Vipshop Reports Unaudited Second Quarter 2020 Financial Results

GUANGZHOU, China, Aug. 19, 2020 /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, 2020.

Second Quarter 2020 Highlights

    --  Total net revenue for the second quarter of 2020 increased by 6.0% year
        over year to RMB24.1 billion (US$3.4 billion) from RMB22.7 billion in
        the prior year period.
    --  GMV([1]) for the second quarter of 2020 increased by 9% year over year
        to RMB38.4 billion from RMB35.1 billion in the prior year period.
    --  Gross profit for the second quarter of 2020 was RMB4.9 billion (US$699.2
        million), as compared with RMB5.1 billion in the prior year period.
    --  Net income attributable to Vipshop's shareholders for the second quarter
        of 2020 increased by 88.9% year over year to RMB1.5 billion (US$217.5
        million) from RMB813.5 million in the prior year period.
    --  Non-GAAP net income attributable to Vipshop's shareholders([2]) for the
        second quarter of 2020 increased by 24.3% year over year to RMB1.3
        billion (US$186.9 million) from RMB1.1 billion in the prior year period.
    --  The number of active customers([3]) for the second quarter of 2020
        increased by 17% year over year to 38.8 million from 33.1 million in the
        prior year period.
    --  Total orders([4]) for the second quarter of 2020 increased by 15% year
        over year to 170.5 million from 147.8 million in the prior year period.

Mr. Eric Shen, Chairman and Chief Executive Officer of Vipshop, stated, "We are delighted to have delivered solid financial and operational results in the second quarter of 2020, driven by our strong merchandising capability. In particular, our number of active customers during the quarter increased by 17% year over year to 38.8 million from 33.1 million in the same period last year. We have seen strong recovery in demand for apparel since early May and ran a successful promotional campaign in June after daily life in China has returned to normal. Looking ahead, we will continue to focus on enhancing our product offerings, working more effectively with our suppliers to provide our customers with top-notch apparel assortments. We believe that we are well positioned to continue to gain market share in China's discount retail segment."

Mr. Donghao Yang, Chief Financial Officer of Vipshop, further commented, "We finished the second quarter of 2020 with healthy topline growth and improved year-over-year net margin attributable to Vipshop's shareholders. During the quarter, repeat customers as a percentage of total active customers increased to 90% from 87% in the prior year period, representing a meaningful enhancement in our customer stickiness. These successes were made possible by our team's solid execution in optimizing our product assortment to meet our customers' needs. Looking ahead, we will continue to execute on our merchandising strategy, aiming to deliver strong topline growth balanced with solid profitability."

Second Quarter 2020 Financial Results

REVENUE

Total net revenue for the second quarter of 2020 increased by 6.0% year over year to RMB24.1 billion (US$3.4 billion) from RMB22.7 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 2020 was RMB4.9 billion (US$699.2 million), as compared with 5.1 billion in the prior year period. Gross margin for the second quarter of 2020 was 20.5%, as compared with 22.4% in the prior year period, primarily attributable to the Company's strategy to reinvest into discounts and coupons during this year's June promotional event.

OPERATING EXPENSES

Total operating expenses for the second quarter of 2020 decreased to RMB3.8 billion (US$540.0 million) from RMB4.2 billion in the prior year period. As a percentage of total net revenue, total operating expenses for the second quarter of 2020 decreased to 15.8% from 18.5% in the prior year period.

    --  Fulfillment expenses for the second quarter of 2020 decreased to RMB1.7
        billion (US$237.3 million) from RMB2.2 billion in the prior year period.
        As a percentage of total net revenue, fulfillment expenses for the
        second quarter of 2020 decreased to 7.0% from 9.7% in the prior year
        period, primarily attributable to the change in fulfillment logistic
        arrangement.
    --  Marketing expenses for the second quarter of 2020 were RMB1.0 billion
        (US$145.6 million), as compared with RMB877.6 million in the prior year
        period. As a percentage of total net revenue, marketing expenses for the
        second quarter of 2020 were 4.3%, as compared with 3.9% in the prior
        year period.
    --  Technology and content expenses for the second quarter of 2020 decreased
        to RMB305.4 million (US$43.2 million) from RMB422.3 million in the prior
        year period. As a percentage of total net revenue, technology and
        content expenses for the second quarter of 2020 decreased to 1.3% from
        1.9% in the prior year period.
    --  General and administrative expenses for the second quarter of 2020 were
        RMB804.6 million (US$113.9 million), as compared with RMB706.3 million
        in the prior year period. As a percentage of total net revenue, general
        and administrative expenses for the second quarter of 2020 were 3.3%, as
        compared with 3.1% in the prior year period.

