the existence and provisions of this Agreement, as well as any
correspondence, resolutions, ancillary agreements and any other documentation associated herewith; and
5.2.15 he will not be entitled to any dividend or profit distribution of the Company and will not request or receive any of
the same without the prior written consent of Party A. If such dividends or other distributions are distributed to
him from the Company, he will immediately and unconditionally pay or transfer to Party A any such dividends
or other distributions in whatsoever form obtained from the Company as a shareholder of the Company at the
time such payables arise, after having deducted and paid any and all relevant taxes and expenses applicable as
a result of his receipt of such dividends or other distributions.
6.1 Repayment of Loan.
6. ENFORCEMENT
6.1.1 Upon the occurrence of either an Event of Default or a decision by Party A, in its sole discretion, to demand
repayment of the Loan or any portion of the Loan, Party A may at its discretion issue a notice (Repayment
Notice) to Party B requiring repayment of the Loan or any portion of the Loan and any other payment in
arrears under this Agreement.
6.1.2 Party B shall repay the Loan by transferring the Equity Interest to Party A or the Designated Party, as directed by
Party A, by signing and delivering an agreement for the transfer of the Equity Interest satisfactory to the Party
A
Loan Agreement
- 10 -
from the form to the substance.
6.1.3 If Party B fails to comply with its repayment obligations under this Agreement, late payment interest shall be
assessed at the rate of 0.3% per day upon the outstanding amount of the Loan and shall be payable from the
Repayment Date until the date on which the total amount of the overdue loan, overdue interest and other
monies payable to Party A are fully settled.
6.2 Notification. Party B shall immediately notify Party A in writing of the occurrence of any event set forth in Article 2.3 or
any circumstance which may lead to the occurrence of any such event as soon as Party B knows or is aware of such
event or circumstance.
7. CONFIDENTIALITY
7.1 Confidentiality Obligations. The parties shall protect and maintain the confidentiality of all information relating to or
arisen from this Agreement, or made available under this Agreement to a party or any associate thereof (the
“Confidential Information”). Without the prior written consent of the other party, no party shall disclose any
Confidential Information to any third party unless the disclosure is required by law or by enforceable orders of the court
or related government departments. Under such circumstances, the party required to disclose the Confidential
Information shall notify the other party immediately, take all possible measures to minimize the disclosure, and notify
the persons to whom information is being disclosed of the confidentiality obligation. Notwithstanding anything to the
contrary above, Party A shall have the full right to disclose any Confidential Information to its shareholders, affiliates or
professional advisors.
7.2
Obligations upon Termination. Upon termination of this Agreement, either party shall, at the request of the other
party, return any document, material, database, equipment, or software containing the Confidential Information to the
other party. If, for any reason, such document, material, database, equipment, or software cannot be returned, either
party shall destroy all the Confidential Information belonging to the other party and delete such Confidential Information
from any memory devices. No party shall be permitted to continue using the Confidential Information in any way after
the termination of this Agreement.
7.3
No Time Limit. There is no time limit to the confidentiality obligations stipulated in this Article, which obligations
will survive the termination of this Agreement unless the Confidential Information is disclosed to the public for reasons
not due to the breach of this Agreement by any party.
Loan Agreement
- 11 -
8.1 Governing Law. This Agreement shall be governed by the laws of the PRC.
8. DISPUTE RESOLUTION
8.2 Consultation and Mediation. If any dispute arises in connection with this
Agreement, the parties shall attempt in the first instance to resolve such dispute through friendly consultation or
mediation.
8.3 Arbitration. Any dispute, controversy or claim arising out of or in connection with this Agreement shall be submitted to
the China International Economic and Trade Arbitration Commission (the “CIETAC”) for arbitration, which shall be
conducted in accordance with the CIETAC’s rules in effect at the time of applying for arbitration. The place of
arbitration shall be Beijing. The language of the arbitration shall be Chinese. The tribunal shall consist of 3 arbitrators.
The arbitral award is final and binding upon the parties. The cost of arbitration shall be allocated as determined by the
arbitrators.
9.
INDEMNITY
Party A agrees to indemnify and hold harmless Party B for any damages, fines or penalties solely incurred in his capacity as a
shareholder or any other positions (including, without limitation, those of legal representative and director) directly as a result of
the establishment of the Company and the operation of the Company’s business in contravention of PRC law; provided, however,
that in no instance will Party A provide such indemnification if Party B has engaged in fraud or willful misconduct or has
breached or is in breach of this Agreement.
10. MISCELLANEOUS
10.1 Notices. All notices or other communications sent by either party shall be written in English or Chinese, and delivered in
person, by mail or telecopy, to the other party at the following addresses. The date at which the communication shall be
deemed to be duly given or made shall be confirmed as follows: (a) for notices delivered in person, the date of delivery
shall be deemed as having been duly given or made; (b) for notices delivered by mail, the 10th day of the delivery date of
air certified mail with postage prepaid (as shown on stamp) or the 4th day of the delivery date to an internationally
certified delivery institution shall be deemed as having been duly given or made; and (c) for notices by telecopy, the
receipt date showed on the delivery confirming paper of the relevant document shall be deemed as having been duly
given or made.
Party A: Beijing Chezhiying Technology Co., Ltd.
Address: Room 1117, F/11, Tower B, No. 3, Danling Street, Haidian District, Beijing 100080, China
Loan Agreement
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Tel: +8610-59857001
Attn: Wang Youdong
Party B: Wang Youdong
Address: ******
Tel: ******
Attn: Wang Youdong
10.2
Entire Agreement. This Agreement, the Exclusive Technology Consulting and Service Agreement, the Equity Interest
Pledge Agreement, the Equity Option Agreement, and the Power of Attorney from Party B to Party A in favor of Party A
shall constitute the entire agreement among the parties in respect of the subject matter hereof and shall supersede any
previous discussions, negotiations and agreements related thereto.
10.3
Amendment. Without the prior written consent of Party A, Party B shall not amend this Agreement. If required by
law, the parties shall obtain all requisite approvals from the relevant authorities to give effect to the amendment.
10.4 No Waiver. Unless otherwise agreed upon by the parties in writing, any failure or delay on the part of either party to
exercise any right, authority or privilege under this Agreement, or under any other agreement relating hereto, shall not
operate as a waiver thereof; nor shall any single or partial exercise of any right, authority or privilege preclude any other
future exercise thereof.
10.5
Severability. The provisions of this agreement are severable from each other. The invalidity of any provision of this
agreement shall not affect the validity or enforceability of any other provision of this agreement.
10.6 Successors. This Agreement shall be valid and binding on the parties, their successors and permitted assigns.
10.7 Assignment. Party A may transfer or assign any or all of its rights and obligations under this Agreement to any of its
designated parties (natural person or legal entity) at any time. In such circumstances, the transferee or assignee shall
enjoy and undertake the same rights and obligations herein of Party A as if the transferee or assignee is Party A
hereunder. When Party A transfers or assigns the rights and obligations under this Agreement, at the request of Party A,
Party B shall execute the relevant agreements and/or documents with respect to such transfer or assignment. Party B
shall not assign any of its rights or obligations hereunder without the prior written consent of the Party A.
Loan Agreement
- 13 -
10.8 Effectiveness. This Agreement shall be effective upon its signing by all the parties or their respective authorized
representative and shall be deemed terminated as of the date when the Loan has been repaid in full.
10.9
Language and Counterparts. This Agreement is prepared in 2 sets of originals both in English and Chinese. Each
party shall hold 1 set. Chinese articles shall prevail over English articles in case of any inconsistency.
[The space below has been intentionally left blank.]
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- 14 -
IN WITNESS WHEREOF, each of the parties hereto has duly executed or has caused this Agreement to be duly executed in its
name and on its behalf by the officer or representative duly authorized, on the day and year first above written.
Party A: Beijing Chezhiying Technology Co., Ltd.
/s/ Wang Youdong
Authorized Representative: Wang Youdong
/s/ Beijing Chezhiying Technology Co., Ltd.
Company Seal: Beijing Chezhiying Technology Co., Ltd.
Loan Agreement
IN WITNESS WHEREOF, each of the parties hereto has duly executed or has caused this Agreement to be duly executed in its
name and on its behalf by the officer or representative duly authorized, on the day and year first above written.
Party B: Wang Youdong
/s/ Wang Youdong
Loan Agreement
Exhibit 4.40
Equity Option Agreement
among
Beijing Cheerbright Technologies Co., Ltd.
and
Long Quan
and
Beijing Autohome Information Technology Co., Ltd.
January, 2024
1.
2.
3.
4.
5.
6.
7.
8.
9.
CONTENTS
DEFINITIONS AND INTERPRETATIONS
PURCHASE AND SALE OF EQUITY INTEREST
UNDERTAKINGS
REPRESENTATIONS AND WARRANTIES
FURTHER WARRANTIES
TERM
APPLICABLE LAW AND DISPUTE RESOLUTION
CONFIDENTIALITY
MISCELLANEOUS
Equity Option Agreement
- 2 -
4
5
6
8
10
10
10
10
11
THIS EQUITY OPTION AGREEMENT (the “Agreement”) is entered into on January 28, 2024 in Beijing, the People’s
Republic of China (“PRC”).
by and among
(1) Beijing Cheerbright Technologies Co., Ltd., a liability limited company incorporated under the PRC laws with its registered
address at Room 1010, F/10, Tower B, No. 3, Danling Street, Haidian District, Beijing 100080, China (the “Party A”);
and
(2) Long Quan, a PRC citizen, holder of identification card number ******, whose residential address is at ****** (the “Party
B”);
and
(3) Beijing Autohome Information Technology Co., Ltd., with its registered address at 1011-1015, F/10, Tower B, No. 3,
Danling Street, Haidian District, Beijing 100080, China (the “Party C”).
(Above-mentioned Party A, Party B and Party C are solely referred as a “Party”, and collectively as the “Parties”)
Recitals
A. Party B holds 50% of the equity interest in Party C.
B. Party C, an operating vehicle of the website (www.autohome.com.cn), is a PRC domestic company lawfully existing in the
PRC and engaged in Internet information services.
C. On January 28, 2024, a Loan Agreement was entered into between Party A and Party B (the “Loan Agreement”), pursuant
to which Party B took a loan (the “Loan”) in the total amount of RMB 5,000,000 from, and therefore owes a debt to,
Party A to subscribe to the aforementioned 50% equity interest in Party C.
D. On January 28, 2024, an Exclusive Technology Consulting and Service Agreement was entered into between Party A and
Party C (the “Service Agreement”), pursuant to which Party C will pay a service fee to Party A in consideration for
services provided by Party A.
Equity Option Agreement
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NOW THEREFORE, the parties agree as follows:
1. DEFINITIONS AND INTERPRETATIONS
1.1 Definitions. Unless otherwise provided in this Agreement, the following terms shall have the meanings set forth
below:
Designated Person(s)
means 1 or more person(s) designated by Party A;
Equity Interest
means all of the equity interest held by Party B in Party C;
Equity Interest Pledge
Agreement
means the Equity Interest Pledge Agreement entered into by and among
Party A and Party B, dated on January 28, 2024, under which Party B
pledges to Party A Party B’s Equity Interest in consideration for Party
C’s performance of its obligations under the Loan Agreement and
Service Agreement;
Notice of Purchase
means the written notice sent by Party A to exercise the Purchase Right
(as defined below), as set forth in Article 2.2;
Person
Purchase Right
Security Interest
means a person, corporation, joint venture, partnership, enterprise,
trust, or non-corporate entity;
means an irrevocable right to purchase, at any time, all or part of the
Equity Interest held by Party B at a price equivalent to the lowest price
permitted by then-current PRC laws; and
means any third party’s security, right or interest, any right to purchase
Party B’s equity interest in Party C, or any right of acquisition, right of
set-off, or other security arrangement, including any security interest
subject to this Agreement, the Equity Interest Pledge Agreement or the
Loan Agreement.
Equity Option Agreement
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1.2 Interpretations. All headings used are for reference purposes only and do not affect the meaning or interpretation of any
provision. The use of the plural shall include the use of the singular, and vice versa. Unless otherwise indicated, a reference
to a day, month or year is to a calendar day, month or year. The use of the masculine shall include the use of the feminine,
and vice versa.
2.
PURCHASE AND SALE OF EQUITY INTEREST
2.1 Authorization. Party B hereby irrevocably grants Party A or its Designated Person(s) the Purchase Right for his
Equity Interest.
2.2 Procedures. Upon Party A’s decision to exercise such Purchase Right, it shall send a written Notice of Purchase to
Party B setting forth details for the purchase.
2.3 Exercise of Purchase Right. Every time Party A exercises the Purchase Right:
2.3.1
2.3.2
2.3.3
Party B shall supervise and ensure other shareholders of Party C to convene a shareholders meeting,
and pass a resolution to transfer the Equity Interest from Party B to Party A and/or the Designated
Person;
Party B shall, upon the terms and conditions of this Agreement and the Notice of Purchase, enter into
all documents requested by Party A; and
Party B and Party C shall execute all documents, acquire all approvals, and perform all actions
necessary to transfer the valid ownership of the Equity Interest to Party A and/or the Designated
Person.
2.4 Method of Payment. Upon exercise of the Purchase Right by Party A or its Designated Person(s), Party A shall
make payment by cancelling all or a portion of the Loan, in the same proportion that Party A or its Designated
Person(s) has acquired the Security Interest. In case PRC laws require Party A or its Designated Person(s) to
pay to Party B, Party B shall immediately and unconditionally pay or transfer to Party A any proceeds in
whatsoever form obtained from the Party A or its Designated Person(s) at the time such payables arise, after
having deducted and paid any and all relevant taxes and expenses applicable to such a shareholder as a result of
his receipt of such proceeds.
Equity Option Agreement
- 5 -
3.
UNDERTAKINGS
3.1 Undertakings of Party C.
Party C hereby undertakes that:
3.1.1
3.1.2
3.1.3
3.1.4
it will maintain its corporate existence, operate its business, and transact affairs prudently and
efficiently in accordance with good financial and commercial standards and practices;
without the prior written consent of Party A, it will not sell, assign, mortgage, or otherwise dispose of
any legal or beneficiary rights to any of its assets, business, or revenues, or permit the creation of any
other Security Interest over such rights at any time after the execution date of this Agreement;
without the prior written consent of Party A, it will not incur, assume, guarantee or allow the existence
of any debts, except for those to which Party A has given its written consent;
it will always operate its business to maintain the value of its assets, and will not do anything which
will affect its business situation nor the value of its assets;
3.1.5
without the prior written consent of Party A, it will not enter into any contract at an amount
exceedingly higher or outside the ordinary business;
3.1.6
without the prior written consent of Party A, it will not provide any loan to any third party;
3.1.7
3.1.8
3.1.9
at the request of Party A, it will provide to Party A all information relating to its operation and
financial conditions;
without the prior written consent of Party A, it will not be consolidated or merged with any third
party, nor acquire or invest in any third party;
it will promptly inform Party A of any existing or threatened litigation, arbitration, or administrative
proceedings relating to its assets, business, or revenues;
3.1.10
in order to maintain the ownership of all its assets, it will execute all necessary or appropriate
documents, take all necessary or
Equity Option Agreement
- 6 -
appropriate actions, file all necessary or appropriate charges, and conduct all necessary or appropriate
defenses against all claims;
3.1.11 without the prior written consent of Party A, it will not in any form whatsoever allocate dividends to
shareholders; and
3.1.12
if PRC law requires it to be dissolved or liquidated, it shall sell all of its assets to the extent permitted
by PRC laws to Party A or another qualifying entity designated by Party A, at the lowest selling price
permitted by applicable PRC law. Any obligation for Party A to pay Party C as a result of such
transaction shall be forgiven by Party C or any proceeds from such transaction shall be paid to Party
A in partial satisfaction of the service fee under the Service Agreement or remitted to Party A or the
qualifying entity designated by Party A, as applicable under then-current PRC laws.
3.2 Undertakings of Party B.
Party B undertakes on his own behalf that:
3.2.1
3.2.2
3.2.3
without the prior written consent of Party A, he will not sell, transfer, mortgage, pledge, grant any
option rights or otherwise dispose of any legal or beneficiary rights to the Equity Interest, or permit
the creation of any other Security Interest over such rights at any time, except for the pledge under the
Equity Interest Pledge Agreement;
without the prior written consent of Party A, he will not vote in favor of, endorse, or sign any
shareholders resolution approving the sale, assignment, mortgage, or other disposal of the legal or
beneficiary rights of any shareholder or allowing the creation of any other Security Interest over such
rights at the shareholders meeting of Party C;
without the prior written consent of Party A, he will not vote in favor of, endorse, or sign any
shareholders resolution approving the consolidation or merger of Party C with any third party or the
acquisition of or investment in any third party by Party C at the shareholders meeting of Party C;
3.2.4
he will promptly inform Party A of any existing or threatened litigation, arbitration, or administrative
proceedings relating to the Equity Interest;
Equity Option Agreement
- 7 -
3.2.5
3.2.6
at the request of Party A, he will cause the shareholders meeting of Party C to vote in favor of the
transfer of the Equity Interest as contemplated hereunder;
in order to maintain his ownership of the Equity Interest, he will execute all necessary or appropriate
documents, take all necessary or appropriate actions, file all necessary or appropriate charges, or
conduct all necessary or appropriate defenses against all claims;
3.2.7
at the request of Party A, he will appoint the person nominated by Party A as the director of, or to
hold any other position in, Party C;
3.2.8
3.2.9
3.2.10
at the request of Party A, he will immediately transfer the requested Equity Interest to the Designated
Person(s);
he will strictly comply with the provisions of this Agreement and any other contracts entered into
jointly or separately by the parties hereto, strictly perform the obligations under such contracts, and
will not do anything which will affect the validity and enforceability of such contracts;
he shall not put forward, or vote in favor of, any shareholder resolution to, or otherwise request Party
C to, issue any dividends or other distributions with respect to his equity interest in Party C; provided,
however, in the event that he receives any profit, bonus, distribution or dividend from Party C, he
shall, as permitted under PRC laws, immediately pay or transfer such profit, bonus, distribution or
dividend to Party A or to any party designated by Party A in order to 1) first, to repay in part the Loan
payable under the Loan Agreement; and 2) then, if there is any profit, bonus, distribution or dividend
amount remaining, to pay in part the service fee under the Service Agreement on behalf of Party C;
and
3.2.11
after mandatory liquidation described in 3.1.12 above, he will remit in full to the Party A any residual
interest he receives in a nonreciprocal transfer or cause it happen. If such transfer is prohibited by
PRC law, he will remit the proceeds to Party A or its Designated Person(s) in a manner permitted
under PRC law
4. REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Party B. Party B hereby represents and warrants on his own behalf to Party
A that as of the date of this Agreement:
Equity Option Agreement
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4.1.1
4.1.2
he has the power and right to sign, deliver, and perform his obligations under this Agreement, and that
the said documents shall constitute his legal, valid, and binding obligations enforceable in accordance
with their terms;
the execution and delivery of this Agreement or any other contracts, and the performance of his
obligations thereunder, will not violate PRC law, breach or result in a default of any contract or
instrument to which he is subject, or result in a breach, suspension, or revocation of any grant, license,
or approval or result in the imposition of any additional conditions being imposed thereon; and
4.1.3
he is the lawful owner of the Equity Interest held by himself and has not created any Security Interest
over such Equity Interest other than the Equity Interest Pledge Agreement.
4.2 Representations and Warranties of Party C.
Party C represents and warrants to Party A that:
4.2.1
4.2.2
it has the power and right to sign, deliver, and perform its obligations under this Agreement, and said
documents shall constitute its legal, valid, and binding obligations enforceable in accordance with
their terms;
the execution and delivery, of this Agreement or any other contracts, and the performance of its
obligations thereunder, will not violate PRC law, conflict with its Articles of Association or other
constituent documents, breach or result in a default of any contract or instrument to which it is
subject, or result in a breach, suspension, or revocation of any grant, license, or approval or result in
the imposition of any additional conditions being imposed thereon;
4.2.3
it is the lawful owner of its assets, and has not created any Security Interest over such assets;
4.2.4
it does not have any outstanding debts other than those incurred in the ordinary course of business and
which have been disclosed to Party A;
4.2.5
it will comply with all PRC law applicable to the acquisition of assets; and
Equity Option Agreement
- 9 -
4.2.6
there is no existing, pending or threatened litigation, arbitration, or administrative proceedings relating
to the Equity Interest, its assets, or itself.
5. FURTHER WARRANTIES
The parties to the Agreement agree to promptly execute documents reasonably requisite to the performance of the provisions and
the aim of this Agreement or documents beneficial to it, and to take actions reasonably requisite to the performance of the
provisions and the aim of this Agreement or actions beneficial to it.
6. TERM
This Agreement shall take effect as of the Effective Date and shall remain in full force and effect until the earlier of (1) the date
on which all of the Equity Interests have been acquired by Party A directly or through its Designated Person(s); or (2) the
unilateral termination by Party A (at its sole and absolute discretion), by giving 30 days prior written notice to the Party B of its
intention to terminate this Agreement.
7. APPLICABLE LAW AND DISPUTE RESOLUTION
7.1 Governing Law. This Agreement shall be governed by and construed in accordance with PRC law.
7.2 Consultation and Mediation. If any dispute arises in connection with this Agreement, the parties shall attempt in
the first instance to resolve such dispute through friendly consultation or mediation.
7.3 Arbitration. Any dispute, controversy or claim arising out of or in connection with this Agreement shall be
submitted to the China International Economic and Trade Arbitration Commission (the “CIETAC”) for
arbitration, which shall be conducted in accordance with the CIETAC’s rules in effect at the time of applying for
arbitration. The place of arbitration shall be Beijing. The language of the arbitration shall be Chinese. The
tribunal shall consist of 3 arbitrators. The arbitral award is final and binding upon the parties. The cost of
arbitration shall be allocated as determined by the arbitrators.
8.
CONFIDENTIALITY
8.1 Confidentiality Obligations. The parties shall protect and maintain the confidentiality of all Confidential
Information. Without the prior written
Equity Option Agreement
- 10 -
consent of the other parties, no party shall disclose any Confidential Information to any third party unless the
disclosure is required by law or by enforceable orders of the court or related government departments. Under
such circumstances, the party required to disclose the Confidential Information shall notify the other parties
immediately, take all possible measures to minimize the disclosure, and notify the persons to whom information
is being disclosed of the confidentiality obligation.
8.2 Obligations upon Termination. Upon termination of this Agreement, each party shall, at the request of the other
parties, return any document, material, database, equipment, or software containing the Confidential
Information to the other parties. If, for any reason, such document, material, database, equipment, or software
cannot be returned, the parties shall destroy all the Confidential Information and delete the Confidential
Information from any memory devices. No party shall be permitted to continue using the Confidential
Information in any way after the termination of this Agreement.
8.3 No Time Limit. There is no time limit to the confidentiality obligations stipulated in this Article, which
obligations will survive after the termination of this Agreement unless the Confidential Information is disclosed
to the public for reasons not due to the breach of this Agreement by any party.
9.
MISCELLANEOUS
9.1 Notices. All notices or other communications sent by either party shall be written in English or Chinese, and
delivered in person, by mail, or telecopy, to the other party at the following addresses. The date at which the
communication shall be deemed to be duly given or made shall be confirmed as follows: (a) for notices
delivered in person, the date of delivery shall be deemed as having been duly given or made; (b) for notices
delivered by mail, the 10th day of the delivery date of air certified mail with postage prepaid (as shown on
stamp) or the 4th day of the delivery date to an internationally certified delivery institution shall be deemed as
having been duly given or made; and (c) for notices by telecopy, the receipt date showed on the delivery
confirming paper of the relevant document shall be deemed as having been duly given or made.
Party A: Beijing Cheerbright Technologies Co., Ltd.
Address: Room 1010, F/10, Tower B, No. 3, Danling Street, Haidian District, Beijing 100080, China
Tel: +8610-59857001
Attn: Wang Youdong
Equity Option Agreement
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Long Quan
Party B：
Address: ****** .
Tel: ******
Attn:
Long Quan
Party C: Beijing Autohome Information Technology Co., Ltd.
Address: 1011-1015, F/10, Tower B, No. 3, Danling Street, Haidian District, Beijing 100080, China
Tel: +8610-59857002
Attn: Wang Youdong
9.2 Entire Agreement. This Agreement, the Service Agreement, the Loan Agreement, the Equity Interest Pledge
Agreement, and the power of attorney from Party B in favor of Party A shall constitute the entire agreement
among the parties in respect of the subject matter hereof and shall supersede any previous discussions,
negotiations and agreements related thereto.
9.3 Amendment. Without the prior written consent of Party A, neither of Party B or Party C of this Agreement shall
be entitled to amend this Agreement. If required by law, the parties shall obtain all requisite approvals from the
relevant authorities to give effect to the amendment.
9.4 No Waiver. Unless otherwise agreed upon by the parties in writing, any failure or delay on the part of any party to
exercise any right, authority or privilege under this Agreement, or under any other agreement relating hereto,
shall not operate as a waiver thereof; nor shall any single or partial exercise of any right, authority or privilege
preclude any other future exercise thereof.
9.5 Severability. The provisions of this agreement are severable from each other. The invalidity of any provision of
this agreement shall not affect the validity or enforceability of any other provision of this agreement.
9.6 Successors. This Agreement shall be valid and binding on the parties, their successors and permitted assigns.
9.7 Assignment. Party A may transfer or assign any or all of its rights and obligations under this Agreement to any of
its designated parties (natural person or legal entity) at any time. In such circumstances, the transferee or
assignee shall enjoy and undertake the same rights and obligations herein of Party A as if the transferee or
assignee is Party A hereunder. When Party A transfers or assigns the rights and obligations under this
Agreement, at the request of Party A, Party B shall execute the relevant agreements and/or documents with
respect to such transfer or assignment. Party B and Party C
Equity Option Agreement
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shall not assign any of its rights or obligations hereunder without the prior written consent of the Party A.
9.8 Language and Counterparts. This Agreement is prepared in 3 sets of originals in both English and Chinese.
Each party shall hold 1 set. Chinese articles shall prevail over English articles in case of any inconsistency.
[The space below has been intentionally left blank.]
Equity Option Agreement
- 13 -
IN WITNESS WHEREOF the parties hereof have caused this Agreement to be executed by their duly authorized
representatives as of the date first written above.
Party A： Beijing Cheerbright Technologies Co., Ltd.
/s/ Wang Youdong
Authorized Representative: Wang Youdong
/s/ Beijing Cheerbright Technologies Co., Ltd.
Company Seal: Beijing Cheerbright Technologies Co., Ltd.
Equity Option Agreement
IN WITNESS WHEREOF the parties hereof have caused this Agreement to be executed by their duly authorized
representatives as of the date first written above.
/s/ Long Quan
Party B: Long Quan
Equity Option Agreement
IN WITNESS WHEREOF the parties hereof have caused this Agreement to be executed by their duly authorized
representatives as of the date first written above.
Party C: Beijing Autohome Information Technology Co., Ltd.
/s/ Wang Youdong
Authorized Representative: Wang Youdong
/s/ Beijing Autohome Information Technology Co., Ltd.
Company Seal: Beijing Autohome Information Technology Co., Ltd.
Equity Option Agreement
Exhibit 4.41
Equity Option Agreement
among
Beijing Cheerbright Technologies Co., Ltd.
and
Wang Youdong
and
Beijing Autohome Information Technology Co., Ltd.
January, 2024
1.
2.
3.
4.
5.
6.
7.
8.
9.
CONTENTS
DEFINITIONS AND INTERPRETATIONS
PURCHASE AND SALE OF EQUITY INTEREST
UNDERTAKINGS
REPRESENTATIONS AND WARRANTIES
FURTHER WARRANTIES
TERM
APPLICABLE LAW AND DISPUTE RESOLUTION
CONFIDENTIALITY
MISCELLANEOUS
Equity Option Agreement
- 2 -
4
5
6
8
10
10
10
10
11
THIS EQUITY OPTION AGREEMENT (the “Agreement”) is entered into on January 28, 2024 in Beijing, the People’s
Republic of China (“PRC”).
by and among
(1) Beijing Cheerbright Technologies Co., Ltd., a liability limited company incorporated under the PRC laws with its registered
address at Room 1010, F/10, Tower B, No. 3, Danling Street, Haidian District, Beijing 100080, China (the “Party A”);
and
(2) Wang Youdong, a PRC citizen, holder of identification card number ******, whose residential address is at ****** (the
“Party B”);
and
(3) Beijing Autohome Information Technology Co., Ltd., with its registered address at 1011-1015, F/10, Tower B, No. 3,
Danling Street, Haidian District, Beijing 100080, China (the “Party C”).
