Vipshop Reports Unaudited Second Quarter 2019 Financial Results
GUANGZHOU, China, Aug. 14, 2019 /PRNewswire/ -- Vipshop Holdings Limited (NYSE: VIPS), a leading online discount retailer for brands in China ("Vipshop" or the "Company"), today announced its unaudited financial results for the second quarter ended June 30, 2019.
Second Quarter 2019 Highlights
-- Total net revenue for the second quarter of 2019 increased by 9.7% year over year to RMB22.7 billion (US$3.3 billion) from RMB20.7 billion in the prior year period. -- GMV([1]) for the second quarter of 2019 increased by 11% year over year to RMB35.1 billion from RMB31.6 billion in the prior year period. -- Gross profit for the second quarter of 2019 increased by 25.9% year over year to RMB5.1 billion (US$741.3 million) from RMB4.0 billion in the prior year period. -- Net income attributable to Vipshop's shareholders for the second quarter of 2019 increased by 19.3% year over year to RMB813.5 million (US$118.5 million) from RMB681.6 million in the prior year period. -- Non-GAAP net income attributable to Vipshop's shareholders(([2])) for the second quarter of 2019 increased by 84.2% year over year to RMB1.1 billion (US$154.8 million) from RMB576.9 million in the prior year period. -- The number of active customers([3]) for the second quarter of 2019 increased by 11% year over year to 33.1 million from 29.8 million in the prior year period. -- Total orders([4]) for the second quarter of 2019 increased by 33% year over year to 147.8 million from 111.3 million in the prior year period.
Mr. Eric Shen, Chairman and Chief Executive Officer of Vipshop, stated, "We are delighted to have finished the second quarter of 2019 with strong operational and financial results. During the quarter, we continued to demonstrate healthy growth momentum in our total active customers, which increased by 11% year over year. In addition, we recently announced our strategic acquisition of Shan Shan Outlets, aiming to further enhance our ecosystem and explore opportunities in online-and-offline integration. Since we refocused on discount apparel and our profitability, we have seen substantial improvement in our financial results and key operating metrics, proving our strategy is very effective. We remain committed to executing on our merchandising strategy and further expanding our market share in China's discount apparel sector. We are confident that we can continue to deliver steady profitability improvement in the future."
Mr. Donghao Yang, Chief Financial Officer of Vipshop, further commented, "We delivered solid financial results this quarter with a substantial improvement in our bottom-line both sequentially and on a year-over-year basis. Additionally, we generated robust free cash flow of RMB1.2 billion during the quarter, which increased by RMB2.2 billion from the prior year period. We continue to focus on our merchandising strategy, particularly in apparel-related categories, in which the GMV grew by 19% year over year in this quarter. The focus on the high margin apparel category has and will enable us to deliver continuous improvement in our gross margin and overall profitability. Going forward, we will continue to closely monitor the return on investment from all our businesses, especially that of our investment in offline stores. We aim to achieve balanced top- and bottom-line growth and are committed to delivering long-term, sustainable shareholder return."
Second Quarter 2019 Financial Results
REVENUE
Total net revenue for the second quarter of 2019 increased by 9.7% year over year to RMB22.7 billion (US$3.3 billion) from RMB20.7 billion in the prior year period, primarily driven by the growth in the number of total active customers.
GROSS PROFIT
Gross profit for the second quarter of 2019 increased by 25.9% year over year to RMB5.1 billion (US$741.3 million) from RMB4.0 billion in the prior year period. Gross margin for the second quarter of 2019 increased to 22.4% from 19.5% in the prior year period.
OPERATING EXPENSES
Total operating expenses for the second quarter of 2019 were RMB4.2 billion (US$612.5 million), as compared with RMB3.9 billion in the prior year period. As a percentage of total net revenue, total operating expenses for the second quarter of 2019 decreased to 18.5% from 18.9% in the prior year period.