INCOME FROM OPERATIONS

Income from operations for the second quarter of 2020 increased by 28.4% year over year to RMB1.2 billion (US$175.5 million) from RMB965.4 million in the prior year period. Operating margin for the second quarter of 2020 increased to 5.1% from 4.2% in the prior year period.

Non-GAAP income from operations([5]) for the second quarter of 2020, which excluded share-based compensation expenses and amortization of intangible assets resulting from business acquisitions, increased by 27.1% year over year to RMB1.5 billion (US$211.4 million) from RMB1.2 billion in the prior year period. Non-GAAP operating income margin([6]) for the second quarter of 2020 increased to 6.2% from 5.2% in the prior year period.

NET INCOME

Net income attributable to Vipshop's shareholders for the second quarter of 2020 increased by 88.9% year over year to RMB1.5 billion (US$217.5 million) from RMB813.5 million in the prior year period. Net margin attributable to Vipshop's shareholders for the second quarter of 2020 increased to 6.4% from 3.6% in the prior year period. Net income attributable to Vipshop's shareholders per diluted ADS([7]) for the second quarter of 2020 increased to RMB2.24 (US$0.32) from RMB1.21 in the prior year period.

Non-GAAP net income attributable to Vipshop's shareholders for the second quarter of 2020, which excluded (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from business acquisitions, (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 loss in investment of limited partnership that is accounted for as an equity method investee, increased by 24.3% year over year to RMB1.3 billion (US$186.9 million) from RMB1.1 billion in the prior year period. Non-GAAP net margin attributable to Vipshop's shareholders([8]) for the second quarter of 2020 increased to 5.5% from 4.7% in the prior year period. Non-GAAP net income attributable to Vipshop's shareholders per diluted ADS([9]) for the second quarter of 2020 increased to RMB1.92 (US$0.27) from RMB1.58 in the prior year period.

For the quarter ended June 30, 2020, the Company's weighted average number of ADSs used in computing diluted income per ADS was 686,613,335.

BALANCE SHEET AND CASH FLOW

As of June 30, 2020, the Company had cash and cash equivalents and restricted cash of RMB8.1 billion (US$1.1 billion) and short term investments of RMB5.9 billion (US$840.7 million).

For the quarter ended June 30, 2020, net cash from operating activities was RMB5.1 billion (US$720.3 million), and free cash flow[(10]), a non-GAAP measurement of liquidity, was as follows:



            For the three months ended


                                                     
       Jun 30, 2019       
       Jun 30, 2020        Jun 30, 2020

                                                       
        RMB'000           
        RMB'000             US$'000

                                                                                                             ---


            Net cash from operating activities                   3,438,809               5,088,869        720,283



            Add: Net impact from Internet financing            (1,254,977)              (311,652)      (44,111)
    activities[11]



            Less: Capital expenditures                           (936,124)              (452,630)      (64,066)




            Free cash inflow                                     1,247,708               4,324,587        612,106








            For the trailing twelve months ended


                                                     
       Jun 30, 2019       
       Jun 30, 2020        Jun 30, 2020

                                                       
        RMB'000           
        RMB'000             US$'000

                                                                                                             ---


            Net cash from operating activities                  10,207,552              11,549,627      1,634,744



            Add: Net impact from Internet financing            (1,829,324)            (4,027,419)     (570,044)
    activities[11]



            Less: Capital expenditures                         (3,954,839)            (3,375,199)     (477,728)




            Free cash inflow                                     4,423,389               4,147,009        586,972

Recent Development

Mr. Donghao Yang will step down from the Company's Chief Financial Officer position for personal reasons in November 2020, and the Company's Board of Directors has appointed Mr. Yang as a new Non-Executive Director, effective simultaneously with the change of his position. Mr. Yang has served as the Company's Chief Financial Officer since 2011 and made significant contributions to the Company's growth and transformation from a privately held company into a publicly listed company with effective internal control and compliance systems in the past nine years. The Company has already commenced a search process for a new Chief Financial Officer.