(Above-mentioned Party A, Party B and Party C are solely referred as a “Party”, and collectively as the “Parties”)
Recitals
A. Party B holds 50% of the equity interest in Party C.
B. Party C, an operating vehicle of the website (www.autohome.com.cn), is a PRC domestic company lawfully existing in the
PRC and engaged in Internet information services.
C. On January 28, 2024, a Loan Agreement was entered into between Party A and Party B (the “Loan Agreement”), pursuant
to which Party B took a loan (the “Loan”) in the total amount of RMB5,000,000 from, and therefore owes a debt to,
Party A to subscribe to the aforementioned 50% equity interest in Party C.
D. On January 28, 2024, an Exclusive Technology Consulting and Service Agreement was entered into between Party A and
Party C (the “Service Agreement”), pursuant to which Party C will pay a service fee to Party A in consideration for
services provided by Party A.
Equity Option Agreement
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NOW THEREFORE, the parties agree as follows:
1. DEFINITIONS AND INTERPRETATIONS
1.1 Definitions. Unless otherwise provided in this Agreement, the following terms shall have the meanings set forth
below:
Designated Person(s)
means 1 or more person(s) designated by Party A;
Equity Interest
means all of the equity interest held by Party B in Party C;
Equity Interest Pledge
Agreement
means the Equity Interest Pledge Agreement entered into by and among
Party A and Party B, dated on January 28, 2024, under which Party B
pledges to Party A Party B’s Equity Interest in consideration for Party
C’s performance of its obligations under the Loan Agreement and
Service Agreement;
Notice of Purchase
means the written notice sent by Party A to exercise the Purchase Right
(as defined below), as set forth in Article 2.2;
Person
Purchase Right
Security Interest
means a person, corporation, joint venture, partnership, enterprise,
trust, or non-corporate entity;
means an irrevocable right to purchase, at any time, all or part of the
Equity Interest held by Party B at a price equivalent to the lowest price
permitted by then-current PRC laws; and
means any third party’s security, right or interest, any right to purchase
Party B’s equity interest in Party C, or any right of acquisition, right of
set-off, or other security arrangement, including any security interest
subject to this Agreement, the Equity Interest Pledge Agreement or the
Loan Agreement.
Equity Option Agreement
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1.2 Interpretations. All headings used are for reference purposes only and do not affect the meaning or interpretation of any
provision. The use of the plural shall include the use of the singular, and vice versa. Unless otherwise indicated, a reference
to a day, month or year is to a calendar day, month or year. The use of the masculine shall include the use of the feminine,
and vice versa.
2.
PURCHASE AND SALE OF EQUITY INTEREST
2.1 Authorization. Party B hereby irrevocably grants Party A or its Designated Person(s) the Purchase Right for his
Equity Interest.
2.2 Procedures. Upon Party A’s decision to exercise such Purchase Right, it shall send a written Notice of Purchase to
Party B setting forth details for the purchase.
2.3 Exercise of Purchase Right. Every time Party A exercises the Purchase Right:
2.3.1
2.3.2
2.3.3
Party B shall supervise and ensure other shareholders of Party C to convene a shareholders meeting,
and pass a resolution to transfer the Equity Interest from Party B to Party A and/or the Designated
Person;
Party B shall, upon the terms and conditions of this Agreement and the Notice of Purchase, enter into
all documents requested by Party A; and
Party B and Party C shall execute all documents, acquire all approvals, and perform all actions
necessary to transfer the valid ownership of the Equity Interest to Party A and/or the Designated
Person.
2.4 Method of Payment. Upon exercise of the Purchase Right by Party A or its Designated Person(s), Party A shall
make payment by cancelling all or a portion of the Loan, in the same proportion that Party A or its Designated
Person(s) has acquired the Security Interest. In case PRC laws require Party A or its Designated Person(s) to
pay to Party B, Party B shall immediately and unconditionally pay or transfer to Party A any proceeds in
whatsoever form obtained from the Party A or its Designated Person(s) at the time such payables arise, after
having deducted and paid any and all relevant taxes and expenses applicable to such a shareholder as a result of
his receipt of such proceeds.
Equity Option Agreement
- 5 -
3.
UNDERTAKINGS
3.1 Undertakings of Party C.
Party C hereby undertakes that:
3.1.1
3.1.2
3.1.3
3.1.4
it will maintain its corporate existence, operate its business, and transact affairs prudently and
efficiently in accordance with good financial and commercial standards and practices;
without the prior written consent of Party A, it will not sell, assign, mortgage, or otherwise dispose of
any legal or beneficiary rights to any of its assets, business, or revenues, or permit the creation of any
other Security Interest over such rights at any time after the execution date of this Agreement;
without the prior written consent of Party A, it will not incur, assume, guarantee or allow the existence
of any debts, except for those to which Party A has given its written consent;
it will always operate its business to maintain the value of its assets, and will not do anything which
will affect its business situation nor the value of its assets;
3.1.5
without the prior written consent of Party A, it will not enter into any contract at an amount
exceedingly higher or outside the ordinary business;
3.1.6
without the prior written consent of Party A, it will not provide any loan to any third party;
3.1.7
3.1.8
3.1.9
at the request of Party A, it will provide to Party A all information relating to its operation and
financial conditions;
without the prior written consent of Party A, it will not be consolidated or merged with any third
party, nor acquire or invest in any third party;
it will promptly inform Party A of any existing or threatened litigation, arbitration, or administrative
proceedings relating to its assets, business, or revenues;
3.1.10
in order to maintain the ownership of all its assets, it will execute all necessary or appropriate
documents, take all necessary or
Equity Option Agreement
- 6 -
appropriate actions, file all necessary or appropriate charges, and conduct all necessary or appropriate
defenses against all claims;
3.1.11 without the prior written consent of Party A, it will not in any form whatsoever allocate dividends to
shareholders; and
3.1.12
if PRC law requires it to be dissolved or liquidated, it shall sell all of its assets to the extent permitted
by PRC laws to Party A or another qualifying entity designated by Party A, at the lowest selling price
permitted by applicable PRC law. Any obligation for Party A to pay Party C as a result of such
transaction shall be forgiven by Party C or any proceeds from such transaction shall be paid to Party
A in partial satisfaction of the service fee under the Service Agreement or remitted to Party A or the
qualifying entity designated by Party A, as applicable under then-current PRC laws.
3.2 Undertakings of Party B.
Party B undertakes on his own behalf that:
3.2.1
3.2.2
3.2.3
without the prior written consent of Party A, he will not sell, transfer, mortgage, pledge, grant any
option rights or otherwise dispose of any legal or beneficiary rights to the Equity Interest, or permit
the creation of any other Security Interest over such rights at any time, except for the pledge under the
Equity Interest Pledge Agreement;
without the prior written consent of Party A, he will not vote in favor of, endorse, or sign any
shareholders resolution approving the sale, assignment, mortgage, or other disposal of the legal or
beneficiary rights of any shareholder or allowing the creation of any other Security Interest over such
rights at the shareholders meeting of Party C;
without the prior written consent of Party A, he will not vote in favor of, endorse, or sign any
shareholders resolution approving the consolidation or merger of Party C with any third party or the
acquisition of or investment in any third party by Party C at the shareholders meeting of Party C;
3.2.4
he will promptly inform Party A of any existing or threatened litigation, arbitration, or administrative
proceedings relating to the Equity Interest;
Equity Option Agreement
- 7 -
3.2.5
3.2.6
at the request of Party A, he will cause the shareholders meeting of Party C to vote in favor of the
transfer of the Equity Interest as contemplated hereunder;
in order to maintain his ownership of the Equity Interest, he will execute all necessary or appropriate
documents, take all necessary or appropriate actions, file all necessary or appropriate charges, or
conduct all necessary or appropriate defenses against all claims;
3.2.7
at the request of Party A, he will appoint the person nominated by Party A as the director of, or to
hold any other position in, Party C;
3.2.8
3.2.9
3.2.10
at the request of Party A, he will immediately transfer the requested Equity Interest to the Designated
Person(s);
he will strictly comply with the provisions of this Agreement and any other contracts entered into
jointly or separately by the parties hereto, strictly perform the obligations under such contracts, and
will not do anything which will affect the validity and enforceability of such contracts;
he shall not put forward, or vote in favor of, any shareholder resolution to, or otherwise request Party
C to, issue any dividends or other distributions with respect to his equity interest in Party C; provided,
however, in the event that he receives any profit, bonus, distribution or dividend from Party C, he
shall, as permitted under PRC laws, immediately pay or transfer such profit, bonus, distribution or
dividend to Party A or to any party designated by Party A in order to 1) first, to repay in part the Loan
payable under the Loan Agreement; and 2) then, if there is any profit, bonus, distribution or dividend
amount remaining, to pay in part the service fee under the Service Agreement on behalf of Party C;
and
3.2.11
after mandatory liquidation described in 3.1.12 above, he will remit in full to the Party A any residual
interest he receives in a nonreciprocal transfer or cause it happen. If such transfer is prohibited by
PRC law, he will remit the proceeds to Party A or its Designated Person(s) in a manner permitted
under PRC law
4. REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Party B. Party B hereby represents and warrants on his own behalf to Party
A that as of the date of this Agreement:
Equity Option Agreement
- 8 -
4.1.1
4.1.2
he has the power and right to sign, deliver, and perform his obligations under this Agreement, and that
the said documents shall constitute his legal, valid, and binding obligations enforceable in accordance
with their terms;
the execution and delivery of this Agreement or any other contracts, and the performance of his
obligations thereunder, will not violate PRC law, breach or result in a default of any contract or
instrument to which he is subject, or result in a breach, suspension, or revocation of any grant, license,
or approval or result in the imposition of any additional conditions being imposed thereon; and
4.1.3
he is the lawful owner of the Equity Interest held by himself and has not created any Security Interest
over such Equity Interest other than the Equity Interest Pledge Agreement.
4.2 Representations and Warranties of Party C.
Party C represents and warrants to Party A that:
4.2.1
4.2.2
it has the power and right to sign, deliver, and perform its obligations under this Agreement, and said
documents shall constitute its legal, valid, and binding obligations enforceable in accordance with
their terms;
the execution and delivery, of this Agreement or any other contracts, and the performance of its
obligations thereunder, will not violate PRC law, conflict with its Articles of Association or other
constituent documents, breach or result in a default of any contract or instrument to which it is
subject, or result in a breach, suspension, or revocation of any grant, license, or approval or result in
the imposition of any additional conditions being imposed thereon;
4.2.3
it is the lawful owner of its assets, and has not created any Security Interest over such assets;
4.2.4
it does not have any outstanding debts other than those incurred in the ordinary course of business and
which have been disclosed to Party A;
4.2.5
it will comply with all PRC law applicable to the acquisition of assets; and
Equity Option Agreement
- 9 -
4.2.6
there is no existing, pending or threatened litigation, arbitration, or administrative proceedings relating
to the Equity Interest, its assets, or itself.
5. FURTHER WARRANTIES
The parties to the Agreement agree to promptly execute documents reasonably requisite to the performance of the provisions and
the aim of this Agreement or documents beneficial to it, and to take actions reasonably requisite to the performance of the
provisions and the aim of this Agreement or actions beneficial to it.
6. TERM
This Agreement shall take effect as of the Effective Date and shall remain in full force and effect until the earlier of (1) the date
on which all of the Equity Interests have been acquired by Party A directly or through its Designated Person(s); or (2) the
unilateral termination by Party A (at its sole and absolute discretion), by giving 30 days prior written notice to the Party B of its
intention to terminate this Agreement.
7. APPLICABLE LAW AND DISPUTE RESOLUTION
7.1 Governing Law. This Agreement shall be governed by and construed in accordance with PRC law.
7.2 Consultation and Mediation. If any dispute arises in connection with this Agreement, the parties shall attempt in
the first instance to resolve such dispute through friendly consultation or mediation.
7.3 Arbitration. Any dispute, controversy or claim arising out of or in connection with this Agreement shall be
submitted to the China International Economic and Trade Arbitration Commission (the “CIETAC”) for
arbitration, which shall be conducted in accordance with the CIETAC’s rules in effect at the time of applying for
arbitration. The place of arbitration shall be Beijing. The language of the arbitration shall be Chinese. The
tribunal shall consist of 3 arbitrators. The arbitral award is final and binding upon the parties. The cost of
arbitration shall be allocated as determined by the arbitrators.
8.
CONFIDENTIALITY
8.1 Confidentiality Obligations. The parties shall protect and maintain the confidentiality of all Confidential
Information. Without the prior written
Equity Option Agreement
- 10 -
consent of the other parties, no party shall disclose any Confidential Information to any third party unless the
disclosure is required by law or by enforceable orders of the court or related government departments. Under
such circumstances, the party required to disclose the Confidential Information shall notify the other parties
immediately, take all possible measures to minimize the disclosure, and notify the persons to whom information
is being disclosed of the confidentiality obligation.
8.2 Obligations upon Termination. Upon termination of this Agreement, each party shall, at the request of the other
parties, return any document, material, database, equipment, or software containing the Confidential
Information to the other parties. If, for any reason, such document, material, database, equipment, or software
cannot be returned, the parties shall destroy all the Confidential Information and delete the Confidential
Information from any memory devices. No party shall be permitted to continue using the Confidential
Information in any way after the termination of this Agreement.
8.3 No Time Limit. There is no time limit to the confidentiality obligations stipulated in this Article, which
obligations will survive after the termination of this Agreement unless the Confidential Information is disclosed
to the public for reasons not due to the breach of this Agreement by any party.
9.
MISCELLANEOUS
9.1 Notices. All notices or other communications sent by either party shall be written in English or Chinese, and
delivered in person, by mail, or telecopy, to the other party at the following addresses. The date at which the
communication shall be deemed to be duly given or made shall be confirmed as follows: (a) for notices
delivered in person, the date of delivery shall be deemed as having been duly given or made; (b) for notices
delivered by mail, the 10th day of the delivery date of air certified mail with postage prepaid (as shown on
stamp) or the 4th day of the delivery date to an internationally certified delivery institution shall be deemed as
having been duly given or made; and (c) for notices by telecopy, the receipt date showed on the delivery
confirming paper of the relevant document shall be deemed as having been duly given or made.
Party A: Beijing Cheerbright Technologies Co., Ltd.
Address: Room 1010, F/10, Tower B, No. 3, Danling Street, Haidian District, Beijing 100080, China
Tel: +8610-59857001
Attn: Wang Youdong
Equity Option Agreement
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Party B： Wang Youdong
Address: ****** .
Tel: ******
Attn: Wang Youdong
Party C: Beijing Autohome Information Technology Co., Ltd.
Address: 1011-1015, F/10, Tower B, No. 3, Danling Street, Haidian District, Beijing 100080, China
Tel: +8610-59857002
Attn: Wang Youdong
9.2 Entire Agreement. This Agreement, the Service Agreement, the Loan Agreement, the Equity Interest Pledge
Agreement, and the power of attorney from Party B in favor of Party A shall constitute the entire agreement
among the parties in respect of the subject matter hereof and shall supersede any previous discussions,
negotiations and agreements related thereto.
9.3 Amendment. Without the prior written consent of Party A, neither of Party B or Party C of this Agreement shall
be entitled to amend this Agreement. If required by law, the parties shall obtain all requisite approvals from the
relevant authorities to give effect to the amendment.
9.4 No Waiver. Unless otherwise agreed upon by the parties in writing, any failure or delay on the part of any party to
exercise any right, authority or privilege under this Agreement, or under any other agreement relating hereto,
shall not operate as a waiver thereof; nor shall any single or partial exercise of any right, authority or privilege
preclude any other future exercise thereof.
9.5 Severability. The provisions of this agreement are severable from each other. The invalidity of any provision of
this agreement shall not affect the validity or enforceability of any other provision of this agreement.
9.6 Successors. This Agreement shall be valid and binding on the parties, their successors and permitted assigns.
9.7 Assignment. Party A may transfer or assign any or all of its rights and obligations under this Agreement to any of
its designated parties (natural person or legal entity) at any time. In such circumstances, the transferee or
assignee shall enjoy and undertake the same rights and obligations herein of Party A as if the transferee or
assignee is Party A hereunder. When Party A transfers or assigns the rights and obligations under this
Agreement, at the request of Party A, Party B shall execute the relevant agreements and/or documents with
respect to such transfer or assignment. Party B and Party C
Equity Option Agreement
- 12 -
shall not assign any of its rights or obligations hereunder without the prior written consent of the Party A.
9.8 Language and Counterparts. This Agreement is prepared in 3 sets of originals in both English and Chinese.
Each party shall hold 1 set. Chinese articles shall prevail over English articles in case of any inconsistency.
[The space below has been intentionally left blank.]
Equity Option Agreement
- 13 -
IN WITNESS WHEREOF the parties hereof have caused this Agreement to be executed by their duly authorized
representatives as of the date first written above.
Party A： Beijing Cheerbright Technologies Co., Ltd.
/s/ Wang Youdong
Authorized Representative: Wang Youdong
/s/ Beijing Cheerbright Technologies Co., Ltd.
Company Seal: Beijing Cheerbright Technologies Co., Ltd.
Equity Option Agreement
IN WITNESS WHEREOF the parties hereof have caused this Agreement to be executed by their duly authorized
representatives as of the date first written above.
/s/ Wang Youdong
Party B: Wang Youdong
Equity Option Agreement
IN WITNESS WHEREOF the parties hereof have caused this Agreement to be executed by their duly authorized
representatives as of the date first written above.
Party C: Beijing Autohome Information Technology Co., Ltd.
/s/ Wang Youdong
Authorized Representative: Wang Youdong
/s/ Beijing Autohome Information Technology Co., Ltd.
Company Seal: Beijing Autohome Information Technology Co., Ltd.
Equity Option Agreement
Exhibit 4.42
Equity Option Agreement
among
Beijing Chezhiying Technology Co., Ltd.
and
Long Quan
and
Beijing Shengtuo Hongyuan Information Technology Co., Ltd.
January 28, 2024
1.
2.
3.
4.
5.
6.
7.
8.
9.
CONTENTS
DEFINITIONS AND INTERPRETATIONS
PURCHASE AND SALE OF EQUITY INTEREST
UNDERTAKINGS
REPRESENTATIONS AND WARRANTIES
FURTHER WARRANTIES
TERM
APPLICABLE LAW AND DISPUTE RESOLUTION
CONFIDENTIALITY
MISCELLANEOUS
Equity Option Agreement
- 2 -
4
5
6
8
10
10
10
10
11
THIS EQUITY OPTION AGREEMENT (the “Agreement”) is entered into on January 28, 2024 in Beijing, the People’s
Republic of China (“PRC”).
by and among
(1) Beijing Chezhiying Technology Co., Ltd., a liability limited company incorporated under the PRC laws with its registered
address at Room1117, F/11, Tower B, No. 3, Danling Street, Haidian District, Beijing 100080, China (the “Party A”);
and
(2) Long Quan, a PRC citizen, holder of identification card number ******, whose residential address is at ****** (the “Party
B”);
and
(3) Beijing Shengtuo Hongyuan Information Technology Co., Ltd., with its registered address Unit 53, F/10, Tower B, No. 3,
Danling Street, Haidian District, Beijing 100080, China (the “Party C”).
(Above-mentioned Party A, Party B and Party C are solely referred as a “Party”, and collectively as the “Parties”)
Recitals
A. Party B holds 50% of the equity interest in Party C.
B. Party C is a PRC domestic company lawfully existing in the PRC and engaged in the business of Internet information
service.
C. On January 28, 2024, a Loan Agreement was entered into between Party A and Party B (the “Loan Agreement”), pursuant
to which Party B took a loan (the “Loan”) in the total amount of RMB5,000,000 from, and therefore owes a debt to,
Party A to subscribe to the aforementioned 50% equity interest in Party C.
D. On January 28, 2024, an Exclusive Technology Consulting and Service Agreement was entered into between Party A and
Party C (the “Service Agreement”), pursuant to which Party C will pay a service fee to Party A in consideration for
services provided by Party A.
NOW THEREFORE, the parties agree as follows:
Equity Option Agreement
- 3 -
1. DEFINITIONS AND INTERPRETATIONS
1.1 Definitions. Unless otherwise provided in this Agreement, the following terms shall have the meanings set forth
below:
Designated Person(s)
means 1 or more person(s) designated by Party A;
Equity Interest
means all of the equity interest held by Party B in Party C;
Equity Interest Pledge
Agreement
means the Equity Interest Pledge Agreement entered into by and among
Party A and Party B, dated on January 28, 2024, under which Party B
pledges to Party A Party B’s Equity Interest in consideration for Party
C’s performance of its obligations under the Loan Agreement and
Service Agreement;
Notice of Purchase
means the written notice sent by Party A to exercise the Purchase Right
(as defined below), as set forth in Article 2.2;
Person
Purchase Right
Security Interest
means a person, corporation, joint venture, partnership, enterprise,
trust, or non-corporate entity;
means an irrevocable right to purchase, at any time, all or part of the
Equity Interest held by Party B at a price equivalent to the lowest price
permitted by then-current PRC laws; and
means any third party’s security, right or interest, any right to purchase
Party B’s equity interest in Party C, or any right of acquisition, right of
set-off, or other security arrangement, including any security interest
subject to this Agreement, the Equity Interest Pledge Agreement or the
Loan Agreement.
1.2 Interpretations. All headings used are for reference purposes only and do not affect the meaning or interpretation of any
provision. The use of the plural shall include the
Equity Option Agreement
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use of the singular, and vice versa. Unless otherwise indicated, a reference to a day, month or year is to a calendar day,
month or year. The use of the masculine shall include the use of the feminine, and vice versa.
2.
PURCHASE AND SALE OF EQUITY INTEREST
2.1 Authorization. Party B hereby irrevocably grants Party A or its Designated Person(s) the Purchase Right for his
Equity Interest.
2.2 Procedures. Upon Party A’s decision to exercise such Purchase Right, it shall send a written Notice of Purchase to
Party B setting forth details for the purchase.
2.3 Exercise of Purchase Right. Every time Party A exercises the Purchase Right:
2.3.1
2.3.2
2.3.3
Party B shall supervise and ensure other shareholders of Party C to convene a shareholders meeting,
and pass a resolution to transfer the Equity Interest from Party B to Party A and/or the Designated
Person;
Party B shall, upon the terms and conditions of this Agreement and the Notice of Purchase, enter into
all documents requested by Party A; and
Party B and Party C shall execute all documents, acquire all approvals, and perform all actions
necessary to transfer the valid ownership of the Equity Interest to Party A and/or the Designated
Person.
2.4 Method of Payment. Upon exercise of the Purchase Right by Party A or its Designated Person(s), Party A shall
make payment by cancelling all or a portion of the Loan, in the same proportion that Party A or its Designated
Person(s) has acquired the Security Interest. In case PRC laws require Party A or its Designated Person(s) to
pay to Party B, Party B shall immediately and unconditionally pay or transfer to Party A any proceeds in
whatsoever form obtained from the Party A or its Designated Person(s) at the time such payables arise, after
having deducted and paid any and all relevant taxes and expenses applicable to such a shareholder as a result of
his receipt of such proceeds.
3.
UNDERTAKINGS
Equity Option Agreement
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3.1 Undertakings of Party C.
Party C hereby undertakes that:
3.1.1
3.1.2
3.1.3
3.1.4
it will maintain its corporate existence, operate its business, and transact affairs prudently and
efficiently in accordance with good financial and commercial standards and practices;
without the prior written consent of Party A, it will not sell, assign, mortgage, or otherwise dispose of
any legal or beneficiary rights to any of its assets, business, or revenues, or permit the creation of any
other Security Interest over such rights at any time after the execution date of this Agreement;
without the prior written consent of Party A, it will not incur, assume, guarantee or allow the existence
of any debts, except for those to which Party A has given its written consent;
it will always operate its business to maintain the value of its assets, and will not do anything which
will affect its business situation nor the value of its assets;
3.1.5
without the prior written consent of Party A, it will not enter into any contract at an amount
exceedingly higher or outside the ordinary business;
3.1.6
without the prior written consent of Party A, it will not provide any loan to any third party;
3.1.7
3.1.8
3.1.9
at the request of Party A, it will provide to Party A all information relating to its operation and
financial conditions;
without the prior written consent of Party A, it will not be consolidated or merged with any third
party, nor acquire or invest in any third party;
it will promptly inform Party A of any existing or threatened litigation, arbitration, or administrative
proceedings relating to its assets, business, or revenues;
3.1.10
in order to maintain the ownership of all its assets, it will execute all necessary or appropriate
documents, take all necessary or appropriate actions, file all necessary or appropriate charges, and
conduct all necessary or appropriate defenses against all claims;
Equity Option Agreement
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3.1.11 without the prior written consent of Party A, it will not in any form whatsoever allocate dividends to
shareholders; and
3.1.12
if PRC law requires it to be dissolved or liquidated, it shall sell all of its assets to the extent permitted
by PRC laws to Party A or another qualifying entity designated by Party A, at the lowest selling price
permitted by applicable PRC law. Any obligation for Party A to pay Party C as a result of such
transaction shall be forgiven by Party C or any proceeds from such transaction shall be paid to Party
A in partial satisfaction of the service fee under the Service Agreement or remitted to Party A or the
qualifying entity designated by Party A, as applicable under then-current PRC laws.
3.2 Undertakings of Party B.
Party B undertakes on his own behalf that:
3.2.1
3.2.2
3.2.3
3.2.4
3.2.5
without the prior written consent of Party A, he will not sell, transfer, mortgage, pledge, grant any
option rights or otherwise dispose of any legal or beneficiary rights to the Equity Interest, or permit
the creation of any other Security Interest over such rights at any time, except for the pledge under the
Equity Interest Pledge Agreement;
without the prior written consent of Party A, he will not vote in favor of, endorse, or sign any
shareholders resolution approving the sale, assignment, mortgage, or other disposal of the legal or
beneficiary rights of any shareholder or allowing the creation of any other Security Interest over such
rights at the shareholders meeting of Party C;
without the prior written consent of Party A, he will not vote in favor of, endorse, or sign any
shareholders resolution approving the consolidation or merger of Party C with any third party or the
acquisition of or investment in any third party by Party C at the shareholders meeting of Party C;
he will promptly inform Party A of any existing or threatened litigation, arbitration, or administrative
proceedings relating to the Equity Interest;
at the request of Party A, he will cause the shareholders meeting of Party C to vote in favor of the
transfer of the Equity Interest as contemplated hereunder;
Equity Option Agreement
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3.2.6
in order to maintain his ownership of the Equity Interest, he will execute all necessary or appropriate
documents, take all necessary or appropriate actions, file all necessary or appropriate charges, or
conduct all necessary or appropriate defenses against all claims;
3.2.7
at the request of Party A, he will appoint the person nominated by Party A as the director of, or to
hold any other position in, Party C;
3.2.8
3.2.9
3.2.10
at the request of Party A, he will immediately transfer the requested Equity Interest to the Designated
Person(s);
he will strictly comply with the provisions of this Agreement and any other contracts entered into
jointly or separately by the parties hereto, strictly perform the obligations under such contracts, and
will not do anything which will affect the validity and enforceability of such contracts;
he shall not put forward, or vote in favor of, any shareholder resolution to, or otherwise request Party
C to, issue any dividends or other distributions with respect to his equity interest in Party C; provided,
however, in the event that he receives any profit, bonus, distribution or dividend from Party C, he
shall, as permitted under PRC laws, immediately pay or transfer such profit, bonus, distribution or
dividend to Party A or to any party designated by Party A in order to 1) first, to repay in part the Loan
payable under the Loan Agreement; and 2) then, if there is any profit, bonus, distribution or dividend
amount remaining, to pay in part the service fee under the Service Agreement on behalf of Party C;
and
3.2.11
after mandatory liquidation described in 3.1.12 above, he will remit in full to the Party A any residual
interest he receives in a nonreciprocal transfer or cause it happen. If such transfer is prohibited by
PRC law, he will remit the proceeds to Party A or its Designated Person(s) in a manner permitted
under PRC law
4. REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Party B. Party B hereby represents and warrants on his own behalf to Party
A that as of the date of this Agreement:
4.1.1
he has the power and right to sign, deliver, and perform his obligations under this Agreement, and that
the said documents shall
Equity Option Agreement
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constitute his legal, valid, and binding obligations enforceable in accordance with their terms;
4.1.2
the execution and delivery of this Agreement or any other contracts, and the performance of his
obligations thereunder, will not violate PRC law, breach or result in a default of any contract or
instrument to which he is subject, or result in a breach, suspension, or revocation of any grant, license,
or approval or result in the imposition of any additional conditions being imposed thereon; and
4.1.3
he is the lawful owner of the Equity Interest held by himself and has not created any Security Interest
over such Equity Interest other than the Equity Interest Pledge Agreement.