-- Fulfillment expenses for the second quarter of 2019 were RMB2.2 billion (US$320.3 million), as compared with RMB1.9 billion in the prior year period. As a percentage of total net revenue, fulfillment expenses for the second quarter of 2019 were 9.7%, as compared with 9.1% in the prior year period, primarily attributable to a write-down of RMB275.5 million related to the Zhaoqing warehouse due to land subsidence during construction. Excluding the write-down, fulfillment expenses as a percentage of total net revenue for the quarter were 8.5%. -- Marketing expenses for the second quarter of 2019 decreased to RMB877.6 million (US$127.8 million) from RMB899.6 million in the prior year period. As a percentage of total net revenue, marketing expenses for the second quarter of 2019 decreased to 3.9% from 4.3% in the prior year period. -- Technology and content expenses for the second quarter of 2019 decreased to RMB422.3 million (US$61.5 million) from RMB510.6 million in the prior year period. As a percentage of total net revenue, technology and content expenses for the second quarter of 2019 decreased to 1.9% from 2.5% in the prior year period. -- General and administrative expenses for the second quarter of 2019 were RMB706.3 million (US$102.9 million), as compared with RMB615.2 million in the prior year period. As a percentage of total net revenue, general and administrative expenses for the second quarter of 2019 were 3.1%, as compared with 3.0% in the prior year period.
INCOME FROM OPERATIONS
Income from operations for the second quarter of 2019 increased by 141.2% year over year to RMB965.4 million (US$140.6 million) from RMB400.3 million in the prior year period. Operating margin for the second quarter of 2019 increased to 4.2% from 1.9% in the prior year period.
Non-GAAP income from operations([5]) for the second quarter of 2019, which excludes share-based compensation expenses and amortization of intangible assets resulting from business acquisitions, increased by 97.6% year over year to RMB1.2 billion (US$171.2 million) from RMB594.8 million in the prior year period. Non-GAAP operating income margin([6]) for the second quarter of 2019 increased to 5.2% from 2.9% in the prior year period.
NET INCOME
Net income attributable to Vipshop's shareholders for the second quarter of 2019 increased by 19.3% year over year to RMB813.5 million (US$118.5 million) from RMB681.6 million in the prior year period. Net margin attributable to Vipshop's shareholders for the second quarter of 2019 increased to 3.6% from 3.3% in the prior year period. Net income attributable to Vipshop's shareholders per diluted ADS([7]) for the second quarter of 2019 increased to RMB1.21 (US$0.18) from RMB0.99 in the prior year period.
Non-GAAP net income attributable to Vipshop's shareholders for the second quarter of 2019, which excludes (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from business acquisitions and equity method investments, (iii) tax effect of amortization of intangible assets resulting from business acquisitions, (iv) investment gain and revaluation of investments excluding dividends, (v) tax effect of investment gain and revaluation of investments excluding dividends, and (vi) share of gain in investment of limited partnership that is accounted for as an equity method investee, increased by 84.2% year over year to RMB1.1 billion (US$154.8 million) from RMB576.9 million in the prior year period. Non-GAAP net margin attributable to Vipshop's shareholders([8]) for the second quarter of 2019 increased to 4.7% from 2.8% in the prior year period. Non-GAAP net income attributable to Vipshop's shareholders per diluted ADS([9]) for the second quarter of 2019 increased to RMB1.58 (US$0.23) from RMB0.84 in the prior year period.
For the quarter ended June 30, 2019, the Company's weighted average number of ADSs used in computing diluted income per ADS was 673,241,463.
BALANCE SHEET AND CASH FLOW
As of June 30, 2019, the Company had cash and cash equivalents and restricted cash of RMB7.8 billion (US$1.1 billion) and short term investments of RMB238.3 million (US$34.7 million).