Business Outlook

For the third quarter of 2020, the Company expects its total net revenue to be between RMB20.6 billion and RMB21.6 billion, representing a year-over-year growth rate of approximately 5% to 10%. 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 RMB7.0651 to US$1.00, the effective noon buying rate on June 30, 2020 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 30, 2020, or at any other rate.

Conference Call Information

The Company will hold a conference call on Wednesday, August 19, 2020 at 7:30 am Eastern Time or 7:30 pm Beijing Time to discuss its financial results and operating performance for the second quarter of 2020.

All participants wishing to join the conference call must pre-register online using the link provided below. Once pre-registration has been complete, participants will receive dial-in numbers, a passcode, and a unique registrant ID. To join the conference, simply dial the number in the calendar invite you receive after pre-registration, enter the passcode followed by your PIN, and you will join the conference instantly.


        Conference
        ID           
     #2094639

    ---

        Registration
        Link                    
     
     http://apac.directeventreg.com/registration/event/2094639

    ---

The replay will be accessible through August 27, 2020 by dialing the following numbers:


               United States Toll Free:    
              +1-855-452-5696



              International:              
              +61-2-8199-0299



              Conference ID:              
              #2094639

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; the potential impact of the COVID-19 to Vipshop's business operations and the economy in China and elsewhere generally; 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, (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 loss 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 resulting from business acquisitions, (c) investment gain and revaluation of investments excluding dividends, and (d) share of loss 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 resulting from business acquisitions, (3) investment gain and revaluation of investments excluding dividends, and (4) share of loss 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, offline stores, and Shan Shan Outlets during the
      relevant period, including through the Company's websites
      and mobile apps, third-party websites and mobile apps,
      Vipshop offline stores and Vipmaxx offline stores, as well
      as Shan Shan Outlets 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, (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 loss 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's online sales business 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 (excluding, for the avoidance of doubt, orders
      from the Company's offline stores and outlets), 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 (used in) 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] Net 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 its 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, 2019                  
            
            March 31, 2020                June 30, 2020             June 30, 2020

                                                                                                                                                                                                                                                                                                                                                      ---

                                                                                                                                                                                                               
              
                RMB'000                       
            
            RMB'000            
       
          RMB'000        
       
          USD'000





              Product revenues                                                                                                                                                                                                                    21,721,951                                17,964,195                23,213,007                  3,285,588



              Other revenues(1)                                                                                                                                                                                                                    1,021,767                                   828,660                   897,660                    127,055



              Total net revenues                                                                                                                                                                                                                  22,743,718                                18,792,855                24,110,667                  3,412,643




              Cost of revenues                                                                                                                                                                                                                  (17,654,577)                             (15,175,739)             (19,170,864)               (2,713,460)



              Gross profit                                                                                                                                                                                                                         5,089,141                                 3,617,116                 4,939,803                    699,183




              Operating expenses:



              Fulfillment expenses(2)                                                                                                                                                                                                            (2,198,543)                              (1,393,690)              (1,676,229)                 (237,255)



              Marketing expenses                                                                                                                                                                                                                   (877,573)                                (412,305)              (1,028,903)                 (145,632)



              Technology and content expenses                                                                                                                                                                                                      (422,314)                                (338,398)                (305,381)                  (43,224)



              General and administrative expenses                                                                                                                                                                                                  (706,252)                                (839,220)                (804,619)                 (113,886)



              Total operating expenses                                                                                                                                                                                                           (4,204,682)                              (2,983,613)              (3,815,132)                 (539,997)




              Other operating income                                                                                                                                                                                                                  80,904                                   148,688                   115,336                     16,325




              Income from operations                                                                                                                                                                                                                 965,363                                   782,191                 1,240,007                    175,511



              Investment gain and revaluation of investments                                                                                                                                                                                          15,012                                    42,553                   551,443                     78,052



              Impairment loss of investments                                                                                                                                                                                                               0                                   (5,046)                        0                          0



              Interest expense                                                                                                                                                                                                                      (12,194)                                 (35,395)                 (21,070)                   (2,982)