4.2 Representations and Warranties of Party C.
Party C represents and warrants to Party A that:
4.2.1
4.2.2
it has the power and right to sign, deliver, and perform its obligations under this Agreement, and said
documents shall constitute its legal, valid, and binding obligations enforceable in accordance with
their terms;
the execution and delivery, of this Agreement or any other contracts, and the performance of its
obligations thereunder, will not violate PRC law, conflict with its Articles of Association or other
constituent documents, breach or result in a default of any contract or instrument to which it is
subject, or result in a breach, suspension, or revocation of any grant, license, or approval or result in
the imposition of any additional conditions being imposed thereon;
4.2.3
it is the lawful owner of its assets, and has not created any Security Interest over such assets;
4.2.4
it does not have any outstanding debts other than those incurred in the ordinary course of business and
which have been disclosed to Party A;
4.2.5
it will comply with all PRC law applicable to the acquisition of assets; and
4.2.6
there is no existing, pending or threatened litigation, arbitration, or administrative proceedings relating
to the Equity Interest, its assets, or itself.
Equity Option Agreement
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5. FURTHER WARRANTIES
The parties to the Agreement agree to promptly execute documents reasonably requisite to the performance of the provisions and
the aim of this Agreement or documents beneficial to it, and to take actions reasonably requisite to the performance of the
provisions and the aim of this Agreement or actions beneficial to it.
6. TERM
This Agreement shall take effect as of the Effective Date and shall remain in full force and effect until the earlier of (1) the date
on which all of the Equity Interests have been acquired by Party A directly or through its Designated Person(s); or (2) the
unilateral termination by Party A (at its sole and absolute discretion), by giving 30 days prior written notice to the Party B of its
intention to terminate this Agreement.
7. APPLICABLE LAW AND DISPUTE RESOLUTION
7.1 Governing Law. This Agreement shall be governed by and construed in accordance with PRC law.
7.2 Consultation and Mediation. If any dispute arises in connection with this Agreement, the parties shall attempt in
the first instance to resolve such dispute through friendly consultation or mediation.
7.3 Arbitration. Any dispute, controversy or claim arising out of or in connection with this Agreement shall be
submitted to the China International Economic and Trade Arbitration Commission (the “CIETAC”) for
arbitration, which shall be conducted in accordance with the CIETAC’s rules in effect at the time of applying for
arbitration. The place of arbitration shall be Beijing. The language of the arbitration shall be Chinese. The
tribunal shall consist of 3 arbitrators. The arbitral award is final and binding upon the parties. The cost of
arbitration shall be allocated as determined by the arbitrators.
8.
CONFIDENTIALITY
8.1 Confidentiality Obligations. The parties shall protect and maintain the confidentiality of all Confidential
Information. Without the prior written consent of the other parties, no party shall disclose any Confidential
Information to any third party unless the disclosure is required by law or by enforceable orders of the court or
related government departments. Under such circumstances, the party required to disclose the Confidential
Information shall notify the other parties immediately, take all possible
Equity Option Agreement
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measures to minimize the disclosure, and notify the persons to whom information is being disclosed of the
confidentiality obligation.
8.2 Obligations upon Termination. Upon termination of this Agreement, each party shall, at the request of the other
parties, return any document, material, database, equipment, or software containing the Confidential
Information to the other parties. If, for any reason, such document, material, database, equipment, or software
cannot be returned, the parties shall destroy all the Confidential Information and delete the Confidential
Information from any memory devices. No party shall be permitted to continue using the Confidential
Information in any way after the termination of this Agreement.
8.3 No Time Limit. There is no time limit to the confidentiality obligations stipulated in this Article, which
obligations will survive after the termination of this Agreement unless the Confidential Information is disclosed
to the public for reasons not due to the breach of this Agreement by any party.
9.
MISCELLANEOUS
9.1 Notices. All notices or other communications sent by either party shall be written in English or Chinese, and
delivered in person, by mail, or telecopy, to the other party at the following addresses. The date at which the
communication shall be deemed to be duly given or made shall be confirmed as follows: (a) for notices
delivered in person, the date of delivery shall be deemed as having been duly given or made; (b) for notices
delivered by mail, the 10th day of the delivery date of air certified mail with postage prepaid (as shown on
stamp) or the 4th day of the delivery date to an internationally certified delivery institution shall be deemed as
having been duly given or made; and (c) for notices by telecopy, the receipt date showed on the delivery
confirming paper of the relevant document shall be deemed as having been duly given or made.
Party A: Beijing Chezhiying Technology Co., Ltd.
Address: Room 1117, F/11, Tower B, No. 3, Danling Street, Haidian District, Beijing 100080, China
Tel: +8610-59857001
Attn: Wang Youdong
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Long Quan
Party B：
Address: ******
Tel: ******
Attn:
Long Quan
Party C: Beijing Shengtuo Hongyuan Information Technology Co., Ltd.
Address: Unit 53, F/10, Tower B, No. 3, Danling Street, Haidian District, Beijing 100080, China
Tel: +8610-59857002
Attn: Wang Youdong
9.2 Entire Agreement. This Agreement, the Service Agreement, the Loan Agreement, the Equity Interest Pledge
Agreement, and the power of attorney from Party B in favor of Party A shall constitute the entire agreement
among the parties in respect of the subject matter hereof and shall supersede any previous discussions,
negotiations and agreements related thereto.
9.3 Amendment. Without the prior written consent of Party A, neither of Party B or Party C of this Agreement shall
be entitled to amend this Agreement. If required by law, the parties shall obtain all requisite approvals from the
relevant authorities to give effect to the amendment.
9.4 No Waiver. Unless otherwise agreed upon by the parties in writing, any failure or delay on the part of any party to
exercise any right, authority or privilege under this Agreement, or under any other agreement relating hereto,
shall not operate as a waiver thereof; nor shall any single or partial exercise of any right, authority or privilege
preclude any other future exercise thereof.
9.5 Severability. The provisions of this agreement are severable from each other. The invalidity of any provision of
this agreement shall not affect the validity or enforceability of any other provision of this agreement.
9.6 Successors. This Agreement shall be valid and binding on the parties, their successors and permitted assigns.
9.7 Assignment. Party A may transfer or assign any or all of its rights and obligations under this Agreement to any of
its designated parties (natural person or legal entity) at any time. In such circumstances, the transferee or
assignee shall enjoy and undertake the same rights and obligations herein of Party A as if the transferee or
assignee is Party A hereunder. When Party A transfers or assigns the rights and obligations under this
Agreement, at the request of Party A, Party B shall execute the relevant agreements and/or documents with
respect to such transfer or assignment. Party B and Party C
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shall not assign any of its rights or obligations hereunder without the prior written consent of the Party A.
9.8 Language and Counterparts. This Agreement is prepared in 3 sets of originals in both English and Chinese.
Each party shall hold 1 set. Chinese articles shall prevail over English articles in case of any inconsistency.
[The space below has been intentionally left blank.]
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IN WITNESS WHEREOF the parties hereof have caused this Agreement to be executed by their duly authorized
representatives as of the date first written above.
Party A： Beijing Chezhiying Technology Co., Ltd.
/s/ Wang Youdong
Authorized Representative: Wang Youdong
/s/ Beijing Chezhiying Technology Co., Ltd.
Company Seal: Beijing Chezhiying Technology Co., Ltd.
Equity Option Agreement
IN WITNESS WHEREOF the parties hereof have caused this Agreement to be executed by their duly authorized
representatives as of the date first written above.
/s/ Long Quan
Party B: Long Quan
Equity Option Agreement
IN WITNESS WHEREOF the parties hereof have caused this Agreement to be executed by their duly authorized
representatives as of the date first written above.
Party C: Beijing Shengtuo Hongyuan Information Technology Co., Ltd.
/s/ Wang Youdong
Authorized Representative: Wang Youdong
/s/ Beijing Shengtuo Hongyuan Information Technology Co., Ltd.
Company Seal: Beijing Shengtuo Hongyuan Information Technology Co., Ltd.
Equity Option Agreement
Exhibit 4.43
Equity Option Agreement
among
Beijing Chezhiying Technology Co., Ltd.
and
Wang Youdong
and
Beijing Shengtuo Hongyuan Information Technology Co., Ltd.
January 28, 2024
1.
2.
3.
4.
5.
6.
7.
8.
9.
CONTENTS
DEFINITIONS AND INTERPRETATIONS
PURCHASE AND SALE OF EQUITY INTEREST
UNDERTAKINGS
REPRESENTATIONS AND WARRANTIES
FURTHER WARRANTIES
TERM
APPLICABLE LAW AND DISPUTE RESOLUTION
CONFIDENTIALITY
MISCELLANEOUS
Equity Option Agreement
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4
5
6
8
10
10
10
10
11
THIS EQUITY OPTION AGREEMENT (the “Agreement”) is entered into on January 28, 2024 in Beijing, the People’s
Republic of China (“PRC”).
by and among
(1) Beijing Chezhiying Technology Co., Ltd., a liability limited company incorporated under the PRC laws with its registered
address at Room1117, F/11, Tower B, No. 3, Danling Street, Haidian District, Beijing 100080, China (the “Party A”);
and
(2) Wang Youdong, a PRC citizen, holder of identification card number ******, whose residential address is at ****** (the
“Party B”);
and
(3) Beijing Shengtuo Hongyuan Information Technology Co., Ltd., with its registered address Unit 53, F/10, Tower B, No. 3,
Danling Street, Haidian District, Beijing 100080, China (the “Party C”).
(Above-mentioned Party A, Party B and Party C are solely referred as a “Party”, and collectively as the “Parties”)
Recitals
A. Party B holds 50% of the equity interest in Party C.
B. Party C is a PRC domestic company lawfully existing in the PRC and engaged in the business of Internet information
service.
C. On January 28, 2024, a Loan Agreement was entered into between Party A and Party B (the “Loan Agreement”), pursuant
to which Party B took a loan (the “Loan”) in the total amount of RMB5,000,000 from, and therefore owes a debt to,
Party A to subscribe to the aforementioned 50% equity interest in Party C.
D. On January 28, 2024, an Exclusive Technology Consulting and Service Agreement was entered into between Party A and
Party C (the “Service Agreement”), pursuant to which Party C will pay a service fee to Party A in consideration for
services provided by Party A.
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NOW THEREFORE, the parties agree as follows:
1. DEFINITIONS AND INTERPRETATIONS
1.1 Definitions. Unless otherwise provided in this Agreement, the following terms shall have the meanings set forth
below:
Designated Person(s)
means 1 or more person(s) designated by Party A;
Equity Interest
means all of the equity interest held by Party B in Party C;
Equity Interest Pledge
Agreement
means the Equity Interest Pledge Agreement entered into by and among
Party A and Party B, dated on January 28, 2024, under which Party B
pledges to Party A Party B’s Equity Interest in consideration for Party
C’s performance of its obligations under the Loan Agreement and
Service Agreement;
Notice of Purchase
means the written notice sent by Party A to exercise the Purchase Right
(as defined below), as set forth in Article 2.2;
Person
Purchase Right
Security Interest
means a person, corporation, joint venture, partnership, enterprise,
trust, or non-corporate entity;
means an irrevocable right to purchase, at any time, all or part of the
Equity Interest held by Party B at a price equivalent to the lowest price
permitted by then-current PRC laws; and
means any third party’s security, right or interest, any right to purchase
Party B’s equity interest in Party C, or any right of acquisition, right of
set-off, or other security arrangement, including any security interest
subject to this Agreement, the Equity Interest Pledge Agreement or the
Loan Agreement.
Equity Option Agreement
- 4 -
1.2 Interpretations. All headings used are for reference purposes only and do not affect the meaning or interpretation of any
provision. The use of the plural shall include the use of the singular, and vice versa. Unless otherwise indicated, a reference
to a day, month or year is to a calendar day, month or year. The use of the masculine shall include the use of the feminine,
and vice versa.
2.
PURCHASE AND SALE OF EQUITY INTEREST
2.1 Authorization. Party B hereby irrevocably grants Party A or its Designated Person(s) the Purchase Right for his
Equity Interest.
2.2 Procedures. Upon Party A’s decision to exercise such Purchase Right, it shall send a written Notice of Purchase to
Party B setting forth details for the purchase.
2.3 Exercise of Purchase Right. Every time Party A exercises the Purchase Right:
2.3.1
2.3.2
2.3.3
Party B shall supervise and ensure other shareholders of Party C to convene a shareholders meeting,
and pass a resolution to transfer the Equity Interest from Party B to Party A and/or the Designated
Person;
Party B shall, upon the terms and conditions of this Agreement and the Notice of Purchase, enter into
all documents requested by Party A; and
Party B and Party C shall execute all documents, acquire all approvals, and perform all actions
necessary to transfer the valid ownership of the Equity Interest to Party A and/or the Designated
Person.
2.4 Method of Payment. Upon exercise of the Purchase Right by Party A or its Designated Person(s), Party A shall
make payment by cancelling all or a portion of the Loan, in the same proportion that Party A or its Designated
Person(s) has acquired the Security Interest. In case PRC laws require Party A or its Designated Person(s) to
pay to Party B, Party B shall immediately and unconditionally pay or transfer to Party A any proceeds in
whatsoever form obtained from the Party A or its Designated Person(s) at the time such payables arise, after
having deducted and paid any and all relevant taxes and expenses applicable to such a shareholder as a result of
his receipt of such proceeds.
Equity Option Agreement
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3.
UNDERTAKINGS
3.1 Undertakings of Party C.
Party C hereby undertakes that:
3.1.1
3.1.2
3.1.3
3.1.4
it will maintain its corporate existence, operate its business, and transact affairs prudently and
efficiently in accordance with good financial and commercial standards and practices;
without the prior written consent of Party A, it will not sell, assign, mortgage, or otherwise dispose of
any legal or beneficiary rights to any of its assets, business, or revenues, or permit the creation of any
other Security Interest over such rights at any time after the execution date of this Agreement;
without the prior written consent of Party A, it will not incur, assume, guarantee or allow the existence
of any debts, except for those to which Party A has given its written consent;
it will always operate its business to maintain the value of its assets, and will not do anything which
will affect its business situation nor the value of its assets;
3.1.5
without the prior written consent of Party A, it will not enter into any contract at an amount
exceedingly higher or outside the ordinary business;
3.1.6
without the prior written consent of Party A, it will not provide any loan to any third party;
3.1.7
3.1.8
3.1.9
at the request of Party A, it will provide to Party A all information relating to its operation and
financial conditions;
without the prior written consent of Party A, it will not be consolidated or merged with any third
party, nor acquire or invest in any third party;
it will promptly inform Party A of any existing or threatened litigation, arbitration, or administrative
proceedings relating to its assets, business, or revenues;
3.1.10
in order to maintain the ownership of all its assets, it will execute all necessary or appropriate
documents, take all necessary or
Equity Option Agreement
- 6 -
appropriate actions, file all necessary or appropriate charges, and conduct all necessary or appropriate
defenses against all claims;
3.1.11 without the prior written consent of Party A, it will not in any form whatsoever allocate dividends to
shareholders; and
3.1.12
if PRC law requires it to be dissolved or liquidated, it shall sell all of its assets to the extent permitted
by PRC laws to Party A or another qualifying entity designated by Party A, at the lowest selling price
permitted by applicable PRC law. Any obligation for Party A to pay Party C as a result of such
transaction shall be forgiven by Party C or any proceeds from such transaction shall be paid to Party
A in partial satisfaction of the service fee under the Service Agreement or remitted to Party A or the
qualifying entity designated by Party A, as applicable under then-current PRC laws.
3.2 Undertakings of Party B.
Party B undertakes on his own behalf that:
3.2.1
3.2.2
3.2.3
without the prior written consent of Party A, he will not sell, transfer, mortgage, pledge, grant any
option rights or otherwise dispose of any legal or beneficiary rights to the Equity Interest, or permit
the creation of any other Security Interest over such rights at any time, except for the pledge under the
Equity Interest Pledge Agreement;
without the prior written consent of Party A, he will not vote in favor of, endorse, or sign any
shareholders resolution approving the sale, assignment, mortgage, or other disposal of the legal or
beneficiary rights of any shareholder or allowing the creation of any other Security Interest over such
rights at the shareholders meeting of Party C;
without the prior written consent of Party A, he will not vote in favor of, endorse, or sign any
shareholders resolution approving the consolidation or merger of Party C with any third party or the
acquisition of or investment in any third party by Party C at the shareholders meeting of Party C;
3.2.4
he will promptly inform Party A of any existing or threatened litigation, arbitration, or administrative
proceedings relating to the Equity Interest;
Equity Option Agreement
- 7 -
3.2.5
3.2.6
at the request of Party A, he will cause the shareholders meeting of Party C to vote in favor of the
transfer of the Equity Interest as contemplated hereunder;
in order to maintain his ownership of the Equity Interest, he will execute all necessary or appropriate
documents, take all necessary or appropriate actions, file all necessary or appropriate charges, or
conduct all necessary or appropriate defenses against all claims;
3.2.7
at the request of Party A, he will appoint the person nominated by Party A as the director of, or to
hold any other position in, Party C;
3.2.8
3.2.9
3.2.10
at the request of Party A, he will immediately transfer the requested Equity Interest to the Designated
Person(s);
he will strictly comply with the provisions of this Agreement and any other contracts entered into
jointly or separately by the parties hereto, strictly perform the obligations under such contracts, and
will not do anything which will affect the validity and enforceability of such contracts;
he shall not put forward, or vote in favor of, any shareholder resolution to, or otherwise request Party
C to, issue any dividends or other distributions with respect to his equity interest in Party C; provided,
however, in the event that he receives any profit, bonus, distribution or dividend from Party C, he
shall, as permitted under PRC laws, immediately pay or transfer such profit, bonus, distribution or
dividend to Party A or to any party designated by Party A in order to 1) first, to repay in part the Loan
payable under the Loan Agreement; and 2) then, if there is any profit, bonus, distribution or dividend
amount remaining, to pay in part the service fee under the Service Agreement on behalf of Party C;
and
3.2.11
after mandatory liquidation described in 3.1.12 above, he will remit in full to the Party A any residual
interest he receives in a nonreciprocal transfer or cause it happen. If such transfer is prohibited by
PRC law, he will remit the proceeds to Party A or its Designated Person(s) in a manner permitted
under PRC law
4. REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Party B. Party B hereby represents and warrants on his own behalf to Party
A that as of the date of this Agreement:
Equity Option Agreement
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4.1.1
4.1.2
he has the power and right to sign, deliver, and perform his obligations under this Agreement, and that
the said documents shall constitute his legal, valid, and binding obligations enforceable in accordance
with their terms;
the execution and delivery of this Agreement or any other contracts, and the performance of his
obligations thereunder, will not violate PRC law, breach or result in a default of any contract or
instrument to which he is subject, or result in a breach, suspension, or revocation of any grant, license,
or approval or result in the imposition of any additional conditions being imposed thereon; and
4.1.3
he is the lawful owner of the Equity Interest held by himself and has not created any Security Interest
over such Equity Interest other than the Equity Interest Pledge Agreement.
4.2 Representations and Warranties of Party C.
Party C represents and warrants to Party A that:
4.2.1
4.2.2
it has the power and right to sign, deliver, and perform its obligations under this Agreement, and said
documents shall constitute its legal, valid, and binding obligations enforceable in accordance with
their terms;
the execution and delivery, of this Agreement or any other contracts, and the performance of its
obligations thereunder, will not violate PRC law, conflict with its Articles of Association or other
constituent documents, breach or result in a default of any contract or instrument to which it is
subject, or result in a breach, suspension, or revocation of any grant, license, or approval or result in
the imposition of any additional conditions being imposed thereon;
4.2.3
it is the lawful owner of its assets, and has not created any Security Interest over such assets;
4.2.4
it does not have any outstanding debts other than those incurred in the ordinary course of business and
which have been disclosed to Party A;
4.2.5
it will comply with all PRC law applicable to the acquisition of assets; and
Equity Option Agreement
- 9 -
4.2.6
there is no existing, pending or threatened litigation, arbitration, or administrative proceedings relating
to the Equity Interest, its assets, or itself.
5. FURTHER WARRANTIES
The parties to the Agreement agree to promptly execute documents reasonably requisite to the performance of the provisions and
the aim of this Agreement or documents beneficial to it, and to take actions reasonably requisite to the performance of the
provisions and the aim of this Agreement or actions beneficial to it.
6. TERM
This Agreement shall take effect as of the Effective Date and shall remain in full force and effect until the earlier of (1) the date
on which all of the Equity Interests have been acquired by Party A directly or through its Designated Person(s); or (2) the
unilateral termination by Party A (at its sole and absolute discretion), by giving 30 days prior written notice to the Party B of its
intention to terminate this Agreement.
7. APPLICABLE LAW AND DISPUTE RESOLUTION
7.1 Governing Law. This Agreement shall be governed by and construed in accordance with PRC law.
7.2 Consultation and Mediation. If any dispute arises in connection with this Agreement, the parties shall attempt in
the first instance to resolve such dispute through friendly consultation or mediation.
7.3 Arbitration. Any dispute, controversy or claim arising out of or in connection with this Agreement shall be
submitted to the China International Economic and Trade Arbitration Commission (the “CIETAC”) for
arbitration, which shall be conducted in accordance with the CIETAC’s rules in effect at the time of applying for
arbitration. The place of arbitration shall be Beijing. The language of the arbitration shall be Chinese. The
tribunal shall consist of 3 arbitrators. The arbitral award is final and binding upon the parties. The cost of
arbitration shall be allocated as determined by the arbitrators.
8.
CONFIDENTIALITY
8.1 Confidentiality Obligations. The parties shall protect and maintain the confidentiality of all Confidential
Information. Without the prior written
Equity Option Agreement
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consent of the other parties, no party shall disclose any Confidential Information to any third party unless the
disclosure is required by law or by enforceable orders of the court or related government departments. Under
such circumstances, the party required to disclose the Confidential Information shall notify the other parties
immediately, take all possible measures to minimize the disclosure, and notify the persons to whom information
is being disclosed of the confidentiality obligation.
8.2 Obligations upon Termination. Upon termination of this Agreement, each party shall, at the request of the other
parties, return any document, material, database, equipment, or software containing the Confidential
Information to the other parties. If, for any reason, such document, material, database, equipment, or software
cannot be returned, the parties shall destroy all the Confidential Information and delete the Confidential
Information from any memory devices. No party shall be permitted to continue using the Confidential
Information in any way after the termination of this Agreement.
8.3 No Time Limit. There is no time limit to the confidentiality obligations stipulated in this Article, which
obligations will survive after the termination of this Agreement unless the Confidential Information is disclosed
to the public for reasons not due to the breach of this Agreement by any party.
9.
MISCELLANEOUS
9.1 Notices. All notices or other communications sent by either party shall be written in English or Chinese, and
delivered in person, by mail, or telecopy, to the other party at the following addresses. The date at which the
communication shall be deemed to be duly given or made shall be confirmed as follows: (a) for notices
delivered in person, the date of delivery shall be deemed as having been duly given or made; (b) for notices
delivered by mail, the 10th day of the delivery date of air certified mail with postage prepaid (as shown on
stamp) or the 4th day of the delivery date to an internationally certified delivery institution shall be deemed as
having been duly given or made; and (c) for notices by telecopy, the receipt date showed on the delivery
confirming paper of the relevant document shall be deemed as having been duly given or made.
Party A: Beijing Chezhiying Technology Co., Ltd.
Address: Room 1117, F/11, Tower B, No. 3, Danling Street, Haidian District, Beijing 100080, China
Tel: +8610-59857001
Attn: Wang Youdong
Equity Option Agreement
- 11 -
Party B： Wang Youdong
Address: ******
Tel: ******
Attn: Wang Youdong
Party C: Beijing Shengtuo Hongyuan Information Technology Co., Ltd.
Address: Unit 53, F/10, Tower B, No. 3, Danling Street, Haidian District, Beijing 100080, China
Tel: +8610-59857002
Attn: Wang Youdong
9.2 Entire Agreement. This Agreement, the Service Agreement, the Loan Agreement, the Equity Interest Pledge
Agreement, and the power of attorney from Party B in favor of Party A shall constitute the entire agreement
among the parties in respect of the subject matter hereof and shall supersede any previous discussions,
negotiations and agreements related thereto.
9.3 Amendment. Without the prior written consent of Party A, neither of Party B or Party C of this Agreement shall
be entitled to amend this Agreement. If required by law, the parties shall obtain all requisite approvals from the
relevant authorities to give effect to the amendment.
9.4 No Waiver. Unless otherwise agreed upon by the parties in writing, any failure or delay on the part of any party to
exercise any right, authority or privilege under this Agreement, or under any other agreement relating hereto,
shall not operate as a waiver thereof; nor shall any single or partial exercise of any right, authority or privilege
preclude any other future exercise thereof.
9.5 Severability. The provisions of this agreement are severable from each other. The invalidity of any provision of
this agreement shall not affect the validity or enforceability of any other provision of this agreement.
9.6 Successors. This Agreement shall be valid and binding on the parties, their successors and permitted assigns.
9.7 Assignment. Party A may transfer or assign any or all of its rights and obligations under this Agreement to any of
its designated parties (natural person or legal entity) at any time. In such circumstances, the transferee or
assignee shall enjoy and undertake the same rights and obligations herein of Party A as if the transferee or
assignee is Party A hereunder. When Party A transfers or assigns the rights and obligations under this
Agreement, at the request of Party A, Party B shall execute the relevant agreements and/or
Equity Option Agreement
- 12 -
documents with respect to such transfer or assignment. Party B and Party C shall not assign any of its rights or
obligations hereunder without the prior written consent of the Party A.
9.8 Language and Counterparts. This Agreement is prepared in 3 sets of originals in both English and Chinese.
Each party shall hold 1 set. Chinese articles shall prevail over English articles in case of any inconsistency.
[The space below has been intentionally left blank.]
Equity Option Agreement
- 13 -
IN WITNESS WHEREOF the parties hereof have caused this Agreement to be executed by their duly authorized
representatives as of the date first written above.
Party A： Beijing Chezhiying Technology Co., Ltd.
/s/ Wang Youdong
Authorized Representative: Wang Youdong
/s/ Beijing Chezhiying Technology Co., Ltd.
Company Seal: Beijing Chezhiying Technology Co., Ltd.
Equity Option Agreement
IN WITNESS WHEREOF the parties hereof have caused this Agreement to be executed by their duly authorized
representatives as of the date first written above.
/s/ Wang Youdong
Party B: Wang Youdong
Equity Option Agreement
IN WITNESS WHEREOF the parties hereof have caused this Agreement to be executed by their duly authorized
representatives as of the date first written above.
Party C: Beijing Shengtuo Hongyuan Information Technology Co., Ltd.
/s/ Wang Youdong
Authorized Representative: Wang Youdong
/s/ Beijing Shengtuo Hongyuan Information Technology Co., Ltd.