For the quarter ended June 30, 2019, net cash from operating activities was RMB3.4 billion (US$500.9 million), and free cash flow([10]), a non-GAAP measurement of liquidity, was as follows:
For the three months ended Jun 30, 2018 Jun 30, 2019 Jun 30, 2019 RMB'000 RMB'000 US$'000 --- Net cash from operating activities (502,235) 3,438,809 500,919 Add: Impact from Internet financing activities[11] 469,515 (1,254,977) (182,808) Less: Capital expenditures (870,103) (936,124) (136,362) Free cash flow (out)/in (902,823) 1,247,708 181,749 For the trailing twelve months ended Jun 30, 2018 Jun 30, 2019 Jun 30, 2019 RMB'000 RMB'000 US$'000 --- Net cash from operating activities 187,270 10,207,552 1,486,898 Add: Impact from Internet financing activities[11] 1,990,180 (1,829,324) (266,471) Less: Capital expenditures (2,901,367) (3,954,839) (576,087) Free cash flow (out)/in (723,917) 4,423,389 644,340
Business Outlook
For the third quarter of 2019, the Company expects its total net revenue to be between RMB17.8 billion and RMB18.7 billion, representing a year-over-year growth rate of approximately 0% to 5%. These forecasts reflect the Company's current and preliminary view on the market and operational conditions, which is subject to change.
Exchange Rate
The Company's business is primarily conducted in China and the significant majority of revenues generated are denominated in Renminbi. This announcement contains currency conversions of Renminbi amounts into U.S. dollars solely for the convenience of the reader. Unless otherwise noted, all translations from Renminbi to U.S. dollars are made at a rate of RMB6.8650 to US$1.00, the effective noon buying rate for June 28, 2019 as set forth in the H.10 statistical release of the Federal Reserve Board. No representation is made that the Renminbi amounts could have been, or could be, converted, realized or settled into U.S. dollars at that rate on June 28, 2019, or at any other rate.
Conference Call Information
The Company will hold a conference call on Thursday, August 15, 2019 at 8:00 am Eastern Time or 8:00 pm Beijing Time to discuss its financial results and operating performance for the second quarter 2019.
United States: +1-845-675-0437 International Toll Free: +1-866-519-4004 China Domestic: 400-6208-038 Hong Kong: +852-3018-6771 Conference ID: #9137629
The replay will be accessible through August 23, 2019 by dialing the following numbers:
United States Toll Free: +1-855-452-5696 International: +61-2-8199-0299 Conference ID: #9137629
A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://ir.vip.com.
About Vipshop Holdings Limited
Vipshop Holdings Limited is a leading online discount retailer for brands in China. Vipshop offers high quality and popular branded products to consumers throughout China at a significant discount to retail prices. Since it was founded in August 2008, the Company has rapidly built a sizeable and growing base of customers and brand partners. For more information, please visit www.vip.com.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as Vipshop's strategic and operational plans, contain forward-looking statements. Vipshop may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Vipshop's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Vipshop's goals and strategies; Vipshop's future business development, results of operations and financial condition; the expected growth of the online discount retail market in China; Vipshop's ability to attract customers and brand partners and further enhance its brand recognition; Vipshop's expectations regarding demand for and market acceptance of flash sales products and services; competition in the discount retail industry; fluctuations in general economic and business conditions in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Vipshop's filings with the SEC. All information provided in this press release is as of the date of this press release, and Vipshop does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
Use of Non-GAAP Financial Measures