              Interest income                                                                                                                                                                                                                         41,732                                    81,190                   100,286                     14,195



              Foreign exchange gain (loss)                                                                                                                                                                                                            30,920                                    48,754                  (14,272)                   (2,020)



              Income before income tax expense and share of (loss) gain of equity method investees                                                                                                                                                 1,040,833                                   914,247                 1,856,394                    262,756



              Income tax expenses                                                                                                                                                                                                                  (213,392)                                (172,716)                (324,883)                  (45,984)



              Share of (loss) gain of equity method investees                                                                                                                                                                                        (9,572)                                 (60,639)                    7,588                      1,074




              Net income                                                                                                                                                                                                                             817,869                                   680,892                 1,539,099                    217,846



              Net (gain) loss attributable to non-controlling interests                                                                                                                                                                              (4,351)                                    3,933                   (2,179)                     (308)




              Net income attributable to Vipshop's shareholders                                                                                                                                                                                      813,518                                   684,825                 1,536,920                    217,538





              Shares used in calculating earnings per share(3):



              Weighted average number of Class A and Class B ordinary shares:



              -Basic                                                                                                                                                                                                                             133,403,777                               134,326,928               134,956,142                134,956,142



              -Diluted                                                                                                                                                                                                                           134,648,293                               136,909,242               137,322,667                137,322,667





              Net earnings per Class A and Class B ordinary share



              Net income attributable to Vipshop's shareholders--Basic                                                                                                                                                                                  6.10                                      5.10                     11.39                       1.61



              Net income attributable to Vipshop's shareholders--Diluted                                                                                                                                                                                6.04                                      5.00                     11.19                       1.58





              Net earnings per ADS (1 ordinary share equals to 5 ADSs)



              Net income attributable to Vipshop's shareholders--Basic                                                                                                                                                                                  1.22                                      1.02                      2.28                       0.32



              Net income attributable to Vipshop's shareholders--Diluted                                                                                                                                                                                1.21                                      1.00                      2.24                       0.32



              
                
                  (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 1.21 billion, RMB 0.8 billion, and RMB 1.1
    billion in the three month periods ended June 30,2019, March 31,2020 and June 30,2020, respectively.



              
                
                  (3) 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, 2019                  
            
            March 31, 2020                June 30, 2020             June 30, 2020

                                                                                                                                                                                                                                                                                                                                                      ---

                                                                                                                                                                                                               
              
                RMB'000                       
            
            RMB'000            
       
          RMB'000        
       
          USD'000



              Share-based compensation expenses included are as follows



              Fulfillment expenses                                                                                                                                                                                                                    37,497                                    27,215                    25,905                      3,667



              Marketing expenses                                                                                                                                                                                                                      10,970                                     3,939                     4,661                        660



              Technology and content expenses                                                                                                                                                                                                         58,010                                    44,402                    45,201                      6,398



              General and administrative expenses                                                                                                                                                                                                    103,048                                   171,455                   172,136                     24,364



              Total                                                                                                                                                                                                                                  209,525                                   247,011                   247,903                     35,089







                                                                                                                                                                      
              
                Vipshop Holdings Limited


                                                                                                                                                          
              
                Unaudited Condensed Consolidated Balance Sheets


                                                                                                                                                        
              
                (In thousands, except for share and per share data)




                                                                                                                                                                                                                                                              
            
            December 31, 2019               June 30, 2020             June 30, 2020



                                                                                                                                                                                                                                                                   
            
            RMB'000            
       
          RMB'000        
       
          USD'000



              
                ASSETS



              CURRENT ASSETS



              Cash and cash equivalents                                                                                                                                                                                                                                                   6,573,808                 7,395,029                  1,046,698



              Restricted cash                                                                                                                                                                                                                                                             1,145,477                   704,630                     99,734



              Short term investments                                                                                                                                                                                                                                                      3,052,726                 5,939,873                    840,734



              Accounts receivable, net                                                                                                                                                                                                                                                    1,295,766                   537,530                     76,082



              Amounts due from related parties                                                                                                                                                                                                                                               47,964                   359,327                     50,859



              Other receivables and prepayments,net                                                                                                                                                                                                                                       2,897,893                 2,480,658                    351,114