Company Seal: Beijing Shengtuo Hongyuan Information Technology Co., Ltd.
Equity Option Agreement
Exhibit 4.44
Equity Interest Pledge Agreement
between
Beijing Cheerbright Technologies Co., Ltd.
and
Long Quan
January, 2024
Equity Interest Pledge Agreement
CONTENTS
DEFINITIONS
PLEDGE
EFFECTIVENESS OF PLEDGE, SCOPE AND TERM
REPRESENTATIONS AND WARRANTIES OF THE PLEDGOR
COVENANTS OF THE PLEDGOR
EVENTS OF DEFAULT
EXERCISE OF THE RIGHTS OF THE PLEDGE
TRANSFER OR ASSIGNMENT
TERMINATION
FORCE MAJEURE
APPLICABLE LAW AND DISPUTE RESOLUTION
NOTICE
APPENDICES
WAIVER
MISCELLANEOUS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Equity Interest Pledge Agreement
4
5
6
7
7
8
10
11
11
11
12
12
13
13
13
THIS EQUITY INTEREST PLEDGE AGREEMENT (this “Agreement”) is entered in Beijing, the People's Republic of
China (“PRC”) and dated on January 28, 2024 by and among the following parties:
PLEDGEE: Beijing Cheerbright Technologies Co., Ltd., with its registered address at Room 1010, F/10, Tower B, No. 3,
Danling Street, Haidian District, Beijing 100080, China.
and
PLEDGOR: Long Quan, a PRC citizen, holder of identification card number ******, whose residential address is at ******.
(Above-mentioned parties are solely referred as a “Party”, and collectively as the “Parties”)
WHEREAS:
A.
Pledgor is a PRC citizen, and holds 50% of the equity interest of Beijing Autohome Information Technology Co., Lt
(“Autohome Information”).
B.
Autohome Information is a limited liability company registered in Beijing, which engages in the business of Intern
information services and operates the website www.autohome.com.cn.
C. The Pledgor and the Pledgee entered into a Loan Agreement on January 28, 2024, pursuant to which the Pledgee extended a
loan in the amount of RMB5,000,000 (the “Loan”) to the Pledgor (the “Loan Agreement”).
D.
The Pledgee, a wholly foreign-owned company registered in Beijing, PRC, and has been licensed by the relevant PR
government authority to carry on the business of technology-related research and development, website design, transfer
of technology, technology training and consulting, and the sale of its own products. The Pledgee and Autohome
Information entered into an Exclusive Technology Consulting and Service Agreement on January 28, 2024, pursuant to
which Autohome Information is required to pay service fees (the “Service Fees”) to the Pledgee in consideration for the
corresponding services to be provided by the Pledgee (the “Service Agreement”).
E. Simultaneous with the execution of this Agreement, the Pledgor has also entered into an Equity Option Agreement with the
Pledgee, pursuant to which the Pledgor grants to the Pledgee an exclusive right to purchase the Equity Interest (as
defined below) at any time upon satisfaction of various requirements under PRC law (the “Equity Option Agreement”).
Equity Interest Pledge Agreement
F. In order to ensure that (i) the Pledgor repay the Loan under the Loan Agreement; (ii) the Pledgee collects Service Fees
under the Service Agreement from Autohome Information, (iii) the Pledgor’s other obligations under the Equity Option
Agreement are fulfilled, and (iv) all other debts, monetary liabilities or other payment obligations owed to the Pledgee
by the Pledgor and/or Autohome Information, arising under or in relation to the Service Agreement or the Loan
Agreement including, but not limited to, any obligation to pay damages for a breach of any obligation of the Pledgor or
Autohome Information under the Loan Agreement or the Service Agreement (as applicable), are paid, the Pledgor is
willing to pledge all the Equity Interest (as defined below,) i.e. the 50% equity interest of Autohome Information,
equivalent to a contribution of RMB 5,000,000 to the Pledgee as security for the above-mentioned obligations of the
Pledgor and Autohome Information (collectively, the “Secured Obligations”).
In order to set forth each Party's rights and obligations, the Pledgee and the Pledgor through mutual negotiations hereby enter into
this Agreement based upon the following terms:
1. DEFINITIONS
Unless otherwise provided in this Agreement, the following terms shall have the following meanings:
1.1 “Pledge” means the full content of Section 2 hereunder.
1.2
“Equity Interest” means all the equity interests in Autohome Information held by the Pledgor (including all
present and future rights and benefits based on such equity interests), and any additional equity interests in
Autohome Information acquired by such Pledgor subsequent to the date hereof. For the avoidance of any doubt,
on the date hereof, the Pledgor holds a 50% equity interest (equivalent to a contribution of RMB5,000,000) in
Autohome Information.
1.3 “Event of Default” means any event in accordance with Section 6 hereunder.
1.4 “Notice of Default” means the notice of default issued by the Pledgee in accordance with this Agreement.
1.5 “ Effective Date” This Agreement shall be effective upon its being signed by the Parties hereunder.
Notwithstanding the foregoing, the Pledge (as defined in Section 2.1) shall only come into effect in accordance
with Section 3 of this Agreement.
Equity Interest Pledge Agreement
2. PLEDGE
2.1
The Pledgor hereby pledges, and if required, transfers and assigns the Equity Interest to the Pledgee as
security for all of the Secured Obligations (the “Pledge”) of an amount up to the Maximum Amount (as defined
below), and grant a first priority security interest in all rights, titles and interests that he has or may at any time
hereafter acquire in and to the Equity Interest, together with all equity or other ownership interests representing
a dividend on the Equity Interest, a distribution or return of capital upon or in respect of such Equity Interest,
any subscription, first refusal, pre-emptive or other purchase rights with respect to or arising from such Equity
Interest, any voting rights with respect to such Equity Interest or any other interest in Autohome Information
which, by reason of notice or lapse of time or the occurrence of other events, may be converted into a direct
equity interest in Autohome Information, and all proceeds of the foregoing (collectively, the “Pledged
Collateral”).
2.1.1
The Parties understand and agree that the monetary valuation arising from, relating to or in connection
with the Secured Obligations shall be a variable and floating valuation until the Settlement Date (as
defined below). Therefore, based on the reasonable assessment and evaluation by the Pledgor and the
Pledgee of the Secured Obligations and the Pledged Collateral, the Pledgor and the Pledgee mutually
acknowledge and agree that the Pledge shall aggregately secure the Secured Obligations for a
maximum amount of RMB 5,000,000.00 (the “Maximum Amount”) prior to the Settlement Date.
The Pledgor and the Pledgee may, taking into account the fluctuation in the monetary value of the Secured
Obligations and the Pledged Collateral, adjust the Maximum Amount based on mutual agreement by
amending and supplementing this Agreement, from time to time, prior to the Settlement Date.
2.1.2 Upon the occurrence of any of the events below (each an “ Event of Settlement”), the Secured
Obligations shall be fixed at a value of the sum of all Secured Obligations that are due, outstanding and
payable to the Pledgee on or immediately prior to the date of such occurrence (the “Fixed
Obligations”):
(a) any or all of the Loan Agreement, Service Agreement or the Equity Option Agreement expires or
is terminated pursuant to the stipulations thereunder;
Equity Interest Pledge Agreement
(b) the occurrence of an Event of Default pursuant to Section 6 that is not resolved, which results in
the Pledgee serving a Notice of Default to the Pledgor pursuant to Section 6.3;
(c) the Pledgee reasonably determines (having made due enquiries) that any of the Pledgor and/or
Autohome Information is insolvent or could potentially be made insolvent; or
(d) any other event that requires the settlement of the Secured Obligations in accordance with
relevant laws of the PRC.
2.2 For the avoidance of doubt, the day of the occurrence of an Event of Settlement shall be the settlement date (the
“Settlement Date”). On or after the Settlement Date, the Pledgee shall be entitled, at the election of the
Pledgee, to enforce the Pledge in accordance with Section 7.
2.3 The Pledgee is entitled to collect any and all dividends or other distributions, if any, arising from the Equity Interest
during the Term of the Pledge (as defined below).
3. EFFECTIVENESS OF PLEDGE, SCOPE AND TERM
3.1
3.2
The Pledgor shall, immediately after the execution of this Agreement, register this Agreement and the Pled
hereunder with the State Administration for Market Regulation of the PRC or its competent local counterpart
(the “SAMR”). The Pledgor shall deliver to the Pledgee a copy of the registration or filing certificate from the
SAMR within 7 days from the date of submission of the application for registration of this Agreement and
Pledge with the SAMR.
The Pledge shall be effective upon the registration of the Pledge with the SAMR in accordance with Section
above. The term of the Pledge shall commence on the date when the Pledge is registered with the SAMR and
shall expire on the earlier of (a) the date on which all outstanding Secured Obligations are paid in full or
otherwise satisfied (as applicable) or (b) the Pledgee enforces the Pledge pursuant to the terms and conditions
hereof, to satisfy its rights under the Secured Obligations and Pledged Collateral in full or (c) the Pledgor
completes his transfer of the Equity Interest to another party (individual or legal entity) pursuant to the Equity
Option Agreement and no longer holds any equity interest in Autohome Information (the “Term of the Pledge”).
Equity Interest Pledge Agreement
4. REPRESENTATIONS AND WARRANTIES OF THE PLEDGOR
The Pledgor hereby makes the following representations and warranties to the Pledgee and confirms that the Pledgee
executes this Agreement in reliance on such representations and warranties:
4.1 The Pledgor is the legal owner of the Equity Interest that has been registered in his name, and is entitled to create a
pledge on such Equity Interest.
4.2
None of the Pledged Collateral or the Pledge will be interfered with by any other pledgee at any time once t
Pledgee exercises the rights of the Pledge in accordance with this Agreement.
4.3
The Pledgee shall be entitled to dispose or assign the Pledge in accordance with the relevant laws and th
Agreement.
4.4
All necessary authorizations have been obtained for the execution and performance of this Agreement by t
Pledgor and the execution and performance of this Agreement by the Pledgor does not violate any applicable
laws or regulations. The Pledgor who signs this Agreement is lawfully and effectively authorized.
4.5
The Pledgor warrants that there is no on-going civil, administrative or criminal litigation or administrativ
punishment or arbitration related to the Equity Interest and is not aware of any such action pending or likely to
be pending in the future as of the date of this Agreement.
4.6 There are no outstanding taxes, fees or undecided legal procedures related to the Equity Interest as of the date of
this Agreement.
4.7 Each stipulation hereunder is the expression of each Party's true intention and shall be binding upon all the Parties.
5. COVENANTS OF THE PLEDGOR
5.1 The Pledgor covenants to the Pledgee that he shall:
5.1.1
not transfer or assign the Equity Interest, or create or permit to be created any pledge, lien, charge,
mortgage, encumbrance, option, security or other interest in or over the Equity Interest that has been
registered in his name, other than the Pledge created hereunder and the option granted under the Equity
Option Agreement, without the prior written consent from the Pledgee;
Equity Interest Pledge Agreement
5.1.2
5.1.3
comply with and implement laws and regulations with respect to the pledge of rights, present to the
Pledgee the notices, orders or suggestions with respect to the Pledge issued or made by the competent
authority within 5 days upon receiving such notices, orders or suggestions and take actions in
accordance with the reasonable instructions of the Pledgee; and
timely notify the Pledgee of any event or any received notice (i) which may affect the Equity Interest
or any part of the Pledgee’s rights, (ii) which may change the Pledgor's covenants or obligations under
this Agreement or (iii) which may affect the Pledgor's performance of his obligations under this
Agreement, and take actions in accordance with the reasonable instructions of the Pledgee.
5.2 The Pledgor covenants that the Pledgee's right of exercising the Pledge under this Agreement shall not be
suspended or hampered by the Pledgor or any successor of the Pledgor or any person authorized by the Pledgor.
5.3 The Pledgor jointly and severally covenants to the Pledgee that in order to protect or perfect the security over the
Secured Obligations, the Pledgor shall (i) execute in good faith and cause other parties who have interests in the
Pledge to execute all the forms, instruments, agreements (including those required for the registration and de-
registration of the Pledge with the SAMR), and/or (ii) take actions and cause other parties who have interests in
the Pledge to take actions as required by the Pledgee and (iii) allow the Pledgee to exercise the rights and
authorization vested in the Pledgee under this Agreement.
5.4 The Pledgor agrees to promptly make or cause to be made any filings or records, give or cause to be given any
notice and take or cause to be taken any other action as may be necessary under the laws of the PRC, to perfect
the Pledge of the Pledged Collateral, including the SAMR registration set forth in Section 3.1.
5.5
The Pledgor covenants to the Pledgee that he will comply with and perform all the guarantees, covenant
agreements, representations and conditions for the benefits of the Pledgee. The Pledgor shall compensate for all
the losses suffered by the Pledgee for such Pledgor’s failure to perform or fully perform his guarantees,
covenants, agreements, representations or conditions.
6. EVENTS OF DEFAULT
Equity Interest Pledge Agreement
6.1 Each of the following shall constitute an Event of Default:
6.1.1
Autohome Information or the Pledgor fails to make full and timely payment of any amounts due under
the Secured Obligations as required under the Service Agreement, Loan Agreement or Equity Option
Agreement, or an event of default as defined and stipulated in those agreements has occurred and is
continuing;
6.1.2
the Pledgor makes or has made any inaccurate, incomplete, misleading or untrue representation or
warranty under Section 4, or is in violation or breach of any of the representations and warranties under
Section 4;
6.1.3
the Pledgor breaches any of the covenants under Section 5;
6.1.4
the Pledgor breaches any other covenant, undertaking or obligation of the Pledgor set forth herein;
6.1.5
the Pledgor is unable to perform its obligations under this Agreement due to the separation or merger
of Autohome Information with other third parties or for any other reason;
6.1.6
6.1.7
the Pledgor relinquishes all or any part of the Pledged Collateral or transfers or assigns all or any part
of the Pledged Collateral without the prior written consent of the Pledgee (except the transfers or
assigns permitted under the Equity Option Agreement);
any indebtedness, guarantee or other obligation of the Pledgor, whether pursuant to a contract or
otherwise, (i) is accelerated as a result of a default thereunder and is required to be repaid or performed
prior to the due date; or (ii) has become due and is not repaid or performed when due which, in the
Pledgee’s reasonable view, has materially adversely affected the Pledgor’s ability to perform his
obligations under this Agreement;
6.1.8
this Agreement is illegal as a result of any applicable laws or the Pledgor is restricted from continuing
to perform his obligations under this Agreement;
6.1.9
Equity Interest Pledge Agreement
any approval, permit, license or authorization from any applicable governmental entity (or registration
internet value-added
or filing procedure) required for Autohome Information
telecommunication service in the PRC is withdrawn, suspended, invalidated or materially amended;
to provide
6.1.10
any approval, permit, license or authorization from any applicable government authority required to
perform this Agreement or make this Agreement enforceable, legal and valid is withdrawn, suspended,
invalidated or materially amended; or
6.1.11
any property owned by the Pledgor is altered or damaged which, in the Pledgee’s reasonable view, has
materially adversely affected the Pledgor’s ability to perform his obligations under this Agreement.
6.2 The Pledgor shall immediately give a written notice to the Pledgee if the Pledgor is aware or find that any event set
forth in Section 6.1 or any event that may result in the foregoing events have occurred or are occurring.
6.3 Unless an Event of Default set forth in Section 6.1 has been rectified to the Pledgee's satisfaction, the Pledgee, at
any time the event of default occurs or thereafter, may give a written notice of default to the Pledgor, and
require the Pledgor, at the discretion of the Pledgee, to immediately make full payment of the outstanding
amounts payable under the Loan Agreement, Service Agreement, and/or Equity Option Agreement, and other
payables, or dispose of the Pledge in accordance with Section 7 herein.
7. EXERCISE OF THE RIGHTS OF THE PLEDGE
7.1 The Pledgor shall not transfer or assign the Pledge without prior written approval from the Pledgee prior to the full
settlement and fulfillment of the Secured Obligations.
7.2 The Pledgee shall give a notice of default to the Pledgor when the Pledgee exercises the rights of Pledge.
7.3 Subject to Section 6.3, the Pledgee may exercise the right to dispose of the Pledge at any time when the Pledgee
gives a notice of default in accordance with Section 6.3 or thereafter.
7.4 The Pledgee is entitled to have priority in receiving payment by the evaluation or proceeds from the auction or sale
of whole or part of the Pledged Collateral in accordance with legal procedures until the outstanding Secured
Obligation or other monetary obligations payable by the Pledgor and/or Autohome Information is fully paid,
repaid or otherwise settled.
7.5 The Pledgor shall not hinder the Pledgee from disposing the Pledge in accordance with this Agreement and shall
give necessary assistance so that the Pledgee could realize his Pledge.
Equity Interest Pledge Agreement
8. TRANSFER OR ASSIGNMENT
8.1
The Pledgor shall not donate or transfer his rights and obligations herein to any third party without prior writ
consent from the Pledgee.
8.2 This Agreement shall be binding upon the Pledgor and his successors and be effective to the Pledgee and his each
successor and assignee.
8.3
The Pledgee may transfer or assign all Secured Obligations and its right to the Pledge to any third party at a
time. In this case, the assignee shall enjoy and undertake the same rights and obligations herein of the Pledgee
as if the assignee is a party hereto. When the Pledgee transfers or assigns the Secured Obligations and its rights
to the Pledge, at the request of the Pledgee, the Pledgor shall execute the relevant agreements and/or documents
with respect to such transfer or assignment.
8.4
After a change to the Pledgee resulting from a transfer or an assignment, the new parties to the pledge shall
execute a pledge contract.
9. TERMINATION
This Agreement shall not terminate until the Term of the Pledge expires pursuant to Section 3 herein.
10. FORCE MAJEURE
10.1
If this Agreement is delayed in or prevented from performing in the Event of Force Majeure (“Event of Force
Majeure”), only within the limitation of such delay or prevention, the affected Party is absolved from any
liability under this Agreement. Force Majeure, which includes acts of governments, acts of nature, fire,
explosion, geographic change, flood, earthquake, tide, lightning, war, means any unforeseen events beyond the
prevented Party's reasonable control and cannot be prevented with reasonable care. However, any shortage of
credit, capital or finance shall not be regarded as an event beyond a Party's reasonable control. The Party
affected by Force Majeure who claims for exemption from performing any obligations under this Agreement or
under any Section herein shall notify the other party of such exemption promptly and advise him/her of the steps
to be taken for completion of the performance.
10.2
The Party affected by Force Majeure shall not assume any liability under this Agreement. However, subject to
the Party affected by Force Majeure having taken its reasonable and practicable efforts to perform this
Equity Interest Pledge Agreement
Agreement, the Party claiming for exemption of the liabilities may only be exempted from performing such
liability as within limitation of the part performance delayed or prevented by Force Majeure. Once causes for
such exemption of liabilities are rectified and remedied, both parties agree to resume performance of this
Agreement with their best efforts.
11. APPLICABLE LAW AND DISPUTE RESOLUTION
11.1
The execution, validity, performance and interpretation of this Agreement shall be governed by and construed
in accordance with the laws of the PRC.
11.2
The Parties shall strive to settle any dispute arising from the interpretation or performance through friendly
consultation. In case no settlement can be reached through consultation, each party can submit such matter to
China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration. The arbitration
shall follow the then current rules of CIETAC, and the arbitration proceedings shall be conducted in Chinese
and shall take place in Beijing. The arbitration award shall be final and binding upon the Parties. This article
shall not be affected by the termination or elimination of this Agreement.
11.3
In case of any dispute arising out of the interpretation and performance of this Agreement or any pending
arbitration of such dispute, each Party shall continue to perform their obligations under this Agreement, except
for the matters in dispute.
12. NOTICE
Any notice or correspondence, which is given by the Party as stipulated hereunder, shall be in Chinese or English writing
and shall be delivered in person or by registered or prepaid mail or recognized express service, or be transmitted by telex
or facsimile to the following addresses:
:
:
Beijing Cheerbright Technologies Co., Ltd.
Room 1010, F/10, Tower B, No. 3, Danling Street, Haidian District, Beijing
100080, China
+8610-59857387
+8610-59857001
:
:
: Wang Youdong
Long Quan
******
******
Long Quan
Pledgee
Address
Fax
Tel
Addressee
Pledgor:
Address:
Tel:
Addressee:
Equity Interest Pledge Agreement
13. APPENDICES
The appendices to this Agreement constitute an integral part of this Agreement.
14. WAIVER
The Pledgee's non-exercise or delay in exercise of any rights, remedies, power or privileges hereunder shall not be
deemed as the waiver of such rights, remedies, power or privileges. Any single or partial exercise of the rights, remedies,
power and privileges shall not exclude the Pledgee from exercising any other rights, remedies, power and privileges. The
rights, remedies, power and privileges hereunder are accumulative and shall not exclude the application of any other
rights, remedies, power and privileges stipulated by laws.
15. MISCELLANEOUS
15.1
Any amendments, modifications or supplements to this Agreement shall be in writing and come into effect
upon being executed and sealed by the Parties hereto.
15.2
In case any terms and stipulations in this Agreement are regarded as illegal or can not be performed in
accordance with the applicable law, such terms and stipulations shall be deemed to ineffective and not
enforceable within the scope governed by the applicable law, and the remaining stipulations will remain
effective.
15.3 This Agreement, the Service Agreement, the Equity Option Agreement, the Loan Agreement and the Power of
Attorney from the Pledgor to the Pledgee in favor of the Pledgee shall constitute the entire agreement among the
parties in respect of the subject matter hereof and shall supersede any previous discussions, negotiations and
agreements related thereto.
15.4 This Agreement is prepared in both English and Chinese. This Agreement shall be executed in 2 originals, with 1
original copy for each party. Chinese articles shall prevail over English articles in case of any inconsistency.
[The space below has been intentionally left blank.]
Equity Interest Pledge Agreement
PLEDGEE: Beijing Cheerbright Technologies Co., Ltd.
/s/ Wang Youdong
Authorized Representative: Wang Youdong
/s/ Beijing Cheerbright Technologies Co., Ltd.
Company Seal: Beijing Cheerbright Technologies Co., Ltd.
Equity Interest Pledge Agreement
PLEDGOR: Long Quan
/s/ Long Quan
Equity Interest Pledge Agreement
Beijing Autohome Information Technology Co., Ltd. Shareholder List
(As of January 28, 2024. Registered Capital is RMB 10,000,000, all of which has been paid in.)
No.
1
2
Name of
Share
holder
Long
Quan
Wang
Youdong
ID Card Number
Address
******
******
******
******
Contribution
(percentage)
Form of
Contrib
ution
RMB5,000,00
0 (50%)
currency
RMB5,000,00
0(50%)
currency
Pledge
The contribution of RMB5,000,000
has been pledged
to Beijing
Cheerbright Technologies Co., Ltd.
on January 28, 2024.
The contribution of RMB5,000,000
has been pledged
to Beijing
Cheerbright Technologies Co., Ltd.
on January 28, 2024
Beijing Autohome Information Technology Co., Ltd.
Signature
Authorized
Representative
Date
： /s/ Wang Youdong
： Wang Youdong
： January 28, 2024
Equity Interest Pledge Agreement
Exhibit 4.45
Equity Interest Pledge Agreement
between
Beijing Cheerbright Technologies Co., Ltd.
and
Wang Youdong
January, 2024
Equity Interest Pledge Agreement
CONTENTS
DEFINITIONS
PLEDGE
EFFECTIVENESS OF PLEDGE, SCOPE AND TERM
REPRESENTATIONS AND WARRANTIES OF THE PLEDGOR
COVENANTS OF THE PLEDGOR
EVENTS OF DEFAULT
EXERCISE OF THE RIGHTS OF THE PLEDGE
TRANSFER OR ASSIGNMENT
TERMINATION
FORCE MAJEURE
APPLICABLE LAW AND DISPUTE RESOLUTION
NOTICE
APPENDICES
WAIVER
MISCELLANEOUS
1.
2.
3.
4.
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15.
Equity Interest Pledge Agreement
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THIS EQUITY INTEREST PLEDGE AGREEMENT (this “Agreement”) is entered in Beijing, the People's Republic of
China (“PRC”) and dated on January 28, 2024 by and among the following parties:
PLEDGEE: Beijing Cheerbright Technologies Co., Ltd., with its registered address at Room 1010, F/10, Tower B, No. 3,
Danling Street, Haidian District, Beijing 100080, China.
and
PLEDGOR: Wang Youdong, a PRC citizen, holder of identification card number ******, whose residential address is at
******.
(Above-mentioned parties are solely referred as a “Party”, and collectively as the “Parties”)
WHEREAS:
A.
Pledgor is a PRC citizen, and holds 50% of the equity interest of Beijing Autohome Information Technology Co., Lt
(“Autohome Information”).
B.
Autohome Information is a limited liability company registered in Beijing, which engages in the business of Intern
information services and operates the website www.autohome.com.cn.
C. The Pledgor and the Pledgee entered into a Loan Agreement on January 28, 2024, pursuant to which the Pledgee extended a
loan in the amount of RMB5,000,000 (the “Loan”) to the Pledgor (the “Loan Agreement”).
D.
The Pledgee, a wholly foreign-owned company registered in Beijing, PRC, and has been licensed by the relevant PR
government authority to carry on the business of technology-related research and development, website design, transfer
of technology, technology training and consulting, and the sale of its own products. The Pledgee and Autohome
Information entered into an Exclusive Technology Consulting and Service Agreement on January 28, 2024, pursuant to
which Autohome Information is required to pay service fees (the “Service Fees”) to the Pledgee in consideration for the
corresponding services to be provided by the Pledgee (the “Service Agreement”).
E. Simultaneous with the execution of this Agreement, the Pledgor has also entered into an Equity Option Agreement with the
Pledgee, pursuant to which the Pledgor grants to the Pledgee an exclusive right to purchase the Equity Interest (as
defined below) at any time upon satisfaction of various requirements under PRC law (the “Equity Option Agreement”).
Equity Interest Pledge Agreement
F. In order to ensure that (i) the Pledgor repay the Loan under the Loan Agreement; (ii) the Pledgee collects Service Fees
under the Service Agreement from Autohome Information, (iii) the Pledgor’s other obligations under the Equity Option
Agreement are fulfilled, and (iv) all other debts, monetary liabilities or other payment obligations owed to the Pledgee
by the Pledgor and/or Autohome Information, arising under or in relation to the Service Agreement or the Loan
Agreement including, but not limited to, any obligation to pay damages for a breach of any obligation of the Pledgor or
Autohome Information under the Loan Agreement or the Service Agreement (as applicable), are paid, the Pledgor is
willing to pledge all the Equity Interest (as defined below,) i.e. the 50% equity interest of Autohome Information,
equivalent to a contribution of RMB 5,000,000 to the Pledgee as security for the above-mentioned obligations of the
Pledgor and Autohome Information (collectively, the “Secured Obligations”).
In order to set forth each Party's rights and obligations, the Pledgee and the Pledgor through mutual negotiations hereby enter into
this Agreement based upon the following terms:
1. DEFINITIONS
Unless otherwise provided in this Agreement, the following terms shall have the following meanings:
1.1 “Pledge” means the full content of Section 2 hereunder.
1.2
“Equity Interest” means all the equity interests in Autohome Information held by the Pledgor (including all
present and future rights and benefits based on such equity interests), and any additional equity interests in
Autohome Information acquired by such Pledgor subsequent to the date hereof. For the avoidance of any doubt,
on the date hereof, the Pledgor holds a 50% equity interest (equivalent to a contribution of RMB 5,000,000) in
Autohome Information.
1.3 “Event of Default” means any event in accordance with Section 6 hereunder.
1.4 “Notice of Default” means the notice of default issued by the Pledgee in accordance with this Agreement.
1.5 “ Effective Date” This Agreement shall be effective upon its being signed by the Parties hereunder.
Notwithstanding the foregoing, the Pledge (as defined in Section 2.1) shall only come into effect in accordance
with Section 3 of this Agreement.