The condensed consolidated financial information is derived from the Company's unaudited interim condensed consolidated financial statements prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"), except that comparative consolidated statements of income and cash flows for the period presented and detailed footnote disclosures required by Accounting Standards Codification 270, Interim Reporting ("ASC270"), have been omitted. Vipshop uses non-GAAP net income attributable to Vipshop's shareholders, non-GAAP net income attributable to Vipshop's shareholders per diluted ADS, non-GAAP income from operations, non-GAAP operating income margin, non-GAAP net margin attributable to Vipshop's shareholders, and free cash flow, each of which is a non-GAAP financial measure. Non-GAAP net income attributable to Vipshop's shareholders is net income attributable to Vipshop's shareholders excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from business acquisitions and equity method investments, (iii) tax effect of amortization of intangible assets resulting from business acquisitions, (iv) investment gain and revaluation of investments excluding dividends, (v) tax effect of investment gain and revaluation of investments excluding dividends, and (vi) share of gain in investment of limited partnership that is accounted for as an equity method investee. Non-GAAP net income attributable to Vipshop's shareholders per diluted ADS is computed using non-GAAP net income attributable to Vipshop's shareholders divided by weighted average number of diluted ADS outstanding for computing diluted earnings per ADS. Non-GAAP income from operations is income from operations excluding share-based compensation expenses and amortization of intangible assets resulting from business acquisitions. Non-GAAP operating income margin is non-GAAP income from operations as a percentage of total net revenue. Non-GAAP net margin attributable to Vipshop's shareholders is non-GAAP net income attributable to Vipshop's shareholders as a percentage of total net revenue. Free cash flow is net cash from operating activities adding back the impact from Internet financing activities and less capital expenditures, which include purchase and deposits of property and equipment and land use rights, and purchase of other assets. Impact from Internet financing activities added back or deducted from free cash flow contains changes in the balances of financial products, which are primarily consumer financing and supplier financing that the Company provides to customers and suppliers. The Company believes that separate analysis and exclusion of the non-cash impact of (a) share-based compensation, (b) amortization of intangible assets, (c) investment gain and revaluation of investments excluding dividends, and (d) share of gain in investment of limited partnership that is accounted for as an equity method investee adds clarity to the constituent parts of its performance. The Company reviews these non-GAAP financial measures together with GAAP financial measures to obtain a better understanding of its operating performance. It uses these non-GAAP financial measures for planning, forecasting and measuring results against the forecast. The Company believes that non-GAAP financial measures are useful supplemental information for investors and analysts to assess its operating performance without the effect of (1) non-cash share-based compensation expenses, (2) amortization of intangible assets, (3) investment gain and revaluation of investments excluding dividends, and (4) share of gain in investment of limited partnership that is accounted for as an equity method investee. Free cash flow enables the Company to assess liquidity and cash flow, taking into account the impact from Internet financing activities and the financial resources needed for the expansion of fulfillment infrastructure and technology platform. Share-based compensation expenses and amortization of intangible assets have been and will continue to be significant recurring expenses in its business. However, the use of non-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using non-GAAP financial measures is that they do not include all items that impact the Company's net income for the period. In addition, because non-GAAP financial measures are not measured in the same manner by all companies, they may not be comparable to other similar titled measures used by other companies. One of the key limitations of free cash flow is that it does not represent the residual cash flow available for discretionary expenditures.
The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Vipshop Holdings Limited Reconciliations of GAAP and Non-GAAP Results" at the end of this release.