              Loan receivables,net                                                                                                                                                                                                                                                          306,115                    90,401                     12,795



              Inventories                                                                                                                                                                                                                                                                 7,708,292                 5,764,895                    815,968



              Total current assets                                                                                                                                                                                                                                                       23,028,041                23,272,343                  3,293,984




              NON-CURRENT ASSETS



              Property and equipment, net                                                                                                                                                                                                                                                11,256,810                12,391,200                  1,753,860



              Deposits for property and equipment                                                                                                                                                                                                                                           101,800                    62,283                      8,816



              Land use rights, net                                                                                                                                                                                                                                                        5,541,108                 5,874,963                    831,547



              Intangible assets, net                                                                                                                                                                                                                                                        337,310                   360,309                     50,998



              Investment in equity method investees                                                                                                                                                                                                                                       3,112,952                 2,119,858                    300,046



              Other investments                                                                                                                                                                                                                                                           2,002,756                 2,502,921                    354,265



              Other long-term assets                                                                                                                                                                                                                                                        608,073                   488,708                     69,172



              Amounts due from related party-non current                                                                                                                                                                                                                                    102,000                    59,446                      8,414



              Goodwill                                                                                                                                                                                                                                                                      236,711                   369,902                     52,356



              Deferred tax assets, net                                                                                                                                                                                                                                                      539,561                   612,344                     86,672



              Operating lease right-of-use assets                                                                                                                                                                                                                                         1,715,556                 1,988,535                    281,459



              Total non-current assets                                                                                                                                                                                                                                                   25,554,637                26,830,469                  3,797,605




              
                TOTAL ASSETS                                                                                                                                                                                                                                                  48,582,678                50,102,812                  7,091,589






              
                LIABILTIES AND  EQUITY



              CURRENT LIABILITIES



              Short term loans                                                                                                                                                                                                                                                            1,093,645                 1,850,828                    261,968



              Accounts payable                                                                                                                                                                                                                                                           13,792,200                11,901,904                  1,684,605



              Advance from customers                                                                                                                                                                                                                                                      1,233,165                 1,053,406                    149,100



              Accrued expenses and other current liabilities                                                                                                                                                                                                                              6,534,575                 5,872,404                    831,185



              Amounts due to related parties                                                                                                                                                                                                                                                532,788                   337,595                     47,784



              Deferred income                                                                                                                                                                                                                                                               405,994                   324,510                     45,931



              Operating lease liabilities                                                                                                                                                                                                                                                   333,268                   291,701                     41,288



              Total current liabilities                                                                                                                                                                                                                                                  23,925,635                21,632,348                  3,061,861




              NON-CURRENT LIABILITIES



              Long term loans                                                                                                                                                                                                                                                                64,515                   197,858                     28,005



              Deferred tax liability                                                                                                                                                                                                                                                        165,098                   388,251                     54,953



              Deferred income-non current                                                                                                                                                                                                                                                   782,068                   926,827                    131,184



              Operating lease liabilities                                                                                                                                                                                                                                                 1,395,665                 1,737,726                    245,959



              Other long term liabilities                                                                                                                                                                                                                                                         0                    40,085                      5,674



              Total non-current liabilities                                                                                                                                                                                                                                               2,407,346                 3,290,747                    465,775




              
                TOTAL LIABILITIES                                                                                                                                                                                                                                             26,332,981                24,923,095                  3,527,636






              
                EQUITY:



              Class A ordinary shares (US$0.0001 par value, 483,489,642 shares authorized, and                                                                                                                                                                                                   76                        77                         11
    117,584,362 and 118,686,997 shares issued and outstanding as of December 31,
    2019 and June 30,2020, respectively)



              Class B ordinary shares (US$0.0001 par value, 16,510,358 shares authorized, and                                                                                                                                                                                                    11                        11                          2
    16,510,358 and 16,510,358 shares issued and outstanding as of December 31, 2019
    and June 30,2020, respectively)



              Additional paid-in capital                                                                                                                                                                                                                                                  9,959,497                10,443,055                  1,478,119



              Retained earnings                                                                                                                                                                                                                                                          11,924,228                14,055,203                  1,989,385



              Accumulated other comprehensive loss                                                                                                                                                                                                                                         (56,656)                 (34,342)                   (4,867)