Equity Interest Pledge Agreement
2. PLEDGE
2.1
The Pledgor hereby pledges, and if required, transfers and assigns the Equity Interest to the Pledgee as
security for all of the Secured Obligations (the “Pledge”) of an amount up to the Maximum Amount (as defined
below), and grant a first priority security interest in all rights, titles and interests that he has or may at any time
hereafter acquire in and to the Equity Interest, together with all equity or other ownership interests representing
a dividend on the Equity Interest, a distribution or return of capital upon or in respect of such Equity Interest,
any subscription, first refusal, pre-emptive or other purchase rights with respect to or arising from such Equity
Interest, any voting rights with respect to such Equity Interest or any other interest in Autohome Information
which, by reason of notice or lapse of time or the occurrence of other events, may be converted into a direct
equity interest in Autohome Information, and all proceeds of the foregoing (collectively, the “Pledged
Collateral”).
2.1.1
The Parties understand and agree that the monetary valuation arising from, relating to or in connection
with the Secured Obligations shall be a variable and floating valuation until the Settlement Date (as
defined below). Therefore, based on the reasonable assessment and evaluation by the Pledgor and the
Pledgee of the Secured Obligations and the Pledged Collateral, the Pledgor and the Pledgee mutually
acknowledge and agree that the Pledge shall aggregately secure the Secured Obligations for a
maximum amount of RMB 5,000,000.00 (the “Maximum Amount”) prior to the Settlement Date.
The Pledgor and the Pledgee may, taking into account the fluctuation in the monetary value of the Secured
Obligations and the Pledged Collateral, adjust the Maximum Amount based on mutual agreement by
amending and supplementing this Agreement, from time to time, prior to the Settlement Date.
2.1.2 Upon the occurrence of any of the events below (each an “ Event of Settlement”), the Secured
Obligations shall be fixed at a value of the sum of all Secured Obligations that are due, outstanding and
payable to the Pledgee on or immediately prior to the date of such occurrence (the “Fixed
Obligations”):
(a) any or all of the Loan Agreement, Service Agreement or the Equity Option Agreement expires or
is terminated pursuant to the stipulations thereunder;
Equity Interest Pledge Agreement
(b) the occurrence of an Event of Default pursuant to Section 6 that is not resolved, which results in
the Pledgee serving a Notice of Default to the Pledgor pursuant to Section 6.3;
(c) the Pledgee reasonably determines (having made due enquiries) that any of the Pledgor and/or
Autohome Information is insolvent or could potentially be made insolvent; or
(d) any other event that requires the settlement of the Secured Obligations in accordance with
relevant laws of the PRC.
2.2 For the avoidance of doubt, the day of the occurrence of an Event of Settlement shall be the settlement date (the
“Settlement Date”). On or after the Settlement Date, the Pledgee shall be entitled, at the election of the
Pledgee, to enforce the Pledge in accordance with Section 7.
2.3 The Pledgee is entitled to collect any and all dividends or other distributions, if any, arising from the Equity Interest
during the Term of the Pledge (as defined below).
3. EFFECTIVENESS OF PLEDGE, SCOPE AND TERM
3.1
3.2
The Pledgor shall, immediately after the execution of this Agreement, register this Agreement and the Pled
hereunder with the State Administration for Market Regulation of the PRC or its competent local counterpart
(the “SAMR”). The Pledgor shall deliver to the Pledgee a copy of the registration or filing certificate from the
SAMR within 7 days from the date of submission of the application for registration of this Agreement and
Pledge with the SAMR.
The Pledge shall be effective upon the registration of the Pledge with the SAMR in accordance with Section
above. The term of the Pledge shall commence on the date when the Pledge is registered with the SAMR and
shall expire on the earlier of (a) the date on which all outstanding Secured Obligations are paid in full or
otherwise satisfied (as applicable) or (b) the Pledgee enforces the Pledge pursuant to the terms and conditions
hereof, to satisfy its rights under the Secured Obligations and Pledged Collateral in full or (c) the Pledgor
completes his transfer of the Equity Interest to another party (individual or legal entity) pursuant to the Equity
Option Agreement and no longer holds any equity interest in Autohome Information (the “Term of the Pledge”).
Equity Interest Pledge Agreement
4. REPRESENTATIONS AND WARRANTIES OF THE PLEDGOR
The Pledgor hereby makes the following representations and warranties to the Pledgee and confirms that the Pledgee
executes this Agreement in reliance on such representations and warranties:
4.1 The Pledgor is the legal owner of the Equity Interest that has been registered in his name, and is entitled to create a
pledge on such Equity Interest.
4.2
None of the Pledged Collateral or the Pledge will be interfered with by any other pledgee at any time once t
Pledgee exercises the rights of the Pledge in accordance with this Agreement.
4.3
The Pledgee shall be entitled to dispose or assign the Pledge in accordance with the relevant laws and th
Agreement.
4.4
All necessary authorizations have been obtained for the execution and performance of this Agreement by t
Pledgor and the execution and performance of this Agreement by the Pledgor does not violate any applicable
laws or regulations. The Pledgor who signs this Agreement is lawfully and effectively authorized.
4.5
The Pledgor warrants that there is no on-going civil, administrative or criminal litigation or administrativ
punishment or arbitration related to the Equity Interest and is not aware of any such action pending or likely to
be pending in the future as of the date of this Agreement.
4.6 There are no outstanding taxes, fees or undecided legal procedures related to the Equity Interest as of the date of
this Agreement.
4.7 Each stipulation hereunder is the expression of each Party's true intention and shall be binding upon all the Parties.
5. COVENANTS OF THE PLEDGOR
5.1 The Pledgor covenants to the Pledgee that he shall:
5.1.1
not transfer or assign the Equity Interest, or create or permit to be created any pledge, lien, charge,
mortgage, encumbrance, option, security or other interest in or over the Equity Interest that has been
registered in his name, other than the Pledge created hereunder and the option granted under the Equity
Option Agreement, without the prior written consent from the Pledgee;
Equity Interest Pledge Agreement
5.1.2
5.1.3
comply with and implement laws and regulations with respect to the pledge of rights, present to the
Pledgee the notices, orders or suggestions with respect to the Pledge issued or made by the competent
authority within 5 days upon receiving such notices, orders or suggestions and take actions in
accordance with the reasonable instructions of the Pledgee; and
timely notify the Pledgee of any event or any received notice (i) which may affect the Equity Interest
or any part of the Pledgee’s rights, (ii) which may change the Pledgor's covenants or obligations under
this Agreement or (iii) which may affect the Pledgor's performance of his obligations under this
Agreement, and take actions in accordance with the reasonable instructions of the Pledgee.
5.2 The Pledgor covenants that the Pledgee's right of exercising the Pledge under this Agreement shall not be
suspended or hampered by the Pledgor or any successor of the Pledgor or any person authorized by the Pledgor.
5.3 The Pledgor jointly and severally covenants to the Pledgee that in order to protect or perfect the security over the
Secured Obligations, the Pledgor shall (i) execute in good faith and cause other parties who have interests in the
Pledge to execute all the forms, instruments, agreements (including those required for the registration and de-
registration of the Pledge with the SAMR), and/or (ii) take actions and cause other parties who have interests in
the Pledge to take actions as required by the Pledgee and (iii) allow the Pledgee to exercise the rights and
authorization vested in the Pledgee under this Agreement.
5.4 The Pledgor agrees to promptly make or cause to be made any filings or records, give or cause to be given any
notice and take or cause to be taken any other action as may be necessary under the laws of the PRC, to perfect
the Pledge of the Pledged Collateral, including the SAMR registration set forth in Section 3.1.
5.5
The Pledgor covenants to the Pledgee that he will comply with and perform all the guarantees, covenant
agreements, representations and conditions for the benefits of the Pledgee. The Pledgor shall compensate for all
the losses suffered by the Pledgee for such Pledgor’s failure to perform or fully perform his guarantees,
covenants, agreements, representations or conditions.
6. EVENTS OF DEFAULT
Equity Interest Pledge Agreement
6.1 Each of the following shall constitute an Event of Default:
6.1.1
Autohome Information or the Pledgor fails to make full and timely payment of any amounts due under
the Secured Obligations as required under the Service Agreement, Loan Agreement or Equity Option
Agreement, or an event of default as defined and stipulated in those agreements has occurred and is
continuing;
6.1.2
the Pledgor makes or has made any inaccurate, incomplete, misleading or untrue representation or
warranty under Section 4, or is in violation or breach of any of the representations and warranties under
Section 4;
6.1.3
the Pledgor breaches any of the covenants under Section 5;
6.1.4
the Pledgor breaches any other covenant, undertaking or obligation of the Pledgor set forth herein;
6.1.5
the Pledgor is unable to perform its obligations under this Agreement due to the separation or merger
of Autohome Information with other third parties or for any other reason;
6.1.6
6.1.7
the Pledgor relinquishes all or any part of the Pledged Collateral or transfers or assigns all or any part
of the Pledged Collateral without the prior written consent of the Pledgee (except the transfers or
assigns permitted under the Equity Option Agreement);
any indebtedness, guarantee or other obligation of the Pledgor, whether pursuant to a contract or
otherwise, (i) is accelerated as a result of a default thereunder and is required to be repaid or performed
prior to the due date; or (ii) has become due and is not repaid or performed when due which, in the
Pledgee’s reasonable view, has materially adversely affected the Pledgor’s ability to perform his
obligations under this Agreement;
6.1.8
this Agreement is illegal as a result of any applicable laws or the Pledgor is restricted from continuing
to perform his obligations under this Agreement;
6.1.9
Equity Interest Pledge Agreement
any approval, permit, license or authorization from any applicable governmental entity (or registration
internet value-added
or filing procedure) required for Autohome Information
telecommunication service in the PRC is withdrawn, suspended, invalidated or materially amended;
to provide
6.1.10
any approval, permit, license or authorization from any applicable government authority required to
perform this Agreement or make this Agreement enforceable, legal and valid is withdrawn, suspended,
invalidated or materially amended; or
6.1.11
any property owned by the Pledgor is altered or damaged which, in the Pledgee’s reasonable view, has
materially adversely affected the Pledgor’s ability to perform his obligations under this Agreement.
6.2 The Pledgor shall immediately give a written notice to the Pledgee if the Pledgor is aware or find that any event set
forth in Section 6.1 or any event that may result in the foregoing events have occurred or are occurring.
6.3 Unless an Event of Default set forth in Section 6.1 has been rectified to the Pledgee's satisfaction, the Pledgee, at
any time the event of default occurs or thereafter, may give a written notice of default to the Pledgor, and
require the Pledgor, at the discretion of the Pledgee, to immediately make full payment of the outstanding
amounts payable under the Loan Agreement, Service Agreement, and/or Equity Option Agreement, and other
payables, or dispose of the Pledge in accordance with Section 7 herein.
7. EXERCISE OF THE RIGHTS OF THE PLEDGE
7.1 The Pledgor shall not transfer or assign the Pledge without prior written approval from the Pledgee prior to the full
settlement and fulfillment of the Secured Obligations.
7.2 The Pledgee shall give a notice of default to the Pledgor when the Pledgee exercises the rights of Pledge.
7.3 Subject to Section 6.3, the Pledgee may exercise the right to dispose of the Pledge at any time when the Pledgee
gives a notice of default in accordance with Section 6.3 or thereafter.
7.4 The Pledgee is entitled to have priority in receiving payment by the evaluation or proceeds from the auction or sale
of whole or part of the Pledged Collateral in accordance with legal procedures until the outstanding Secured
Obligation or other monetary obligations payable by the Pledgor and/or Autohome Information is fully paid,
repaid or otherwise settled.
7.5 The Pledgor shall not hinder the Pledgee from disposing the Pledge in accordance with this Agreement and shall
give necessary assistance so that the Pledgee could realize his Pledge.
Equity Interest Pledge Agreement
8. TRANSFER OR ASSIGNMENT
8.1
The Pledgor shall not donate or transfer his rights and obligations herein to any third party without prior writ
consent from the Pledgee.
8.2 This Agreement shall be binding upon the Pledgor and his successors and be effective to the Pledgee and his each
successor and assignee.
8.3
The Pledgee may transfer or assign all Secured Obligations and its right to the Pledge to any third party at a
time. In this case, the assignee shall enjoy and undertake the same rights and obligations herein of the Pledgee
as if the assignee is a party hereto. When the Pledgee transfers or assigns the Secured Obligations and its rights
to the Pledge, at the request of the Pledgee, the Pledgor shall execute the relevant agreements and/or documents
with respect to such transfer or assignment.
8.4
After a change to the Pledgee resulting from a transfer or an assignment, the new parties to the pledge shall
execute a pledge contract.
9. TERMINATION
This Agreement shall not terminate until the Term of the Pledge expires pursuant to Section 3 herein.
10. FORCE MAJEURE
10.1
If this Agreement is delayed in or prevented from performing in the Event of Force Majeure (“Event of Force
Majeure”), only within the limitation of such delay or prevention, the affected Party is absolved from any
liability under this Agreement. Force Majeure, which includes acts of governments, acts of nature, fire,
explosion, geographic change, flood, earthquake, tide, lightning, war, means any unforeseen events beyond the
prevented Party's reasonable control and cannot be prevented with reasonable care. However, any shortage of
credit, capital or finance shall not be regarded as an event beyond a Party's reasonable control. The Party
affected by Force Majeure who claims for exemption from performing any obligations under this Agreement or
under any Section herein shall notify the other party of such exemption promptly and advise him/her of the steps
to be taken for completion of the performance.
10.2
The Party affected by Force Majeure shall not assume any liability under this Agreement. However, subject to
the Party affected by Force Majeure having taken its reasonable and practicable efforts to perform this
Equity Interest Pledge Agreement
Agreement, the Party claiming for exemption of the liabilities may only be exempted from performing such
liability as within limitation of the part performance delayed or prevented by Force Majeure. Once causes for
such exemption of liabilities are rectified and remedied, both parties agree to resume performance of this
Agreement with their best efforts.
11. APPLICABLE LAW AND DISPUTE RESOLUTION
11.1
The execution, validity, performance and interpretation of this Agreement shall be governed by and construed
in accordance with the laws of the PRC.
11.2
The Parties shall strive to settle any dispute arising from the interpretation or performance through friendly
consultation. In case no settlement can be reached through consultation, each party can submit such matter to
China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration. The arbitration
shall follow the then current rules of CIETAC, and the arbitration proceedings shall be conducted in Chinese
and shall take place in Beijing. The arbitration award shall be final and binding upon the Parties. This article
shall not be affected by the termination or elimination of this Agreement.
11.3
In case of any dispute arising out of the interpretation and performance of this Agreement or any pending
arbitration of such dispute, each Party shall continue to perform their obligations under this Agreement, except
for the matters in dispute.
12. NOTICE
Any notice or correspondence, which is given by the Party as stipulated hereunder, shall be in Chinese or English writing
and shall be delivered in person or by registered or prepaid mail or recognized express service, or be transmitted by telex
or facsimile to the following addresses:
:
:
Beijing Cheerbright Technologies Co., Ltd.
Room 1010, F/10, Tower B, No. 3, Danling Street, Haidian District, Beijing
100080, China
+8610-59857387
+8610-59857001
:
:
: Wang Youdong
Wang Youdong
******
******
Wang Youdong
Pledgee
Address
Fax
Tel
Addressee
Pledgor:
Address:
Tel:
Addressee:
Equity Interest Pledge Agreement
13. APPENDICES
The appendices to this Agreement constitute an integral part of this Agreement.
14. WAIVER
The Pledgee's non-exercise or delay in exercise of any rights, remedies, power or privileges hereunder shall not be
deemed as the waiver of such rights, remedies, power or privileges. Any single or partial exercise of the rights, remedies,
power and privileges shall not exclude the Pledgee from exercising any other rights, remedies, power and privileges. The
rights, remedies, power and privileges hereunder are accumulative and shall not exclude the application of any other
rights, remedies, power and privileges stipulated by laws.
15. MISCELLANEOUS
15.1
Any amendments, modifications or supplements to this Agreement shall be in writing and come into effect
upon being executed and sealed by the Parties hereto.
15.2
In case any terms and stipulations in this Agreement are regarded as illegal or can not be performed in
accordance with the applicable law, such terms and stipulations shall be deemed to ineffective and not
enforceable within the scope governed by the applicable law, and the remaining stipulations will remain
effective.
15.3 This Agreement, the Service Agreement, the Equity Option Agreement, the Loan Agreement and the Power of
Attorney from the Pledgor to the Pledgee in favor of the Pledgee shall constitute the entire agreement among the
parties in respect of the subject matter hereof and shall supersede any previous discussions, negotiations and
agreements related thereto.
15.4 This Agreement is prepared in both English and Chinese. This Agreement shall be executed in 2 originals, with 1
original copy for each party. Chinese articles shall prevail over English articles in case of any inconsistency.
[The space below has been intentionally left blank.]
Equity Interest Pledge Agreement
PLEDGEE: Beijing Cheerbright Technologies Co., Ltd.
/s/ Wang Youdong
Authorized Representative: Wang Youdong
/s/ Beijing Cheerbright Technologies Co., Ltd.
Company Seal: Beijing Cheerbright Technologies Co., Ltd.
Equity Interest Pledge Agreement
PLEDGOR: Wang Youdong
/s/ Wang Youdong
Equity Interest Pledge Agreement
Beijing Autohome Information Technology Co., Ltd. Shareholder List
(As of January 28, 2024. Registered Capital is RMB 10,000,000, all of which has been paid in.)
No.
1
2
Name of
Share
holder
ID Card
Number
Address
Long Quan
******
******
Contribution
(percentage)
Form of
Contrib
ution
RMB5,000,00
0 (50%)
currency
Wang
Youdong
******
******
RMB5,000,00
0(50%)
currency
Pledge
The contribution of RMB5,000,000
has been pledged
to Beijing
Cheerbright Technologies Co., Ltd.
on January 28, 2024.
The contribution of RMB5,000,000
has been pledged
to Beijing
Cheerbright Technologies Co., Ltd.
on January 28, 2024
Beijing Autohome Information Technology Co., Ltd.
Signature
Authorized
Representative
Date
： /s/ Wang Youdong
： Wang Youdong
： January 28, 2024
Equity Interest Pledge Agreement
Exhibit 4.46
Equity Interest Pledge Agreement
between
Beijing Chezhiying Technology Co., Ltd.
and
Long Quan
January 28, 2024
Equity Interest Pledge Agreement
CONTENTS
DEFINITIONS
PLEDGE
EFFECTIVENESS OF PLEDGE, SCOPE AND TERM
REPRESENTATIONS AND WARRANTIES OF THE PLEDGOR
COVENANTS OF THE PLEDGOR
EVENTS OF DEFAULT
EXERCISE OF THE RIGHTS OF THE PLEDGE
TRANSFER OR ASSIGNMENT
TERMINATION
FORCE MAJEURE
APPLICABLE LAW AND DISPUTE RESOLUTION
NOTICE
APPENDICES
WAIVER
MISCELLANEOUS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Equity Interest Pledge Agreement
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This Equity Interest Pledge Agreement (this “Agreement”) is entered in Beijing, the People's Republic of China (“PRC”) and
dated on January 28, 2024 by and among the following parties:
PLEDGEE: Beijing Chezhiying Technology Co., Ltd, with its registered address at Room1117, F/11, Tower B, No. 3, Danling
Street, Haidian District, Beijing 100080, China.
and
PLEDGOR: Long Quan, a PRC citizen, holder of identification card number ******, whose residential address is at ******.
(Above-mentioned parties are individually referred as a “Party”, and collectively as the “Parties”)
WHEREAS:
A. Pledgor is a PRC citizen, and holds 50% of the equity interest of Beijing Shengtuo Hongyuan Information Technology Co.,
Ltd. (“Shengtuo Hongyuan Information”).
B.
Shengtuo Hongyuan Information is a limited liability company registered in Beijing, which engages in the business
Internet information service.
C. The Pledgor and the Pledgee entered into a Loan Agreement on January 28, 2024, pursuant to which the Pledgee extended
a loan in the amount of RMB5,000,000 (the “Loan”) to the Pledgor (the “Loan Agreement”).
D.
The Pledgee, a wholly foreign-owned company registered in Beijing, PRC, and has been licensed by the relevant PR
government authority to carry on the business of technology-related research and development, transfer of technology,
technology training and consulting. The Pledgee and Shengtuo Hongyuan Information entered into an Exclusive
Technology and Consulting Service Agreement on January 28, 2024, pursuant to which Shengtuo Hongyuan Information
is required to pay service fees (the “Service Fees”) to the Pledgee in consideration for the corresponding services to be
provided by the Pledgee (the “Service Agreement”).
E. Simultaneous with the execution of this Agreement, the Pledgor has also entered into an Equity Option Agreement with the
Pledgee, pursuant to which the Pledgor grants to the Pledgee an exclusive right to purchase the Equity Interest (as
defined below) at any time upon satisfaction of various requirements under PRC law (the “Equity Option Agreement”).
Equity Interest Pledge Agreement
F. In order to ensure that (i) the Pledgor repay the Loan under the Loan Agreement; (ii) the Pledgee collects Service Fees
under the Service Agreement from Shengtuo Hongyuan Information, (iii) the Pledgor’s other obligations under the
Equity Option Agreement are fulfilled, and (iv) all other debts, monetary liabilities or other payment obligations owed to
the Pledgee by the Pledgor and/or Shengtuo Hongyuan Information, arising under or in relation to the Service
Agreement or the Loan Agreement including, but not limited to, any obligation to pay damages for a breach of any
obligation of the Pledgor or Shengtuo Hongyuan Information under the Loan Agreement or the Service Agreement (as
applicable), are paid, the Pledgor is willing to pledge all the Equity Interest (as defined below,) i.e. the 50% equity
interest of Shengtuo Hongyuan Information, equivalent to a contribution of RMB 5,000,000 to the Pledgee as security
for the above-mentioned obligations of the Pledgor and Shengtuo Hongyuan Information (collectively, the “Secured
Obligations”).
In order to set forth each Party's rights and obligations, the Pledgee and the Pledgor through mutual negotiations hereby enter into
this Agreement based upon the following terms:
1. DEFINITIONS
Unless otherwise provided in this Agreement, the following terms shall have the following meanings:
1.1 “Pledge” means the full content of Section 2 hereunder.
1.2 “Equity Interest” means all the equity interests in Shengtuo Hongyuan Information held by the Pledgor (including
all present and future rights and benefits based on such equity interests), and any additional equity interests in
Shengtuo Hongyuan Information acquired by such Pledgor subsequent to the date hereof. For the avoidance of
any doubt, on the date hereof, the Pledgor holds a 50% equity interest (equivalent to a contribution of RMB
5,000,000) in Shengtuo Hongyuan Information.
1.3 “Event of Default” means any event in accordance with Section 6 hereunder.
1.4 “Notice of Default” means the notice of default issued by the Pledgee in accordance with this Agreement.
1.5 “ Effective Date” This Agreement shall be effective upon its being signed by the Parties hereunder.
Notwithstanding the foregoing, the Pledge (as defined in Section 2.1) shall only come into effect in accordance
with Section 3 of this Agreement.
Equity Interest Pledge Agreement
2. PLEDGE
2.1
The Pledgor hereby pledges, and if required, transfers and assigns the Equity Interest to the Pledgee as
security for all of the Secured Obligations (the “Pledge”) of an amount up to the Maximum Amount (as defined
below), and grant a first priority security interest in all rights, titles and interests that he has or may at any time
hereafter acquire in and to the Equity Interest, together with all equity or other ownership interests representing
a dividend on the Equity Interest, a distribution or return of capital upon or in respect of such Equity Interest,
any subscription, first refusal, pre-emptive or other purchase rights with respect to or arising from such Equity
Interest, any voting rights with respect to such Equity Interest or any other interest in Shengtuo Hongyuan
Information which, by reason of notice or lapse of time or the occurrence of other events, may be converted into
a direct equity interest in Shengtuo Hongyuan Information, and all proceeds of the foregoing (collectively, the
“Pledged Collateral”).
2.1.1
The Parties understand and agree that the monetary valuation arising from, relating to or in connection
with the Secured Obligations shall be a variable and floating valuation until the Settlement Date (as
defined below). Therefore, based on the reasonable assessment and evaluation by the Pledgor and the
Pledgee of the Secured Obligations and the Pledged Collateral, the Pledgor and the Pledgee mutually
acknowledge and agree that the Pledge shall aggregately secure the Secured Obligations for a
maximum amount of RMB 5,000,000.00 (the “Maximum Amount”) prior to the Settlement Date.
The Pledgor and the Pledgee may, taking into account the fluctuation in the monetary value of the Secured
Obligations and the Pledged Collateral, adjust the Maximum Amount based on mutual agreement by
amending and supplementing this Agreement, from time to time, prior to the Settlement Date.
2.1.2 Upon the occurrence of any of the events below (each an “Event of Settlement”), the Secured
Obligations shall be fixed at a value of the sum of all Secured Obligations that are due, outstanding and
payable to the Pledgee on or immediately prior to the date of such occurrence (the “Fixed
Obligations”):
(a) any or all of the Loan Agreement, Service Agreement or the Equity Option Agreement expires or
is terminated pursuant to the stipulations thereunder;
Equity Interest Pledge Agreement
(b) the occurrence of an Event of Default pursuant to Section 6 that is not resolved, which results in
the Pledgee serving a Notice of Default to the Pledgor pursuant to Section 6.3;
(c) the Pledgee reasonably determines (having made due enquiries) that any of the Pledgor and/or
Shengtuo Hongyuan Information is insolvent or could potentially be made insolvent; or
(d) any other event that requires the settlement of the Secured Obligations in accordance with
relevant laws of the PRC.
2.2 For the avoidance of doubt, the day of the occurrence of an Event of Settlement shall be the settlement date (the
“Settlement Date”). On or after the Settlement Date, the Pledgee shall be entitled, at the election of the
Pledgee, to enforce the Pledge in accordance with Section 7.
2.3 The Pledgee is entitled to collect any and all dividends or other distributions, if any, arising from the Equity Interest
during the Term of the Pledge (as defined below).
3. EFFECTIVENESS OF PLEDGE, SCOPE AND TERM
3.1
3.2
The Pledgor shall, immediately after the execution of this Agreement, register this Agreement and the Pled
hereunder with the State Administration for Market Regulation of the PRC or its competent local counterpart
(the “SAMR”). The Pledgor shall deliver to the Pledgee a copy of the registration or filing certificate from the
SAMR within 7 days from the date of submission of the application for registration of this Agreement and
Pledge with the SAMR.
The Pledge shall be effective upon the registration of the Pledge with the SAMR in accordance with Section
above. The term of the Pledge shall commence on the date when the Pledge is registered with the SAMR and
shall expire on the earlier of (a) the date on which all outstanding Secured Obligations are paid in full or
otherwise satisfied (as applicable) or (b) the Pledgee enforces the Pledge pursuant to the terms and conditions
hereof, to satisfy its rights under the Secured Obligations and Pledged Collateral in full or (c) the Pledgor
completes his transfer of the Equity Interest to another party (individual or legal entity) pursuant to the Equity
Option Agreement and no longer holds any equity interest in Shengtuo Hongyuan Information (the “Term of the
Pledge”).
Equity Interest Pledge Agreement
4. REPRESENTATIONS AND WARRANTIES OF THE PLEDGOR
The Pledgor hereby makes the following representations and warranties to the Pledgee and confirms that the Pledgee
executes this Agreement in reliance on such representations and warranties:
4.1 The Pledgor is the legal owner of the Equity Interest that has been registered in his name, and is entitled to create a
pledge on such Equity Interest.
4.2
None of the Pledged Collateral or the Pledge will be interfered with by any other pledgee at any time once t
Pledgee exercises the rights of the Pledge in accordance with this Agreement.
4.3
The Pledgee shall be entitled to dispose or assign the Pledge in accordance with the relevant laws and th
Agreement.
4.4
All necessary authorizations have been obtained for the execution and performance of this Agreement by t
Pledgor and the execution and performance of this Agreement by the Pledgor does not violate any applicable
laws or regulations. The Pledgor who signs this Agreement is lawfully and effectively authorized.
4.5
The Pledgor warrants that there is no on-going civil, administrative or criminal litigation or administrativ
punishment or arbitration related to the Equity Interest and is not aware of any such action pending or likely to
be pending in the future as of the date of this Agreement.