[1] "Gross merchandise value (GMV)" is defined as the total Renminbi value of all products and services sold through the Company's online sales business, online marketplace platform, and offline stores during the relevant period, including through the Company's websites and mobile apps, third-party websites and mobile apps, as well as Vipshop offline stores and Vipmaxx offline stores that were fulfilled by either the Company or its third-party merchants, regardless of whether or not the goods were delivered or returned. GMV includes shipping charges paid by buyers to sellers. For prudent considerations, the Company does not consider products or services to be sold if the relevant orders were placed and canceled pre-shipment and only included orders that left the Company's or other third-party vendors' warehouses. [2] Non-GAAP net income attributable to Vipshop's shareholders is a non-GAAP financial measure, which is defined as net income attributable to Vipshop's shareholders excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from business acquisitions and equity method investments, (iii) tax effect of amortization of intangible assets resulting from business acquisitions, (iv) investment gain and revaluation of investments excluding dividends, (v) tax effect of investment gain and revaluation of investments excluding dividends, and (vi) share of gain in investment of limited partnership that is accounted for as an equity method investee. [3] "Active customers" is defined as registered members who have purchased from the Company or the Company's online marketplace platforms at least once during the relevant period. [4] "Total orders" is defined as the total number of orders placed during the relevant period, including the orders for products and services sold through the Company's online sales business and the Company's online marketplace platforms, net of orders returned. [5] Non-GAAP income from operations is a non- GAAP financial measure, which is defined as income from operations excluding share-based compensation expenses and amortization of intangible assets resulting from business acquisitions. [6] Non-GAAP operating income margin is a non- GAAP financial measure, which is defined as non- GAAP income from operations as a percentage of total net revenues. [7] "ADS" means American depositary share, each of which represents 0.2 Class A ordinary share. [8] Non-GAAP net margin attributable to Vipshop's shareholders is a non-GAAP financial measure, which is defined as non-GAAP net income attributable to Vipshop's shareholders, as a percentage of total net revenues. [9] Non-GAAP net income attributable to Vipshop's shareholders per diluted ADS is a non-GAAP financial measure, which is defined as non-GAAP net income attributable to Vipshop's shareholders, divided by the weighted average number of diluted ADS outstanding for computing diluted earnings per ADS. [10] Free cash flow is a non-GAAP financial measure, which is defined as net cash from operating activities adding back the impact from Internet financing activities and less capital expenditures, which include purchase and deposits of property and equipment and land use rights, and purchase of other assets. [11] Impact from Internet financing activities represents net cash flow relating to the Company's financial products, which are primarily consumer financing and supplier financing that the Company provides to customers and suppliers.
Vipshop Holdings Limited Unaudited Condensed Consolidated Statements of Income and Comprehensive Income (In thousands, except for share and per share data) Three Months Ended June 30, 2018 March 31, 2019 June 30, 2019 June 30, 2019 --- RMB'000 RMB'000 RMB'000 USD'000 Product revenues 20,103,555 20,459,633 21,721,951 3,164,159 Other revenues(1) 634,820 858,983 1,021,767 148,837 Total net revenues 20,738,375 21,318,616 22,743,718 3,312,996 Cost of revenues (16,694,602) (16,962,283) (17,654,577) (2,571,679) Gross profit 4,043,773 4,356,333 5,089,141 741,317 Operating expenses: Fulfillment expenses(2) (1,897,097) (1,761,770) (2,198,543) (320,254) Marketing expenses (899,581) (780,920) (877,573) (127,833) Technology and content expenses (510,603) (382,956) (422,314) (61,517) General and administrative expenses(3) (615,169) (668,920) (706,252) (102,877) Total operating expenses (3,922,450) (3,594,566) (4,204,682) (612,481) Other operating income 278,960 101,404 80,904 11,785 Income from operations 400,283 863,171 965,363 140,621 Investment gain and revaluation of investments 309,059 214,085 