              Non-controlling interests                                                                                                                                                                                                                                                     422,541                   715,713                    101,303



              Total shareholders' equity                                                                                                                                                                                                                                                 22,249,697                25,179,717                  3,563,953




              
                TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                                                                                                                                                    48,582,678                50,102,812                  7,091,589







                                                                                                                                                                      
              
                Vipshop Holdings Limited


                                                                                                                                                           
              
                 Reconciliations of GAAP and Non-GAAP Results




                                                                                                                                                                                                                                                              
            
            Three Months Ended



                                                                                                                                                                                                                                                                
            
            June 30, 2019                 June 30, 2020             June 30, 2020



                                                                                                                                                                                                                                                                   
            
            RMB'000            
       
          RMB'000        
       
          USD'000



              Income from operations                                                                                                                                                                                                                                                        965,363                 1,240,007                    175,511



              Share-based compensation expenses                                                                                                                                                                                                                                             209,525                   247,903                     35,089



              Amortization of intangible assets resulting from business acquisitions                                                                                                                                                                                                            511                     5,896                        835



              Non-GAAP income from operations                                                                                                                                                                                                                                             1,175,399                 1,493,806                    211,435








              Net income                                                                                                                                                                                                                                                                    817,869                 1,539,099                    217,846



              Share-based compensation expenses                                                                                                                                                                                                                                             209,525                   247,903                     35,089



              Investment gain and revaluation of investments excluding dividends                                                                                                                                                                                                            (2,198)                (551,443)                  (78,052)



              Share of loss in investment of limited partnership that is accounted for as an equity                                                                                                                                                                                          24,218                    27,739                      3,926
    method investee



              Tax effect of investment gain and revaluation of investments excluding dividends                                                                                                                                                                                               17,150                    55,044                      7,791



              Amortization of intangible assets resulting from business acquisitions                                                                                                                                                                                                            511                     5,896                        835



              Tax effect of amortization of intangible assets resulting from business acquisitions                                                                                                                                                                                            (128)                  (1,474)                     (209)



              Non-GAAP net income                                                                                                                                                                                                                                                         1,066,947                 1,322,764                    187,226






              Net income attributable to Vipshop's shareholders                                                                                                                                                                                                                             813,518                 1,536,920                    217,538



              Share-based compensation expenses                                                                                                                                                                                                                                             209,525                   247,903                     35,089



              Investment gain and revaluation of investments excluding dividends                                                                                                                                                                                                            (2,198)                (551,443)                  (78,052)



              Share of loss in investment of limited partnership that is accounted for as an equity                                                                                                                                                                                          24,218                    27,739                      3,926
    method investee



              Tax effect of investment gain and revaluation of investments excluding dividends                                                                                                                                                                                               17,150                    55,044                      7,791



              Amortization of intangible assets resulting from business acquisitions                                                                                                                                                                                                            501                     5,896                        835



              Tax effect of amortization of intangible assets resulting from business acquisitions                                                                                                                                                                                            (125)                  (1,474)                     (209)



              Non-GAAP net income attributable to Vipshop's shareholders                                                                                                                                                                                                                  1,062,589                 1,320,585                    186,918






              Shares used in calculating earnings per share:



              Weighted average number of Class A and Class B ordinary shares:



              --Basic                                                                                                                                                                                                                                                                   133,403,777               134,956,142                134,956,142



              --Diluted                                                                                                                                                                                                                                                                 134,648,293               137,322,667                137,322,667





              Non-GAAP net income per Class A and Class B ordinary share



              Non-GAAP net income attributable to Vipshop's shareholders--Basic                                                                                                                                                                                                                7.97                      9.79                       1.39



              Non-GAAP net income attributable to Vipshop's shareholders--Diluted                                                                                                                                                                                                              7.89                      9.62                       1.36





              Non-GAAP net income per ADS (1 ordinary share equal to 5 ADSs)



              Non-GAAP net income attributable to Vipshop's shareholders--Basic                                                                                                                                                                                                                1.59                      1.96                       0.28



              Non-GAAP net income attributable to Vipshop's shareholders--Diluted                                                                                                                                                                                                              1.58                      1.92                       0.27

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SOURCE Vipshop Holdings Limited