4.6 There are no outstanding taxes, fees or undecided legal procedures related to the Equity Interest as of the date of
this Agreement.
4.7 Each stipulation hereunder is the expression of each Party's true intention and shall be binding upon all the Parties.
5. COVENANTS OF THE PLEDGOR
5.1 The Pledgor covenants to the Pledgee that he shall:
5.1.1
not transfer or assign the Equity Interest, or create or permit to be created any pledge, lien, charge,
mortgage, encumbrance, option, security or other interest in or over the Equity Interest that has been
registered in his name, other than the Pledge created hereunder and the option granted under the Equity
Option Agreement, without the prior written consent from the Pledgee;
Equity Interest Pledge Agreement
5.1.2
5.1.3
comply with and implement laws and regulations with respect to the pledge of rights, present to the
Pledgee the notices, orders or suggestions with respect to the Pledge issued or made by the competent
authority within 5 days upon receiving such notices, orders or suggestions and take actions in
accordance with the reasonable instructions of the Pledgee; and
timely notify the Pledgee of any event or any received notice (i) which may affect the Equity Interest
or any part of the Pledgee’s rights, (ii) which may change the Pledgor's covenants or obligations under
this Agreement or (iii) which may affect the Pledgor's performance of his obligations under this
Agreement, and take actions in accordance with the reasonable instructions of the Pledgee.
5.2 The Pledgor covenants that the Pledgee's right of exercising the Pledge under this Agreement shall not be
suspended or hampered by the Pledgor or any successor of the Pledgor or any person authorized by the Pledgor.
5.3 The Pledgor jointly and severally covenants to the Pledgee that in order to protect or perfect the security over the
Secured Obligations, the Pledgor shall (i) execute in good faith and cause other parties who have interests in the
Pledge to execute all the forms, instruments, agreements (including those required for the registration and de-
registration of the Pledge with the SAMR), and/or (ii) take actions and cause other parties who have interests in
the Pledge to take actions as required by the Pledgee and (iii) allow the Pledgee to exercise the rights and
authorization vested in the Pledgee under this Agreement.
5.4 The Pledgor agrees to promptly make or cause to be made any filings or records, give or cause to be given any
notice and take or cause to be taken any other action as may be necessary under the laws of the PRC, to perfect
the Pledge of the Pledged Collateral, including the SAMR registration set forth in Section 3.1.
5.5
The Pledgor covenants to the Pledgee that he will comply with and perform all the guarantees, covenant
agreements, representations and conditions for the benefits of the Pledgee. The Pledgor shall compensate for all
the losses suffered by the Pledgee for such Pledgor’s failure to perform or fully perform his guarantees,
covenants, agreements, representations or conditions.
6. EVENTS OF DEFAULT
Equity Interest Pledge Agreement
6.1 Each of the following shall constitute an Event of Default:
6.1.1
Shengtuo Hongyuan Information or the Pledgor fails to make full and timely payment of any amounts
due under the Secured Obligations as required under the Service Agreement, Loan Agreement or
Equity Option Agreement, or an event of default as defined and stipulated in those agreements has
occurred and is continuing;
6.1.2
the Pledgor makes or has made any inaccurate, incomplete, misleading or untrue representation or
warranty under Section 4, or is in violation or breach of any of the representations and warranties under
Section 4;
6.1.3
the Pledgor breaches any of the covenants under Section 5;
6.1.4
the Pledgor breaches any other covenant, undertaking or obligation of the Pledgor set forth herein;
6.1.5
the Pledgor is unable to perform its obligations under this Agreement due to the separation or merger
of Shengtuo Hongyuan Information with other third parties or for any other reason;
6.1.6
6.1.7
the Pledgor relinquishes all or any part of the Pledged Collateral or transfers or assigns all or any part
of the Pledged Collateral without the prior written consent of the Pledgee (except the transfers or
assigns permitted under the Equity Option Agreement);
any indebtedness, guarantee or other obligation of the Pledgor, whether pursuant to a contract or
otherwise, (i) is accelerated as a result of a default thereunder and is required to be repaid or performed
prior to the due date; or (ii) has become due and is not repaid or performed when due which, in the
Pledgee’s reasonable view, has materially adversely affected the Pledgor’s ability to perform his
obligations under this Agreement;
6.1.8
this Agreement is illegal as a result of any applicable laws or the Pledgor is restricted from continuing
to perform his obligations under this Agreement;
6.1.9
any approval, permit, license or authorization from any applicable governmental entity (or registration
or filing procedure) required for Shengtuo Hongyuan Information to provide internet value-added
Equity Interest Pledge Agreement
telecommunication service in the PRC is withdrawn, suspended, invalidated or materially amended;
6.1.10
any approval, permit, license or authorization from any applicable government authority required to
perform this Agreement or make this Agreement enforceable, legal and valid is withdrawn, suspended,
invalidated or materially amended; or
6.1.11
any property owned by the Pledgor is altered or damaged which, in the Pledgee’s reasonable view, has
materially adversely affected the Pledgor’s ability to perform his obligations under this Agreement.
6.2 The Pledgor shall immediately give a written notice to the Pledgee if the Pledgor is aware or find that any event set
forth in Section 6.1 or any event that may result in the foregoing events have occurred or are occurring.
6.3 Unless an Event of Default set forth in Section 6.1 has been rectified to the Pledgee's satisfaction, the Pledgee, at
any time the event of default occurs or thereafter, may give a written notice of default to the Pledgor, and
require the Pledgor, at the discretion of the Pledgee, to immediately make full payment of the outstanding
amounts payable under the Loan Agreement, Service Agreement, and/or Equity Option Agreement, and other
payables, or dispose of the Pledge in accordance with Section 7 herein.
7. EXERCISE OF THE RIGHTS OF THE PLEDGE
7.1 The Pledgor shall not transfer or assign the Pledge without prior written approval from the Pledgee prior to the full
settlement and fulfillment of the Secured Obligations.
7.2 The Pledgee shall give a notice of default to the Pledgor when the Pledgee exercises the rights of Pledge.
7.3 Subject to Section 6.3, the Pledgee may exercise the right to dispose of the Pledge at any time when the Pledgee
gives a notice of default in accordance with Section 6.3 or thereafter.
7.4 The Pledgee is entitled to have priority in receiving payment by the evaluation or proceeds from the auction or sale
of whole or part of the Pledged Collateral in accordance with legal procedures until the outstanding Secured
Obligation or other monetary obligations payable by the Pledgor and/or Shengtuo Hongyuan Information is
fully paid, repaid or otherwise settled.
Equity Interest Pledge Agreement
7.5 The Pledgor shall not hinder the Pledgee from disposing the Pledge in accordance with this Agreement and shall
give necessary assistance so that the Pledgee could realize his Pledge.
8. TRANSFER OR ASSIGNMENT
8.1
The Pledgor shall not donate or transfer his rights and obligations herein to any third party without prior writ
consent from the Pledgee.
8.2 This Agreement shall be binding upon the Pledgor and his successors and be effective to the Pledgee and his each
successor and assignee.
8.3
The Pledgee may transfer or assign all Secured Obligations and its right to the Pledge to any third party at a
time. In this case, the assignee shall enjoy and undertake the same rights and obligations herein of the Pledgee
as if the assignee is a party hereto. When the Pledgee transfers or assigns the Secured Obligations and its rights
to the Pledge, at the request of the Pledgee, the Pledgor shall execute the relevant agreements and/or documents
with respect to such transfer or assignment.
8.4
After a change to the Pledgee resulting from a transfer or an assignment, the new parties to the pledge shall
execute a pledge contract.
9. TERMINATION
This Agreement shall not terminate until the Term of the Pledge expires pursuant to Section 3 herein.
10. FORCE MAJEURE
10.1
If this Agreement is delayed in or prevented from performing in the Event of Force Majeure (“Event of Force
Majeure”), only within the limitation of such delay or prevention, the affected Party is absolved from any
liability under this Agreement. Force Majeure, which includes acts of governments, acts of nature, fire,
explosion, geographic change, flood, earthquake, tide, lightning, war, means any unforeseen events beyond the
prevented Party's reasonable control and cannot be prevented with reasonable care. However, any shortage of
credit, capital or finance shall not be regarded as an event beyond a Party's reasonable control. The Party
affected by Force Majeure who claims for exemption from performing any obligations under this Agreement or
under any Section herein shall notify the other party of such exemption promptly and advise him/her of the steps
to be taken for completion of the performance.
Equity Interest Pledge Agreement
10.2
The Party affected by Force Majeure shall not assume any liability under this Agreement. However, subject to
the Party affected by Force Majeure having taken its reasonable and practicable efforts to perform this
Agreement, the Party claiming for exemption of the liabilities may only be exempted from performing such
liability as within limitation of the part performance delayed or prevented by Force Majeure. Once causes for
such exemption of liabilities are rectified and remedied, both parties agree to resume performance of this
Agreement with their best efforts.
11. APPLICABLE LAW AND DISPUTE RESOLUTION
11.1
The execution, validity, performance and interpretation of this Agreement shall be governed by and construed
in accordance with the laws of the PRC.
11.2
The Parties shall strive to settle any dispute arising from the interpretation or performance through friendly
consultation. In case no settlement can be reached through consultation, each party can submit such matter to
China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration. The arbitration
shall follow the then current rules of CIETAC, and the arbitration proceedings shall be conducted in Chinese
and shall take place in Beijing. The arbitration award shall be final and binding upon the Parties. This article
shall not be affected by the termination or elimination of this Agreement.
11.3
In case of any dispute arising out of the interpretation and performance of this Agreement or any pending
arbitration of such dispute, each Party shall continue to perform their obligations under this Agreement, except
for the matters in dispute.
12. NOTICE
Any notice or correspondence, which is given by the Party as stipulated hereunder, shall be in Chinese or English writing
and shall be delivered in person or by registered or prepaid mail or recognized express service, or be transmitted by telex
or facsimile to the following addresses:
Pledgee：
Address：
Fax：
Tel：
Addressee：
Beijing Chezhiying Technology Co., Ltd.
Room 1117, F/11, Tower B, No. 3, Danling Street, Haidian District, Beijing 100080,
China
+8610-59857387
+8610-59857001
Wang Youdong
Equity Interest Pledge Agreement
Pledgor:
Address:
Tel:
Addressee:
Long Quan
******
******
Long Quan
13. APPENDICES
The appendices to this Agreement constitute an integral part of this Agreement.
14. WAIVER
The Pledgee's non-exercise or delay in exercise of any rights, remedies, power or privileges hereunder shall not be
deemed as the waiver of such rights, remedies, power or privileges. Any single or partial exercise of the rights, remedies,
power and privileges shall not exclude the Pledgee from exercising any other rights, remedies, power and privileges. The
rights, remedies, power and privileges hereunder are accumulative and shall not exclude the application of any other
rights, remedies, power and privileges stipulated by laws.
15. MISCELLANEOUS
15.1
Any amendments, modifications or supplements to this Agreement shall be in writing and come into effect
upon being executed and sealed by the Parties hereto.
15.2
In case any terms and stipulations in this Agreement are regarded as illegal or can not be performed in
accordance with the applicable law, such terms and stipulations shall be deemed to ineffective and not
enforceable within the scope governed by the applicable law, and the remaining stipulations will remain
effective.
15.3 This Agreement, the Service Agreement, the Equity Option Agreement, the Loan Agreement and the Power of
Attorney from the Pledgor to the Pledgee in favor of the Pledgee shall constitute the entire agreement among the
parties in respect of the subject matter hereof and shall supersede any previous discussions, negotiations and
agreements related thereto.
15.4 This Agreement is prepared in both English and Chinese. This Agreement shall be executed in 2 originals, with 1
original copy for each party. Chinese articles shall prevail over English articles in case of any inconsistency.
Equity Interest Pledge Agreement
[The space below has been intentionally left blank.]
Equity Interest Pledge Agreement
PLEDGEE: Beijing Chezhiying Technology Co., Ltd.
/s/ Wang Youdong
Authorized Representative: Wang Youdong
/s/ Beijing Chezhiying Technology Co., Ltd.
Company Seal: Beijing Chezhiying Technology Co., Ltd.
Equity Interest Pledge Agreement
PLEDGOR: Long Quan
/s/ Long Quan
Equity Interest Pledge Agreement
Beijing Shengtuo Hongyuan Information Technology Co., Ltd. Shareholder List
(As of January 28, 2024. Registered Capital is RMB 10,000,000, all of which has been paid in.)
Contribution
(percentage)
Form of
Contrib
ution
Pledge
RMB5,000,000
currency
(50%)
RMB5,000,000
(50%)
currency
The contribution of RMB5,000,000
has been pledged
to Beijing
Chezhiying Technology Co., Ltd. on
January 28, 2024.
The contribution of RMB5,000,000
has been pledged
to Beijing
Chezhiying Technology Co., Ltd. on
January 28, 2024
No.
1
2
Name of
Share
holder
ID Card
Number
Long
Quan
******
Wang
Youdong
******
Address
******
******
Beijing Shengtuo Hongyuan Information Technology Co., Ltd.
Signature
Authorized
Representative
Date
： /s/ Wang Youdong
： Wang Youdong
： January 28, 2024
Equity Interest Pledge Agreement
Exhibit 4.47
Equity Interest Pledge Agreement
between
Beijing Chezhiying Technology Co., Ltd.
and
Wang Youdong
January 28, 2024
Equity Interest Pledge Agreement
CONTENTS
DEFINITIONS
PLEDGE
EFFECTIVENESS OF PLEDGE, SCOPE AND TERM
REPRESENTATIONS AND WARRANTIES OF THE PLEDGOR
COVENANTS OF THE PLEDGOR
EVENTS OF DEFAULT
EXERCISE OF THE RIGHTS OF THE PLEDGE
TRANSFER OR ASSIGNMENT
TERMINATION
FORCE MAJEURE
APPLICABLE LAW AND DISPUTE RESOLUTION
NOTICE
APPENDICES
WAIVER
MISCELLANEOUS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Equity Interest Pledge Agreement
4
5
6
7
7
8
10
11
11
11
12
12
13
13
13
This Equity Interest Pledge Agreement (this “Agreement”) is entered in Beijing, the People's Republic of China (“PRC”) and
dated on January 28, 2024 by and among the following parties:
PLEDGEE: Beijing Chezhiying Technology Co., Ltd, with its registered address at Room1117, F/11, Tower B, No. 3, Danling
Street, Haidian District, Beijing 100080, China.
and
PLEDGOR: Wang Youdong, a PRC citizen, holder of identification card number ******, whose residential address is at
******.
(Above-mentioned parties are individually referred as a “Party”, and collectively as the “Parties”)
WHEREAS:
A. Pledgor is a PRC citizen, and holds 50% of the equity interest of Beijing Shengtuo Hongyuan Information Technology Co.,
Ltd. (“Shengtuo Hongyuan Information”).
B.
Shengtuo Hongyuan Information is a limited liability company registered in Beijing, which engages in the business
Internet information service.
C. The Pledgor and the Pledgee entered into a Loan Agreement on January 28, 2024, pursuant to which the Pledgee extended
a loan in the amount of RMB5,000,000 (the “Loan”) to the Pledgor (the “Loan Agreement”).
D.
The Pledgee, a wholly foreign-owned company registered in Beijing, PRC, and has been licensed by the relevant PR
government authority to carry on the business of technology-related research and development, transfer of technology,
technology training and consulting. The Pledgee and Shengtuo Hongyuan Information entered into an Exclusive
Technology and Consulting Service Agreement on January 28, 2024, pursuant to which Shengtuo Hongyuan Information
is required to pay service fees (the “Service Fees”) to the Pledgee in consideration for the corresponding services to be
provided by the Pledgee (the “Service Agreement”).
E. Simultaneous with the execution of this Agreement, the Pledgor has also entered into an Equity Option Agreement with the
Pledgee, pursuant to which the Pledgor grants to the Pledgee an exclusive right to purchase the Equity Interest (as
defined below) at any time upon satisfaction of various requirements under PRC law (the “Equity Option Agreement”).
Equity Interest Pledge Agreement
F. In order to ensure that (i) the Pledgor repay the Loan under the Loan Agreement; (ii) the Pledgee collects Service Fees
under the Service Agreement from Shengtuo Hongyuan Information, (iii) the Pledgor’s other obligations under the
Equity Option Agreement are fulfilled, and (iv) all other debts, monetary liabilities or other payment obligations owed to
the Pledgee by the Pledgor and/or Shengtuo Hongyuan Information, arising under or in relation to the Service
Agreement or the Loan Agreement including, but not limited to, any obligation to pay damages for a breach of any
obligation of the Pledgor or Shengtuo Hongyuan Information under the Loan Agreement or the Service Agreement (as
applicable), are paid, the Pledgor is willing to pledge all the Equity Interest (as defined below,) i.e. the 50% equity
interest of Shengtuo Hongyuan Information, equivalent to a contribution of RMB 5,000,000 to the Pledgee as security
for the above-mentioned obligations of the Pledgor and Shengtuo Hongyuan Information (collectively, the “Secured
Obligations”).
In order to set forth each Party's rights and obligations, the Pledgee and the Pledgor through mutual negotiations hereby enter into
this Agreement based upon the following terms:
1. DEFINITIONS
Unless otherwise provided in this Agreement, the following terms shall have the following meanings:
1.1 “Pledge” means the full content of Section 2 hereunder.
1.2 “Equity Interest” means all the equity interests in Shengtuo Hongyuan Information held by the Pledgor (including
all present and future rights and benefits based on such equity interests), and any additional equity interests in
Shengtuo Hongyuan Information acquired by such Pledgor subsequent to the date hereof. For the avoidance of
any doubt, on the date hereof, the Pledgor holds a 50% equity interest (equivalent to a contribution of RMB
5,000,000) in Shengtuo Hongyuan Information.
1.3 “Event of Default” means any event in accordance with Section 6 hereunder.
1.4 “Notice of Default” means the notice of default issued by the Pledgee in accordance with this Agreement.
1.5 “ Effective Date” This Agreement shall be effective upon its being signed by the Parties hereunder.
Notwithstanding the foregoing, the Pledge (as defined in Section 2.1) shall only come into effect in accordance
with Section 3 of this Agreement.
Equity Interest Pledge Agreement
2. PLEDGE
2.1
The Pledgor hereby pledges, and if required, transfers and assigns the Equity Interest to the Pledgee as
security for all of the Secured Obligations (the “Pledge”) of an amount up to the Maximum Amount (as defined
below), and grant a first priority security interest in all rights, titles and interests that he has or may at any time
hereafter acquire in and to the Equity Interest, together with all equity or other ownership interests representing
a dividend on the Equity Interest, a distribution or return of capital upon or in respect of such Equity Interest,
any subscription, first refusal, pre-emptive or other purchase rights with respect to or arising from such Equity
Interest, any voting rights with respect to such Equity Interest or any other interest in Shengtuo Hongyuan
Information which, by reason of notice or lapse of time or the occurrence of other events, may be converted into
a direct equity interest in Shengtuo Hongyuan Information, and all proceeds of the foregoing (collectively, the
“Pledged Collateral”).
2.1.1
The Parties understand and agree that the monetary valuation arising from, relating to or in connection
with the Secured Obligations shall be a variable and floating valuation until the Settlement Date (as
defined below). Therefore, based on the reasonable assessment and evaluation by the Pledgor and the
Pledgee of the Secured Obligations and the Pledged Collateral, the Pledgor and the Pledgee mutually
acknowledge and agree that the Pledge shall aggregately secure the Secured Obligations for a
maximum amount of RMB 5,000,000.00 (the “Maximum Amount”) prior to the Settlement Date.
The Pledgor and the Pledgee may, taking into account the fluctuation in the monetary value of the Secured
Obligations and the Pledged Collateral, adjust the Maximum Amount based on mutual agreement by
amending and supplementing this Agreement, from time to time, prior to the Settlement Date.
2.1.2 Upon the occurrence of any of the events below (each an “Event of Settlement”), the Secured
Obligations shall be fixed at a value of the sum of all Secured Obligations that are due, outstanding and
payable to the Pledgee on or immediately prior to the date of such occurrence (the “Fixed
Obligations”):
(a) any or all of the Loan Agreement, Service Agreement or the Equity Option Agreement expires or
is terminated pursuant to the stipulations thereunder;
Equity Interest Pledge Agreement
(b) the occurrence of an Event of Default pursuant to Section 6 that is not resolved, which results in
the Pledgee serving a Notice of Default to the Pledgor pursuant to Section 6.3;
(c) the Pledgee reasonably determines (having made due enquiries) that any of the Pledgor and/or
Shengtuo Hongyuan Information is insolvent or could potentially be made insolvent; or
(d) any other event that requires the settlement of the Secured Obligations in accordance with
relevant laws of the PRC.
2.2 For the avoidance of doubt, the day of the occurrence of an Event of Settlement shall be the settlement date (the
“Settlement Date”). On or after the Settlement Date, the Pledgee shall be entitled, at the election of the
Pledgee, to enforce the Pledge in accordance with Section 7.
2.3 The Pledgee is entitled to collect any and all dividends or other distributions, if any, arising from the Equity Interest
during the Term of the Pledge (as defined below).
3. EFFECTIVENESS OF PLEDGE, SCOPE AND TERM
3.1
3.2
The Pledgor shall, immediately after the execution of this Agreement, register this Agreement and the Pled
hereunder with the State Administration for Market Regulation of the PRC or its competent local counterpart
(the “SAMR”). The Pledgor shall deliver to the Pledgee a copy of the registration or filing certificate from the
SAMR within 7 days from the date of submission of the application for registration of this Agreement and
Pledge with the SAMR.
The Pledge shall be effective upon the registration of the Pledge with the SAMR in accordance with Section
above. The term of the Pledge shall commence on the date when the Pledge is registered with the SAMR and
shall expire on the earlier of (a) the date on which all outstanding Secured Obligations are paid in full or
otherwise satisfied (as applicable) or (b) the Pledgee enforces the Pledge pursuant to the terms and conditions
hereof, to satisfy its rights under the Secured Obligations and Pledged Collateral in full or (c) the Pledgor
completes his transfer of the Equity Interest to another party (individual or legal entity) pursuant to the Equity
Option Agreement and no longer holds any equity interest in Shengtuo Hongyuan Information (the “Term of the
Pledge”).
Equity Interest Pledge Agreement
4. REPRESENTATIONS AND WARRANTIES OF THE PLEDGOR
The Pledgor hereby makes the following representations and warranties to the Pledgee and confirms that the Pledgee
executes this Agreement in reliance on such representations and warranties:
4.1 The Pledgor is the legal owner of the Equity Interest that has been registered in his name, and is entitled to create a
pledge on such Equity Interest.
4.2
None of the Pledged Collateral or the Pledge will be interfered with by any other pledgee at any time once t
Pledgee exercises the rights of the Pledge in accordance with this Agreement.
4.3
The Pledgee shall be entitled to dispose or assign the Pledge in accordance with the relevant laws and th
Agreement.
4.4
All necessary authorizations have been obtained for the execution and performance of this Agreement by t
Pledgor and the execution and performance of this Agreement by the Pledgor does not violate any applicable
laws or regulations. The Pledgor who signs this Agreement is lawfully and effectively authorized.
4.5
The Pledgor warrants that there is no on-going civil, administrative or criminal litigation or administrativ
punishment or arbitration related to the Equity Interest and is not aware of any such action pending or likely to
be pending in the future as of the date of this Agreement.
4.6 There are no outstanding taxes, fees or undecided legal procedures related to the Equity Interest as of the date of
this Agreement.
4.7 Each stipulation hereunder is the expression of each Party's true intention and shall be binding upon all the Parties.
5. COVENANTS OF THE PLEDGOR
5.1 The Pledgor covenants to the Pledgee that he shall:
5.1.1
not transfer or assign the Equity Interest, or create or permit to be created any pledge, lien, charge,
mortgage, encumbrance, option, security or other interest in or over the Equity Interest that has been
registered in his name, other than the Pledge created hereunder and the option granted under the Equity
Option Agreement, without the prior written consent from the Pledgee;
Equity Interest Pledge Agreement
5.1.2
5.1.3
comply with and implement laws and regulations with respect to the pledge of rights, present to the
Pledgee the notices, orders or suggestions with respect to the Pledge issued or made by the competent
authority within 5 days upon receiving such notices, orders or suggestions and take actions in
accordance with the reasonable instructions of the Pledgee; and
timely notify the Pledgee of any event or any received notice (i) which may affect the Equity Interest
or any part of the Pledgee’s rights, (ii) which may change the Pledgor's covenants or obligations under
this Agreement or (iii) which may affect the Pledgor's performance of his obligations under this
Agreement, and take actions in accordance with the reasonable instructions of the Pledgee.
5.2 The Pledgor covenants that the Pledgee's right of exercising the Pledge under this Agreement shall not be
suspended or hampered by the Pledgor or any successor of the Pledgor or any person authorized by the Pledgor.
5.3 The Pledgor jointly and severally covenants to the Pledgee that in order to protect or perfect the security over the
Secured Obligations, the Pledgor shall (i) execute in good faith and cause other parties who have interests in the
Pledge to execute all the forms, instruments, agreements (including those required for the registration and de-
registration of the Pledge with the SAMR), and/or (ii) take actions and cause other parties who have interests in
the Pledge to take actions as required by the Pledgee and (iii) allow the Pledgee to exercise the rights and
authorization vested in the Pledgee under this Agreement.
5.4 The Pledgor agrees to promptly make or cause to be made any filings or records, give or cause to be given any
notice and take or cause to be taken any other action as may be necessary under the laws of the PRC, to perfect
the Pledge of the Pledged Collateral, including the SAMR registration set forth in Section 3.1.
5.5
The Pledgor covenants to the Pledgee that he will comply with and perform all the guarantees, covenant
agreements, representations and conditions for the benefits of the Pledgee. The Pledgor shall compensate for all
the losses suffered by the Pledgee for such Pledgor’s failure to perform or fully perform his guarantees,
covenants, agreements, representations or conditions.
6. EVENTS OF DEFAULT
Equity Interest Pledge Agreement
6.1 Each of the following shall constitute an Event of Default:
6.1.1
Shengtuo Hongyuan Information or the Pledgor fails to make full and timely payment of any amounts
due under the Secured Obligations as required under the Service Agreement, Loan Agreement or
Equity Option Agreement, or an event of default as defined and stipulated in those agreements has
occurred and is continuing;
6.1.2
the Pledgor makes or has made any inaccurate, incomplete, misleading or untrue representation or
warranty under Section 4, or is in violation or breach of any of the representations and warranties under
Section 4;
6.1.3
the Pledgor breaches any of the covenants under Section 5;
6.1.4
the Pledgor breaches any other covenant, undertaking or obligation of the Pledgor set forth herein;
6.1.5
the Pledgor is unable to perform its obligations under this Agreement due to the separation or merger
of Shengtuo Hongyuan Information with other third parties or for any other reason;
6.1.6
6.1.7
the Pledgor relinquishes all or any part of the Pledged Collateral or transfers or assigns all or any part
of the Pledged Collateral without the prior written consent of the Pledgee (except the transfers or
assigns permitted under the Equity Option Agreement);
any indebtedness, guarantee or other obligation of the Pledgor, whether pursuant to a contract or
otherwise, (i) is accelerated as a result of a default thereunder and is required to be repaid or performed
prior to the due date; or (ii) has become due and is not repaid or performed when due which, in the
Pledgee’s reasonable view, has materially adversely affected the Pledgor’s ability to perform his
obligations under this Agreement;
6.1.8
this Agreement is illegal as a result of any applicable laws or the Pledgor is restricted from continuing
to perform his obligations under this Agreement;
6.1.9
any approval, permit, license or authorization from any applicable governmental entity (or registration
or filing procedure) required for Shengtuo Hongyuan Information to provide internet value-added
Equity Interest Pledge Agreement
telecommunication service in the PRC is withdrawn, suspended, invalidated or materially amended;
6.1.10
any approval, permit, license or authorization from any applicable government authority required to
perform this Agreement or make this Agreement enforceable, legal and valid is withdrawn, suspended,
invalidated or materially amended; or
6.1.11
any property owned by the Pledgor is altered or damaged which, in the Pledgee’s reasonable view, has
materially adversely affected the Pledgor’s ability to perform his obligations under this Agreement.