15,012 2,187 Interest expense (39,003) (31,983) (12,194) (1,776) Interest income 62,272 70,560 41,732 6,079 Foreign exchange gain(loss) 79,557 (41,631) 30,920 4,504 Income before income tax expense and share of gain of equity method investees 812,168 1,074,202 1,040,833 151,615 Income tax expenses(4) (125,486) (243,897) (213,392) (31,084) Share of gain (loss) of equity method investees 2,092 46,659 (9,572) (1,394) Net income 688,774 876,964 817,869 119,137 Net gain attributable to noncontrolling interests (7,130) (4,682) (4,351) (634) Net income attributable to Vipshop's shareholders 681,644 872,282 813,518 118,503 Shares used in calculating earnings per share(5): Weighted average number of Class A and Class B ordinary shares: --Basic 132,138,434 133,037,380 133,403,777 133,403,777 --Diluted 140,270,995 139,290,699 134,648,293 134,648,293 Net earnings per Class A and Class B ordinary share Net income attributable to Vipshop's shareholders -- Basic 5.16 6.56 6.10 0.89 Net income attributable to Vipshop's shareholders -- Diluted 4.97 6.33 6.04 0.88 Net earnings per ADS (1 ordinary share equals to 5 ADSs) Net income attributable to Vipshop's shareholders -- Basic 1.03 1.31 1.22 0.18 Net income attributable to Vipshop's shareholders -- Diluted 0.99 1.27 1.21 0.18 (1) Other revenues primarily consist of revenues from third-party logistics services, product promotion and online advertising, fees charged to third-party merchants which the Company provides platform access for sales of their products, interest income from microcredit and consumer financing services, and inventory and warehouse management services to certain suppliers. (2) Fulfillment expenses include shipping and handling expenses, which amounted RMB 1.14 billion, RMB 1.1 billion and RMB 1.21 billion in the three month periods ended June 30,2018, March 31,2019 and June 30,2019, respectively. (3) General and administrative expenses include amortization of intangible assets resulting from business acquisitions, which amounted to RMB 0.6 million, RMB 0.6 million and RMB 0.5 million in the three month periods ended June 30,2018, March 31,2019 and June 30,2019, respectively. (4) Income tax expenses include income tax benefits of RMB 0.2 million, RMB 0.2 million and RMB 0.1 million related to the reversal of deferred tax liabilities, which was recognized on business acquisitions for the three month periods ended June 30,2018, March 31,2019 and June 30,2019, respectively. (5) Authorized share capital is re-classified and re-designated into Class A ordinary shares and Class B ordinary shares, with each Class A ordinary share being entitled to one vote and each Class B ordinary share being entitled to ten votes on all matters that are subject to shareholder vote. Three Months Ended June 30, 2018 March 31, 2019 June 30, 2019 June 30, 2019 --- RMB'000 RMB'000 RMB'000 USD'000 Share-based compensation expenses included are as follows Fulfillment expenses 21,217 19,466 37,497 5,462 Marketing expenses 11,501 10,843 10,970 1,598 Technology and content expenses 62,542 52,605 58,010 8,450 General and administrative expenses 98,658 89,813 103,048 15,011 Total 193,918 172,727 209,525 30,521 Vipshop Holdings Limited Unaudited Condensed Consolidated Balance Sheets (In thousands, except for share and per share data) December 31, 2018 June 30, 2019 June 30, 2019 RMB'000 RMB'000 USD'000 ASSETS CURRENT ASSETS Cash and cash equivalents 9,540,556 6,836,990 995,920 Restricted cash 497,916 995,255 144,975 Short term investments 2,321,244 238,302 34,713 Accounts receivable, net 5,674,731 3,999,549 582,600 Amounts due from related parties 17,475 78,919 11,496 Other receivables and prepayments,net 3,594,736 2,583,560 376,338 Loan Receivables,net 310,873 763,360 111,196 Inventories 5,368,106 4,489,339 653,946 Total current assets 27,325,637 19,985,274 2,911,184 NON-CURRENT ASSETS Property and equipment, net 8,531,483 9,194,037 1,339,262 Deposits for property and equipment 176,556 130,076 18,948 Land use rights, net 3,885,578 4,466,116 650,563 Intangible assets, net 353,108 351,333 51,178 Investment in equity method investees 667,427 717,376 104,498 Other investments 1,470,551 1,790,343 260,792 Other long-term assets 396,447 806,760 117,518 Goodwill 367,106 356,050 51,865 Deferred tax assets, net 388,770 447,254 65,150 Operating lease right-of-use assets(1) 0 988,655 144,014 Total non-current assets 16,237,026 19,248,000 2,803,788 TOTAL ASSETS 