6.2 The Pledgor shall immediately give a written notice to the Pledgee if the Pledgor is aware or find that any event set
forth in Section 6.1 or any event that may result in the foregoing events have occurred or are occurring.
6.3 Unless an Event of Default set forth in Section 6.1 has been rectified to the Pledgee's satisfaction, the Pledgee, at
any time the event of default occurs or thereafter, may give a written notice of default to the Pledgor, and
require the Pledgor, at the discretion of the Pledgee, to immediately make full payment of the outstanding
amounts payable under the Loan Agreement, Service Agreement, and/or Equity Option Agreement, and other
payables, or dispose of the Pledge in accordance with Section 7 herein.
7. EXERCISE OF THE RIGHTS OF THE PLEDGE
7.1 The Pledgor shall not transfer or assign the Pledge without prior written approval from the Pledgee prior to the full
settlement and fulfillment of the Secured Obligations.
7.2 The Pledgee shall give a notice of default to the Pledgor when the Pledgee exercises the rights of Pledge.
7.3 Subject to Section 6.3, the Pledgee may exercise the right to dispose of the Pledge at any time when the Pledgee
gives a notice of default in accordance with Section 6.3 or thereafter.
7.4 The Pledgee is entitled to have priority in receiving payment by the evaluation or proceeds from the auction or sale
of whole or part of the Pledged Collateral in accordance with legal procedures until the outstanding Secured
Obligation or other monetary obligations payable by the Pledgor and/or Shengtuo Hongyuan Information is
fully paid, repaid or otherwise settled.
Equity Interest Pledge Agreement
7.5 The Pledgor shall not hinder the Pledgee from disposing the Pledge in accordance with this Agreement and shall
give necessary assistance so that the Pledgee could realize his Pledge.
8. TRANSFER OR ASSIGNMENT
8.1
The Pledgor shall not donate or transfer his rights and obligations herein to any third party without prior writ
consent from the Pledgee.
8.2 This Agreement shall be binding upon the Pledgor and his successors and be effective to the Pledgee and his each
successor and assignee.
8.3
The Pledgee may transfer or assign all Secured Obligations and its right to the Pledge to any third party at a
time. In this case, the assignee shall enjoy and undertake the same rights and obligations herein of the Pledgee
as if the assignee is a party hereto. When the Pledgee transfers or assigns the Secured Obligations and its rights
to the Pledge, at the request of the Pledgee, the Pledgor shall execute the relevant agreements and/or documents
with respect to such transfer or assignment.
8.4
After a change to the Pledgee resulting from a transfer or an assignment, the new parties to the pledge shall
execute a pledge contract.
9. TERMINATION
This Agreement shall not terminate until the Term of the Pledge expires pursuant to Section 3 herein.
10. FORCE MAJEURE
10.1
If this Agreement is delayed in or prevented from performing in the Event of Force Majeure (“Event of Force
Majeure”), only within the limitation of such delay or prevention, the affected Party is absolved from any
liability under this Agreement. Force Majeure, which includes acts of governments, acts of nature, fire,
explosion, geographic change, flood, earthquake, tide, lightning, war, means any unforeseen events beyond the
prevented Party's reasonable control and cannot be prevented with reasonable care. However, any shortage of
credit, capital or finance shall not be regarded as an event beyond a Party's reasonable control. The Party
affected by Force Majeure who claims for exemption from performing any obligations under this Agreement or
under any Section herein shall notify the other party of such exemption promptly and advise him/her of the steps
to be taken for completion of the performance.
Equity Interest Pledge Agreement
10.2
The Party affected by Force Majeure shall not assume any liability under this Agreement. However, subject to
the Party affected by Force Majeure having taken its reasonable and practicable efforts to perform this
Agreement, the Party claiming for exemption of the liabilities may only be exempted from performing such
liability as within limitation of the part performance delayed or prevented by Force Majeure. Once causes for
such exemption of liabilities are rectified and remedied, both parties agree to resume performance of this
Agreement with their best efforts.
11. APPLICABLE LAW AND DISPUTE RESOLUTION
11.1
The execution, validity, performance and interpretation of this Agreement shall be governed by and construed
in accordance with the laws of the PRC.
11.2
The Parties shall strive to settle any dispute arising from the interpretation or performance through friendly
consultation. In case no settlement can be reached through consultation, each party can submit such matter to
China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration. The arbitration
shall follow the then current rules of CIETAC, and the arbitration proceedings shall be conducted in Chinese
and shall take place in Beijing. The arbitration award shall be final and binding upon the Parties. This article
shall not be affected by the termination or elimination of this Agreement.
11.3
In case of any dispute arising out of the interpretation and performance of this Agreement or any pending
arbitration of such dispute, each Party shall continue to perform their obligations under this Agreement, except
for the matters in dispute.
12. NOTICE
Any notice or correspondence, which is given by the Party as stipulated hereunder, shall be in Chinese or English writing
and shall be delivered in person or by registered or prepaid mail or recognized express service, or be transmitted by telex
or facsimile to the following addresses:
Pledgee：
Address：
Fax：
Tel：
Addressee：
Beijing Chezhiying Technology Co., Ltd.
Room 1117, F/11, Tower B, No. 3, Danling Street, Haidian District, Beijing 100080,
China
+8610-59857387
+8610-59857001
Wang Youdong
Equity Interest Pledge Agreement
Pledgor:
Address:
Tel:
Addressee:
Wang Youdong
******
******
Wang Youdong
13. APPENDICES
The appendices to this Agreement constitute an integral part of this Agreement.
14. WAIVER
The Pledgee's non-exercise or delay in exercise of any rights, remedies, power or privileges hereunder shall not be
deemed as the waiver of such rights, remedies, power or privileges. Any single or partial exercise of the rights, remedies,
power and privileges shall not exclude the Pledgee from exercising any other rights, remedies, power and privileges. The
rights, remedies, power and privileges hereunder are accumulative and shall not exclude the application of any other
rights, remedies, power and privileges stipulated by laws.
15. MISCELLANEOUS
15.1
Any amendments, modifications or supplements to this Agreement shall be in writing and come into effect
upon being executed and sealed by the Parties hereto.
15.2
In case any terms and stipulations in this Agreement are regarded as illegal or can not be performed in
accordance with the applicable law, such terms and stipulations shall be deemed to ineffective and not
enforceable within the scope governed by the applicable law, and the remaining stipulations will remain
effective.
15.3 This Agreement, the Service Agreement, the Equity Option Agreement, the Loan Agreement and the Power of
Attorney from the Pledgor to the Pledgee in favor of the Pledgee shall constitute the entire agreement among the
parties in respect of the subject matter hereof and shall supersede any previous discussions, negotiations and
agreements related thereto.
15.4 This Agreement is prepared in both English and Chinese. This Agreement shall be executed in 2 originals, with 1
original copy for each party. Chinese articles shall prevail over English articles in case of any inconsistency.
Equity Interest Pledge Agreement
[The space below has been intentionally left blank.]
Equity Interest Pledge Agreement
PLEDGEE: Beijing Chezhiying Technology Co., Ltd.
/s/ Wang Youdong
Authorized Representative: Wang Youdong
/s/ Beijing Chezhiying Technology Co., Ltd.
Company Seal: Beijing Chezhiying Technology Co., Ltd.
Equity Interest Pledge Agreement
PLEDGOR: Wang Youdong
/s/ Wang Youdong
Equity Interest Pledge Agreement
Beijing Shengtuo Hongyuan Information Technology Co., Ltd. Shareholder List
(As of January 28, 2024. Registered Capital is RMB 10,000,000, all of which has been paid in.)
No.
1
2
Name of
Share
holder
ID Card Number
Address
Long
Quan
******
Wang
Youdong
******
******
******
Contribution
(percentage)
Form of
Contrib
ution
RMB5,000,00
0 (50%)
currency
RMB5,000,00
0(50%)
currency
Pledge
The contribution of RMB5,000,000
has been pledged
to Beijing
Chezhiying Technology Co., Ltd on
January 28, 2024.
The contribution of RMB5,000,000
has been pledged
to Beijing
Chezhiying Technology Co., Ltd on
January 28, 2024
Beijing Shengtuo Hongyuan Information Technology Co., Ltd.
Signature
Authorized
Representative
Date
： /s/ Wang Youdong
： Wang Youdong
： January 28, 2024
Equity Interest Pledge Agreement
Date：January 28, 2024
Exhibit 4.48
POWER OF ATTORNEY
I, Long Quan, a citizen of the People’s Republic of China (“PRC”) with PRC ID number ******, hereby authorize any
individual appointed in writing by Beijing Cheerbright Technologies Co., Ltd., its successors or any of its designated entities (the
“Authorizee”) to singly exercise the following powers and rights during the term of this Power of Attorney (this “POA”):
I hereby assign the Authorizee the right to vote on my behalf at the shareholders’ meetings of Beijing Autohome Information
Technology Co., Ltd. (the “Company”) and to exercise full voting rights as the shareholder of the Company as granted to me by
law and under the Articles of Association of the Company, such voting rights including but not limited to the right to sell or
transfer any or all of my equity of interest of the Company. Further, as my authorized representative at the shareholders’ meeting
of the Company, I hereby assign the Authorizee the right to designate and appoint the directors and management personnel of the
Company.
In exercising the rights and powers provided hereunder, the Authorizee shall act with due care and diligence and pursuant to this
POA and applicable laws.
This POA shall become valid, binding and enforceable upon the execution hereof.
This POA is prepared in both English and Chinese. Chinese version shall prevail over English version in case of any
inconsistency.
/s/ Long Quan
(Signature)
Long Quan
POWER OF ATTORNEY – LONG QUAN
Date：January 28, 2024
Exhibit 4.49
POWER OF ATTORNEY
I, Wang Youdong, a citizen of the People’s Republic of China (“PRC”) with PRC ID number ******, hereby authorize any
individual appointed in writing by Beijing Cheerbright Technologies Co., Ltd., its successors or any of its designated entities (the
“Authorizee”) to singly exercise the following powers and rights during the term of this Power of Attorney (this “POA”):
I hereby assign the Authorizee the right to vote on my behalf at the shareholders’ meetings of Beijing Autohome Information
Technology Co., Ltd. (the “Company”) and to exercise full voting rights as the shareholder of the Company as granted to me by
law and under the Articles of Association of the Company, such voting rights including but not limited to the right to sell or
transfer any or all of my equity of interest of the Company. Further, as my authorized representative at the shareholders’ meeting
of the Company, I hereby assign the Authorizee the right to designate and appoint the directors and management personnel of the
Company.
In exercising the rights and powers provided hereunder, the Authorizee shall act with due care and diligence and pursuant to this
POA and applicable laws.
This POA shall become valid, binding and enforceable upon the execution hereof.
This POA is prepared in both English and Chinese. Chinese version shall prevail over English version in case of any
inconsistency.
/s/ Wang Youdong
(Signature)
Wang Youdong
POWER OF ATTORNEY – WANG YOUDONG
Date：January 28, 2024
POWER OF ATTORNEY
Exhibit 4.50
I, Long Quan, a citizen of the People’s Republic of China (“PRC”) with PRC ID number ******, hereby authorize any
individual appointed in writing by Beijing Chezhiying Technology Co., Ltd its successors or any of its designated entities (the
“Authorizee”) to singly exercise the following powers and rights during the term of this Power of Attorney (this “POA”):
I hereby assign the Authorizee the right to vote on my behalf at the shareholders’ meetings of Beijing Shengtuo Hongyuan
Information Technology Co., Ltd. (the “Company”) and to exercise full voting rights as the shareholder of the Company as
granted to me by law and under the Articles of Association of the Company, such voting rights including but not limited to the
right to sell or transfer any or all of my equity of interest of the Company. Further, as my authorized representative at the
shareholders’ meeting of the Company, I hereby assign the Authorizee the right to designate and appoint the directors and
management personnel of the Company.
In exercising the rights and powers provided hereunder, the Authorizee shall act with due care and diligence and pursuant to this
POA and applicable laws.
This POA shall become valid, binding and enforceable upon the execution hereof.
This POA is prepared in both English and Chinese. Chinese version shall prevail over English version in case of any
inconsistency.
/s/ Long Quan
(Signature)
Long Quan
POWER OF ATTORNEY – LONG QUAN
Date：January 28, 2024
POWER OF ATTORNEY
Exhibit 4.51
I, Wang Youdong, a citizen of the People’s Republic of China (“PRC”) with PRC ID number ******, hereby authorize any
individual appointed in writing by Beijing Chezhiying Technology Co., Ltd its successors or any of its designated entities (the
“Authorizee”) to singly exercise the following powers and rights during the term of this Power of Attorney (this “POA”):
I hereby assign the Authorizee the right to vote on my behalf at the shareholders’ meetings of Beijing Shengtuo Hongyuan
Information Technology Co., Ltd. (the “Company”) and to exercise full voting rights as the shareholder of the Company as
granted to me by law and under the Articles of Association of the Company, such voting rights including but not limited to the
right to sell or transfer any or all of my equity of interest of the Company. Further, as my authorized representative at the
shareholders’ meeting of the Company, I hereby assign the Authorizee the right to designate and appoint the directors and
management personnel of the Company.
In exercising the rights and powers provided hereunder, the Authorizee shall act with due care and diligence and pursuant to this
POA and applicable laws.
This POA shall become valid, binding and enforceable upon the execution hereof.
This POA is prepared in both English and Chinese. Chinese version shall prevail over English version in case of any
inconsistency.
/s/ Wang Youdong
(Signature)
Wang Youdong
POWER OF ATTORNEY – WANG YOUDONG
Termination Agreement
Exhibit 4.52
This Termination Agreement (“this Agreement”) is made and entered into on January 28, 2024 in Beijing, the People’s Republic
of China (hereinafter referred to as “China”, for the purpose of this Agreement, excludes the Hong Kong Special Administrative
Region, the Macau Special Administrative Region and Taiwan) by the following parties:
1
2
3
4
Beijing Cheerbright Technologies Co., Ltd.,(“Cheerbright”), a wholly foreign-owned enterprise established in China with its
registered address at Room 1010, F/10,Tower B, No. 3, Danling Street, Haidian District, Beijing, China. Its uniform social
credit code is 91110108791607588Y;
Beijing Autohome Information Technology Co., Ltd. (“Autohome Information”), a company duly organized and existing in
China with its legal address at Room 1011-1015,F/10, Tower B, No. 3, Danling Street, Haidian District, Beijing, China. Its
uniform social credit code is 911101087934346098;
Long Quan, whose identification card number is ******;
Lei Haiyun, whose identification card number is ******.
Each of Cheerbright, Autohome Information, Lei Haiyun and Long Quan is referred to as the “Party” and together as the
“Parties”.
Recitals:
1
Cheerbright, Autohome Information and its original shareholders Lu Min and Lei Haiyun, entered into the following
agreements (collectively referred to as “Control Documents”):
(1) On February 19, 2021, Cheerbright and Autohome Information entered into the Exclusive Technology Consulting and
Service Agreement;
(2) On February 19, 2021, Cheerbright, Autohome Information and Long Quan entered into the Equity Option Agreement;
(3) On February 19, 2021, Cheerbright and Long Quan entered into the Equity Interest Pledge Agreement;
1 / NUMPAGES7
(4) On February 19, 2021, Cheerbright and Long Quan entered into the Loan Agreement;
(5) On February 19, 2021, Long Quan signed the Power of Attorney;
(6) On February 19, 2021, Cheerbright, Autohome Information and Lei Haiyun entered into the Equity Option Agreement;
(7) On February 19, 2021, Cheerbright and Lei Haiyun entered into the Equity Interest Pledge Agreement;
(8) On February 19, 2021, Cheerbright and Lei Haiyun entered into the Loan Agreement;
(9) On February 19, 2021, Lei Haiyun signed the Power of Attorney.
Lei Haiyun is currently in the process of transfer all the equity of Autohome Information to Wang Youdong.
The Parties agree to terminate the Control Documents in accordance with the terms and conditions set forth in this
Agreement.
2
3
The Parties agree as follows:
1
From the date of the issuance of an approval notice for the change of registration by the competent Bureau of Administration
for Market Regulation in charge of Autohome Information, the Control Documents shall be terminated, and the rights and
obligations of the Parties thereunder shall be terminated immediately, unconditionally and irrevocably. Upon the termination
of the Control Documents, the Parties shall not undertake any rights, obligations or responsibilities arising from the Control
Documents.
The Parties undertake that, except for the above-mentioned Control Documents, there is no agreement or unilaterally issued
document or arrangement in any other form among the Parties or held by any Party that results in or may result in a
controlling relationship in Autohome Information among the Parties or a Party holding a controlling relationship in
Autohome Information. If such agreements, documents or arrangements do exist, the Parties shall automatically waive any
of their rights and obligations under such agreements, documents or arrangements from the date of this Agreement.
The execution, validity, interpretation, modification, implementation, and termination of this Agreement and the resolution
of disputes hereunder shall be
2
3
2 / NUMPAGES7
governed by the PRC laws. If any dispute arises in the process of the interpretation or implementation of this Agreement, the
Parties shall attempt in the first instance to resolve such dispute through amicable consultation. If a dispute cannot be
resolved in the above manner within 30 days after a Party sends a written notice to the other Party requesting for a
consultation to resolve the dispute, any Party can submit the dispute to the China International Economic and Trade
Arbitration Commission located in Beijing for arbitration in accordance with its then-current rules. The place of arbitration
shall be in Beijing and the arbitral award shall be final and binding to the Parties.
This Agreement is written and executed in both English and Chinese, and Chinese articles shall prevail over English articles
in case of any inconsistency. This Agreement shall take effect upon the signature or seal by the Parties. This Agreement
shall be executed in 4 originals, each with the same legal effect.
4
[The space below is intentionally left blank.]
3 / NUMPAGES7
(Signature Page of the Termination Agreement)
/s/ Beijing Cheerbright Technologies Co., Ltd.
Beijing Cheerbright Technologies Co., Ltd., (Seal)
4 / NUMPAGES7
(Signature Page of the Termination Agreement)
/s/ Beijing Autohome Information Technology Co., Ltd.
Beijing Autohome Information Technology Co., Ltd. (Seal)
5 / NUMPAGES7
(Signature Page of the Termination Agreement)
/s/ Long Quan
Long Quan
6 / NUMPAGES7
(Signature Page of the Termination Agreement)
/s/ Lei Haiyun
Lei Haiyun
7 / NUMPAGES7
Equity Interest Purchase Agreement
Exhibit 4.53
This Agreement is executed on January 28, 2024 by and among:
The Seller (hereinafter referred to as “Party A”):
Lei Haiyun, ID No.: ******;
The Buyer (hereinafter referred to as “Party B”):
Wang Youdong, ID No.: ******;
The Target Company (hereinafter referred to as “Party C”): Beijing Autohome Information Technology Co., Ltd., universal
social credit code: 911101087934346098.
The registered capital of Party C is RMB 10,000,000. Party A contributed RMB 5,000,000, accounting for 50% of the total. In
accordance with the applicable laws and regulations, the Parties hereby enter into this Agreement as below through friendly
consultation:
Clause 1 Equity Interests to be Sold And The Sale Price
1.1 Party A shall sell 50% equity interests he held in Party C to Party B at the price of RMB 5,000,000.
1.2 Other rights and obligations pertaining to the said equity interests shall be transferred together with such equity
interests.
1.3 After the sale of equity interests as contemplated hereunder is consummated and the relevant procedures for change
are properly handled with the competent administration for market regulation, Party B shall pay the share sale price to
Party A. It is acknowledged by the Parties, Party B shall have the right to offset the debts owed to it by Party A against
the share sale price due by it to Party A hereunder, or make payment hereunder according to the method of payment as
agreed by the Parties through consultation at that time.
Clause 2 Undertakings and Warranties
Party A hereby warrants that, the equity interests to be sold to Party B under Clause 1 hereof are lawfully owned by him, and he
has the lawful right to dispose of such equity interests. Except for the pledge created under the Equity Interest Pledge Agreement
entered into by Party A with Beijing Cheerbright Technologies Co., Ltd., there are no pledges or other securities or third-party’s
claims over the equity interests to be sold by Party A hereunder.
Clause 3 Liabilities for Breach of the Agreement
If any party fails to perform or materially breaches any provisions contained herein, he or she shall indemnify the non-breaching
party for any losses caused thereby, and, except as otherwise agreed in this Agreement, the non-breaching party may terminate
this Agreement and claim against the breaching party.
Clause 4 Dispute Resolution
This Agreement shall be governed by and construed in accordance with the applicable laws of the People’s Republic of China.
Any dispute arising out of or in connection with this Agreement shall be resolved by the Parties through amicable consultation,
failing which, a lawsuit may be brought with the competent court having jurisdiction.
Clause 5 Miscellaneous
5.1
5.2
This Agreement shall be executed in four originals, of which each party keeps one, and the remaining shall be filed with
the competent administration for market regulation. All copies have the same legal effects.
This Agreement shall become effective immediately after it is sealed (in case of a corporate body) or signed (in case of a
natural person) by each party.
(The remainder of this page is intentionally left blank)
(Signature Page of the Equity Interest Purchase Agreement)
Party A
/s/ Lei Haiyun
Lei Haiyun
Date: September 30, 201
(Signature Page of the Equity Interest Purchase Agreement)
Party B
/s/ Wang Youdong
Wang Youdong
(Signature Page of the Equity Interest Purchase Agreement)
Party C
/s/ Beijing Autohome Information Technology Co., Ltd.
Beijing Autohome Information Technology Co., Ltd.
This Agreement is executed on January 28, 2024 by and among:
Debt Transfer and Offset Agreement
Exhibit 4.54
(a) The Creditor: Beijing Cheerbright Technologies Co., Ltd. (hereinafter referred to as “Cheerbright");
(b) The Transferor: Lei Haiyun ("Lei Haiyun”), ID No.: ******;
(c) The Transferee: Wang Youdong ("Wang Youdong”), ID No.: ******.
Whereas,
(1) Cheerbright and Lei Haiyun executed a Loan Agreement dated February 19, 2021 (the “Loan Agreement”) in respect of the
loan of RMB 5,000,000 provided by Cheerbright to Lei Haiyun;
(2) Lei Haiyun intends to transfer to Wang Youdong, and Wang Youdong agrees to accept, all debts and all of its rights and
obligations under the Loan Agreement as described in above (1);
(3) The registered capital of Beijing Autohome Information Technology Co., Ltd. (hereinafter referred to as the "Target
Company”)is RMB 10,000,000, of which Lei Haiyun contributed RMB 5,000,000, accounting for 50% of the total; On
January 28, 2024, Lei Haiyun executed an Equity Interest Purchase Agreement with Wang Youdong in respect of sale of
50% equity interests in the Target Company (hereinafter referred to as the "Equity Interest Purchase Agreement"). Wang
Youdong shall purchase the 50% equity interests in the Target Company according to the directions of Cheerbright. Pursuant
to the provisions of the Equity Interest Purchase Agreement, Wang Youdong shall pay Lei Haiyun the equity interest sale
price that has not been paid yet (the “Sale Price”). Lei Haiyun intends to offset the Sale Price against the debts owed by Lei
Haiyun to Wang Youdong hereunder according to the following provisions; and
(4) Any currency as referred to herein shall mean RMB, except as otherwise specified.
NOW THEREFORE, in accordance with applicable laws and regulations and through amicable consultation, the Parties hereby
enter into this Agreement as below:
Clause 1 Transfer of Debts
1.1
Lei Haiyun agrees to transfer to Wang Youdong, and Wang Youdong agrees to accept, the debt of RMB 5,000,000 owed by
Lei Haiyun to Cheerbright (the “Debt Transfer”).
After the consummation of the Debt Transfer, Lei Haiyun shall owe the debt of
RMB 5,000,000 to Wang Youdong.
1.2
Cheerbright acknowledges and agrees to the Debt Transfer.
1.3
After the consummation of the Debt Transfer, Lei Haiyun shall no longer owe any debt to Cheerbright; Wang Youdong
shall owe the debt of RMB 5,000,000 in total to Cheerbright.
Clause 2 Transfer of Rights and Obligations
2.1
In addition to the Debt Transfer under Clause 1 hereof, Lei Haiyun agrees to transfer to Wang Youdong, and Wang
Youdong agrees to accept, all rights and obligations of Lei Haiyun under the Loan Agreement.
2.2 Cheerbright acknowledges and agrees to the transfer of rights and obligations.
2.3 Cheerbright and Wang Youdong agree to enter into the Loan Agreement to agree on matters such as Cheerbright’s claims
against Wang Youdong and relevant rights and obligations.
Clause 3 Offset of Debts
3.1
3.2
3.3
Pursuant to the provisions of the Equity Interest Purchase Agreement, Wang Youdong shall pay to Lei Haiyun the equity
interest sale price of RMB 5,000,000. The Sale Price has not been paid.
It is acknowledged and agreed by Lei Haiyun that, the debts owed by Lei Haiyun to Wang Youdong shall be offset against
the Sale Price payable by Wang Youdong to Lei Haiyun under the Equity Interest Purchase Agreement.
It is acknowledged by the Parties, the Sale Price under the Equity Interest Purchase Agreement shall be the amounts net of
tax. Any taxes or levies (if any) imposed with respect to the Sale Price shall be borne by Cheerbright, instead of the sellers
of the equity interests. Cheerbright shall be responsible for communicating with the competent taxation authorities and
paying the relevant taxes as requested by taxation authorities, and shall assist the sellers of equity interests to obtain the
receipts of tax payment.
Clause 4 Liabilities for Breach of Contract
If any party fails to perform or materially breaches any provision contained herein, he or she shall indemnify the non-breaching
parties for any loss caused thereby, and, except as otherwise agreed in this Agreement, the non-breaching parties may terminate
this Agreement and claim against the breaching party.
Clause 5 Dispute Resolution
This Agreement shall be governed by and construed in accordance with the applicable laws of the People's Republic of China.
Any dispute arising out of or in connection with this Agreement shall be resolved by
the Parties through amicable consultation, failing which, a lawsuit may be brought with the competent court having jurisdiction.
Clause 6 Miscellaneous
6.1
6.2
This Agreement shall be executed in four originals, of which each party and the Target Company shall keep one
respectively.
This Agreement shall become effective immediately after it is sealed (in case of a corporate body) or signed (in case of a
natural person) by each party.
(The remainder of this page is intentionally left blank)
(Signature Page of the Debt Transfer and Offset Agreement)
/s/ Beijing Cheerbright Technologies Co., Ltd.
Company Seal: Beijing Cheerbright Technologies Co., Ltd.
(Signature Page of the Debt Transfer and Offset Agreement)
/s/ Lei Haiyun
Lei Haiyun
(Signature Page of the Debt Transfer and Offset Agreement)
/s/ Wang Youdong
Wang Youdong
Termination Agreement
Exhibit 4.55
This Termination Agreement (“this Agreement”) is made and entered into on January 24, 2024 in Beijing, the People’s Republic
of China (hereinafter referred to as “China”, for the purpose of this Agreement, excludes the Hong Kong Special Administrative
Region, the Macau Special Administrative Region and Taiwan) by the following parties:
1
2
3
4
Beijing Chezhiying Technology Co., Ltd.,(“Chezhiying”), a wholly foreign-owned enterprise established in China with its
registered address at Room1117, F/11, Tower B, No. 3, Danling Street, Haidian District, Beijing, China. Its uniform social
credit code is 91110108322170854H;
Beijing Shengtuo Hongyuan Information Technology Co., Ltd. (“Shengtuo Hongyuan”), a company duly organized and
existing in China with its legal address at Unit 53, F/10, Tower B, No. 3, Danling Street, Haidian District, Beijing, China. Its
uniform social credit code is 91110108563619210K;
Long Quan, whose identification card number is ******;
Lei Haiyun, whose identification card number is ******.
Each of Chezhiying, Shengtuo Hongyuan, Lei Haiyun and Long Quan is referred to as the “Party” and together as the “Parties”.
Recitals:
1
Chezhiying, Shengtuo Hongyuan and its original shareholders Lu Min and Lei Haiyun, entered into the following
agreements (collectively referred to as “Control Documents”):
(1) On February 19, 2021, Chezhiying and Shengtuo Hongyuan entered into the Exclusive Technology Consulting and
Service Agreement;
(2) On February 19, 2021, Chezhiying, Shengtuo Hongyuan and Long Quan entered into the Equity Option Agreement;
(3) On February 19, 2021, Chezhiying and Long Quan entered into the Equity Interest Pledge Agreement;
(4) On February 19, 2021, Chezhiying and Long Quan entered into the Loan
1 / NUMPAGES7
Agreement;
(5) On February 19, 2021, Long Quan signed the Power of Attorney;
(6) On February 19, 2021, Chezhiying, Shengtuo Hongyuan and Lei Haiyun entered into the Equity Option Agreement;
(7) On February 19, 2021, Chezhiying and Lei Haiyun entered into the Equity Interest Pledge Agreement;
(8) On February 19, 2021, Chezhiying and Lei Haiyun entered into the Loan Agreement;
(9) On February 19, 2021, Lei Haiyun signed the Power of Attorney.
Lei Haiyun is currently in the process of transfer all the equity of Shengtuo Hongyuan to Wang Youdong.
The Parties agree to terminate the Control Documents in accordance with the terms and conditions set forth in this
Agreement.
2
3
The Parties agree as follows:
1
From the date of the issuance of an approval notice for the change of registration by the competent Bureau of Administration
for Market Regulation in charge of Shengtuo Hongyuan, the Control Documents shall be terminated, and the rights and
obligations of the Parties thereunder shall be terminated immediately, unconditionally and irrevocably. Upon the termination
of the Control Documents, the Parties shall not undertake any rights, obligations or responsibilities arising from the Control
Documents.
The Parties undertake that, except for the above-mentioned Control Documents, there is no agreement or unilaterally issued
document or arrangement in any other form among the Parties or held by any Party that results in or may result in a
controlling relationship in Shengtuo Hongyuan among the Parties or a Party holding a controlling relationship in Shengtuo
Hongyuan. If such agreements, documents or arrangements do exist, the Parties shall automatically waive any of their rights
and obligations under such agreements, documents or arrangements from the date of this Agreement.
The execution, validity, interpretation, modification, implementation, and termination of this Agreement and the resolution
of disputes hereunder shall be governed by the PRC laws. If any dispute arises in the process of the
2
3
2 / NUMPAGES7
interpretation or implementation of this Agreement, the Parties shall attempt in the first instance to resolve such dispute
through amicable consultation. If a dispute cannot be resolved in the above manner within 30 days after a Party sends a
written notice to the other Party requesting for a consultation to resolve the dispute, any Party can submit the dispute to the
China International Economic and Trade Arbitration Commission located in Beijing for arbitration in accordance with its
then-current rules. The place of arbitration shall be in Beijing and the arbitral award shall be final and binding to the Parties.
This Agreement is written and executed in both English and Chinese, and Chinese articles shall prevail over English articles
in case of any inconsistency. This Agreement shall take effect upon the signature or seal by the Parties. This Agreement
shall be executed in 4 originals, each with the same legal effect.
4
[The space below is intentionally left blank.]
3 / NUMPAGES7
(Signature Page of the Termination Agreement)
/s/ Beijing Chezhiying Technology Co., Ltd.
Beijing Chezhiying Technology Co., Ltd.
4 / NUMPAGES7
(Signature Page of the Termination Agreement)
/s/ Beijing Shengtuo Hongyuan Information Technology Co., Ltd.
Beijing Shengtuo Hongyuan Information Technology Co., Ltd.
5 / NUMPAGES7
(Signature Page of the Termination Agreement)
/s/ Long Quan
Long Quan
6 / NUMPAGES7
(Signature Page of the Termination Agreement)
/s/ Lei Haiyun
Lei Haiyun
7 / NUMPAGES7
Equity Interest Purchase Agreement
Exhibit 4.56
This Agreement is executed on January 28, 2024by and among:
The Seller (hereinafter referred to as “Party A”):
Lei Haiyun, ID No.: ******;
The Buyer (hereinafter referred to as “Party B”):
Wang Youdong, ID No.: ******;
The Target Company (hereinafter referred to as “Party C”): Beijing Shengtuo Hongyuan Information Technology Co., Ltd.,
universal social credit code: 91110108563619210K.
The registered capital of Party C is RMB 10,000,000. Party A contributed RMB 5,000,000, accounting for 50% of the total. In
accordance with the applicable laws and regulations, the Parties hereby enter into this Agreement as below through friendly
consultation:
Clause 1 Equity Interests to be Sold And The Sale Price
1.1 Party A shall sell 50% equity interests he held in Party C to Party B at the price of RMB 5,000,000.
1.2 Other rights and obligations pertaining to the said equity interests shall be transferred together with such equity
interests.
1.3 After the sale of equity interests as contemplated hereunder is consummated and the relevant procedures for change
are properly handled with the competent administration for market regulation, Party B shall pay the share sale price to
Party A. It is acknowledged by the Parties, Party B shall have the right to offset the debts owed to it by Party A against
the share sale price due by it to Party A hereunder, or make payment hereunder according to the method of payment as
agreed by the Parties through consultation at that time.
Clause 2 Undertakings and Warranties
Party A hereby warrants that, the equity interests to be sold to Party B under Clause 1 hereof are lawfully owned by him, and he
has the lawful right to dispose of such equity interests. Except for the pledge created under the Equity Interest Pledge Agreement
entered into by Party A with Beijing Chezhiying Technology Co., Ltd., there are no pledges or other securities or third-party’s
claims over the equity interests to be sold by Party A hereunder.
Clause 3 Liabilities for Breach of the Agreement
If any party fails to perform or materially breaches any provisions contained herein, he or she shall indemnify the non-breaching
party for any losses caused thereby, and, except as otherwise agreed in this Agreement, the non-breaching party may terminate
this Agreement and claim against the breaching party.
Clause 4 Dispute Resolution
This Agreement shall be governed by and construed in accordance with the applicable laws of the People’s Republic of China.
Any dispute arising out of or in connection with this Agreement shall be resolved by the Parties through amicable consultation,
failing which, a lawsuit may be brought with the competent court having jurisdiction.
Clause 5 Miscellaneous
5.1
5.2
This Agreement shall be executed in four originals, of which each party keeps one, and the remaining shall be filed with
the competent administration for market regulation. All copies have the same legal effects.
This Agreement shall become effective immediately after it is sealed (in case of a corporate body) or signed (in case of a
natural person) by each party.
(The remainder of this page is intentionally left blank)
(Signature Page of the Equity Interest Purchase Agreement)
Party A
/s/ Lei Haiyun
Lei Haiyun
Date: September 30, 201
(Signature Page of the Equity Interest Purchase Agreement)
Party B
/s/ Wang Youdong
Wang Youdong
(Signature Page of the Equity Interest Purchase Agreement)
Party C
/s/ Beijing Shengtuo Hongyuan Information Technology Co., Ltd.
Beijing Shengtuo Hongyuan Information Technology Co., Ltd.
This Agreement is executed on January 28, 2024 by and among:
Debt Transfer and Offset Agreement
Exhibit 4.57
(a) The Creditor: Beijing Chezhiying Technology Co., Ltd. (hereinafter referred to as “Chezhiying");
(b) The Transferor: Lei Haiyun ("Lei Haiyun”), ID No.: ******;
(c) The Transferee: Wang Youdong ("Wang Youdong”), ID No.: ******.
Whereas,
(1) Chezhiying and Lei Haiyun executed a Loan Agreement dated February 19, 2021 (the “Loan Agreement”) in respect of the
loan of RMB 5,000,000 provided by Cheerbright to Lei Haiyun;
(2) Lei Haiyun intends to transfer to Wang Youdong, and Wang Youdong agrees to accept, all debts and all of its rights and
obligations under the Loan Agreement as described in above (1);
(3) The registered capital of Beijing Shengtuo Hongyuan Information Technology Co., Ltd. (hereinafter referred to as the
"Target Company”)is RMB 10,000,000, of which Lei Haiyun contributed RMB 5,000,000, accounting for 50% of the total;
On January 28, 2024, Lei Haiyun executed an Equity Interest Purchase Agreement with Wang Youdong in respect of sale of
50% equity interests in the Target Company (hereinafter referred to as the "Equity Interest Purchase Agreement"). Wang
Youdong shall purchase the 50% equity interests in the Target Company according to the directions of Chezhiying. Pursuant
to the provisions of the Equity Interest Purchase Agreement, Wang Youdong shall pay Lei Haiyun the equity interest sale
price that has not been paid yet (the “Sale Price”). Lei Haiyun intends to offset the Sale Price against the debts owed by Lei
Haiyun to Wang Youdong hereunder according to the following provisions; and
(4) Any currency as referred to herein shall mean RMB, except as otherwise specified.
NOW THEREFORE, in accordance with applicable laws and regulations and through amicable consultation, the Parties hereby
enter into this Agreement as below:
Clause 1 Transfer of Debts
1.1
Lei Haiyun agrees to transfer to Wang Youdong, and Wang Youdong agrees to accept, the debt of RMB 5,000,000 owed by
Lei Haiyun to Chezhiying (the “Debt Transfer”).
After the consummation of the Debt Transfer, Lei Haiyun shall owe the debt of
RMB 5,000,000 to Wang Youdong.
1.2
Chezhiying acknowledges and agrees to the Debt Transfer.
1.3
After the consummation of the Debt Transfer, Lei Haiyun shall no longer owe any debt to Chezhiying; Wang Youdong
shall owe the debt of RMB 5,000,000 in total to Chezhiying.
Clause 2 Transfer of Rights and Obligations
2.1
In addition to the Debt Transfer under Clause 1 hereof, Lei Haiyun agrees to transfer to Wang Youdong, and Wang
Youdong agrees to accept, all rights and obligations of Lei Haiyun under the Loan Agreement.
2.2 Chezhiying acknowledges and agrees to the transfer of rights and obligations.
2.3 Chezhiying and Wang Youdong agree to enter into the Loan Agreement to agree on matters such as Chezhiying’s claims
against Wang Youdong and relevant rights and obligations.
Clause 3 Offset of Debts
3.1
3.2
3.3
Pursuant to the provisions of the Equity Interest Purchase Agreement, Wang Youdong shall pay to Lei Haiyun the equity
interest sale price of RMB 5,000,000. The Sale Price has not been paid.
It is acknowledged and agreed by Lei Haiyun that, the debts owed by Lei Haiyun to Wang Youdong shall be offset against
the Sale Price payable by Wang Youdong to Lei Haiyun under the Equity Interest Purchase Agreement.
It is acknowledged by the Parties, the Sale Price under the Equity Interest Purchase Agreement shall be the amounts net of
tax. Any taxes or levies (if any) imposed with respect to the Sale Price shall be borne by Chezhiying, instead of the sellers
of the equity interests. Chezhiying shall be responsible for communicating with the competent taxation authorities and
paying the relevant taxes as requested by taxation authorities, and shall assist the sellers of equity interests to obtain the
receipts of tax payment.
Clause 4 Liabilities for Breach of Contract
If any party fails to perform or materially breaches any provision contained herein, he or she shall indemnify the non-breaching
parties for any loss caused thereby, and, except as otherwise agreed in this Agreement, the non-breaching parties may terminate
this Agreement and claim against the breaching party.
Clause 5 Dispute Resolution
This Agreement shall be governed by and construed in accordance with the applicable laws of the People's Republic of China.
Any dispute arising out of or in connection with this Agreement shall be resolved by
the Parties through amicable consultation, failing which, a lawsuit may be brought with the competent court having jurisdiction.
Clause 6 Miscellaneous
6.1
6.2
This Agreement shall be executed in four originals, of which each party and the Target Company shall keep one
respectively.
This Agreement shall become effective immediately after it is sealed (in case of a corporate body) or signed (in case of a
natural person) by each party.
(The remainder of this page is intentionally left blank)
(Signature Page of the Debt Transfer and Offset Agreement)
/s/ Beijing Chezhiying Technologies Co., Ltd.
Beijing Chezhiying Technologies Co., Ltd.
(Signature Page of the Debt Transfer and Offset Agreement)
/s/ Lei Haiyun
Lei Haiyun
(Signature Page of the Debt Transfer and Offset Agreement)
/s/ Wang Youdong
Wang Youdong
Principal Subsidiaries and VIEs of Autohome Inc.
Exhibit 8.1
Subsidiaries:
Cheerbright International Holdings Limited, a British Virgin Islands company
Autohome Link Inc., a Cayman Islands company
Autohome (Hong Kong) Limited, a Hong Kong company
Autohome Media Limited, a Hong Kong company
Autohome Link Hong Kong Limited, a Hong Kong company
Beijing Cheerbright Technologies Co., Ltd., a PRC company
Autohome Shanghai Advertising Co., Ltd., a PRC company
Beijing Prbrownies Software Co., Ltd., a PRC company
Beijing Autohome Technologies Co., Ltd., a PRC company
Beijing Autohome Advertising Co., Ltd., a PRC company
Beijing Chezhiying Technology Co., Ltd., a PRC company
Guangzhou Chezhihuitong Advertising Co., Ltd., a PRC company
Shanghai Chezhitong Information Technology Co., Ltd., a PRC company
Hainan Chezhiyitong Information Technology Co., Ltd., a PRC company
Tianjin Autohome Software Co., Ltd., a PRC company
Autohome Zhejiang Advertising Co., Ltd., a PRC company
TTP Car Inc., a Cayman Islands company
Auto Pai Ltd., a British Virgin Islands company
TTP Car (HK) Limited, a Hong Kong company
Shanghai Jinpai E-commerce Co., Ltd., a PRC company
Variable Interest Entities:
Beijing Autohome Information Technology Co., Ltd., a PRC company
Beijing Shengtuo Hongyuan Information Technology Co., Ltd., a PRC company
Shanghai Jinwu Auto Technology Consultant Co., Ltd., a PRC company
Shanghai Jinyou Auto Technology Consultant Co., Ltd., a PRC company
Shanghai Tianhe Insurance Brokerage Co., Ltd., a PRC company
Certification by the Principal Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 12.1
I, Tao Wu, certify that:
1. I have reviewed this annual report on Form 20-F of Autohome Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for
the company and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual
report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to
the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control
over financial reporting.
Date: April 25, 2024
By:
/s/ Tao Wu
Tao Wu
Chief Executive Officer and Executive Director
Certification by the Principal Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 12.2
I, Craig Yan Zeng, certify that:
1. I have reviewed this annual report on Form 20-F of Autohome Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for
the company and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual
report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to
the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control
over financial reporting.
Date: April 25, 2024
By:
/s/ Craig Yan Zeng
Craig Yan Zeng
Chief Financial Officer
Certification by the Principal Executive Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 13.1
In connection with the Annual Report of Autohome Inc. (the “Company”) on Form 20-F for the year ended December 31, 2023 as filed with the
Securities and Exchange Commission on the date hereof (the “Report”), I, Tao Wu, Chief Executive Officer and Executive Director of the Company,
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: April 25, 2024
By:
/s/ Tao Wu
Tao Wu
Chief Executive Officer and Executive Director
Certification by the Principal Financial Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 13.2
In connection with the Annual Report of Autohome Inc. (the “Company”) on Form 20-F for the year ended December 31, 2023 as filed with the
Securities and Exchange Commission on the date hereof (the “Report”), I, Craig Yan Zeng, Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: April 25, 2024
By:
/s/ Craig Yan Zeng
Craig Yan Zeng
Chief Financial Officer
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 333-196006 and No. 333-219032) of Autohome Inc.
of our report dated April 25, 2024 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this
Form 20-F.
Exhibit 15.1
/s/ PricewaterhouseCoopers Zhong Tian LLP
Beijing, the People’s Republic of China
April 25, 2024
Exhibit 15.2
April 25, 2024
Autohome Inc.
18th Floor Tower B, CEC Plaza
3 Dan Ling Street
Haidian District, Beijing
The People’s Republic of China
Dear Sir/Madam:
We consent to the reference to our firm under the captions of “Item 3.D—Risk Factors” and “Item 4B—Business Overview” in Autohome Inc.’s annual
report on Form 20-F for the year ended December 31, 2023, which will be filed with the Securities and Exchange Commission in the month of April 2024,
and further consent to the incorporation by reference of the summaries of our opinions under these captions into Autohome Inc.’s registration statements on
Form S-8 (File No. 333-196006 and 333-219032) that was filed on May 16, 2014 and June 29, 2017, respectively.
Yours faithfully,
/s/ Commerce & Finance Law Offices
Commerce & Finance Law Offices
AUTOHOME INC.
INCENTIVE COMPENSATION RECOUPMENT POLICY
Exhibit 97.1
1.
INTRODUCTION
The Board of Directors (the “Board”) of Autohome Inc., a company incorporated in the Cayman Islands (the “Company”), has
determined that it is in the best interests of the Company and its shareholders to adopt this Incentive Compensation Recoupment Policy (this
“Policy”) providing for the Company’s recoupment of Recoverable Incentive Compensation that is received by Covered Officers of the
Company under certain circumstances. Certain capitalized terms used in this Policy have the meanings given to such terms in Section 3
below.
This Policy is designed to comply with, and shall be interpreted to be consistent with, Section 10D of the Exchange Act, Rule 10D-
1 promulgated thereunder (“Rule 10D-1”) and Section 303A.14 of the New York Stock Exchange Listed Company Manuel (the “Listing
Standards”).
2.
EFFECTIVE DATE
This Policy shall apply to all Incentive Compensation that is received by a Covered Officer on or after October 2, 2023 (the
“Effective Date”). Incentive Compensation is deemed “received” in the Company’s fiscal period in which the Financial Reporting Measure
specified in the Incentive Compensation award is attained, even if the payment or grant of such Incentive Compensation occurs after the end
of that period.
3.
DEFINITIONS
“Accounting Restatement” means an accounting restatement that the Company is required to prepare due to the material
noncompliance of the Company with any financial reporting requirement under the securities laws, including any required accounting
restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that
would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period.
“Accounting Restatement Date” means the earlier to occur of (a) the date that the Board, a committee of the Board authorized to
take such action, or the officer or officers of the Company authorized to take such action if Board action is not required, concludes, or
reasonably should have concluded, that the Company is required to prepare an Accounting Restatement, or (b) the date that a court, regulator
or other legally authorized body directs the Company to prepare an Accounting Restatement.
“Administrator” means the Compensation Committee or, in the absence of such committee, the Board.
“Code” means the U.S. Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.
“Compensation Committee” means the Compensation Committee of the Board.
“Covered Officer” means each current and former Executive Officer.
“Exchange” means the New York Stock Exchange.
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
“Executive Officer” means the Company’s president, principal financial officer, principal accounting officer (or if there is no such
accounting officer, the controller), any vice-president of the Company in charge of a principal business unit, division, or function (such as
sales, administration, or finance), any other officer who performs a policy-making function, or any other person who performs similar policy-
making functions for the Company. Executive officers of the Company’s parent(s) or subsidiaries are deemed executive officers of the
Company if they perform such policy-making functions for the Company. Policy-making function is not intended to include policy-making
functions that are not significant. Identification of an executive officer for purposes of this Policy would include at a minimum executive
officers identified pursuant to Item 401(b) of Regulation S-K promulgated under the Exchange Act.
“Financial Reporting Measures” means measures that are determined and presented in accordance with the accounting principles
used in preparing the Company’s financial statements, and any measures derived wholly or in part from such measures, including Company
share price and total shareholder return (“TSR”). A measure need not be presented in the Company’s financial statements or included in a
filing with the SEC in order to be a Financial Reporting Measure.
“Incentive Compensation” means any compensation that is granted, earned or vested based wholly or in part upon the attainment of
a Financial Reporting Measure.
“Lookback Period” means the three completed fiscal years immediately preceding the Accounting Restatement Date, as well as any
transition period (resulting from a change in the Company’s fiscal year) within or immediately following those three completed fiscal years
(except that a transition period of at least nine months shall count as a completed fiscal year). Notwithstanding the foregoing, the Lookback
Period shall not include fiscal years completed prior to the Effective Date.
“Recoverable Incentive Compensation” means Incentive Compensation received by a Covered Officer during the Lookback Period
that exceeds the amount of Incentive Compensation that would have been received had such amount been determined based on the
Accounting Restatement, computed without regard to any taxes paid (i.e., on a gross basis without regard to tax withholdings and other
deductions). For any compensation plans or programs that take into account Incentive Compensation, the amount of Recoverable Incentive
Compensation for purposes of this Policy shall include, without limitation, the amount contributed to any notional account based on
Recoverable Incentive Compensation and any earnings to date on that notional amount. For any Incentive Compensation that is based on
share price or TSR, where the Recoverable Incentive Compensation is not subject to mathematical recalculation directly from the information
in an Accounting Restatement, the Administrator will determine the amount of Recoverable Incentive Compensation based on a reasonable
estimate of the effect of the Accounting Restatement on the share price or TSR upon which the Incentive Compensation was received. The
Company shall maintain documentation of the determination of that reasonable estimate and provide such documentation to the Exchange in
accordance with the Listing Standards.
“SEC” means the U.S. Securities and Exchange Commission.
4.
RECOUPMENT
(a) Applicability of Policy. This Policy applies to Incentive Compensation received by a Covered Officer (i) after beginning
services as an Executive Officer, (ii) who served as an Executive Officer at any time during the performance period for such Incentive
Compensation, (iii) while the Company had a class of securities listed on a national securities exchange or a national securities association,
and (iv) during the Lookback Period.
(b) Recoupment Generally. Pursuant to the provisions of this Policy, if there is an Accounting Restatement, the Company must
reasonably promptly recoup the full amount of the Recoverable Incentive Compensation, unless the conditions of one or more subsections of
Section 4(c) of this Policy are met and the Compensation Committee, or, if such committee does not consist solely of independent directors, a
majority of the independent directors serving on the Board, has made a determination that recoupment would be impracticable. Recoupment
is required regardless of whether the Covered Officer engaged in any misconduct and regardless of fault, and the Company’s obligation to
recoup Recoverable Incentive Compensation is not dependent on whether or when any restated financial statements are filed.
(c) Impracticability of Recovery. Recoupment may be determined to be impracticable if, and only if:
(i)
the direct expense paid to a third party to assist in enforcing this Policy would exceed the amount of the applicable
Recoverable Incentive Compensation; provided that, before concluding that it would be impracticable to recover any amount of
Recoverable Incentive Compensation based on expense of enforcement, the Company shall make a reasonable attempt to recover
such Recoverable Incentive Compensation, document such reasonable attempt(s) to recover, and provide that documentation to the
Exchange in accordance with the Listing Standards; or
(ii)
recoupment of the applicable Recoverable Incentive Compensation would likely cause an otherwise tax-qualified
retirement plan, under which benefits are broadly available to employees of the Company, to fail to meet the requirements of Code
Section 401(a)(13) or Code Section 411(a) and regulations thereunder.
(d) Sources of Recoupment. To the extent permitted by applicable law, the Administrator shall, in its sole discretion, determine the
timing and method for recouping Recoverable Incentive Compensation hereunder, provided that such recoupment is undertaken reasonably
promptly. The Administrator may, in its discretion, seek recoupment from a Covered Officer from any of the following sources or a
combination thereof, whether the applicable compensation was approved, awarded, granted, payable or paid to the Covered Officer prior to,
on or after the Effective Date: (i) direct repayment of Recoverable Incentive Compensation previously paid to the Covered Officer; (ii)
cancelling prior cash or equity-based awards (whether vested or unvested and whether paid or unpaid); (iii) cancelling or offsetting against
any planned future cash or equity-based awards; (iv) forfeiture of deferred compensation, subject to compliance with Code Section 409A;
and (v) any other method authorized by applicable law or contract. Subject to compliance with any applicable law, the Administrator may
effectuate recoupment under this Policy from any amount otherwise payable to the Covered Officer, including amounts payable to such
individual under any otherwise applicable Company plan or program, e.g., base salary, bonuses or commissions and compensation previously
deferred by the Covered Officer. The Administrator need not utilize the same method of recovery for all Covered Officers or with respect to
all types of Recoverable Incentive Compensation.
(e) No Indemnification of Covered Officers. Notwithstanding any indemnification agreement, applicable insurance policy or any
other agreement or provision of the Company’s organizational documents to the contrary, no Covered Officer shall be entitled to
indemnification or advancement of expenses in connection with any enforcement of this Policy by the Company, including paying or
reimbursing such Covered Officer for insurance premiums to cover potential obligations to the Company under this Policy.
(f) Indemnification of Administrator. Any members of the Administrator, and any other members of the Board who assist in the
administration of this Policy, shall not be personally liable for any
action, determination or interpretation made with respect to this Policy and shall be indemnified by the Company to the fullest extent under
applicable law and Company policy with respect to any such action, determination or interpretation. The foregoing sentence shall not limit
any other rights to indemnification of the members of the Board under applicable law or Company policy.
(g) No “Good Reason” for Covered Officers. Any action by the Company to recoup or any recoupment of Recoverable Incentive
Compensation under this Policy from a Covered Officer shall not be deemed (i) “good reason” for resignation or to serve as a basis for a
claim of constructive termination under any benefits or compensation arrangement applicable to such Covered Officer, or (ii) to constitute a
breach of a contract or other arrangement to which such Covered Officer is party.
5.
ADMINISTRATION
Except as specifically set forth herein, this Policy shall be administered by the Administrator. The Administrator shall have full and
final authority to make any and all determinations required under this Policy. Any determination by the Administrator with respect to this
Policy shall be final, conclusive and binding on all interested parties and need not be uniform with respect to each individual covered by this
Policy. In carrying out the administration of this Policy, the Administrator is authorized and directed to consult with the full Board or such
other committees of the Board as may be necessary or appropriate as to matters within the scope of such other committee’s responsibility and
authority. Subject to applicable law, the Administrator may authorize and empower any officer or employee of the Company to take any and
all actions that the Administrator, in its sole discretion, deems necessary or appropriate to carry out the purpose and intent of this Policy
(other than with respect to any recovery under this Policy involving such officer or employee).
6.
SEVERABILITY
If any provision of this Policy or the application of any such provision to a Covered Officer shall be adjudicated to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Policy, and
the invalid, illegal or unenforceable provisions shall be deemed amended to the minimum extent necessary to render any such provision or
application enforceable.
7.
NO IMPAIRMENT OF OTHER REMEDIES
Nothing contained in this Policy, and no recoupment or recovery as contemplated herein, shall limit any claims, damages or other
legal remedies the Company or any of its affiliates may have against a Covered Officer arising out of or resulting from any actions or
omissions by the Covered Officer. This Policy does not preclude the Company from taking any other action to enforce a Covered Officer’s
obligations to the Company, including, without limitation, termination of employment and/or institution of civil proceedings. This Policy is in
addition to the requirements of Section 304 of the Sarbanes-Oxley Act of 2002 (“SOX 304”) that are applicable to the Company’s Chief
Executive Officer and Chief Financial Officer and to any other compensation recoupment policy and/or similar provisions in any
employment, equity plan, equity award, or other individual agreement, to which the Company is a party or which the Company has adopted
or may adopt and maintain from time to time; provided, however, that compensation recouped pursuant to this Policy shall not be duplicative
of compensation recouped pursuant to SOX 304 or any such compensation recoupment policy and/or similar provisions in any such
employment, equity plan, equity award, or other individual agreement except as may be required by law.
8.
AMENDMENT; TERMINATION
The Administrator may amend, terminate or replace this Policy or any portion of this Policy at any time and from time to time in its
sole discretion. The Administrator shall amend this Policy as it deems necessary to comply with applicable law or any Listing Standard.
9.
SUCCESSORS
This Policy shall be binding and enforceable against all Covered Officers and, to the extent required by Rule 10D-1 and/or the
applicable Listing Standards, their beneficiaries, heirs, executors, administrators or other legal representatives.
10. REQUIRED FILINGS
The Company shall make any disclosures and filings with respect to this Policy that are required by law, including as required by the
SEC.