43,562,663 39,233,274 5,714,972 LIABILTIES AND EQUITY CURRENT LIABILITIES Short term loans 1,343,160 637,494 92,861 Accounts payable 11,630,172 10,762,058 1,567,670 Advance from customers 1,473,134 783,655 114,152 Accrued expenses and other current liabilities 5,512,605 4,985,198 726,176 Amounts due to related parties 323,108 399,082 58,133 Deferred income 367,512 387,002 56,373 Securitization debt 969,000 494,000 71,959 Convertible senior notes 4,327,268 0 0 Operating lease liabilities(1) 0 257,524 37,513 Total current liabilities 25,945,959 18,706,013 2,724,837 NON-CURRENT LIABILITIES Deferred tax liability 4,960 51,267 7,468 Deferred income-non current 400,951 455,468 66,346 Operating lease liabilities(1) 0 720,484 104,950 Total non-current liabilities 405,911 1,227,219 178,764 TOTAL LIABILITIES 26,351,870 19,933,232 2,903,601 EQUITY: Class A ordinary shares (US$0.0001 par value, 483,489,642 shares authorized, 75 76 11 and 116,395,883 and 117,022,836 shares issued and outstanding as of December 31, 2018 and June 30,2019, respectively) Class B ordinary shares (US$0.0001 par value, 16,510,358 shares authorized, 11 11 2 and 16,510,358 and 16,510,358 shares issued and outstanding as of December 31, 2018 and June 30,2019, respectively) Additional paid-in capital 9,385,216 9,767,477 1,422,793 Retained earnings 7,907,396 9,593,197 1,397,407 Accumulated other comprehensive loss (30,883) (21,181) (3,083) Noncontrolling interests (51,022) (39,538) (5,759) Total shareholders' equity 17,210,793 19,300,042 2,811,371 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 43,562,663 39,233,274 5,714,972 (1) On January 1, 2019, the Company adopted ASU 2016-02, "Leases (Topic 842)" and associated ASUs related to Topic 842 using the modified retrospective transition, under which the new standard was applied to leases existing at the date of initial adoption, and prior periods were not restated. Vipshop Holdings Limited Reconciliations of GAAP and Non-GAAP Results Three Months Ended June 30, 2018 June 30, 2019 June 30, 2019 RMB'000 RMB'000 USD'000 Income from operations 400,283 965,363 140,621 Share-based compensation expenses 193,918 209,525 30,521 Amortization of intangible assets resulting from business acquisitions 607 511 74 Non-GAAP income from operations 594,808 1,175,399 171,216 Net income 688,774 817,869 119,137 Share-based compensation expenses 193,918 209,525 30,521 Investment gain and revaluation of investments excluding dividends (309,059) (2,198) (320) Share of gain in investment of limited partnership that is accounted for as an equity 0 24,218 3,528 method investee Tax effect of investment gain and revaluation of investments excluding dividends 9,967 17,150 2,498 Amortization of intangible assets resulting from business acquisitions and equity 607 511 74 method investments Tax effect of amortization of intangible assets resulting from business acquisitions (152) (128) (19) Non-GAAP net income 584,055 1,066,947 155,419 Net income attributable to Vipshop's shareholders 681,644 813,518 118,503 Share-based compensation expenses 193,918 209,525 30,521 Investment gain and revaluation of investments excluding dividends (309,059) (2,198) (320) Share of gain in investment of limited partnership that is accounted for as an equity 0 24,218 3,528 method investee Tax effect of investment gain and revaluation of investments excluding dividends 9,967 17,150 2,498 Amortization of intangible assets resulting from business acquisitions and equity 597 501 73 method investments Tax effect of amortization of intangible assets resulting from business acquisitions (149) (125) (18) Non-GAAP net income attributable to Vipshop's shareholders 576,918 1,062,589 154,785 Shares used in calculating earnings per share: Weighted average number of Class A and Class B ordinary shares: --Basic 132,138,434 133,403,777 133,403,777 --Diluted 140,270,995 134,648,293 134,648,293 Non-GAAP net income per Class A and Class B ordinary share Non-GAAP net income attributable to Vipshop's shareholders -- Basic 4.37 7.97 1.16 Non-GAAP net income attributable to Vipshop's shareholders -- Diluted 4.22 7.89 1.15 Non-GAAP net income per ADS (1 ordinary share equal to 5 ADSs) Non-GAAP net income attributable to Vipshop's shareholders -- Basic 0.87 1.59 0.23 Non-GAAP net income attributable to Vipshop's shareholders -- Diluted 0.84 1.58 0.23
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SOURCE Vipshop Holdings Limited